FOR THE YEAR ENDED 31ST DECEMBER 2011
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31st DECEMBER 2011
|
|
|
|
|
|
|
2011 |
2010 |
|
|
|
|
|
|
|
|
£ |
£ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET TRADING INCOME |
|
- |
- |
|
|
|
--------------- |
--------------- |
|
|
|
|
|
|
Share based payment charge |
- |
- |
|
|
Other operating expenses |
(186,800) |
(92,843) |
|
|
|
|
|
|
|
|
|
------------------ |
------------------ |
|
Total operating expenses |
|
(186,800) |
(92,843) |
|
|
|
------------------- |
------------------- |
|
OPERATING LOSS |
|
(186,800) |
(92,843) |
|
|
|
|
|
|
Finance income |
11,550 |
10,404 |
|
|
|
------------------ |
------------------ |
|
|
LOSS BEFORE TAXATION |
(175,250) |
(82,439) |
|
|
|
|
|
|
|
Taxation |
|
- |
- |
|
|
|
|
|
|
|
|
------------------ |
------------------ |
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LOSS FOR THE YEAR ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY |
|
(175,250) |
(82,439) |
|
|
|
============ |
============ |
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|
|
|
|
|
Earnings per share (pence) - basic and fully diluted |
|
(0.76p) |
(0.36p) |
|
|
|
======= |
======= |
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STATEMENT OF FINANCIAL POSITION AS AT 31st DECEMBER 2011
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2011 |
2010 |
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|
|
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|
|
|
|
£ |
£ |
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Trade and other receivables |
|
7,055 |
8,795 |
|
Cash and cash equivalents |
|
3,018,225 |
3,188,206 |
|
|
|
------------------ |
------------------ |
|
|
|
3,025,280 |
3,197,001 |
|
CURRENT LIABILITIES |
|
|
|
|
Trade and other payables |
|
(24,816) |
(21,287) |
|
|
|
----------------- |
----------------- |
|
NET CURRENT ASSETS |
|
3,000,464 |
3,175,714 |
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|
|
---------------- |
---------------- |
|
NET ASSETS |
|
3,000,464 |
3,175,714 |
|
|
|
=========== |
=========== |
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|
|
|
|
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EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY |
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|
|
|
Share capital |
|
230,800 |
230,800 |
|
Share premium account |
|
3,086,962 |
3,086,962 |
|
Share based payment reserve |
|
21,588 |
21,588 |
|
Retained earnings |
|
(338,886) |
(163,636) |
|
|
|
------------------- |
------------------- |
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TOTAL EQUITY |
|
3,000,464 |
3,175,714 |
|
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|
============= |
============= |
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31st DECEMBER 2011
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2011 |
2010 |
|
|
|
|
|
|
|
|
£ |
£ |
|
|
|
|
|
|
Net cash outflow from operating activities |
|
(181,531) |
(91,712) |
|
|
|
---------------- |
---------------- |
|
Cash flows from investing activities |
|
|
|
|
Interest received |
|
11,550 |
10,404 |
|
|
|
---------------- |
---------------- |
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|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(169,981) |
(81,308) |
|
|
|
|
|
|
Cash and cash equivalents at beginning of year |
|
3,188,206 |
3,269,514 |
|
|
|
------------------ |
----------------- |
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Cash and cash equivalents at end of year |
|
3,018,225 |
3,188,206 |
|
|
|
============= |
============= |
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1. ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
Trading income
Trading income is recognised to the extent that it is probable that economic benefit will flow to the Company and the trading income can be reliably measured.
Cash and cash equivalents
Cash and cash equivalents are defined as cash in hand, demand deposits and short-term, highly liquid investments which are readily convertible to known amounts of cash, subject to insignificant risk of changes in value, and have a maturity of less than 3 months from the date of acquisition.
For the purposes of the cash flow statement, cash and cash equivalents consist of cash in hand and bank deposits.
Taxation
The tax currently payable is based on the taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred taxation
Deferred income tax is provided for using the liability method on temporary timing differ-ences at the balance sheet date between tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised in full for all temporary differences. Deferred tax assets are recognised for all deductible temporary differ-ences carried forward of unused tax credits and unused tax losses to the extent that it is prob-able that taxable profit will be available against which the deductible temporary differences, and carry-forward of unused tax credits and unused losses can be utilised.
The carrying amount of deferred income tax assets is assessed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that is probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.
Share-based payments
Certain Directors of the Company receive remuneration in the form of share-based payment transactions (equity-settled transactions).
The cost of equity-settled transactions is determined with reference to the fair value at the date on which they were granted. The fair value is determined by using the Black-Scholes option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("the vesting date"). The cumulative expense recognised for equity-settled transactions at each re-porting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
The dilutive effect of the outstanding options is reflected as additional dilution in the compu-tation of earnings per share.
Financial instruments
Financial assets and financial liabilities are recognised on the Company's balance sheet when the Company becomes a contractual party to the instrument.
Trade receivables
Trade receivables are recognised initially at their fair value which equates to their nominal value as reduced by appropriate provision for irrecoverable amounts and subsequently at amortised cost.
Trade payables
Trade payables are recognised initially at their fair value and subsequently at amortised cost.
Accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions in certain circumstances that affect reported amounts. The most sensitive estimate affecting the financial statements is the area of share based payments. Actual outcomes may therefore differ from these estimates and assumptions.
In determining the fair value of equity settled share based payments and the related charge to the income statement, the Company makes assumptions about future events and market conditions. In particular, judgment must be made as to the likely number of shares that will vest and the fair value of each award granted. The fair value is determined using a valuation model which is dependent on further estimates including the Company's future dividend policy, employee turnover, the timing of the exercise of options and the future volatility in the price of the Company's shares. Such assumptions are based on publicly available information and reflect market expectations. Different assumptions from those used (which are disclosed in note 8) could materially affect the reported value of share based payments. The Company has recognised a corresponding increase in equity in accordance with IFRS 2: Share based payments by crediting "Share based payment reserve" (a component of equity) for the issue of shares in connection with the share options.
New and amended standards
Standards and interpretations that became effective for the first time during the year have not had a material impact on the financial statements. No impact is expected from any other standards or interpretations which have been endorsed by the European Union and are available for early adoption, but which have not been adopted.
2. AUDITORS' REMUNERATION
|
2011 |
2010 |
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|
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|
£ |
£ |
|
|
|
Services provided by the Company's auditors: |
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Fees payable to the company's auditors for the audit of the company's financial statements |
12,200 |
19,100 |
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|
|
Fees payable to the company's auditors for other services: |
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- Other services pursuant to legislation |
- |
- |
|
|
|
- Taxation |
- |
- |
|
|
|
|
====== |
====== |
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3. PARTICULARS OF EMPLOYEES
The average number of employees of the company in the period was:
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2011 |
2010 |
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Number |
Number |
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Directors |
3 |
3 |
|
|
====== |
====== |
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|
£ |
£ |
|
The directors' aggregate emoluments in respect of qualifying services were: |
|
|
|
Salary and short-term employment benefits |
7,500 |
10,000 |
|
Other fees paid |
4,500 |
5,875 |
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|
---------------- |
---------------- |
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|
12,000 |
15,875 |
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|
========== |
========== |
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|
Other fees paid comprise £4,500 (2010: £5,875) paid to Munslows LLP, a firm in which Nathan Steinberg is a partner.
4. INCOME TAX EXPENSE
(a) Analysis of charge in the period
|
2011 |
2010 |
|
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|
|
£ |
£ |
|
|
|
Current tax: |
|
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|
|
|
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|
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|
UK corporation tax based on the results for the year at 20% (2010: 21%) |
- |
- |
|
|
|
Adjustment to prior year |
- |
- |
|
|
|
---------------- |
---------------- |
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|
|
Total current tax |
- |
- |
|
|
|
|
========== |
========== |
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|
(b) Factors affecting the tax charge for the period
The tax assessed for the period does not reflect an expense equivalent to the profit before tax multiplied by the standard rate of corporation tax of 20% (2010: 21%).
|
2011 |
2010 |
|
|
|
£ |
£ |
|
|
|
|
|
|
|
Loss before tax |
|
(175,250) |
(83,969) |
|
|
|
========= |
========= |
|
Loss before tax multiplied by the standard rate of corporation tax |
|
35,050 |
17,633 |
|
|
|
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|
|
|
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Losses carried forward |
|
(35,050) |
(17,633) |
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|
------------ |
------------ |
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Current tax for the period |
|
- |
- |
|
|
|
========= |
========= |
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5. EARNINGS PER SHARE
The calculation of earnings per share is based on the loss of £175,250 (2010: £82,439) and on the number of shares in issue, being the weighted average number of shares in issue during the period of 23,080,002 (2010: 23,080,002) ordinary £0.01 shares. There is no dilutive effect of share options on the basic earnings per share, as the option exercise prices are higher than the average market price in the period.
6. TRADE AND OTHER RECEIVABLES
|
2010 |
2010 |
|
|
|
|
£ |
£ |
|
|
|
|
|
|
|
|
|
Prepayments |
7,055 |
8,795 |
|
|
|
|
=============== |
=============== |
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|
The Directors consider that the carrying value of each class of receivable approximates its fair value.
7. TRADE AND OTHER PAYABLES
|
2010 |
2010 |
|
|
|
£ |
£ |
|
|
|
|
|
|
|
Trade payables |
3,216 |
7,287 |
|
|
Accrued expenses |
21,600 |
14,000 |
|
|
|
-------------------- |
-------------------- |
|
|
|
24,816 |
21,287 |
|
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|
============= |
============= |
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8. SHARE CAPITAL
Share options
The Company granted and issued share options over ordinary shares in the Company as follows:
Date granted |
Parties |
Exercise price |
Number of shares |
Final exercisable date |
21/04/08 |
C Cannon Brookes |
20p |
500,000 |
21/04/15 |
21/04/08 |
C Niven |
20p |
500,000 |
21/04/15 |
|
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|
------------------- |
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Options outstanding at 31/12/11 and 31/12/10 |
|
1,000,000 |
|
|
|
|
|
============= |
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The fair value of equity settle share options granted is estimated as at the date of grant using a Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs into the model used for the period ended 31st December 2008:
Dividend yield on underlying shares |
|
0% |
Risk free rate |
|
4% |
Expected volatility |
|
22.36% |
Average time to expiry |
|
1 year |
Weighted average share price of options |
|
20p |
|
|
========== |
The expected life of the options is based on an estimate and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not be the actual outcome.
Allotted, called up and fully paid:
|
2011 |
2010 |
|
|
£ |
£ |
|
23,080,002 Ordinary shares of £0.01 each |
230,800 |
230,800 |
|
|
=================================== |
=================================== |
|
9. CASH FLOWS FROM OPERATING ACTIVITIES
|
2011 |
2010 |
|
|
£ |
£ |
|
|
|
|
|
Loss before taxation |
(175,250) |
(82,439) |
|
Adjustments for: |
|
|
|
Interest income |
(11,550) |
(10,404) |
|
|
-------------------- |
-------------------- |
|
|
(186,800) |
(92,843) |
|
|
|
|
|
Decrease/(increase) in receivables |
1,740 |
(666) |
|
Increase in payables |
3,529 |
1,797 |
|
|
-------------------- |
-------------------- |
|
Net cash outflows from operating activities |
(181,531) |
(91,712) |
|
|
============= |
============= |
|
10. FINANCIAL INSTRUMENTS
Financial Assets and liabilities were held as follows :-
|
2011 |
2010 |
|
|
Assets |
£ |
£ |
|
|
Cash and cash equivalents |
3,018,225 |
3,188,206 |
|
|
|
-------------------- |
-------------------- |
|
|
Total financial assets |
3,018,225 |
3,188,206 |
|
|
|
============= |
============= |
|
|
Liabilities |
|
|
|
|
Trade payables |
3,216 |
7,287 |
|
|
Accrued expenses |
21,600 |
14,000 |
|
|
|
-------------------- |
-------------------- |
|
|
Total financial liabilities |
24,816 |
21,287 |
|
|
|
============= |
============= |
|
|
The Directors consider that the carrying value of the financial assets and liabilities approximates their fair value.
11. GENERAL INFORMATION
Longships plc is a public limited company incorporated and domiciled in England and Wales. The company does not have an ultimate controlling party.