TIDMLEG
RNS Number : 6611P
Legendary Investments PLC
04 September 2017
4 September 2017
Legendary Investments PLC
("Legendary" or the "Company")
AUDITED RESULTS FOR THE YEARED 31 MARCH 2017
HIGHLIGHTS
-- Virtual Stock makes substantial progress in the health
sector: cited by Lord Carter in his government review as
"exemplary", contracts strategically important Shelford Group of
NHS Trusts and then contracts NHS Shared Business Services.
-- Virtual Stock continues progress in the retail sector by
winning a landmark contract with the John Lewis Partnership.
-- Post year end, in July 2017, Notion Capital, invest GBP4.5m
in Virtual Stock at a valuation of for Virtual Stock of GBP66m.
Legendary increases its stake in Virtual Stock to 7.2%, valuing
Legendary's stake, post year end, at GBP4.7m.
-- Progress also made at Manas Resources, with the results from
both the sampling programme and the geophysical studies proving
positive.
-- Post the year end, in August 2017, Legendary acquires a 12%
stake in IBS Corporation for a nominal sum. The stake in IBS and
the cooperation it should enable between Legendary and IBS should
provide further opportunities for value generation.
Zafar Karim, Executive Chairman commented:
"The year has been marked by substantial progress at Virtual
Stock. This investment has proved highly profitable. Moreover,
there is much further to go, and a listing in the mid-term is a
distinct possibility. Manas also continues to progress.
"Perhaps the most important development has been the investment
in IBS, which is strategic for Legendary and which should provide
more opportunities and a more powerful platform for Legendary to
work with and from."
- Ends -
Legendary Investments Zafar Karim / Thomas
Plc Reuner 020 8201 3536
Colin Aaronson /
Grant Thornton UK Harrison Clarke /
LLP Carolyn Sansom 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 in which progress has been
made with key investments. Virtual Stock was cited by Lord Carter
in his government review as "exemplary", after which the
strategically important Shelford Group of NHS Trusts agreed to
utilise The Edge software, followed shortly after that by the NHS
Shared Business Services ("NHS SBS"). This development put Virtual
Stock into a nationally if not globally recognised position in the
health sector, and the landmark contract with John Lewis
Partnership did likewise for Virtual Stock in the retail sector. It
has been an outstanding year for this Legendary investee. Good
progress was also made at Manas Resources, with the results from
both the sampling programme and the geophysical studies proving
positive. The next stage is test drilling and all options for this
are being considered.
Potentially the most significant development occurred post year
end with the acquisition for a nominal sum of a 12% stake in IBS
Corporation. For some time, Legendary has been exploring options to
enable it to widen its reach and provide it with access to
additional resources to be able to make follow on investments in
current investee companies and additional investments in new
companies, in short "increase its fire power". The stake in IBS and
the cooperation it should enable between Legendary and IBS should
provide a platform to be able to do this, thereby taking Legendary
to the next level.
Operating loss was GBP281,000, (2016: profit of GBP2,132,000),
and net loss was GBP281,000 (2016: net profit GBP2,118,000). As at
the year end, Legendary's investments (fixed asset investments and
current asset investments) were GBP4,293,000 (2016: GBP4,275,000).
Overall, net and total assets for the year were GBP4,729,000 (2016:
GBP4,073,000) an increase of 16%, and GBP4,867,000 (2016:
GBP4,354,000), an increase of 12%.
Virtual Stock Holdings Limited
Virtual Stock utilises agile, open source technology to allow
information to flow between fragmented systems in a unique way,
without disruption to any existing IT landscape. Data is seamlessly
collated, enriched, mapped and validated, allowing only trusted,
reliable information to be deployed. Virtual Stock's solutions are
a rapid, flexible and scalable alternative to traditional costly
and time-consuming systems integrations. The "integration" market
is worth c.US$300-500 billion per year.
Virtual Stock's flagship product, The Edge, aims to transform
global enterprise supply chains and marketplaces. The Edge delivers
best-in-class eProcurement functionality, including an Amazon-style
B2B marketplace, full procure-to-pay (P2P), product information
management (PIM), catalogue management, order management, inventory
management, e-invoicing, track and trace, and analytics. The Edge
has been successful in delivering supply chain optimisation for
leading retailers, the NHS, and, ultimately, their customers.
In the year under review, Virtual Stock built substantially on
the success of the previous year. Following the contract wins in
July 2015 with Guy's and St Thomas's Trust, Virtual Stock's goal
was to win several further NHS contracts by the end of calendar
2016. The reality of what happened, exceeded that goal.
In February 2016, before the year under review, Virtual Stock
was cited as exemplary of best practice in employing digital
technology to deliver significant cost reductions with Guy's and St
Thomas Trust in the landmark Lord Carter report, "Operational
productivity and performance in English NHS acute hospitals:
Unwarranted variations".
After much diligence, in the year under review, in October 2016,
Virtual Stock's The Edge was adopted as the common catalogue
management solution by the Shelford Group to deploy Virtual Stock's
cloud-based module catalogue management solution, part of The Edge,
providing a solution to what Lord Carter described as one of the
major issues affecting the NHS. Virtual Stock, through The Edge
platform, aims to support significant savings over the next five
years through supply chain optimisation and procurement process
efficiencies.
The trusts that make up the Shelford Group are of strategic
significance to NHS care, the life sciences industries and the
wider UK economy. They comprise the 10 leading NHS multi-specialty
academic healthcare organisations, employ over 100,000 people and
have turnover of over GBP10 billion, making up over 13% of acute
trusts' turnover across England. The Shelford Group was formed in
2011 to share best practice in key service areas across its
membership and to engage with Government, Parliament and industry
to represent large tertiary centres and the wider NHS.
The "win" took longer than expected, but was ultimately more
substantial than expected. The Shelford Group is the first group of
trusts to collaborate in the adoption of a single catalogue
management solution. Discussions are underway with several other
trusts.
This success was followed by the announcement on 2 November 2016
that Virtual Stock's The Edge was to be utilised by NHS SBS, a
joint venture between the NHS and Sopra Steria Group S.A., a
European leader in digital transformation. The Edge enables
hospitals to purchase a full range of products through a single
eCommerce platform, in a way that users experience in everyday
online shopping. The Shelford Group has signed up to use the
technology, and the NHS SBS partnership is expanding the potential
for savings to many more trusts.
NHS SBS has already saved the NHS hundreds of millions of pounds
since it was set up in 2005. By utilising Virtual Stock technology,
it aims to help the health service work towards achieving the
GBP500 million to GBP1 billion of procurement savings called for in
Lord Carter's 2016 productivity review. In essence, Virtual Stock
technology is providing an "Amazon" like marketplace for the NHS by
partnering with NHS SBS.
Virtual Stock also continued to build its presence in the retail
sector. In March 2017, it was announced that Virtual Stock had been
appointed by the John Lewis Partnership, including 48 John Lewis
shops across the UK, johnlewis.com and 349 Waitrose shops, to
implement its Supply Chain Management System, The Edge.
Virtual Stock is now established as a provider of digital
solutions to the UK's leading retailers. Its retail clients include
Tesco, Maplin, Sainsbury's Argos, Dixons Carphone and Office Depot.
Selected for its ability to implement agile, scalable technologies,
Virtual Stock continues to provide its retail partners with the
tools to optimise supply chain operations, while delivering
significant cost savings.
At the year end Legendary's Holding of Virtual Stock continues
to be accounted for at a value consistent with the prior year of
GBP4.0m. This continues to be supported by subsequent transactions
in shares for Virtual Stock (see note 16 for more details regarding
the fair value assessment). In July 2017, Notion Capital, a leading
European B2B SaaS Venture Capital firm, invested GBP4.5m in Virtual
Stock at a valuation of for Virtual Stock of GBP66m.
Subsequent to this investment and also in July 2017, Legendary
increased its stake in Virtual Stock from 6.8% (subsequent to the
dilution due to Notion's investment) to 7.2% increasing the
carrying value of its investment in Virtual Stock to GBP4.3m which
compares to an estimated value of GBP4.7m based upon the GBP66m
valuation of Virtual Stock.
Manas Resources LLC
Manas Resources is the holder of a licence to explore for gold
in Sultan Sary, Narynskaya Oblast, Kyrgyzstan. The licence area is
located in the gold-rich Tien-Shan region of Kyrgyzstan covering
approximately 66 sq km.
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
In April 2016, Legendary announced preliminary results from the
2015 sampling programme carried out by Manas. These results
delineated some focussed areas for follow-up work. Highlights of
the results included the existence of several bedrock samples up to
4 g/t Au within a 1 sq km soil anomaly in Area 2 and a boulder
sample grade of 36 g/t along the structural corridor in Area 3. In
Area 1, only two of the bedrock samples returned gold values
significantly above background concentrations (0.5 g/t and 0.4
g/t). Of the 3 areas, Area 1, Area 2 and Area 3, Area 3 was the
most prospective, followed by Area 2.
In August 2016, Manas had initiated a geophysical work programme
to define better and delineate known and potential gold
mineralisation in licence area. The geophysics programme consisted
of Ground Magnetics, Induced Polarisation ("IP") profiles and Gamma
Spectrometry, and focussed on the high priority areas, Areas 3 and
Area 2.
Area 3, considered to be the most prospective area, covers
approximately 1.2 sq km in the southwestern corner of the licence
area. The pole-dipole IP surveys conducted in Area 3, which is
almost entirely covered by Quaternary sediments, identified strong
chargeability and/or resistivity anomalies over a strike length of
some 1.4 km extending from the edge of the survey area. Modelling
of the results suggests that the tops of the targets are 50 - 100
metres from surface.
These anomalies correspond with the postulated WNW extension of
the gold-rich structural corridor that hosts the known deposits
(outside the licence area) of Choloktor (3km), Buchuk (5km) and
Altyntor (9km). Altyntor is currently being mined by a Chinese
company, and about 5 tonnes of gold has historically been mined
from Buchuk. Under the Russian/Soviet classification scheme Buchuk
contains a C1 resource of 20 tonnes of gold, and Altyntor contains
a C1 and C2 resource of 7 tonnes of gold.
With the focus on Area 3, the geophysics carried out in Area 2
were more exploratory in nature (200m vs 100m line spacing
respectively). The results received from Area 2 were sufficiently
positive to warrant follow-up work, though the focus is on the most
promising area, Area 3.
On the basis on the above results it was decided at the end of
2016 to test drill the promising targets in Area 3, and from early
2017, Manas began exploring various options, including raising
capital, to do this. These discussions continue. The aim is to have
concluded discussions and made progress with drilling before the
end of 2017.
As at the year end, 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. In addition, working
capital has been provided to Manas of GBP259,000 which is included
as a non-current receivable.
Amedeo Resources PLC
Amedeo: Amedeo's strategy is to invest in the energy and
resource infrastructure sectors. To date Amedeo has made 3
investments: in an new offshore vessel construction joint venture,
Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJ Offshore");
in a ferrous metal and ferrous ore trader, MGR Resources Pte Ltd
("MGR"); and in a copper mine, Ganjine Kani Company ("GKC").
During the year under review, YZJ Offshore completed its first
order, a Le Tourneau Super 116E Class design self-elevating mobile
offshore jack up drilling rig ("Explorer 1"), pending final
delivery checks. The rig has yet to be delivered as the purchaser
of Explorer 1 is in the process of securing financing and
employment for the rig. In the meantime, YZJ has continued to seek
further orders, and with Explorer 1 completed to a high standard,
is utilising it as a showpiece. The rig market has been soft and no
new orders have been secured. Signs of improvement, however, are
evident as YZJ Offshore has had credible enquiries including
interest in Explorer 1. In the meantime, YZJ offshore has been
utilising its facilities to provide berthing capacity and build
modules for LNG vessels.
Iron ore prices remained depressed during 2016. As such, MGR cut
back activities to a bare minimum. Due to the low level of
activity, in February 2016, MGR paid back to Amedeo a loan of
GBP1,200,000. Near the end of the year, however, MGR saw an uplift
in activities with iron ore prices rising. As a result, in January
2017, Amedeo made available to MGR a loan facility of US$800,000 to
expand activities.
Also in January 2017, Amedeo acquired a 2.5% stake in GKC for
US$500,000, a copper mining company. GKC is a producing miner which
has, to date extracted around 1m tonnes of ore. GKC has three
mines. MGR intends to work with GKC to supply copper to East
Asia.
Despite the ongoing difficult environment, Amedeo continues to
pursue its long-term strategy of building a vertically integrated
investment business in the resource and energy and related
infrastructure sectors, while on an operational level, cash
resources are used conservatively.
As at the year end, Legendary's stake in Amedeo was valued at
GBP43,000.
Bosques Energeticos EBE S.A. de C.V
Bosques is an innovation based second generation biodiesel
company which has scored many "firsts". 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 currently has 18 ha under cultivation, with 2,000
pongamia trees and 6,000 jatropha plants. Having proven its
techniques on its test plantation, Bosques continues to explore
ways in which to commercialise its innovations in Mexico and
further afield, including potentially in East and South East Asia
and in Africa. In addition to exploiting the biodiesel properties,
Bosques is also looking to exploit the soil improving and
reforestation properties of pongamia.
Legendary has a substantial minority stake of 40% in Bosques
that it holds on its balance sheet at GBP83,000.
Medgold Corporation
Medgold is a Serbia-focused TSX-V listed exploration company
targeting gold-silver projects in the relatively under-explored
Oligo-Miocene Belt of southern Serbia. 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.
Legendary invested in Medgold at its inception, before it was
listed. Medgold has now been listed for several years, and as at
the balance sheet date, Legendary's stake was valued at GBP39,000.
Medgold is considered a non-core investment.
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. The stake in Oracle was acquired with the proceeds of the
disposal of Legendary's stake Regency Mines PLC. Legendary did not
consider the stake in Oracle as core and in May 2016 divested the
stake.
Sula Iron and Gold PLC
Sula was one of Legendary's earlier investments. Legendary
initially invested in a pre-IPO funding round, shortly after which
Sula was admitted to trading on AIM, and Legendary invested again
at the IPO. Sula has not performed as expected, and in May 2016,
the stake was divested.
IBS Corporation Limited
Post year end, in August 2017, Legendary announced that it had
negotiated a 12% stake in IBS for nominal value. IBS is a newly
established entity in New Zealand for the purposes of providing
financial services, initially in New Zealand and then expanding
into Asia Pacific, South East Asia and the Middle East.
IBS intends to build a banking services platform with the
ability to provide a range of financial services including
investment banking, asset management, debt funding and insurance
services aimed at corporate and high net worth clients. The
availability of such services to New Zealand SMEs is less well
developed than in international markets, and IBS initially intends
to target opportunities in this area, providing debt funding and
taking equity stakes in New Zealand SMEs with strong managements
and business models with the potential for internationalisation.
Target sectors include fintech, property and agriculture and
fisheries. These services are intended to be extended into other
markets over time.
IBS is in the process of obtaining the necessary authorities
from the New Zealand regulators to be able to conduct these
services. It expects to receive the authorities in the next few
months, however, there is no assurance that they will be obtained.
In the meantime, IBS is establishing an experienced core team to
spearhead the business, some of whom have already been identified.
In addition, IBS has already commenced discussions with a number of
potential clients and institutions regarding funding solutions and
financing lines.
Legendary view the investment in IBS as strategic move which
could catapult Legendary to the next level. As a proactive
investor, Legendary has invested in and nurtured a number of
companies, with the successful ones generating substantial
returns.
For some time, Legendary has been exploring various strategic
opportunities in order to scale up its operations, make larger
investments, including follow on investments into its successful
investee companies, and provide additional services to its investee
companies. IBS is a "challenger" financial services platform, which
will initially focus on an underserviced sector in New Zealand and
which has ambitions to expand further into the most dynamic regions
in the world.
Once authorities to operate and funding lines are obtained, IBS
expects to grow its business and accrete value rapidly.
Importantly, the activities of IBS are complementary to the
activities of Legendary thereby providing further opportunities for
value generation for both Legendary and IBS. The cooperation should
give Legendary additional sources of funds for current and future
projects, and give IBS access to new investment opportunities via
Legendary's channels thereby providing further opportunities for
value generation.
Financial Review
During the year, Legendary made a net gain on fair value of
investments of GBP45,000 (2016: net gain of GBP2,391,000). This was
due primarily due to gains on Medgold and Amedeo (2016: gain on
Virtual Stock). As discussed above, Sula and Oracle were disposed
of during the year end, leaving Amedeo and Medgold as the Company's
only listed investments.
Administrative expenses were GBP326,000 (2016: GBP259,000). The
increase resulted primarily from an increase in Directors' fees to
GBP82,000 (2016: GBP16,000) and the rental of office space at a
cost of GBP34,000 (2016: nil). Travel expenditure also increased to
GBP33,000 (2016: GBP24,000) and there was a one-off increase
associated with IT work to GBP6,000 (2016: GBP1,000). Offsetting
items included a smaller foreign exchange loss due to the holding
of a portion of cash balances in US$ and a reduced audit fee.
Overall, operating loss for the year was GBP281,000 (2016:
profit of GBP2,132,000).
Finance charges and tax were GBPnil (2016: nil), and
consequently net loss for the year was GBP281,000 (2016: profit of
GBP2,132,000).
As at the year end, Legendary's investments (fixed asset
investments and current asset investments) were GBP4,293,000 (2016:
GBP4,275,000).
Trade and other debtors due within one year were GBP136,000
(2016: GBP47,000) and GBP259,000 due in greater than one year. The
principal reasons for this rise are that expenditures were incurred
on various projects including Manas and certain strategic
initiatives. Should these projects succeed then the expenses
incurred by Legendary in relation to them are expected to be
recovered.
Cash amounted GBP176,000 (2016: GBP30,000) (including GBP2,000
(2016: GBPnil) in the client account of the Company's accountants
and GBP4,000 (2016: nil) held in company brokers account).
As at the year end, non-current liabilities were GBPnil (2016:
GBP30,000). These liabilities relate to a facility taken out in
2010. The facility bears no interest and has no fixed repayment
terms, however, repayment may be requested from 5 August 2017. As a
t 31 March 2017 GBP30,000 was recognised within current
liabilities.
Current liabilities were GBP138,000 (2016: GBP251,000). The fall
was due primarily to the Company repaying a loan of US$250,000 to
Alcazar 1 Pte Limited.
Post the year end, in April 2017, Legendary entered into a new
facility agreement with Alcazar 1 Pte Limited for up to US$400,000.
The facility bears an interest rate of 10% and has a term of one
year. At the end of June 2017, US$250,000 of the facility was drawn
down.
As at 1 September 2017, Legendary had cash and listed
investments of GBP236,000.
May Fund Raise
In May 2016, 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.
Loans
In August 2016, Legendary repaid the US$250,000 loan and
interest that was due to Alcazar 1 Pte Ltd. The loan was taken out
in May 2015 and bore interest of 10 per cent. At the time the loan
was taken out, Alcazar held an 11.1% stake in Legendary so was
treated as a related party under Rule 13 of the AIM Rules for
Companies. Subsequent to the successful placing of shares by
Legendary in May 2016, Alcazar's holding in Legendary was diluted
down to 9.7%. Therefore, it is no longer a related party under AIM
Rule 13.
Post the year end, in April 2017, Legendary entered into a new
facility agreement with Alcazar 1 Pte Limited for up to US$400,000.
The facility bears an interest rate of 10% and has a term of one
year. At the end of June 2017, US$250,000 of the facility was drawn
down.
Exercise of Warrants
During the year under review, warrants were exercised over
12,500,000 ordinary shares of nominal value 0.1p each. Subsequent
to the year end, further warrants were exercised over a total of
237,272,727 ordinary shares. Consequently, as at the balance sheet
date and the date of these accounts the total number of ordinary
shares in issue was 2,807,364,166 and 3,044,636,893, respectively.
The total proceeds of the exercises were GBP237,732.
Miscellaneous
During the year under review, in April 2016, Legendary reverted
from having two brokers to having Beaufort Securities Limited as
its sole broker. In addition, it changed its registered office to
2nd Floor, Jubilee House, Townsend Lane, London NW9 8TZ.
Outlook
The year under review has been one of progress. In particular,
Virtual Stock continues it's upwards trajectory and initial results
from Manas have been positive. Importantly, the stake in IBS and
the cooperation that it will entail present a strategic move with
the potential to deliver significant value to Legendary.
The Board looks to the future with confidence.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2017
2017 2016
Note GBP'000 GBP'000
Net gain/(loss) on fair value investments 45 2,391
Administrative expenses (326) (259)
Operating (loss)/profit (281) 2,132
(Loss)/ profit on ordinary activities
before interest (281) 2,132
Interest payable - (14)
(Loss)/profit on ordinary activities
before taxation (281) 2,118
Tax on profit on ordinary activities 5 - -
(Loss)/ profit for the financial year (281) 2,118
Other comprehensive income, net of income
tax:
Other comprehensive income, net of tax - -
Total comprehensive (loss)/income for
the year (281) 2,118
(Loss)/earnings per share
* basic (pence) 6 (0.01)p 0.09p
* diluted (pence) 6 (0.01)p 0.08p
All activities derive from continuing operations.
STATEMENT OF FINANCIAL POSITION
As at 31 March 2017
2017 2016
Notes GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant and equipment 7 3 2
Other receivables 10 259 -
Investments held at fair value through
profit and loss 8 4,211 4,211
Total non-current assets 4,473 4,213
cURRENT aSSETS
Trade and other receivables 10 136 47
Investments held at fair value through
profit and loss 9 82 64
Cash at bank and in hand 176 30
Total current assets 394 141
TOTAL ASSETS 4,867 4,354
equity AND LIABILITIES
Share capital 13 2,807 2,462
Share premium 14 8,937 8,345
Share warrant and option reserve 293 293
Profit and loss account - deficit (7,308) (7,027)
Equity attributable to equity holders 4,729 4,073
NON-CURRENT LIABILITIES 12 - 30
CURRENT LIABILITIES 11 138 251
TOTAL EQUITY AND LIABILITIES 4,867 4,354
The financial statements were approved by the Board of Directors
and authorised for issue on 1 September 2017
STATEMENT OF CHANGES IN EQUITY
As at 31 March 2017
Attributable to owners of the company
-----------------------------------------------------
Share
warrant Profit
and and loss
Share Share option account Total
capital premium reserve deficit equity
--------- --------- --------- ---------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ---------- --------
Balance at 1 April 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
--------- --------- --------- ---------- --------
(Loss) for the year - - - (281) (281)
--------- --------- --------- ---------- --------
Total other comprehensive - - - - -
loss
--------- --------- --------- ---------- --------
Total comprehensive loss - - - (281) (281)
--------- --------- --------- ---------- --------
Issue of Shares (net of issue
costs) 345 592 - - 937
--------- --------- --------- ---------- --------
Balance at 31 March 2017 2,807 8,937 293 (7,308) 4,729
--------- --------- --------- ---------- --------
STATEMENT OF CASHFLOWS
For the year ended 31 March 2017
2017 2016
Cash flows from operating activities GBP'000 GBP'000
Profit/(loss) before taxation (281) 2,118
Adjustments for:
Share option / warrant charge - 49
Depreciation 1 2
Change in fair value of investments (18) (2,390)
------------------- ---------------------
(298) (221)
Changes in working capital:
(Increase)/decrease in trade and other
receivables (336) (45)
Increase/(decrease) in trade and other
payables 46 12
------------------- ---------------------
(290) (33)
-------------------------------------------- ------------------- ---------------------
Net cash outflow from operating activities (588) (254)
------------------- ---------------------
Cash flows from investing activities
Purchase of property, plant and equipment (2) -
Purchase of investments - (100)
------------------- ---------------------
Net cash outflow from investing activities (2) (100)
------------------- ---------------------
Cash flows from financing activities
Proceeds from issues of new ordinary shares 1,000 -
Expenses paid in connection with issue
of shares (75) -
(Repayment)/ Increase in long term loan (189) 189
------------------- ---------------------
Net cash inflow from financing activities 736 189
------------------- ---------------------
Net (decrease)/increase in cash and cash
equivalents 146 (165)
Cash and cash equivalents at 1 April 30 195
------------------- ---------------------
Cash and cash equivalents at 31 March 176 30
------------------- ---------------------
Accounting Policies
Corporate information
Legendary Investments PLC (the "Company") is a company
incorporated and domiciled in the UK (registered number 0392024).
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 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.
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 on pages 2 to 7.
Legendary had administrative costs for the year ended 31 March
2017 of GBP326,000. Of this amount GBP146,000 are 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 in comparison to
other listed companies (Legendary is listed on the AIM market of
the LSE).
The fixed costs of Legendary for the next 12 months are expected
to be in the region of GBP150,000. Other than these, and the
current payables of GBP138,000, Legendary expects no other fixed
outlays.
Legendary is an investment company and in order to advance its
business it needs to make investments and have funds available to
do so. Funds can come from three sources, realising existing
investments, equity fund raising or debt fund raising. It is
Legendary's policy to maintain sufficient liquid resources to cover
its working capital needs when it makes new investments.
As at 1 September 2017, Legendary had GBP177,000 of cash and
GBP59,000 of listed investments. The listed investments may be
realised for cash at short notice. Together, this gave Legendary,
liquid resources of GBP236,000. In addition, Legendary has a
facility of which an additional US$150,000 (c. GBP117,000) may be
drawn down. The facility is repayable at the end of April 2018 in
its entirety (US$400,000 + 10% interest), and may be settled in
Legendary shares, at Legendary's option.
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.
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. 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. See note 16 for further
details.
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 BEFORE TAX 2017 2016
GBP'000 GBP'000
Profit on ordinary activities before tax for the year is stated
after charging:
Depreciation of tangible fixed assets 1 2
Auditor's remuneration - statutory audit 18 17
- Other services - 1
- Corporate finance services 26 -
--------- --------
4 DIRECTORS 2017 2016
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 82 16
Share based payment cost - -
------- -------
5 TAX ON (LOSS)/ PROFIT ON ORDINARY ACTIVITIES 2017 2016
GBP'000 GBP'000
Analysis of charge/(credit) in the year:
Current tax - -
Deferred tax - -
------------- -------------
- -
------------- -------------
(Loss)/ profit on ordinary activities before
tax (281) 2,118
------------- -------------
Profit/(loss) on ordinary activities multiplied
by standard rate of corporation tax in the UK
20% (2016: 20%) (56) 424
Expenses not deductible for tax purposes 48 29
Tax losses unutilised/(utilised) 8 (453)
------------- -------------
Current tax charge for year - -
------------- -------------
As at 31 March 2017 the Company had capital losses of
approximately GBP4.6 million (2016: GBP4.6million) available to
carry forward against future capital gains, and trading losses of
approximately GBP3.5 million (2016: GBP3.5 million), which includes
GBP0.07 million (2016:GBP0.03 million) in respect of tax deductions
on share options and warrants. A deferred tax asset of GBP0.7
million (2016: GBP0.7 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.
6 EARNINGS PER ORDINARY SHARE 2017 2016
GBP'000 GBP'000
(Loss)/profit for the financial year (281) 2,118
------------ ---------
Average number of ordinary shares in issue
(basic) ('000) 2,773,337 2,461,532
------------ ---------
Basic (loss)/earnings per share (pence) (0.01)p 0.09p
Diluted (loss)/earnings per share (pence) (0.01)p 0.08p
------------ ---------
The average number of undiluted shares in issue during the year
is the same as the average number of ordinary shares in issue on
the basis that the inclusion of potentially dilutive shares would
be anti-dilutive (2016: 2,461,531,830).
7 PROPERTY, PLANT AND EQUIPMENT Office Equipment
GBP'000
COST
At 1 April 2015 9
Additions -
At 31 March 2016
At 1 April 2016 9
Additions 2
------------------
At 31 March 2017 11
DEPRECIATION
At 1 April 2015 5
Charge for the year 2
At 31 March 2016
At 1 April 2016 7
Charge for the year 1
------------------
At 31 March 2017 8
NET BOOK VALUE
At 31 March 2017 3
------------------
At 31 March 2016 2
------------------
At 1 April 2015 4
------------------
8 INVESTMENTS Unlisted
Investments
GBP'000
VALUATION
At 1 April 2015 1,673
Exercise of options 100
Unrealised gain on revaluation 2,438
--------------------
At 31 March 2016 4,211
At 1 April 2016 4,211
Exercise of options -
Unrealised gain on revaluation -
--------------------
At 31 March 2017 4,211
--------------------
INVESTMENT Carrying Exercise Unrealised Carrying Fair value
value of gain on value hierarchy
31 March options revaluation 31 March
2016 GBP'000 2017
GBP'000 GBP'000 GBP'000
Bosques
Energeticos
S.A de C.V 83 - - 83 Level 3
Virtual Stock
Holdings
Limited 4,028 - - 4,028 Level 3
Manas Resources
LLC 100 - - 100 Level 3
--------------------- ---------------- ---------------------- --------------------
Total 4,211 - - 4,211 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 of Proportion Nature of Business
Other Participating Interest: holding directly held
Bosques Energeticos EBE Ordinary 40% Development and
S.A. de C.V. 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 2015 112
Loss on revaluation (48)
At 31 March 2016 and 1 April 2016 64
Disposal (27)
Gain on revaluation 45
--------------------
At 31 March 2017 82
--------------------
Being:
AIM listed 43
TSX listed 39
--------------------
82
Included in listed investments are the following companies:
INVESTMENT Carrying Disposal Unrealised Carrying Fair value
value gain / (loss) value hierarchy
31 March on revaluation/ 31 March
2016 Disposal 2017
GBP'000 GBP'000
GBP'000 GBP'000
Medgold Resources
Corp 13 - 26 39 Level 1
Sula Iron and Gold
PLC 4 (3) (1) - Level 1
Amedeo Resources
PLC 22 - 21 43 Level 1
Oracle Coalfields
PLC 25 (24) (1) - Level 1
---------------------- ------------------------ --------------------- ---------
Total 64 (27) 45 82
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 2017 2016
GBP'000 GBP'000
Prepayments 6 2
Other debtors 130 45
--------- ---------
136 47
--------- ---------
Included within other debtors is an amount of GBP117,000 (2016:
GBPnil) due from a third party. These sums were expended in the
pursuit of strategic initiatives.
Non-current receivables 2017 2016
GBP'000 GBP'000
Other debtors 259 -
--------- ---------
259 -
--------- ---------
Included within other debtors due after more than one year is
GBP259,000 (2016: GBP42,000, included within other debtors due
within one year) being expenditure incurred and monies provided to
Manas (see note 8) in relation to its activities. This balance is
expected to be recovered on the positive outcome of the
project.
11 CURRENT LIABILITIES 2017 2016
GBP'000 GBP'000
Trade creditors 90 38
Accruals 18 20
Short term loan - 189
Loan (see note 12) 30 -
Other creditors - 4
-------------- --------------
138 251
-------------- --------------
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.
12 NON-CURRENT LIABILITIES 2017 2016
GBP'000 GBP'000
Loan - 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 current
at 31 March 2017. The Directors consider the fair value of this
loan approximates the carrying value.
13 CALLED UP SHARE CAPITAL 2017 2016
GBP'000 GBP'000
AUTHORISED
3,000,000,000 ordinary shares of GBP0.001 each 3,000 3,000
-------------- --------------
ALLOTTED, ISSUED AND FULLY PAID
2,807,364,166 (2016: 2,461,530,833)
ordinary shares of GBP0.001 each 2,807 2,462
-------------- --------------
On 5 May 2016 the company issued 333,333,333 ordinary GBP0.001
shares for GBP0.003 each.
On 14 September 2016 the company issued 12,500,000 shares as a
result of the exercise of warrants for a GBP0.001.
2017 2016
14 SHARE PREMIUM GBP'000 GBP'000
At start of the year 8,345 8,345
Premium on Ordinary Shares Issued of 0.001 each 667
-
Expenses paid in connection with the share issue
(75) -
-------------- --------------
At end of the year 8,937 8,345
-------------- --------------
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 2017 31 March 2016
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 2017 31 March 2016
Weighted average Weighted average
exercise price exercise price
Number pence Number Pence
At start of the year 450,000,000 0.20p 450,000,000 0.20p
Granted during the
year - - - -
At end of the year 450,000,000 0.20p 450,000,000 0.20p
All options were exercisable at the end of the year.
15 SHARE BASED PAYMENT (continued)
Last date when Exercise Granted No. Lapsed Exercised Outstanding
exercisable price No. at 31 March
2017
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
and the options vested immediately.
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.
15 SHARE BASED PAYMENT (continued)
Warrants
Other than the employee share options set out above, warrants
have been granted to third parties in return for providing loan
finance or providing public relations services. The exercise prices
and dates are shown in the table below.
Last date when Exercise Granted Lapsed Exercised Outstanding
exercisable price No. No. at 31 March
2017
5 August 2017
(1) 0.10p 250,000,000 - - 250,000,000
21 May 2017
(2) 0.12p 2,272,727 - - 2,272,727
14 November
2018 (3) 0.10p 45,000,000 - (12,500,000) 32,500,000
297,272,727 - (12,500,000) 284,772,727
(1) In 2015, 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 made on 5
August 2010 until 5 August 2017. The loans bear no interest and has
no fixed repayment terms. Repayment can be requested from 5 August
2017. Subsequent to the year end, 235,000,000 of these warrants
were exercised for total proceeds of GBP235,000. The remainder
lapsed after 4 August 2017.
(2) Subsequent to the year end these warrants were exercised for total proceeds of GBP2,273.
(3) 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 2017 31 March 2016
Weighted average Weighted average
exercise price exercise
price
Number Pence Number pence
At start of the year 297,272,727 0.11p 317,272,727 0.12p
Granted during the year - - 45,000,000 0.15-1p
Lapsed during the year - - (65,000,000) 0.17p
Exercised during the year (12,500,000) - - -
At end of the year 284,772,727 0.11p 297,272,727 0.11p
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.
15 SHARE BASED PAYMENT (continued)
Expected life of warrants (years) 3 years
Exercise price 0.10p
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 0.040p to a low of 0.015p during the year. No charge has
been made to the profit or loss account for the year ended 31 March
2017.
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
During the year Company had a facility US$400,000 from Alcazar 1
Pte Ltd. US$250,000 of the facility was drawn down. The facility
had an interest rate of 10% and was repayable at the end of June
2018, the facility was repaid in cash on 11 August 2016.
Capital Management
The Company is financed primarily with equity capital with debt
utilised form time to time, 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 (see above).
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.
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.
16 FINANCIAL INSTRUMENTS (continued)
2017
Less than Between 3 months Between Between Over 5
3 months and 1 year 1 2 years
GBP'000 GBP'000 and 2 years and 5 years GBP'000
GBP'000 GBP'000
----------- ---------------- ------------ ------------ ------------
Trade and other payables 90 - - - -
Borrowings - 30 - - -
Accruals and deferred
income 18 - - - -
2016
Less than Between 3 months Between Between Over 5
3 months and 1 year 1 2 years
GBP'000 GBP'000 and 2 years and 5 years GBP'000
GBP'000 GBP'000
----------- ---------------- ------------ ------------ ------------
Trade and other payables 42
Borrowings - 189 30 - -
Accruals and deferred
income 20 - - - -
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
Level 1 Level 2 Level 3 Unobservable
'Quoted 'Observable prices'
prices' prices' GBP'000 Total
GBP'000 GBP'000 GBP'000
Year ended 31 March 2017
Investments held at
fair value 82 - 4,211 4,293
Year ended 31 March 2016
Investments held at
fair value 64 4,028 183 4,275
16 FINANCIAL INSTRUMENTS (continued)
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 unlisted investments were valued using the 'price of recent
investment' method, in accordance with the company's accounting
policy and IPEVG guidelines, as the investee companies are in their
early stage of development. These were considered level 3
valuations as judgement was required to assess whether adjustments
to the values were required. The Directors reviewed the indicators
to assess whether the fair value had changed and concluded that no
material adjustment was required. They have no information that
would suggest that the investments are impaired and will continue
to monitor the activity in the investee companies.
With regards to the investment in Virtual Stock, the Directors
had regard to the recent share transaction post year end in July
2017, where Notion Capital invested GBP4.5m. If this share price
had been used at the year end, the fair value of the investment
would have been GBP392,000 higher.
17 SUBSEQUENT EVENTS
IBS Corporation Limited
Post the year end, in August 2017, Legendary is announced that
it has negotiated a 12% stake in IBS for nominal value. IBS is a
newly established entity in New Zealand for the purposes of
providing financial services, initially in New Zealand and then
expanding into Asia Pacific, South East Asia and the Middle
East.
Exercise of warrants
Subsequent to the year end, further warrants were exercised over
a total of 237,272,727 ordinary shares. As at the balance sheet
date the total outstanding ordinary shares were 2,807,364,166, and
subsequent to the warrant exercises, at the date of these accounts,
there were 3,044,636,893. The total proceeds of the exercises was
GBP237,732.
Facility of US$400,000
Post the year end, in April 2017, Legendary entered into a new
facility agreement with Alcazar 1 Pte Limited for up to US$400,000.
The facility bears an interest rate of 10% and has a term of one
year. At the end of June 2017, US$250,000 of the facility was drawn
down.
18 RELATED PARTY TRANSACTIONS
Director's transactions are detailed on note 4 of the notes to
the financial statements. No other related party transactions were
undertaken during the year other than those disclosed above.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSLFIDFWSEEU
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