Half-yearly Report

18 December 2013 Vela Technologies PLC ("Vela" or the "Company") Half-Yearly Report for the six months Ended 30 September 2013 chairman's statement It is with pleasure that I present the half yearly report for the 6 months under review to 30 September 2013. The company continues to maintain a position in Disruptive Tech Limited (formerly eSeekers Limited) and Advanced Laser Imaging Limited, both acquired during the period under review, and in Stream TV Networks Inc., Rosslyn Analytics Limited and Portr Limited, acquired after the period end. Further details and update announcements can be found on our website at www.velatechplc.com. We look forward to a least one if not two of our investments obtaining a public quotation sometime during 2014. We are constantly looking at potential new investments that will add further value to our portfolio. Details of all related party transactions can be found at note 10 of these interim accounts. N.B. Fitzpatrick MBE Chairman For further Information: Brent Fitzpatrick, Non-Executive Chairman 0207 330 1885 Antony Laiker, Director Vela Technologies plc ZAI Corporate Finance, Nomad 020 7060 2220 Peter Trevelyan-Clark/ Tim Cofman/Wei Wang Peterhouse Corporate Finance, Broker 020 7469 0932 Eran Zucker unaudited statement of comprehensive income for the six months ended 30 September 2013 6 months 6 months year ended ended ended 30 30 31 September September March 2013 2012 2013 Notes Â£'000 Â£'000 Â£'000 Revenue - - - Cost of sales - - - Gross profit - - - Administrative expenses - depreciation - - - - share-based payments - (2) (2) - other administrative expenses (98) (451) (561) - Amounts written off in CVA 7 - - 430 Total administrative expenses and (98) (453) (133) loss from operations Interest payable - - - Profit on disposal of subsidiary 6 - 273 273 Profit on disposal of associate - - - Profit/(loss) before tax (98) (180) 140 Income tax - - (45) Profit/(loss) and total (98) (180) 95 comprehensive income Attributable to: Equity holders of the company (98) (180) 95 Earnings per share Basic and diluted earnings/(loss) 5 (0.11) (2.34) 0.47 per share (pence) unaudited balance sheet as at 30 September 2013 30 30 31 September September March 2013 2012 2013 Notes Â£'000 Â£'000 Â£'000 Assets Investments 8 264 - - Current assets Trade and other receivables 17 36 11 Cash and cash equivalents 61 44 104 Total current assets 78 80 115 Non current assets held for - - - sale Total assets 342 80 115 Equity and liabilities Equity Called up share capital 9 133 4,852 4,912 Capital redemption reserve - 13,188 13,188 Share-based payment reserve - 1,178 - Share premium account 257 23,792 24,032 Retained earnings (127) (43,546) (42,093) Total equity 263 (536) 39 Current liabilities Trade and other payables 79 616 76 Total liabilities 79 616 76 Total equity and liabilities 342 80 115 unaudited cashflow statement for the six months ended 30 September 2013 6 months 6 months year ended ended ended 30 30 31 September September March 2013 2012 2013 Â£'000 Â£'000 Â£'000 Operating activities (Loss)/profit before tax (98) (180) 140 Share-based charge - 2 2 (Increase)/Decrease in receivables (6) 15 40 Increase in payables 3 154 86 Gain on Company Voluntary - - (430) Arrangement (Utilisation) of provision for - - (42) onerous lease Profit on disposal of subsidiaries - (273) (273) Tax charge - - (45) Total cash flow from operating (101) (282) (522) activities Investing activities Consideration for disposal of - 323 323 investment in subsidiary Consideration for acquisition in (264) - - associates Total cash flow from investing (264) 323 323 activities Financing activities Issue of ordinary share capital 65 - 60 Share premium on the issue of 257 - 240 ordinary share Total cash flow from financing 322 - 300 activities Net (decrease)/increase in cash (43) 41 101 and cash equivalents Cash and cash equivalents at start 104 3 3 of year/period Cash and cash equivalents at the 61 44 104 end of the year/period Cash and cash equivalents comprise: Cash and cash in bank 61 44 104 Cash and cash equivalents at end 61 44 104 of year/period unaudited statement of changes in equity for the six months ended 30 September 2013 Capital Share-based Share Share Redemption payment Retained Total capital Premium Reserve reserve Earnings Equity Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Balance at 1 April 4,912 24,032 13,188 - (42,093) 39 2013 Share option - - - - - - charge Share options - - - - - - lapse Capital (4,844) (24,032) (13,188) - 42,064 - restructure Issue of share 65 257 - - - 322 capital Transactions with - - - - - - owners Profit for the - - - - (98) (98) period and total comprehensive income for the period Balance at 30 133 257 - - (127) 263 September 2013 Balance at 1 April 4,852 23,792 13,188 1,176 (43,366) (358) 2012 Share option - - - 2 - 2 charge Share options - - - - - - lapse Issue of share - - - - - - capital Transactions with - - - - - - owners Profit for the - - - - (180) (180) year and total comprehensive income for the year Balance at 30 4,852 23,792 13,188 1,178 (43,546) (536) September 2012 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 notes to the interimaccounts for the six months ended 30 September 2013 1. General information Vela Technologies Plc is a company incorporated n the United Kingdom. These unaudited condensed interim financial statements for the six months ended 30 September 2013 have been prepared in accordance with International Financial Reporting Standards (IFRS) and IAS 34 "Interim Financial Reporting" as adopted by the European Union and do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. This condensed set of financial statements has been prepared applying the accounting policies that were applied in the preparation of the Company's published financial statements for the year ended 31 March 2013 and are presented in pounds sterling. The comparative figures for the financial year ended 31 March 2013 have been extracted from the Company's statutory accounts which have been delivered to the Registrar of Companies and reported on by the company's Auditors. Their report was unqualified and contained no statement under section 298 (2) or (3) of the Companies Act 2006. 2. Changes in accounting policy The assessment of new standards, amendments and interpretations issued but not effective, are not anticipated to have a material impact on the interim financial statements. 3. Going concern The company's activities, together with the factors likely to affect its future development and performance, the financial position of the company, its cash flows and liquidity position have been considered by the Directors, taking account of the current market conditions which demonstrate that the company shall continue to operate within its own resources. The Directors believe that the company is well placed to manage its business risks successfully, and that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they consider it appropriate to adopt the going concern basis in preparing these condensed financial statements. 4. Investments Fixed asset investments are stated at cost less provision for diminution in value. 5.Earnings per share Earnings per share has been calculated on a loss after tax of Â£98,000 (period to 30 September 2012: Â£180,000 loss; year to 31 March 2013: Â£95,000 profit) and the weighted number of average shares in issue for the year of 88,679,309 weighted (30 September 2012: 7,679,309 weighted; 31 March 2013: 20,008,076). Reconciliation of the profit and weighted average number of shares used in the calculations are set out below: 6 months ended 6 months ended Year ended 30 September 30 September 31 March 2013 2012 2013 Profit/(loss) (Â£'000) (98) (180) 95 Earnings per share (pence) (0.11) (2.34) 0.47 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. 6.Disposal 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 Â£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 (Â£323,000) less carrying value of asset (Â£50,000) giving the profit recognised of Â£273,000. At 31 March 2013 all subsidiaries had been disposed of. 7.Amounts 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 Â£280,000 allowed Â£99,189 to be used for the benefit of the CVA creditors, with the balance to allow the Company to fulfil its new investing policy. The amount written off represents the difference between the total creditors approved and the dividend paid. 8. Investments Other investments Cost at 1 April 2013 - Purchased in the period 264 Cost at 30 September 2013 264 Investment in Disruptive Tech Ltd On 14 August 2013 the Company acquired 262,090 shares, ultimately representing a 0.62% interest in Disruptive Tech Ltd (a Gibraltar Company) for a total of Â£ 250,000. The purchase price was satisfied by a cash payment of Â£125,000 and the balance of Â£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 Company acquired a Â£75,000 investment in Advance Laser Imaging Ltd representing a 6.25% share. Investment in Stream TV Networks Inc. The Company acquired a minority investment for Â£64,000 by way of Convertible Loan Note in Stream TV Networks Inc. ("Stream TV") a Delaware-based technology company. The Loan Notes will accrue simple interest at the rate of twelve (12%) per cent annually until 31 December 2014. 9.Share capital 30 30 31 September September March 2013 2012 2013 Â£'000 Â£'000 Â£'000 Authorised capital 9,999,520,000 ordinary shares of 0.1 pence 10,000 10,000 10,000 each 76,025,157,516 deferred shares of 0.001 pence 760 760 760 4,083,918,156 deferred shares of 0.1 pence 4,084 4,084 4,084 each 54,952,000 deferred shares of 24 pence each 13,188 13,188 13,188 28,032 28,032 28,032 Allotted, called up and fully paid capital 67,679,309 (30 September 2012: 7,679,309) 133 8 68 ordinary 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 - 4,084 4,084 each 133 4,852 4,912 Allotments during the period The Company allotted the following ordinary shares during the period: 6 months ended 30 September 2013 Shares in issue at 1 April 2013 67,679,309 Shares issued during the year 65,000,000 Shares in issue at 30 September 2013 132,679,309 6 months ended 30 September 2012 Shares in issue at 1 April 2012 7,679,309 Shares issued during the period - Shares in issue at 30 September 2012 7,679,309 Year ended 31 March 2013 Shares in issue at 1 April 2012 7,679,309 Shares issued during the period 60,000,000 Shares in issue at 31 March 2013 67,679,309 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. On 24th December 2012, the Company announced that Adrian Moss, a former director of the company had agreed to participate in a placing of 5,000,000 0.01p shares at a price of 0.05p for a total consideration of Â£25,000. This transaction completed on 5 September 2013. On completion of this Adrian Moss owns 5,995,100 shares in the Company representing a shareholding of 4.25%. A further issue of shares took place on 9 August 2013, 60,000,000 Ordinary shares of 0.1 pence being issued at 0.5p each generating gross proceeds of Â£ 300,000. 10.Related party transactions During the period the Company entered into the following related party transactions. All transactions were made on an arm's length basis: Ocean Park Developments Limited Nigel Brent Fitzpatrick, Non-Executive director is also a director of Ocean Park Developments Limited. During the period the Company paid Â£6,000 (30 September 2012: Â£nil; 31 March 2013 : Â£2,500) in respect of his directors fees to the Company. The balance due to Ocean Park Developments at the period end was Â£nil (30 September 2012 Â£nil; 31March 2013 : Â£nil). Risk Alliance Insurance Brokers Limited Nigel Brent Fitzpatrick, Non-Executive director is also a director of Risk Alliance Insurance Brokers Limited. During the period the Company paid Â£3,975 (30 September 2012: Â£nil; 31 March 2013: Â£nil) in respect of insurance services for the Company. The balance due to Risk Alliance Insurance Brokers Limited at the period end was Â£nil (30 September 2012 Â£nil; 31March 2013 : Â£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 participate in a placing of 5,000,000 0.01p shares at a price of 0.05p for a total consideration of Â£25,000. This transaction completed on 5 September 2013. On completion of this Adrian Moss will own 5,995,100 shares in the Company representing a shareholding of 4.25%. 11.Events after the balance sheet date Investment in Rosslyn AnalyticsLtd On 9 October 2013, the Board announced that the Board a Â£100,002 investment in Rosslyn Analytics Ltd. The Company has committed Â£100,002 for a 0.7% interest. Investment in Portr Ltd The Company announced an investment of Â£50,000 by way of a cash subscription for 32,136 new ordinary shares of 0.0001p each in Portr Limited, for a 2% interest. Placing of 11,500,000 Ordinary Shares A further issue of shares took place on 9 October 2013, 11,500,000 Ordinary shares of 0.1 pence being issued at 1p each generating gross proceeds of Â£ 115,000. 12. Principal risks and uncertainties Principal risks and uncertainties are set out in the annual financial statements within the directors' report and also in note 14 and are reviewed on an on-going basis. The Board will provide leadership within a framework of appropriate and effective controls. The Board will set up, operate and monitor the corporate governance values of the company, and will have overall responsibility for setting the company's strategic aims, defining the business objective, managing the financial and operational resources of the Company and reviewing the performance of the officers and management of the company's business both prior to and following an acquisition. There have been no significant changes in the first six months of the financial year to the principle risks and uncertainties as set out in the 31 March 2013 Annual Report and Accounts. 13. Board Approval These interim results were approved by the Board of Vela Technologies PLC on 18th December 2013.

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