ClearDebt Group plc 
REPORT AND FINANCIAL STATEMENTS 
for the year ended 30 June 2012 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Registration Number 02441375 ClearDebt Group plc 
CONTENTS 
 
 
 
 Page 
 
Financial highlights 1 
Directors and advisers 2 
Chairman’s statement 3 
Chief Executive’s statement 4-6 
Directors’ report 7-9 
Corporate governance 10-11 
Statement of directors’ responsibilities 12 
Directors’ remuneration report 13-14 
Accounts 
Independent Auditor’s report to the members of ClearDebt Group plc 15-16 
Consolidated income statement 17 
Consolidated statement of financial position  18 
Consolidated statement of changes in equity 19 
Consolidated statement of cash flows 20 
Notes to the consolidated financial statements 21-43 
Company balance sheet 44 
Notes to the company financial statements 45-51 
Shareholder information 52  ClearDebt Group plc 
FINANCIAL HIGHLIGHTS 
For the year ended 30 June 2012 
 
   1 
 
 
 2012 2011 
 £ £ 
 
Revenue 9,203,453 7,776,362 
Gross profit 4,678,074 3,963,959 
Profit before interest, tax, depreciation and amortisation 2,737,967 2,222,411 
Profit from operations          1,418,085  756,150 
Profit before taxation 834,758 227,219 
Profit after taxation 591,257 71,036 
Cash generated by operations 1,788,944 1,045,707 
 
Since 1 July 2011 (2011: 1 July 2010), the following numbers of new Individual Voluntary Arrangements 
(IVAs) have been arranged through ClearDebt:- 
 
 Year ended Year ended 
 30 June 2012 30 June 2011 
First quarter 488 355 
Second quarter 345 407 
Third quarter 273 411 
Fourth quarter 353 428 
 ____ ____ 
 1,459 1,601 
 ____ ____ 
 
As at 30 June 2012 the total number of IVAs and Protected Trust Deeds (“PTDs”) generating income was 6,504 
(2011: 5,893). Some 120 new IVA cases were acquired during the year.  
 
As at 30 June 2012, the total number of Debt Management Programmes (“DMPs”) generating income and under 
management was 6,566 (2011: 5,761). 
   
ClearDebt Group plc 
DIRECTORS AND ADVISERS 
 
2 
 
 
DIRECTORS 
G Carey FCIB 
D E M Mond FCA FCCA 
D M Shalom ACA 
A F Smith  
A J Leon FCA 
S Lee (appointed 25 May 2012) 
 
 
SECRETARY 
D E M Mond FCA FCCA 
 
 
REGISTERED OFFICE 
Nelson House 
Park Road 
Timperley 
Altrincham  
Cheshire 
WA14 5BZ 
 
 
AUDITORS 
Baker Tilly UK Audit LLP 
3 Hardman Street 
Manchester  
M3 3HF 
 
 
BROKERS AND NOMINATED ADVISER 
Seymour Pierce Limited 
20 Old Bailey 
London   
EC4M 7EN 
 
 
REGISTRARS 
Neville Registrars 
Neville House 
18 Laurel Lane 
Halesowen 
West Midlands 
 
 
SOLICITORS 
DWF LLP 
1 Scott Place  
2 Hardman Street 
Manchester   
M3 3AA 
 
BANKERS 
Barclays Bank PLC 
1 Bridge Street 
Stockport 
Cheshire 
SK1 1XU 
 
The Royal Bank of Scotland PLC 
P O Box 157  
2 Chestergate  
Macclesfield  
SK11 6BQ 
 
   
ClearDebt Group plc 
CHAIRMAN’S STATEMENT 
 
3 
 
I am delighted to present the Group’s financial statements for the year ended 30 June 2012.   
 
The Group increased revenue to £9,203,453 (2011: £7,776,362) producing an increased gross profit of 
£4,678,074 (2011: £3,963,959).  Earnings before interest, tax, depreciation and amortisation increased to 
£2,737,967 (2011: £2,222,411) resulting in a substantial pre-tax profit for the year of £834,758 (2011: £227,219) 
after finance charges of £585,611 (2011: £532,404) and amortisation relating to the acquisition of back books 
and other intangibles of £1,199,481 (2011: £1,388,809).  Profit after taxation was £591,257 (2011: £71,036). 
 
During the first quarter of the financial year the Group acquired a further tranche of new IVAs for £259,880 
resulting in a gain on bargain purchase of £27,089.   
 
At the year end the group had net assets of £5,827,562 (2011: £5,150,582) including cash of £462,459 (2011: 
£336,636) after spending £259,880 on back book acquisitions (2011: £1,088,783) in the year financed out of 
cash flow. In addition £700,000 of loans was repaid in the year (2011: net new loans of £315,000). 
 
Following the Paymex ruling the Group received some £750,000, including interest, prior to the year end in 
respect of our claim to recover VAT which had been incorrectly charged on IVAs. The money has been placed 
into a client account although we have since the year end refunded the VAT due to the open cases and the 
element of VAT that is due to the Group in respect of nominee fees. We will shortly commence the process of 
distributing the VAT on closed cases. At the 30 June 2012 the Group had accrued revenue of £338,000 based 
upon estimates of the revenues expected to arise to the Group out of the VAT refund process. 
 
I am pleased to say that, excluding acquired back books of debt management clients, Abacus has started again to 
grow the number of clients under debt management despite current market conditions. 
 
The numbers of new IVAs have, however, particularly in the second half of the year, been disappointing with 
only 1,459 new IVAs passed in the year (2011: 1,601).  Whilst sales of new IVAs have been disappointing the 
Group has benefitted from significant income in the year generated from consultancy services related to the IVA 
business. This income includes items which are one off in nature and whilst it will continue in the current 
financial year we expect it will be at lower levels than have been seen previously.  
 
We continue to invest in various marketing activities to increase the number of new IVAs being passed and 
continue to concentrate on managing overheads as we accumulate cash in readiness to repay the convertible 
bond due in April 2013. 
 
 
 
Gerald Carey FCIB 
Chairman 
 
29 November 2012 ClearDebt Group plc 
CHIEF EXECUTIVE’S STATEMENT 
 
4 
 
The Group has enjoyed a good year in terms of profitability and cash flow although this has to be tempered by 
lower numbers of new IVA cases particularly in the second half of the financial year. During the year 1,459 
(2011: 1,601) new IVAs were passed. In addition some 120 new IVAs were acquired in the first quarter of the 
financial year and as at 30 June 2012 the total number of IVAs and PTDs generating income was 6,504 (2011: 
5,893). 
 
The number of new IVAs is disappointing but I feel that this position is being mirrored by many in the sector as 
the IVA market as a whole remains flat at best. In addition, clients’ average disposable incomes after basic 
living expenses continue to fall as household food and energy costs remain high which has the effect of reducing 
fees for new IVAs as they are geared towards the level of contributions paid by clients. 
 
I am pleased however to report that Abacus has returned to growth in DMP client numbers, excluding acquired 
back books, and as at 30 June 2012, the total number of active DMPs under management was 6,566 (2011: 
5,761).  
 
We have been successful in generating substantial income from consultancy services related to the IVA business 
to offset the lower IVA numbers. Income from this source has increased substantially in the current year with 
revenue generated of £1,307,992 (2011: £361,341). Whilst I expect revenue from this source to continue into the 
new financial year it will continue at lower levels as certain elements of a non-recurring nature drop out.  
 
We continue to invest in the training of our staff with many having obtained the Certificate of Debt Resolution 
(CertDR), exclusively offered by the Debt Resolution Forum (“DRF”), and many more are progressing towards 
the qualification. I am proud of the culture within our organisation for training and the focus on the highest 
ethical standards which will keep us well ahead of industry standards and compliance in the United Kingdom.  I 
am also pleased with our commitment in supporting the DRF in all of its activities especially ensuring 
representation on many government and industry wide committees in our sector.  
 
We have continued to reduce our dependency on internet advertising and increasingly are focused upon referral 
sources for client leads together with the acquisition of good quality data for our now well established call 
centre. We constantly try to diversify and expand our referral base in an effort to boost the numbers of new 
clients to the business.  
 
Cash flow remains good and we are now focused on accumulating cash to repay the convertible bond in April 
2013 with cash balances currently now in excess of £1m and increasing. 
 
 
OPERATIONAL REVIEW 
 
ClearDebt – IVA Division 
 
Since 1 July 2011 (2011: 1 July 2010), the following numbers of new IVAs have been arranged through 
ClearDebt:- 
 
 Year ended Year ended 
 30 June 2012 30 June 2011 
First quarter 488 355 
Second quarter 345 407 
Third quarter 273 411 
Fourth quarter 353 428 
 ____ ____ 
 1,459 1,601 
 ____ ____ 
 
The numbers of new IVAs in the second half of the financial year have been disappointing and this has 
continued since the year end. New IVAs passed in the year declined by 9% to 1,459 from 1,601 new cases in 
2010/11.  We acquired the income stream from some 120 IVAs in the year and including this purchase, we had 
as at 30 June 2012 a total of 6,504 (2011: 5,893) IVAs and PTDs generating income.  
  ClearDebt Group plc 
CHIEF EXECUTIVE’S STATEMENT 
 
5 
 
Revenue of £1,307,992 (2011: £361,341) from consultancy income related to the IVA business has increased 
substantially in the year to offset the lower numbers of new IVAs. This year has benefitted from items which are 
one off in nature and whilst we continue to expect significant revenue from this source we expect income to be 
lower in the new financial year as it returns to more normal levels. 
 
The Board monitors several key performance indicators  (“KPIs”) for the business on a monthly basis including 
the number of cases passed, various conversion ratios from lead to cases passed, the cost per case acquired and 
the staff to caseload numbers. Whilst reduced numbers of leads and referrals has led to lower numbers of cases 
passed, all other indicators remain within expectations. 
 
Abacus– Debt Management Division  
 
The division made a pleasing profit in the period with DMP client numbers, excluding acquired back books, 
starting to increase again month on month since January 2012.  
 
As at 30 June 2012, the total number of DMPs generating income was 6,566 (2011: 5,761). Our attrition rates on 
DMPs are well within our normal expectations and we continue to look to acquire back books as a means of 
boosting income over the short and medium term. 
 
The Board has KPIs to monitor the number of active income generating plans as well as the value of monthly 
payments made by debtors.  The costs of acquisition of cases and plans are also monitored closely. We continue 
to resist the temptation to grow the book through lead sources providing leads at what are, in our view, 
uneconomic prices. 
 
ClearCash – prepaid MasterCard 
  
Steady progress continues to be made with our Pre-Paid MasterCard, ClearCash, although it has yet to reach a 
break even position. Increased losses in the current year as compared to 2011 have arisen due to the decision in 
December 2011 to switch service providers to enhance the card functionality. This has led to duplicated costs 
whilst we wind down the old card and switch clients to the new ClearCash card which was successfully 
migrated in July 2012 - but we believe the switch will be a worthwhile one for future card sales.  
 
The new ClearCash card has increased functionality, in particular giving card holders their own unique sort code 
and account number. This not only gives cardholders the feel of a traditional bank account but also allows them 
to set up direct debits for the first time giving them the full functionality they require. Following the successful 
migration of current card holders we will start actively marketing the new card to our extensive database. 
  
As card numbers increase we expect the card to produce a profit next year. 
 
 
FINANCIAL REVIEW 
 
Group turnover increased by 18% to £9,203,453 (2011: £7,776,362) and gross profit by 18% to £4,678,074 
(2011: £3,963,959). The performance was driven by the consultancy income related to the IVA business as well 
as revenue generated from our substantial IVA and DMP back books. Amortisation charges in respect of 
acquisitions and impairment amounted to £1,199,481 (2011: £1,388,809). 
 
Finance costs rose to £585,611 (2011: £532,404 ) reflecting the continued accrual of interest due in respect of 
the three year 10% secured convertible loan notes which are due for repayment in April 2013. Actual interest 
paid in respect of the convertible loan notes totalled £230,000 with the balance being an accounting charge for 
the redemption premium due on maturity in 2013. 
 
Cash resources at the year-end amounted to £462,459 (2011: £336,636) after back-book acquisitions of some 
£259,880 (2011: £1,088,783) and repayment of loans of £700,000 (2011: net loans advanced £315,000). 
Operational cash flow remains strong and cash balances at the end of September 2012 were in excess of £1m as 
we continue to build cash for repayment of the convertible loan notes. 
  
   ClearDebt Group plc 
CHIEF EXECUTIVE’S STATEMENT 
 
6 
 
GOING CONCERN 
  
As part of its going concern review the Board has followed the guidelines published by the Financial Reporting 
Council entitled “Going Concern and Liquidity Risk: Guidance for UK Companies 2009”.  The Board has 
prepared detailed financial forecasts and cash flows for the three years to 30 June 2015 and in drawing up these 
forecasts the Board has made assumptions based upon its view of the current and future economic conditions in 
the UK that will prevail over the forecast period - given that the business is likely to be solely focused on the 
UK market for the foreseeable future. The timing of the cash flows in respect of loans provided has been taken 
into consideration and in addition to the forecasts we have produced sensitivities to these forecasts to test our 
ability to trade as a going concern for at least the following 12 months. In addition, I have provided the Board 
with an undertaking of support in the event that the Group should require additional finance. 
 
The Board believes that the use of the going concern basis of accounting is appropriate based upon a review of 
these forecasts and the finance available to the Group. 
 
FUTURE OUTLOOK 
 
The IVA market has plateaued and the numbers of new cases are not rising as expected due to declining 
disposable incomes of consumers and some resistance by certain creditors to the solution.  We are working on 
initiatives to increase our penetration whilst also considering new models to offer IVAs at much reduced levels 
of contribution to enable consumers to enter this solution. 
 
We continue to look for acquisitions of client books wherever we can at reasonable prices to supplement our 
growth as we know these can be highly profitable given the ease with which we can assimilate them into our 
scalable business model and systems.  
 
Given the current economic outlook in the UK with unemployment showing no signs of falling together with 
high taxation and continued public sector cuts I believe the Group is still well placed for another profitable year.  
 
I would like to take this opportunity to thank all our staff for their dedication and hard work over the last year 
and for their continuing advice and assistance to our thousands of clients.  
  
 
 
 
 
David Emanuel Merton Mond FCA FCCA 
Chief Executive Officer 
 
29 November 2012 ClearDebt Group plc 
DIRECTORS’ REPORT 
 
7 
 
The Directors present their report and the financial statements of the Group for the year ended 30 June 2012. 
 
ClearDebt Group plc is a public listed parent company, incorporated and domiciled in England, and quoted on 
AIM. 
 
Principal Activities and Review of the Business 
The principal activity of the Group is the provision of financial advice and appropriate solutions to individuals 
experiencing personal debt problems. 
 
The principal activity of the Company is that of a holding company. 
 
A review of the Group’s activities and its future prospects is detailed in the Chairman’s Statement on page 3 and 
the Chief Executive’s Statement on pages 4 to 6. 
 
Results and Dividends 
The trading results for the year and the Group’s financial position at the end of the year are set out in the 
attached financial statements. 
 
The Directors do not recommend payment of a final dividend (2011: nil). 
 
Share Capital 
The Company is aware of the following substantial interests in the ordinary share capital as at 23 November 
2012.  
 
    Number of shares held % of Total 
 
D E M Mond   119,054,616 38.61 
O Mond    17,459,800 5.66 
S Mond   15,305,734 4.96 
A Mond    14,555,733 4.72 
D Murray   11,921,125 3.87 
Ms M Joseph   11,351,467 3.68 
 
The Directors are not aware of any other person who is beneficially interested in 3% or more of the issued share 
capital. 
 
Directors who held office during the year 
The Directors of the Company who held office during the year are as follows: 
 
G Carey FCIB (Non-Executive Chairman) 
D E M Mond FCA FCCA 
A F Smith  
D M Shalom  
S Lee (appointed 25 May 2012) 
A J Leon FCA (Non-Executive) 
 
Payment of Creditors 
It is the Group’s policy to consider the terms of payment with suppliers when agreeing the terms of the 
transaction, to ensure that suppliers are aware of these terms and abide by them. Trade creditor days for the 
Group at 30 June 2012, were 18 days (2011: 16 days). This represents the ratio, expressed in days, between the 
amounts invoiced to the Group in the period by its suppliers and the amounts due, at the year end, to trade 
creditors falling due for payment within one year.   
 
 
 
  ClearDebt Group plc 
DIRECTORS’ REPORT 
 
8 
 
Employee Involvement 
The Group recognises and seeks to encourage the involvement of its employees, with the aim being the 
recruitment, motivation and retention of quality employees throughout the Group.  
 
The Group’s employment policies, including the commitment to equal opportunity, are designed to attract, 
retain and motivate employees regardless of sex, race, religion or disability. The Group is committed to ensuring 
and communicating the requirements for a safe and healthy working environment for all employees, consistent 
with health and safety legislation and, wherever practicable, gives full consideration to applications for 
employment from disabled persons. 
 
Principal Risks and Uncertainties 
All businesses face a range of risks and uncertainties, being subject to risk factors from internal and external 
sources. The Board considers the likelihood and significance of risk factors when putting in place risk 
management procedures to ensure risk mitigation. 
 
The following are considered to be the key risks facing the Group:- 
 
1. Competition - the market for debt resolution solutions remains highly competitive. The Group seeks 
to manage the risk of losing referrers through providing innovative solutions supported by high 
quality delivery. The Group’s main marketing channel still continues to be the internet and the 
Group monitors closely the strategies of competitors and the prices paid in the market place and 
reacts appropriately where necessary.  
 
2. Credit risk – the Group’s credit risk is attributable to its trade receivables and is managed by daily 
monitoring of client’s payments into their programmes versus agreed contracted terms. 
 
3. Funding arrangements – the Group monitors cash flow as part of its normal activities. Cash flow 
positions are discussed with the Board on a monthly basis to ensure that all possible treasury benefits 
are being taken and facilities are available if necessary. Advertising and marketing spend is 
monitored closely as it is a key component of funding requirements. 
 
4. Consultancy income - substantial revenue has been earned from consultancy income in relation to 
advice given to a third party to enable it to provide outsourced services to ClearDebt Limited and 
other companies which manage IVAs and Protected Trust Deeds (PTDs). These services are provided 
to, and paid for by, the estates of the respective IVAs and PTDs. Calculation of the amount of 
revenue due to ClearDebt Limited is based on the profit generated from those IVA and PTD cases by 
the third party. Should these services cease to be chargeable to the estates then the reduction in 
consultancy income would significantly affect the reported revenues and profits of ClearDebt Limited 
and the Group. 
 
5. Economic environment – the current economic climate is extremely favourable and the market for 
indebted consumers is likely to grow in the next few years. 
 
6. Creditor Pressure – Creditors can restrict the market for personal debt resolutions by refusing to 
agree to proposals which they do not deem acceptable. This can have the effect of restricting 
approvals and therefore the timing of fees. The Group is actively involved in talking to creditors 
constantly to ensure that all Group products are in line with creditor approval criteria as much as 
possible.   
 
 
Risks associated with financial instruments entered into by the Group are detailed in note 19. 
 
 
 
 
 
 
 
 
   ClearDebt Group plc 
DIRECTORS’ REPORT 
 
9 
 
Statement as to Disclosure of Information to Auditors 
The directors who were in office on the date of approval of these financial statements have confirmed, as far as 
they are aware, that there is no relevant audit information of which the auditors are unaware. Each of the 
directors has confirmed that they have taken all the steps that they ought to have taken as directors in order to 
make themselves aware of any relevant audit information and to establish that it has been communicated to the 
auditor. 
 
Auditors 
Baker Tilly UK Audit LLP, Chartered Accountants, will not be standing for re-election following the expiry of 
its term of office at the annual general meeting. 
 
By order of the Board 
 
 
 
 
D E M Mond 
Company Secretary 
 
29 November 2012 ClearDebt Group plc 
CORPORATE GOVERNANCE 
 
10 
 
Principles of Corporate Governance 
The Group’s Board appreciates the value of good corporate governance not only in the areas of accountability 
and risk management but also as a positive contribution to business prosperity. It believes that corporate 
governance involves more than a simple “box ticking” approach to establish whether a company has met the 
principles (including those set out in the corporate governance guidelines for AIM companies published by the 
Quoted Companies Alliance in September 2010) of a number of specific rules and regulations. Rather the issue 
is one of applying corporate governance in a sensible and pragmatic fashion having regard to the individual 
circumstances of a particular company’s business. The key objective is to enhance and protect shareholder 
value.  
 
Board Structure 
The Board is responsible to shareholders for the proper management of the Group. A statement of Directors’ 
responsibilities in respect of the accounts is set out on page 12.   
 
The Non-Executive Directors have a particular responsibility to ensure that the strategies proposed by the 
Executive Directors are fully considered.   
 
To enable the Board to discharge its duties, all Directors have full and timely access to all relevant information 
and there is a procedure for all Directors, in furtherance of their duties, to take independent professional advice, 
if necessary, at the expense of the Group. The Board has a formal schedule of matters reserved to it and meets 
monthly. It is responsible for overall group strategy, approval of major capital expenditure projects and 
consideration of significant financing matters.   
 
The following Committees have been set up, which have written terms of reference and deal with specific 
aspects of the Group’s affairs.   
 
1. The Remuneration Committee, which includes D E M Mond and the two Non-Executive Directors, is 
responsible for making recommendations to the Board on the Company’s framework of executive 
remuneration and its cost.  The Committee determines the contract terms, remuneration and other 
benefits for each of the Executive Directors, including pension rights and compensation payments. The 
Board itself determines the remuneration of D E M Mond and the Non-Executive Directors. The 
Committee meets as required.  
 
2. The Audit Committee includes the two Non-Executive Directors.  Its prime tasks are to review the 
scope of the external audit, to receive regular reports from Baker Tilly UK Audit LLP, and to review 
the half-yearly and annual accounts before they are presented to the Board, focusing in particular on 
accounting policies and areas of management judgment and estimation. The Committee is responsible 
for monitoring the controls, which are in force to ensure the integrity of the information reported to the 
shareholders. The Committee acts as a forum for discussion of internal control issues and contribute to 
the Board’s review of the effectiveness of the Group’s internal control and risk management systems 
and processes. It advises the Board on the appointment of external auditors and on their remuneration 
for both audit and non-audit work, and discusses the nature and scope of the audit with the external 
auditors. It reviews and monitors the independence of the auditors especially with regard to non-audit 
work. It meets at least twice a year including immediately before the submission of the annual and 
interim financial statements to the Board.   
 
Any new Non-Executive Directors will be asked to join both Committees.   
 
No formal nomination Committee exists in view of the stage of development of the Group. Instead appointments 
to the Board by the Chief Executive and other Executive Directors are discussed with the Non-Executive 
Chairman. Appointments are made after an evaluation of the skills, knowledge, and expertise required ensuring 
that the Board as a whole has the ability to ensure that the Group can continue to compete effectively in its 
market place. 
  ClearDebt Group plc 
CORPORATE GOVERNANCE 
 
11 
 
Internal Control 
The Directors are responsible for the Group’s system of internal control and for reviewing its effectiveness. The 
Board has designed the Group’s system of internal control in order to provide the Directors with reasonable 
assurance that its assets are safeguarded, that transactions are authorised and properly recorded and that material 
errors and irregularities are either prevented or would be detected within a timely period. However, no system of 
internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance 
against material misstatement or loss.  The key elements of the control system in operation are: 
 
a. The Board meets regularly with a formal schedule of matters reserved to it for decision and has put in 
place an organisational structure with clear lines of responsibility defined and with appropriate 
delegation of authority;  
 
b. There are procedures for planning, approval and monitoring of capital expenditure and information 
systems for monitoring the Group’s financial performance against approved budgets and projections;  
 
The process adopted by the Group accords with the guidance contained in the document “Internal Control 
Guidance for Directors on the Combined Code” issued by the ICAEW. 
 
The Audit Committee receives reports from the external auditors on a regular basis and from Executive 
Directors of the Group. During the period, the Board has reviewed the effectiveness of the system of internal 
control as described above. The Board has considered whether the Group’s internal controls processes would be 
significantly enhanced by an internal audit function and has taken the view that at the Group’s current stage of 
development, this is not required. The Board will continue to review this matter each year. The Board receives 
periodic reports from all Committees. 
 
There are no significant issues disclosed in the financial statements for the period ended 30 June 2012 and up to 
the date of approval of the report and financial statements that have required the Board to deal with any related 
material internal control issues. 
 
Relations with Shareholders 
The Group values its dialogue with both institutional and private investors. Effective two-way communication 
with fund managers, institutional investors and analysts is actively pursued and this encompasses issues such as 
performance, policy and strategy. During the period the Directors have had meetings with analysts and 
institutions and will continue to do so. 
 
There is also an opportunity, at the Company’s Annual General Meeting for individual shareholders to raise 
general business matters with the full Board and notice of the Company’s Annual General Meeting is circulated 
to all shareholders at least 20 working days before such meeting. The Chairman of the Audit and Remuneration 
Committee will be available at the Annual General Meeting to answer questions. 
  ClearDebt Group plc 
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 
IN RESPECT OF THE FINANCIAL STATEMENTS 
 
12 
 
The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with 
applicable law and regulations. 
  
Company law requires the directors to prepare Group and Company Financial Statements for each financial 
year.  The directors are required by the AIM Rules of the London Stock Exchange to prepare Group financial 
statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European 
Union (“EU”) and have elected under company law to prepare the company financial statements in accordance 
with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and 
applicable law). 
  
The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial 
position and performance of the Group; the Companies Act 2006 provides in relation to such financial 
statements that references in the relevant part of that Act to financial statements giving a true and fair view are 
references to their achieving a fair presentation. 
 
Under company law the directors must not approve the financial statements unless they are satisfied that they 
give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the 
Group for that period.  
  
In preparing each of the Group and Company financial statements, the directors are required to: 
  
a. select suitable accounting policies and then apply them consistently; 
  
b. make judgements and accounting estimates that are reasonable and prudent; 
  
c.  for the Group financial statements, state whether they have been prepared in accordance with IFRSs 
adopted by the EU; and for the Company financial statements state whether applicable UK accounting 
standards have been followed, subject to any material departures disclosed and explained in the 
Company financial statements. 
 
d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 
Group and the Company will continue in business; 
 
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 
Group’s and the Company’s transactions and disclose with reasonable accuracy at any time the financial 
position of the Group and Company and enable them to ensure that the financial statements comply with the 
Companies Act 2006. They are also responsible for safeguarding the assets of the Group and the Company and 
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. 
 
The directors are responsible for the maintenance and integrity of the corporate and financial information 
included on the ClearDebt Group plc website. Legislation in the United Kingdom governing the preparation and 
dissemination of financial statements may differ from legislation in other jurisdictions. 
   
ClearDebt Group plc 
DIRECTORS’ REMUNERATION REPORT 
 
13 
 
The Board’s Remuneration Committee, which currently comprises Gerald Carey (Non-Executive Chairman), 
Anthony Leon ( Non-executive director) and David Mond (Chief Executive Officer), makes recommendations 
to the Board within agreed terms of reference in determining specific remuneration packages for each of the 
Directors, including pension rights. 
 
Members of the Committee who have a personal financial interest in the matters to be decided are not involved 
in decisions.  In arriving at its recommendations, the Committee has access to professional advice from both 
within and outside the Company.   
 
Remuneration Policy 
Each remuneration package is reviewed against a background of published comparative information on the 
remuneration of Executive Directors in similar positions, taking into account the industry, the region of 
employment, the type of work and the size of the Company.  The extent to which the recommended 
remuneration is above or below average takes account of the Director’s qualifications and length of service with 
the Company, the Director’s actual performance and the performance of the Company.  This will remain the 
policy for forthcoming years. 
 
Directors’ Emoluments 
The emoluments of the Directors from the date of their appointment during the financial year ended 30 June 
2012 were as follows: 
 
  2012 2012 2012 2011 
    Total Total 
  Salary &   Salary & Salary & 
  Benefits Pensions  Benefits Benefits 
  £’000 £’000 £’000 £’000 
Executive Directors 
David Mond (Chief Executive) 125 - 125 125 
David Shalom (Finance Director) 79 10 89 83 
Andrew Smith (Marketing Director) 52 - 52 54 
Simon Lee (Operations Director) - appointed 25 May 2012 5 - 5 - 
 
Non-Executive Directors 
Gerald Carey (Chairman) 18 - 18 18 
Anthony Leon 12 - 12 12 
  ___ ___ ___ ___ 
Aggregate remuneration 291 10 301 292 
  ___ ___ ___ ___ 
  
 
The present Directors’ positions are currently not pensionable although David Shalom has entered into an 
agreement to sacrifice part of his salary in return for pension payments into his SIPP. 
 
Options 
Options have been granted to directors under an EMI scheme.  The granting of options ensures that the holders 
are incentivised to concentrate on growing shareholder value.  During the year 3,000,000 options were granted 
leaving options outstanding over 5,500,000 ordinary shares at a weighted average exercise price of 1.82p per 
ordinary share.   
 
The mid-market price of the Company’s shares on 30 June 2012 was 1.31p and the high and low share prices 
during the year were 1.2p and 2.9p respectively.   
 
Directors’ Service Agreements 
Anthony Leon, Gerald Carey and David Mond all have agreements subject to 6 months’ notice. David Shalom, 
Andrew Smith and Simon Lee all have service agreements subject to 12 months’ notice. 
 
  ClearDebt Group plc 
DIRECTORS’ REMUNERATION REPORT 
 
14 
 
Directors’ Interests 
The interests of the Directors in the ordinary shares of the Company as at 30 June 2012 and 23 November 2012 
were as follows:- 
 
 Ordinary Shares   
 At 0.005p each At 0.005p each 
 At 30 June At 30 June 
 2012 2011 
David Mond 119,054,616 119,054,616 
Andrew Smith 6,750,000 6,750,000 
David Shalom  2,150,000 2,150,000 
Gerald Carey 1,020,000 1,020,000 
Anthony Leon 500,000 500,000 
 
The directors held the following interests in share options as at 30 June 2012 and 23 November 2012. 
 
  At 30 June At 30 June Option Date Expiry 
 Scheme 2012 2011 Price Exercisable Date 
 
 
David Mond EMI 375,000 375,000 2.00p 07.10.12 07.10.19 
David Mond EMI 500,000 500,000 1.75p 21.09.13 21.09.20 
David Mond EMI 750,000 - 1.75p 31.10.14 31.10.21 
Andrew Smith EMI 375,000 375,000 2.00p 07.10.12 07.10.19 
Andrew Smith  EMI 750,000 - 1.75p 31.10.14 31.10.21 
David Shalom EMI 375,000 375,000 2.00p 07.10.12 07.10.19 
David Shalom EMI 500,000 500,000 1.75p 21.09.13 21.09.20 
David Shalom  EMI 750,000 - 1.75p 31.10.14 31.10.21 
Simon Lee  EMI 375,000 375,000 2.00p 07.10.12 07.10.19 
Simon Lee  EMI 750,000 - 1.75p 31.10.14 31.10.21 
 
  INDEPENDENT AUDITOR’S REPORT 
TO THE MEMBERS OF CLEARDEBT GROUP PLC 
 
15 
 
We have audited the Group and Parent Company financial statements which comprise the Consolidated 
Statement of Comprehensive Income, Consolidated Statement of Financial Position, the Company Balance 
Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity and the 
related notes. The financial reporting framework that has been applied in the preparation of the Group financial 
statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the 
European Union.  The financial reporting framework that has been applied in the preparation of the Parent 
Company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom 
Generally Accepted Accounting Practice).  
 
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 auditor’s 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 
As more fully explained in the Directors’ Responsibilities Statement set out on page 12 the directors are 
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair 
view.  Our responsibility is to audit and express an opinion on the financial statements in accordance with 
applicable law and International Standards on Auditing (UK and Ireland).  Those standards require us to comply 
with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.  
 
Scope of the audit of the financial statements 
A description of the scope of an audit of financial statements is provided on the APB’s website at 
www.frc.org.uk/apb/scope/private.cfm. 
 
Basis for qualified opinion on the financial statements 
Revenues of £1,307,992 have been reported in the Group financial statements for the year ended 30 June 2012 
(2011: £361,341) for consultancy services provided to a corporate entity which is a related party under the 
definitions of IAS 24 “Related Party Disclosures”.  In respect of these revenues, we have not been able to 
obtain sufficient appropriate evidence as to: 
 
1) the substance of the services provided; or 
2) whether the amounts recognised have been correctly stated and/or recognised in the correct 
accounting period, or in accordance with the terms of the contract which, we are informed, governs 
these revenues.  
 
Qualified opinion on the financial statements 
In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion 
paragraph: 
 
• the financial statements give a true and fair view of the state of the Group’s and of the Parent 
Company’s affairs as at 30 June 2012 and of the Group’s profit for the year then ended; 
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by 
the European Union;  
• the Parent Company financial statements have been properly prepared in accordance with United 
Kingdom Generally Accepted Accounting Practice; and 
• the financial statements have been prepared in accordance with the requirements of the Companies Act 
2006. 
 
Opinion on other matters prescribed by the Companies Act 2006 
In our opinion the information given in the Directors’ Report for the financial year for which the financial 
statements are prepared is consistent with the financial statements. 
   
INDEPENDENT AUDITOR’S REPORT 
TO THE MEMBERS OF CLEARDEBT GROUP PLC 
 
16 
 
Matters on which we are required to report by exception 
In respect solely of the limitation on our work relating to revenues from consultancy services, described above:  
 
• we have not obtained all the information and explanations that we considered necessary for the purpose 
of our audit; and  
• we were unable to determine whether adequate accounting records had been kept. 
 
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: 
 
• 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.  
 
 
 
 
 
 
GEOFF WIGHTWICK FCA (Senior Statutory Auditor) 
For and on behalf of BAKER TILLY UK AUDIT LLP, Statutory Auditor  
Chartered Accountants 
3 Hardman Street 
Manchester 
M3 3HF 
 
 
29 November 2012  ClearDebt Group plc 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
For the year ended 30 June 2012 
 
17 
 
   2012 2011 
 Notes  £ £ 
Revenue 
- ongoing 3  9,056,403 7,582,367 
- acquisitions   147,050 193,995 
   _________ _________ 
   9,203,453 7,776,362 
 
Cost of sales   (4,525,379) (3,812,403) 
   _________ _________ 
Gross profit   4,678,074 3,963,959 
 
Administrative expenses   (1,854,384) (1,678,623) 
Share based payment  16  (85,723) (62,925) 
   _________ _________ 
Profit before interest, tax,  
depreciation and amortisation   2,737,967 2,222,411 
 
Depreciation 10  (147,490) (132,437) 
Amortisation 9  (1,199,481) (1,388,809) 
Gain on bargain purchase 17  27,089 54,985 
   _________ _________ 
Profit from operations 3 & 4  1,418,085 756,150 
 
Profit from continuing operations   1,371,105 747,112 
Profit from acquisitions 17  46,980 9,038 
 
Finance costs 5  (585,611) (532,404) 
Finance income   2,284 3,473 
   _________ _________ 
Profit before taxation   834,758 227,219 
 
Taxation 7  (243,501) (156,183) 
   _________ _________ 
Profit after taxation and total comprehensive  
income for year   591,257 71,036 
   _________ _________ 
Amount attributable to: 
 
Owners of the parent    591,257 71,036       
  
Earnings per ordinary share - basic (pence) 8 0.19p 0.02p 
Earnings per ordinary share - diluted (pence) 8 0.19p 0.02p 
   _________ _________ 
 
 
  ClearDebt Group plc 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
As At 30 June 2012      Company Number 02441375 
 
18 
 
 
  2012 2011 
 Notes £ £ 
Assets 
 
Non-current assets 
Intangible assets 9 5,626,779 6,476,691 
Property, plant and equipment 10 375,593 252,998 
Deferred taxation  14 72,034 78,188 
  __________ _________ 
  6,074,406 6,807,877 
Current assets 
Trade and other receivables 11 3,428,878 2,181,959 
Cash and cash equivalents  462,459 336,636 
  __________ _________ 
  3,891,337 2,518,595 
  __________ _________ 
Total assets  9,965,743 9,326,472 
  __________ _________ 
 
Equity and liabilities 
 
Equity 
Issued capital 15 6,166,812 6,166,812 
Share premium  279,948 279,948 
Share based compensation  289,035 203,312 
Other reserves  96,495 96,495 
Retained losses  (1,004,728) (1,595,985) 
  __________ _________ 
Total equity attributable to the owners of the parent  5,827,562 5,150,582 
  __________ _________ 
 
Current liabilities 
Trade and other payables 12 912,166 698,255 
Corporation tax payable 12 263,970 92,662 
Current financial liabilities  12 2,597,306 - 
  __________ _________ 
  3,773,442 790,917 
Non-current liabilities 
Financial liabilities 13 315,000 3,318,309 
Deferred taxation 14 49,739 66,664 
  __________ _________ 
Total liabilities  4,138,181 4,175,890 
  __________ _________ 
Total equity and liabilities  9,965,743 9,326,472 
  __________ _________ 
 
The financial statements were approved by the Board of Directors and authorised for issue on 29 November 2012 
and are signed on its behalf by: 
 
 
D E M Mond 
Director  ClearDebt Group plc 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
For the year ended 30 June 2012 
 
19 
 
 
 Issued Share Share   Share Based Other Retained Total 
 Capital Premium Compensation Reserves Losses Equity 
 £ £ £ £ £ £ 
 
Balance as at 1 July 2010 6,166,812 279,948 140,387 96,495 (1,667,021) 5,016,621 
 
 
Share based compensation - - 62,925 - - 62,925 
 
Total comprehensive income - - - - 71,036 71,036 
for the year   
 ________ ________ ________ _______ ________ ________ 
 
Balance as at 30 June 2011 6,166,812 279,948 203,312 96,495 (1,595,985) 5,150,582 
 
 
Share based compensation - - 85,723 - - 85,723 
 
 
Total comprehensive income - - - - 591,257 591,257 
for the year   
 ________ ________ ________ _______ _________ ________ 
 
Balance as at 30 June 2012  6,166,812 279,948 289,035 96,495 (1,004,728) 5,827,562 
 ________ ________ ________ _______ _________ ________ 
 
Share capital 
Share capital has arisen on the issue of shares and represents the nominal value of shares issued. 
 
Share premium 
The share premium account arose from the issue of equity shares above the nominal value less share issue costs. 
 
Share based compensation  
This reserve is the result of the Company’s grant of equity settled share options and warrants and measured in 
accordance with IFRS2 share-based payment. 
 
Other reserves   
This reserve is the result of the Company’s issue of secured convertible loan notes in April 2010 in accordance 
with IAS 32 – Financial Instruments: Presentation. 
 
Retained losses 
The retained losses reflect losses incurred to date. 
  ClearDebt Group plc 
CONSOLIDATED STATEMENT OF CASH FLOWS 
For the year ended 30 June 2012 
 
20 
 
   
 Notes 2012 2011 
  £ £ 
Cash flow from continuing operating activities 
 
Profit before taxation  834,758 227,219 
Depreciation of property, plant and equipment  147,490 132,437 
Amortisation of intangible assets  1,199,481 1,388,809 
Gain on bargain purchase   (27,089)  (54,985) 
Profit on sale of fixed assets   (1,739) - 
Share based payment  85,723 62,925 
Increase in trade and other receivables  (1,246,980) (928,733) 
Finance costs  585,611 532,404 
Finance income  (2,284) (3,473) 
Increase/(decrease)in trade and other payables  213,973 (310,896) 
  _________ _________ 
Cash generated by operations  1,788,944 1,045,707 
Corporation tax (paid)/refunded  (91,995) 8,794 
  _________ _________ 
 Net cash generated by operating activities  1,696,949 1,054,501 
 
Investing activities 
 
Acquisition of business and assets 17 (267,080) (1,088,783) 
Acquisition of intangibles  (46,370) (37,170) 
Acquisition of property, plant and equipment  (270,085) (157,443) 
Finance income  2,284 3,473 
Sale of property, plant and equipment  1,739 - 
  _________ _________ 
Net cash used in investing activities  (579,512) (1,279,923) 
 
Financing activities 
Repayment of existing loans  (700,000) - 
Proceeds from new loans advanced  - 315,000 
Interest on loans  (291,614) (294,446) 
  _________ _________ 
Cash (used by)/generated from financing activities  (991,614) 20,554 
 
Increase/(decrease) in cash and cash equivalents  125,823 (204,868)  
Opening cash and cash equivalents  336,636 541,504 
  _________ _________ 
Closing cash and cash equivalents  462,459 336,636 
  _________ _________  ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
21 
 
1. General information 
 
ClearDebt Group plc is a company incorporated and domiciled in the United Kingdom under the Companies Act 
2006.  The Group’s functional and presentational currency is £ sterling. 
 
Interpretations of standards  
 
The following accounting standards, interpretations and amendments have been adopted by the Company since 1 
July 2011 with no significant impact on its results or financial position: 
 
IFRS 7 Amendment “Financial Instrument Disclosures”: Transfers of Financial Assets 
IAS 24 Amendment “Related Party Disclosures”   
IFRIC 14 Amendment “Pre-payments of a Minimum Funding Requirement”. 
 
Annual Improvement to IFRSs (May 2010)   
 
The following standards, interpretations and amendments to existing standards have been published and are 
mandatory for the Company’s accounting periods beginning on or after 1 July 2012 or later periods, but which 
have not been adopted by the Company: 
 
IFRS 7           Amendment related to transition to IFRS is effective from 1 January 2015 
IFRS 9  “Financial Instruments” is effective from 1 January 2015. 
IFRS 10  “Consolidated Financial Statements”. 
IFRS 11  “Joint Arrangements”. 
IFRS 12  “Disclosures of Interest in Other Entities”. 
IFRS 13  “Fair Value Measurement”. 
IAS 1  Amendments from annual improvements effective May 2012. 
IAS 12  Amendment “Deferred Tax: Recovery of Underlying Assets”. 
IAS 27  (revised 2011) “Separate Financial Statements” 
IAS 28 (revised) “Associate and Joint Venture”. 
IAS 32 Amendments from annual improvements effective May 2012 
 
2. Significant Accounting Policies 
 
Basis of Preparation 
The financial statements have been prepared in accordance with International Financial Reporting Standards and 
IFRIC interpretations as endorsed by the European Union (IFRS) and the requirements of the Companies Act 
2006 applicable to companies reporting under IFRS. 
 
The financial statements have been prepared on the historic cost basis.  The principal accounting policies adopted 
are set out below. 
 
Going concern 
As part of its going concern review the Board has followed the guidelines published by the Financial Reporting 
Council entitled “Going Concern and Liquidity Risk: Guidance for UK Companies 2009”.  The Board has 
prepared detailed financial forecasts and cash flows for the three years to 30 June 2015 and in drawing up these 
forecasts the Board has made assumptions based upon its view of the current and future economic conditions in 
the UK that will prevail over the forecast period - given that the business is likely to be solely focused on the UK 
market for the foreseeable future. The timing of the cash flows in respect of loans provided has been taken into 
consideration and in addition to the forecasts the Board has produced sensitivities to these forecasts to test the 
Group’s ability to trade as a going concern for at least the following 12 months. In addition, Mr DEM Mond has 
provided the Board with an undertaking of support in the event that the Group should require additional finance. 
 
The Board believes that the use of the going concern basis of accounting is appropriate based upon a review of 
these forecasts and the finance available to the Group.   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
22 
 
2. Significant Accounting Policies (continued) 
 
Critical Accounting Estimates and Judgements 
The preparation of the financial information in conformity with IFRS requires management to make judgements, 
estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, 
income and expenses.  The estimates and associated assumptions are based on historical experience and various 
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of 
making the judgements about carrying values of assets and liabilities.  Actual results may differ from these 
estimates.  The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting 
estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in 
the period of the revision and future periods if the revision affects both current and future periods. 
 
The principal balances that have been estimated relate to:- 
- estimates of future cash flows for the goodwill impairment review ( see note 9) 
- estimates in respect of the future recoverability of the deferred tax asset in respect of losses brought 
forward ( see note 14) 
- estimates of the fair value of intangible assets acquired ( see note 17) 
 
Basis of Consolidation 
Where the company has the power, either directly or indirectly, to govern the financial and operating policies of 
another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary.  The 
consolidated financial statements present the results of the company and its subsidiaries (“the Group”) as if they 
formed a single entity.  Inter-company transactions are therefore eliminated in full. 
 
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies 
used in line with those used by the Group.  
 
Business Combinations 
The consolidated financial statements incorporate the results of business combinations using the purchase method.  
In the consolidated statement of financial position, 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 income statement from the date on which control is obtained. 
 
Goodwill represents the excess of the cost of a business combination over the interest in the fair value of 
identifiable assets, liabilities and contingent liabilities acquired.  Cost comprises the fair values of assets given, 
liabilities assumed and equity instruments issued. 
 
Goodwill 
Goodwill arising on acquisition of subsidiaries or business is recognised as a separate asset on the statement of 
financial position after the recognition at fair value of any other intangible assets identified at the time of 
acquisition. 
 
Goodwill is capitalised as an intangible asset.  Where the fair value of identifiable assets, liabilities and contingent 
liabilities exceeds the fair value of consideration paid, the excess is credited in full to the Group income statement 
on the acquisition date.  The Group carries out annual impairment tests for goodwill.  Impairment losses in respect 
of goodwill are recognised immediately in the income statement and are not reversed. 
 
 
 
 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
23 
 
2. Significant Accounting Policies (continued) 
 
Impairment 
At each reporting date, the Group reviews the carrying amounts of its intangibles and property, plant and 
equipment to determine whether there is any indication that those assets have suffered an impairment loss.  If any 
such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the 
impairment loss (if any).  Where the asset does not generate cash flows that are independent of other assets, the 
Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. 
 
Recoverable amount is the higher of fair value less costs to sell and value in use.  In assessing value in use, the 
estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current 
market assessments of the time value of money and the risks specific to the asset for which the estimates of future 
cash flows have been adjusted. 
 
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the 
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount, in which case the 
impairment loss is treated as expenses in the consolidated income statement.  
 
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is 
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not 
exceed the carrying amount that would have been determined had no impairment loss been recognised for the 
asset (cash-generating unit) in prior years.  A reversal of an impairment loss is recognised as income immediately.  
 
Other Intangible Assets 
Internal and externally acquired intangible assets are initially recognised at cost and subsequently amortised over 
their useful economic lives.  The amortisation expense is shown separately on the face of the Consolidated Income 
Statement.  The significant intangibles recognised by the Group, their useful economic lives and the methods used 
to determine the cost of intangibles acquired in a business combination are as follows:- 
 
Software and other development costs  - 4 years straight line 
Intangible assets - Debt management back books - 12-18 months straight line 
Intangible assets – Insolvency back books  - 3-4 years straight line  
 
Expenditure arising from the Group’s development costs and software development is recognised only if all of the 
following conditions are met: 
 
- an asset is created that can be identified; 
- it is probable that the asset created will generate future economic benefits; 
- the development cost of the asset can be measured reliably; 
- the Group has the intention to complete the asset and the ability and intention to use or sell it; 
- sufficient resources are available to complete the development and to either sell or use the asset. 
 
Where the criteria have not been achieved, software development expenditure is recognised as an expense in the 
period in which it is incurred. 
 
Segmental Reporting  
Management determines its operating segments by identifying components: 
 
a) that engage in business activities that earn revenues and incur expenses (including revenues and expenses 
relating to transactions with other components of the Group),  
b) whose operating results are regularly reviewed by the entity’s chief operating decision maker, the board 
of directors of ClearDebt Group plc, to make decisions about resources to be allocated to the segment, 
and 
c) for which discrete financial information is available. 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
24 
 
2. Significant Accounting Policies (continued) 
 
Revenue 
Revenue is recognised at the fair value of amounts receivable or received in relation to a range of services 
provided to clients as follows: 
 
Individual Voluntary Arrangements (IVA) 
Fees are earned for arranging and administering IVAs on behalf of individuals experiencing debt problems.  
Generally, revenue is accrued based upon the stage of completion of specific client contracts where the outcome 
can be assessed with reasonable certainty and the value for that service has been agreed between the Group and 
the client. 
 
Nominee fees 
Nominee fees are recognised upon the approval of an IVA proposal at a creditors meeting. 
 
Supervisory fees 
Supervisory fees are accrued on a monthly basis over the duration of the arrangement as the service is provided. 
 
Protected Trust Deeds (PTD) 
Fees earned in respect of PTDs are recognised when received. 
 
Debt management services 
Fees are receivable for the management of debts on behalf of clients experiencing financial difficulties.  Fees are 
recognised upon receipt of client payments on the basis that these arrangements are informal and there is no 
certainty that economic benefits will accrue until a payment is received. 
 
Commissions and payment protection mis-selling claims income 
The Group also receives commission income from the referral of loans and other products as well as fees in 
respect of claims for mis-sold payment protection products.  Commissions are recorded as they are received. 
 
Consultancy income 
Revenue from consultancy income is accrued in accordance with contractual agreements in place which provide 
for revenue to fall due at the time contracted services are provided by a third party. Revenue is calculated as a 
proportion of the profit made by that third party from the provision of those services. 
 
Prepayment Card services 
The Group receives a revenue share from the issue and usage charges in respect of the ClearCash prepaid 
MasterCard. Income and charges are recognised in the period in which they were incurred by the card user.   
 
Property, Plant and Equipment 
All property, plant and equipment are initially recorded at cost.  Depreciation is provided at rates calculated to 
write off the cost less residual value of each asset over its expected useful life, as follows: 
 
Leasehold improvements  - 25% straight line 
Fixtures and fittings   - 25% straight line 
 
Residual value and estimated remaining lives are reviewed annually. 
 
Provisions 
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past 
event which it is probable will result in an outflow of economic benefits that can be reliably estimated.  If the 
effect of time value of money is material, provisions are determined by discounting the expected future cash flows 
at a pre-tax rate that reflects current market assessments of the time value of money. 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
25 
 
2. Significant Accounting Policies (continued) 
 
Share-based Compensation 
Equity-settled share-based payments are measured at the fair value of services received in exchange for the grant 
of options or warrants.  The fair value determined is recognised as an expense if it relates to trading activities or in 
the share premium account if it relates to the issue of equity instruments.  The total amount to be expensed over 
the vesting period is determined by reference to the fair value of the options or warrants granted, excluding the 
impact of any non-market vesting conditions (for example, profitability and growth targets).  Non-market vesting 
conditions are included in the assumptions about the number of options or warrants that are expected to become 
exercisable.   
 
At each reporting date, the Group revises its estimates of the number of options or warrants that are expected to 
become exercisable.  It recognises the impact of the revision of original estimates, if any, in the income statement, 
and a corresponding adjustment to reserves over the remaining vesting period. 
 
The proceeds received net of any attributed transaction costs are credited to share capital (nominal value) and 
share premium when the options or warrants are exercised. Non vesting conditions which are not satisfied during 
the vesting period, are treated as cancellations and any remaining expense is accelerated in the period of failure. 
 
Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, 
based on management’s best estimate, for the effect of non-transferability, exercise restrictions and behavioural 
considerations. 
 
Leasing 
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant 
lease. 
 
Financial Instruments 
Financial assets and financial liabilities are recognised in the statement of financial position when the Group has 
become a party to the contractual provisions of the instrument. 
 
Trade and other receivables 
Trade receivables are classified as loans and other receivables in accordance with IAS 39, measured on initial 
recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method.  
Appropriate allowances for estimated irrecoverable amounts are recognised in the consolidated income statement 
when there is objective evidence that the asset is impaired.  The allowance recognised is measured as the 
difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at 
the effective interest rate computed at initial recognition. 
 
Cash and cash equivalents 
Cash and cash equivalents comprise cash at bank and in hand, deposits held at call with banks and other short-
term highly liquid investments with original maturities of three months or less and are classified as other loans and 
receivables in accordance with IAS 39. 
 
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of amounts as defined above. 
 
Financial liabilities 
Financial liabilities are classified according to the substance of the contractual arrangements entered into.  An 
instrument will be classified as a financial liability when there is a contractual obligation to deliver cash or another 
financial asset to another enterprise. 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
26 
 
2. Significant Accounting Policies (continued) 
 
Trade and other payables  
Trade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest 
method. They are classified as “Other liabilities” in accordance with IAS 39. 
 
Borrowings 
Interest-bearing bank loans and overdrafts are classified as “other liabilities” in accordance with IAS 39.  They are 
initially recorded at their fair value, net of any transaction costs associated with borrowings.  Borrowings are 
subsequently stated at amortised cost. 
 
Finance charges, including premiums payable on settlement or redemption, are expensed to the income statement 
over the term of the instrument using an effective rate of interest and are added to the carrying amount of the 
instrument to the extent that they are not settled in the period in which they arise. 
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of 
the liability for at least 12 months after the reporting date. 
 
Secured convertible loan notes 
Convertible loan notes are regarded as compound instruments, consisting of a liability component and an equity 
component. At the date of issue, the fair value of the liability component is estimated using the prevailing market 
interest rate for similar non-convertible debt. The difference between the proceeds of issue of the convertible loan 
notes and the fair value assigned to the liability component, representing the embedded option to convert the 
liability into equity of the Group, is included in equity. 
 
Issue costs are apportioned between the liability and equity components of the convertible loan notes based on 
their relative carrying amounts at the date of issue.  The portion relating to the equity component is charged 
directly against equity. 
 
The interest expense on the liability component is calculated by applying the prevailing market interest rate for 
similar non-convertible debt to the instrument. The difference between this amount and the interest paid is added 
to the carrying value of the convertible loan note. 
 
Taxation 
The tax expense represents the sum of the current tax expense and deferred tax expense.  Taxable profits differ 
from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or 
expense that are taxable or deductible in other years and it further excludes items that are not taxable or 
deductible.  The Group’s liability for current tax is calculated by using tax rates that have been enacted or 
substantively enacted by the reporting date. 
 
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets 
and liabilities in the financial statements are the corresponding tax bases used in the computation of taxable profit, 
and is accounted for using the balance sheet liability method.  Deferred tax liabilities are recognised for all taxable 
temporary differences  and deferred tax assets are recognised to the extent that it is probable that taxable profits 
will be available against which the deductible temporary differences can be utilised.  Such assets and liabilities are 
not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial 
recognition (other than in a business combination) of other assets and liabilities in a transaction which affects 
neither the tax profit nor the accounting profit. 
 
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the 
liability is settled based upon tax rates that have been enacted or substantively enacted by the reporting date.  
Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged 
directly to equity, in which case the deferred tax is also dealt with in equity. 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
27 
 
3. Segmental Information 
 
The Group’s total income, profit before taxation and net assets were all derived from its principal activities being 
the provision of IVA and other financial advice and appropriate solutions to individuals experiencing personal 
debt problems.  All the Group’s activities were undertaken wholly in the United Kingdom. 
 
During the year ClearDebt Limited had one customer which accounted for revenue of £1,443,351 (2011: 
£361,341).  Of this revenue, £1,307,992 (2011: £361,341) is from the provision of consultancy services and has 
been reported on as part of the insolvency segment of the business as it is not separately identified to, and 
reviewed by, the Group’s chief operating decision maker. A further £135,359 (2011: £nil) relates to the 
management of debt management clients and is recorded within the debt management segment of the business. 
 
 
 
Year ended 30 June 2012 
  Debt Total  Debt Total 
 Insolvency Management 2012 Insolvency Management 2011 
 £ £ £ £ £ £ 
Revenue 
- Ongoing 6,144,226 2,912,177 9,056,403 4,843,540 2,738,827 7,582,367 
- Acquisition  147,050 - 147,050 - 193,995 193,995  
 _________ _________ _________ _________ _________ _________ 
 
Total Revenue 6,291,276 2,912,177 9,203,453 4,843,540 2,932,822 7,776,362 
 
Cost of sales (2,796,908) (1,728,471) (4,525,379) (2,355,997) (1,456,406) (3,812,403) 
 _________ _________ _________ _________ _________ _________ 
 
Gross Profit  3,494,368 1,183,706 4,678,074 2,487,543 1,476,416 3,963,959 
 
Administrative expenses (1,174,368) (680,016) (1,854,384) (1,072,653) (605,970) (1,678,623) 
Share based payment  (47,310) (38,413) (85,723) (30,380) (32,545) (62,925) 
 ________ _________ _________ _________ _________ _________ 
 
Profit before interest, tax 2,272,690 465,277 2,737,967 1,384,510 837,901 2,222,411 
depreciation and amortisation   
 
Depreciation (106,183) (41,307) (147,490) (59,674) (72,763) (132,437) 
Amortisation (1,031,677) (167,804) (1,199,481) (892,425) (496,384) (1,388,809) 
Gain on bargain purchase  27,089 - 27,089 33,648 21,337 54,985 
 ________ _________ _________ _________ _________ _________ 
 
Profit from operations  1,161,919 256,166 1,418,085 466,059 290,091 756,150 
 
Finance costs (468,489) (117,122) (585,611) (374,368) (158,036) (532,404) 
Finance income 2,284 - 2,284 3,473 - 3,473 
 _________ _________ _________ _________ _________ _________ 
 
Profit before taxation 695,714 139,044 834,758 95,164 132,055 227,219 
  
Taxation (178,059) (65,442) (243,501) (121,849) (34,334) (156,183) 
 _________ _________ _________ _________ _________ _________ 
  
Profit after tax 517,655 73,602 591,257 (26,685) 97,721 71,036 
 _________ _________ _________ _________ _________ _________  ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
28 
 
3. Segmental Information (continued) 
 
Net operating assets are reconciled to equity funds as follows: 
 
  2012 2011 
  £ £ 
Gross assets 
Insolvency  9,717,031 7,492,638 
Debt management  248,712 1,833,834 
  _________ _________ 
  9,965,743 9,326,472 
  _________ _________ 
Gross liabilities  
Insolvency  3,242,955 2,530,762 
Debt management  895,226 1,645,128 
  _________ _________ 
  4,138,181 4,175,890 
  _________ _________ 
Capital expenditure to acquire property, plant and equipment 
Insolvency  240,240 152,063 
Debt management  29,845 5,380 
  _________ _________ 
  270,085 157,443 
  _________ _________ 
Capital expenditure to acquire intangible assets 
Insolvency   349,569 799,806 
Debt management  - 300,647 
  _________ _________ 
  349,569 1,100,453 
  _________ _________ 
Depreciation of property, plant and equipment 
Insolvency  106,183 59,674 
Debt management  41,307 72,763 
  _________ _________ 
  147,490 132,437 
  _________ _________ 
Amortisation of intangible assets 
Insolvency  1,031,677 892,425 
Debt management  167,804 496,384 
  _________ _________ 
  1,199,481 1,388,809 
  _________ _________ 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
29 
 
4.   Profit from Operations 
  2012 2011 
  £ £ 
Profit from operations is stated after charging: 
Depreciation of owned assets  147,490 132,437 
Amortisation  1,199,481 1,388,809 
Profit on sale of fixed assets  (1,739) - 
Share based payment   85,723 62,925 
Operating lease rentals – buildings  113,998 133,591 
Operating lease rentals – other   29,432 20,022 
Auditor’s remuneration – audit  11,600 11,250 
Auditor’s remuneration – other services  27,850 34,175 
  _______ _______ 
 
  
Amounts payable to Baker Tilly UK Audit LLP and their associates in respect of both audit and non-audit 
services: 
 
 
  2012 2011 
 £ % £ % 
Audit services 
- Statutory audit of parent and consolidated accounts 11,600 29% 11,250 25% 
Other services 
Fees payable to the company’s auditor and its associates for  
other services: 
- Audit of subsidiaries pursuant to legislation  24,400 62% 24,775 55% 
- Tax compliance services 2,500 6% 2,500 5% 
- Corporate finance transactions -  4,500 10% 
- Other services  950 3% 2,400 5% 
 _______  _______ 
 39,450  45,425 
 _______  ______ 
 
 
5. Finance Costs   
   2012 2011 
   £ £ 
 
Interest payable on loans  61,614 64,444 
Interest payable on convertible loan notes  230,000 230,000 
Interest payable on redemption of convertible loan notes  293,997 237,960 
  ________ ________ 
   585,611 532,404 
   ________ ________ 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
30 
 
6. Employees 
 
Number of Employees 
 
The average monthly numbers of employees (including the Directors) during the period was: 
 
 
   2012 2011 
   Number Number 
 
Directors  4 4 
Sales and marketing  42 30 
Advice team, management and administration  28 19 
IVA and PTD processing team  27 29 
DMP processing team  34 30 
  ________ ________ 
  135 112 
  ________ ________ 
 
 
Employment costs  2012 2011 
  £ £ 
 
Wages and salaries  3,348,146 2,545,435 
Social security costs  277,439 195,847 
Pension costs  13,039 4,253 
  ________ ________ 
  3,638,624 2,745,535 
  ________ ________ 
 
For the year ended 30 June 2012, staff costs of £3,351,271 (2011: £2,461,843) have been included in cost of sales 
and £287,353 (2011: £283,692) in administration expenses. 
 
Directors’ Emoluments  2012 2011 
  £ £ 
 
Directors’ fees  30,000 30,000 
Directors’ emoluments  270,962 262,176 
  ________ ________ 
  300,962 292,176 
Social security costs  30,085 30,827 
  ________ ________ 
Key management compensation – short term benefits  331,047 323,003 
  ________ ________ 
 
Key management consist of the statutory directors of the Group. The share based payment with regard to key 
management amounted to £23,130 (2011 £4,098). 
  Number Number 
    
Number of directors to whom retirement benefits are accruing under a    
money purchase scheme  - - 
  ________ ________ 
    
  Number Number 
Number of directors who exercised share options in the year  - - 
  ________ ________ 
 
Further information about the remuneration of the individual directors is disclosed in the Directors’ Remuneration 
Report on pages 13 and 14.   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
31 
 
7. Taxation   
   2012 2011 
   £ £ 
Analysis of current year   
 
Current tax 
UK corporation tax payable  264,637 92,662 
Over provision from prior years   (667) (422) 
   ________ ________ 
 
Total corporation tax   263,970 92,240 
   ________ ________ 
 
Deferred tax 
Temporary differences, origination and reversal  (14,851) (7,170) 
Provision for irrecoverable losses  - 75,000 
Effect of tax rate changing on opening balance  (5,618) (3,887) 
   ________ ________ 
 
Total deferred tax charge  (20,469) 63,943 
   ________ ________ 
 
Tax on profit for the year  243,501 156,183 
   ________ ________ 
 
 
Factors affecting charge for year   
   2012 2011 
   £ £ 
 
Profit before taxation  834,758 227,219 
   ________ ________ 
Profit multiplied by standard rate of corporation tax  
in the UK of 25.75% (2011: 26%)  214,950 59,077 
 
Effects of: 
  
Expenses not deductible  6,169 4,878 
Adjustment due to change of tax rate  (5,618) (3,887) 
Unrelieved tax losses   - 75,000 
Other adjustments  28,000 21,115 
   ________ ________ 
 
Current tax expense for year  243,501 156,183 
   ________ ________  ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
32 
 
8. Earnings per Ordinary Share   
   2012 2011 
   £ £ 
Profit for the financial year  591,257 71,036 
   __________ __________ 
 
Weighted average number of ordinary shares in issue during the year   308,340,567 308,340,567 
 
Dilutive potential of share options   - - 
Dilutive potential of convertible loan notes  - - 
   __________ __________ 
   308,340,567 308,340,567 
   __________ __________ 
Earnings per share  
 
Basic  0.19p 0.02p 
Diluted  0.19p 0.02p 
   __________ __________ 
 
The calculation of the basic earnings per ordinary share of 0.19p (2011:  0.02p) each has been based on the profit 
for the relevant financial year and on 308,340,567 shares (2011: 308,340,567).  This represents the weighted 
average number of ordinary shares in issue.  The profit for the period for the purpose of calculating the diluted 
earnings per share is the same as for the basic earnings per share calculation adjusted in respect of the interest 
charges in relation to the convertible loan notes. After using this adjusted profit the diluted earnings per share is 
higher than the basic earnings per share and would therefore not be dilutive under the terms of IAS 33.   
 
9. Intangible Assets 
    Other Software 
    Intangibles - Development 
   Goodwill back books costs Total 
   £ £ £ £ 
Cost – 2012 
 
At 1 July 2011  4,457,892 4,141,283 295,663 8,894,838 
Arising on acquisition of back books   - 303,199 - 303,199  
Additions   - - 46,370 46,370 
Disposals  (55,612) - (128,303) (183,915) 
   _________ _________ _________ _________ 
At 30 June 2012  4,402,280 4,444,482 213,730 9,060,492 
   _________ _________ _________ _________ 
Amortisation – 2012 
 
At 1 July 2011  55,612 2,211,458 151,077 2,418,147 
Charge for year  - 1,133,448 66,033 1,199,481 
Disposals  (55,612) - (128,303) (183,915) 
   _________ _________ _________ _________ 
 
At 30 June 2012  - 3,344,906 88,807 3,433,713 
   _________ _________ _________ _________ 
Net book value  
At 30 June 2012  4,402,280 1,099,576 124,923 5,626,779 
   _________ _________ _________ _________ 
 
Back books comprise the entitlement to future income arising from client contracts acquired from third parties.    ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
33 
 
9. Intangible Assets (continued) 
   Other Software 
   Intangibles - Development 
  Goodwill back books costs Total 
  £ £ £ £ 
Cost – 2011 
At 1 July 2010 4,457,892 3,078,000 258,493 7,794,385 
Arising on acquisition of back books  - 1,063,283 - 1,063,283 
Additions  - - 37,170 37,170 
 _________ _________ _________ _________ 
At 30 June 2011 4,457,892 4,141,283 295,663 8,894,838 
 _________ _________ _________ _________ 
 
Amortisation – 2011 
At 1 July 2010 - 944,234 85,104 1,029,338 
Charge for year 55,612 1,267,224 65,973 1,388,809 
 _________ _________ _________ _________ 
At 30 June 2011 55,612 2,211,458 151,077 2,418,147 
 _________ _________ _________ _________ 
Net book value 
At 30 June 2011 4,402,280 1,929,825 144,586 6,476,691 
 _________ _________ _________ _________ 
 
Impairment reviews 
 
The total carrying value of £4,402,280 relating to goodwill is reviewed annually for impairment.  This comprises 
£3,013,374 relating to the insolvency business and £1,388,906 relating to the debt management business.  
 
For the purposes of impairment review the recoverable amount has been calculated as the value in use based on 
discounted future cash flow projections for a five year period based on approved budgets for 3 years and assuming 
no growth for the remaining 2 years. 
 
Goodwill arising on ClearDebt acquisition (insolvency business) – critical accounting estimates and 
judgements in relation to the impairment review on the insolvency business 
 
Assumptions are based on recent experience and estimates of how economic conditions may affect levels of 
activity in the business taking into account management’s strategy for growth. The number of IVA cases approved 
will fall by 4% in the current year and remain steady thereafter. Nominee fees per case are expected to remain at 
current levels together with average supervisory fees, with IVAs lasting a maximum of 5 years.  Expenses 
excluding amortisation are expected to fall 10% in the first year and remaining steady thereafter.  The appropriate 
discount factor used in the calculations is 14.4%. 
 
Assumptions are based on recent experience and estimates of how economic conditions may affect levels of 
activity in the business taking into account management’s strategy for growth.  
 
The Group’s cost of capital could increase to 15% or insolvency income fall short of projections by 10% without a 
matching fall in expenses before the carrying value of this part of goodwill would exceed the value in use. 
 
Impairment review on the debt management business 
 
Projections have been produced covering a five year period.  Revenues for the current year have been adjusted for 
the sales experience at the start of the year and are expected to rise by 3% in the first year and remain flat 
thereafter.  Expenses are expected to increase by 10% in year 1, reduce by 7% in year 2 and remain constant in the 
remaining years.  
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
34 
 
9. Intangible Assets (continued) 
 
The assumptions are based on recent experience of monthly growth and estimates of how economic conditions 
will affect levels of activity in the business.  The discount factor used in the calculations is 14.4% 
 
The Group’s debt management income would need to fall short of projections by 14.75% without a matching fall 
in expenses or the Group’s cost of capital increase to 34.0% before the carrying value of this part of goodwill 
would exceed the value in use. 
 
10. Property, Plant and Equipment 
 
 Fixtures Leasehold  
 and fittings improvements Total 
 £ £ £ 
Cost – 2012 
At 1 July 2011 622,972 49,848 672,820 
Additions 270,085 - 270,085 
Disposals (298,905) - (298,905) 
 ________ ________ ________ 
At 30 June 2012 594,152 49,848 644,000 
 ________ ________ ________ 
Depreciation – 2012 
At 1 July 2011 386,227 33,595 419,822 
Charge for the year 139,871 7,619 147,490 
Disposals (298,905) - (298,905) 
 ________ ________ ________ 
At 30 June 2012 227,193 41,214 268,407 
 ________ ________ ________ 
Net book value 
At 30 June 2012 366,959 8,634 375,593 
 ________ ________ ________ 
 
Cost – 2011 
At 1 July 2010 466,679 48,698 515,377  
Additions 156,293 1,150 157,443 
 ________ ________ ________ 
At 30 June 2011 622,972 49,848 672,820 
 ________ ________ ________ 
Depreciation – 2011 
At 1 July 2010 264,373 23,012 287,385 
Charge for the year 121,854 10,583 132,437 
 ________ ________ ________ 
At 30 June 2011 386,227 33,595 419,822 
 ________ ________ ________ 
Net book value 
At 30 June 2011 236,745 16,253 252,998 
 ________ ________ ________  ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
35 
 
11. Trade and other receivables 
  2012 2011 
  £ £ 
 
Trade receivables 2,669,662 1,420,150 
Prepayments 655,594 265,164 
Other receivables 103,622 496,645 
  ________ ________ 
  3,428,878 2,181,959 
  ________ ________ 
 
Trade receivables are all due in less than one year and represent monies due in respect of consultancy income 
together with IVA nominee and supervisors’ fees.  The trade receivables figure is shown net of provisions in 
respect of IVA failures amounting to £396,280 (2011: £189,799). There are no trade receivables that are past due 
that have not been impaired. 
 
An analysis of the provision for impairment of receivables is as follows: 
  2012 2011 
  £ £ 
 
At the beginning of the year 189,799 135,674 
Charge for the year 213,215 191,943 
Utilised during the year (6,734) (137,818) 
  ________ ________ 
At end of year 396,280 189,799 
  ________ ________ 
 
The directors consider that the carrying value of trade and other receivables approximates to their fair value.  
 
 
12. Current Liabilities 
  2012 2011 
  £ £ 
Trade and other payables: 
 
Trade payables  224,903 167,700 
Accruals 391,213 331,845 
Other payables 296,050 198,710 
  ________ ________ 
  912,166 698,255 
  ________ ________ 
 
The directors consider that the carrying value of trade and other payables approximates to their fair value.  
 
 
Corporation tax payable 263,970 92,662 
  ________ ________ 
Current financial liabilities 
 
Current financial liabilities - secured loan notes (note 13)  2,597,306 - 
  ________ ________ 
 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
36 
 
13. Financial Liabilities 
 
Loans outstanding at the reporting date were as follows:- 
  2012 2011 
  £ £ 
 
Secured convertible loan notes  - 2,303,309 
Loans 315,000 1,015,000 
  ________ ________ 
 
  315,000 3,318,309 
  ________ ________ 
 
 
On 16 April 2010 £2.3m of 3 year 10% Secured Convertible Loan notes were issued by CDG (Guernsey) Limited,  
a wholly owned subsidiary of ClearDebt Group plc, to investors. Holders of the loan notes are entitled to interest 
on the loan notes at a rate of 10% per annum payable on a quarterly basis and have an option to convert all or part 
of their holdings at par into ordinary shares of ClearDebt Group plc at any time at a price of 1.8p per share. At the 
end of the 3 year period the principal is repayable in cash plus a premium of 25% in respect of any holdings that 
are not converted into ordinary shares at the loan note holder’s option. 
 
The Loan Notes are secured by way of a debenture dated 19 April 2010 over the assets of the Group. The 
Company has also entered into a cross guarantee with CDG (Guernsey) Limited in respect of the convertible loan 
notes. 
 
In 2010 the directors determined the financial liability component of this compound instrument by calculating the 
net present values of the cash flows in respect of the interest and principal payments (assuming all are redeemed in 
cash and not taken as shares) over the next three years using a discount rate of 17% which the directors consider 
would have been the interest payable on a bank loan without the convertible element. Accordingly the loan notes 
are recorded at £2,597,306 (2011:  £2,303,309).  
 
At 30 June 2012 D E M Mond was interested in £500,000 of the secured convertible loan notes (2011: £500,000). 
 
The loan from D E M Mond of £315,000 (2011: £1,015,000) is repayable on 31 March 2014 or earlier at the 
Group’s discretion although there is a confirmation in place that this support will continue should the Group not be 
in a position to repay the loan and continue to meet other liabilities as they fall due.  Loan repayments of £700,000 
(2011: nil) were made in the year with the approval of the secured convertible loan note holders.  Interest at a rate 
of 10.5% totalling £60,984 (2011: £64,444) was paid by the Group to D E M Mond in the year in respect of his 
loans. Interest of £230,000 was paid to the secured convertible loan note holders in the year (2011: £230,000).  ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
37 
 
14. Deferred Taxation 
  2012 2011 
  £ £ 
Temporary differences (39,352) (61,510) 
Losses  61,647 73,034 
  ________ ________ 
At 30 June 22,295 11,524 
  ________ ________ 
 
Analysed as follows: 
  2012 2011 
  £ £ 
 
Deferred tax asset 72,034 78,188 
Deferred tax liability (49,739) (66,664) 
  ________ ________ 
At 30 June 22,295 11,524 
  ________ ________ 
    
Movement in the period  
  2012 2011 
  £ £ 
 
At 1 July 11,524 94,981 
Arising on acquisition of intangible assets (9,698) (19,514) 
Deferred tax charge taken to the income statement 20,469 (63,943) 
  ________ ________ 
At 30 June 22,295 11,524 
  ________ ________ 
 
The deferred tax asset primarily relates to tax losses available to offset against future taxable profits in ClearDebt 
Group plc. Forecasts have been prepared for the next 5 years which show that there will be insufficient profits in 
the holding company to enable all of the losses brought forward to be utilised in this time frame. It is the directors’ 
opinion that the remaining losses will be recoverable over this time period.  
 
Unrecognised deferred tax 
  2012 2011 
  £ £ 
 
Losses 200,773 222,000 
  ________ ________ 
At 30 June 200,773 222,000 
  ________ ________ 
 
Provision for liabilities and charges – deferred taxation  
 
During the year the Group purchased back books of client cases from certain companies (see note 17). Following 
the estimation of the fair values of the assets purchased the Group provided £9,638 (2011: £19,514) in respect of 
deferred taxation in relation to the acquisitions. During the year £9,488 (2011: £49,986) of provision relating to 
acquisitions has been released to the profit and loss account based upon the revenue received to date as a 
proportion of the total estimated revenue to be received at the time of acquisition. 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
38 
 
15. Share Capital 
  2012 2011 
  £ £ 
Authorised share capital:  
 
Ordinary share capital  
750,000,000 (2011: 750,000,000)  3,750,000 3,750,000 
Ordinary shares of 0.5 pence each  
 
Deferred ordinary share capital  
750,000,000 (2011: 750,000,000) 11,250,000 11,250,000 
Deferred shares of 1.5p each   
  _________ _________ 
  
  15,000,000 15,000,000 
  _________ ________ 
Allotted, called up and fully paid:  
 
Ordinary share capital  
308,340,567 (2011: 308,340,567)  1,541,703 1,541,703 
Ordinary shares of 0.5 pence each  
 
Deferred ordinary share capital  
308,340,567 (2011: 308,340,567)  4,625,109 4,625,109 
Deferred shares of 1.5p each   
  _________ _________ 
  
  6,166,812 6,166,812 
  _________ ________ 
 
 
The Deferred Ordinary Shares of 1.5p each carry the same rights as the Ordinary 0.5p shares save that they do not 
carry any rights to vote at general meetings or any rights to receive dividends. The Deferred Ordinary Shares are 
not capable of transfer at any time without the prior written consent of the Directors and have the right to 
repayment of the paid up capital only on any winding up or return of capital. It is the intention of the Board to seek 
Court approval to cancel the Deferred Ordinary Shares and the Share Premium Account in due course.   
 
The Company has granted equity settled share options to selected directors and employees under an EMI scheme. 
The exercise price is the market value of the shares at the date of grant. The vesting period is three years. If the 
options remain unexercised after a period of ten years from the date of grant then they are forfeited. 
  
At 30 June 2012 there were 16,625,000 (2011: 11,312,500) share options outstanding over the Company’s 
ordinary shares at a weighted average exercise price of 1.89p per share.  
 
 
 
 
 
 
 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
39 
 
15. Share Capital (continued) 
 
Details of the share options issued during the year and outstanding at 30 June 2012 are as follows:- 
 
  2012  2011 
   Weighted  Weighted 
  Number of average exercise Number of average exercise 
  Options  price in (p) options  price in (p) 
 
Outstanding at beginning of year 11,312,500 1.98 11,750,000 2.00 
Granted during year 6,575,000 1.75 1,000,000 1.75 
Forfeited during year (1,262,500) 1.96 (1,437,500)    2.00 
  __________ _____ __________ _____ 
 
Outstanding at the end of the year 16,625,000 1.89 11,312,500 1.98 
  __________ _____ __________ _____ 
 
Exercisable at 30 June  - - - - 
  __________ _____ __________ _____ 
 
 
These share options are normally exercisable between 7 October 2012 and 31 October 2021 providing the 
employee has been in continuous service for 3 years following the granting of the options.  
 
The options outstanding at 30 June 2012 had a weighted average exercise price of 1.89p and a weighted average 
remaining contractual life of 8 years and 1 month. 
 
The fair value of options granted under the scheme is measured by use of the Black-Scholes model. The inputs 
into the Black-Scholes model for options granted during the year are as follows: 
 
 
Grant date 31 October 2011 
Share price at grant date 1.75p 
Exercise price 1.75p 
Number of employees 16 
Share options granted 6,575,000 
Vesting period (years) 3 
Expected volatility 82% 
Option life (years) 10 
Expected life (years) 3 
Risk free rate 2.5% 
Expected dividends expressed as a dividend yield 0% 
Fair value per option 1.45p 
  
Expected volatility was based upon the historical volatility of the Company’s share price.  The expected life is 
based upon historical data and has been adjusted based on management’s best estimates for the effects of non-
transferability, exercise restrictions and behaviour considerations. 
 
 
 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
40 
 
16. Share Based Compensation 
 
The Group recognised the following expense related to share-based payments in the year relating to the issue of 
EMI share options to certain directors and employees of the Group. 
 
    2012 2011 
    £ £ 
 
Charged to consolidated income statement    85,723 62,925 
    ______ ______ 
 
 
17. Acquisition 
 
Between July and November 2011 a number of new IVA cases were purchased by ClearDebt Limited from 
Invocas Group plc.  
 
The assets acquired were intangible assets represented by the future income due from the book of IVA cases.  At 
the date of acquisition the fair values of the assets purchased comprised the following: 
 
 
  
Book value 
Fair value 
Adjustment 
 
 Fair Value 
 £ £  £ 
Other intangible assets- IVA  - 295,999  295,999 
Deferred taxation  - (9,030)  (9,030) 
Gain on bargain purchase – negative goodwill - (27,089)  (27,089) 
 
 - 259,880  259,880 
    
    
Settled by:    £ 
Cash consideration    259,880 
    
 
 
The intangible IVA assets acquired are being amortised over 4 years which, in the directors’ opinion, is the useful 
economic life of the assets. 
 
Included in the results for the year are revenues of £147,050 (2011: £193,995) and a pre-tax profit of £46,980 
(2011: £9,038) excluding the gain on purchase of a bargain asset of £27,089 (2011: £54,985).The gain on purchase 
of bargain assets represents the excess of the directors assessment of the fair value of the assets acquired over the 
acquisition price. 
 
We have estimated the timing of, and the expected future income due, from the back books acquired less a 
provision for future expected delinquency together with the estimated costs necessary to collect in the income. 
This has been produced on a net present value basis to provide an estimate of the fair value of the intangible assets 
acquired.  
 
The fair value of the net assets acquired was £286,969 which equates to the cash consideration.  
 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
41 
 
18. Related party transactions 
 
D E M Mond is a partner in Hodgsons, Chartered Accountants, by whom ClearDebt Group plc (“Group”), 
ClearDebt Limited (“ClearDebt”) and Abacus (Financial Consultants) Ltd (“Abacus”) were recharged at cost for 
Google advertising, travelling, book-keeping, accountancy and utility charges to the value of £52,699 in the year 
(2011: £85,820).  ClearDebt and Abacus have also re-charged Hodgsons at cost £67,472 (2011: £69,704) for 
certain costs including rent, rates and other expenses borne by ClearDebt in the year.  At 30 June 2012 Hodgsons 
owed ClearDebt and Abacus a net amount of £1,160 (2011: £12,241).  The Group made no payments on behalf of 
Hodgsons in the year. 
 
As at 30 June 2012 Group had net amounts due to Hodgsons of £29,038 (2011: due from Hodgsons £49,788).   
 
No interest is charged on the outstanding amounts.   
 
D E M Mond made no further loans to the Group in the year (2011:£625,000) and received a partial repayment of 
£700,000 (2011: £310,000).  As at 30 June 2012 the loan balance was £315,000 (2011: £1,015,000). The loan is 
repayable on 31 March 2014 or earlier at the Group’s discretion.  The loan carries interest at a fixed rate of 10.5% 
per annum and £60,984 (2011: £64,444) was paid by the Group to D E M Mond in the year in respect of interest 
on the loan. 
 
During the year ClearDebt earned income of £1,307,992 (2011: £361,341) from a third party which the auditors 
consider is a related party within the meaning of IAS 24 as they believe ClearDebt may be able to exercise 
influence over them. This income relates to the provision of consultancy services to the third party to assist it in 
the development and management of outsourced services provided to ClearDebt in relation to IVAs and PTDs, 
and claims management activities. The third party has invoiced £1,268,997 (2011: £944,988) as disbursements to 
the individual estates of the IVA and PTD clients of ClearDebt for services provided to them. 
 
No costs were charged by the related party to ClearDebt.  The balance due from the related party to ClearDebt at 
the year-end was £900,000 (2011: £ nil). 
 
During the year Abacus recognised revenues of £135,359 (2011: £nil) from a third party which the auditors 
consider is a related party within the meaning of IAS 24.  This related to the management by Abacus of a book of 
debt management clients acquired by the third party. At the year end the balance outstanding from the related 
party was £15,999 (2011: £nil). 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
42 
 
19. Financial instruments 
 
It is not the Group’s policy to enter into financial derivatives.  The nature of the Group’s operating activities 
exposes it to credit risk.  The Group finances its operations from cash resources, short term loans and convertible 
debt. At present the financial risks arising from the Group’s financing arrangements are considered to be minimal 
but the Board will continue to review its existing policies on an on-going basis. 
 
Interest rate risk 
The Group’s objective is to minimise its exposure to the effects of fluctuations in interest rates whilst balancing 
this against the need to minimise borrowing costs.  To manage exposure to interest rate risk the Group has taken 
all borrowings on a fixed interest rate.  The only assets that attract an interest rate risk are cash and cash 
equivalents. 
 
Liquidity risk 
It is the Group’s policy to manage liquidity in order to achieve continuity of funding.  This is managed by detailed 
projections and monitoring of expenditure with significant items of expenditure requiring approval of senior 
management. 
 
Foreign currency risk 
The Group has no overseas assets or liabilities. 
 
Interest rate risk profile of financial assets 
All the financial assets of the Group were floating rate or non-interest bearing assets.  Floating rate financial assets 
comprise cash deposits on call and interest was received at rates between 1.15% and 1.25%.  At 30 June 2012 
interest bearing financial assets of the Group totalled £270,618 (2011: £53,489). 
 
Credit risk 
The Group’s objective is to minimise credit risk as far as possible whilst maximising returns on financial assets.  
The financial assets of the Group are placed on money markets with the Group’s bankers and other banks.  As 
such the Group is exposed to counter party risks with respect to deposits placed with its bankers.  Financial 
institutions in which deposits are made are selected based on their credit rating as well as the returns offered. 
 
There is an inherent risk of default in trade receivables.  The Group minimises its risk by ensuring that IVAs are 
only entered into appropriately to minimise the risk of failure of the IVA.  The risk of default will generally only 
arise if an IVA fails in the first 6 months. 
 
Details of exposure of the trade receivables are shown at note 11.   
 
Capital 
The Group defines capital as equity and long term debt. 
 
The Group’s objective for managing capital is to balance the risk and reward to shareholders by ensuring an 
appropriate level of gearing.  There are no restrictions on the makeup of the Group’s capital. 
 
Interest rate risk profile of financial liabilities 
The financial liabilities of the Group are all non-interest bearing other than the loans which attract a fixed rate of 
interest as described in note 13. 
 
 
 
 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
For the year ended 30 June 2012 
 
43 
 
19. Financial instruments (continued) 
 
Maturity of financial liabilities 
The maturity profile of the Group’s loans as at 30 June 2012 was as follows: 
 
    2012 2011 
    £ £ 
 
Payable within one year   3,090,657 336,575 
Payable between one and two years   339,806 3,739,931 
Payable between two and five years   - - 
    _________ _________ 
 
All other financial liabilities are due within one year. 
 
Currency exposures 
The Group has no foreign currency assets or liabilities. 
 
Fair values of financial assets and financial liabilities 
The fair values, based upon the market value or discounted cash flows of the financial instruments detailed above 
was not materially different from their book values. 
 
 
20. Operating Lease Commitments 
 
Total rentals under operating leases charged to the income statement were as follows:- 
 
    2012 2011 
    £ £ 
 
Operating leases   143,430 153,613 
    ________ ________ 
 
 
The future minimum lease payments under operating leases that have initial or remaining terms in excess of one 
year at 30 June 2012 were as follows: 
    2012 2011 
    £ £ 
 
Payable within one year   157,299 133,142 
Payable between one and five years   416,917 70,444 
Payable in more than five years   - 4,685 
    ________ ________ 
     
    574,216 208,271 
    ________ _________ 
 
The operating leases represent leases on the office premises used by the Group at its Timperley and Chesterfield 
sites as well as office equipment and motor vehicles.  These leases are due to expire between March 2013 and May 
2017.  ClearDebt Group plc  
COMPANY BALANCE SHEET 
For the year ended 30 June 2012   Company number 02441375 
 
44 
 
 
  2012 2011 
 Notes £ £ 
Fixed Assets 
Intangible assets   2 6,806 18,472 
Tangible assets 3 3,037 6,944 
Investments 4 4,764,692 4,697,757 
  _________ _________ 
  4,774,535 4,723,173 
Current Assets 
Debtors: amounts falling due within one year 5 82,644 82,118 
Debtors: amounts falling due after one year 6 1,567,333 2,840,771 
Cash at bank   285,653 65,853 
  _________ _________ 
  1,935,630 2,988,742 
Creditors: amounts falling due within one year 7 (65,856) (32,535)  
  _________ _________ 
 
Net Current Assets 
  1,869,774 2,956,207 
  _________ _________ 
Total assets less current liabilities  6,644,309 7,679,380 
 
Creditors: amounts falling due after one year 8 (3,008,801) (3,414,805)  
  _________ _________ 
 
Net Assets  3,635,508 4,264,575 
  _________ _________ 
 
Capital and Reserves 
Called up share capital 9 6,166,812 6,166,812 
Share premium account 11 279,948 279,948 
Share based compensation reserve 11 289,035 203,312 
Profit and loss account 11 (3,100,287) (2,385,497)  
  _________ _________ 
 
Equity Shareholders’ Funds  3,635,508 4,264,575 
  _________ _________ 
 
 
The financial statements were approved by the Board of Directors and authorised for issue on 29 November 2012 
and are signed on its behalf by: 
 
 
 
 
D E M Mond 
Director 
   
ClearDebt Group plc 
NOTES TO THE COMPANY FINANCIAL STATEMENTS 
 
45 
 
1.     Significant Accounting Policies 
 
Basis of Accounting 
The financial statements have been prepared under the historical cost convention and in accordance with UK 
Generally Accepted Accounting Principles (UK GAAP). 
 
Deferred Taxation 
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the 
balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a 
right to pay less tax in the future have occurred at the balance sheet date.  Timing differences are the differences 
between the Company taxable profits and its results as stated in the financial statements that arise from the 
inclusion of gains and losses in tax arrangements in periods different from those in which they are recognised in 
the financial statements. 
 
Deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not 
that there will be suitable taxable profits from which the future reversal of the underlying timing differences can 
be deducted. 
 
Deferred tax is calculated at the rates that are expected to apply in the periods in which timing differences 
reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.  Deferred tax is 
measured on a non-discounted basis. 
 
Cash Flow Statement 
The Company has taken advantage of the exemption permitted by FRS1 not to present a cash flow statement. 
 
Investments  
Fixed asset investments are stated at cost except where in the opinion of the directors, there has been permanent 
diminution in the value of the investments, in which case an appropriate adjustment is made. 
 
Share-Based Compensation 
Equity-settled share based payments are measured at the fair value of services received in exchange for the 
grant of options or warrants.  The fair value determined is recognised as an expense if it relates to trading 
activities or in the share premium account if it relates to the issue of equity instruments.  The total amount to be 
expensed over the vesting period is determined by reference to the fair value of the options or warrants granted, 
excluding the impact of any non-market vesting conditions (for example, profitability and growth targets).  
Non-market vesting conditions are included in the assumptions about the number of options or warrants that are 
expected to become exercisable.  At each balance sheet date, the company revises its estimates of the number of 
options or warrants that are expected to become exercisable.  It recognises the impact of the revision of original 
estimates, if any, in the income statement, and a corresponding adjustment to reserves over the remaining 
vesting period. 
 
The proceeds received net of any attributable transaction costs are credited to share capital (nominal value) and 
share premium when the options or warrants are exercised. 
 
Non vesting conditions which are not satisfied during the vesting period are treated as cancellations and any 
remaining expense is accelerated in the period of failure. Share based payments associated with share options 
granted to employees of subsidiaries of the parent company are treated as an expense of the subsidiary company 
to be settled by equity of the parent company. The share based payment expense increases the value of the 
parent company’s investment in the subsidiaries and is credited to the Share based payment reserve. 
 
Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been 
adjusted, based on management’s best estimate, for the effect of non-transferability, exercise restrictions and 
behavioural considerations. 
 
Share based payments associated with share options granted to employees of subsidiaries of the parent company 
are treated as an expense of the subsidiary company to be settled by equity of the parent company. The share 
based payment expense increases the value of the parent company’s investment in the subsidiaries and is 
credited to the Share based payment reserve.  ClearDebt Group plc 
NOTES TO THE COMPANY FINANCIAL STATEMENTS 
 
46 
 
1.  Significant Accounting Policies (continued) 
 
Tangible Fixed Assets  
All tangible fixed assets are initially recorded at cost.  Depreciation is provided at rates calculated to write off the 
cost less residual value of each asset over its expected useful life, as follows: 
 
Fixtures and fittings   - 25% straight line 
 
Residual value and estimated remaining lives are reviewed annually. 
 
Other Intangible Assets 
Internal and externally acquired intangible assets are initially recognised at cost and subsequently amortised over 
their useful economic lives. The significant intangibles recognised by the Group, their useful economic lives and 
the methods used to determine the cost of intangibles acquired in a business combination are as follows:- 
 
Other intangibles – websites and databases  - 3 years straight line 
 
Loss attributable to the Members of the Parent Company 
 
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own 
profit and loss account for these financial statements.  The loss dealt with in the accounts of the parent company 
was £714,790 (2011: £701,807). 
 
 
2.     Intangible Assets     
   Other  
   Intangibles  
     £  
Cost – 2012 
At 1 July 2011 and 30 June 2012  35,000 
   _______  
Amortisation – 2012   
At 1 July 2011  16,528  
Charge for year  11,666 
   _______ 
At 30 June 2012  28,194  
   _______  
Net book value  
At 30 June 2012  6,806  
   _______  
Net book value 
At 30 June 2011  18,472 
   _______  
  
  ClearDebt Group plc 
NOTES TO THE COMPANY FINANCIAL STATEMENTS 
 
47 
 
3.    Tangible assets 
   Fixtures 
   and fittings 
   £ 
Cost – 2012  
At 1 July 2011  11,721 
Additions    - 
   _______ 
At 30 June 2012  11,721 
   _______ 
Depreciation – 2012  
At 1 July 2011  4,777 
Charge for the year  3,907 
   _______ 
At 30 June 2012  8,684 
   _______ 
Net book value 
At 30 June 2012  3,037 
   _______ 
Net book value 
At 30 June 2011  6,944 
   _______ 
 
 
4. Fixed Asset Investments    Shares in 
    Subsidiary undertakings 
     £ 
Cost 
As at 1 July 2011    4,697,757 
Investment in subsidiaries - share based payments     66,935 
    ________ 
 
As at 30 June 2012     4,764,692 
    ________ 
 
 
Shares in subsidiary undertakings are stated at cost.  The company owns directly the following principal 
subsidiaries which are all incorporated in the United Kingdom and included in the consolidated accounts: 
 
     Profit/ Reserves 
  Class of  (loss) for 30 June 
Company Activity shares  Holding period 2012 
      £ £ 
 
ClearDebt Limited IVA Services  Ordinary 100%   1,291,764 2,068,375 
ClearCash Limited Pre-Paid Card Ordinary 100%        (83,040)  (131,161) 
Abacus (Financial Consultants) Limited Debt Management Ordinary 100% 165,587 458,352 
The Debt Advice Portal Limited Dormant  Ordinary 100% - - 
Clear Finance Solutions Limited  Dormant  Ordinary  100% - - 
Nelco1Limited  Dormant  Ordinary  75.1% - - 
Reclaim Assistance Limited  Dormant  Ordinary 100% - - 
CDG (Guernsey) Limited     Investments       Ordinary 100% - 96,496 
ClearlyMoney Limited    Dormant        Ordinary 100% - - 
Clearly Money Limited     Dormant        Ordinary 100% - - 
 
 
   ClearDebt Group plc 
NOTES TO THE COMPANY FINANCIAL STATEMENTS 
 
48 
 
5.    Debtors: amounts falling due within one year 
   2012 2011 
   £ £ 
 
Other debtors   - 55,188 
Prepayments and accrued income   82,644 26,930 
   ________ ________ 
  
   82,644 82,118 
   ________ ________ 
 
 
6.    Debtors: amounts falling due after one year 
   2012 2011 
   £ £ 
 
Amounts owed by Group undertakings   1,499,917 2,762,583 
Deferred tax asset    67,416 78,188 
   ________ ________ 
 
   1,567,333 2,840,771 
   ________ ________ 
 
 
The deferred tax asset relates to tax losses available to offset against future taxable profits. Detailed forecasts have 
been prepared for the next 5 years and at present these forecasts show that not all of these will not be fully utilised. 
Total deferred tax losses amount to £262,421 of which £67,416 has been recognised at the balance sheet date as an 
asset after provisions and write offs.   
 
 
7.   Creditors: amounts falling due within one year 
   2012 2011 
   £ £ 
 
Trade creditors   25,000 16,069 
Accruals   40,856 16,466 
    ________ ________ 
 
    65,856 32,535 
    ________ ________ 
 
8.    Creditors: amounts falling due after one year 
   2012 2011 
   £ £ 
 
Amounts owed to Group undertakings   2,693,801 2,399,805 
Loan    315,000 1,015,000 
    ________ ________ 
 
    3,008,801 3,414,805 
    ________ ________ 
     
The loan due to DEM Mond of £315,000 (2011: £1,015,000) is repayable on 31 March 2014 or earlier at the 
Company’s discretion although there is a confirmation in place that this support will continue should the Company 
not be in a position to repay the loan and continue to meet other liabilities as they fall due. Interest of £61,614 
(2011: £64,444) was paid by the Company to DEM Mond in the year in respect of his loans.   ClearDebt Group plc 
NOTES TO THE COMPANY FINANCIAL STATEMENTS 
 
49 
 
9.    Share capital 
   2012 2011 
   £ £ 
Authorised share capital:  
 
Ordinary share capital  
750,000,000 (2011: 750,000,000)  3,750,000 3,750,000 
Ordinary shares of 0.5 pence each  
 
Deferred ordinary share capital  
750,000,000 (2011: 750,000,000) 11,250,000 11,250,000 
Deferred shares of 1.5p each   
  _________ _________ 
  
  15,000,000 15,000,000 
  _________ ________ 
Company 
 
Allotted, called up and fully paid:  
 
Ordinary share capital  
308,340,567 (2011: 308,340,567)  1,541,703 1,541,703 
Ordinary shares of 0.5 pence each   
 
Deferred ordinary share capital  
308,340,567 (2011: 308,340,567)  4,625,109 4,625,109 
Deferred shares of 1.5p each  
  _________ _________   
 
  6,166,812 6,166,812 
  _________ ________ 
 
 
The Deferred Ordinary Shares of 1.5p each carry the same rights as the Ordinary 0.5p shares save that they do not 
carry any rights to vote at general meetings or any rights to receive dividends. The Deferred Ordinary Shares are 
not capable of transfer at any time without the prior written consent of the Directors and have the right to 
repayment of the paid up capital only on any winding up or return of capital. It is the intention of the Board to 
seek Court approval to cancel the Deferred Ordinary Shares and the Share Premium Account in due course. 
   
The Company has granted equity settled share options to selected directors and employees under an EMI scheme. 
The exercise price is the market value of the shares at the date of grant. The vesting period is three years. If the 
options remain unexercised after a period of ten years from the date of grant then they are forfeited. 
  
At 30 June 2012 there were 16,625,000 (2011: 11,312,500) share options outstanding over the Company’s 
ordinary shares at a weighted average exercise price of 1.89p per share.  
 
 
 
 
 
 
 
 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE COMPANY FINANCIAL STATEMENTS 
 
50 
 
9.    Share capital (continued) 
 
Details of the share options issued during the year and outstanding at 30 June 2012 are as follows:- 
 
  2012  2011 
   Weighted  Weighted 
  Number of average exercise Number of average exercise 
  Options  price in (p) options  price in (p) 
 
Outstanding at beginning of year 11,312,500 1.98 11,750,000 2.00 
Granted during year 6,575,000 1.75 1,000,000 1.75 
Forfeited during year (1,262,500) 1.96 (1,437,500)    2.00 
  __________ _____ __________ _____ 
 
Outstanding at the end of the year 16,625,000 1.89 11,312,500 1.98 
  __________ _____ __________ _____ 
 
Exercisable at 30 June  - - - - 
  __________ _____ __________ _____ 
 
 
These share options are normally exercisable between 7 October 2012 and 31 October 2021 providing the 
employee has been in continuous service for 3 years following the granting of the options.  
 
The options outstanding at 30 June 2012 had a weighted average exercise price of 1.89p and a weighted average 
remaining contractual life of 8 years and 1 month. 
 
The fair value of options granted under the scheme is measured by use of the Black-Scholes model. The inputs 
into the Black-Scholes model for options granted during the year are as follows: 
Grant date 
    
 
31 October  2011 
Share price at grant date 
    1.75p 
Exercise price 
    1.75p 
Number of employees 
    16 
Share options granted     6,575,000 
Vesting period (years) 
    3 
Expected volatility 
    82% 
Option life (years) 
    10 
Expected life (years) 
    3 
Risk free rate 
    2.5% 
Expected dividends expressed as a dividend yield     0% 
Fair value per option 
    1.45p 
  
Expected volatility was based upon the historical volatility of the Company’s share price.  The expected life is 
based upon historical data and has been adjusted based on management’s best estimates for the effects of non-
transferability, exercise restrictions and behaviour considerations. 
 
 
 
 
 
 
 
 
 
   ClearDebt Group plc 
NOTES TO THE COMPANY FINANCIAL STATEMENTS 
 
51 
 
10.   Related party transactions 
 
D E M Mond is a partner in Hodgsons, Chartered Accountants, by whom ClearDebt Group plc (“Group”) were 
recharged at cost for certain expenses including Google advertising, travelling, book-keeping, accountancy and 
utility charges. At 30 June 2012 £29,038 was owed to Hodgsons (2011: owed by £49,788). The highest balance in 
the year was £29,038 and the lowest balance £17,591. 
 
The directors have taken advantage of the exemption under FRS 8 from disclosing transactions with other wholly 
owned group companies. 
 
 
11. Equity reserves 
  
   Share Share Profit and 
  based compensation premium loss account 
   £ £ £ 
Company 
At 1 July 2011  203,312 279,948 (2,385,497)  
Share based compensation   85,723 - - 
Loss for the year  - - (714,790) 
   ________ ________ _________ 
 
At 30 June 2012  289,035 279,948 (3,100,287) 
   ________ ________ _________ 
  ClearDebt Group plc 
SHAREHOLDER INFORMATION 
 
52 
 
Trading Record 
 
   
  2012 2011 2010 2009 2008 
  £ £ £ £ £ 
 
 
Revenue 9,203,453 7,776,362 6,633,995 3,386,935 1,869,190 
 
  
Profit/(loss) for the financial period 591,257 71,036 342,235 407,062 (697,264) 
 
 
Cash generated by/(used in) operations 1,788,944 1,045,707 1,466,180 380,807 (652,233)