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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Legendary Inv. | LSE:LEG | London | Ordinary Share | GB0001514032 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.085 | 0.08 | 0.09 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMLEG
RNS Number : 3104J
Legendary Investments PLC
08 September 2016
8 September 2016
Legendary Investments PLC
("Legendary" or the "Company")
RESULTS FOR THE YEARED 31 MARCH 2016
HIGHLIGHTS
-- Operating profit at GBP2,132,000, a record for Legendary (2015: loss of GBP466,000) -- Net profit at GBP2,118,000, also a record for Legendary (2015: loss GBP470,000)
-- Investments (fixed asset investments and current asset investments) at GBP4,275,000 (2015: GBP1,785,000), a rise of 139%
-- Net and total assets for the year were GBP4,071,000 (2015: GBP1,906,000), an increase of 114%, and GBP4,354,000 (2015: GBP1,986,000), an increase of 119%, respectively.
Zafar Karim, Executive Chairman commented:
"We believe that Legendary's search for deep value, its patient opportunism and its proactive investment strategy have been vindicated. We look back with pride on a year that was Legendary's best ever, and forward with confidence in the potential of Legendary's strategy and the transformational power of some of its investments for the Company."
- Ends -
Legendary Investments Zafar Karim PLC / Thomas Reuner 020 8201 3536 Grant Thornton Colin Aaronson UK LLP / Harrison Clarke 020 7383 5100 Beaufort Securities Limited Elliot Hance 020 7382 8300
About Legendary Investments PLC
Legendary Investments PLC is a proactive investment company that focuses on making investments in and assisting companies which exhibit the potential to generate returns of many multiples through capital appreciation. Typically, Legendary invests in small companies where there are clear catalysts for value appreciation and the companies are operating in sectors exhibiting long term growth. Examples of such sectors include technology, energy and natural resources.
Executive Chairman's Statement
The year under review has been one of dramatic progress. Virtualstock won further landmark clients in the retail sector, and importantly won its first client in the health sector, Guy's and St Thomas's Trust. In addition, its pipeline of new clients is strong and growing in both sectors. Virtualstock's success attracted highly reputable executives in the form of a new CEO, Andrew Mills, and a Director of Healthcare and Public sector, Robert Knott. Success also resulted in substantial value crystallisation when Nick Jenkins, founder of Moonpig.com and angel investor, acquired a small stake in Virtualstock at a valuation of GBP58 million. This compares very favourably with the valuation of GBP2 million at which Legendary acquired its initial stake in October 2012. Legendary's holding in Manas Minerals, holder of a coal licence in Kyrgyzstan, was exchanged for a stake in Manas Resources, holder of a gold licence in the gold rich Tien-Shan region of Kyrgyzstan. Bosques generation 1 and generation 2 pongamia have germinated and are producing saplings. Amedeo completed the build of its first rig. Several potential investments were reviewed but none were made and, post the year end, the portfolio was streamlined to enable more focus on the performing investments.
Operating profit was GBP2,132,000, a record for Legendary (2015: loss of GBP466,000), and net profit was GBP2,118,000 (2015: loss GBP470,000), also a record for Legendary, predominantly as a result of the unrealised gain on the Company's investment in Virtualstock of GBP2,438,000.
As at the year end, Legendary's investments (fixed asset investments and current asset investments) were GBP4,275,000 (2015: GBP1,785,000), a rise of 139%. Overall, net and total assets for the year were GBP4,073,000 (2015: GBP1,906,000) an increase of 114%, and GBP4,354,000 (2015: GBP1,986,000), an increase of 119%.
Virtualstock Holdings Limited
Virtualstock is a disruptive software company with a game changing approach to the costly and time-consuming process of traditional systems integration. Utilising agile, open source technology, Virtualstock has a unique way for information to flow between fragmented systems, without disruption to any existing IT landscape. Data is seamlessly collated, enriched, mapped and validated, allowing only trusted, reliable information to be deployed. Virtualstock's solutions are a rapid, flexible and scalable alternative to traditional systems integrations. The "integration" market is worth c.US$300-500 billion per year.
In the year under review, Virtualstock continued to build on the success of the previous year: significant contracts in the retail sector were won; expansion into the health sector occurred; and success attracted executives of the highest calibre and increased value by well over 100%.
In July 2015, Virtualstock supplied its Edge Solutions to Maplin, the UK's leading electronics specialist. Virtualstock also supplied the Edge Order Management System and Drop Ship Solutions to Argos. Argos is the UK's leading digital retailer. Significantly, Virtualstock contracted with Guy's and St Thomas's Trust, a leading NHS Trust, to deliver cost saving efficiencies within the Trust's supply chain. This represented Virtualstock's first expansion into the health sector. Virtualstock is building significant momentum in this sector. In February 2016, Virtualstock continued to expand its presence in the retail sector by contracting two clients, to use the Edge Solutions, both of whom are household names and leaders in their respective fields.
The Edge Solutions facilitate expansion of online ranges without the risks and costs associated with taking on additional inventory. They allow clients to expand their online ranges by enabling seamless connection to hundreds of suppliers and provide real time visibility of inventory levels and order status (including track and trace) enhancing customer experience and reducing cost. Online orders taken by retailers can be fulfilled directly from suppliers to the end consumer.
In September 2015, Virtualstock appointed Andrew Mills as its Chief Executive Officer, and in December 2015, Virtualstock appointed Robert Knott as Director of Healthcare and Public Sector. Both Andrew Mills and Robert Knott have held senior and leadership positions at Samsung IBM, EDS and KPMG Consulting, and the NHS, Policing, Olympics, Work and Pensions, Local Government, Goldman Sachs, Lehman Brothers, Schroders and Ernst Young, respectively. Virtualstock's ability to attract executives with their experience and reputation is testament to it increasing momentum and ultimate potential.
In October 2015, and prior to Mr Knott's appointment, Virtualstock's potential was recognised by Nick Jenkins, founder of Moonpig.com and angel investor, who purchased a small stake in Virtualstock at a valuation of GBP58 million, more than double the valuation achieved in the April 2014 growth funding round. The purchase placed a value of over GBP4 million on Legendary's 7% stake and is responsible for Legendary's record profits.
In May 2016, post the year end, Beaufort published a broker's note on Legendary, which valued Legendary's stake in Virtualstock at GBP12.5 million, equivalent to Virtualstock having a valuation of GBP179 million. This compares very favourably to the initial valuation of GBP2 million at which Legendary originally invested in Virtualstock in October 2012.
Virtualstock continues to service existing clients (including Tesco, Office Depot, Maplin, Argos and Guy's and St Thomas's Trust). Its pipeline and momentum continue to grow in both the retail and healthcare sectors. It has high gross margins, typical of companies in the SaaS space. Virtualstock has unicorn potential.
Legendary has proactively supported and assisted Virtualstock to reach this stage during which substantial milestones have been achieved by and substantial value has been added to Virtualstock. Legendary looks forward to continuing to work with Virtualstock to achieve its unicorn potential. Legendary expects further progress in the near to medium term with further contract wins and value crystallisation.
As at the balance sheet date, and currently, Legendary holds its 7% stake in Virtualstock at a valuation of GBP4.0 million.
Manas Resources LLC
In 2012, Legendary invested GBP100,000 into Kyrgyzstan based Manas Minerals LLC. Manas Minerals owned a coal licence in Kyrgyzstan. With the outlook for coal deteriorating significantly, Legendary began exploring ways of mitigating this. This culminated in October 2015 when Legendary acquired a 5.5% stake and an option over an additional 4.45% stake in Manas Resources LLC, the holder of a licence to explore for gold in Sultan Sary, Narynskaya Oblast, Kyrgyzstan, in exchange for its interests in Manas Minerals. The option has a nominal exercise price and vests on Manas Resources achieving certain milestones.
Manas Resources' licence area is located in the gold-rich Tien-Shan region of Kyrgyzstan and covers approximately 66 sq km. The southwest corner of the area covered by the licence, an area of approximately 2 sq km, borders on its southern side the Choloktor gold area that under the Soviet Classification system contains a P3 resource of 15 tonnes of gold. Choloktor in turn is bordered by Buchuk, an area that under the Soviet Classification system contains a C1 resource of 20 tonnes of gold and a P3 resource of 41 tonnes of gold. This area in turn borders the Altyntor area that under the Soviet Classification system contain a C1 and C2 resource of 7 tonnes of gold. About 5 tonnes of gold has historically been mined from Buchuk, which is currently being evaluated by another company. The structures in the southwest corner of the licence (Area 3) are similar to those in the gold containing areas of Choloktor, Buchuk and Altyntor, and it is believed that the same mineralised structure runs through all four areas.
A map of the licence area can be found under the link:
https://www.dropbox.com/s/jkeglhpq3shfp3v/Soltan%20Sary%20Licence%20Map%20RNS%202.pdf?dl=0
Exploration work was conducted in 3 prospective sub-areas within the licence area for an initial sampling phase in 2015. The results of this work were announced in April 2016. Area 3, located in the southwestern corner of the licence area and covers approximately 1.2 sq km, and is considered to be the most prospective part of the licence area, being located along the same WNW structural corridor, from the known deposits (outside the licence area) of Choloktor (3 km), Buchuk (5 km) and Altyntor (9 km). Area 3 is almost entirely covered by Quaternary sediments, and no detailed surveys were conducted in 2015. A reconnaissance survey identified some small boulders in stream beds and gullies. A boulder sample collected close to the southern border of the licence area assayed 36 g/t Au. A bedrock sample taken from about 1 km outside the licence area assayed 12 g/t Au. In both of these higher grade samples, the gold is associated with quartz and limonite. These results lend support to the interpretation that the mineralised Choloktor-Buchuk-Altyntor structure continues onto the licence area.
Area 2 is located in the eastern end of the licence area and covers approximately 12 sq km. In this area sampling consisted of approximately 2,500 soil samples (1,500 analysed) and 200 bedrock samples (103 analysed). The surveys to date have identified a number of lithochemical anomalies. This southern area is interpreted as a WNW trending structural corridor favourable for gold mineralisation. This is supported by the results of the bedrock sampling, with samples returning assays with values up to 4 g/t Au. Five samples taken over 1 km, have returned values of 0.5 g/t Au or higher. The gold mineralisation in this southern area tends to occur in quartz carbonate veinlets associated with copper sulphides.
Area 1 is located in the northwestern corner of the licence area and covers approximately 1.4 sq km. The distribution of bedrock in Area 1 is restricted, especially in the more prospective regions, covering less than 30% of the area. Sampling consisted of approximately 400 soil samples and 100 bedrock samples (52 analysed). Two of the bedrock samples returned gold values significantly above background concentrations.
Post the year end, in August 2016, Legendary announced that Manas Resources had initiated a geophysical work programme to define better and delineate known and potential gold mineralisation in the licence area. The geophysics programme consists of ground magnetics, Induced Polarisation (IP) profiles and gamma spectrometry, and is focussing on the high priority subareas (Areas 3 and 2) identified previously. The geophysics programme is being carried out by a local geophysical contractor in Kyrgyzstan. The results of the geophysical surveys are expected sometime in Q42016. Results from the geophysical work, and additional field work will determine the nature and extent of further work.
As at the year end, and currently, Legendary holds a 5.5% stake in Manas Resources, with an option over an additional 4.45% stake, which are held on its balance sheet at GBP100,000.
Bosques Energeticos S.A. de C.V.
Bosques is an innovation based second generation biodiesel company which has scored many "firsts" in Mexico, the region and, potentially, worldwide. It was the first company to germinate pongamia seeds in Mexico and Central America; it was the first to root successfully pongamia scions in Mexico and the region; and it was the first to have pongamia flowering within 2 1/2 years of planting compared with the normal time of 5 to 6 years; and then in less than 2 years in Mexico and the region, and possibly worldwide. It has developed advanced generation jatropha which commences yielding seeds in as early as 6 months compared to up to 2 years for normal jatropha. In addition, its generation 4 jatropha exhibits high yields. Generation 4 jatropha is also non-toxic as a result of which its cake can and is being used for animal feed (higher value) as well as fertilizer. Bosques was also ahead of others in developing its inter and mixed multi-crop strategy.
In the year under review, in April 2015, Bosques reported that the seeds produced by Bosques generation 1 and generation 2 pongamia had germinated and were producing saplings. This is yet another landmark first for Bosques in Mexico and the region. The germination of generation 1 and generation 2 pongamia seeds demonstrates that Bosques has the ability to scale organically its pongamia.
Bosques currently has 18 ha under cultivation, 11 ha in Puebla and another 7 ha in Morelos, with 16,000 pongamia trees of which 300 are generation 2 and are producing fertile seeds and 400 are generation 3, and 26,000 jatropha plants of which 14,000 are generation 4.
Having proven its techniques on its test plantation, Bosques is exploring ways in which to commercialise its innovations in Mexico and further afield, including potentially in East and South East Asia and in Africa.
Legendary has a substantial minority stake of 40% in Bosques that it holds on its balance sheet at GBP83,000. Value crystallisation might be expected in the medium term.
Amedeo Resources PLC
Amedeo's strategy is to invest in the energy and resource infrastructure sectors. To date Amedeo has made 2 investments: one in an new offshore vessel construction joint venture, Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJ Offshore") with multi-billion dollar Singaporean listed shipbuilder, Yangzijiang Shipbuilding (Holdings) Ltd; and the other in a ferrous metal and ferrous ore trader, MGR Resources Pte Ltd ("MGR").
Construction of YZJ Offshore's new yard commenced in mid-2012 and now the new yard is fully operational. The new yard won its first order, for a Le Tourneau Super 116E Class design self-elevating mobile offshore jack up rig, Explorer 1, in December 2012.
Explorer 1 was physically completed in December 2015. Following completion, commissioning commenced, a process of testing and certifying which takes several months, subsequent to which the rig is expected to be delivered. Currently, delivery is expected in the second half of 2016.
YZJ Offshore continues discussions with potential customers for further orders with the benefit that it now has a rig that is physically complete to showcase. No new orders, however, have been forthcoming as currently the offshore vessel market remains difficult due to the volatility in the oil price from its high around US$115 per barrel in July 2014, through below c.US$30 per barrel, with only a recent recovery.
While the current outlook in the offshore vessel sector may appear challenging, Amedeo believes that the medium to long term outlook is positive with activity set to increase. YZJ Offshore, having completed its first rig, is well positioned to take advantage of the recovery in the offshore fabrication market.
In the meantime, YZJ Offshore is absorbing container block overspill from Yangzijiang Shipbuilding (Holdings) Ltd's principal yards. These activities keep YZJ Offshore's yard busy. Amedeo has an indirect 19.0% stake in YZJ Offshore.
With respect to MGR, the price of iron ore has fallen substantially from January 2014 to now. This has eroded margins in the iron ore brokering business. MGR has nonetheless remained marginally profitable. With no immediate recovery in the price of iron ore expected, MGR is exploring opportunities in broking other commodities. Amedeo has a 49.0% equity stake in MGR.
As at the balance sheet date Legendary's stake in Amedeo was valued at GBP22,000.
Other Investments
Medgold Resources Corp.
Medgold is a European-focused TSX-V listed exploration and development company targeting gold properties in northwest Iberia and the under-explored gold provinces of southern Europe. Run by a highly experienced management team with a successful track record of building value in resource companies, Medgold is aiming to become a leading European gold company.
Medgold has 7 granted-licences in Portugal, all covering gold exploration projects. Portugal has a robust, updated mining code, and its government is actively seeking foreign investors and working to encourage investment by mining and exploration companies. Medgold has also established a wholly owned subsidiary in the Republic of Serbia where it is applying for licences.
Medgold is Legendary's smallest and one of its earlier investments. As at the balance sheet date, the market value of Legendary's stake in Medgold was GBP13,000.
Sula Iron and Gold PLC
Sula was one of Legendary's earlier investments. Legendary initially invested GBP50,000 in a pre-IPO funding round, shortly after which Sula was admitted to trading on AIM, and Legendary invested another GBP50,000 for further shares. As at the balance sheet date, the investment in Sula was held on the balance sheet at GBP4,000. Sula has not performed as expected, and post the year end, in May 2016, the stake in Sula was divested.
Oracle Coalfields PLC
Oracle is a coal developer whose primary asset is the Thar Coalfield Block VI licence area located in the Sindh Province, Pakistan, a 1.4 billion tonnes resource with 529 million tonnes JORC mineral resource and 113 million tonnes JORC proven reserves within the mining area of the licence.
The stake in Oracle was acquired with the proceeds of the disposal of Legendary's stake Regency Mines PLC. As at the balance sheet date, the market value of Legendary's stake in Oracle was GBP25,000. Legendary divested its holding in Oracle, post the year end, in May 2016.
Financial Review
During the year, Legendary made a record net gain on fair value of investments of GBP2,391,000 (2015: net loss of GBP235,000) due primarily to the increase in value of the holding in Virtualstock. Losses were incurred on the majority of listed investments. As discussed above, Sula and Oracle were disposed of after the year end, leaving only Amedeo and Medgold as the Company's listed investments.
Administrative expenses were GBP259,000 (2015: GBP231,000). Within Administrative expenses, share based payments charges rose to GBP49,000 (2015: GBP25,000) due to the extension of the life of certain warrants and the grant of incentive based warrants to certain advisers. Directors' cash fees rose to GBP16,000 (2015: GBP2,000). There was a GBP16,000 (2015: nil) foreign exchange loss due to the deterioration of the GBP Sterling against the US$ in relation to a US$ denominated loan of US$250,000 from Alcazar 1 Pte. The rises in Administrative expenses was offset by falls in travel expenses to GBP24,000 (2015: GBP42,000) and legal, audit and professional fees to GBP100,000 (2015: GBP110,000). Excluding the non-cash element of share based payment charges, depreciation and the foreign exchange loss, cash administrative expenses were lower at GBP192,000 (2015: GBP204,000).
Operating profit was GBP2,132,000, a record for Legendary (2015: loss of GBP466,000).
There were GBP14,000 of finance charges (2015: GBP4,000) due to a loan of US$250,000 from Alcazar 1 Pte. This loan and associated interest was repaid post the year end.
Net profit was GBP2,118,000, a record for Legendary (2015: loss GBP470,000).
As at the year end, Legendary's investments (fixed asset investments and current asset investments) were recorded GBP4,275,000 (2015: GBP1,785,000), a rise of 139%. As noted above the, the primary cause of this rise was the increase in the value of the holding in Virtualstock.
Trade and other receivables due within one year were GBP47,000 (2015: GBP2,000). The principal reason for this rise was that an agreement was entered into with Manas Resources for it to reimburse Legendary for the costs and expenses that Legendary has incurred and will incur in relation to assisting the development of that business.
Cash amounted GBP30,000 (2015: GBP195,000) (including GBPnil (2015: GBP1,000) in the client account of the Company's accountants).
As at the year end, non-current liabilities were GBP30,000 (2015: GBP30,000). These liabilities relate to a facility taken out in 2010. The facility bears no interest but repayment may be requested from 5 August 2017.
Current liabilities were GBP251,000 (2015: GBP50,000). The increase was due primarily to the Company obtaining a short term loan of US$250,000 from Alcazar 1 Pte Limited. The loan bore interest at a rate of 10% per annum. Subsequent to the year end, the loan and attendant interest were repaid.
Overall, net and total assets for the year were GBP4,073,000 (2015: GBP1,906,000) an increase of 114%, and GBP4,354,000 (2015: GBP1,986,000), an increase of 119%.
As at 5 September 2016, Legendary had cash and listed investments of GBP566,000.
May Fund Raise
Post the year end, Legendary raised GBP1 million (before expenses), by way of an oversubscribed placing of 333,333,333 ordinary shares of 0.10 pence nominal value each at a price of 0.3 pence per new ordinary share. The shares were placed with a range of institutional and private investors. Following admission of the new ordinary shares, Legendary's enlarged issued share capital comprised 2,794,864,166 ordinary shares.
Outlook
The year under review has been one of dramatic progress. Legendary believes that its search for deep value, its patient opportunism and its proactive investment strategy have been vindicated. Legendary works to continue increasing the value of its existing investee companies, and is reviewing further potential investments, particularly those with a technology angle.
The Board looks to the future with confidence.
Statement of Comprehensive Income
For the year ended 31 March 2016 (Audited)
Hot Features
Premium
2016 2015
Note GBP'000 GBP'000
Net gain/(loss) on fair value
investments 2,391 (235)
Administrative expenses (259) (231)
Operating profit/(loss) 2,132 (466)
Profit/(loss) on ordinary activities
before interest 2,132 (466)
Interest payable (14) (4)
Profit on ordinary activities
before taxation 2,118 (470)
Tax on profit on ordinary activities 5 - -
Profit/(loss) for the financial
year 2,118 (470)
Other comprehensive income,
net of income tax:
Other comprehensive income,
net of tax - -
Total comprehensive income for
the year 2,118 (470)
Earnings per share
* basic (pence) 6 0.09p (0.02)p
* diluted (pence) 6 0.08p (0.02)p
All activities derive from continuing operations.
Statement of Financial Position
As at 31 March 2016 (Audited)
1 April
2016 2015 2014
Notes GBP'000 GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant and
equipment 7 2 4 2
Investments held
at fair value through
profit and loss 8 4,211 1,673 1,281
Total non-current
assets 4,213 1,677 1,283
cURRENT aSSETS
Trade and other receivables 10 47 2 39
Investments held
at fair value through
profit and loss 9 64 112 347
Cash at bank and
in hand 30 195 63
Total current assets 141 309 449
TOTAL ASSETS 4,354 1,986 1,732
equity AND LIABILITIES
Share capital 13 2,462 2,462 1,643
Share premium 14 8,345 8,345 8,316
Share warrant and
option reserve 293 244 219
Profit and loss account
- deficit (7,027) (9,145) (8,675)
Equity attributable
to equity holders 4,073 1,906 1,503
NON-CURRENT LIABILITIES 12 30 30 30
CURRENT LIABILITIES 11 251 50 199
TOTAL EQUITY AND
LIABILITIES 4,354 1,986 1,732
Statement of Changes in Equity
As at 31 March 2016 (Audited)
Attributable to owners of the company
Profit and
loss
Share Share account
capital premium Share warrant and option reserve deficit Total equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April 2014 1,643 8,316 219 (8,675) 1,503
========== ========= ================================= ========== ================
Loss for the year - - - (470) (470)
Total other comprehensive loss - - - - -
----- ----- --- ------- -------
Total comprehensive loss - - - (470) (470)
----- ----- --- ------- -------
Issue of shares 819 29 - - 848
Share based payments - - 25 - 25
----- ----- --- ------- -------
Balance at 31 March 2015 2,462 8,345 244 (9,145) 1,906
===== ===== === ======= =======
Profit for the year - - - 2,118 2,118
Total other comprehensive loss - - - - -
----- ----- --- ------- -------
Total comprehensive income - - - 2,118 2,118
----- ----- --- ------- -------
Share based payments - - 49 - 49
----- ----- --- ------- -------
Balance at 31 March 2016 2,462 8,345 293 (7,027) 4,073
===== ===== === ======= =======
Statement of Cash Flows
For the year ended 31 March 2016 (Audited)
2016 2015
Cash flows from operating activities GBP'000 GBP'000
Profit/(loss) before taxation 2,118 (470)
Adjustments for:
Share option / warrant charge 49 25
Depreciation 2 2
Change in fair value of investments (2,390) 235
(221) (208)
Changes in working capital:
(Increase)/decrease in trade
and other receivables (45) 37
Increase/(decrease) in trade
and other payables 12 (149)
(33) (112)
Net cash outflow from operating
activities (254) (320)
------- -------
Cash flows from investing activities
Purchase of investments (100) (396)
Net cash outflow from investing
activities (100) (396)
------- -------
Cash flows from financing activities
Proceeds from issues of new
ordinary shares - 900
Expenses paid in connection
with issue of shares - (52)
Increase in long term loan 189 -
Net cash inflow from financing
activities 189 848
------- -------
Net (decrease)/increase in
cash and cash equivalents (165) 132
Cash and cash equivalents at
1 April 195 63
Cash and cash equivalents at
31 March 30 195
======= =======
Accounting Policies
Corporate information
Legendary Investments PLC (the 'Company') is a company incorporated and domiciled in the UK. The address of the registered office is Jubilee House, Townsend Lane, London, NW9 8TZ. The Company's principal activity is that of an investment company.
Basis of preparation
The company prepares its financial statements in accordance with applicable International Financial Reporting Standards as adopted by the European Union ("IFRS"), and with those parts of the Companies Act 2006 as applicable to companies reporting under IFRS.
The Group's deemed transition date to IFRS is 1 April 2014. The principles and requirements for first time adoption of IFRS are set out in IFRS 1. IFRS 1 allows certain exemptions in the application of particular standards to prior periods in order to assist companies with the transition process. The Company has not applied any of the optional exemptions under IFRS 1. This is the first financial information prepared in accordance with IFRS.
The financial statements have been prepared on a historical cost basis, except for the revaluation of certain financial instruments.
The financial statements are presented in thousands of pounds sterling ("GBP'000") except when otherwise indicated.
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all periods presented, unless otherwise stated.
New standards, amendments and interpretations
At the date of authorisation of this financial information, the directors have reviewed the Standards in issue by the International Accounting Standards Board ("IASB") and IFRIC, which are effective for annual accounting periods ending on or after the stated effective date. In their view, none of these standards would have a material impact on the financial reporting of the Company.
Impairment of asset values
Property, plant and equipment is reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable or as otherwise required by relevant accounting standards.
Investments and financial instruments
Investments, financial assets and financial liabilities are recognised on the Company's statement of financial position when the Company has become a party to the contractual provisions of the instrument.
Fixed asset investments include investments in investee companies where the time horizon for realisation of the investment is considered to be longer than one year. Investments in investee companies where the time horizon for realisation of the investment is considered to be less than one year are classified as current assets.
All investments have been designated as fair value through profit or loss, and are initially measured at cost that is the best estimate of fair value. Thereafter, the investments are measured at subsequent balance sheet dates at fair value. A financial asset is designated in this category if it is acquired to be managed and its performance is evaluated on a fair value basis with a view to selling after a period of time. Listed investments and investments traded on AIM or overseas stock exchanges are stated at current price at the balance sheet date provided the market is active. Unlisted investments are stated at directors' valuation with reference to the International Private Equity and Venture Capital Valuation Guidelines ("IPEVG") and in accordance with IAS39 "Financial Instruments: Recognition and Measurement":
Investments which have been made within the last twelve months or where the investee company is in the early stage of development will usually be valued at the price of recent investment except where the company's performance against plan is significantly different from expectations on which the investment was made in which case a different valuation methodology will be adopted.
For investments with a shareholding greater than 20% but less than 50% of the equity share capital, IAS 28 states that venture capital companies have the option of recording investments on the balance sheet according to the equity method or at fair value in accordance with IFRS 9 "Financial Instruments" (or IAS 39 "Financial Instruments: Recognition and Measurement"). Management makes use of this option and assesses the associates at fair value through profit or loss. In the current and prior year, the conditions for exercising this option were fulfilled for Bosques Energeticos EBE S.A. de C.V; the value of which is included at fair value through profit or loss.
Any realised and unrealised gains or losses on investments are taken to the profit and loss account.
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
-- In the principal market for the asset or liability
Or
-- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits from the asset's highest and best use or by selling it to another market participant that would utilise the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy. This is described, as follows, based on the lowest level input that is significant to
the fair value measurement as a whole:
-- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
-- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
-- Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
Financial assets
Classification
Management determines the classification of its financial assets at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are initially recognised at fair value, and are subsequently stated at amortised cost using the effective interest method. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. Loans and receivables comprise mainly cash and cash equivalents and trade and other receivables.
Impairment of financial assets
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty, default or significant delay in payment, disappearance of active market for that financial asset, or bankruptcy or financial reorganisation of borrowers) that the Company will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.
For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Financial liabilities and equity
Debt and equity instruments issued by a group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of equity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.
Debt, such as borrowings and trade and other payables are measure at amortised cost using the effective interest method.
Cash and cash equivalents
The Company considers any cash on short-term deposits and other short term investments to be cash equivalents.
Trade payables
Trade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.
Loans
Loans are initially recognised at fair value and subsequently at amortised cost.
Equity instruments
Issued equity instruments are recorded at fair value on initial recognition net of transaction costs.
Property, plant and equipment
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. When parts of an item of property, plant and equipment have different useful lives, those components are accounted for as separate items of property, plant and equipment.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income statement.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term. Freehold land is not depreciated.
The estimated useful lives are as follows:
Computer equipment - 4 years
The useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
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 income tax is provided for using the liability method on temporary timing differences at the balance sheet date between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised in full for all temporary differences. Deferred income tax assets are recognised for all deductible temporary differences carried forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profits 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 profits 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 income tax asset to be recovered. Consideration is given to both capital and trading losses, and to the extent that the company is able to realise a deferred tax asset and settle any taxation liabilities simultaneously, these amounts are offset.
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the accounting date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit or loss.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting to the Board of Directors which has been identified as the chief operating decision maker ("CODM"). The Board of Directors consists of the Executive Directors. Please refer to note 2 for segmental information.
Going concern
The Company's business activities, together with the financial position of the Company and the factors likely to affect its future development, performance and position are set out in the Executive Chairman's Statement.
Legendary had administrative expenses, excluding non-cash items, for the year ended 31 March 2016 of GBP192,000
(2015: GBP204,000). These administrative expenses of GBP192,000 included GBP44,000 relating to travel expenses, legal and investment related expenses and directors remuneration. The remaining balance of GBP148,000 (2015: GBP133,000) related to the fixed costs of running Legendary and maintaining its listing.
The directors take steps to keep the running costs of Legendary low. This is evidenced by the costs themselves, the directors' remuneration policy and the costs in comparison to other listed companies (Legendary is listed on the AIM market of the LSE).
As at 5 September 2016, Legendary had GBP503,000 of cash and GBP63,000 of listed investments. The listed investments may be realised for cash at short notice. Together, this gave Legendary, liquid resources of GBP566,000.
On the basis of the above, the Directors believe that sufficient funds will be available to support the going concern status of the Company over the next 12 months following the approval of these financial statements. Consequently, the Directors believe that it is appropriate to prepare the Company's financial statements on a going concern basis. This assumes that the Company is to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements.
Share based payments
The Company issues equity-settled share based payments to certain employees in the form of options and warrants. A fair value for the equity-settled share awards is measured at the date of the grant. The fair value is measured using the Black Scholes method of valuation, which is considered to be the most appropriate valuation technique. The valuation takes into account factors such as non-transferability, exercise restrictions and behavioural considerations.
An expense is recognised to spread the fair value of each award over the vesting period on a straight-line basis, after allowing for an estimate of the share awards that will actually vest. The estimate of vesting is reviewed annually, with any impact on the cumulative charge being recognised immediately. Amounts to be settled in shares are presented within equity, representing the expected time-apportioned fair value of the awards that are expected to vest.
Exceptional items policy
Material items which derive from events or transactions that fall within the ordinary activities of the reporting entity have been disclosed as exceptional where individually or, if of a similar type, in aggregate, their size or occurrence requires separate disclosure if the financial statements are to give a true and fair view.
1 CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Company's financial statements under IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. 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. Actual results may differ from these estimates.
The Directors consider that the following estimates and judgements are likely to have the most significant effect on the amounts recognised in the financial statements:
Valuation of investments:
The Company's financial instruments are measured at fair value in the statement of financial position and it is usually possible to determine their fair values within a reasonable range of estimates. For actively traded financial instruments, quoted market prices are readily available. For other financial instruments, such as unlisted securities, valuation techniques are used to estimate fair value. Valuation techniques make maximum use of market inputs, including reference to the current fair values of instruments that are substantially the same (subject to appropriate adjustments). Fair value estimates are made at a specific point in time, based on market conditions and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision.
Share based payments:
In order to calculate the charge for share-based compensation as required by IFRS 2, the Group makes estimates principally relating to the assumptions used in its option-pricing model as set out in note 15.
2 SEGMENTAL ANALYSIS
The Company only has one class of business and only operates within the United Kingdom.
3 PROFIT ON ORDINARY ACTIVITIES 2016 2015
BEFORE TAX GBP'000 GBP'000
Profit on ordinary activities before
tax for the year is stated after
charging:
Depreciation of tangible fixed
assets 2 2
Auditor's remuneration - statutory
audit (1) 17 23
- Other services 1 1
(1) Auditor's remuneration for the year ended 31 March 2015 related to amounts paid to RSM UK Audit LLP.
2016 2015
4 DIRECTORS Number Number
Number of employees
The average monthly number of employees
including directors, during the
year was: 2 2
GBP'000 GBP'000
Directors' emoluments
Directors' fees 16 2
Share based payment cost - 25
Other than the gross directors' fees of GBP16,200 (2015: GBP2,400) paid in the year there were no fees accrued during the year With respect to directors' share based payments, see note 15. The directors' fee remained unpaid as at the year-end date.
5 TAX ON (LOSS)/ PROFITON ORDINARY 2016 2015
ACTIVITIES GBP'000 GBP'000
Analysis of charge/(credit) in
the year:
Current tax - -
Deferred tax - -
- -
Profit/(loss) on ordinary activities
before tax 2,118 (470)
Profit/(loss) on ordinary activities
multiplied by standard rate of
corporation tax in the UK 20% (2015:
21%) 424 (99)
Expenses not deductible for tax
purposes 29 32
Tax losses unutilised/(utilised) (453) 67
Current tax charge for year - -
The company has not recognised a deferred tax liability on current period and cumulative unrealised gains on certain investments as these gains will be offset against the available capital losses of the company. The total gains on the investments are GBP3.97 million, and the associated deferred tax asset and liability would be approximately GBP0.79 million. As at 31 March 2016 the Company had capital losses of approximately GBP4.6 million (2015: GBP4.6million) available to carry forward against future capital gains, and trading losses of approximately GBP3.5 million (2015: GBP5.7 million), which includes GBP0.03 million in respect of tax deductions on share options and warrants. A deferred tax asset of GBP0.7 million (2015: GBP1.1 million) is not recognised in respect of these trading losses due to the uncertainty as to the utilisation of the losses in the foreseeable future.
Future tax charges will be dependent on the split of profits for tax purposes as between revenue and capital items, and the utilisation of losses incurred to date.
2016 2015
6 EARNINGS PER ORDINARY SHARE GBP'000 GBP'000
Profit / (loss) for the financial
year 2,118 (470)
Average number of ordinary shares
in issue (basic) ('000) 2,461,532 2,322,441
Basic earnings per share (pence) 0.09p (0.02)p
Diluted earnings per share (pence) 0.08p (0.02)p
The average number of undiluted shares in issue during the year was 2,461,531,830. The fully diluted number of shares in issue during the year was 2,709,093,455.
7 PROPERTY, PLANT AND EQUIPMENT Office
Equipment
GBP'000
COST
At 1 April 2014 5
Additions 4
At 31 March 2015
At 1 April 2015 9
Additions -
At 31 March 2016 9
DEPRECIATION
At 1 April 2014 3
Charge for the year 2
At 31 March 2015
At 1 April 2015 5
Charge for the year 2
At 31 March 2016 7
NET BOOK VALUE
At 31 March 2016 2
At 31 March 2015 4
At 1 April 2014 4
8 INVESTMENTS Unlisted
Investments
GBP'000
VALUATION
At 1 April 2014 1,281
Exercise of options 392
At 31 March 2015 1,673
At 1 April 2015 1,673
Exercise of options 100
Unrealised gain on revaluation 2,438
At 31 March 2016 4,211
During the year, options over 75,187 shares in Virtualstock Holdings Limited were exercised for GBP100,000. In April 2015, the Company increased its stake in Virtualstock to 7.0%. Included in unlisted investments are the following companies:
INVESTMENT Carrying Exercise Carrying Fair value
value of options Unrealised value hierarchy
31 March gain on 31 March
2015 GBP'000 revaluation 2016
GBP'000 GBP'000 GBP'000
Bosques energeticos Level
Ebe S.A de C.V 83 - - 83 3
Virtualstock Holdings Level
Limited 1,490 100 2,438 4,028 2
Manas Resources Level
LLC 100 - - 100 3
Total 1,673 100 2,438 4,211
Further information in relation to the fair value hierarchy is provided in note 1 and 16 to the financial statements.
The Company holds more than 20% of the equity (and no other share or loan capital) of the following undertakings:-
Class Proportion Nature of
Other Participating of directly Business
Interest: holding held
Bosques Energeticos Ordinary 40% Development
EBE S.A. de C.V. and cultivation
of renewable
energy crops
Bosques Energeticos EBE S.A. de C.V., in which the Company has more than 20% interest, is an associated undertaking. The investment is recognised on the balance sheet at fair value in accordance with IAS 39 Financial Instruments: "Recognition and Measurement"
All investments are measured at fair value through profit and loss as detailed in the accounting policy.
9 CURRENT ASSET INVESTMENTS Listed
Investments
GBP'000
VALUATION
At 1 April 2014 347
Loss on revaluation (235)
At 31 March 2015 112
At 1 April 2015 112
Loss on revaluation (48)
At 31 March 2016 64
Being:
AIM listed 51
TSX listed 13
64
Included in listed investments are the following companies:
INVESTMENT Carrying Exercise Unrealised Carrying Fair value
value of options gain / value hierarchy
31 March (loss) 31 March
2015 GBP'000 on revaluation 2016
GBP'000 GBP'000 GBP'000
Medgold Resources Level
Corp 16 - (3) 13 1
Sula Iron and Level
Gold PLC 22 - (18) 4 1
Amadeo Resources Level
PLC 64 - (42) 22 1
Oracle Coalfields Level
PLC 10 - 15 25 1
Total 112 - (48) 64
Further information in relation to the fair value hierarchy is provided in notes 1 and 16 to the financial statements.
10 tRADE AND OTHER RECEIVABLES 1 April
2016 2015 2014
GBP'000 GBP'000 GBP'000
Prepayments 2 1 1
Other debtors 45 1 38
47 2 39
Other debtors includes amounts receivable of GBP42,000 (2015: GBP1,000) under a loan facility agreement between Manas Resources LLC and the Company.
1 April
2016 2015 2014
11 CURRENT LIABILITIES GBP'000 GBP'000 GBP'000
Trade creditors 38 15 21
Accruals 20 26 26
Short term loan 189 - 152
Other creditors 4 9 -
251 50 199
Trade creditors, other creditors and accruals represent the Company's financial liabilities measured at amortised cost. Due to their short term nature, carrying value approximates to fair value.
Other creditors of GBP4,000 (2015: GBP9,000) related to travel and other expenses that the Directors incurred in relation to ordinary activities of the Company. These amounts remained outstanding as at the balance sheet date, but were paid post the balance sheet date.
In May 2015, the Company obtained a short term loan of US$250,000, equivalent to GBP159,000 from Alcazar 1 Pte Limited, which holds 272,727,273 shares (at that time 11.1% stake) in the Company. The loan has an interest rate of 10% per annum. The loan was secured on shares in the Company valued at the market price of the shares at the time when the loan became repayable. Interest accrued on the loan at balance sheet date totalled GBP14,000 and is included in the loan balance. As at the year end date the foreign exchange loss of GBP16,000 was recognised and loan amount was restated. As at the year end date the total loan outstanding including interest was GBP189,000 (2015: nil). The loan was repaid in July 2016, post the balance sheet date.
1 April
2016 2015 2014
12 NON-CURRENT LIABILITIES GBP'000 GBP'000 GBP'000
Loan 30 30 30
GBP30,000 was raised in August 2010 by way of a loan facility. The facility bears no interest. Repayment can be requested from 5 August 2017. Therefore, the facility has been classified as due in more than one year as the Directors believe this most appropriately reflects the period over which the loan will be repaid. The Directors consider the fair value of this loan approximates the carrying value.
1 April
2016 2015 2014
13 CALLED UP SHARE CAPITAL GBP'000 GBP'000 GBP'000
AUTHORISED
3,000,000,000 ordinary
shares of GBP0.001 each 3,000 3,000 3,000
ALLOTTED, ISSUED AND
FULLY PAID
2,461,530,833 (2015:
2,461,530,833)
ordinary shares of GBP0.001
each 2,462 2,462 1,643
2016 2015 1 April 2014
14 SHARE PREMIUM GBP'000 GBP'000 GBP'000
At start of the year 8,345 8,316 8,316
Premium on Ordinary
Shares Issued of 0.001
each - 82 -
Expenses paid in connection
with the share issue - (53) -
At end of the year 8,345 8,345 8,316
15 SHARE BASED PAYMENT
Share Options
The Company has unapproved and approved share option schemes in which the directors participate.
Under the Company's approved share option plan, the Company grants options and shares to certain directors and employees of the Company. If the options remain unexercised for a period of 10 years from the date of grant, the options lapse. The options are exercisable immediately on grant.
Details of Directors' outstanding share options as at the year ended are shown below.
31 March 2016 31 March 2015
Exercise Exercise
price price
per share Number per share Number
Zafar Karim 0.2p 316,000,000 0.2p 316,000,000
Thomas Reuner 0.35p 5,000,000 0.35p 5,000,000
Thomas Reuner 0.2p 97,000,000 0.2p 97,000,000
418,000,000 418,000,000
Movements in ordinary share options outstanding
31 March 31 March
2016 2015
Weighted Weighted
average average
exercise exercise
price price
Number pence Number Pence
At start of the
year 450,000,000 0.2p 350,000,000 0.20p
Granted during
the year - - 100,000,000 0.20p
At end of the year 450,000,000 0.2p 450,000,000 0.20p
All options were exercisable at the end of the year.
Last date Exercise Granted Lapsed Exercised Outstanding
when exercisable price No. No. at 31 March
2016
12 February
2021 0.20p 80,000,000 - - 80,000,000
20 May
2021 0.35p 5,000,000 - - 5,000,000
6 February
2022 0.20p 35,000,000 - - 35,000,000
21 January
2023 0.20p 50,000,000 - - 50,000,000
9 June
2023 0.20p 80,000,000 - - 80,000,000
23 December
2023 0.20p 100,000,000 - - 100,000,000
3 August
2024 0.20p 100,000,000 - - 100,000,000
450,000,000 450,000,000
Fair value
The fair value of the options granted in the prior year was estimated at the date of grant using a Black-Scholes option pricing model that uses assumptions noted in the table below. No performance conditions were included in the fair value calculations.
Expected life of options (years) 5
Exercise price 0.20p
Share price at grant date 0.10p
Risk free rate 1.94%
Expected share price volatility 49.1%
Expected dividend yield 0.00%
Estimate of % of options vesting 100%
Assumed staff attrition 0%
Fair value of options 0.0253p
The Company uses historical data to estimate option exercise and employee termination within the valuation model. Expected volatilities are based on implied volatilities as determined by simple average of a sample of listed companies base in similar sectors. The risk free rate for the period within the contractual life of the option is based on the UK gilt yield curve at the time of the grant.
Warrants
Other than the employee share options set out above, warrants have been granted with exercise prices and dates shown in the table below.
Last date Exercise Granted Lapsed Exercised Outstanding
when exercisable price No. No. at 31
March
2016
5 August
2015 (1) 0.10p 260,000,000 (10,000,000) - 250,000,000
5 August
2015 0.20p 10,000,000 (10,000,000) - -
23 November
2015 0.15p 25,000,000 (25,000,000) - -
28 November
2015 0.20p 20,000,000 (20,000,000) - -
21 May 2017 0.12p 2,272,727 - - 2,272,727
14 November
2017 (2) 0.00p 45,000,000 - - 45,000,000
362,272,727 (65,000,000) - 297,272,727
(1) During the year, 250,000,000 of the warrants had their life extended by 2 years to 4 August 2017 in exchange for not asking for repayment of the attached loan facility of GBP30,000 until 5 August 2017 made on 5 August 2010. The loans bear no interest. Repayment can be requested from 5 August 2017. As a result of modification of warrants, a charge amounting to GBP31,000 was recognised in the statement of comprehensive income.
(2) On 15 November 2015, 45,000,000 performance related warrants to purchase one ordinary share each were issued with the performance period from 15 November to 14 November 2018. The performance warrants are subject to absolute share price target between 0.15p - 1.00p.
Movements in warrants outstanding
31 March 31 March
2016 2015
Weighted Weighted
average average
exercise exercise
price price
Number Pence Number pence
At start of the year 317,272,727 0.12p 352,500,000 0.12p
Granted during the year 45,000,000 0.15p -1p 2,272,727 0.12p
Lapsed during the year (65,000,000) 0.17p (37,500,000) 0.15p
At end of the year 297,272,727 0.11p 317,272,727 0.11p
The fair value of the performance warrants granted in the year was GBP18,000 (2015: GBP1,000). The fair value of the warrants is estimated at the date of grant using a stochastic option pricing model that uses assumptions noted in the table below. Performance conditions were included in the fair value calculations.
Expected life of warrants (years) 3 years
Exercise price 0p
Share price at grant date 0.10p
Risk free rate 0.87%
Expected share price volatility 70.58%
Expected dividend yield 0.00%
Fair value of warrants GBP18,000
Other Information
The market price of the Company's ordinary shares ranged from a high of 0.17p to a low of 0.08p during the year.
16 FINANCIAL INSTRUMENTS
Loans and receivables
Loans and receivables include cash at bank and in hand and other debtors. Financial liabilities at amortised cost include trade creditors, accruals and loans.
Borrowing facilities
At the year end the Company had no overdraft or other borrowing facilities (2015: GBPnil).
Capital Management
The Company is financed primarily with equity capital, which is then utilised to meet operating expenses and make investments. Investments are financed primarily from equity capital, though debt may be utilised where it is felt that it is prudent to do so.
Interest rate risk
The Company does not have exposure to interest rate. The Company had a loan at a fixed interest rate of 10% paid in two half yearly instalments. The interest rate is fixed for the term of the loan. The loan was repaid in July 2016.
Currency risk
The Company makes investments in both UK and foreign companies. In addition, the companies in which the Company invests may or may not have exposure to foreign currency exposure. In this regard the Company has foreign currency exposure. Currency exposure is one the factors considered when making investments, and as such it is implicitly managed at the point of investment.
In addition, the Company had a loan denominated in US$ and is therefore exposed to the risk of GBPSterling depreciating against the US$. This loan was repaid in July 2016, post the year end.
Liquidity risk
The Company makes investments in unlisted and listed entities. Consequently, the Company is exposed to the liquidity risk to the extent that it may not be able to find buyers for its unlisted investments and liquidity in its listed investments may be low. Therefore, there can be no certainty that the Company would be able to exit its investments. The table below analyses the Company's non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
2016
---------------------------------------------------------
Less Between Between Between Over
than 3 months 1 and 2 and 5 years
3 months and 1 year 2 years 5 years GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
---------- ------------ --------- --------- ---------
Trade and other 42 - - - -
payables
Borrowings - 189 30 -
Accruals and 20 - - - -
deferred income
2015
---------------------------------------------------------
Less Between Between Between Over
than 3 months 1 and 2 and 5 years
3 months and 1 year 2 years 5 years GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
---------- ------------ --------- --------- ---------
Trade and other
payables 24
Borrowings - - - - 30
Accruals and 26 - - - -
deferred income
1 April 2014
---------------------------------------------------------
Less Between Between Between Over
than 3 months 1 and 2 and 5 years
3 months and 1 year 2 years 5 years GBP'000
GBP'000 GBP'000 GBP'000 GBP'000
---------- ------------ --------- --------- ---------
Trade and other
payables 21
Borrowings - 152 - - 30
Accruals and 26 - - - -
deferred income
Market risk
The Company monitors the value of its investments on a regular basis, and takes action to decrease or dispose of investments when it deems appropriate.
Credit risk
The bank account of the Company and of the client account held by PSB Accountants Limited is held with well-established financial institutions of high quality credit standing.
Fair value hierarchy
Fair values have been measured at the end of the reporting period as follows -
Level Level Level
1 2 3 Total
'Quoted 'Observable 'Unobservable GBP'000
prices' prices' prices'
GBP'000 GBP'000 GBP'000
Year ended 31 March
2016
Investments held
at fair value 64 4,028 183 4,275
Year ended 31 March
2015
Investments held
at fair value 112 1,490 183 1,784
All fixed asset investments are classified as Level 2 or Level 3. The movement on Level 2 and Level 3 assets are disclosed in note 8.
Financial assets and liabilities measured at fair value are disclosed using a fair value hierarchy that reflects the significance of the inputs used making the fair value measurements, as follows -
-- Level 1 - Unadjusted quoted prices in active markets for identical asset or liabilities ('quoted prices'),
-- Level 2 - Inputs (other than quoted prices in active markets for identical assets or liabilities) that are directly or indirectly observable for the asset or liability ('observable inputs'), or
-- Level 3 - Inputs that are not based on observable market data ('unobservable inputs')
The Level 2 and Level 3 investments have been valued at the price of recent investment, net asset value or discounted cash flow based on post period end redemptions in line with the Company's accounting policies and IPEVG guidelines.
17 SUBSEQUENT EVENTS
In May 2016, post the year end, Legendary raised GBP1 million (before expenses), by way of an oversubscribed placing of 333,333,333 ordinary shares of 0.10 pence nominal value each at a price of 0.3 pence per new ordinary share. The shares were placed with a range of institutional and private investors. Following admission of the new ordinary shares, Legendary's enlarged issued share capital comprised 2,794,864,166 ordinary shares.
In May 2015, Legendary obtained a loan of US$250,000 from Alcazar 1 Pte Limited. The loan bore interest at a rate of 10% per annum. Subsequent to the year end, in July 2016, the loan and attendant interest were repaid. Alcazar 1 Pte was at the time the loan was taken out a related party by virtue of its holding 11.1% of the shares of Legendary. In the opinion of the Directors, and after consultation with the NOMAD, the Directors considered the terms of the loan fair and reasonable.
18 RELATED PARTY TRANSACTIONS
In May 2015, Legendary obtained a loan of US$250,000 from Alcazar 1 Pte Limited. The loan bore interest at a rate of 10% per annum. Subsequent to the year end, in July 2016, the loan and attendant interest were repaid. Alcazar 1 Pte was at the time the loan was taken out a related party by virtue of its holding 11.1% of the shares of Legendary. The Directors considered, after consultation with the Company's nominated adviser, that the terms of the loan were fair and reasonable insofar as the Company's shareholders are concerned.
Director's transactions are detailed on note 4 and note 11 of the notes to the financial statements.
No other related party transactions were undertaken during the year other than those disclosed above
19 EXPLANATION OF TRANSITION TO IFRS
As stated in the accounting policies these are the first consolidated financial statements prepared in accordance with IFRS's. The date of the Group transition to IFRS is 1 January 2015 (the "Transition date").
The accounting policies described above were applied when preparing consolidated financial statements for the years ended 31 December 2014 and 31 December 2015 and the Consolidated Statement of Financial Position as at the Transition Date.
In preparing its opening IFRS Consolidated Statement of Financial Position and adjusting amounts reported previously in the financial statements prepared in accordance with UK GAAP (Generally Accepted Accounting Practice in the UK, previous GAAP), the Group has applied IFRS 1 First-Time Adoption of International Financial Reporting Standards, which contains a number of voluntary exemptions and mandatory exceptions from the requirement to apply IFRS retrospectively.
Whilst the notes to the financial statements, where applicable, include the position as at 1 April 2014, these figures do not include any restatement of amounts previously reported.
Exceptions and Exemptions used during transition to IFRS
The Group has applied the following mandatory exception required by IFRS 1 in the conversion from UK GAAP to IFRS:
Estimates
Hindsight is not used to create or revise estimates. Estimates previously made by the Company under UK GAAP were not revised for application of IFRS except where necessary to reflect any difference in accounting policies.
Impact on the cash flow statements
The transition has no significant impact on the presentation of the statement of cash flows.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR LPMPTMBAMMMF
(END) Dow Jones Newswires
September 08, 2016 05:17 ET (09:17 GMT)
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