Final Results

RNS Number : 1243P

In-Deed Online PLC

30 September 2013

 

27 September 2013

IN-DEED ONLINE PLC

("In-Deed" or the "Company")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2013

Chairman's Review

As predicted in the half year results of the Company, the winter of 2012/13 proved to be a testing environment for the Company's licensed conveyancing business, Runnett & Co Limited ('Runnett'). The seasonal downturn conspired with reduced activity from key customers, to produce material losses which had to be funded by cash loans from the Company.  The ability to recover from these set backs was hampered by the loss of several senior key staff.  In light of the low margins on the volume business it was concluded that efficiency gains were required which would come from operational improvements and a new IT system.  The Company's detailed review of this significant investment, together with prospective returns, led the Board to question the financial viability of the Runnett business and the Company's business overall.  The online volumes, whilst growing, remained relatively small and unprofitable, taking overheads into account.

As part of a detailed review, the Board appointed BDO LLP to examine its strategic options.  These concluded that a sale of Runnett was the best option for Shareholders, with a sale to Runnett's management the only feasible route given the fragile nature of certain customer relationships.  The Company therefore agreed to sell Xanther, the intermediate holding company of Runnett, to the Purchaser for £1 with a reverse premium of £325,000 which will support restructuring of the business, meet current liabilities and future losses.  An insolvent closure was considered but due to certain payments under the earn out with the Original Vendors plus a possible requirement to put 'run off' insurance cover in place, the Board considered was in the best interests of Shareholders to conclude a solvent sale with the reverse premium.  The sale was approved by shareholders and completed on 2 July 2013.

Without Runnett, the online business of the Company lacked critical mass and remained loss making.  The Board therefore included the intellectual property behind the Company's website in the disposal thereby enabling the quickest closure and elimination of costs at the Company.  Following completion of the disposal only two employees remain in the Company (being the executive Directors) and the sale of the intellectual property behind the website means the closure of the Company's business could be concluded quickly and with less cash expenditure.   Following completion of the disposal the Company had approximately £800,000 of cash and no liabilities other than those relating to limited warranties and tax covenants.

Having disposed of all of its trading businesses and therefore (under Rule 15 of the AIM Rules) the company was re-classified as an Investing Company and adopted an Investing Policy, which was approved by the Shareholders.  The Company has a generalist investing policy with the Company investing in all sectors.   The Board has reviewed several opportunities and continue to have active discussions.  It will update the market in due course.

Mailing of 2013 Annual Report and Notice of 2013 Annual General Meeting

The Annual Report of the Company for the year ended 31 March 2013 (the "Annual Report") and the Notice of 2013 Annual General Meeting (the "Notice of AGM") have been placed on the Company's website at www.in-deedplc.com and will be posted to shareholders later today.

The Company's 2013 Annual General Meeting will be held at 10am on 29 October 2013 at the offices of DWF LLP, Capital House, 85 King William Street, London, EC4N 7BL.

Enquiries

In-Deed Online PLC	020 84120184
Harry Hill - Executive Chairman Peter Gordon - Managing Director
Numis Securities Limited - Nomad and Broker	020 7260 1000
Stuart Skinner/Andrew Holloway (Nomad) David Poutney/James Serjeant (Broker)

Consolidated Statement of Comprehensive Income

For the year ended 31 March 2013

		Year ended 31 March 2013	Year ended 31 March 2012
	Note	£	£
Continuing Operations
Revenue	5	3,460,219	19,050
Cost of sales		(1,449,742)	(462,227)
		────────	────────
Gross profit/(loss)		2,010,477	(443,177)
Administrative expenses		(4,246,180)	(1,179,613)
		────────	────────
Loss from operations	6	(2,235,703)	(1,622,790)
Finance cost		(2,921)	(30)
Investment income		174,419	50,808
		────────	────────
Loss for the year before taxation		(2,064,205)	(1,572,012)
Taxation	8	6,329	(156)
		────────	────────
Loss for the year	16	(2,057,876)	(1,572,168)
		════════	════════
Total comprehensive expense		(2,057,876)	(1,572,168)
		════════	════════
Loss attributable to :
Owners of the company		(2,057,876)	(1,572,168)
		════════	════════
Total comprehensive expense attributable to :
Owners of the company		(2,057,876)	(1,572,168)
		════════	════════
Earnings per share
Basic (pence per share)	9	(10.1)	(8.4)
Diluted (pence per share)	9	(9.0)	(7.4)

Company Statement of Comprehensive Income

For the year ended 31 March 2013

		Year ended 31 March 2013	Year ended 31 March 2012
	Note	£	£
Continuing Operations
Revenue	5	72,767	19,050
Cost of sales		(114,280)	(462,227)
		────────	────────
Gross loss		(41,513)	(443,177)
Administrative expenses		(2,112,624)	(1,179,613)
		────────	────────
Loss from operations	6	(2,154,137)	(1,622,790)
Finance cost		(40)	(30)
Investment income		41,991	50,808
		────────	────────
Loss for the year before taxation		(2,112,186)	(1,572,012)
Taxation	8	(319)	(156)
		────────	────────
Loss for the year	16	(2,112,505)	(1,572,168)
		════════	════════
Total comprehensive expense		(2,112,505)	(1,572,168)
		════════	════════
Loss attributable to :
Owners of the company		(2,112,505)	(1,572,168)
		════════	════════
Total comprehensive expense attributable to :
Owners of the company		(2,112,505)	(1,572,168)
		════════	════════
Earnings per share
Basic (pence per share)	9	(10.4)	(8.4)
Diluted (pence per share)	9	(9.3)	(7.4)

Consolidated Statement of Financial Position

As at 31 March 2013

		2013		2012
	Note	£	£	£	£
Non-current assets
Goodwill	10	-		-
Intangible asset	11	-		186,315
Property, plant and equipment	12	56,799		5,134
		───────		───────
			56,799		191,449
Current assets
Trade and other receivables	13	191,101		93,780
Cash and cash equivalents		1,467,356		3,299,191
		───────		───────	3,392,971
			1,658,457
			───────		───────
Total assets			1,715,256		3,584,420
			───────		───────
Current liabilities
Trade and other payables	14		(319,381)		(142,057)
			───────		───────
Net current assets			1,339,076		3,250,914
			───────		───────
Non current liabilities
Deferred tax		(11,388)		-
Contingent consideration		-		-
		───────		───────
			(11,388)		-
			───────		───────
Net assets			1,384,487		3,442,363
			═══════		═══════
Equity
Share capital	15		76,500		76,500
Share premium	16		1,218,335		1,218,335
Share based payment reserve	16		-		93,924
Retained earnings	17		89,652		2,053,604
			───────		───────
Equity attributable to owners of the company			1,384,487		3,442,363
			═══════		═══════

Company Statement of Financial Position

As at 31 March 2013

		2013		2012
	Note	£	£	£	£
Non-current assets
Investment in subsidiary	10	-		-
Intangible asset	11	-		186,315
Property, plant and equipment	12	7,285		5,134
		───────		───────
			7,285		191,449
Current assets
Trade and other receivables	13	37,732		93,780
Cash and cash equivalents		1,361,659		3,299,191
		───────		───────	3,392,971
			1,399,391
			───────		───────
Total assets			1,406,676		3,584,420
			───────		───────
Current liabilities
Trade and other payables	14		(76,818)		(142,057)
			───────		───────
Net current assets			1,322,573		3,250,914
			───────		───────
Non current liabilities               Contingent consideration			-		-
			───────		───────
Net assets			1,329,858		3,442,363
			═══════		═══════
Equity
Share capital	15		76,500		76,500
Share premium	16		1,218,335		1,218,335
Share based payment reserve	16		-		93,924
Retained earnings	17		35,023		2,053,604
			───────		───────
Equity attributable to owners of the company			1,329,858		3,442,363
			═══════		═══════

Consolidated Statement of Changes in Equity

For the year ended 31 March 2013

	Share capital	Share premium	Share based payment reserve	Retained earnings	Total
	£	£	£	£	£

At 1 April 2012	76,500	1,218,335	93,924	2,053,604	3,442,363
Share based payment in the year	-	-	-	-	-
Impairment of  reserve	-	-	(93,924)	93,924	-
Loss/total comprehensive expense for the year	-	-	-	(2,057,876)	(2,057,876)
	────────	────────	────────	────────	────────
At 31 March 2013	76,500	1,218,335	-	89,652	1,384,487
	════════	════════	════════	════════	════════

Company Statement of Changes in Equity

For the year ended 31 March 2013

	Share capital	Share premium	Share based payment reserve	Retained earnings	Total
	£	£	£	£	£
At 1 April 2012	76,500	1,218,335	93,924	2,053,604	3,442,363
Share based payment in the year	-	-	-	-	-
Impairment of reserve			(93,924)	93,924	-
Loss/total comprehensive expense for the period	-	-	-	(2,112,505)	(2,112,505)
	────────	────────	────────	────────	────────
At 31 March 2013	76,500	1,218,335	-	35,023	1,329,858
	════════	════════	════════	════════	════════

Group Statement of Cash Flows

For the year ended 31 March 2013

		Year ended 31 March 2013	Year ended 31 March 2012
	Notes	£	£
Net cash outflow from operating activities	18	(1,858,544)	(1,319,041)
Cash flows from investing activities
Acquisition of property, plant & equipment		(26,088)	(3,719)
Acquisition of subsidiary		(225,000)	(542)
Cash received on acquisition		122,300	-
Interest received		175,625	1,808
		────────	────────
Net cash inflow/(outflow) from investing activities		46,837	(2,453)
		────────	────────
Taxation paid		(10,550)	(156)
Cash flows from financing activities
Repayment of bank loans/overdrafts		(4,466)	-
Repayment of directors' loans on acquisition of subsidiary		-	-
Proceeds on issue of ordinary shares		-	4,706,488
Costs of share issue		-	(351,509)
Interest paid		(5,361)	-
		────────	────────
Net cash (used)/generated by financing activities		(10,097)	4,354,979
		────────	────────
Net (decrease)/increase in cash and cash equivalents		(1,720,980)	3,033,329
Cash and cash equivalents at beginning of year		3,299,191	265,862
		────────	────────
Cash and cash equivalents at end of year		1,467,356	3,299,191
		════════	════════
Comprising:-
Cash		1,467,356	3,299,191
		════════	════════

Company Statement of Cash Flows

For the year ended 31 March 2013

		Year ended 31 March 2013	Year ended 31 March 2012
	Notes	£	£
Net cash from operating activities	18	(1,750,304)	(1,319,041)
Cash flows from investing activities
Acquisition of property, plant & equipment		(4,219)	(3,719)
Acquisition of intangible asset		(225,000)	(542)
Interest received		41,991	1,808
		────────	────────
Net cash (used in) investing activities		(187,228)	(2,453)
		────────	────────
Taxation paid		-	(156)
Cash flows from financing activities
Proceeds on issue of ordinary shares		-	4,706,488
Costs of share issue		-	(351,509)
		────────	────────
Net cash generated by financing activities		-	4,354,979
		────────	────────
Net (decrease)/increase in cash and cash equivalents		(1,937,532)	3,033,329
Cash and cash equivalents at beginning of year		3,299,191	265,862
		────────	────────
Cash and cash equivalents at end of year		1,361,659	3,299,191
		════════	════════
Comprising:-
Cash		1,361,659	3,299,191
		════════	════════

Notes to the Financial Statements

For the year ended 31 March 2013

1.      General information

In-Deed Online PLC is a company incorporated in the United Kingdom. The address of its registered office and principal place of business are disclosed in the company information section of the financial statements.

The principal activity of the group is described on page 2.

2.      Statement of compliance

         The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board, International Financial Reporting Interpretations Committee (IFRIC) interpretations endorsed by the European Union, and the Companies Act 2006 where applicable to companies reporting under IFRSs.

3.       Summary of significant accounting policies

          Group and Company

The accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to each year presented unless otherwise stated.

Basis of preparation

The financial statements have been prepared under the historical cost convention.

Basis of consolidation

The group accounts consolidate the accounts of In-Deed Online PLC and all its subsidiary undertakings drawn up to 31 March.

Adoption of new and revised standards

The following standards, amendments and interpretations became effective during the year and have been adopted in these financial statements.  Their adoption has not had any impact on the amounts reported in these financial statements:

IAS 1                                  Presentation of Financial Statements

IAS 24                                Related Party Disclosures

IAS 32                                Financial Instruments: Presentation

IFRS 7                               Financial Instruments: Disclosures

IAS 7                                  Statement of Cash Flows

At the year end the following standards, amendments and interpretations, which have not been applied in these financial statements, were in issue but not yet effective:

IAS 1                                  Presentation of Financial Statements

IAS 12                                Income Taxes

IAS 27                                Separate Financial Statements

IAS 32                                Financial Instruments: Presentation

IFRS 7                               Financial Instruments: Disclosures

IFRS 10                             Consolidated Financial Statements

IFRS 12                             Disclosure of Interests in Other Entities

IFRS 13                             Fair Value Measurement

The directors have not yet had an opportunity to consider the potential impact of the adoption of these amendments. At the year end there were further standards, amendments and interpretations in issue but not yet effective which are not expected to be relevant to the company's operations and are therefore not disclosed separately.

Revenue

Revenue is recognised for the rendering of services when all the following conditions are satisfied:

·     the amount of revenue can be measured reliably

·     it is probable that the economic benefits associated with the transaction will flow to the entity

The point at which the company recognises its revenue is where contracts between the vendor and buyer have been exchanged.

Interest revenue

Interest revenue is accrued on a time basis, by reference to the principal outstanding and the effective interest rate.

Taxation

The tax expense represents the sum of the tax currently payable. Current tax, including UK corporation tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Intangible assets

Expenditure on research activities are recognised as an expense in the year in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:

·     the technical feasibility of completing the intangible asset so that it will be available for use or sale;

·     the intention to complete the intangible asset and use or sell it;

·     the ability to use or sell the intangible asset;

·     how the intangible asset will generate probable future economic benefits;

·     the availability of adequate technical, financial and other resources to complete the development and use or sell the intangible asset; and

·     the ability to measure reliably the expenditure attributable to the intangible asset during its development

The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from the date when the asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognised, development expenditure is recognised in profit or loss in the year in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses.

The amortisation rates applicable are:-

Website development costs - 25% straight line

The amortisation charge for the year is disclosed within administrative expenses within the Statement of Comprehensive Income.

Property, plant and equipment

Fixtures & fittings and equipment are stated at cost less accumulated depreciation.

Any item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

Depreciation

Depreciation is calculated to write off the cost less the estimated residual value of assets over their expected useful lives. The estimated useful lives, residual values and depreciation method are reviewed by class of asset at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

The rates applicable are:-

Fixtures & fittings       -    25% straight line

Computer equipment -    25% straight line

Impairment of tangible and intangible assets other than goodwill

At the end of each reporting period, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. Value in use is based on estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where the impairment subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and on deposit.

Share-based payment transactions of the company

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity settled share-based transactions are set out in note 21. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the company's estimate of equity instruments that will eventually vest, with a corresponding increase to equity. At the end of each reporting period, the company revises its estimate of the number of equity instruments expected to vest. The impact of the revision on the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share based payment reserve.

The policy described above is applied to all equity settled share based payment transactions.

Equity settled share based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

Leases

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight line basis, except where another systematic basis is more representative of the time pattern in which economic benefits of the leased asset are consumed.

Financial Instruments

Financial assets and financial liabilities are recognised in the company's Statement of Financial Position when the company has become a party to the contractual provisions of the instrument:

I. Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

II. Derecognition of financial assets

The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the company retains substantially all the risks and rewards of ownership of a transferred financial asset, the company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

III.     Impairment of financial assets

The company assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets are impaired. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. 

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of estimated future cash flows. 

IV.     Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

V.      Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

VI.     Other financial liabilities

Trade payables, and other payables that have fixed or determinable payments are classified as other financial liabilities. Other financial liabilities are initially measured at fair value, and subsequently measured at amortised cost

VII.    Derecognition of financial liabilities

The company derecognises a financial liability only when the contractual obligations to the cash flows of the liability expire. Expiry occurs where full settlement of the amount outstanding is made in the form of cash payment or where an agreement is made with the relevant counter party which extinguishes the liability of the company.

4.         Critical accounting judgements and key sources of estimation uncertainty

            Group and Company

The preparation of financial statements under IFRS requires the company to make estimates and assumptions that affect the application of policies and reported amounts. 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.  If in the future should such estimates and assumptions deviate from actual circumstances, the original estimates and assumptions would be modified as appropriate in the period in which circumstances change.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below:

Valuation of intangible assets

As explained in note 23, the company disposed of its intangible assets after the year end.  In light of this, the directors have incorporated an impairment provision to reduce the carrying value of the company's intangible assets to £Nil at the year end.

5.       Revenue

Revenue for the year comprises of fees rendered for the arrangement of conveyancing contracts, exclusive of value added tax. This includes revenue for contracts which have been completed and invoiced, and those where contracts have been exchanged.  Revenue is accrued in line with the company's accounting policy. 

		2013		2012
		Group	Company	Group	Company
6.	Loss from operations	£	£	£	£
	Loss from operations is stated after charging:-
	Depreciation of property, plant and equipment	10,250	2,068	1,751	1,751
	Amortisation of intangible assets	93,071	93,071	92,977	92,977
	Auditors' remuneration - audit services	15,500	8,500	8,000	8,000
	Auditors' remuneration - non audit services	5,000	-	-	-
		════════	════════	════════	════════

7.	Staff costs	2013		2012
		Group Number	Company Number	Group Number	Company Number
	The average monthly number of employees was:-	61	7	7	7
		════════	════════	════════	════════
	Their aggregate remuneration comprised:-	£	£	£	£
	Wages and salaries	2,535,769	378,724	409,648	409,648
	Share based payments	101,114	101,114	93,924	93,924
	Social security costs	238,313	45,164	49,011	49,011
		────────	────────	────────	────────
		2,875,196	525,002	552,583	552,583
		════════	════════	════════	════════

Compensation of key management personnel The remuneration of directors and key management personnel during the year was as follows:

		2013		2012
		Group £	Company £	Group £	Company £
	Emoluments	579,842	274,891	271,081	271,081
	Compensation for loss of office	30,000
	Share options granted	-	-	76,604	76,604
		────────	────────	────────	────────
		609,842	274,891	347,685	347,685
		════════	════════	════════	════════
		2013		2012
		Group Number	Company Number	Group Number	Company Number
	Number of directors and key management personnel	9	5	5	5
		════════	════════	════════	════════

8.	Taxation	2013		2012
		Group	Company	Group	Company
		£	£	£	£
	UK corporation tax - current year	-	-	-	-
	UK corporation tax - previous year over/(under) provision	6,329	(319)	(156)	(156)
		────────	────────	────────	────────
		6,329	(319)	(156)	(156)
		════════	════════	════════	════════
	Factors affecting the tax charge for the year
	Loss on ordinary activities before taxation	(2,064,205)	(2,112,186)	(1,572,012)	(1,572,012)
		════════	════════	════════	════════

		2013		2012
		Group	Company	Group	Company
		£	£	£	£
	Loss on ordinary activities before taxation multiplied by the effective rate of corporation tax in the United Kingdom of 24% (2012: 26%)	(495,409)	(506,925)	(408,723)	(408,723)
	Income not taxable for tax purposes	(312,000)	(312,000)	-	-
	Expenses not deductible for tax purposes	598,281	598,281	24,420	24,420
	Depreciation in excess of capital allowances	(4,408)	(516)	42	42
	Unrelieved tax losses	217,438	221,160	384,261	384,261
	Prior year adjustment	(10,231)	319
		────────	────────	────────	────────
		(6,329)	319	-	-
		════════	════════	════════	════════

9.	Earnings per share	2013		2012
		Group	Company	Group	Company
		Pence per share	Pence per share	Pence per share	Pence per share
	Basic loss per share	(10.1)	(10.4)	(8.4)	(8.4)
		───────	───────	───────	───────
	Diluted loss per share	(9.0)	(9.3)	(7.4)	(7.4)
		───────	───────	───────	───────

	The loss used in the calculation of basic and diluted earnings per share are as follows:

		2013		2012
		Group	Company	Group	Company
		£	£	£	£
	Loss for the year attributable to owners of the company	(2,057,876)	(2,112,186)	(1,572,168)	(1,572,168)
		───────	───────	───────	───────

The weighted average number of shares used in the calculation of basic and diluted earnings per share are as follows:

		2013		2012
		Group	Company	Group	Company
		Number	Number	Number	Number
	Weighted average number of ordinary shares used in the calculation of basic earnings per share	20,400,000	20,400,000	18,826,971	18,826,971
	Shares deemed to be issued for no consideration in respect of
	- options exercised	2,381,178	2,381,178	2,425,776	2,425,776
		───────	───────	───────	───────
	Weighted average number of ordinary shares used in the calculation of diluted earnings per share	22,761,089	22,761,089	21,252,748	21,252,748
		═══════	═══════	═══════	═══════

10.	Fixed asset investments		Total
			£
	Company
	Cost
	At 1 April 2011 and 31 March 2012		-
			══════
	At 1 April 2012		-
	Additions		1,525,000
			──────
	At 31 March 2013		1,525,000
			══════
	Amortisation/Impairment
	At 1 April 2011 and 31 March 2012		-
			══════
	At 1 April 2012		-
	Provision for impairment		1,525,000 ──────
	At 31 March 2013		1,525,000 ══════
	Net book value
	At 31 March 2013		-
			══════
	At 31 March 2012		-
			══════

10.	Fixed asset investments (co		Total
			£
	The company's subsidiaries at 31 March 2013 wwere as follows:-

	Name of subsidiary undertaking		Country of Incorporation	Class of Share Capital held	Properties held		Nature of Business
	Xanther Limited		England and Wales	Ordinary	100%		Intermediate holding company
	Name of subsidiary undertaking				Capital and Reserves		Profit/loss for the year
	Xanther Limited				£              1		£ -
	On 14 May 2012, the company acquired 100% of the issued share capital of Xanther Limited in exchange for an initial consideration of £225,000.               . Xanther Limited owes 100% of the issued share capital of Runnett & Co Limited.  Runnett & Co Limited is engaged in the provision of conveyancing services. The primary reason for this investment was to enable the company to carry out some conveyancing in-house as well as expanding its distribution to the estate agency network.
		Consideration				£
		Initial payment				225,000
		Contingent consideration arrangement				1,300,000
						───────
						1,525,000
						═══════
		The contingent consideration require the Group to pay 5 times Post Tax Profit to the vendors of Xanther.  Post Tax Profit is calculated as the average, audited, taxed profit calculated over the financial years ending 31 March 2014, 2015, 2016 and 2017.  The vendors could, at their discretion, substitute the year ending 31 March 2013 for the year ended 31 March 2017 in this calculation. The total value of payments was capped at £4m.  The company's debts at completion (comprising the overdraft and directors' loans totalling £525,000) are deducted from the value of the total consideration.  The vendors may draw down up to £200,000 of consideration following finalisation of the audited accounts for any one year providing the actual audited taxed profits exceed £200,000.  Any amounts drawn down are deducted from the final price payable.

As described in note 23, the above subsidiaries were disposed of after the year end, and the contingent consideration will not therefore be payable.  Full provision has also been made in these accounts against the carrying value of the investment.

	Assets acquired and liabilities assumed at the date of acquisition	£
	Current assets
	Cash & cash equivalents	122,133
	Trade and other receivables	139,197
	Non-current assets
	Plant & equipment	35,827
	Goodwill	520,999
	Current liabilities
	Trade & other payables	(957,615)
	Current tax liabilities	(10,550)
	Non-current liabilities
	Deferred tax liabilities	(7,486)
		───────
		(157,495)
		═══════

Goodwill arose in the acquisition because the acquisition included the reputation and customer relationships of Runnett & Co Limited as part of the acquisition. These assets could not be separately recognised from goodwill because they are not capable of being separated from the Group and sold, transferred, licensed, rented or exchanged, either individually or together with any related contracts.

11.	Intangible Assets		Total
			£
	Group Cost
	At 1 April 2012 and 31 March 2013		372,209
			═══════
	Amortisation
	At 1 April 2012		185,894
	Charge for year		93,071
	Impairment of intangible assets		93,244
			───────
	At 31 March 2013		372,209
			═══════
	Net book value
	At 31 March 2013		-
			═══════
	At 31 March 2012		186,315
			═══════

Intangible assets relate to costs incurred in the development and implementation of the company's web portal which is considered as having a finite useful life. The amortisation method and rate applied are disclosed within the summary of significant accounting policies.

As described in note 23, all rights over the intangible assets have been disposed of after the year end.

11.	Intangible Assets (cont'd)		Total
			£
	Company
	Cost		───────
	At 1 April 2012 and 31 March 2013		372,209
			═══════
	Amortisation
	At 1 April 2012		185,894
	Charge for year		93,071
	Provision for impairment		93,244
			───────
	At 31 March 2013		372,209
			═══════
	Net book value
	At 31 March 2013		-
			═══════
	At 31 March 2012		186,315
			═══════

Intangible assets relate to costs incurred in the development and implementation of the company's web portal which is considered as having a finite useful life. The amortisation method and rate applied are disclosed within the summary of significant accounting policies.

As described in note 23, all rights over the intangible assets have been disposed of after the year end.

12.	Property, plant and equipment		Fixtures &
			Fittings	Equipment	Total
	Group		£	£	£
	Cost
	At 1 April 2012		2,510	5,430	7,940
	Additions		-	26,088	26,088
	Assets acquired on acquisition of subsidiary		-	35,827	35,827
			────────	────────	────────
	At 31 March 2013		2,510	67,345	69,855
			════════	════════	════════
	Depreciation
	At 1 April 2012		1,157	1,649	2,806
	Charge for year		624	9,626	10,250
			────────	────────	────────
	At 31 March 2013		1,781	11,275	13,056
			════════	════════	════════
	Net book value
	At 31 March 2013		729	56,070	56,799
			════════	════════	════════
	At 31 March 2012		1,353	3,781	5,134
			════════	════════	════════

			Fixtures &
	Company		Fittings	Equipment	Total
			£	£	£
	Cost
	At 1 April 2012		2,510	5,430	7,940
	Additions		-	4,219	4,219
			────────	────────	────────
	At 31 March 2013		2,510	9,649	12,159
			════════	════════	════════
	Depreciation
	At 1 April 2012		1,157	1,649	2,806
	Charge for year		624	1,444	2,068
			────────	────────	────────
	At 31 March 2013		1,781	3,093	4,874
			════════	════════	════════
	Net book value
	At 31 March 2013		729	6,556	7,285
			════════	════════	════════
	At 31 March 2012		1,353	3,781	5,134
			════════	════════	════════

13.	Trade and other receivables	2013		2012
		Group	Company	Group	Company
		£	£	£	£
	Trade receivables	33,571	3,540	3,120	3,120
	Other debtors	144,795	19,327	31,275	31,275
	Prepayments and accrued income	12,735	12,735	59,385	59,385
	Amounts owed by related undertakings	-	2,130	-	-
		────────	────────	────────	────────
		191,101	37,732	93,780	93,780
		════════	════════	════════	════════

	Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost. Trade receivables do not include any amounts that are past due at the end of the reporting period, therefore no allowance for doubtful receivables is necessary.

		2013		2012
		Group	Company	Group	Company
14.	Trade and other payables	£	£	£	£
	Trade payables	28,648	13,502	55,802	55,802
	Other payables and accruals	200,943	36,910	69,951	69,951
	Other tax and social security	89,790	26,087	16,304	16,304
		────────	────────	────────	────────
		319,381	76,499	142,057	142,057
		════════	════════	════════	════════

The average credit period on purchases is 30 days (2012: 30 days). The company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

		2013	2012
15.	Share capital	£	£
	Group and Company
	Authorised
	Equity
	20,400,000 ordinary shares of £0.00375 each	76,500	76,500
		════════	════════
	Allotted, called up and fully paid
	Equity
	20,400,000 ordinary shares of £0.00375 each	76,500	76,500
		════════	════════

The share classes noted above carry one vote per share and carry a right to dividends.

	Reconciliation of shares	2013	2012
		Number of shares	Number of shares
	On 1 April	20,400,000	8,000,000
	Issue of shares during the year	-	45,657,148
	Consolidation of shares	-	(33,257,148)
		────────	────────
		20,400,000	20,400,000
		════════	════════

16.	Reserves	2013		2012
		Group	Company	Group	Company
	Share premium	£	£	£	£
	At 1 April 2012	1,218,335	1,218,335	970,000	970,000
	Elimination of share premium	-	-	(4,040,144)	(4,040,144)
	Issue of shares during the year	-	-	4,639,988	4,639,988
	Cost of share issue	-	-	(351,509)	(351,509)
		────────	────────	────────	────────
	At 31 March 2013	1,218,335	1,218,335	1,218,335	1,218,335
		════════	════════	════════	════════
	Equity-settled share based payments
	At 1 April 2012	93,924	93,924	56,641	56,641
	Share options exercised in the year	-	-	(56,641)	(56,641)
	Share based payments in year	-	-	93,924	93,924
	Impairment of reserve (note 23)	(93,924)	(93,924)	-	-
		────────	────────	────────	────────
	At 31 March 2013	-	-	93,924	93,924
		════════	════════	════════	════════

The above equity-settled share based payment reserve relates to share options granted by the company to 5 of its employees under a share option plan (2012: six employees and one of its suppliers). Further information about share-based payments is set out in note 21.

17.	Retained earnings	2013		2012
		Group	Company	Group	Company
		£	£	£	£
	At 1 April 2012	2,053,604	2,053,604	(471,013)	(471,013)
	Elimination of share premium	-	-	4,040,144	4,040,144
	Options exercised in the period	-	-	56,641	56,641
	Elimination of share payment reserve	93,924	93,924	-	-
	Loss for the year	(2,057,557)	(2,112,186)	(1,572,168)	(1,572,168)
		────────	────────	────────	────────
	At 31 March 2013	89,971	35,342	2,053,604	2,053,604
		════════	════════	════════	════════

18.	Notes to the Statement of Cash Flows	2013		2012
		Group	Company	Group	Company
		£	£	£	£
	Loss from operations	(2,187,152)	(2,112,186)	(1,622,790)	(1,622,790)
	Adjustments for:
	Depreciation of property, plant and equipment	10,250	2,068	1,751	1,751
	Amortisation of intangible assets	137,165	93,071	92,977	92,977
	Share based payments	-	-	93,924	93,924
	Increase in deferred taxation	3,902	-	-	-
	Impairment of intangibles	421,262	93,244	-	-
	Impairment of investment	1,525,000	1,525,000	-	-
	Write back of contingent consideration	(1,300,000)	(1,300,000)	-	-
	Goodwill	255,412	-	-	-
	Interest	-	(41,991)	(30)	(30)
		────────	────────	────────	────────
	Operating cash outflows before movements in working capital	(1,134,161)	(1,740,794)	(1,434,168)	(1,434,168)
	Increase in receivables	146,846	56,048	(5,988)	(5,988)
	Increase/(decrease) in payables	(768,234)	(65,558)	121,115	121,115
		────────	────────	────────	────────
	Net cash outflow from         operating activities	(1,755,549) ════════	(1,750,304) ════════	(1,319,041) ════════	(1,319,041) ════════

19.	Operating Lease Arrangements	2013		2012
		Group	Company	Group	Company
		£	£	£	£
	Minimum lease payments under operating leases recognised	18,454	18,454	35,854	35,854
	as an expense for the year	════════	════════	════════	════════

At the balance sheet date, the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:-

		2013		2012
		Group	Company	Group	Company
		£	£	£	£
	Within one year	6,682	5,631	18,454	18,454
	In the second to fifth years inclusive	33,265	-	-	-
		────────	────────	────────	────────
		34,316	5,631	18,454	18,454
		════════	════════	════════	════════

Operating lease payments are in respect of the rental of premises and ongoing computer hosting, with terms of one and two years from inception respectively.

20.    Financial instruments

         Group and Company

Capital management

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor, and market confidence and to sustain future development of the business. Given the stage of the company's development there are no formal targets set for return on capital. There were no changes to the company's approach to capital management during the year.

The directors manage capital to ensure that the company will be able to continue as a going concern, whilst maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the company currently consists of cash and equity only.

Financial risk management

The company's activities expose it to market risk (which would include currency risk and interest rate risk), credit risk and liquidity risk. As the company operates within the United Kingdom whereby all transactions are made in GBP there is no currency risk.

This note presents qualitative and quantitative information about the company's exposure to each of the above risks, their objectives, policies and procedures for managing risk. The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

The company's overall risk management approach focuses on the unpredictability of financial markets and seeks to minimise the potential adverse effects on the financial performance of the company. The company does not currently use derivative financial instruments to hedge financial risk exposures and therefore it is exposed to movements in interest rates.

			2013				2012
			Group		Company		Group		Company
	Categories of financial instruments		£		£		£		£
	Financial assets
	Cash and cash equivalents		1,467,356		1,361,659		3,299,191		3,299,191
	Trade and other receivables		191,101		37,732		93,780		93,780
			────────		────────		────────		────────
			1,569,512		1,399,391		3,392,971		3,392,971
			════════		════════		════════		════════
	Financial liabilities
		Trade and other payables		319,381		76,818		142,057		142,057
				────────		────────		────────		────────
				578,476		76,818		142,057		142,057
				════════		════════		════════		════════

The fair value of the company's financial assets and liabilities above is not considered to be materially different from their book values.

Credit risk

Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in a financial loss to the company and arises principally from the company's receivables and cash deposits.

At the year end no receivables were past due or considered impaired. Cash and cash equivalents are held with Financial Institutions of high credit rating. Credit risk as assessed by the directors is considered low.

Group and Company

Liquidity risk

The company monitors its cash position on a daily basis and utilises short term deposit accounts to maximise interest rate returns. Cash flow requirements are reviewed on a weekly basis with transfers made to current accounts to provide sufficient funds to settle invoices as required.

Interest rate risk

The management of interest rate risks to the company are dependent on a number of factors including:

·     Interest rates

·     Level of cash and liquid investments

·     Term of cash and liquid investments

·     Maturity dates of investments.

At the reporting date, the company had no interest bearing financial liabilities.

Sensitivity analysis

A 1% increase in the Bank of England base rate would have increased equity and reduced the pre tax loss by £8,000, a decrease of 0.5% would have decreased equity and increased the loss by £4,000.

21.     Share based payments

          Group and Company

          Details of the share option plan of the company

The company has a share option scheme for its senior employees. Each option converts into one ordinary share of the company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to their date of expiry.

The following share-based payment arrangements were in existence during the year:

Option series	Number	Expiry date	Exercise price	Fair value at grant date
			£	£
(1) Granted on 6 October 2010	1,500,000	06/10/2020	0.125	0.036
(2) Granted on 21 January 2011	200,000	21/01/2021	0.125	0.036
(3) Granted on 15 June 2011	2,538,000	15/06/2018	0.420	0.420

          Fair value of share options granted in the year

          The weighted average fair value of the share options granted during the year is £0.420. (2011: £0.036). Options were valued using the Black Scholes option pricing model. Where relevant, the expected life, used in the model, has been adjusted based on management's best estimate. Expected volatility is based on the historical share price volatility taking into account the effects of trading in the year.

          Inputs into the model

                                                            Series 1           Series 2           Series 3                                  

          Grant date share price                £0.125           £0.125 £0.420

          Exercise price                          £0.125      £0.125          £0.420

          Expected volatility                                     20%             20%                     30%

          Option life                                              10 years      10 years       7 years

          Dividend yield                                0%                    0%              0%

          Risk-free interest rate                    1%                    1%                  1%

          Movements in share options

		Number 2013	Number 2012
	At 1 April	2,538,000	1,700,000
	Granted during the year	-	2,538,000
	Forfeited during the year	(738,000)	-
	Exercised during the year	-	(1,700,000)
	Waived during the year	(1,800,000)	-
		────────	────────
	At 31 March	-	2,538,000
		════════	════════

22.     Related party transactions

          Group and Company

          Advantage has been taken of the exemptions conferred by IAS 24 "Related Party Disclosures" from disclosing transactions between group members.

          Other than group related transactions no related party transactions arose during the year.

23.     Post balance sheet events

          Since the year end the company has disposed of its investment in its subsidiary Xanther Limited, including its wholly owned subsidiary Runnett & Co Limited.  The transaction involves a consideration of £1 and effectively the transfer of intellectual property rights over the intangible assets.

On completion of this disposal, the company has been reclassified as an Investing Company under Rule 15 of the AIM Rules.

During 2012/13 the carrying value of the investment in the Company's investment in Xanther Limited was impaired to £nil in the accounts reflecting the higher of its recoverable amount and value in use. 

 

END

 

 

FR UBUAROBAKUAR