TIDMLEG
RNS Number : 3104J
Legendary Investments PLC
08 September 2016
8 September 2016
Legendary Investments PLC
("Legendary" or the "Company")
RESULTS FOR THE YEARED 31 MARCH 2016
HIGHLIGHTS
-- Operating profit at GBP2,132,000, a record for Legendary (2015: loss of GBP466,000)
-- Net profit at GBP2,118,000, also a record for Legendary (2015: loss GBP470,000)
-- Investments (fixed asset investments and current asset
investments) at GBP4,275,000 (2015: GBP1,785,000), a rise of
139%
-- Net and total assets for the year were GBP4,071,000 (2015:
GBP1,906,000), an increase of 114%, and GBP4,354,000 (2015:
GBP1,986,000), an increase of 119%, respectively.
Zafar Karim, Executive Chairman commented:
"We believe that Legendary's search for deep value, its patient
opportunism and its proactive investment strategy have been
vindicated. We look back with pride on a year that was Legendary's
best ever, and forward with confidence in the potential of
Legendary's strategy and the transformational power of some of its
investments for the Company."
- Ends -
Legendary Investments Zafar Karim
PLC / Thomas Reuner 020 8201 3536
Grant Thornton Colin Aaronson
UK LLP / Harrison Clarke 020 7383 5100
Beaufort Securities
Limited Elliot Hance 020 7382 8300
About Legendary Investments PLC
Legendary Investments PLC is a proactive investment company that
focuses on making investments in and assisting companies which
exhibit the potential to generate returns of many multiples through
capital appreciation. Typically, Legendary invests in small
companies where there are clear catalysts for value appreciation
and the companies are operating in sectors exhibiting long term
growth. Examples of such sectors include technology, energy and
natural resources.
Executive Chairman's Statement
The year under review has been one of dramatic progress.
Virtualstock won further landmark clients in the retail sector, and
importantly won its first client in the health sector, Guy's and St
Thomas's Trust. In addition, its pipeline of new clients is strong
and growing in both sectors. Virtualstock's success attracted
highly reputable executives in the form of a new CEO, Andrew Mills,
and a Director of Healthcare and Public sector, Robert Knott.
Success also resulted in substantial value crystallisation when
Nick Jenkins, founder of Moonpig.com and angel investor, acquired a
small stake in Virtualstock at a valuation of GBP58 million. This
compares very favourably with the valuation of GBP2 million at
which Legendary acquired its initial stake in October 2012.
Legendary's holding in Manas Minerals, holder of a coal licence in
Kyrgyzstan, was exchanged for a stake in Manas Resources, holder of
a gold licence in the gold rich Tien-Shan region of Kyrgyzstan.
Bosques generation 1 and generation 2 pongamia have germinated and
are producing saplings. Amedeo completed the build of its first
rig. Several potential investments were reviewed but none were made
and, post the year end, the portfolio was streamlined to enable
more focus on the performing investments.
Operating profit was GBP2,132,000, a record for Legendary (2015:
loss of GBP466,000), and net profit was GBP2,118,000 (2015: loss
GBP470,000), also a record for Legendary, predominantly as a result
of the unrealised gain on the Company's investment in Virtualstock
of GBP2,438,000.
As at the year end, Legendary's investments (fixed asset
investments and current asset investments) were GBP4,275,000 (2015:
GBP1,785,000), a rise of 139%. Overall, net and total assets for
the year were GBP4,073,000 (2015: GBP1,906,000) an increase of
114%, and GBP4,354,000 (2015: GBP1,986,000), an increase of
119%.
Virtualstock Holdings Limited
Virtualstock is a disruptive software company with a game
changing approach to the costly and time-consuming process of
traditional systems integration. Utilising agile, open source
technology, Virtualstock has a unique way for information to flow
between fragmented systems, without disruption to any existing IT
landscape. Data is seamlessly collated, enriched, mapped and
validated, allowing only trusted, reliable information to be
deployed. Virtualstock's solutions are a rapid, flexible and
scalable alternative to traditional systems integrations. The
"integration" market is worth c.US$300-500 billion per year.
In the year under review, Virtualstock continued to build on the
success of the previous year: significant contracts in the retail
sector were won; expansion into the health sector occurred; and
success attracted executives of the highest calibre and increased
value by well over 100%.
In July 2015, Virtualstock supplied its Edge Solutions to
Maplin, the UK's leading electronics specialist. Virtualstock also
supplied the Edge Order Management System and Drop Ship Solutions
to Argos. Argos is the UK's leading digital retailer.
Significantly, Virtualstock contracted with Guy's and St Thomas's
Trust, a leading NHS Trust, to deliver cost saving efficiencies
within the Trust's supply chain. This represented Virtualstock's
first expansion into the health sector. Virtualstock is building
significant momentum in this sector. In February 2016, Virtualstock
continued to expand its presence in the retail sector by
contracting two clients, to use the Edge Solutions, both of whom
are household names and leaders in their respective fields.
The Edge Solutions facilitate expansion of online ranges without
the risks and costs associated with taking on additional inventory.
They allow clients to expand their online ranges by enabling
seamless connection to hundreds of suppliers and provide real time
visibility of inventory levels and order status (including track
and trace) enhancing customer experience and reducing cost. Online
orders taken by retailers can be fulfilled directly from suppliers
to the end consumer.
In September 2015, Virtualstock appointed Andrew Mills as its
Chief Executive Officer, and in December 2015, Virtualstock
appointed Robert Knott as Director of Healthcare and Public Sector.
Both Andrew Mills and Robert Knott have held senior and leadership
positions at Samsung IBM, EDS and KPMG Consulting, and the NHS,
Policing, Olympics, Work and Pensions, Local Government, Goldman
Sachs, Lehman Brothers, Schroders and Ernst Young, respectively.
Virtualstock's ability to attract executives with their experience
and reputation is testament to it increasing momentum and ultimate
potential.
In October 2015, and prior to Mr Knott's appointment,
Virtualstock's potential was recognised by Nick Jenkins, founder of
Moonpig.com and angel investor, who purchased a small stake in
Virtualstock at a valuation of GBP58 million, more than double the
valuation achieved in the April 2014 growth funding round. The
purchase placed a value of over GBP4 million on Legendary's 7%
stake and is responsible for Legendary's record profits.
In May 2016, post the year end, Beaufort published a broker's
note on Legendary, which valued Legendary's stake in Virtualstock
at GBP12.5 million, equivalent to Virtualstock having a valuation
of GBP179 million. This compares very favourably to the initial
valuation of GBP2 million at which Legendary originally invested in
Virtualstock in October 2012.
Virtualstock continues to service existing clients (including
Tesco, Office Depot, Maplin, Argos and Guy's and St Thomas's
Trust). Its pipeline and momentum continue to grow in both the
retail and healthcare sectors. It has high gross margins, typical
of companies in the SaaS space. Virtualstock has unicorn
potential.
Legendary has proactively supported and assisted Virtualstock to
reach this stage during which substantial milestones have been
achieved by and substantial value has been added to Virtualstock.
Legendary looks forward to continuing to work with Virtualstock to
achieve its unicorn potential. Legendary expects further progress
in the near to medium term with further contract wins and value
crystallisation.
As at the balance sheet date, and currently, Legendary holds its
7% stake in Virtualstock at a valuation of GBP4.0 million.
Manas Resources LLC
In 2012, Legendary invested GBP100,000 into Kyrgyzstan based
Manas Minerals LLC. Manas Minerals owned a coal licence in
Kyrgyzstan. With the outlook for coal deteriorating significantly,
Legendary began exploring ways of mitigating this. This culminated
in October 2015 when Legendary acquired a 5.5% stake and an option
over an additional 4.45% stake in Manas Resources LLC, the holder
of a licence to explore for gold in Sultan Sary, Narynskaya Oblast,
Kyrgyzstan, in exchange for its interests in Manas Minerals. The
option has a nominal exercise price and vests on Manas Resources
achieving certain milestones.
Manas Resources' licence area is located in the gold-rich
Tien-Shan region of Kyrgyzstan and covers approximately 66 sq km.
The southwest corner of the area covered by the licence, an area of
approximately 2 sq km, borders on its southern side the Choloktor
gold area that under the Soviet Classification system contains a P3
resource of 15 tonnes of gold. Choloktor in turn is bordered by
Buchuk, an area that under the Soviet Classification system
contains a C1 resource of 20 tonnes of gold and a P3 resource of 41
tonnes of gold. This area in turn borders the Altyntor area that
under the Soviet Classification system contain a C1 and C2 resource
of 7 tonnes of gold. About 5 tonnes of gold has historically been
mined from Buchuk, which is currently being evaluated by another
company. The structures in the southwest corner of the licence
(Area 3) are similar to those in the gold containing areas of
Choloktor, Buchuk and Altyntor, and it is believed that the same
mineralised structure runs through all four areas.
A map of the licence area can be found under the link:
https://www.dropbox.com/s/jkeglhpq3shfp3v/Soltan%20Sary%20Licence%20Map%20RNS%202.pdf?dl=0
Exploration work was conducted in 3 prospective sub-areas within
the licence area for an initial sampling phase in 2015. The results
of this work were announced in April 2016. Area 3, located in the
southwestern corner of the licence area and covers approximately
1.2 sq km, and is considered to be the most prospective part of the
licence area, being located along the same WNW structural corridor,
from the known deposits (outside the licence area) of Choloktor (3
km), Buchuk (5 km) and Altyntor (9 km). Area 3 is almost entirely
covered by Quaternary sediments, and no detailed surveys were
conducted in 2015. A reconnaissance survey identified some small
boulders in stream beds and gullies. A boulder sample collected
close to the southern border of the licence area assayed 36 g/t Au.
A bedrock sample taken from about 1 km outside the licence area
assayed 12 g/t Au. In both of these higher grade samples, the gold
is associated with quartz and limonite. These results lend support
to the interpretation that the mineralised
Choloktor-Buchuk-Altyntor structure continues onto the licence
area.
Area 2 is located in the eastern end of the licence area and
covers approximately 12 sq km. In this area sampling consisted of
approximately 2,500 soil samples (1,500 analysed) and 200 bedrock
samples (103 analysed). The surveys to date have identified a
number of lithochemical anomalies. This southern area is
interpreted as a WNW trending structural corridor favourable for
gold mineralisation. This is supported by the results of the
bedrock sampling, with samples returning assays with values up to 4
g/t Au. Five samples taken over 1 km, have returned values of 0.5
g/t Au or higher. The gold mineralisation in this southern area
tends to occur in quartz carbonate veinlets associated with copper
sulphides.
Area 1 is located in the northwestern corner of the licence area
and covers approximately 1.4 sq km. The distribution of bedrock in
Area 1 is restricted, especially in the more prospective regions,
covering less than 30% of the area. Sampling consisted of
approximately 400 soil samples and 100 bedrock samples (52
analysed). Two of the bedrock samples returned gold values
significantly above background concentrations.
Post the year end, in August 2016, Legendary announced that
Manas Resources had initiated a geophysical work programme to
define better and delineate known and potential gold mineralisation
in the licence area. The geophysics programme consists of ground
magnetics, Induced Polarisation (IP) profiles and gamma
spectrometry, and is focussing on the high priority subareas (Areas
3 and 2) identified previously. The geophysics programme is being
carried out by a local geophysical contractor in Kyrgyzstan. The
results of the geophysical surveys are expected sometime in Q42016.
Results from the geophysical work, and additional field work will
determine the nature and extent of further work.
As at the year end, and currently, Legendary holds a 5.5% stake
in Manas Resources, with an option over an additional 4.45% stake,
which are held on its balance sheet at GBP100,000.
Bosques Energeticos S.A. de C.V.
Bosques is an innovation based second generation biodiesel
company which has scored many "firsts" in Mexico, the region and,
potentially, worldwide. It was the first company to germinate
pongamia seeds in Mexico and Central America; it was the first to
root successfully pongamia scions in Mexico and the region; and it
was the first to have pongamia flowering within 2 1/2 years of
planting compared with the normal time of 5 to 6 years; and then in
less than 2 years in Mexico and the region, and possibly worldwide.
It has developed advanced generation jatropha which commences
yielding seeds in as early as 6 months compared to up to 2 years
for normal jatropha. In addition, its generation 4 jatropha
exhibits high yields. Generation 4 jatropha is also non-toxic as a
result of which its cake can and is being used for animal feed
(higher value) as well as fertilizer. Bosques was also ahead of
others in developing its inter and mixed multi-crop strategy.
In the year under review, in April 2015, Bosques reported that
the seeds produced by Bosques generation 1 and generation 2
pongamia had germinated and were producing saplings. This is yet
another landmark first for Bosques in Mexico and the region. The
germination of generation 1 and generation 2 pongamia seeds
demonstrates that Bosques has the ability to scale organically its
pongamia.
Bosques currently has 18 ha under cultivation, 11 ha in Puebla
and another 7 ha in Morelos, with 16,000 pongamia trees of which
300 are generation 2 and are producing fertile seeds and 400 are
generation 3, and 26,000 jatropha plants of which 14,000 are
generation 4.
Having proven its techniques on its test plantation, Bosques is
exploring ways in which to commercialise its innovations in Mexico
and further afield, including potentially in East and South East
Asia and in Africa.
Legendary has a substantial minority stake of 40% in Bosques
that it holds on its balance sheet at GBP83,000. Value
crystallisation might be expected in the medium term.
Amedeo Resources PLC
Amedeo's strategy is to invest in the energy and resource
infrastructure sectors. To date Amedeo has made 2 investments: one
in an new offshore vessel construction joint venture, Jiangsu
Yangzijiang Offshore Engineering Co. Ltd ("YZJ Offshore") with
multi-billion dollar Singaporean listed shipbuilder, Yangzijiang
Shipbuilding (Holdings) Ltd; and the other in a ferrous metal and
ferrous ore trader, MGR Resources Pte Ltd ("MGR").
Construction of YZJ Offshore's new yard commenced in mid-2012
and now the new yard is fully operational. The new yard won its
first order, for a Le Tourneau Super 116E Class design
self-elevating mobile offshore jack up rig, Explorer 1, in December
2012.
Explorer 1 was physically completed in December 2015. Following
completion, commissioning commenced, a process of testing and
certifying which takes several months, subsequent to which the rig
is expected to be delivered. Currently, delivery is expected in the
second half of 2016.
YZJ Offshore continues discussions with potential customers for
further orders with the benefit that it now has a rig that is
physically complete to showcase. No new orders, however, have been
forthcoming as currently the offshore vessel market remains
difficult due to the volatility in the oil price from its high
around US$115 per barrel in July 2014, through below c.US$30 per
barrel, with only a recent recovery.
While the current outlook in the offshore vessel sector may
appear challenging, Amedeo believes that the medium to long term
outlook is positive with activity set to increase. YZJ Offshore,
having completed its first rig, is well positioned to take
advantage of the recovery in the offshore fabrication market.
In the meantime, YZJ Offshore is absorbing container block
overspill from Yangzijiang Shipbuilding (Holdings) Ltd's principal
yards. These activities keep YZJ Offshore's yard busy. Amedeo has
an indirect 19.0% stake in YZJ Offshore.
With respect to MGR, the price of iron ore has fallen
substantially from January 2014 to now. This has eroded margins in
the iron ore brokering business. MGR has nonetheless remained
marginally profitable. With no immediate recovery in the price of
iron ore expected, MGR is exploring opportunities in broking other
commodities. Amedeo has a 49.0% equity stake in MGR.
As at the balance sheet date Legendary's stake in Amedeo was
valued at GBP22,000.
Other Investments
Medgold Resources Corp.
Medgold is a European-focused TSX-V listed exploration and
development company targeting gold properties in northwest Iberia
and the under-explored gold provinces of southern Europe. Run by a
highly experienced management team with a successful track record
of building value in resource companies, Medgold is aiming to
become a leading European gold company.
Medgold has 7 granted-licences in Portugal, all covering gold
exploration projects. Portugal has a robust, updated mining code,
and its government is actively seeking foreign investors and
working to encourage investment by mining and exploration
companies. Medgold has also established a wholly owned subsidiary
in the Republic of Serbia where it is applying for licences.
Medgold is Legendary's smallest and one of its earlier
investments. As at the balance sheet date, the market value of
Legendary's stake in Medgold was GBP13,000.
Sula Iron and Gold PLC
Sula was one of Legendary's earlier investments. Legendary
initially invested GBP50,000 in a pre-IPO funding round, shortly
after which Sula was admitted to trading on AIM, and Legendary
invested another GBP50,000 for further shares. As at the balance
sheet date, the investment in Sula was held on the balance sheet at
GBP4,000. Sula has not performed as expected, and post the year
end, in May 2016, the stake in Sula was divested.
Oracle Coalfields PLC
Oracle is a coal developer whose primary asset is the Thar
Coalfield Block VI licence area located in the Sindh Province,
Pakistan, a 1.4 billion tonnes resource with 529 million tonnes
JORC mineral resource and 113 million tonnes JORC proven reserves
within the mining area of the licence.
The stake in Oracle was acquired with the proceeds of the
disposal of Legendary's stake Regency Mines PLC. As at the balance
sheet date, the market value of Legendary's stake in Oracle was
GBP25,000. Legendary divested its holding in Oracle, post the year
end, in May 2016.
Financial Review
During the year, Legendary made a record net gain on fair value
of investments of GBP2,391,000 (2015: net loss of GBP235,000) due
primarily to the increase in value of the holding in Virtualstock.
Losses were incurred on the majority of listed investments. As
discussed above, Sula and Oracle were disposed of after the year
end, leaving only Amedeo and Medgold as the Company's listed
investments.
Administrative expenses were GBP259,000 (2015: GBP231,000).
Within Administrative expenses, share based payments charges rose
to GBP49,000 (2015: GBP25,000) due to the extension of the life of
certain warrants and the grant of incentive based warrants to
certain advisers. Directors' cash fees rose to GBP16,000 (2015:
GBP2,000). There was a GBP16,000 (2015: nil) foreign exchange loss
due to the deterioration of the GBP Sterling against the US$ in
relation to a US$ denominated loan of US$250,000 from Alcazar 1
Pte. The rises in Administrative expenses was offset by falls in
travel expenses to GBP24,000 (2015: GBP42,000) and legal, audit and
professional fees to GBP100,000 (2015: GBP110,000). Excluding the
non-cash element of share based payment charges, depreciation and
the foreign exchange loss, cash administrative expenses were lower
at GBP192,000 (2015: GBP204,000).
Operating profit was GBP2,132,000, a record for Legendary (2015:
loss of GBP466,000).
There were GBP14,000 of finance charges (2015: GBP4,000) due to
a loan of US$250,000 from Alcazar 1 Pte. This loan and associated
interest was repaid post the year end.
Net profit was GBP2,118,000, a record for Legendary (2015: loss
GBP470,000).
As at the year end, Legendary's investments (fixed asset
investments and current asset investments) were recorded
GBP4,275,000 (2015: GBP1,785,000), a rise of 139%. As noted above
the, the primary cause of this rise was the increase in the value
of the holding in Virtualstock.
Trade and other receivables due within one year were GBP47,000
(2015: GBP2,000). The principal reason for this rise was that an
agreement was entered into with Manas Resources for it to reimburse
Legendary for the costs and expenses that Legendary has incurred
and will incur in relation to assisting the development of that
business.
Cash amounted GBP30,000 (2015: GBP195,000) (including GBPnil
(2015: GBP1,000) in the client account of the Company's
accountants).
As at the year end, non-current liabilities were GBP30,000
(2015: GBP30,000). These liabilities relate to a facility taken out
in 2010. The facility bears no interest but repayment may be
requested from 5 August 2017.
Current liabilities were GBP251,000 (2015: GBP50,000). The
increase was due primarily to the Company obtaining a short term
loan of US$250,000 from Alcazar 1 Pte Limited. The loan bore
interest at a rate of 10% per annum. Subsequent to the year end,
the loan and attendant interest were repaid.
Overall, net and total assets for the year were GBP4,073,000
(2015: GBP1,906,000) an increase of 114%, and GBP4,354,000 (2015:
GBP1,986,000), an increase of 119%.
As at 5 September 2016, Legendary had cash and listed
investments of GBP566,000.
May Fund Raise
Post the year end, Legendary raised GBP1 million (before
expenses), by way of an oversubscribed placing of 333,333,333
ordinary shares of 0.10 pence nominal value each at a price of 0.3
pence per new ordinary share. The shares were placed with a range
of institutional and private investors. Following admission of the
new ordinary shares, Legendary's enlarged issued share capital
comprised 2,794,864,166 ordinary shares.
Outlook
The year under review has been one of dramatic progress.
Legendary believes that its search for deep value, its patient
opportunism and its proactive investment strategy have been
vindicated. Legendary works to continue increasing the value of its
existing investee companies, and is reviewing further potential
investments, particularly those with a technology angle.
The Board looks to the future with confidence.
Statement of Comprehensive Income
For the year ended 31 March 2016 (Audited)
2016 2015
Note GBP'000 GBP'000
Net gain/(loss) on fair value
investments 2,391 (235)
Administrative expenses (259) (231)
Operating profit/(loss) 2,132 (466)
Profit/(loss) on ordinary activities
before interest 2,132 (466)
Interest payable (14) (4)
Profit on ordinary activities
before taxation 2,118 (470)
Tax on profit on ordinary activities 5 - -
Profit/(loss) for the financial
year 2,118 (470)
Other comprehensive income,
net of income tax:
Other comprehensive income,
net of tax - -
Total comprehensive income for
the year 2,118 (470)
Earnings per share
* basic (pence) 6 0.09p (0.02)p
* diluted (pence) 6 0.08p (0.02)p
All activities derive from continuing operations.
Statement of Financial Position
As at 31 March 2016 (Audited)
1 April
2016 2015 2014
Notes GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant and
equipment 7 2 4 2
Investments held
at fair value through
profit and loss 8 4,211 1,673 1,281
Total non-current
assets 4,213 1,677 1,283
cURRENT aSSETS
Trade and other receivables 10 47 2 39
Investments held
at fair value through
profit and loss 9 64 112 347
Cash at bank and
in hand 30 195 63
Total current assets 141 309 449
TOTAL ASSETS 4,354 1,986 1,732
equity AND LIABILITIES
Share capital 13 2,462 2,462 1,643
Share premium 14 8,345 8,345 8,316
Share warrant and
option reserve 293 244 219
Profit and loss account
- deficit (7,027) (9,145) (8,675)
Equity attributable
to equity holders 4,073 1,906 1,503
NON-CURRENT LIABILITIES 12 30 30 30
CURRENT LIABILITIES 11 251 50 199
TOTAL EQUITY AND
LIABILITIES 4,354 1,986 1,732
Statement of Changes in Equity
As at 31 March 2016 (Audited)
Attributable to owners of the company
Profit and
loss
Share Share account
capital premium Share warrant and option reserve deficit Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April 2014 1,643 8,316 219 (8,675) 1,503
========== ========= ================================= ========== ================
Loss for the year - - - (470) (470)
Total other comprehensive loss - - - - -
----- ----- --- ------- -------
Total comprehensive loss - - - (470) (470)
----- ----- --- ------- -------
Issue of shares 819 29 - - 848
Share based payments - - 25 - 25
----- ----- --- ------- -------
Balance at 31 March 2015 2,462 8,345 244 (9,145) 1,906
===== ===== === ======= =======
Profit for the year - - - 2,118 2,118
Total other comprehensive loss - - - - -
----- ----- --- ------- -------
Total comprehensive income - - - 2,118 2,118
----- ----- --- ------- -------
Share based payments - - 49 - 49
----- ----- --- ------- -------
Balance at 31 March 2016 2,462 8,345 293 (7,027) 4,073
===== ===== === ======= =======
Statement of Cash Flows
For the year ended 31 March 2016 (Audited)
2016 2015
Cash flows from operating activities GBP'000 GBP'000
Profit/(loss) before taxation 2,118 (470)
Adjustments for:
Share option / warrant charge 49 25
Depreciation 2 2
Change in fair value of investments (2,390) 235
(221) (208)
Changes in working capital:
(Increase)/decrease in trade
and other receivables (45) 37
Increase/(decrease) in trade
and other payables 12 (149)
(33) (112)
Net cash outflow from operating
activities (254) (320)
------- -------
Cash flows from investing activities
Purchase of investments (100) (396)
Net cash outflow from investing
activities (100) (396)
------- -------
Cash flows from financing activities
Proceeds from issues of new
ordinary shares - 900
Expenses paid in connection
with issue of shares - (52)
Increase in long term loan 189 -
Net cash inflow from financing
activities 189 848
------- -------
Net (decrease)/increase in
cash and cash equivalents (165) 132
Cash and cash equivalents at
1 April 195 63
Cash and cash equivalents at
31 March 30 195
======= =======
Accounting Policies
Corporate information
Legendary Investments PLC (the 'Company') is a company
incorporated and domiciled in the UK. The address of the registered
office is Jubilee House, Townsend Lane, London, NW9 8TZ. The
Company's principal activity is that of an investment company.
Basis of preparation
The company prepares its financial statements in accordance with
applicable International Financial Reporting Standards as adopted
by the European Union ("IFRS"), and with those parts of the
Companies Act 2006 as applicable to companies reporting under
IFRS.
The Group's deemed transition date to IFRS is 1 April 2014. The
principles and requirements for first time adoption of IFRS are set
out in IFRS 1. IFRS 1 allows certain exemptions in the application
of particular standards to prior periods in order to assist
companies with the transition process. The Company has not applied
any of the optional exemptions under IFRS 1. This is the first
financial information prepared in accordance with IFRS.
The financial statements have been prepared on a historical cost
basis, except for the revaluation of certain financial
instruments.
The financial statements are presented in thousands of pounds
sterling ("GBP'000") except when otherwise indicated.
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all periods presented, unless otherwise
stated.
New standards, amendments and interpretations
At the date of authorisation of this financial information, the
directors have reviewed the Standards in issue by the International
Accounting Standards Board ("IASB") and IFRIC, which are effective
for annual accounting periods ending on or after the stated
effective date. In their view, none of these standards would have a
material impact on the financial reporting of the Company.
Impairment of asset values
Property, plant and equipment is reviewed for impairment if
events or changes in circumstances indicate that the carrying
amount may not be recoverable or as otherwise required by relevant
accounting standards.
Investments and financial instruments
Investments, financial assets and financial liabilities are
recognised on the Company's statement of financial position when
the Company has become a party to the contractual provisions of the
instrument.
Fixed asset investments include investments in investee
companies where the time horizon for realisation of the investment
is considered to be longer than one year. Investments in investee
companies where the time horizon for realisation of the investment
is considered to be less than one year are classified as current
assets.
All investments have been designated as fair value through
profit or loss, and are initially measured at cost that is the best
estimate of fair value. Thereafter, the investments are measured at
subsequent balance sheet dates at fair value. A financial asset is
designated in this category if it is acquired to be managed and its
performance is evaluated on a fair value basis with a view to
selling after a period of time. Listed investments and investments
traded on AIM or overseas stock exchanges are stated at current
price at the balance sheet date provided the market is active.
Unlisted investments are stated at directors' valuation with
reference to the International Private Equity and Venture Capital
Valuation Guidelines ("IPEVG") and in accordance with IAS39
"Financial Instruments: Recognition and Measurement":
Investments which have been made within the last twelve months
or where the investee company is in the early stage of development
will usually be valued at the price of recent investment except
where the company's performance against plan is significantly
different from expectations on which the investment was made in
which case a different valuation methodology will be adopted.
For investments with a shareholding greater than 20% but less
than 50% of the equity share capital, IAS 28 states that venture
capital companies have the option of recording investments on the
balance sheet according to the equity method or at fair value in
accordance with IFRS 9 "Financial Instruments" (or IAS 39
"Financial Instruments: Recognition and Measurement"). Management
makes use of this option and assesses the associates at fair value
through profit or loss. In the current and prior year, the
conditions for exercising this option were fulfilled for Bosques
Energeticos EBE S.A. de C.V; the value of which is included at fair
value through profit or loss.
Any realised and unrealised gains or losses on investments are
taken to the profit and loss account.
Fair value measurement
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability
Or
-- In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must be accessible
by the Group.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.
A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits from the asset's highest and best use or by selling it to
another market participant that would utilise the asset in its
highest and best use.
The Group uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant
observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised
within the fair value hierarchy. This is described, as follows,
based on the lowest level input that is significant to
the fair value measurement as a whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets
for identical assets or liabilities
-- Level 2 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly
or indirectly observable
-- Level 3 - Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable
Financial assets
Classification
Management determines the classification of its financial assets
at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are initially recognised at fair value, and are
subsequently stated at amortised cost using the effective interest
method. They are included in current assets, except for maturities
greater than 12 months after the end of the reporting period. Loans
and receivables comprise mainly cash and cash equivalents and trade
and other receivables.
Impairment of financial assets
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty, default or significant delay in payment,
disappearance of active market for that financial asset, or
bankruptcy or financial reorganisation of borrowers) that the
Company will be unable to collect all of the amounts due under the
terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable.
For trade receivables, which are reported net, such provisions
are recorded in a separate provision account with the loss being
recognised within administrative expenses in the consolidated
statement of comprehensive income. On confirmation that the trade
receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
Financial liabilities and equity
Debt and equity instruments issued by a group are classified as
either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual
interest in the assets of equity after deducting all of its
liabilities. Equity instruments issued by a group entity are
recognised at the proceeds received, net of direct issue costs.
Debt, such as borrowings and trade and other payables are
measure at amortised cost using the effective interest method.
Cash and cash equivalents
The Company considers any cash on short-term deposits and other
short term investments to be cash equivalents.
Trade payables
Trade payables are initially recognised at fair value and
subsequently at amortised cost using the effective interest
method.
Loans
Loans are initially recognised at fair value and subsequently at
amortised cost.
Equity instruments
Issued equity instruments are recorded at fair value on initial
recognition net of transaction costs.
Property, plant and equipment
Items of property, plant and equipment are stated at cost or
deemed cost less accumulated depreciation and impairment losses.
Cost includes the original purchase price of the asset and the
costs attributable to bringing the asset to its working condition
for its intended use. When parts of an item of property, plant and
equipment have different useful lives, those components are
accounted for as separate items of property, plant and
equipment.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be measured
reliably. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognised in the
income statement.
Depreciation is charged to profit or loss on a straight-line
basis over the estimated useful lives of each part of an item of
property, plant and equipment. The property, plant and equipment
acquired under finance leases is depreciated over the shorter of
the useful life of the asset and the lease term. Freehold land is
not depreciated.
The estimated useful lives are as follows:
Computer equipment - 4 years
The useful lives are reviewed, and adjusted if appropriate, at
each balance sheet date.
Taxation
The tax currently payable is based on the taxable profit for the
period. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other periods and it further
excludes items that are never taxable or deductible. The Company's
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Deferred income tax is provided for using the liability method
on temporary timing differences at the balance sheet date between
the tax basis of assets and liabilities and their carrying amounts
for financial reporting purposes. Deferred income tax liabilities
are recognised in full for all temporary differences. Deferred
income tax assets are recognised for all deductible temporary
differences carried forward of unused tax credits and unused tax
losses to the extent that it is probable that taxable profits will
be available against which the deductible temporary differences,
and carry-forward of unused tax credits and unused losses can be
utilised. The carrying amount of deferred income tax assets is
assessed at each balance sheet date and reduced to the extent that
it is no longer probable that sufficient taxable profits will be
available to allow all or part of the deferred income tax asset to
be utilised. Unrecognised deferred income tax assets are reassessed
at each balance sheet date and are recognised to the extent that is
probable that future taxable profits will allow the deferred income
tax asset to be recovered. Consideration is given to both capital
and trading losses, and to the extent that the company is able to
realise a deferred tax asset and settle any taxation liabilities
simultaneously, these amounts are offset.
Foreign currency translation
Monetary assets and liabilities denominated in foreign
currencies are translated into sterling at the rates of exchange
ruling at the accounting date. Transactions in foreign currencies
are recorded at the rate ruling at the date of the transaction. All
differences are taken to profit or loss.
Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting to the Board of Directors which has been
identified as the chief operating decision maker ("CODM"). The
Board of Directors consists of the Executive Directors. Please
refer to note 2 for segmental information.
Going concern
The Company's business activities, together with the financial
position of the Company and the factors likely to affect its future
development, performance and position are set out in the Executive
Chairman's Statement.
Legendary had administrative expenses, excluding non-cash items,
for the year ended 31 March 2016 of GBP192,000
(2015: GBP204,000). These administrative expenses of GBP192,000
included GBP44,000 relating to travel expenses, legal and
investment related expenses and directors remuneration. The
remaining balance of GBP148,000 (2015: GBP133,000) related to the
fixed costs of running Legendary and maintaining its listing.
The directors take steps to keep the running costs of Legendary
low. This is evidenced by the costs themselves, the directors'
remuneration policy and the costs in comparison to other listed
companies (Legendary is listed on the AIM market of the LSE).
As at 5 September 2016, Legendary had GBP503,000 of cash and
GBP63,000 of listed investments. The listed investments may be
realised for cash at short notice. Together, this gave Legendary,
liquid resources of GBP566,000.
On the basis of the above, the Directors believe that sufficient
funds will be available to support the going concern status of the
Company over the next 12 months following the approval of these
financial statements. Consequently, the Directors believe that it
is appropriate to prepare the Company's financial statements on a
going concern basis. This assumes that the Company is to continue
in operational existence for a period of at least 12 months from
the date of approval of the financial statements.
Share based payments
The Company issues equity-settled share based payments to
certain employees in the form of options and warrants. A fair value
for the equity-settled share awards is measured at the date of the
grant. The fair value is measured using the Black Scholes method of
valuation, which is considered to be the most appropriate valuation
technique. The valuation takes into account factors such as
non-transferability, exercise restrictions and behavioural
considerations.
An expense is recognised to spread the fair value of each award
over the vesting period on a straight-line basis, after allowing
for an estimate of the share awards that will actually vest. The
estimate of vesting is reviewed annually, with any impact on the
cumulative charge being recognised immediately. Amounts to be
settled in shares are presented within equity, representing the
expected time-apportioned fair value of the awards that are
expected to vest.
Exceptional items policy
Material items which derive from events or transactions that
fall within the ordinary activities of the reporting entity have
been disclosed as exceptional where individually or, if of a
similar type, in aggregate, their size or occurrence requires
separate disclosure if the financial statements are to give a true
and fair view.
1 CRITICAL ACCOUNTING JUDGEMENTS
AND ESTIMATES
The preparation of the Company's financial statements under IFRS
requires the Directors to make estimates and assumptions that
affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities. Estimates and
judgements are continually evaluated and are based on historical
experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates.
The Directors consider that the following estimates and
judgements are likely to have the most significant effect on the
amounts recognised in the financial statements:
Valuation of investments:
The Company's financial instruments are measured at fair value
in the statement of financial position and it is usually possible
to determine their fair values within a reasonable range of
estimates. For actively traded financial instruments, quoted market
prices are readily available. For other financial instruments, such
as unlisted securities, valuation techniques are used to estimate
fair value. Valuation techniques make maximum use of market inputs,
including reference to the current fair values of instruments that
are substantially the same (subject to appropriate adjustments).
Fair value estimates are made at a specific point in time, based on
market conditions and information about the financial instrument.
These estimates are subjective in nature and involve uncertainties
and matters of significant judgement and therefore cannot be
determined with precision.
Share based payments:
In order to calculate the charge for share-based compensation as
required by IFRS 2, the Group makes estimates principally relating
to the assumptions used in its option-pricing model as set out in
note 15.
2 SEGMENTAL ANALYSIS
The Company only has one class of business and only operates
within the United Kingdom.
3 PROFIT ON ORDINARY ACTIVITIES 2016 2015
BEFORE TAX GBP'000 GBP'000
Profit on ordinary activities before
tax for the year is stated after
charging:
Depreciation of tangible fixed
assets 2 2
Auditor's remuneration - statutory
audit (1) 17 23
- Other services 1 1
(1) Auditor's remuneration for the year ended 31 March 2015
related to amounts paid to RSM UK Audit LLP.
2016 2015
4 DIRECTORS Number Number
Number of employees
The average monthly number of employees
including directors, during the
year was: 2 2
GBP'000 GBP'000
Directors' emoluments
Directors' fees 16 2
Share based payment cost - 25
Other than the gross directors' fees of GBP16,200 (2015:
GBP2,400) paid in the year there were no fees accrued during the
year With respect to directors' share based payments, see note 15.
The directors' fee remained unpaid as at the year-end date.
5 TAX ON (LOSS)/ PROFITON ORDINARY 2016 2015
ACTIVITIES GBP'000 GBP'000
Analysis of charge/(credit) in
the year:
Current tax - -
Deferred tax - -
- -
Profit/(loss) on ordinary activities
before tax 2,118 (470)
Profit/(loss) on ordinary activities
multiplied by standard rate of
corporation tax in the UK 20% (2015:
21%) 424 (99)
Expenses not deductible for tax
purposes 29 32
Tax losses unutilised/(utilised) (453) 67
Current tax charge for year - -
The company has not recognised a deferred tax liability on
current period and cumulative unrealised gains on certain
investments as these gains will be offset against the available
capital losses of the company. The total gains on the investments
are GBP3.97 million, and the associated deferred tax asset and
liability would be approximately GBP0.79 million. As at 31 March
2016 the Company had capital losses of approximately GBP4.6 million
(2015: GBP4.6million) available to carry forward against future
capital gains, and trading losses of approximately GBP3.5 million
(2015: GBP5.7 million), which includes GBP0.03 million in respect
of tax deductions on share options and warrants. A deferred tax
asset of GBP0.7 million (2015: GBP1.1 million) is not recognised in
respect of these trading losses due to the uncertainty as to the
utilisation of the losses in the foreseeable future.
Future tax charges will be dependent on the split of profits for
tax purposes as between revenue and capital items, and the
utilisation of losses incurred to date.
2016 2015
6 EARNINGS PER ORDINARY SHARE GBP'000 GBP'000
Profit / (loss) for the financial
year 2,118 (470)
Average number of ordinary shares
in issue (basic) ('000) 2,461,532 2,322,441
Basic earnings per share (pence) 0.09p (0.02)p
Diluted earnings per share (pence) 0.08p (0.02)p
The average number of undiluted shares in issue during the year
was 2,461,531,830. The fully diluted number of shares in issue
during the year was 2,709,093,455.
7 PROPERTY, PLANT AND EQUIPMENT Office
Equipment
GBP'000
COST
At 1 April 2014 5
Additions 4
At 31 March 2015
At 1 April 2015 9
Additions -
At 31 March 2016 9
DEPRECIATION
At 1 April 2014 3
Charge for the year 2
At 31 March 2015
At 1 April 2015 5
Charge for the year 2
At 31 March 2016 7
NET BOOK VALUE
At 31 March 2016 2
At 31 March 2015 4
At 1 April 2014 4
8 INVESTMENTS Unlisted
Investments
GBP'000
VALUATION
At 1 April 2014 1,281
Exercise of options 392
At 31 March 2015 1,673
At 1 April 2015 1,673
Exercise of options 100
Unrealised gain on revaluation 2,438
At 31 March 2016 4,211
During the year, options over 75,187 shares in Virtualstock
Holdings Limited were exercised for GBP100,000. In April 2015, the
Company increased its stake in Virtualstock to 7.0%. Included in
unlisted investments are the following companies:
INVESTMENT Carrying Exercise Carrying Fair value
value of options Unrealised value hierarchy
31 March gain on 31 March
2015 GBP'000 revaluation 2016
GBP'000 GBP'000 GBP'000
Bosques energeticos Level
Ebe S.A de C.V 83 - - 83 3
Virtualstock Holdings Level
Limited 1,490 100 2,438 4,028 2
Manas Resources Level
LLC 100 - - 100 3
Total 1,673 100 2,438 4,211
Further information in relation to the fair value hierarchy is
provided in note 1 and 16 to the financial statements.
The Company holds more than 20% of the equity (and no other
share or loan capital) of the following undertakings:-
Class Proportion Nature of
Other Participating of directly Business
Interest: holding held
Bosques Energeticos Ordinary 40% Development
EBE S.A. de C.V. and cultivation
of renewable
energy crops
Bosques Energeticos EBE S.A. de C.V., in which the Company has
more than 20% interest, is an associated undertaking. The
investment is recognised on the balance sheet at fair value in
accordance with IAS 39 Financial Instruments: "Recognition and
Measurement"
All investments are measured at fair value through profit and
loss as detailed in the accounting policy.
9 CURRENT ASSET INVESTMENTS Listed
Investments
GBP'000
VALUATION
At 1 April 2014 347
Loss on revaluation (235)
At 31 March 2015 112
At 1 April 2015 112
Loss on revaluation (48)
At 31 March 2016 64
Being:
AIM listed 51
TSX listed 13
64
Included in listed investments are the following companies:
INVESTMENT Carrying Exercise Unrealised Carrying Fair value
value of options gain / value hierarchy
31 March (loss) 31 March
2015 GBP'000 on revaluation 2016
GBP'000 GBP'000 GBP'000
Medgold Resources Level
Corp 16 - (3) 13 1
Sula Iron and Level
Gold PLC 22 - (18) 4 1
Amadeo Resources Level
PLC 64 - (42) 22 1
Oracle Coalfields Level
PLC 10 - 15 25 1
Total 112 - (48) 64
Further information in relation to the fair value hierarchy is
provided in notes 1 and 16 to the financial statements.
10 tRADE AND OTHER RECEIVABLES 1 April
2016 2015 2014
GBP'000 GBP'000 GBP'000
Prepayments 2 1 1
Other debtors 45 1 38
47 2 39
Other debtors includes amounts receivable of GBP42,000 (2015:
GBP1,000) under a loan facility agreement between Manas Resources
LLC and the Company.
1 April
2016 2015 2014
11 CURRENT LIABILITIES GBP'000 GBP'000 GBP'000
Trade creditors 38 15 21
Accruals 20 26 26
Short term loan 189 - 152
Other creditors 4 9 -
251 50 199
Trade creditors, other creditors and accruals represent the
Company's financial liabilities measured at amortised cost. Due to
their short term nature, carrying value approximates to fair
value.
Other creditors of GBP4,000 (2015: GBP9,000) related to travel
and other expenses that the Directors incurred in relation to
ordinary activities of the Company. These amounts remained
outstanding as at the balance sheet date, but were paid post the
balance sheet date.
In May 2015, the Company obtained a short term loan of
US$250,000, equivalent to GBP159,000 from Alcazar 1 Pte Limited,
which holds 272,727,273 shares (at that time 11.1% stake) in the
Company. The loan has an interest rate of 10% per annum. The loan
was secured on shares in the Company valued at the market price of
the shares at the time when the loan became repayable. Interest
accrued on the loan at balance sheet date totalled GBP14,000 and is
included in the loan balance. As at the year end date the foreign
exchange loss of GBP16,000 was recognised and loan amount was
restated. As at the year end date the total loan outstanding
including interest was GBP189,000 (2015: nil). The loan was repaid
in July 2016, post the balance sheet date.
1 April
2016 2015 2014
12 NON-CURRENT LIABILITIES GBP'000 GBP'000 GBP'000
Loan 30 30 30
GBP30,000 was raised in August 2010 by way of a loan facility.
The facility bears no interest. Repayment can be requested from 5
August 2017. Therefore, the facility has been classified as due in
more than one year as the Directors believe this most appropriately
reflects the period over which the loan will be repaid. The
Directors consider the fair value of this loan approximates the
carrying value.
1 April
2016 2015 2014
13 CALLED UP SHARE CAPITAL GBP'000 GBP'000 GBP'000
AUTHORISED
3,000,000,000 ordinary
shares of GBP0.001 each 3,000 3,000 3,000
ALLOTTED, ISSUED AND
FULLY PAID
2,461,530,833 (2015:
2,461,530,833)
ordinary shares of GBP0.001
each 2,462 2,462 1,643
2016 2015 1 April 2014
14 SHARE PREMIUM GBP'000 GBP'000 GBP'000
At start of the year 8,345 8,316 8,316
Premium on Ordinary
Shares Issued of 0.001
each - 82 -
Expenses paid in connection
with the share issue - (53) -
At end of the year 8,345 8,345 8,316
15 SHARE BASED PAYMENT
Share Options
The Company has unapproved and approved share option schemes in
which the directors participate.
Under the Company's approved share option plan, the Company
grants options and shares to certain directors and employees of the
Company. If the options remain unexercised for a period of 10 years
from the date of grant, the options lapse. The options are
exercisable immediately on grant.
Details of Directors' outstanding share options as at the year
ended are shown below.
31 March 2016 31 March 2015
Exercise Exercise
price price
per share Number per share Number
Zafar Karim 0.2p 316,000,000 0.2p 316,000,000
Thomas Reuner 0.35p 5,000,000 0.35p 5,000,000
Thomas Reuner 0.2p 97,000,000 0.2p 97,000,000
418,000,000 418,000,000
Movements in ordinary share options outstanding
31 March 31 March
2016 2015
Weighted Weighted
average average
exercise exercise
price price
Number pence Number Pence
At start of the
year 450,000,000 0.2p 350,000,000 0.20p
Granted during
the year - - 100,000,000 0.20p
At end of the year 450,000,000 0.2p 450,000,000 0.20p
All options were exercisable at the end of the year.
Last date Exercise Granted Lapsed Exercised Outstanding
when exercisable price No. No. at 31 March
2016
12 February
2021 0.20p 80,000,000 - - 80,000,000
20 May
2021 0.35p 5,000,000 - - 5,000,000
6 February
2022 0.20p 35,000,000 - - 35,000,000
21 January
2023 0.20p 50,000,000 - - 50,000,000
9 June
2023 0.20p 80,000,000 - - 80,000,000
23 December
2023 0.20p 100,000,000 - - 100,000,000
3 August
2024 0.20p 100,000,000 - - 100,000,000
450,000,000 450,000,000
Fair value
The fair value of the options granted in the prior year was
estimated at the date of grant using a Black-Scholes option pricing
model that uses assumptions noted in the table below. No
performance conditions were included in the fair value
calculations.
Expected life of options (years) 5
Exercise price 0.20p
Share price at grant date 0.10p
Risk free rate 1.94%
Expected share price volatility 49.1%
Expected dividend yield 0.00%
Estimate of % of options vesting 100%
Assumed staff attrition 0%
Fair value of options 0.0253p
The Company uses historical data to estimate option exercise and
employee termination within the valuation model. Expected
volatilities are based on implied volatilities as determined by
simple average of a sample of listed companies base in similar
sectors. The risk free rate for the period within the contractual
life of the option is based on the UK gilt yield curve at the time
of the grant.
Warrants
Other than the employee share options set out above, warrants
have been granted with exercise prices and dates shown in the table
below.
Last date Exercise Granted Lapsed Exercised Outstanding
when exercisable price No. No. at 31
March
2016
5 August
2015 (1) 0.10p 260,000,000 (10,000,000) - 250,000,000
5 August
2015 0.20p 10,000,000 (10,000,000) - -
23 November
2015 0.15p 25,000,000 (25,000,000) - -
28 November
2015 0.20p 20,000,000 (20,000,000) - -
21 May 2017 0.12p 2,272,727 - - 2,272,727
14 November
2017 (2) 0.00p 45,000,000 - - 45,000,000
362,272,727 (65,000,000) - 297,272,727
(1) During the year, 250,000,000 of the warrants had their life
extended by 2 years to 4 August 2017 in exchange for not asking for
repayment of the attached loan facility of GBP30,000 until 5 August
2017 made on 5 August 2010. The loans bear no interest. Repayment
can be requested from 5 August 2017. As a result of modification of
warrants, a charge amounting to GBP31,000 was recognised in the
statement of comprehensive income.
(2) On 15 November 2015, 45,000,000 performance related warrants
to purchase one ordinary share each were issued with the
performance period from 15 November to 14 November 2018. The
performance warrants are subject to absolute share price target
between 0.15p - 1.00p.
Movements in warrants outstanding
31 March 31 March
2016 2015
Weighted Weighted
average average
exercise exercise
price price
Number Pence Number pence
At start of the year 317,272,727 0.12p 352,500,000 0.12p
Granted during the year 45,000,000 0.15p -1p 2,272,727 0.12p
Lapsed during the year (65,000,000) 0.17p (37,500,000) 0.15p
At end of the year 297,272,727 0.11p 317,272,727 0.11p
The fair value of the performance warrants granted in the year
was GBP18,000 (2015: GBP1,000). The fair value of the warrants is
estimated at the date of grant using a stochastic option pricing
model that uses assumptions noted in the table below. Performance
conditions were included in the fair value calculations.
Expected life of warrants (years) 3 years
Exercise price 0p
Share price at grant date 0.10p
Risk free rate 0.87%
Expected share price volatility 70.58%
Expected dividend yield 0.00%
Fair value of warrants GBP18,000
Other Information
The market price of the Company's ordinary shares ranged from a
high of 0.17p to a low of 0.08p during the year.
16 FINANCIAL INSTRUMENTS
Loans and receivables
Loans and receivables include cash at bank and in hand and other
debtors. Financial liabilities at amortised cost include trade
creditors, accruals and loans.
Borrowing facilities
At the year end the Company had no overdraft or other borrowing
facilities (2015: GBPnil).
Capital Management
The Company is financed primarily with equity capital, which is
then utilised to meet operating expenses and make investments.
Investments are financed primarily from equity capital, though debt
may be utilised where it is felt that it is prudent to do so.
Interest rate risk
The Company does not have exposure to interest rate. The Company
had a loan at a fixed interest rate of 10% paid in two half yearly
instalments. The interest rate is fixed for the term of the loan.
The loan was repaid in July 2016.
Currency risk
The Company makes investments in both UK and foreign companies.
In addition, the companies in which the Company invests may or may
not have exposure to foreign currency exposure. In this regard the
Company has foreign currency exposure. Currency exposure is one the
factors considered when making investments, and as such it is
implicitly managed at the point of investment.
In addition, the Company had a loan denominated in US$ and is
therefore exposed to the risk of GBPSterling depreciating against
the US$. This loan was repaid in July 2016, post the year end.
Liquidity risk
The Company makes investments in unlisted and listed entities.
Consequently, the Company is exposed to the liquidity risk to the
extent that it may not be able to find buyers for its unlisted
investments and liquidity in its listed investments may be low.
Therefore, there can be no certainty that the Company would be able
to exit its investments. The table below analyses the Company's
non-derivative financial liabilities into relevant maturity
groupings based on the remaining period at the balance sheet date
to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscounted cash flows.
2016
---------------------------------------------------------
Less Between Between Between Over
than 3 months 1 and 2 and 5 years
3 months and 1 year 2 years 5 years GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
---------- ------------ --------- --------- ---------
Trade and other 42 - - - -
payables
Borrowings - 189 30 -
Accruals and 20 - - - -
deferred income
2015
---------------------------------------------------------
Less Between Between Between Over
than 3 months 1 and 2 and 5 years
3 months and 1 year 2 years 5 years GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
---------- ------------ --------- --------- ---------
Trade and other
payables 24
Borrowings - - - - 30
Accruals and 26 - - - -
deferred income
1 April 2014
---------------------------------------------------------
Less Between Between Between Over
than 3 months 1 and 2 and 5 years
3 months and 1 year 2 years 5 years GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
---------- ------------ --------- --------- ---------
Trade and other
payables 21
Borrowings - 152 - - 30
Accruals and 26 - - - -
deferred income
Market risk
The Company monitors the value of its investments on a regular
basis, and takes action to decrease or dispose of investments when
it deems appropriate.
Credit risk
The bank account of the Company and of the client account held
by PSB Accountants Limited is held with well-established financial
institutions of high quality credit standing.
Fair value hierarchy
Fair values have been measured at the end of the reporting
period as follows -
Level Level Level
1 2 3 Total
'Quoted 'Observable 'Unobservable GBP'000
prices' prices' prices'
GBP'000 GBP'000 GBP'000
Year ended 31 March
2016
Investments held
at fair value 64 4,028 183 4,275
Year ended 31 March
2015
Investments held
at fair value 112 1,490 183 1,784
All fixed asset investments are classified as Level 2 or Level
3. The movement on Level 2 and Level 3 assets are disclosed in note
8.
Financial assets and liabilities measured at fair value are
disclosed using a fair value hierarchy that reflects the
significance of the inputs used making the fair value measurements,
as follows -
-- Level 1 - Unadjusted quoted prices in active markets for
identical asset or liabilities ('quoted prices'),
-- Level 2 - Inputs (other than quoted prices in active markets
for identical assets or liabilities) that are directly or
indirectly observable for the asset or liability ('observable
inputs'), or
-- Level 3 - Inputs that are not based on observable market data
('unobservable inputs')
The Level 2 and Level 3 investments have been valued at the
price of recent investment, net asset value or discounted cash flow
based on post period end redemptions in line with the Company's
accounting policies and IPEVG guidelines.
17 SUBSEQUENT EVENTS
In May 2016, post the year end, Legendary raised GBP1 million
(before expenses), by way of an oversubscribed placing of
333,333,333 ordinary shares of 0.10 pence nominal value each at a
price of 0.3 pence per new ordinary share. The shares were placed
with a range of institutional and private investors. Following
admission of the new ordinary shares, Legendary's enlarged issued
share capital comprised 2,794,864,166 ordinary shares.
In May 2015, Legendary obtained a loan of US$250,000 from
Alcazar 1 Pte Limited. The loan bore interest at a rate of 10% per
annum. Subsequent to the year end, in July 2016, the loan and
attendant interest were repaid. Alcazar 1 Pte was at the time the
loan was taken out a related party by virtue of its holding 11.1%
of the shares of Legendary. In the opinion of the Directors, and
after consultation with the NOMAD, the Directors considered the
terms of the loan fair and reasonable.
18 RELATED PARTY TRANSACTIONS
In May 2015, Legendary obtained a loan of US$250,000 from
Alcazar 1 Pte Limited. The loan bore interest at a rate of 10% per
annum. Subsequent to the year end, in July 2016, the loan and
attendant interest were repaid. Alcazar 1 Pte was at the time the
loan was taken out a related party by virtue of its holding 11.1%
of the shares of Legendary. The Directors considered, after
consultation with the Company's nominated adviser, that the terms
of the loan were fair and reasonable insofar as the Company's
shareholders are concerned.
Director's transactions are detailed on note 4 and note 11 of
the notes to the financial statements.
No other related party transactions were undertaken during the
year other than those disclosed above
19 EXPLANATION OF TRANSITION TO IFRS
As stated in the accounting policies these are the first
consolidated financial statements prepared in accordance with
IFRS's. The date of the Group transition to IFRS is 1 January 2015
(the "Transition date").
The accounting policies described above were applied when
preparing consolidated financial statements for the years ended 31
December 2014 and 31 December 2015 and the Consolidated Statement
of Financial Position as at the Transition Date.
In preparing its opening IFRS Consolidated Statement of
Financial Position and adjusting amounts reported previously in the
financial statements prepared in accordance with UK GAAP (Generally
Accepted Accounting Practice in the UK, previous GAAP), the Group
has applied IFRS 1 First-Time Adoption of International Financial
Reporting Standards, which contains a number of voluntary
exemptions and mandatory exceptions from the requirement to apply
IFRS retrospectively.
Whilst the notes to the financial statements, where applicable,
include the position as at 1 April 2014, these figures do not
include any restatement of amounts previously reported.
Exceptions and Exemptions used during transition to IFRS
The Group has applied the following mandatory exception required
by IFRS 1 in the conversion from UK GAAP to IFRS:
Estimates
Hindsight is not used to create or revise estimates. Estimates
previously made by the Company under UK GAAP were not revised for
application of IFRS except where necessary to reflect any
difference in accounting policies.
Impact on the cash flow statements
The transition has no significant impact on the presentation of
the statement of cash flows.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LPMPTMBAMMMF
(END) Dow Jones Newswires
September 08, 2016 05:17 ET (09:17 GMT)
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