Final Results

8 June 2015

RED24 PLC

(the "Group", "Company" or "red24")

Final Results

red24 plc, the crisis assistance company, is pleased to announce its audited final results for the year ended 31 March 2015.

Financial Highlights:

· Revenue from continuing operations increased by 1% to £5,947,246 (2014: £5,886,707)

· Profit before tax up 25% to £1,066,398 (2014: £854,905)

· Cash balances up 48% to £3,417,956 (2014: £2,302,577)

· Dividend payment for the year increased by 11% to 0.50p per share (2014: 0.45p). Final dividend of 0.27p per share recommended (2014: 0.23p).

· Basic EPS from continuing operations up 38% to 1.83p (2014: 1.33p)

Operational Highlights:

· Cost reductions and improved levels of new business led to record profit before tax.

· Improvements to Red24 Assist and the travel tracker product were well received ensuring new business wins

· Awarded "Risk Management Firm of the Year, 2015" (Finance Monthly)

· Post year end, exchanged contracts for the acquisition of RISQ Worldwide Pte. Ltd. ("RISQ Worldwide") to enhance business in Asia and broaden the product offering in London.

Simon Richards, Chairman, commented:

"During this last year, we have shown that our business is both robust and flexible, and it is a tribute to our staff that we have been able to deliver record profits before tax, in what was a testing period. We have added new business contracts world-wide, improved our key products and strengthened our position in the competitive global business of crisis assistance. I am looking forward to the next 6 to 12 months for red24, and, having recently announced the acquisition of RISQ Worldwide, I believe it will be an exciting period for our business and a rewarding one for our shareholders."

Enquiries:

red24 is a crisis assistance company that provides a range of security and business support services, offering preventative and reactive advice to help organisations and individuals to avoid or manage security and business risks to themselves, their families and their businesses. Its products and services are distributed through leading international financial service companies.

Chairman's statement

Introduction

I am pleased to present our report for the year ended 31 March 2015.

Financial Overview

The business continues to develop successfully and for many of our KPIs in a way that has exceeded our expectations. Revenue has increased by 1% to £5,947,246 from £5,886,707 achieved last year, despite the loss of our largest single contract. We responded swiftly to the news of this loss both to reduce our fixed cost base and to win new contracts. As a result we have achieved a record profit before tax of £1,066,398 as against the previous year's £854,905. The research and development investment in our travel tracker product attracts a tax credit in the UK and this has reduced the tax charge, so basic earnings per share show a substantial increase to 1.83p per share from 1.33p, this improvement was also assisted by the purchase in the year of 1,050,000 shares by the Employee Benefit Trust, which serves to reduce the number of shares in issue for earnings per share calculation purposes.

The net assets per share continue to increase and are now 8.7p per share up from 7.6p last year. In January 2013 we completed the purchase of the building housing our Crisis Response Management Centre in Cape Town. The local bank loan to fund part of the purchase remains our only debt.

The Board are recommending a final dividend of 0.27p be paid in September, which is an increase of 17% on the 0.23p final dividend paid last year, and brings the dividend return for the year as a whole to 0.50p as compared to 0.45p last year.

The share price has had a volatile year and was understandably depressed by the August news of the loss of a major contract. Since then we have worked hard to ensure that the fundamentals of the business remain very sound and to communicate the fact that the business still has considerable potential to develop. This work is beginning to be reflected in an improved share price, so enhancing shareholders overall return.

We have worked hard to build up a reputation with well established clients for high quality work and we see future growth both from our existing services and also from the addition of other services that are likely to be of assistance to those clients.

Although there are risks to any business, the Board feel encouraged by the way we have continued to progress over the last year, despite the loss of one of our key contracts which represented the realization of one of the biggest risk factors that the business faced, and are confident of further progress to come.

Our staff are absolutely crucial to the quality of service provided and to creating an environment where we can attract good quality people who want to come to work for us. The Board are most grateful to all the staff for their hard work and are gratified that so many of them are choosing to build their careers with the group.

Simon Richards

Chairman

5 June 2015

Chief Executive's Report

red24 is a crisis management assistance group that provides a range of security and business support services. Our business continues to enjoy four distinct streams of revenue: travel assistance, including accident and healthcare, special risks, consulting and product safety. We have developed an excellent reputation for assisting clients in minimising risks to their personnel, operations and profitability and this reputation is key to our ability to grow the business into related areas and to expanding our geographic coverage.

Business model

The heart of our business operation is our 24/7 Crisis Response Management Centre (CRM) in Cape Town. This state of the art response centre is staffed 24 hours a day, 365 days a year by a dedicated team of multi-lingual customer service representatives, regional analysts and experienced security professionals. The centre enables our experts to give accurate impartial, up to the minute information and advice to our clients. Across the group clients are offered escalating levels of assistance that are appropriate to the threat.

Travel assistance

Our travel assistance service has been significantly enhanced by the investment in our travel tracker product which has placed it onto a new technical platform that will make it both easier to interface with new clients and with new travel data bases. The product was launched at the business travel show in London in February 2015 and met with a most encouraging response from FTSE350 companies and higher education establishments and we think this will help materially in ensuring that this revenue stream is maintained in 2016, notwithstanding the loss of the major book of business from HSBC.

The loss of the HSBC Premier and Advance books in the UK was announced last August but has only impacted the revenue numbers in the current calendar year. We have been working hard to diversify our revenue base in recent years and the numbers show that significant progress has been made. Regulatory changes in the UK make it unlikely that the revenues lost will be replaced by like for like income and given the relatively high fixed cost base that the CRM represents we responded quickly to the bad news to reduce the cost base. Unfortunately this could not be done without implementing some staff reductions, the cost of which was taken in the first half year. I am pleased to say that the improved level of new business means we are once again recruiting.

We were pleased to be awarded the title of Risk Management Firm of the Year, 2015, by Finance Monthly and believe the year under review has seen our reputation continue to grow.

Special risks

Our special risks business had a busy year and dealt with a record number of kidnappings and other attempts at extortion - Mexico and Indonesia were particular trouble spots. None of these incidents resulted in the prolonged incident in the Middle East that so affected the 2014 numbers. We continue to publish our respected "Threat forecast" and have added new books of business over the year. The office we set up in Munich, primarily to service this unit, is meeting expectations and has created a number of promising opportunities.

Consulting and response

Throughout the year this unit has been busy with requests for close protection work and for evacuation planning services. In August a new Far Eastern client requested a large evacuation from Libya involving several hundred of their staff. This was successfully completed and represents our largest operation to date.

Product safety

Red24 Assist our product safety brand, showed an increase in revenue in the second half year following the launch of a new analytical tool and new training modules. This has kept our offering ahead of the competition and is helping to ensure that contracts are renewed and that new business is won.  

Principal risks and uncertainties

There are a number of principal risks and uncertainties which could have a material effect on the group. Some of these risks and uncertainties are external to the group and largely outside the group's control. Foremost amongst these is the economic environment, which remains a challenging one as many governments struggle with debt constraints. This has implications for the relative value of currencies, not least sterling, which is our functional and reporting currency. The past two years have seen significant growth in our dollar revenues and costs, and we also have a significant rand cost base in South Africa. The impact of currency movements on our earnings cannot be reliably forecast and remains an area of uncertainty, though the Board do seek to reduce uncertainty by using forward foreign exchange contracts to purchase rand for the forthcoming twelve months.

Risks and uncertainties that are largely within the control of the group include the maintenance of the group's competitive position to ensure the achievement and collection of sufficient revenue to meet the group's objectives. The group maintains significant cash reserves both to mitigate against the possibility of periods of reduced working capital and to ensure adequate working capital is available to meet any sudden increase in the level of response work clients may require. Internally we have worked hard, and with some success, to broaden the customer base and reduce dependence on key accounts. Other normal business risks include dependence on the continued availability of key personnel to ensure that our clients receive the level of service they are entitled to expect, and the ability of the group to continue to provide that level of service. The reputation of the group is critical to its continued success and it works hard to develop and protect that reputation by ensuring that it only associates itself with activities that are appropriate for a business in its sector.

Looking forward

To date the group has been able to expand organically by recruiting appropriate specialists in the desired fields without the need for acquisitions. However the Board is mindful that acquisition remains an additional avenue to growth and, particularly in overseas markets, may be a more effective means of achieving growth. To this end, in June 2015, we announced the acquisition of Risq Worldwide, a Singapore based company specialising in corporate investigations, business intelligence and employment background screening. This will significantly enhance our business in Asia, adds a number of blue-chip clients and broadens our product offering in London.

We have a good pipeline of new business, and see significant opportunities in Europe and in Asia. Whether the revenue lost can be fully recovered by organic growth in a single year remains to be seen, but we are pleased with the level of new business achieved thus far.

Expansion in areas outside our reporting currency is affected by exchange rate movements. Almost half our revenue is now denominated in US dollars, even where our clients are the UK arm of US insurers, whereas almost 50% of our costs are incurred in Rand. Exchange rate movements are influenced by many complex factors and whilst the Board continues to believe that it is neither practical nor desirable to hedge these risks fully, we have taken steps to secure what we believe to be a favourable opportunity to purchase forward 80% of our forecast Rand requirements for the coming year.

Key performance indicators

The key performance indicators ("KPIs") for the group are those that communicate the financial performance and strength of the group, as a whole, to shareholders. A summary of the KPI's is as follows (derived from continuing operations only):

Maldwyn Worsley-Tonks

Chief Executive

5 June 2015

Corporate Social Responsibility Report

The red24 brand and our corporate values are the key to our approach to Corporate Social Responsibility (CSR). Our CSR strategy is focused on the following key issues:

Business Ethics

The Board is committed to maintaining high ethical standards across the group and expect the same commitment from our staff, customers and suppliers. Our reputation is vital to our continued business success and we do not tolerate any form of bribery, corruption or fraud. We have anti-bribery policies in place of which all employees are made aware when they join as well as through the group intranet and through training.

Employee engagement

The Board recognise that our employees are fundamental to our success. As a professional services business we have a highly skilled workforce who assist in delivering our strategic objectives. The Board aim to ensure that there are equal opportunities for all employees and that decisions affecting employees are taken based on merit and not on such factors as race, gender, nationality or religious beliefs. In South Africa there are legislative requirements that expect the workforce to be reflective of the mix of peoples in the Western Cape. The board regularly monitor progress towards this.

Many of the group's employees have become shareholders through the share loan scheme. In 2013 an employee benefit trust was created. The Board have provided a loan of £125,000 to the Trustees to acquire shares in the market and, at 31 March 2015 the Trust held 1,050,000 shares in the Group. The Board intend that these shares will be used to satisfy staff share awards made as part of a longer term incentive scheme. The remaining step will be to create a new, approved, Enterprise Management Incentive Scheme open to all qualifying staff.

The optional defined contribution pension schemes, introduced in 2012, for all staff based in either South Africa or the United Kingdom, have been taken up 80% of our staff.

Health and safety

The Board are committed to providing a safe workplace for all our staff and to ensure that our services are provided in a way that delivers our services safely for clients and staff, including contractors. Responsibility for health and safety rests with the Chief Executive.

Sustainability

The Board monitor staffing needs to ensure that it is regularly reviewed and appropriate plans put in place to ensure we retain and develop the necessary levels of skills and take action where necessary.

We monitor and work to minimise our impact on the environment. We measure our carbon footprint and work to reduce it. We provide the green24 website as an open access one, allowing individuals and corporates to live and work in a more sustainable way.

Community engagement

Red24 established a charity committee in 2007, "Project Infundo", which means education. Through the work of this committee we support educational initiatives. In Cape Town, we assist a disadvantaged primary school in Constantia and a teacher improvement programme in Khayelitsha; whilst in London we assist a community voluntary charity.

On behalf of the Board

J E A Mocatta

Secretary

5 June 2015

Directors Report

Year ended 31 March 2015

The directors present their report and the audited financial statements of the company and of the group for the year ended 31 March 2015.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW

red24 plc is incorporated in Scotland and domiciled in England. Its shares are listed on the AIM Market ("AIM") of the London Stock Exchange. The company acts as a holding company. The principal activities of its wholly-owned trading subsidiaries are the provision of security risk management and other assistance services. These activities are expected to continue for the foreseeable future.

A fair review of the business, and its future prospects, including consideration of the principal risks facing the group and a review of our performance against financial key performance indicators is contained in the Strategic Report. The Board intend to adopt non-financial key performance indicators in the coming year.

The Board exercises proper and appropriate corporate governance for the group. It ensures that there are effective systems of internal controls in place to manage the shareholders' interests and the group's assets, including the assessment and management of the risks to which the group's businesses are exposed. A discussion of the principal risks is contained in the strategic review and in note 28 to the financial statements.

RESULTS FOR THE YEAR

The financial result for the year ended 31 March 2015 and the comparative result for the year ended 31 March 2014 are set out in the Consolidated Income Statement and Consolidated Statement of Comprehensive Income. An interim dividend of 0.23p per share (2014: 0.22p) was paid on 24 February 2015. A final dividend of 0.27p per share (2014: 0.23p) will be recommended to the AGM on 4 August 2015, to be paid on 18 September 2015.

DIRECTORS

S A Richards, J E A Mocatta and M S H Worsley-Tonks held office throughout the year. D J Gill was appointed on 1 August 2013 and resigned on 16 June 2014. L Adlam was appointed on 1 October 2014.

M S H Worsley-Tonks retires by rotation at the forthcoming annual general meeting and, being eligible, offers himself for re-election. L Adlam, having been appointed since the last Annual General Meeting and, being eligible, offers herself for re-election.

BIOGRAPHIES OF DIRECTORS

Simon Richards, who is a Chartered Accountant, is the company's executive chairman. Simon has been a director since 1995 and oversaw the company's first listing on AIM in 1999 and the re-listing on the acquisition of the security business in 2002. He also acts as the part time finance director as well as being the chairman of Sidebell Limited.

Maldwyn Worsley-Tonks joined the Board in 2003 and has been the group's chief executive since 2007. Maldwyn has overseen the profitable development of the group. A former Lieutenant Colonel in the British Army, having commanded a regular Parachute Battalion, he has many years' experience in the security industry and is an expert in crisis contingency planning for businesses.

John Mocatta, who is a Chartered Accountant, is the company's senior non-executive director and joined the Board in 1999 to assist in the AIM listing and to be the independent voice of shareholders. He is a specialist in corporate finance and has previously been both an executive and a non-executive director of a number of public and private companies.

Lorraine Adlam joined the board in October 2014 as a Non-Executive Director. She has over thirty years' experience in the insurance sector in a variety of roles including CEO of a Lloyd's Underwriting business and Chairman of Howden Insurance Brokers Ltd. Lorraine is an expert practitioner in financial and professional lines, with significant experience in strategy, business development and investor relations.

DIRECTORS' INTERESTS

The interests of the directors in the company's share capital, including shares held by companies controlled by the directors, were as follows:

(i) S A Richards is interested in the shares of Sidebell Limited, which held 13,389,250 ordinary shares of 1p each at 31 March 2015 (1 April 2014: 13,389,250 ordinary shares of 1p each).

S A Richards is also interested in the shares of Financial & General Securities Limited, which held 440,000 ordinary shares of 1p each at 31 March 2015 (1 April 2014: 260,000).

(ii) J E A Mocatta is also interested in 18,000 (1 April 2014: 12,000) ordinary shares held in trust for his granddaughter.

(iii) On 16 April 2004 options over ordinary shares of 1p each at a price of 18.75p per share were granted to directors and certain employees. These options were exercisable between 16 April 2006 and 15 April 2014, when they lapsed.

(iv) On 2 March 2010 options over ordinary shares of 1p each at a price of 8p per share were granted to M S H Worsley-Tonks. These options are exercisable between 31 March 2013 and 31 March 2016.

(v) On 8 August 2012 options over ordinary shares of 1p each at a price of 10.5p per share were granted to M S H Worsley-Tonks. These options are exercisable between 8 August 2015 and 8 August 2018.

SUBSTANTIAL SHAREHOLDINGS

The following shareholders had advised the company of holding an interest of 3 per cent or more in the issued ordinary share capital of the company at 6 May 2015:

DIRECTORS' AND OFFICERS LIABILITY INSURANCE

During the year the company has maintained insurance to indemnify the directors against potential claims arising from the performance of their duties.

RELATED PARTIES

The group considers that the Directors, their spouses and children and other companies or businesses of which the Directors, their spouses or children are either directors or principals, or both, are related parties. Full details of transactions with related parties are disclosed in note 27 to these accounts. The interests of related parties in the shares of the company are set out above.

Equal opportunities

The group endorses and supports the principles of equal employment opportunities. It is the policy of the group to provide equal employment opportunities to all qualified individuals, which ensures that all employment decisions are made, subject to legal obligations, on a non-discriminatory basis.

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that the training, career development and promotion opportunities of disabled persons should, as far as possible, be identical with those of other employees.

PRODUCT DEVELOPMENT

The group invests in its products and services on a continuous basis to ensure that its offerings remain at the forefront of those on offer in the market place.

Suppliers' payment terms

It is the policy of the group to agree terms of payment with its suppliers when trading relationships are established, to ensure that the terms of payment are clear and to abide by the agreed terms, provided the suppliers meet their obligations. Payable days at 31 March 2015 were 26 (2014: 19) for the group and 32 (2014: 32) for the company.

FINANCIAL INSTRUMENTS

Details of the financial instruments of the company and its subsidiary undertakings are contained in note 28.

Employee participation

The group values the involvement of its employees and keeps them informed of matters affecting them and on the various factors affecting the performance of the group. Employees are encouraged to become shareholders in the company.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITOR

Each of the directors confirms that, so far as he is aware, there is no relevant audit information of which the company's auditor is unaware, and that he has taken all steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information.

Auditor

A resolution proposing that Baker Tilly UK Audit LLP, Chartered Accountants, be appointed as auditor of the company will be put to the members at the Annual General Meeting. Baker Tilly UK Audit LLP has indicated its willingness to continue in office.

On behalf of the Board

J E A Mocatta

Secretary

5 June 2015

Corporate Governance Statement

The company is committed to high standards of corporate governance. The board is accountable to the company's shareholders for good corporate governance. The company has complied substantially throughout the period with the corporate governance guidelines for smaller quoted companies issued by the Quoted Companies Alliance and details are provided below.

Application of the Principles of Good Governance

At the year end, the Board consisted of two executive directors and two non-executive directors. Both non-executive directors are regarded as independent. The full Board met 12 times during the year (2014: 12) and receives appropriate information from management in advance of its meetings. Certain functions are delegated to Board Committees.

The Remuneration Committee is chaired by the senior independent non-executive director and consists of that director, the other non-executive director and the Chairman. Its key role is to make recommendations to the Board, within agreed terms of reference, on the Company's framework of executive remuneration and its cost and to determine on behalf of the Board specific remuneration packages for the Executive Directors.

The Audit Committee consists of the Chairman and the two non-executive directors, two of whom are Chartered Accountants. The Committee, which is chaired by the senior non-executive director, meets with the independent auditor to consider the group's financial reporting in advance of its publication.

The Board considers that its structure is appropriate to its present stage of development and that both non-executive directors are independent of the executives in both character and judgement.

Internal control

The Board has overall responsibility for ensuring that the group maintains a system of internal control to provide it with reasonable assurance regarding the reliability of information used within the business and for publication and that assets are safeguarded. There are inherent limitations in any system of internal control and, accordingly, even the most effective system can provide only reasonable, and not absolute, assurance with respect to the preparation of financial information and the safeguarding of assets.

The key features of the internal control system that operated during the year may be summarised as follows:

· Board responsibility for overall strategy and for approving budgets, forecasts and plans;

· Board and business heads participate in the annual strategic planning process which sets the framework for the budgets of individual business units;

· clear lines of authority, responsibility and financial accountability within each business unit, ensuring an appropriate organisational structure for planning, executing, controlling and monitoring its business operations;

· consideration and review by the Board of monthly management accounts which compare actual results with budgets and prior years' results;

· regular reporting of legal, accounting, human resources and health and safety developments and issues to the Board; and

· comprehensive accounting policies and regular reviews of compliance with those policies.

The Audit Committee reviews the operation and effectiveness of this framework on a regular basis and, on behalf of the Board, has reviewed the half yearly report and the annual financial statements along with the nature and scope of the external audit.

The directors consider that there have been no weaknesses in internal financial control that have resulted in any material losses, contingencies or uncertainties requiring disclosure in the group's financial statements.

RElations WItH SHAREHOLDERS

The Chairman and Chief Executive make themselves available to major shareholders on request and periodically attend meetings with and presentations to shareholders. The Annual General Meeting is normally attended by all directors and shareholders are invited to ask questions during the meeting and to meet with directors after the formal proceedings have ended.

Going concern

Having made enquiries, the directors have a reasonable expectation that the company and the group as a whole will have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the accounts.

AUDITOR INDEPENDENCE

The Audit Committee undertakes a formal assessment of the external auditor's independence each year which includes:

· a review of non-audit services provided to the group and related fees;

· receipt from the auditor of a written report detailing relationships with the company and any other parties that could affect independence or the perception of independence;

· a review of the auditor's own procedures for ensuring independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and

· obtaining written confirmation from the auditor that, in their professional judgement, they are independent.

An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in note 4 to the financial statements.

On behalf of the board

J E A Mocatta

Audit Committee Chairman

5 June 2015

Remuneration Report

Year ended 31 March 2015

The Remuneration Committee comprises J E A Mocatta, as Chairman, L Adlam and S A Richards.

Policy on remuneration of executive directors

The purpose of the Remuneration Committee is to consider all aspects of executive directors' remuneration and determine the specific remuneration packages of each of the executive directors and, as appropriate, other senior executives, ensuring that the remuneration packages are competitive within the service industry and reflect both group and personal performance.

The current remuneration packages of the executive directors consist of basic salary, share options and a discretionary bonus.

M S H Worsley-Tonks has a letter of appointment dated 1 April 2008, which is capable of termination by twelve months notice by either party.

S A Richards has a letter of appointment dated 23 September 2004, which is capable of termination by twelve months notice by either party.

Non-Executive DirectorS

The remuneration of the Non-Executive Directors is set by the Board as a whole.

John Mocatta & Co has agreed to provide the services of J E A Mocatta, as a non-executive director, under a letter of appointment dated 23 September 2004, which is capable of termination by the giving of twelve months notice by either party.

L Adlam has a letter of appointment dated 1 October 2014, which is capable of termination by six months notice by the company and at no notice by the director.

Directors' remuneration

The emoluments of the individual directors, which comprise salaries or fees and bonus were as follows:

Directors' remuneration

DIRECTORS' BENEFITS

None of the directors received any benefits in kind during the year or during the previous year, nor were any pension contributions made on behalf of any director in either year. On 1 August 2013 the group introduced a three times salary death in service benefit scheme of which the executive directors are members.

DIRECTORS' INTERESTS IN SHARES AND OPTIONS

The interests of the directors holding office at 31 March 2015 in the company's share capital, including share options and also including shares held by companies controlled by the directors, are shown in the directors' report.

The Board believe that the direct participation in the equity of the company leads to a significant reduction in staff turnover and is an effective method of ensuring that the longer term interests of staff and shareholders coincide. In 2013 the Board set up an Employee Benefit Trust with the intention of empowering the Trust to acquire shares at appropriate opportunities to satisfy future staff share awards. At 31 March 2015 1,050,000 shares (2014: Nil) had been acquired by the trust. In the coming year a new Enterprise Management Incentive Scheme is planned.

Executive directors, managers and staff will all be eligible to participate in the scheme after a minimum length of service and the Board envisage that the present system of discretionary cash bonuses will move to one where there is a short and long term element to the award, the former will continue to be paid in cash and the later by way of share options, under the EMI Scheme for those eligible.

The Board are pleased to note that at 31 March 2015 20 members of staff (2014: 33) were shareholders in the company.

J E A Mocatta

Remuneration Committee Chairman

5 June 2015

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report and 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 IFRS as adopted by the EU.

The financial statements are required by law and IFRS adopted by the EU to present fairly the financial position of the group and the company and the financial 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 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. state whether they have been prepared in accordance with IFRSs adopted by the EU;

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 the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the 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 red24 plc website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

CONSOLIDATED INCOME STATEMENT AND CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2015

CONSOLIDATED STATEMENT OF coMPREHENSIVE INCOME

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF CHANGES IN EQUITY

For the year ended 31 March

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

COMPANY STATEMENT OF CHANGES IN EQUITY

The accompanying notes are an integral part of these financial statements.

CASH FLOW STATEMENTS

The accompanying notes are an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

31 March 2015

1 Accounting policies

(a) Basis of preparation

From 1 April 2007, the group and company have adopted International Financial Reporting Standards ("IFRS") and the International Financial Report Interpretations Committee ("IFRIC") interpretations as adopted by the European Union ("EU") in the preparation of its financial statements and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost basis, except for trade investments and land and buildings which have been measured at fair value.

The accounts are prepared on a going concern basis. In assessing whether the going concern assumption is appropriate, the directors have taken into account relevant available information about the future including profit and cash forecasts for the next two financial years and the assumptions on which they are based. Afterreviewing this information, the directors consider that it is appropriate to prepare the financial statements on a going concern basis.

(b) Basis of consolidation

The consolidated financial statements include the financial statements of the company and all of the entities controlled by the company (its subsidiaries) made up to 31 March each year. Control is obtained when the company has exposure or rights to the variable returns from the involvement in the investee entity and the ability to affect those returns through its power over the investee. The acquisition of subsidiaries is accounted for using the acquisition method. The cost of an acquisition is measured as the cash paid and the fair value of other assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange of contracts. Costs directly attributable to the acquisition are expensed as incurred.

The results of subsidiaries sold or acquired are included in the consolidated income statement up to, or from, the date control passes. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

The company has not presented its own income statement as permitted by Section 408 of the Companies Act 2006. The profit for the year was £423,835 (2014: £809,985).

(c) Revenue recognition

Revenue represents the fair value of the consideration received or receivable in respect of services provided in the normal course of business, net of discounts, value added tax and other sales related taxes. Sales of services are recognised when the services have been provided, services invoiced in advance are treated as deferred income and income is accrued where services have been provided but not yet invoiced.

Interest income is accrued on a time-apportioned basis. Dividend income is accounted for when received.

(d) Cost of sales, gross profit and operating profit

Cost of sales represent the fair value of costs directly incurred in the supply of goods sold and services provided. Costs are recognised at the time when the goods have been supplied or the services have been provided. Costs relating to still to be provided services are carried forward in other receivables to the extent it is considered probable they will be recovered.

1 Accounting policies (continued)

(d) Cost of sales, gross profit and operating profit (continued)

Gross profit is defined as revenue recognised less cost of sales.

Operating profit is arrived at after deducting all administrative expenses from gross profit, including restructuring and impairment costs, but before finance income and finance costs.

(e) Borrowing costs

All borrowing costs are recognised in the income statement in the period in which they are incurred. Interest costs are accrued on a time basis by reference to the principal outstanding at the effective interest rate applicable.

(f) Taxation

The tax credit or expense represents the sum of the current tax expense and deferred tax.

The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the income statements because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group's liability for current tax is calculated using the applicable rate for the period the taxable profits are earned in.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis. Deferred tax is charged or credited in the income statement, except where it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax is provided on temporary timing differences arising on investments in subsidiary companies, except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future.

(g) Intangible assets

Goodwill, being the excess of the cost of acquisition over the fair value of net assets, including any intangible assets identified, acquired, is capitalised. Goodwill is not amortised but is tested at least annually for impairment and carried at cost less accumulated impairment provisions.

Goodwill is allocated to cash generating units for the purpose of impairment testing. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, then any goodwill is considered to be impaired. Impairment losses recognised for goodwill are not reversed in subsequent periods.

1 Accounting policies (continued)

(g) Intangible assets (continued)

The recoverable amounts of the cash generating units are determined from value in use calculations. The group prepares cash flow forecasts from the most recent financial budgets approved by management. The cash flows are discounted at an appropriate interest rate, based on the likely cost of loan capital, to determine value in use.

Intellectual properties, including computer software licences, training courses, websites and trademarks are capitalised at cost and are amortised on a straight-line basis over their estimated useful economic lives of between one and three years.

(h) Investment

A trade investment is an entity over which the group does not have significant influence and that is neither a subsidiary, an associate nor a joint venture. Such investments are initially measured at fair value, to which transaction costs are added. Such assets are financial assets and any gain or loss arising on remeasurement is recognised in profit and loss.

(i) Property, plant & equipment and depreciation

Land and buildings held for use in the provision of services, or for administrative purposes, are initially valued at cost, including transaction costs. Subsequent to initial measurement land and buildings are revalued regularly and held in the balance sheet at the revalued amount, being the fair value at the date of revaluation, less any subsequent accumulated depreciation. A gain or loss arising from a change in fair value is included in taken to a revaluation reserve in the period in which it arises.

Plant and equipment is valued at cost less accumulated depreciation and less provisions for impairment. Depreciation is provided at the following annual rates in order to write off each asset, on a straight-line basis, over its estimated useful life:

Buildings 3% per annum

Fixtures, fittings and equipment 16.67% to 50% per annum

Motor vehicles 20% per annum

The depreciation charge is time apportioned in the year of acquisition and disposal of assets. Freehold land is not depreciated.

(j) Product development

Product development is written off to the income statement as incurred unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.

(k) Foreign currency translation

The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purposes of the consolidated financial statements, the results and financial position of each group company are expressed in sterling, which is the functional currency of the company, and the presentation currency for the consolidated financial statements.

1 Accounting policies (continued)

(k) Foreign currency translation (continued)

In preparing the financial statements of the individual companies, transactions expressed in currencies other than the entity's functional currency (foreign currencies) are translated at rates of exchange approximating to those ruling at the date of the transaction. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at rates ruling at the balance sheet date. Non monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the profit or loss before tax for the period.

In presenting the consolidated financial statements the assets and liabilities of the overseas subsidiary are translated at the rate ruling at the balance sheet date. The results of the overseas subsidiary have been translated at the average exchange rate ruling during the year. Differences arising on retranslation are added to or deducted from the group's translation reserve.

 (l) Financial assets

Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as "Loans and receivables". These receivables are initially recognised at fair value and subsequently measured at their amortised cost using the effective interest rate method less any provision for impairment.

Financial assets are assessed for indications of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the asset have been impacted. For trade and other receivables the carrying amount is reduced by an allowance reflecting the impairment. When a trade receivable is uncollectible it is written off against the allowance, subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance are reflected in the income statement.

Cash and cash equivalents comprise cash in hand and on demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

(m) Financial liabilities and equity

Financial liabilities and equity are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

The component parts of compound instruments are classified separately as financial liabilities and equity in accordance with the substance of the transaction. At the date of issue the fair value of the liability is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or upon the instrument reaching maturity. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised in equity through other reserves and is not subsequently re-measured.

1 Accounting policies (continued)

(m) Financial liabilities and equity (continued)

Other financial liabilities are initially measured at fair value, net of transaction costs, and subsequently at amortised cost using the effective interest method. Interest bearing bank loans and overdrafts together with obligations under finance leases are classified as "Borrowings".

(n) Net cash

Net cash is defined as the excess of cash and cash equivalents over borrowings. 

(o) Investments

Non-current investments representing investments in subsidiary undertakings are valued at cost less any provision for impairment in the value of the investment.

Held-for-sale investments that do not have a quoted market price are held at fair value, where that can be reliably measured, otherwise they are held at cost less any identified impairment losses at the end of each reporting period.

(p) Dividends

Dividend payments are recognised as liabilities once they are appropriately authorised and no longer at the discretion of the company.

(q) Share based payments

The group issues equity-settled share based payments to certain employees. Equity settled share based payments are measured at fair value at the date of grant. The fair value determined at the grant date is expensed on a straight line basis over the vesting period, based on the group's estimate of options that will eventually vest. Fair value is measured by use of the Black Scholes model. The assumptions underlying the number of awards expected to vest are subsequently adjusted to reflect conditions prevailing at the balance sheet date. At the vesting date of an award, the cumulative expense is adjusted to take account of the awards that actually vest.

(r) Leased assets and obligations

An asset is acquired when substantially all the risks and rewards are transferred and is capitalised as an asset under a finance lease with the corresponding liability to the finance company included in trade and other payables. Depreciation on assets held under finance leases is provided in accordance with the policy noted in (i) above. Finance lease payments are treated as consisting of capital and interest elements and the interest is charged to the income statement on a constant rate basis over the period of the agreement. Finance charges are charged directly to income. All other leases are operating leases.

Rentals receivable or payable under operating leases are credited or charged to the income statement on a straight line basis over the lease term.

(s) Adoption of new and revised standards

In the current financial year the group has adopted the following improvements to IFRSs which were effective for this financial period. These have had no material impact on the financial statements of the Group:

• IAS 27 'Separate financial statements';

• IAS 28 'Investments in associates and joint ventures';

• IFRS 10 'Consolidated financial statements';

• IFRS 11 'Joint arrangements';

• IFRS 12 'Disclosure of interests in other entities';

1 Accounting policies (continued)

(s) Adoption of new and revised standards (continued)

At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective:

• IAS 1 'Disclosure initiative';

• IAS 19 'Employee benefits';

• IAS 32 'Offsetting financial assets and financial liabilities';

• IAS 34 'Interim financial reporting';

• IFRS 5 'Discontinued operations';

• IFRS 9 'Financial Instruments';

• IFRS 13 'Fair value measurement'.

• IFRS 15 'Revenue from contracts with customers'.

The directors do not anticipate that they will have a material impact on the financial statements.

2 Critical accounting judgements and key sources of estimation uncertainty

Estimates and judgements are evaluated on a continual basis and are based on historical experience together with expectations of future events believed to be reasonable at the time. In considering the possible impairment of intangible assets and in recognising deferred tax assets, estimates of future revenues are particularly critical. The directors have prepared forecasts of revenues and expenses covering the next two financial years to assist in the making of estimates and judgements.

 In the process of applying the group's accounting policies, which are described in note 1, the directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements.

Critical accounting judgement - Revenue recognition

Much of the group's revenue comes from business that relates to the provision of services over a period of time. Invoiced revenue may cover more than one accounting period and these revenues are time apportioned to the accounting period to which they relate and the obligation for future service is shown in deferred income. Even after recognition as revenue on a time apportioned basis, there may be uncertainty as to the costs relating to these revenues for some time afterwards and there may remain an obligation for future service. An estimate of this obligation has been made by the directors, using their experience of similar contracts, and deducted from recognised revenue.

Estimation uncertainty - Life of intangible assets

The group depends on its intangible assets to generate revenue and invests to develop and maintain its intangible assets. New intangible assets are recognised on the balance sheet and tested annually for impairment, as described further in note 14. The estimates supporting these impairment tests are based on future revenue projections and discount rates and are inherently uncertain.

3 Revenue and segment analysis

Following the sale of the training business in 2013 the management of the group has been reorganised into a single operating segment. The segment recognises four streams of revenue each of which is supported by the Crisis Response Management Centre (CRM) in Cape Town. The Chief Operating Decision Maker which is deemed to be the group board of directors, receives reports of revenue and cost of sales by revenue stream but it is considered neither desirable nor practical to allocate the administrative overheads to those revenue streams.

The following tables provide details of revenue and profit for each revenue stream:

3 Revenue and segment analysis (continued)

The group's operations are located in the United Kingdom, in the Republic of South Africa and in the USA. The following tables provide an analysis of the group's sales by location of customer, irrespective of the origin of the services, and a geographical analysis of the location of segment assets and additions to property, plant and equipment and intangible assets.

The following tables provide details of capital expenditure and amortisation by geographic segment:

Two customers accounted for more than 10% of group revenue; one, a distributor, accounts for 14.0% (2014: 23.4%) and the other, which followed a major response, also accounts for 14.0% (2014:10.4%).

Auditor's remuneration includes £36,800 (2014: £41,900) in respect of the group auditor, of which £35,000 (2014: £38,500) relates to audit services and £1,800 (2014: £3,400) to non audit services. Other services comprise £1,500 (2014: £3,400) relating to a review of the group's half year report and the provision of a registered office £300 (2014: £Nil).

Employee costs are included in administrative expenses in the consolidated income statement. Employee costs of £Nil (2014: £21,000) have been capitalised in intangible assets.

8 Share based payments

The company has issued share options, none of which are subject to performance conditions, to certain directors and employees. The options cannot be exercised in the first three years following their grant and, under normal circumstances, the options lapse if an employee leaves the group.

On 16 April 2004, the company granted 1,595,000 options to subscribe for ordinary shares of 1p each under the company's general share option scheme, exercisable at 18.75p per share between 16 April 2006 and 15 April 2014, all of which have now lapsed.

On 2 March 2010, the company granted 500,000 options to subscribe for ordinary shares of 1p each under the company's executive share option scheme, exercisable at 8p per share between 31 March 2013 and 31 March 2016.

On 8 August 2012 the company granted 750,000 options to subscribe for ordinary shares of 1p each under the company's executive share option scheme, exercisable at 10.5p per share at any time between 8 August 2015 and 8 August 2018.

At 31 March 2015 1,250,000 outstanding options are exercisable (2014: 1,562,500) at a weighted average exercise price of 9.5p (2014: 11.35p).

The total charge recognised in administration expenses in the income statement from share based transactions, all equity-settled, amounted to £9,040 (2014: £9,040).

The following movement took place in the year:

The following movements took place in the previous year:

8 Share based payments (continued)

Fair value is determined by use of the Black Scholes model using the following assumptions:

The expected volatility of all equity compensation benefits is based on the expected volatility of the underlying share price over the term of the option. This has been calculated using historical share price data.

9 Directors' emoluments

The total emoluments of the directors, who are considered to be the key management personnel, were as follows: