Final Results
Vela Technologies Plc ("Vela" or "the Company")
Final results for the year ended 31 March 2013
30 September 2013
chairman's statement
I am pleased to welcome you to this my first statement as your new Chairman,
covering the Company's year ended 30 June 2013.
The period under review has two distinct periods, the first culminating in the
Company Voluntary Arrangement and winding up of legacy investments. The second
period breathed new life into the company with a new company name, receipt of £
300,000 from the first of two fund raisings, the appointment of two new
directors and advisors and finally the purchase of two investments after the
year end.
I do not propose to dwell on the CVA as this has been well documented in
previous announcements and circulars to shareholders but will spend time on our
new endeavour!
The business also disposed of its investments in DGM India, and some of the
previously impaired inter company receivables with other former investments was
realised as a result of the sale of assets prior to these businesses being
wound up.
The Board was strengthened earlier this year with the appointment of myself and
colleague Antony Laiker. During March Adrian Moss stepped down from the Board
and we thank him for his contribution during the transition period.
Shortly after the year-end, the capital reduction approved by shareholders on
11 July 2013 was confirmed by the High Court and became effective on 1 August
2013, writing off the entire accumulated deficit on the Company's profit and
loss account. This was followed by a further placing raising £300,000 and
receipt of an additional £25,000 in respect of an earlier conditional placing
to Adrian Moss, to provide funding to evaluate and make new investments.
Between the year-end and the date of this report the Company made two
investments for a total consideration of £325,000, of which £125,000 was
settled by the issue of new ordinary shares; further investments are under
active consideration.
Our first investment was the acquisition for £250,000 of 262,090 shares in
eSeekers Ltd which following a corporate restructuring will become an interest
of 0.63 per cent in Disruptive Tech Limited. Disruptive Tech manages
investments in a number of technology enterprises including: Interest Labs
which enables high quality connections between brands and consumers; Netkan
which delivers on line gaming products; VNU Capital LLC a direct retailer of
consumer products via ecommerce and high yield consumer credit solutions; and
Freeformers which helps global companies understand and leverage technology.
For our second investment we invested £75,000 for a 6.25% interest in Advance
Laser Imaging Limited a recently established company established which uses
laser scanning hardware and software applications to produce 360 degree 3D
images and models. There are many applications of this specialist technology in
both private and public sectors including the Military, property development
and the Police to name but a few.
Further particulars of these investments can be viewed on the Company's
website. Following the investment in Advance Laser Imaging, the Company has
implemented its investing policy for the purposes of AIM Rule 15.
Your company is now in a position to move forward and your Board is confident
of taking it forward in a positive manner during the current year.
I would like to close by thanking our shareholders and advisers who have
contributed to giving the company a new and hopefully profitable lease of life.
Nigel Brent Fitzpatrick MBE
Chairman
For further Information:
Brent Fitzpatrick e-mail brent@lowwave.co.uk
Non-Executive Chairman
Vela Technologies plc
ZAI Corporate Finance, Nomad Tel 0207 060 0220
Peter Trevelyan-Clark/
Tim Cofman/Wei Wang
Peterhouse Corporate Finance, Broker Tel 020 7469 0932
Eran Zucker
The financial statements for the year ended 31 March 2013 are being posted to
shareholders on 30 September 2013 and will shortly be available on the Company'
website at www.velatechplc.com.
statement of comprehensive income
for the year ended 31 March 2013
year ended 15 months
ended
31 March 31 March
2013 2012
Notes £'000 £'000
Revenue 1 - -
Cost of sales - -
Gross profit - -
Administrative expenses
- depreciation - -
- share-based payments (2) (21)
- other administrative expenses (561) (452)
- Amounts written off in CVA 8 430 -
Total administrative expenses and loss from 2 (133) (473)
operations
Interest payable - -
Profit on disposal of subsidiary 7 273 -
Profit on disposal of associate - 195
Profit/(loss) before tax 140 (278)
Income tax 5 (45) (9)
Profit/(loss) and total comprehensive 95 (287)
income
Attributable to:
Equity holders of the company 95 (287)
Earnings per share
Basic and diluted earnings/(loss)per share 6 0.47 (3.74)
(pence)
balance sheet
as at 31 March 2013
31 March 31 March
2013 2012
Notes £'000 £'000
Assets
- -
Current assets
Trade and other receivables 9 11 51
Cash and cash equivalents 13 104 3
Total current assets 115 54
Non current assets held for sale - 50
Total assets 115 104
Equity and liabilities
Equity
Called up share capital 11 4,912 4,852
Capital redemption reserve 13,188 13,188
Share-based payment reserve 12 - 1,176
Share premium account 24,032 23,792
Retained earnings (42,093) (43,366)
Total equity 39 (358)
Current liabilities
Trade and other payables 10 76 420
Onerous lease provisions - 42
Total liabilities 76 462
Total equity and liabilities 115 104
These financial statements were approved by the Board, authorised for issue and
signed on their behalf on 30September 2013 by:
Nigel Brent Fitzpatrick MBE
Chief Executive Officer
Company registration number: 03904195
cashflow statement
for the year ended 31 March 2013
year ended 15 months
ended
31 March 31 March
2013 2012
Notes £'000 £'000
Operating activities
Profit/(loss) before tax 140 (278)
Share-based payment 2 21
Decrease in receivables 40 709
(Decrease) in payables 86 (455)
Gain on Company Voluntary Arrangement (430) -
Impairment of group receivables - 422
(Utilisation)/Release of provision for (42) (397)
onerous lease
Profit on disposal of associates - (195)
Profit on disposal of subsidiaries (273) -
Tax (charge) (45) (9)
Total cash flow from operating activities (522) (182)
Investing activities
Consideration for disposal of investment 323 -
in subsidiary
Consideration for disposal of investment - 195
in associate
Total cash flow from investing activities 323 195
Financing activities
Issue of ordinary share capital 60 -
Share premium on the issue of ordinary 240 -
share
Total cash flow from financing activities 300 -
Net increase/(decrease) in cash and cash 101 13
equivalents
Cash and cash equivalents at start of year 3 (10)
/period
Cash and cash equivalents at the end of 13 104 3
the year /period
Cash and cash equivalents comprise:
Cash and cash in bank 104 3
Cash and cash equivalents at end of year/ 13 104 3
period
statement of changes in equity
for the year ended 31 March 2013
Capital Share-based
Share Share Redemption payment Retained Total
capital premium Reserve reserve earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 4,852 23,792 13,188 1,176 (43,366) (358)
2012
Share option - - - 2 - 2
charge
Share options - - - (1,178) 1,178 -
lapse
Issue of share 60 240 - - - 300
capital
Transactions with 60 240 - (1,176) 1,178 302
owners
Profit for the - - - - 95 95
year and total
comprehensive
income for the
year
Balance at 31 4,912 24,032 13,188 - (42,093) (39)
March 2013
Balance at 1 4,852 23,792 13,188 1,155 (43,079) (92)
January 2011
Share options - - - 21 - 21
charge
Issue of share - - - - - -
capital
Transactions with - - - 21 - 21
owners
Loss for the - - - - (287) (287)
period and total
comprehensive loss
for the period
Balance at 31 4,852 23,792 13,188 1,176 (43,366) (358)
March 2012
accounting policies - extracts
for the year ended March 2013
Presentation of financial statements
The financial statements of the Company have been prepared in accordance with
International Financial Reporting Standards (IFRS), as adopted in the European
Union and as applied in accordance with the provisions of the Companies Act
2006, and under the historical cost convention.
In prior years, consolidated financial statements were prepared for the group
headed by the Company. Consolidated financial statements have not been prepared
for the year ended 31 March 2013 as there were no subsidiaries. Comparative
figures in these financial statements are therefore in respect of the Company
only and are not consolidated.
Whilst the financial information in this announcement has been prepared in
accordance with IFRSs, this announcement does not itself contain sufficient
information to comply with IFRSs. The financial information set out above does
not constitute the Company's financial accounts for the year ended 31 March
2013 or for the period ended 31 March 2012 but is derived from those accounts.
Statutory accounts for the period ended 31 March 2012 have been delivered to
the Registrar of Companies and those for the year ended 31 March 2013 will be
delivered following the Company's annual general meeting. The auditors have
reported on those accounts: their reports were unqualified, did not, in respect
of the year ended 31 March 2013, draw attention to any matters by way of
emphasis without qualifying their report and did not contain statements under
section 298(2) or (3) Companies Act 2006 or equivalent preceding legislation.
The auditor's report in respect of the period ended 31 March 2012, whilst not
modifying the opinion given, contained an emphasis of matter in relation to
going concern.
The financial statements for the year ended 31 March 2013 are being posted to
shareholders on 30 September 2013 and will shortly be available on the Company'
website at www.velatechplc.com.
Change of financial yearend
In the previous period the financial year end of the Company was changed from
31 December 2011 to 31 March 2012. Accordingly, the current financial
statements are prepared for year ended 31 March 2013 and the comparative
figures for the statement of comprehensive income, cash flow statement,
statement of changes in equity and related notes are for the 15 months from 1
January 2011 to 31 March 2012.
notes to the financial statements
for the year ended 31 March 2013
1 Revenue and segmental information
The Company does not trade and as such there is only one identifiable operating
segment, being the holding and support of investments. Furthermore the Company
operates in a single geographic segment being the United Kingdom. The results
and balance and cashflows of the segment are as presented in the primary
statements.
2 Loss from operations
Loss from operations is stated after charging:
Year ended 15 months
ended
31 March 31 March
2013 2012
£'000 £'000
Auditors' remuneration for auditing of accounts 14 64
Auditors' remuneration for non-audit services 2 31
Operating lease rentals - -
Share-based payment charge 2 21
3 Staff costs
The average number of persons employed by the Company (including Directors)
during the period was as follows:
Year ended 15 months
ended
31 March 31 March
2013 2012
Directors and senior management 2 2
Management - -
Non-management - -
Total 2 2
The aggregate payroll costs for these persons were as follows:
Year ended 15 months
ended
31 March 31 March
2013 2012
Aggregate wages and salaries 271 271
Social security costs - -
Share-based payments - -
Pensions costs - -
271 271
4 Directors and senior management
Directors' remuneration
Year ended 31 March 2013
Salary Fees Pension Equity Total
£'000 £'000 £'000 £'000 £'000
A Moss (resigned 5 March 2013) 271 - - - 271
N B Fitzpatrick - 3 - - 3
A Laiker - - - - -
271 3 - - 274
15 months ended 31 March 2012
Salary Fees Pension Equity Total
£'000 £'000 £'000 £'000 £'000
A Moss 260 - 11 - 271
Directors'and senior management's interests in shares
The Directors who held office at 31 March 2013 held the following shares:
31 March 31 March
2013 2012
£'000 £'000
N B Fitzpatrick - -
A Laiker 1,916,724 1,916,724
The total share-based payment costs in respect of options granted are:
Year ended 15 months
ended
31 March 31 March
2013 2012
£'000 £'000
Directors - 18
Non-management 2 3
5 Tax
Year ended 15 months
ended 31 March
31 March 2013 2013
£'000 £'000
Current tax
UK tax 45 9
Tax charge 45 9
The deferred tax asset relating to the losses has not been recognised due to
uncertainty over the existence of future taxable profits against which the
losses can be used.
Tax reconciliation
Year ended 15 months
ended
31 March 31 March
2013 2012
£'000 £'000
Profit/(Loss) before tax 140 (278)
Tax at 24% (2012: 26%) on loss before tax 34 (72)
Effects of:
Other expenses not deductible 21 81
Utilisation of losses (10) -
Current tax expense/(credit) 45 9
6Earnings per share
Earnings per share have been calculated on a profit after tax of £95,000
(period to 31 March 2012: £287,000 loss) and the weighted number of average
shares in issue for the year of 20,008,076 (31 March 2012: 7,679,309 weighted).
Reconciliation of the profit and weighted average number of shares used in the
calculations are set out below:
Year ended 31 15 months
March 2013 ended 31
March 2013
Profit/(loss) (£'000) 95 (287)
Earnings/(loss) per share (pence) 0.47 (3.74)
A capital reorganisation was approved at a General Meeting held on 28 May 2012.
Each of the Company's existing Ordinary shares of 0.1p each were subdivided
into 1 `New' Ordinary Share of 0.001 pence (`New shares') and 99 New Deferred
shares of 0.001 pence (`New Deferred Shares'). The New Shares above were
consolidated into New Ordinary Shares of 0.1 pence each on the basis of 1 New
Ordinary Share for every 100 New Shares. The Admission of the New Ordinary
Shares to trading on AIM took place on 29 May 2012.
The Earnings per Share comparatives have been adjusted to reflect the
redenomination of the share capital.
7Disposal of subsidiary / Non current assets held for sale
Disposal of DGM India Internet Marketing Limited (DGM India)
On 4 April 2012, the Board entered into a sale and purchase agreement for the
disposal of the subsidiary, DGM India, to Tyroo Media Private Limited and to
Inflection Digital Holdings Private Limited (both of which are private
companies incorporated and registered in India), for a total gross
consideration of 33,500,000 ruppees (approx £412,760). This transaction
completed in July 2012.
The carrying value of the investment in the subsidiary was recognised as a "non
current asset held for sale" as at 31 March 2012.
The profit on disposal was calculated as proceeds net of costs (£373,000) less
carrying value of asset (£50,000) giving the profit recognised of £323,000.
At 31 March 2013 all subsidiaries had been disposed of.
8Amounts written off in CVA
On 21 December 2012 the Company entered a company voluntary arrangement ("CVA")
and on 14th January 2013 the Company's creditors and members approved the CVA
proposed by the previous directors of the Company who resigned on 18th January
2013. Since this approval the Joint Supervisors have established all claims and
despatched payments in respect of valid claims at the rate set in the approved
arrangement being 17 pence in the pound before administrators' costs. The first
and final dividend was paid on 29 April 2013 at a rate of 15.96 pence in the
pound. The CVA was successfully completed on 29 August 2013.
In December 2012 new investors conditionally subscribed for a number of
ordinary shares, which generated substantial funds into the Company. Net funds
received of some £280,000 allowed £99,189 to be used for the benefit of the CVA
creditors, with the balance to allow the Company to fulfill its new investing
policy.
The amount written off represents the difference between the total creditors
approved and the dividend paid.
9 Trade and other receivables
31 March 31 March
2013 2012
£'000 £'000
Trade receivables - 11
Other receivables 5 -
Prepayments and accrued income 6 40
11 51
10Trade and other payables
31 March 31 March
2013 2012
£'000 £'000
Trade payables 14 284
Social security and other taxes - 16
Corporation tax payable 45 -
Other payables - 33
Accruals and deferred income 17 87
76 420
11Share capital
31 March 31 March
2013 2012
£'000 £'000
Authorised capital
9,999,520,000 ordinary shares of 0.1 pence each 10,000 10,000
76,025,157,516 deferred shares of 0.001 pence 760 760
4,083,918,156 deferred shares of 0.1 pence each 4,084 4,084
54,952,000 deferred shares of 24 pence each 13,188 13,188
28,032 28,032
Allotted, called up and fully paid capital
67,679,309 (31 December 2010: 7,679,309) ordinary 68 8
shares of 0.1 pence each
76,025,157,516 deferred shares of 0.001 pence 760 760
4,083,918,156 deferred shares of 0.1 pence each 4,084 4,084
4,912 4,852
Allotments during the period
The Company allotted the following ordinary shares during the year/period:
year ended 31 March 2013
Shares in issue at 31 March 2012 7,679,309
Shares issued during the year 60,000,000
Shares in issue at 31 March 2013 67,679,309
15 months ended 31 March 2012
Shares in issue at 1 January 2011 7,679,309
Shares issued during the period -
Shares in issue at 31 March 2012 7,679,309
11Share capital continued
A capital reorganisation was approved at a General Meeting held on 28 May 2012.
Each of the Company's existing Ordinary shares of 0.1p each have been
subdivided into 1 `New' Ordinary Share of 0.001 pence (`New shares') and 99 New
Deferred shares of 0.001 pence (`New Deferred Shares'). The New Shares above
have been consolidated into New Ordinary Shares of 0.1 pence each on the basis
of 1 New Ordinary Share for every 100 New Shares. The Admission of the New
Ordinary Shares to trading on AIM took place on 29 May 2012.
The Company's main source of capital is the parent Company's equity shares. The
policy is to retain sufficient authorised share capital so as to be able to
issue further shares to fund acquisitions, settle share-based transactions and
raise new funds.
12Share-based payments
During the year, all options lapsed as the employees and directors who held the
options ceased to be employees or directors. The reserve relating to vested
share based payments was transferred to retained earnings at the point the
options lapsed.
For the period to 31 March 2013, the movement on options was as follows:
Exercise Held at Granted Forfeited Cancelled Held at
price Issue 31 during during during 31
December the the the March
(pence) date 2010 period period period 2012
124.68 October 2,516 - - - 2,516
2003
356.50 December 3,000 - - - 3,000
2003
510.00 April 300 - - - 300
2004
650.00 April 250 - - - 250
2004
450.00 January 5,000 - - - 5,000
2006
375.00 June 2006 7,500 - - - 7,500
425.00 September 333 - - - 333
2006
350.00 April 9,651 - - (333) 9,318
2007
125.00 May 2008 138,050 - - (17,500) 121,050
125.00 February 91,167 - (4,333) (32,334) 54,500
2009
050.00 January 168,300 - (30,667) - 137,633
2010
050.00 February - 10,000 - - 10,000
2011
050.00 April - 49,833 - - 49,833
2011
426,067 59,833 (35,000) (50,167) 401,233
The above table excludes Directors' options.
Options forfeited in the year are in respect of employees leaving the
employment of the Company.
13Cash and cash equivalents
Cash and cash equivalents comprise the following:
31 March 31 March
2013 2012
£'000 £'000
Cash and cash in bank:
Pound sterling 104 3
Cash and cash equivalents at end of year/period 104 3
14Financial instruments
The Company uses various financial instruments which include cash and cash
equivalents and various items such trade receivables and trade payables that
arise directly from its operations. The main purpose of these financial
instruments is to raise finance for the Company's operations and manage its
working capital requirements.
The fair values of all financial instruments are considered equal to their book
values. The existence of these financial instruments exposes the Company to a
number of financial risks which are described in more detail overleaf.
The main risks arising from the Company financial instruments are currency
risk, credit risk and liquidity risk. The Directors review and agree the
policies for managing each of these risks and they are summarised overleaf. The
Company has a sales ledger facility on which interest is charged at a variable
rate. The Directors, therefore, do not consider the Company to be exposed to
material interest rate risk.
Currency risk
There was no exposure to foreign exchange fluctuations to 31 March 2013, and as
such sensitivity analysis has not been presented.
Credit risk
The Company's exposure to credit risk is limited to the carrying amount of
financial assets recognised at the balance sheet date, as summarised below:
31 March 31 March
2013 2012
Classes of financial assets - carrying amounts £'000 £'000
Cash and cash equivalents 104 3
Trade receivables - -
104 3
The Company's management considers that all of the above financial assets that
are not impaired for each of the reporting dates under review are of good
credit quality.
None of the Company's financial assets are secured by collateral or other
credit enhancements.
Liquidity risk
The Company maintains sufficient cash to meet its liquidity requirements.
Management monitors rolling forecasts of the Company's liquidity on the basis
of expected cash flow in accordance with practice and limits set by the
Company. In addition, the Company's liquidity management policy involves
projecting cash flows and considering the level of liquid assets necessary to
meet these.
Maturity analysis for financial liabilities
31 March 2013 31 March 2012
Within Later Within Later
than than
1 year 1 year 1 year 1 year
£'000 £'000 £'000 £'000
At amortised costs:
Trade payables 14 - 284 -
Other payables - - 136 -
Lease commitments provision - - - -
14 - 420 -
Capital risk management
The Company's objectives when managing capital are to safeguard the Company's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. This is achieved by making
investments commensurate with the level of risk.
The Company monitors capital on the basis of the carrying amount of equity.
The Company policy is to set the amount of capital in proportion to its overall
financing structure, i.e. equity and long-term loans. The Company manages the
capital structure and makes adjustments to it in the light of changes in
economic conditions and the risk characteristics of the underlying assets. In
order to maintain or adjust the capital structure, the Company may adjust the
amount of dividends paid to shareholders, issue new shares or loan notes, or
sell assets to reduce debt.
On 24th December 2012, the Company conditionally placed 67,400,000 new Ordinary
Shares at a price of 0.5 pence raising £337,000 before expenses. The funds
raised allowed the Company to fulfil its obligations under a CVA and allow the
Company to continue to trade. The surplus was retained in the Company to allow
the Company to fulfill its new investing policy.
The Company has approved a capital reduction which was finalised after the
balance sheet date. Following the Capital Reduction both classes of Deferred
Shares and the balances standing to the credit of the share premium account and
the capital redemption reserve of the Company have been cancelled. The balance
on the share premium account includes for this purpose any additional share
premium arising before 31 July 2013. The Capital Reduction was sufficient to
write off the entirety of the deficit on its profit and loss account, and
create a small positive balance. Following the Capital Reduction, there was no
change in the number of Ordinary Shares in issue.
15Related party transactions
During the period the Company entered into the following related party
transactions. All transactions were made on an arm's length basis:
Ocean Park Developments Limited
Nigel Brent Fitzpatrick, Non-Executive director is also a director of Ocean
Park Developments Limited. During the year the Company paid £2,500 (31 March
2012 : £nil) in respect of his directors fees to the Company. The balance due
to Ocean Park Developments at the year end was £nil (31March 2012 : £nil)
Share Options held by Directors
On 21 December 2012, the following share options held by the former directors
lapsed when the Company entered a CVA:
Adrian Moss - 174,000 options
David Lees - 17,500 options
Keith Lassman - 12,500 options
Placing of shares
On 24th December 2012, the Company announced that Adrian Moss, a former
director of the company had agreed to place 5,000,000 0.01p shares at a price
of 0.05p for a total consideration of £25,000. This transaction completed on 5
September 2013. On completion of this Adrian Moss own 5,995,100 shares in the
Company representing a shareholding of 4.25%.
16Events after the balance sheet date
Investment in Disprutive Tech Ltd
At a Directors meeting on 14 August 2013 a proposal was approved to acquire
262,090 shares, ultimately representing a 0.62% interest in Disruptive Tech Ltd
(a Gibraltar Company) for a total of £250,000. The purchase price was satisfied
by a cash payment of £125,000 and the balance of £125,000 by way of the issue
of 8,333,333 Ordinary shares of 0.1 pence at a price of 0.15p.
Investment in Advance Laser Imaging Limited
On 11 September 2013 the Board announced a £75,000 investment in Advance Laser
Imaging Ltd. The Company has committed £75,000 for a 6.25% interest.
Placing of 60,000,000 Ordinary Share
A further issue of shares took place on 9 August 2013 with 60,000,000 Ordinary
shares of 0.1 pence being issued at 0.5p each generating gross proceeds of £
300,000.
Reduction in share capital
Following the announcement on 18 June 2013 that the Company proposed to take
further steps to restructure its balance sheet, a capital reduction was
approved by shareholders and was confirmed at the final Court Hearing which
took place on 31 July 2013. Both classes of Deferred Shares and the balances
standing to the credit of the share premium account and the capital redemption
reserve of the Company were cancelled. This reduction is sufficient to write
off the entirety of the deficit on its profit and loss account and create a
small positive balance. There were no changes to the number of ordinary shares
in issue.
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