Source - RNS
RNS Number : 8818I
Vela Technologies PLC
05 September 2016
 

5 September 2016

 

Vela Technologies plc

 

("Vela" or the "Company")

 

 

Final Results for the year ended 31 March 2016

 

 

The Board of Vela (AIM: VELA), the investing company focused on early-stage and pre-IPO disruptive technology investments, is pleased to announce the Company's results for the year ended 31 March 2016.

 

Brent Fitzpatrick, Non-Executive Chairman of the Company, commented: "The Company's investment portfolio continues to make positive progress and the Board are encouraged by the activity at certain investee companies over the past few months. The Board look forward to keeping shareholders updated with news of additional developments as and when they arise."

 

For further information, please contact:

 

Vela Technologies plc

 

Brent Fitzpatrick, Non-Executive Chairman

Antony Laiker, Director

 

 

 

Tel: +44 (0) 7802 262 443

 

Allenby Capital Limited

(Nominated Adviser)

 

Nick Athanas/Katrina Perez

 

Smaller Company Capital Limited

(Broker)

Rupert Williams/Jeremy Woodgate

 

 

 

Tel: +44 (0) 20 3328 5656

 

 

 

Tel: +44 (0) 20 3651 2910

 

 

 

 

chairman's statement

for the year ended 31 March 2016

 

It gives me great pleasure to present the report and accounts for the year ended 31 March 2016.

 

Since the current investment strategy was adopted over 3 years ago, Vela has invested in 10 separate businesses. Almost all of these investments have been in early stage businesses and all with a disruptive aspect, in accordance with our stated investing policy.

 

Investing in such businesses requires patience and understanding of what is involved in creating a business from nothing. It is no easy task but that patience is now starting to pay off with a number of the investments raising additional finance at valuations higher than previous funding rounds. In certain cases, such as Portr, Vela has been able to investor further to maintain its shareholding position.

 

We have been clear to explain to investors our definition of 'disruptive' and the types of companies we want to invest in. A disruptive business should be one that changes the way in which a business, service or sector might operate over the long term. In addition, we want to invest in companies where management have both proved themselves and have a meaningful personal risk to the success of the business. In the future we would like to make investments that represent a higher percentage shareholding than has been the case in the past where historically we have taken minority shareholding positions.

 

Summary of investment portfolio: -

 

The Company's investment portfolio currently consists of the following investments:

 

• Portr Limited - a private UK Company that is the owner of an on-demand airport luggage transfer service, AirPortr. Portr employs leading-edge technology across its web booking platform and logistics engine in the development of convenience-orientated services for customers.

 

AirPortr has been building a reputation as London's airports' trusted and secure luggage transportation service, delivering same-day and on-demand, to and from the city's homes, hotels and offices for residents, visiting business travellers and tourists.

 

Launched at City Airport in May 2014, AirPortr expanded into Gatwick and Heathrow during 2015. AirPortr now operates in all terminals at both Heathrow and Gatwick.

 

AirPortr can be pre-booked in advance or on the day of travel from any device. Bags are either dropped off in the airport with an AirPortr concierge, before being securely transported by an AirPortr driver to their London destination. Alternatively, bags are collected from any London location and delivered to the airport at a time suitable to the customer.

The AirPortr service is designed to give passengers "luggage freedom" to allow them to maximise their time in the city. Portr employs sophisticated technology across its web and mobile applications, which incorporate resource management, asset tracking and auditing and its logistics engine allocating collections and deliveries.

Based on filings at Companies House for the year ended 26 December 2015 Portr generated a loss of £2,022,427 and as at 26 December 2015 had net assets of £819,467.

 

In March 2016 the Company announced that it had committed to a further investment in Portr Limited, which completed in April 2016.  The Company has further invested £151,343 and, following completion, the Company has an interest in 101,989 shares representing 3.9% of Portr's issued share capital.

 

• StreamTV Networks Inc. - a private US Company that has developed a technology called Ultra-D that enables the viewing of 3D media without glasses and from any angle.

StreamTV's products are now in production with StreamTV working in conjunction with Pegatron, the Asia-based designer and manufacturer to companies like Apple, Microsoft and various major TV brands.

 

For consumers the technology is planned to be affordable and natural, with the degree of 3D adjustable to suit individual needs just like a volume control. The technology will also enable consumers to convert 2D content to 3D. The ability to do this opens up the possibility of using the technology at live events for the immediate conversion of 2D to 3D.

 

Following a proposal being made by the board of StreamTV to the holders of the StreamTV CPNs, Vela entered into a conversion notice on 23 June 2016 agreeing to an early conversion of its $100,000 StreamTV CPNs, along with accrued interest of US$43,693.16, into new Class A Common shares in StreamTV at a price of US$3.00 per share.

 

• Blockchain Tech Limited (TSX: BTL) - is a technology company whose current business is focused on developing blockchain technologies to disrupt and transform existing industries. Technology is developed in-house and through BTL's incubator and accelerator programs, based in Vancouver, British Columbia. BTL's first technology platform is a remittance business called Xapcash which, combined with BTL's proprietary cross border settlement technology (Interbit), is focused on leveraging blockchain technology to create rapid and cost effective "cash-in cash-out" settlement solutions from Canada and the United Kingdom to target countries.

 

•Revolve Performance - a long-established and profitable specialist powertrain and performance engineering group that owns a leading performance parts brand, Mountune, whose products are used by consumers and racing teams to enhance engine performance. The company has exclusive rights to supply branded and warranted performance parts through the Ford Dealership networks in the UK and US.

 

In June 2015 Rockpool Investors provided a growth loan of £1.5 million to Revolve and equity funding of £1.5 million in EIS qualifying shares. Vela invested £50,000 in the equity funding round.

 

In the year to 31 December 2015 sales for Revolve increased by 6% to £8.5 million and EBITDA increased by 9% to £530,000.

 

In the three months to 31 March 2016 sales were £2.8 million which were 44% ahead of the comparative period in 2015, with a particularly strong contribution from Mountune in the US. In the three months to 31 March 2016 EBITDA was £229,000, 8% ahead of the comparative period in 2015.

 

• Disruptive Tech Limited - a private technology investment business focusing on companies that can "disrupt" and which owns and manages investments in six technology businesses.

 

Vela originally acquired 262,090 Ordinary Shares in eSeekers Limited for £250,000. Following an agreed corporate restructuring, the Company ended up with an equivalent interest in DTL, a Gibraltar-based technology focused investing Company.

 

DTL has a portfolio of 6 investments, including Nektan Plc (13%), VNU Holdings (65%) and Freeformers (5%). The normal timeframe for investments is 3 to 4 years following which DTL looks to exit an investment and dispense proceeds back to shareholders.

 

DTL is now closed to new investments and will continue with the process of divestment.

 

• SalvaRx Group plc (AIM: SALV) - (formerly known as 3Legs Resources plc), a biotech company focused on therapies that leverage the immune system to fight cancer.

 

Vela purchased a total of 23,500,000 shares in the company, whilst it was 3Legs, for a total consideration of approximately £50,090. During the period, 3Legs completed the reverse acquisition of SalvaRx Limited and was renamed SalvaRx Group Plc. As a result of this transaction, the Company's shareholding was consolidated to 235,000 shares in SalvaRx Group Plc.

 

Since the year end the company has sold a large proportion of its holding in SalvaRx.  Further details are given in note 15 to the financial statements.


• Advance Laser Imaging Limited - a private Company which uses laser scanning hardware and software applications to produce 360 degree 3D images and models.

Such images can be created for anything from small components or pieces of forensic evidence at a micron level, up to buildings, industrial plants or areas of a town and can be utilised and manipulated to view scenes from multiple perspectives at varying levels of detail, without any further scanning or photography.

 

The 3D scenes are used in crime scene investigations and specialist techniques are used to establish anything from bullet trajectory to suspect biometric information. The technology also has a number of applications for counter terror, resilience and safer cities. There are markets in both the private and public sectors including the Infrastructure Management, building change enhancement and facilities management.

 

• The Social Superstore Limited - a peer to peer platform allowing users to recommend products to their friends and gain rewards for doing so and is aiming to combine online retailing with social media in a unique way.

 

In May 2014 Vela made an investment of £100,000 in the £1 million seed funding of The Social Superstore, valuing Social Superstore at £4 million. Social Superstore has subsequently raised a further £1.75m on a £10m valuation.

 

There are a number of key user groups that have been identified and who the Company has access to. The Directors of The Social Superstore continue to believe that social commerce represents a significant opportunity which has not been fully exploited by a single Company.

 

The Social Superstore platform went live in March 2016.

 

• Rosslyn Data Technologies plc (AIM: RDT) - AIM quoted Company whose cloud-based service provides a fast and efficient way for Companies to use and understand their data.

 

The Company invested £100,000 in October 2013 in Rosslyn Analytics Ltd, RDT's main operating subsidiary in the UK. Rosslyn was the first of the Company's investment portfolio to achieve a flotation having floated on AIM in April 2014. Subsequent to the flotation of RDT, Vela invested a further £30,226 in Rosslyn and, as at 31 March 2016, Vela owned 403,368 shares in RDT.

 

RDT has recently announced that revenue for the year to 30 April 2016 is expected to increase by over 40% on the previous financial year. The loss for the year, before income tax, is expected to be no more than £2.4m (FY 15, £3.5m loss, excluding exceptional items and share based payments). As at 30 April 2016, Rosslyn had net cash balances of approximately £1.8m (FY 15, £4.7m).

 

RDT has recently announced that it has agreed terms with a number of new customers. Whilst these contracts were not signed during the 2016 financial year, as had been intended, they are expected to be signed imminently and the Board of RDT have stated that they continue to be encouraged by the performance of the Company, which they believe reflects the solid foundations that have been established since Rosslyn floated in April 2014.

 

The Company sold 30,000 shares in RDT for £2,700 in July 2016, as detailed in note 15 to the financial statements, and as at today's date holds 373,368 shares in RDT.

 

We have updated shareholders in detail on a number of our investments over the financial year. As with any portfolio, the rate of progress and performance varies across the portfolio. Some of our investments will be able to develop their route to market more quickly. Others involve a longer development timetable. Taking this into account, I am very pleased with the progress made over this last financial year.

 

Your Directors will continue to review projects where we believe value can be created for the benefit of shareholders.

 

N Brent Fitzpatrick MBE

Non-Executive Chairman

 

strategic report

for the year ended 31 March 2016

 

Business review

Further details of the investments made and the investee companies are detailed in the Chairman's statement and note 7 to the financial statements.

 

At the period end the Company holds approximately £200k cash (2015: £156k), no debt and continues to keep administration costs to a minimum so that the Company has sufficient resources to cover the Company's ongoing running costs and has maximum funds that can be dedicated to further investments.

 

The Company's net loss for the year is £351k (2015: loss of £303k). However, the overall total comprehensive income, which also includes the unrealised gains on investments carried at fair value, was a positive £204k (2015: loss of £50k).

 

The valuation of the investment portfolio under accounting rules and recorded in these financial statements at 31 March 2016 was £1,918k (2015: £1,147k), an increase of £771,000 on the prior year.  During the year Vela invested £386,000 in disruptive technology businesses.  Further details of these investment additions are given in note 7.  The Company also recorded an unrealised gain through Other Comprehensive Income on its estimate of the fair value of the investment portfolio at 31 March 2016.  This gain, of £449,000, included a significant increase in the estimate of the fair value of the Company's investment in Portr.  We update shareholders regularly on investee company performance through our website newsfeed, as information becomes available, and further detailed information can be found here.

 

The Company has no employees and has a board of 1 male executive Director and 1 male non-executive Director.

 

Key performance indicators (KPIs)

Measuring performance is integral to the next phase of our strategic growth. Management has selected KPIs to benchmark to the Company's progress. Management considers investment income, profit before tax and investment growth as KPIs in measuring Company performance.

 

Investment income is detailed in the statement of comprehensive income.

 

Management is satisfied with the level of costs and that these have been maintained to a minimum level and the loss is as expected for the Company.

 

Investment growth is detailed in note 7.

 

Principal risks and uncertainties

The preservation of its cash balances and management of the capital remain key risks for the Company, ensuring that investments are commensurate with the level of risk.

 

The Company is committed to maintaining its minimal operational costs.

 

Further information about the Company's principal risks are detailed in note 12, specifically in the credit risk, liquidity risk and capital risk management sections.

 

Approved by the Board of directors and signed on behalf of the Board on 2 September 2016.

 

 

 

 

 

statement of comprehensive income

for the year ended 31 March 2016

 

 

 

 

 

 

 

 

 

 

 

31 March

31 March

 

 

2016

2015

 

Notes

£'000

£'000

Revenue

1

9

8

Administrative expenses

 

 

 

- share-based payments

 

(23)

(107)

- other administrative expenses

 

(181)

(204)

- loss on disposal of available-for-sale assets

 

(13)

-

- impairment of available-for-sale assets

 

(143)

-

Total administrative expenses

 

(360)

(311)

Operating loss

2

(351)

(303)

Loss before tax

 

(351)

(303)

Income tax

5

-

-

Loss

 

(351)

(303)

 

 

 

 

Other comprehensive income:

 

 

 

Items that will or may be reclassified to profit or loss:

Fair value movement on available-for-sale investments

 

449

253

Reclassification of changes in fair value of available-for-sale investments to profit or loss

 

 

106

 

-

Other comprehensive income for the year

 

555

253

 

 

 

 

Total comprehensive income

 

204

(50)

 

 

 

 

Attributable to:                                                                   

 

 

 

Equity holders of the Company

 

204

(50)

 

 

 

 

Earnings per share

 

 

 

Basic and diluted loss per share (pence)

6

(0.07)

(0.12)

 

 

 

balance sheet

as at 31 March 2016

 

 

 

 

 

31 March

31 March

 

 

2016

2015

 

Notes

£'000

£'000

Non-current assets

 

 

 

Investments

7

1,918

1,147

Current assets

 

 

 

Trade and other receivables

8

36

31

Cash and cash equivalents

11

200

156

Total current assets

 

236

187

Total assets

 

2,154

1,334

Equity and liabilities

 

 

 

Equity

 

 

 

Called up share capital

10

722

459

Share premium account

 

1,117

936

Available-for-sale reserve

 

808

253

Share option reserve

 

130

107

Retained earnings

 

(801)

(450)

Total equity

 

1,976

1,305

Current liabilities

 

 

 

Trade and other payables

9

178

29

Total liabilities

 

178

29

Total equity and liabilities

 

2,154

1,334

 

 

These financial statements were approved by the Board, authorised for issue and signed on their behalf on 2 September 2016 by:

 

 

Nigel Brent Fitzpatrick MBE

Non-Executive Chairman

 

Company registration number: 03904195

 

cash flow statement

for the year ended 31 March 2016

 

 

 

 

 

 

 

31 March

31 March

 

 

2016

2015

 

Notes

£'000

£'000

Operating activities

 

 

 

Loss before tax

 

(351)

(303)

Loss on disposal of available-for-sale assets

 

13

-

Impairment of available-for-sale assets

 

143

-

Share-based charge

 

23

107

Issue of shares in lieu of services

 

-

65

Increase in receivables

 

(5)

(5)

Decrease in payables

 

(2)

(12)

Tax charge

 

-

-

Total cash flow from operating activities

 

(179)

(148)

Investing activities

 

 

 

Consideration for disposal of investment

 

14

6

Consideration for purchase of investment

 

(235)

(276)

Total cash flow from investing activities

 

(221)

(270)

Financing activities

 

 

 

Proceeds from the issue of ordinary share capital

 

444

565

Total cash flow from financing activities

 

444

565

Net increase in cash and cash equivalents

 

44

147

Cash and cash equivalents at start of year

 

156

9

Cash and cash equivalents at the end of the year

11

200

156

 

 

 

 

Cash and cash equivalents comprise:

 

 

 

Cash and cash in bank

 

200

156

Cash and cash equivalents at end of year

11

200

156

 

 

 

 

 

 

statement of changes in equity

for the year ended 31 March 2016

 

 

 

 

 

 

 

 

 

 

 

 

Share

 

Share

Capital

Redemption

 

Retained

Available-for-sale

Share

option

 

Total

 

Capital

Premium

Reserve

Earnings

 reserve

Reserve

Equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

Balance at 1 April 2015

459

936

-

(450)

253

107

1,305

Transactions with owners

 

 

 

 

 

 

 

Issue of share options

-

-

-

-

-

23

23

Issue of share capital

263

181

-

-

-

-

444

Transactions with owners

263

181

-

-

-

23

467

Loss for the year

-

-

-

(351)

-

-

(351)

Other comprehensive income

 

-

 

-

 

-

 

-

 

555

 

-

 

555

Total comprehensive income

 

-

 

-

 

-

 

(351)

 

555

 

-

 

204

 

 

 

 

 

 

 

 

Balance at 31 March 2016

722

1,117

-

(801)

808

130

1,976

 

 

 

 

 

 

 

 

Balance at 1 April 2014

222

723

-

(147)

-

-

798

Issue of share options

-

-

-

-

-

107

107

Issue of share capital

237

213

-

-

-

-

450

Transactions with owners

237

213

-

-

-

107

557

Loss for the year

-

-

-

(303)

-

-

(303)

Other comprehensive income

 

-

 

-

 

-

 

-

 

253

 

-

 

253

Total comprehensive income

-

-

-

(303)

253

-

(50)

 

 

 

 

 

 

 

 

Balance at 31 March 2015

459

936

-

(450)

253

107

1,305

 

 

 

 

notes to the financial statements

for the year ended 31 March 2016

 

1 Revenue and segmental information

The Company is an investment Company and as such there is only one identifiable operating segment, being the holding and support of investments.  Furthermore, the Company operates in a single geographic segment being the United Kingdom.  The results and balances and cash flows of the segment are as presented in the primary statements.  Revenue received in the period under review represents the accrued value for interest receivable from loan notes held in Stream TV Networks.

 

2 Loss from operations

Loss from operations is stated after charging:

 

31 March

31 March

 

2016

2015

 

£'000

£'000

Auditors' remuneration for auditing of accounts

9

9

Auditors' remuneration for non-audit services

1

1

Foreign exchange gains

(4)

(6)

Loss on disposal of available-for-sale assets

13

-

Impairment of available-for-sale assets

143

-

 

3 Staff costs

The average number of persons employed by the Company (including Directors) during the period was as follows:

 

31 March

31 March

 

2016

2015

Directors and senior management

2

2

Total

2

2

 

The aggregate payroll costs for these persons were as follows:

 

 

31 March 2016

£'000

31 March 2015

£'000

Aggregate wages and salaries

 

78

44

Social security costs

 

-

-

Share-based payments

 

23

107

Pensions costs

 

-

-

 

 

101

151

 

 

4 Directors and senior management

 

Directors' remuneration

 

31 March 2016

 

Salary

Fees

Pension

Equity

Total

 

£'000

£'000

£'000

£'000

£'000

N B Fitzpatrick

-

32

-

-

32

A Laiker

-

46

-

46

 

-

78

-

-

78

 

 

31 March 2015

 

Salary

Fees

Pension

Equity

Total

 

£'000

£'000

£'000

£'000

£'000

N B Fitzpatrick

-

21

-

-

21

A Laiker

-

23

-

-

23

 

-

44

-

-

44

                   

 

Directors' and senior management's interests in shares

The Directors who held office at 31 March 2016 held the following shares:

 

 

31 March

2016

31 March

2015

N B Fitzpatrick

 

1,500,000

1,500,000

A Laiker

 

35,191,724

25,416,724

  

The total share-based payment costs in respect of options granted are:  

 

31 March

31 March

 

2016

2015

 

£'000

£'000

Directors

23

107

Non-management

-

-

 

On 18 September 2015 the Company granted options over a total of 10,489,560 ordinary shares of 0.1 pence each ("Ordinary Shares") representing approximately 1.7 per cent of the Company's issued ordinary share capital at the time of the grant, at an exercise price of 0.15 pence per share. The options were granted equally (5,244,780 each with a total exercise price of £7,867 per Director) to Directors, Brent Fitzpatrick and Antony Laiker, and vest as to one third on grant and one third on each of the first and second anniversaries of grant. They are not subject to any performance conditions and will lapse 7 years from the date of grant.

 

The exercise price of the options is lower than the mid-market price on 18 September 2015 of 0.19p per share and at a discount of 25 per cent. to the Company's most recent placing announced on 26 August 2015.

 

On 22 October 2015 the Company announced that it granted options over a total of 6,400,000 ordinary shares of 0.1 pence each ("Ordinary Shares") representing approximately 1.3 per cent of the Company's issued ordinary share capital at the time of the grant, at an exercise price of 0.205 pence per share. The options were granted equally (3,200,000 each with a total exercise price of £6,560 per Director) to Directors, Brent Fitzpatrick and Antony Laiker, and vest as to one third on grant and one third on each of the first and second anniversaries of grant. They are not subject to any performance conditions and will lapse 7 years from the date of grant.

 

The exercise price of the options is equal to the mid-market price on 22 October 2015 of 0.205p per share and at a premium of 2.5 per cent. to the Company's most recent placing announced on 26 August 2015.

 

Following the grant, the total number of options outstanding over ordinary shares is 29,124,854, representing 4.99 per cent of the Company's issued share capital.

 

The options have been valued using the Black-Scholes method and the appropriate charge made to the financial statements during the year under review. Further details regarding the valuation methodology are provided in note 13 to the financial statements

 

5 Tax

 

31 March 2016

31 March 2015

 

£'000

£'000

Current tax:

 

 

UK tax

-

-

Tax charge

-

-

 

A deferred tax asset relating to losses carried forward has not been recognised due to uncertainty over the existence of future taxable profits against which the losses can be used.  The Company has unused tax losses of approximately £4.4m (2015: £4.0m). In addition, a deferred tax liability on the cumulative fair value gain of £808k on available-for-sale assets has not been recognised on the basis that it would be offset by available taxable losses.

 

Tax reconciliation

 

31 March

31 March

 

2016

2015

 

£'000

£'000

Loss before tax

(351)

(303)

Tax at 21% (2015: 24%) on loss before tax

(74)

(63)

Effects of:

 

 

Other expenses not deductible

7

17

Utilisation of losses

-

-

Unrelieved losses carried forward

67

46

Total tax (credit)/expense

-

-

 

6 Loss per share

Loss per share has been calculated on a loss after tax of £351,000 (2015: £303,000 loss) and the weighted number of average shares in issue for the year of 533,749,896 (2015: 263,087,300).

 

The loss and weighted average number of shares used in the calculations is set out below:

 

 

31 March

 2016

31 March 2015

Loss (£'000)

(351)

(303)

Loss per share (pence)

(0.07)

(0.12)

 

 

7 Investments

 

31 March

31 March

 

2016

2015

 

£'000

£'000

Opening balance

1,147

524

Additions during the year

386

369

Disposals during the year

(17)

(5)

Exchange rate differences

3

6

Gain included in Other Comprehensive Income

449

253

Current year impairment charged to profit or loss

(50)

-

Closing balance

1,918

1,147

 

 

 

Additions during the year:

Further investment in 3Legs Resources Plc / SalvaRx

On 13 May 2015 the Company acquired a further 4,500,000 shares in 3Legs at a price of 0.215 pence per share.  The Company's resultant holding in 3Legs was 23,500,000 shares, representing 5.42% of the total voting rights of 3Legs. Vela's shareholding in 3Legs has been acquired at an average price of 0.213 pence per share for a total consideration of approximately £50,090. During the period, 3Legs completed the reverse acquisition of SalvaRx Limited and was renamed SalvaRx Group Plc. As a result of this transaction, the Company's shareholding was consolidated to 235,000 shares in SalvaRx Group Plc.

 

Investment in Revolve Performance

On 19 June 2015, the Company announced it had invested £50,000 in Revolve Performance.  Revolve Performance is a newly incorporated Company that has acquired 100% of the share capital of Nitec Limited, a non-operating holding Company that owns 100% of the UK operating Company, Revolve Technologies Limited ("Revolve Technologies"), and 91% of Mountune LLC, the US operating Company.

 

Revolve Performance has raised £1.5 million through an equity investment to support expansion in the US and £1.5 million through a loan investment which will be used mainly to refinance existing debt and capital expenditure in the UK. Vela has invested £50,000 in the equity investment round for a minority interest in the share capital of Revolve Performance.

 

Revolve Performance was incorporated on 17 April 2015 for the purposes of the transaction and has therefore not produced any accounts to date. For the year ended 31 December 2014, Nitec Limited generated revenue of £7.82 million and an operating profit of £0.20 million. Net assets of Nitec Limited as at 31 December 2014 were £2.22 million. Results for the first quarter of 2015 were ahead of internal forecasts with sales at Mountune LLC at record levels and growing.

 

BTL Limited

On 6 November 2015, the Company announced that it has successfully completed the investment in BTL Limited as previously announced on 26 August 2015 and 14 October 2015.  The Company invested £175,000, representing circa 5% of the fully diluted share capital of BTL Limited. BTL Limited is a technology company incorporated in the Isle of Man, headquartered in Vancouver, Canada, is exploring applications of blockchain technology in a variety of existing industries including money transmission, insurance, voting and smart contracts, its current focus is on developing a remittance solution, Interbit, as well as providing consultancy services to firms looking to leverage blockchain technology.

 

Further investment in Portr Limited

In March 2016 the Company announced that it had committed to a further investment in Portr Limited, which completed in April 2016.  The Company has further invested £151,343 and, following completion, the Company has an interest in 101,989 shares representing 3.9% of Portr's issued share capital.

 

 

8 Trade and other receivables       

 

31 March

31 March

 

2016

2015

 

£'000

£'000

Other receivables

13

19

Prepayments and accrued income

23

12

 

36

31

 

9 Trade and other payables

 

31 March

31 March

 

2016

2015

 

£'000

£'000

Trade payables

13

5

Accruals and deferred income

165

24

 

178

29

 

10 Share capital

 

31 March

31 March

 

2016

2015

 

£'000

£'000

Authorised capital

 

 

9,999,520,000 ordinary shares of 0.1 pence each

10,000

10,000

 

10,000

10,000

Allotted, called up and fully paid capital

 

 

721,588,020 ordinary shares of 0.1 pence each

722

459

 

722

459

 

Allotments during the period

The Company allotted the following ordinary shares during the year:

 

31 March 2016

Shares in issue at 1 April 2015

459,088,020

Shares issued during the year

262,500,000

Shares in issue at 31 March 2016

721,588,020

 

 

31 March 2015

Shares in issue at 1 April 2014

222,088,021

Shares issued during the period

236,999,999

Shares in issue at 31 March 2015

459,088,020

 

On 21 September 2015 the Company issued 125,000,000 new ordinary shares of 0.1p each at a price of 0.2p each, totalling £250,000.

 

On 8 March 2016 the Company issued 137,500,000 new ordinary shares of 0.1p each at a price of 0.16p each, totalling £220,000. Mr Antony Laiker, a Director of the Company, subscribed for 6,875,000 of these shares.

 

11 Cash and cash equivalents

Cash and cash equivalents comprise the following:

 

31 March

31 March

 

2016

2015

 

£'000

£'000

Cash and cash in bank:

 

 

Pound sterling

200

156

Cash and cash equivalents at end of year

200

156

 

12 Financial instruments

The Company uses various financial instruments which include cash and cash equivalents and various items such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company's operations and manage its working capital requirements.

 

The fair values of all financial instruments, other than certain investments recorded at cost, are considered equal to their book values. The existence of these financial instruments exposes the Company to a number of financial risks which are described in more detail overleaf.

 

The main risks arising from the Company's financial instruments are currency risk, credit risk and liquidity risk. The Directors review and agree the policies for managing each of these risks and they are summarised overleaf. The Company does not have any borrowings on which interest is charged at a variable rate. The Directors, therefore, do not consider the Company to be exposed to material interest rate risk.

 

Currency risk

There was minimal exposure to foreign exchange fluctuations to 31 March 2016, and as such sensitivity analysis has not been presented.

 

Credit risk

This section along with the liquidity risk and capital risk management sections below also form part of the strategic report.

 

The Company's exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date, as summarised below:

 

31 March

31 March

 

2016

2015

Classes of financial assets - carrying amounts

£'000

£'000

Financial assets measured at fair value through other comprehensive income

1,918

1,147

Loans and receivables

13

19

 

1,931

1,166

 

The Company's management considers that all of the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality.

 

None of the Company's financial assets are secured by collateral or other credit enhancements.

 

The Company is required to report the category of fair value measurements used in determining the value of its investments, to be disclosed by the source of its inputs, using a three-level hierarchy. There have been no transfers between Levels in the fair value hierarchy.

 

Quoted market prices in active markets - "Level 1"

Inputs to Level 1 fair values are quoted prices in active markets for identical assets.  An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.  The Company has three investments classified in this category, one of which was purchased in the year. The aggregate historic cost of the three investments is £355,950 and the fair value as at 31 March 2016 was £343,787 (2015: £127,683). In the current period £92,916 has been reclassified from the Available-For-Sale reserve to profit or loss in respect of the impairment of one of these three investments.

 

Valued using models with significant observable market parameters - "Level 2"

Inputs to Level 2 fair values are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly.  The Company has one unquoted investment classified in this category. The historic cost of this investment is £351,343 (2015: £200,000) and the fair value as at 31 March 2016 was £1,079,050 (2015: £525,444), giving rise to a gain of £402,263 in 2016 credited to Other Comprehensive Income. The investment was valued using the transaction price ascribed to the shares following a placing by the investee Company in April 2016.

 

Valued using models with significant unobservable market parameters - "Level 3"

Inputs to Level 3 fair values are unobservable inputs for the asset.  Unobservable inputs may have been used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date (or market information for the inputs to any valuation models).  As such, unobservable inputs reflect the assumptions the Company considers that market participants would use in pricing the asset.  None of the Company's investments fall into this category.

 

The Company has five investments that are held at cost less impairment as a reliable estimate of fair value cannot be determined. An impairment charge of £50,000 has been recognised directly in profit or loss in respect of one of these investments. As at 31 March 2016 the historical cost of these investments amounted to £545,413 and their aggregate carrying value was £495,413.

 

Liquidity risk

The Company maintains sufficient cash to meet its liquidity requirements. Management monitors rolling forecasts of the Company's liquidity on the basis of expected cash flow in accordance with practice and limits set by the Company. In addition, the Company's liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these.

 

Maturity analysis for financial liabilities

 

31 March 2016

 

31 March 2015

 

Within

Later than

 

Within

Later than

 

1 year

1 year

 

1 year

1 year

 

£'000

£'000

 

£'000

£'000

At amortised cost:

 

 

 

 

 

Financial liabilities at amortised cost

178

-

 

5

-

 

178

-

 

5

-

 

Capital risk management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. This is achieved by making investments commensurate with the level of risk. The Company is performing in line with the expectations of the Directors.

 

The Company monitors capital on the basis of the carrying amount of equity. The Company policy is to set the amount of capital in proportion to its overall financing structure, i.e. equity and long-term loans. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares or loan notes, or sell assets to reduce debt.

 

13 Share-based payments

 

The Company rewards its Directors using equity settled share-based payments.

 

On 18 September 2015 the Company granted options over a total of 10,489,560 ordinary shares of 0.1 pence each representing approximately 1.7 per cent of the Company's issued ordinary share capital at the time of the grant, at an exercise price of 0.15 pence per share. The options were granted equally (5,244,780 each with a total exercise price of £7,867 per Director) to Directors, Brent Fitzpatrick and Antony Laiker, and vest as to one third on grant and one third on each of the first and second anniversaries of grant. They are not subject to any performance conditions and will lapse 7 years from the date of grant.  The fair value of the options granted during the year was determined using the Black Scholes valuation model.

 

The model takes into account a volatility rate of 70.98%, which has been derived from historical experience. A weighted average risk-free interest rate of 2.0% has been applied. The share price was 0.19 pence and the exercise prices of the options were 0.15 pence.

 

On 22 October 2015 the Company announced that it granted options over a total of 6,400,000 ordinary shares of 0.1 pence each representing approximately 1.3 per cent of the Company's issued ordinary share capital at the time of the grant, at an exercise price of 0.205 pence per share. The options were granted equally (3,200,000 each with a total exercise price of £6,560 per Director) to Directors, Brent Fitzpatrick and Antony Laiker, and vest as to one third on grant and one third on each of the first and second anniversaries of grant. They are not subject to any performance conditions and will lapse 7 years from the date of grant. The fair value of the options granted during the year was determined using the Black Scholes valuation model.

 

The model takes into account a volatility rate of 79.47%, which has been derived from historical experience. A weighted average risk-free interest rate of 2.0% has been applied. The share price was 0.205 pence and the exercise prices of the options were 0.205 pence.

 

The amount of remuneration expense in respect of the share options granted amounts to £23,000 (2015: £107,000).

 

The total number of options outstanding at 31 March 2016 was 29,124,854 (2015: 22,724,854). None of the options issued have either lapsed or been exercised in the period.

 

Details of the options outstanding at the year end and the inputs to the option pricing model are as follows:

 

 

 

 

Options granted

Options granted

Options granted

Options

granted

 

 

22 October

18 September

2 October

8 April

 

 

2015

2015

2014

2014

Share price at grant date (pence)

 

0.21

0.19

0.33

1.50

Exercise price (pence)

 

0.21

0.15

0.33

0.85

Expected life (years)

 

7

7

7

7

Annualised volatility (%)

 

79.47

70.98

95.16

74.23

Risk-free interest rate (%)

 

2.0

2.0

2.0

2.0

Fair value determined (pence)

 

0.15

0.13

0.26

1.17

Number of options granted

 

6,400,000

10,489,560

4,000,000

8,235,294

Options exercisable at 31 March 2016

 

2,133,333

6,993,040

2,666,667

5,490,196

 

None of the options outstanding as at 31 March 2016 are subject to any performance criteria

 

14 Related party transactions

 

During the period the Company entered into the following related party transactions. All transactions were made on an arm's length basis.

 

Ocean Park Developments Limited

Nigel Brent Fitzpatrick, Non-Executive Director, is also a Director of Ocean Park Developments Limited.  During the year the Company paid £32,000 (2015: £21,000) in respect of his Directors fees to the Company.  The balance due to Ocean Park Developments Limited at the year end was £nil (2015: £nil).

 

Risk Alliance Insurance Brokers Limited

Nigel Brent Fitzpatrick, Non-Executive Director, is also a Director of Risk Alliance Insurance Brokers Limited.  During the year the Company paid £5,510 (2015: £5,830) in respect of insurance fees at arm's length, for the Company.  The balance due to Risk Alliance Insurance Brokers Limited at the year end was £nil (2015: £nil).

 

Widdington Limited

Antony Laiker, Director, is also a Director of Widdington Limited.  During the year the Company paid £46,000 (2015: £23,000) in respect of his Directors fees to the Company.  The balance due to Widdington Limited at the year end was £nil (2015: £nil).

 

15 Events after the balance sheet date

 

Further investment in BTL Limited

On 6 May 2016 the Company announced that it had subscribed for CAN$25,000 of new BTL shares at the price of the BTL private placement.  Following this new investment, the Company holds 741,666 ordinary shares, equivalent to a 4.7% equity interest.

 

Conversion of Stream TV loan note

On 23 June 2016 the Company has entered into a conversion notice agreeing to an early conversion of its $100,000 Stream TV CPN's, along with accrued interest of $43,693, into new Class A common shares in Stream TV at a price of $3.00 per share.  The accrued interest includes a bonus of $7,500 as a consequence of early conversion.   Following the conversion, the Company will have an interest of 0.14% in the Class A common share capital of Stream TV.

 

Disposal of SalvaRx shares

Between April 2016 and August 2016 the Company has disposed of a significant proportion of the shares held in SalvaRx for an aggregate consideration of £53,161.

 

Sale of Rosslyn Data Technologies plc shares

In July 2016 the company disposed of 30,000 shares for a consideration of £2,700.

 

 

Extraction of information in this announcement

 

The financial information, which comprises the statement of comprehensive income, balance sheet, cashflow statement, statement of changes in equity, and related notes to the financial statements, is derived from the full Company financial statements for the year ended 31 March 2016, which have been prepared under European Union endorsed International Financial Reporting Standards (IFRS) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

 

It does not constitute full financial statements within the meaning of section 434 of the Companies Act 2006. This financial information has been agreed with the auditor for release. The Company's full financial statements (comprising the statement of comprehensive income, balance sheet, cashflow statement, statement of changes in equity, and related notes to the financial statements) will be available for download on the Company's website from 5 September 2016.

 

The full annual report and financial statements for the year ended 31 March 2016 on which the auditor has given an unqualified report and which does not contain a statement under section 498 of the Companies Act 2006, will be delivered to the Registrar of Companies in due course.

 

The accounting policies used in completing this financial information have been consistently applied in all periods shown.  These accounting policies are detailed in the Company's financial statements for the year ended 31 March 2016 and will be available for download on the Company's website from 5 September 2016.

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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