Final Results

RNS Number : 5000R

Vela Technologies PLC

22 September 2017

 

22 September 2017

Vela Technologies plc

("Vela", the "Company" or the "Group")

Final Results for the year ended 31 March 2017

The Board of Vela (AIM: VELA), the investing company focused on early-stage and pre-IPO disruptive technology investments, is pleased to announce the Company's results for the year ended 31 March 2017.

The annual report and accounts and notice of annual general meeting will be posted to shareholders shortly and will be made available on the Company's website: www.velatechplc.com. The Company's Annual General Meeting will be held at 10.00 a.m. on 19 October 2017 at the offices of Allenby Capital Limited, 5 St Helen's Place, London, EC3A 6AB.

For further information, please contact:

Vela Technologies plc Brent Fitzpatrick, Non-Executive Chairman Antony Laiker, Director Tel: [phone] Allenby Capital Limited (Nominated Adviser) Nick Athanas/Katrina Perez/Asha Chotai Tel: [phone] Smaller Company Capital Limited (Broker) Rupert Williams/Jeremy Woodgate Tel: [phone]

chairman's statement

for the year ended 31 March 2017

It gives me great pleasure to present the annual report and financial statements for the year ended 31 March 2017.

The period under review produced total comprehensive income of £993k, resulting from significant unrealised gains on our investment portfolio (year ended 31 March 2016- £204k). The Company also generated realised gains on the sale of investments in the period amounting to £186k.  Cash at bank at the year end was approximately £383k which has been added to during the current financial year following sales of shares in BTL Group Ltd (TSX: BTL). During the financial year the Company raised £400k through the issue of unsecured loan notes in October 2016 and, in February 2017, the Company completed a 10% Bond issue with UK Bond Network Limited raising gross £550k.

As at 31 March 2017 gross assets were £3.85 million (31 March 2016- £2.15 million) and investments were valued at £3.45 million (31 March 2016- £1.98 million). The Board is pleased to have seen a strong uplift in the valuation of its investment portfolio in the period under review, resulting from new investments made and positive revaluations on certain investments held. Note 8 to the financial statements provides further details on the valuation of the investment portfolio and additions and disposals made during the financial year under review.

The Directors have reviewed numerous investments but in the period under review have only added one new investment to the portfolio, this being a £200k investment into THEVIBE Limited, a fan-to-fan ticket platform. We have also increased our holdings in Portr Limited and BTL. Whilst the remainder of the portfolio; Stream TV, Revolve Performance, Disruptive Tech Limited, The Social Superstore Limited and Rosslyn Data Technologies plc make progress we have decided to write off the remaining small balance of our investment in Advance Laser Imaging Limited. We also sold our remaining holding in SalvaRx in the period under review.

Shareholders should avail themselves of the Company website for full information on announcements made by the Company. The website link is www.velatechplc.com.

Looking forward we continue to manage our existing portfolio and review potential new investments, although we are finding that the expectations of business owners as to the valuation of their business are somewhat inflated relative to the business risk.

strategic report

for the year ended 31 March 2017

Business review

Further details of the investments made and the investee companies are detailed in the Chairman's statement and note 8 to the financial statements.

At the period end the Company holds approximately £383k of cash (31 March 2016: £200k) and continues to keep administration costs to a minimum so that the Company has sufficient resources to cover the Company's ongoing running costs and has maximum funds that can be dedicated to further investments.

Additional funds were raised during the period through the issue of bonds and convertible loan notes. These funds have provided the Company with additional capital in order to acquire additional investments. Further details regarding the loans issued in the period are provided in note 11.

The Company's net loss for the year is £72k (12 months ended 31 March 2016: £351k). However, the overall total comprehensive income, which also includes the unrealised gains on investments carried at fair value, was a positive £993k (2016: £204k).

The valuation of the investment portfolio under accounting rules and recorded in these financial statements at 31 March 2017 was £3,455k (2016: £1,918k), an increase of £1,537k on the prior year.  During the year Vela invested £602k in disruptive technology businesses.  Further details of these investment additions are given in note 8.  The Company also recorded an unrealised gain through Other Comprehensive Income on its estimate of the fair value of the investment portfolio at 31 March 2017.  This gain, of £1,127k, included a significant increase in the estimate of the fair value of the Company's investment in BTL.  We update shareholders regularly on investee company performance through our website newsfeed, as information becomes available, and further detailed information can be found here.

The Company has no employees and has a Board of one male executive Director and one male non-executive Director.

Key performance indicators (KPIs)

Measuring performance is integral to the next phase of our strategic growth. The Directors have selected KPIs to benchmark to the Company's progress. The Directors consider investment income, profit before tax and investment growth as KPIs in measuring Company performance.

Investment income is detailed in the statement of comprehensive income.

Management is satisfied with the level of costs and that these have been maintained to a minimum level and the loss is as expected for the Company.

Investment growth is detailed above and in note 8.

Principal risks and uncertainties

The preservation of its cash balances and management of the capital remain key risks for the Company, ensuring that investments are commensurate with the level of risk.

The Company is committed to maintaining its minimal operational costs.

Further information about the Company's principal risks are detailed in note 14, specifically in the currency risk, credit risk, liquidity risk and capital risk management sections.

Approved by the Board of directors and signed on behalf of the Board on 21 September 2017.

statement of comprehensive income

for the year ended 31 March 2017

		31 March	31 March
		2017	2016
	Notes	£'000	£'000
Revenue	1	7	9
Administrative expenses
- share-based payments		-	(23)
- other administrative expenses		(212)	(181)
- profit/(loss) on disposal of available-for-sale assets		186	(13)
- impairment of available-for-sale assets		(25)	(143)
Total administrative expenses		(51)	(360)
Operating loss	2	(44)	(351)
Finance expense	4	(28)	-
Loss before tax		(72)	(351)
Income tax	6	-	-
Loss		(72)	(351)
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
Fair value movement on available-for-sale investments		1,127	449
Reclassification of changes in fair value of available-for-sale investments to profit or loss		(62)	106
Other comprehensive income for the year		1,065	555
Total comprehensive income		993	204
Attributable to:
Equity holders of the Company		993	204
Earnings per share
Basic and diluted loss per share (pence)	7	(0.01)	(0.07)

balance sheet

as at 31 March 2017

		31 March	31 March
		2017	2016
	Notes	£'000	£'000
Non-current assets
Investments	8	3,455	1,918
Current assets
Trade and other receivables	9	13	36
Cash and cash equivalents	13	383	200
Total current assets		396	236
Total assets		3,851	2,154
Equity and liabilities
Equity
Called up share capital	12	722	722
Share premium account		1,117	1,117
Available-for-sale reserve		1,873	808
Share option reserve		130	130
Retained earnings		(873)	(801)
Total equity		2,969	1,976
Current liabilities
Trade and other payables	10	22	178
Total current liabilities		22	178
Non current liabilities
Loans and borrowings	11	860	-
Total non current liabilities		860	-
Total equity and liabilities		3,851	2,154

These financial statements were approved by the Board, authorised for issue and signed on their behalf on 21 September 2017 by:

Nigel Brent Fitzpatrick MBE

Non-Executive Chairman

Company registration number: 03904195

cash flow statement

for the year ended 31 March 2017

		31 March	31 March
		2017	2016
	Notes	£'000	£'000
Operating activities
Loss before tax		(72)	(351)
(Profit)/loss on disposal of available-for-sale assets		(186)	13
Impairment of available-for-sale assets		25	143
Share-based charge		-	23
Finance expenses		28	-
Decrease/(Increase) in receivables		-	(5)
Decrease in payables		(5)	(2)
Tax charge		-	-
Total cash flow from operating activities		(210)	(179)
Investing activities
Consideration for disposal of investment		247	14
Consideration for purchase of investment		(726)	(235)
Total cash flow from investing activities		(479)	(221)
Financing activities
Proceeds from issue of loans (net of issue costs)		872	-
Proceeds from the issue of ordinary share capital		-	444
Total cash flow from financing activities		872	444
Net increase in cash and cash equivalents		183	44
Cash and cash equivalents at start of year		200	156
Cash and cash equivalents at the end of the year	13	383	200
Cash and cash equivalents comprise:
Cash and cash in bank		383	200
Cash and cash equivalents at end of year	13	383	200

statement of changes in equity

for the year ended 31 March 2017

	Share	Share	Retained	Available-for-sale	Share Option	Total
	Capital	Premium	Earnings	reserve	Reserve	Equity
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 April 2016	722	1,117	(801)	808	130	1,976
Transactions with owners
Issue of share options	-	-	-	-	-	-
Issue of share capital	-	-	-	-	-	-
Transactions with owners	-	-	-	-	-	-
Loss for the year	-	-	(72)	-	-	(72)
Other comprehensive income	-	-	-	1,065	-	1,065
Total comprehensive income	-	-	(72)	1,065	-	993
Balance at 31 March 2017	722	1,117	(873)	1,873	130	2,969
Balance at 1 April 2015	459	936	(450)	253	107	1,305
Issue of share options	-	-	-	-	23	23
Issue of share capital	263	181	-	-	-	444
Transactions with owners	263	181	-	-	23	467
Loss for the year	-	-	(351)	-	-	(351)
Other comprehensive income	-	-	-	555	-	555
Total comprehensive income	-	-	(351)	555	-	204
Balance at 31 March 2016	722	1,117	(801)	808	130	1,976

notes to the financial statements

for the year ended 31 March 2017

1 Revenue and segmental information

The Company is an investment Company 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 balances and cash flows of the segment are as presented in the primary statements.  Revenue received in the period under review represents the accrued value for interest receivable from loan notes held in investee company Stream TV Networks.

2 Loss from operations

Loss from operations is stated after charging/(crediting):

	31 March	31 March
	2017	2016
	£'000	£'000
Auditors' remuneration for auditing of accounts	10	9
Auditors' remuneration for non-audit services	1	1
Foreign exchange losses/(gains)	4	(4)
(Profit)/Loss on disposal of available-for-sale assets	(186)	13
Impairment of available-for-sale assets	25	143

3 Staff costs

The average number of persons employed by the Company (including Directors) during the period was as follows:

	31 March	31 March
	2017	2016
Directors and senior management	2	2
Total	2	2

The aggregate payroll costs for these persons were as follows:

		31 March 2017 £'000	31 March 2016 £'000
Aggregate wages and salaries		95	78
Social security costs		-	-
Share-based payments		-	23
Pensions costs		-	-
		95	101

4 Finance expense

	31 March 2017	31 March 2016
	£'000	£'000
Loan note interest	18	-
Bond interest	10	-
Total finance expense	28	-

Included in finance expenses is £6k in respect of the amortisation of loan issue costs.

5 Directors and senior management

Directors' remuneration

	31 March 2017
	Salary	Fees	Pension	Equity	Total
	£'000	£'000	£'000	£'000	£'000
N B Fitzpatrick	-	40	-	-	40
A Laiker	-	55	-	-	55
	-	95	-	-	95

		31 March 2016
		Salary		Fees		Pension		Equity	Total
		£'000		£'000		£'000		£'000	£'000
N B Fitzpatrick	-		32		-		-		32
A Laiker	-		46		-		-		46
	-		78		-		-		78

Directors' and senior management's interests in shares

The Directors who held office at 31 March 2017 held the following shares:

		31 March 2017	31 March 2016
N B Fitzpatrick		1,500,000	1,500,000
A Laiker		35,191,724	35,191,724

The total share-based payment costs in respect of options granted are:  

	31 March	31 March
	2017	2016
	£'000	£'000
Directors	-	23

As at 31 March 2017, the total number of outstanding options held by the Directors over ordinary shares is 29,124,854, representing 4.0 per cent of the Company's issued share capital. Each Director holds 14,562,427 options.

Further details regarding the options issued are provided in note 15.

6 Tax

	31 March 2017	31 March 2016
	£'000	£'000
Current tax:
UK tax	-	-
Tax charge	-	-

A deferred tax asset relating to losses carried forward has not been recognised due to uncertainty over the existence of future taxable profits against which the losses can be used.  The Company has unused tax losses of approximately £4.5m (2016: £4.4m). In addition, a deferred tax liability on the cumulative fair value gain of £1,873k on available-for-sale assets has not been recognised on the basis that it would be offset by available taxable losses.

Tax reconciliation

	31 March	31 March
	2017	2016
	£'000	£'000
Loss before tax	(72)	(351)
Tax at 20% (2016: 21%) on loss before tax	(14)	(74)
Effects of:
Other expenses not deductible	-	7
Utilisation of losses	-	-
Unrelieved losses carried forward	14	67
Total tax (credit)/expense	-	-

7 Loss per share

Loss per share has been calculated on a loss after tax of £72,000 (2016: £351,000 loss) and the weighted number of average shares in issue for the year of 721,588,020 (2016: 533,749,896).

The loss and weighted average number of shares used in the calculations is set out below:

	31 March  2017	31 March 2016
Loss (£'000)	(72)	(351)
Loss per share (pence)	(0.01)	(0.07)

8 Investments

	31 March	31 March
	2017	2016
	£'000	£'000
Opening balance	1,918	1,147
Additions during the year	602	386
Disposals during the year	(163)	(17)
Exchange rate differences	(4)	3
Gain included in Other Comprehensive Income	1,127	449
Current year impairment charged to profit or loss	(25)	(50)
Closing balance	3,455	1,918

Additions during the year:

Further investment in BTL

On 6 May 2016 the Company subscribed for 41,666 shares and 41,666 warrants in BTL for consideration of CAN$25,000.

On 18 November 2016, the Company acquired a further 41,666 shares in BTL, via the exercise of the 41,666 warrants, for consideration of CAN$41,666. As at 31 March 2017, taking into account the disposals below, the Company held 689,800 shares in BTL, equivalent to 4.0 per cent. of BTL's share capital.

In addition, on 23 March 2017, the Company conditionally acquired 50,000 shares and 25,000 warrants in BTL for consideration of CAN$135,000. This transaction has been included within investment additions in the period, on the basis that the consideration was paid before 31 March 2017 and the transaction was substantially complete by 31 March 2017.

Conversion of Stream TV loan note

On 23 June 2016 the Company entered into a conversion notice agreeing to an early conversion of its $100,000 Stream TV Convertible Promissory Notes (CPN's), along with accrued interest of $43,693, into new Class A common shares in Stream TV at a price of $3.00 per share.  The accrued interest includes a bonus of $7,500 as a consequence of early conversion.   Following the conversion, the Company has an interest of 0.14% in the Class A common share capital of Stream TV.

Investment in THEVIBE Limited

In September 2016 the Company submitted an order to Crowdcube to invest £200,000 in THEVIBE Limited. On 3 October 2016 the investment became binding and completed in November 2016.  Following completion of the funding round the Company holds 428,346 ordinary shares in THEVIBE Limited.

Further investment in Portr Limited

On 10 January 2017 the Company invested a further £100,000 in Portr for 9,452 ordinary shares.  Following this new investment the company was interested in 111,441 ordinary shares. A further £150,000 was invested in Portr in February 2017 for a further 14,178 ordinary shares. 

Disposals during the year:

Disposal of SalvaRx shares

Between April 2016 and August 2016 the Company disposed of all of the shares held in SalvaRx for an aggregate consideration of £68,505, net of disposal costs.

Sale of Rosslyn Data Technologies plc shares

In July 2016 and January 2017, the Company disposed of 30,000 shares and 73,368 shares respectively for an aggregate consideration of £8,485 net of transaction costs.

Sale of BTL shares

During March 2017 the Company disposed of 94,232 shares in BTL for an aggregate consideration of £169,530 net of transaction costs.

Transfer of Portr Limited shares

In February 2017, the Company transferred 3,780 shares in Portr Limited as consideration for the provision of a personal guarantee, as detailed in note 11. The Company held 121,839 shares in Portr Limited as at 31 March 2017.

9 Trade and other receivables

	31 March	31 March
	2017	2016
	£'000	£'000
Other receivables	13	13
Prepayments and accrued income	-	23
	13	36

10 Trade and other payables

	31 March	31 March
	2017	2016
	£'000	£'000
Trade payables	5	13
Accruals and deferred income	17	165
	22	178

11 Loans and borrowings

Loans due after 1 year	31 March 2017 £'000	31 March 2016 £'000
Convertible loan notes	408	-
Bonds	452	-
	860	-

On 9 September 2016, the Company issued £400,000 of convertible unsecured loan notes to certain Shareholders, including Antony Laiker (a director of the Company).  The loan notes are repayable on 30 September 2018 and carry an annual interest rate of 8 per cent.  The Loan Notes will be convertible into Ordinary Shares at 0.15p per share, a discount of 6.25 per cent. to the closing bid price of 0.16p per share on 8 September 2016. The Directors consider the convertible loan notes to represent a compound financial instrument. The Directors consider the equity element of the instrument to be immaterial. Accordingly, the full balance is classified as a financial liability.

On 1 February 2017, the Company launched the issue of secured bonds, through UK Bond Network, to raise £550,000 for the Company.  The Bonds have a coupon of 10% and a term of 3 years with full repayment in cash of the principal amount of the Bonds due at maturity.  The Bonds may be repaid at the option of Vela: (i) after the first anniversary of the issue of the Bond, together with all accrued (but unpaid) interest on the amount prepaid; or (ii) prior to the first anniversary of issue, together with the interest that would have accrued up to the first anniversary had the Bond not been prepaid.  The Bonds will not be convertible into ordinary shares in the capital of the Company.

The Bonds are secured by way of a fixed charge over the shares that the Company owns in Portr Limited and a floating charge over all other assets of the Company present and future.

Further protection for bondholders has been provided through a personal guarantee being given by Scott Fletcher, an existing shareholder in the Company and the Chairman of UK Bond Network. As consideration for the provision of the personal guarantee, Scott Fletcher received a fee of £40,000 from the Company which was satisfied by the Company transferring 3,780 shares that it previously held in Portr Limited to Scott Fletcher.

The loan balances above are stated net of debt issue costs and rolled up interest amounting to £90k.

12 Share capital

	31 March	31 March
	2017	2016
	£'000	£'000
Authorised capital
9,999,520,000 ordinary shares of 0.1 pence each	10,000	10,000
	10,000	10,000
Allotted, called up and fully paid capital
721,588,020 ordinary shares of 0.1 pence each	722	722
	722	722

Allotments during the period

The Company allotted the following ordinary shares during the year:

	31 March 2017
Shares in issue at 1 April 2016	721,588,020
Shares issued during the year	-
Shares in issue at 31 March 2017	721,588,020

	31 March 2016
Shares in issue at 1 April 2015	459,088,020
Shares issued during the period	262,500,000
Shares in issue at 31 March 2016	721,588,020

On 26 September 2016, the Company passed a resolution to consolidate every 1,500 ordinary shares of 0.1p into one consolidated ordinary share of 150p ("Consolidated Ordinary Share"). All fractional shareholdings resulting from the consolidation were aggregated and sold for the best price reasonably obtainable. The proceeds were then distributed to the shareholders, subject to a minimum entitlement of £3, with the balance being retained by the Company.

Each Consolidated Ordinary Share of 150p arising from the consolidation was subsequently sub-divided into 1,500 ordinary shares of 0.1p. The retained balance of proceeds received by the Company amounted to £286.

13 Cash and cash equivalents

Cash and cash equivalents comprise the following:

	31 March	31 March
	2017	2016
	£'000	£'000
Cash and cash in bank:
Pound sterling	383	200
Cash and cash equivalents at end of year	383	200

14 Financial instruments

The Company uses various financial instruments which include cash and cash equivalents, loans and borrowings and various items such as 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, other than certain investments recorded at cost, 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's 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 below. The Company does not have any borrowings 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

The Company's shareholdings in BTL and Stream TV are denominated in Canadian Dollars and US Dollars respectively, which gives rise to exposure to foreign currency risk. The Directors have considered the risk and do not deem it necessary to enter into any specific risk management arrangements at the present time. The Directors will continue to review the position going forward to ensure this remains appropriate in the context of the Company's risk profile.

Credit risk

This section along with the liquidity risk and capital risk management sections below also form part of the strategic report.

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
	2017	2016
Classes of financial assets - carrying amounts	£'000	£'000
Available-for-sale financial assets measured at fair value through other comprehensive income (*)	3,455	1,918
Loans and receivables	13	13
	3,468	1,931

* where a reliable estimate of fair value cannot be determined, the investment is measured at cost less impairment (see below).

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.

The Company's financial assets are secured, as detailed in note 11.

The Company is required to report the category of fair value measurements used in determining the value of its investments, to be disclosed by the source of its inputs, using a three-level hierarchy. There have been no transfers between Levels in the fair value hierarchy.

Quoted market prices in active markets - "Level 1"

Inputs to Level 1 fair values are quoted prices in active markets for identical assets.  An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.  The Company has two (2016: three) investments classified in this category. The aggregate historic cost of the two investments is £299,393 (2016: £355,950 in respect of three investments) and the fair value as at 31 March 2017 was £1,446,713 (2016: £343,787).

Valued using models with significant observable market parameters - "Level 2"

Inputs to Level 2 fair values are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly.  The Company has one (2016: one) unquoted investment classified in this category. The historic cost of this investment is £586,034 (2016: £351,343) and the fair value as at 31 March 2017 was £1,289,058 (2016: £1,079,050), giving rise to a cumulative gain of £703,024 credited to the available-for-sale reserve as at 31 March 2017. The investment was valued using the transaction price ascribed to the shares following a placing by the investee Company in March 2017.

Valued using models with significant unobservable market parameters - "Level 3"

Inputs to Level 3 fair values are unobservable inputs for the asset.  Unobservable inputs may have been used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date (or market information for the inputs to any valuation models).  As such, unobservable inputs reflect the assumptions the Company considers that market participants would use in pricing the asset.  The Company holds 25,000 warrants, with an estimated fair value of £22,750, in relation to shares in one of its investee companies.

The Company has six (2016: five) investments that are held at cost less impairment as a reliable estimate of fair value cannot be determined. An impairment charge of £25,000 (2016: £50,000) has been recognised directly in profit or loss in respect of one of these investments. As at 31 March 2017 the historical cost of these investments amounted to £771,504 (2016: £545,413) and their aggregate carrying value was £696,504 (2016: £495,413).

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 2017			31 March 2016
	Within	Later than		Within	Later than
	1 year	1 year		1 year	1 year
	£'000	£'000		£'000	£'000
At amortised cost:
Financial liabilities at amortised cost	22	860		178	-
	22	860		178	-

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 is performing in line with the expectations of the Directors.

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.

15 Share-based payments

The Company rewards its Directors using equity settled share-based payments.

No new share options have been issued in the current accounting period and the total number of options outstanding at 31 March 2017 was 29,124,854 (2016: 29,124,854). None of the options issued have either lapsed or been exercised in the period.

The options have historically been valued using the Black Scholes option pricing model.

The amount of remuneration expense in respect of the share options granted amounts to £NIL (2016: £23,000).

Details of the options outstanding at the year end and the inputs to the option pricing model are as follows:

		Options granted	Options granted	Options granted	Options granted
		22 October	18 September	2 October	8 April
		2015	2015	2014	2014
Share price at grant date (pence)		0.21	0.19	0.33	1.50
Exercise price (pence)		0.21	0.15	0.33	0.85
Expected life (years)		7	7	7	7
Annualised volatility (%)		79.47	70.98	95.16	74.23
Risk-free interest rate (%)		2.0	2.0	2.0	2.0
Fair value determined (pence)		0.15	0.13	0.26	1.17
Number of options granted		6,400,000	10,489,560	4,000,000	8,235,294
Options exercisable at 31 March 2017		4,266,667	6,993,040	4,000,000	8,235,294

None of the options outstanding as at 31 March 2017 are subject to any performance criteria

16 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 year the Company paid £40,000 (2016: £32,000) in respect of his Directors fees to the Company. The balance due to Ocean Park Developments Limited at the year end was £nil (2016: £nil).

Risk Alliance Insurance Brokers Limited

Nigel Brent Fitzpatrick, Non-Executive Director, is also a Director of Risk Alliance Insurance Brokers Limited.  During the year the Company paid £5,756 (2016: £5,510) in respect of insurance fees at arm's length.  The balance due to Risk Alliance Insurance Brokers Limited at the year end was £nil (2016: £nil).

Widdington Limited

Antony Laiker, Director, is also a Director of Widdington Limited. During the year the Company paid £55,000 (2016: £46,000) in respect of his Directors fees to the Company. The balance due to Widdington Limited at the year end was £nil (2016: £nil).

During the year Antony Laiker subscribed for £200,000 of the 8% loan notes.

Kevin Sinclair

Kevin Sinclair, a shareholder of the Company, subscribed for £100,000 of the new bonds under the Company's 10% bond issue in February 2017.  At 31 March 2017, Kevin Sinclair held 106,449,000 (14.75%) of the issued share capital of the Company through JIM Nominees Ltd.

Scott Fletcher

Scott Fletcher, a shareholder of the Company, subscribed for £200,000 of the 8% convertible loan notes issued by the company in September 2016.

Scott Fletcher also issued a personal guarantee relating to the payment obligations of the Company in respect of the 10% bond issue to a maximum guaranteed amount of £575,000.   In consideration of Scott Fletcher entering into the personal guarantee, the Company entered into an agreement with him to pay him a fee of £40,000.  This fee was satisfied by the Company transferring to him 3,780 ordinary shares in Portr, an investee company.  As part of this agreement the Company has agreed that, until the Bonds have been repaid in full, the Company shall not increase the balance of its indebtedness beyond an aggregate amount of £950,000 without having notified Scott Fletcher and receiving his prior written consent.

Scott Fletcher held 63,944,656 Ordinary Shares at 31 March 2017 representing 8.86 per cent. of the issued share capital of the Company in addition to the 8% convertible loan notes above.  He is also the chairman of UK Bond Network Limited, which acted on behalf of the Company in relation to the bond issue.

17 Events after the balance sheet date

Disposal of BTL shares

On 6 April 2017, the Company disposed of 56,700 common shares held in BTL generating net proceeds of CAN$232,564.

On 19 April 2017, the Company disposed of 20,000 common shares held in BTL for a consideration of CAN$92,850. 

On 30 May 2017, the Company disposed of a further 50,000 common shares held in BTL for a consideration of CAN$263,106.

Investment in BTL Group Ltd

On 18 April 2017 the Company announced the completion of a follow-on investment of C$135,000 in BTL Group Ltd.

Investment in Rosslyn Data Technologies plc

On 26 April 2017, the Company announced that it had conditionally subscribed for 1,111,111 ordinary shares for a consideration of £50,000. Vela is interested in 1,411,111 ordinary shares in Rosslyn Data Technologies representing 0.75% of the company's issued share capital.

18 Annual report and accounts

The annual report and accounts will be posted to shareholders shortly, and will be available on the Company's website: http://www.velatechplc.com/.

19 Annual General Meeting

The Company's Annual General Meeting will be held at 10.00 a.m. on 19 October 2017 at the offices of Allenby Capital, 5 St Helen's Place, London, EC3A 6AB. Notice of the Annual General Meeting will be sent to shareholders with the annual report and accounts.

Extraction of information in this announcement

The financial information, which comprises the statement of comprehensive income, balance sheet, cashflow statement, statement of changes in equity, and related notes to the financial statements, is derived from the full Company financial statements for the year ended 31 March 2017, which have been prepared under European Union endorsed International Financial Reporting Standards (IFRS) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. It does not constitute full financial statements within the meaning of section 434 of the Companies Act 2006. This financial information has been agreed with the auditor for release.

The full annual report and financial statements for the year ended 31 March 2017, on which the auditor has given an unqualified report and which does not contain a statement under section 498 of the Companies Act 2006, will be delivered to the Registrar of Companies in due course.

 

END

 

 

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