TIDMPEBI
RNS Number : 9804P
Port Erin Biopharma Investments Ltd
01 November 2012
1 November 2012
Port Erin Biopharma Investments Limited (the 'Company')
Report and audited accounts for the period from 3 May 2011 (date
of incorporation) to 30 June 2012
Port Erin Biopharma Investments Limited (LSE : PEBI), a Company
investing in the biotechnology and biopharmaceutical sector,
releases its final results for the year ended 30 June 2012.
The 2012 Annual Report and Audited Accounts will be available
from the Company's website http://www.porterinbiopharma.com/.
Financial Highlights
-- Investment income of GBP510,515
-- Operating profit of GBP422,748
-- Profit for the period of GBP425,208
-- Total assets of GBP3,156,154
-- Cash of GBP237,391
-- Total equity and liabilities of GBP3,156,154
- Operating expenses of less than GBP95,000
- Near 17% return on available capital
- Net asset value per share of 9.47 pence
For further information, please contact:- Port Erin Biopharma Libertas Capital Corporate Peterhouse Capital
Investments Ltd Finance Limited Limited
The Company Nomad Broker
Denham Eke Sandy Jamieson Jon Levinson
+44 162 463 9396 +44 207 569 9650 +44 207 562 3350
Chairman's statement
Introduction
I have great pleasure in presenting the maiden annual report and
audited accounts for Port Erin Biopharma Investments Limited.
We set up the company over a year ago, essentially to track my
own portfolio investments within the biotechnology sector. This is
a sector which I believe to be both undervalued and to offer
excellent opportunities in its potential for growth. This is a view
that I have outlined in the recently published book "Cracking the
Code", which outlines the tremendous advances being made in the bio
sciences as a result of the fusion of computer power and cumulative
human discovery.
Financial Review
We raised net cash of just under GBP2.7 million (GBP3.0 million
before listing expenses) in September 2011. I am pleased to report
that, by the reporting date, we have increased our total assets to
GBP3,156,154 - nearly a 17% return on available capital. This is
despite the fact that it took some time to become invested. At the
end of June 2012, we held cash of GBP237,391, a portfolio of assets
valued at GBP2,909,183 and receivables of GBP9,580.
During the same period, we have generated an income of
GBP510,515 made up of GBP16,448 dividend income, net sales gains of
GBP226,308 and net unrealised portfolio gains of GBP267,759. This,
after subtracting all expenses of GBP94,062 and adding interest
income and foreign exchange gains of GBP8,755, produced a total
comprehensive income of GBP425,208. In addition, admission costs of
GBP301,954 have been taken into equity.
Bearing in mind the current size of the company, I and the board
have been very careful to minimise on-going operating expenses.
Thus we have been able to keep the annual running cost of the
Company, after listing expenses, under a relatively modest
GBP95,000.
Strategy and Outlook
Our strategy is very simple - to invest the portfolio into those
bio-pharma companies which I hold in my personal portfolios.
The bulk of the portfolio (approximately 70%) is and will be
invested in companies that are cash generative, and often dividend
paying, and which have market capitalisations in excess of US$ 5
billion. Many of these companies are situated in the USA, home to
the bulk of the world's largest drug companies, but there are also
representatives from elsewhere in the world, providing us with a
diversified spread and a generous income stream. Names such as
Pfizer, Inc., Sanofi SA, Celgene Corporation and GlaxoSmithKline
fall into this category, and while growth for these companies is
somewhat constrained by their sheer scale, and by rich-world
government pressures on health care costs, they have substantial
exposure to emerging markets. The combination of rich-world
standards in drug manufacture and emerging market potential growth
in sales is a potent one and leads us to believe that many of these
large companies will experience better than expected sales and
profits in the years ahead. Emerging markets currently have very
low per capita expenditure on drugs and we believe that this
provides significant opportunities. Furthermore, Price Earnings
ratios and other measures of share values indicate fundamental
opportunities in these larger companies.
To provide greater, albeit more speculative, upside to the
portfolio we also hold a range of smaller to medium sized companies
which amount to approximately a third of the portfolio. Names such
as Medivation, Inc. (which is commercialising a new prostate drug)
and Plethora Solutions Holdings (developing a male sexual health
product), as well as Summit plc (involved in research into Duchenne
muscular dystrophy), all feature.
This balanced portfolio approach we hope will continue to yield
positive NAV results and we remain optimistic for the next
year.
Jim Mellon
Chairman
Directors' report
The Directors of Port Erin Biopharma Investments Limited present
the Directors' report and financial statements for the period from
3 May 2011 (date of incorporation) to 30 June 2012. The Directors
have elected to prepare this set of financial statements from the
date of incorporation to 30 June 2012. A previous set of financial
statements from date of incorporation to 6 June 2011 was prepared
for, the AIM admission.
Principal activity
The Company was formed for the purpose of investing in the
biotechnology and biopharmaceutical sector. The Company was
incorporated on 3 May 2011 under the Isle of Man Companies Act 2006
and has no employees other than Directors. On 15 September 2011 the
Company's shares were admitted to AIM.
Results and transfer to reserves
The results and transfers to reserves for the year are set out
on page 7.
The Company made a profit for the period after taxation of
GBP425,208.
Dividend
The Directors do not propose the payment of a dividend.
Directors
The Directors who served during the period and to date were:
Appointed Resigned
James Mellon 3 May 2011
Thomas Winnifrith 3 May 2011 30 May 2012
Nicholas James Woolard 3 May 2011
Denham Eke 30 May 2012
Directors' Interests
As at 30 June 2012, the interests of the Directors and their
families (as such term is defined in the AIM Rules for Companies)
in the share capital of the Company are as follows:
Number of Ordinary Shares Percentage of
Issued
Capital
Direct Interests Other Interests
James Mellon(1)(2)(3)(4) 310,000 3,850,000 12.61%
Nicholas James Woolard 100,000 - 0.30%
Notes to Directors' Interests:
(1) Shellbay Investments Limited, wholly owned by a trust of
which James Mellon is a life tenant, holds 3,100,000 Ordinary
Shares.
(2) Galloway Limited, wholly owned by a trust of which James
Mellon is a life tenant, holds 750,000 Ordinary shares.
(3) Denham Eke is a director of Shellbay Investments Limited and
Galloway Limited.
(4) Post period, Galloway Limited acquired a further 250,000
Ordinary shares on 19 July 2012 and James Mellon is now interested,
in aggregate, in 4,410,000 Ordinary shares representing
approximately 13.36 per cent. of the Company's issued share
capital.
As at 30 June 2012 the Directors and their families (as such
term is defined in the AIM Rules for Companies) held the following
Warrants:
Number of Warrants
James Mellon(1) 2,100,000
Nicholas James Woolard(2) 100,000
Notes to Directors' Interests:
(1) Shellbay Investments Limited acquired 1,500,000 Warrants on
5 August 2011 and a further 600,000 on 9 August 2011.
(2) Nicholas James Woolard acquired 50,000 Warrants on 12 July
2011 and a further 50,000 on 8 August 2011.
Significant shareholdings
Except for the interests disclosed in this note, the Directors
are not aware of any holding of ordinary shares as at 30 June 2012
representing 3% or more of the issued share capital of the
Company:
Number of Percentage
ordinary shares of total
30 June 2012 issued capital
30 June 2012
James Mellon(1) 4,160,000 12.61%
Share Nominees Limited 4,110,934 12.46%
State Street Nominees Limited 3,250,000 9.85%
The Bank of New York (Nominees) 2,260,000 6.85%
XCAP Nominees Limited 1,150,500 3.49%
Jim Nominees Limited 1,135,000 3.44%
Note:
(1) James Mellon's shareholding consists of 3,100,000 shares
held by Shellbay Investments Limited, and 750,000 shares held by
Galloway Limited. Shellbay Investments Limited and Galloway Limited
are companies which are indirectly wholly owned by the trustee of a
settlement under which James Mellon is a life tenant. The balance
of James Mellon's shareholding is held in his own name.
On behalf of the Board
Denham Eke
Director 18 Athol Street
Douglas
30 October 2012 Isle of Man
IM1 1JA
British Isles
Statement of Directors' Responsibilities in Respect of the
Directors' Report and the Financial Statements
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations. In addition, the Directors have elected to
prepare the financial statements in accordance with International
Financial Reporting Standards.
The financial statements are required to give a true and fair
view of the state of affairs of the Company and of the profit or
loss of the Company for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with
International Financial Reporting Standards, and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company. They have general responsibility
for taking such steps as are reasonably open to them to safeguard
the assets of the Company and to prevent and detect fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation governing the preparation and
dissemination of financial statements may differ from one
jurisdiction to another.
On behalf of the Board
Denham Eke
Director
30 October 2012
Report of the Independent Auditors, KPMG Audit LLC, to the
members of Port Erin Biopharma Investments Limited
We have audited the financial statements of Port Erin Biopharma
Investments Limited for the period from 3 May 2011 (date of
incorporation) to 30 June 2012 which comprise the Statement of
Comprehensive Income, the Statement of Financial Position, the
Statement of Cash Flows and the Statement of Changes in Equity and
the related notes. The financial reporting framework that has been
applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs).
This report is made solely to the Company's members, as a body.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of Directors and Auditor
As explained more fully in the Directors' Responsibilities
Statement set out on page 5, the Directors are responsible for the
preparation of financial statements that give a true and fair view.
Our responsibility is to audit, and express an opinion on, the
financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
(APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the Directors; and the
overall presentation of the financial statements.
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 30 June 2012 and of its profit for the period then
ended; and
-- have been properly prepared in accordance with IFRSs.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
Statement of comprehensive income
for the period from 3 May 2011 (date of incorporation) to 30
June 2012
Notes 2012
GBP
Investment Income 3 510,515
Operating expenses
Directors' fees 2,5 (10,000)
Other costs 4 (84,062)
Foreign exchange gains 6,295
------------
Profit from operating
activities 5 422,748
Interest received 2,460
------------
Profit before taxation 425,208
Taxation 1(i) -
------------
Profit for the period 425,208
Other comprehensive -
income
------------
Total comprehensive income for the
period 425,208
Basic and diluted earnings
per share (EPS) 13 0.0181
The Directors consider that the Company's activities are
continuing.
The notes form part of these financial statements.
Statement of financial position
as at 30 June 2012
Notes 2012
GBP
Current assets
Convertible loans 8 64,033
Financial assets at
fair value through profit
or loss 7 2,845,150
Trade and other receivables 9,580
Cash and cash equivalents 237,391
----------------
Total assets 3,156,154
Equity and liabilities
Capital and reserves
Share capital 6 33
Share premium 6 2,699,013
Retained earnings 425,208
----------------
3,124,254
Current liabilities
Trade and other payables 10 31,900
----------------
Total equity and liabilities 3,156,154
The notes form part of the financial statements.
These financial statements were approved by the Board of
Directors on 30 October 2012 and were signed on their behalf
by:
Denham Eke
Director
Statement of changes in equity
for the period from 3 May 2011 (date of incorporation) to 30
June 2012
Share Share Retained
Premium Capital Profit Total
GBP GBP GBP GBP
Balance at 3 May 2011 - - - -
Total comprehensive
income for the period - - 425,208 425,208
Shares issued 3,000,967 33 - 3,001,000
Share issue costs (301,954) - - (301,954)
---------------- ---------------- ---------------- ----------------
Balance at 30 June
2012 2,699,013 33 425,208 3,124,254
The notes form part of these financial statements.
Statement of cash flows
for the period from 3 May 2011 (date of incorporation) to 30
June 2012
Notes 2012
GBP
Cash flows from operating activities
Profit for the period 425,208
Adjusted for:
Interest received (2,460)
Realised and unrealised gains (494,066)
--------------
Operating profit before changes
in working capital (71,318)
Increase in receivables (9,580)
Increase in payables 31,900
--------------
Net cash outflow from operating
activities (48,998)
--------------
Cash flows from investing activities
Purchase of investments (3,775,097)
Proceeds from sale of investments 1,359,980
Interest received 2,460
--------------
(2,412,657)
--------------
Cash flows from financing activities
Share issues 6 3,001,000
Share issue costs (301,954)
--------------
2,699,046
--------------
Increase in cash and cash equivalents 237,391
Cash and cash equivalents at beginning -
of period
--------------
Cash and cash equivalents at the
end of period 237,391
The notes form part of these financial statements.
Notes
(forming part of the financial statements for the period from 3
May 2011 (date of incorporation) to 30 June 2012)
1 Accounting policies
Port Erin Biopharma Investments Limited is a Company domiciled
in the Isle of Man. The Company's strategy is to create value for
Shareholders through investing in companies that have the potential
to generate substantial revenues through the development of
biopharmaceutical drugs.
The principal accounting policies are set out below.
a) Statement of compliance
The financial statements are prepared on the historical cost
basis except for the valuation of financial assets and liabilities
at fair value through profit or loss and in accordance with
International Financial Reporting Standards (IFRS) and the
interpretations adopted by the International Accounting Standards
Board (IASB).
The financial statements were approved by the Board of Directors
on 30 October 2012.
b) Basis of preparation
Use of estimates and judgment
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision only
affects that period or in the period of the revision and future
periods if the revision affects both current and future
periods.
Going concern
The financial statements have been prepared on a going concern
basis, taking into consideration the level of cash and cash
equivalents held by the Company. The Directors have a reasonable
expectation that the Company will have adequate resources for its
continuing existence and projected activities for the foreseeable
future, and for these reasons, continue to adopt the going concern
basis in preparing the financial statements for the period ended 30
June 2012.
Functional and presentation currency
These financial statements are presented in Pound Sterling which
is the Company's functional currency.
c) Investment income
Any realised and unrealised gains and losses on investments are
presented within Income.
Interest income earned during the period, is accrued on a time
apportionment basis, by reference to the principal outstanding and
the effective rate applicable.
Dividend income is recognised when a security held goes
ex-dividend. Dividends are shown as net cash received, after the
deduction of withholding taxes.
d) Financial instruments
Classification
The Company classifies its investments in equity securities as
financial assets at fair value through profit or loss. These
financial assets are classified as held for trading or designated
at fair value through profit or loss at inception.
Classification (continued)
Financial assets held for trading are acquired or incurred
principally for the purpose of selling in the short term.
Financial assets designated at fair value through profit or loss
are those that are managed and their performance evaluated on a
fair value basis in accordance with the Company's documented
investment strategy.
Financial assets that are classified as loans and receivables
include amounts due from brokers, other receivables and cash and
cash equivalents.
Recognition/de-recognition
Purchases and sales of investments are recognised on their trade
date, which is the date on which the Company commits to purchase or
sell the asset. Investments are initially measured at fair value.
Investments are de-recognised when the rights to receive cash flows
from the investments have expired or the Company has transferred
substantially all risks and rewards of ownership.
Measurement
Subsequent to initial recognition, all financial assets and
financial liabilities at fair value through profit or loss are
measured at fair value. Any gains and losses arising from changes
in Financial assets at fair value through profit or loss are
included in profit or loss in the period in which they arise.
Interest from Financial assets at fair value through profit or loss
is recognised in the Statement of Comprehensive Income using the
effective interest rate method. Dividend income from Financial
assets at fair value through profit or loss is recognised in the
Statement of Comprehensive Income when the Company's right to
receive payment is established.
Fair value measurement principles
The fair value of investment holdings is based on their quoted
market prices at the reporting date on a recognised exchange or in
the case of non-exchange traded instruments, sourced from a
reputable counterparty, without any deduction for estimated future
selling costs. Financial assets are priced at their closing bid
prices, while financial liabilities are priced at their closing
offer prices.
Company assets may, at any time include securities and other
financial instruments or obligations that are thinly traded or for
which no market exists and/or which are restricted as to their
transferability under securities laws.
If a quoted market price is not available on a recognised stock
exchange, or a market is not sufficiently active for the market
price to be considered reliable, or if a price is not available
from a reputable counterparty, fair value of the financial
instruments may be estimated by the Directors using valuation
techniques, including use of recent arm's length market
transactions, reference to the current fair value of another
instrument that is substantially the same, discounted cash flow
techniques, option pricing models or any other valuation technique
that provides a reliable estimate of prices obtained in actual
market transactions.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits with maturities of three months or less from the
acquisition date that are subject to an insignificant risk of
changes in fair value.
Compound financial instruments
Compound financial instruments comprise convertible loans that
can be converted to equity at the option of the issuer. The
financial instrument is initially recognised at fair value.
Subsequent to initial recognition, the derivative component is
measured at fair value while the non-derivative loan component is
measured at amortised cost using the effective interest method.
Trade and other receivables
Trade and other receivables originated by the Company are
initially recognised at fair value and subsequently stated at
amortised cost less impairment losses.
Trade and other payables
Trade and other payables are initially recognised at fair value
less directly attributable transaction costs. Subsequently they are
measured at amortised cost using the effective interest method.
e) Share capital and share premium
Ordinary shares are classified as equity. The ordinary shares of
the Company have a par value of GBP0.000001 each. Excess proceeds
received for the issue of shares has been credited to share
premium. Incremental costs directly attributable to the issue of
ordinary shares are recognised as a deduction from equity, net of
any tax effects.
f) Share based payments - warrants
The fair value of warrants is calculated using the Black-Scholes
option pricing model (where no fair value of the service or assets
provided is evident) and is recognised as expense over the vesting
period where applicable with a corresponding increase in equity. On
determining fair values, terms and conditions attaching to the
warrants are taken into account. Management is also required to
make certain assumptions and estimates regarding such items as the
life of warrants, volatility and forfeiture rates. Changes in the
assumptions used to estimate fair value could result in materially
different results.
g) Foreign currencies
Transactions in foreign currencies are recorded at the rate
ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at
the rate of exchange ruling at the reporting date. All differences
are taken to the income statement.
Non-monetary assets and liabilities that are measured in terms
of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction.
h) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are not yet effective for the period, and have not
been applied in preparing these financial statements:
Effective
date (accounting
New/Revised International Accounting periods commencing
Standards / International Financial Reporting on or after)
Standards (IAS/IFRS)
IFRS 9 Financial Instruments- Classification 1 January
and Measurement 2015
IFRS 10 Consolidated Financial Statements 1 January
2013
IFRS 11 Joint Arrangements 1 January
2013
IFRS 12 Disclosure of Interests in Other 1 January
Entities 2013
IFRS 13 Fair Value Measurement 1 January
2013
The Directors do not expect the adoption of the standards and
interpretations to have a material impact on the Company's
financial statements in the period of initial application.
There has been no material impact on the Company's financial
statements of new standards or interpretations that have come into
effect during the current reporting period.
i) Taxation
The Company is subject to income tax at a rate of 0% in the Isle
of Man, and accordingly, no tax has been provided for in these
financial statements.
The Company may be subject to withholding taxes in relation to
income from investments, or investment realisation proceeds or
gains, and such amounts will be accounted for as incurred.
2 Directors' fees
The fees of Directors who served during the period from 3 May
2011 (date of incorporation) to 30 June 2012 were as follows:
2012
GBP
James Mellon -
Thomas Winnifrith -
Nicholas James Woolard 10,000
Denham Eke -
--------------
10,000
On 6 May 2011, Shellbay Investments Limited entered into a
letter of appointment with the Company to provide the services of
James Mellon as Non-Executive Chairman of the Company. The letter
of appointment is for an initial period of twelve months, from 16
May 2011 and was renewed on 1 June 2012, and may be terminated on
not less than one month's notice given by either party at any time.
The letter of appointment contains provisions for early
termination, inter alia, in the event of a breach by James Mellon.
Remuneration under the letter of appointment shall be payable to
Shellbay Investments Limited and shall be satisfied by the issue of
such number of Ordinary Shares equivalent to 15.0 per cent. of any
increase in the Net Asset Value of the Company over each quarterly
period. There are no provisions providing for any benefit to
Shellbay Investments Limited or James Mellon on the termination of
the engagement. The Director of Shellbay Investments Limited has
agreed to waive any share-based payments until the Net Asset Value
of each share exceeds 10.00 pence.
On 6 May 2011, Thomas Winnifrith entered into a letter of
appointment with the Company to provide services as an Executive
Director and Chief Investment Officer of the Company. The letter of
appointment was for an initial period of twelve months, from 16 May
2011. Thomas Winnifrith's employment was terminated on 30 May 2012
under the provisions of the appointment without compensation
due.
On 6 May 2011 Nicholas James Woolard entered into a letter of
appointment with the Company to provide services as a Non-Executive
Director of the Company. The letter of appointment is for an
initial period of twelve months, from 16 May 2011, and may be
terminated on not less than three months' notice given by either
party to the other at any time. The letter of appointment contains
provisions for early termination, inter alia, in the event of a
breach by Nicholas James Woolard. Remuneration under the letter of
appointment shall be an annual fee of GBP10,000 payable on a
quarterly basis. There are no provisions providing for any benefit
to Nicholas James Woolard on the termination of the engagement.
Denham Eke was appointed a Director on 30 May 2012 and currently
receives no remuneration for providing his services.
At present, there are no other fees due by the Company in
respect of investment management services.
3 Investment income
2012
GBP
Dividend income 16,448
Net realised gains on sale of
investments 226,308
Net unrealised gains on investments 267,759
--------------
510,515
4 Other costs
2012
GBP
Auditors' remuneration for the
current period 14,400
Bank charges 826
Insurance 5,939
Marketing 1,000
Professional fees 61,857
Sundry expenses 40
--------------
84,062
The Company has no employees other than the Directors.
5 Profit from operating activities
Profit from operating activities is stated after charging:
2012
GBP
Auditors' fees 14,400
Directors' fees 10,000
6 Share capital and share premium
Each share in the Company confers upon the shareholder:
-- the right to one vote at a meeting of the shareholders or on any resolution of shareholders;
-- the right to an equal share in any dividend paid by the Company, and
-- the right to an equal share in the distribution of the
surplus assets of the Company on its liquidation
The Company may by resolution of Directors redeem, purchase or
otherwise acquire all or any of the shares in the Company subject
to regulations set out in the Company's Articles of
Association.
2012
GBP
Authorised
2,000,000,000 Ordinary shares of
GBP0.000001 2,000
Issued
33,000,000 Ordinary shares of GBP0.000001
each 33
----------------
33
2012
GBP
Share premium
3 shares issued at incorporation 997
30,000,000 shares issued on 15
September 2011 2,999,970
Share issue costs (301,954)
----------------
At 30 June 2012 2,699,013
On incorporation the authorised share capital of the Company was
GBP2,000 divided into 2,000 ordinary shares of GBP1 each. At
incorporation, 3 ordinary shares were subscribed for at GBP333.33
each, resulting in share premium of GBP997.
On 9 May 2011, pursuant to a Director's resolution, the
authorised share capital was divided into 2,000,000,000 ordinary
shares of GBP0.000001 each. Following this, the shares issued at
incorporation were sub-divided by 1,000,000 resulting in there
being 3,000,000 ordinary shares in issue at this date.
On 15 September 2011 the Company issued 30,000,000 ordinary
shares at a price of GBP0.10 each resulting in share premium of
GBP2,999,970.
Capital management
The Company manages its capital to maximise the return to
shareholders through the optimisation of equity. The capital
structure of the Company as at 30 June 2012 consists of equity
attributable to equity holders of the Company, comprising issued
capital, reserves and retained earnings as disclosed.
The Company manages its capital structure and makes adjustments
to it in the light of economic conditions and the strategy approved
by shareholders. To maintain or adjust the capital structure, the
Company may make dividend payment to shareholders, return capital
to shareholders or issue new shares and release the share premium
account. No changes were made in the objectives, policies or
processes during the period under review.
7 Financial assets at fair value through profit or loss
2012
GBP
Quoted 2,802,587
Unquoted 42,563
--------------
2,845,150
Equities 2,834,603
Warrants 10,547
--------------
2,845,150
8 Convertible loans
The Company has subscribed US$ 100,000 to a 10% Convertible
Promissory Note issued by Ampliphi Biosciences Corporation of
Seattle, USA ("Ampliphi"). The terms of the Note, at Ampliphi's
discretion, allow the principal and accrued interest to be
converted into either Common Stock at the rate of US$ 0.20 or,
subject to a number of conditions precedent which, if met, allow
the principal and accrued interest be converted at a discounted
rate of 10% of US$ 0.20.
9 Financial instruments
Financial Risk Management
The Company has risk management policies that systematically
view the risks that could prevent it from achieving its objectives.
These policies are intended to manage risks identified in such a
way that opportunities to deliver the Company's objectives are
achieved. The Company's risk management takes place in the context
of day-to-day operations and normal business processes such as
strategic and business planning. The Directors have identified each
risk and are responsible for coordinating and continuously
improving risk strategies, processes and measures in accordance
with the Company's established business objectives.
The Company's principal financial instruments consist of cash,
receivables and payables arising from its operations and
activities. The main risks arising from the Company's financial
instruments and the policies for managing each of these risks are
summarised below.
Credit Risk
Credit risk is the risk of loss associated with the
counterparty's inability to fulfil its obligations. The Company's
credit risk is primarily attributable to investments, receivables
and cash balances with the maximum exposure being the reported
balance in the statement of financial position. The Company has a
nominal level of debtors and as such the Company believes that the
credit risk is minimal. The Company holds available cash with
licensed banks which have a strong history. The Company considers
the credit ratings of banks in which it holds funds in order to
reduce exposure to credit risk.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date was:
Carrying amount
2012
GBP
Investments and loans
Quoted 2,802,587
Unquoted 42,563
Convertible loans 64,033
Cash and cash equivalents 237,391
--------------
3,146,574
Market price risk
Market price risk is the risk that the market price will
fluctuate due to macro-economic issues such as changes in market
factors specific to that security, market interest rates and
foreign exchange rates.
The Company is exposed to significant market price risks as
financial instruments recognised are linked to market price
volatility.
A 1% increase/decrease in market value of investments would
increase/decrease equity and profit by GBP28,452.
Cash flow and funding risk
The Company is exposed to liquidity risk to the extent that it
holds investments that it may not be able to sell quickly at close
to fair value.
The risk is managed by the Company by means of cash flow
planning to ensure that future cash requirements are anticipated
and, where financial instruments have to be sold to meet these
requirements, the process is carried out in a controlled manner
intended to minimise the liquidity risk involved.
Interest rate risk
A significant share of the Company's assets is comprised of cash
held at banks. As a result, the Company is subject to risk due to
fluctuations in the prevailing level of market interest rates.
However, income earned from bank interest is not considered
material to the Company's performance or financial position.
Fair values of financial instruments
At 30 June 2012 the carrying amounts of cash resources, trade
and other receivables, and trade and other payables approximate
fair value due to their short-term maturities.
Foreign currency risk
The Company is exposed to foreign currency risk on fluctuations
related to financial assets and liabilities that are denominated in
a number of currencies.
GBP equivalents as at 30 June 2012
Trade &
Convertible other receivables Cash at Total by
loans Investments bank currency
GBP GBP GBP GBP GBP
GBP - 424,240 9,580 120,905 554,725
USD 64,033 1,952,842 - 108,089 2,124,964
CAD - 30,057 - - 30,057
CHF - 160,387 - 4,411 164,798
DKK - 73,848 - 1,529 75,377
JPY - 140,607 - 2,457 143,064
SEK - 63,169 - - 63,169
-------------- -------------- -------------- -------------- --------------
64,033 2,845,150 9,580 237,391 3,156,154
The following significant exchange rate applied during the
year:
Average rate for active Period end rate (30
period June 2012)
USD 1.5909 1.5617
Sensitivity analysis
A 5% per cent. strengthening of Sterling against the US Dollar
at 30 June 2012 would have decreased equity and profit for the
period by the amounts shown below. The analysis assumes that all
other variables, in particular interest rates, remain constant.
Equity Profit or loss
USD (GBP138,558) (GBP138,558)
A 5% per cent. weakening of Sterling against the US Dollar at 30
June 2012 would have increased equity and profit for the period by
the amounts shown below. The analysis assumes that all other
variables, in particular interest rates, remain constant.
Equity Profit or loss
USD GBP145,528 GBP145,528
Notes (continued)
(forming part of the financial statements for the period from 3
May 2011 (date of incorporation) to 30 June 2012)
9 Financial instruments (continued)
Fair value hierarchy measurement at 30 June 2012
Investments in securities at fair value
Quoted prices
In active Significant Significant
markets other unobservable
for identical observable Inputs
Total assets inputs (level 3)
(level 1) (level 2)
Investments
Quoted 2,802,587 2,802,587 - -
Unquoted 42,563 - - 42,563
-------------- -------------- -------------- --------------
2,845,150 2,802,587 - 42,563
There have been no disposals of investments classified as level
3 during the period.
10 Trade and other payables
2012
GBP
Due to related party (note 12) 17,500
Provision for audit fee 14,400
--------------
31,900
11 Share warrants
At the date of admission to AIM, the Company issued 30,000,000
warrants, entitling the holder to subscribe for one new ordinary
share for every placing share, and which will not be admitted to
trading on AIM. The warrants may be exercised for 12.5 pence at any
time within two years of the date of issue. The warrant exercise is
either at the option of the holder or at the option of the Company,
in the event that the closing price of the ordinary shares is more
than 20 pence for five consecutive trading days. In considering the
share subscription price, the lack of historic share price
performance data, and the price and conditions attaching to
exercise, the Directors deem the warrants to have no separate value
from the shares issued on the Company's admission to AIM.
The total number of share warrants in issue as at the year-end
is set out below:
Fair value
Grant Term in Exercise of warrants
Recipients Date Years Price Issued at issue
9 September
Placing subscribers 2011 2 GBP0.125 30,000,000 -
12 Related party transaction
Under an agreement dated 1 December 2011, Burnbrae Limited, a
Company related to both James Mellon and Denham Eke, provide
certain services, principally accounting and administration, to the
Company. This agreement may be terminated by either party on three
months' notice. The charge for services provided is GBP30,000 per
annum.
13 Basic and diluted earnings per share
The calculation of basic earnings per share of the Company is
based on the profit for the year of GBP425,208 and the weighted
average number of shares of 23,428,235 in issue during the
period.
Diluted earnings per share are calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares such as
warrants and options. There is no dilutive effect at 30 June 2012
because the warrants are not able to be exercised until a
market-based criterion is satisfied. This criterion had not been
satisfied at 30 June 2012.
14 Commitments and contingent liabilities
There are no known commitments or contingent liabilities as at
the period end.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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