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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 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Mar 2020 to Mar 2025
TIDMLEG
RNS Number : 4486Y
Legendary Investments PLC
21 August 2018
21 August 2018
Legendary Investments PLC
("Legendary" or the "Company")
AUDITED RESULTS FOR THE YEARED 31 MARCH 2018
HIGHLIGHTS
-- Value of investments increases to GBP6.2m (2017: GBP4.3m), a rise of 44% -- Net assets increase to GBP6.0m (2017: GBP4.7m), a rise of 28% -- Net gain on fair value of investments of GBP1.2m (2017: GBP45k) -- Net profit at GBP664k (2017: loss of GBP281k) -- Post year end net assets higher at GBP6.5m -- Proposed change of name to Eight Peaks Group plc -- Proposed consolidation of the Company's shares in the ratio of approximately 377.19 to 1
-S -
Hot Features
Premium
020 8201
Legendary Investments PLC Zafar Karim / Thomas Reuner 3536
Nominated Adviser
Colin Aaronson / Harrison
Grant Thornton UK LLP Clarke 020 7383
Broker Seamus Fricker 5100
S.P. Angel Corporate Finance Richard Parlons / Richard 020 3470
LLP Morrison 0470
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
About Legendary Investments PLC
Legendary Investments PLC focuses on assisting companies and making investments which exhibit the potential to generate returns of many multiples through capital appreciation. Typically, Legendary takes stakes 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.
www.leginvest.com
Executive Chairman's Statement
Some seven years ago, Legendary set out its mission to seek out private opportunities, not typically available to public equity investors, that had the potential to generate substantial oversized returns. Having identified those opportunities, Legendary would use its skills, experience and network to nurture such opportunities. The expectation was that successful opportunities would generate returns of many multiples making up for the less successful opportunities. This strategy was balanced by Legendary's approach to fair value being conservative being based on historic transactions value of its investments.
Legendary's strategy has worked. In 2010, the year before current management took control of Legendary, it had no investments or capital with which to make them and negative net assets. Since that time, Legendary has raised approximately GBP3m after costs with which it has run the Company for seven years and made investments of approximately GBP1.5m.
Of the 12 investments made to date: five have been successful and are currently valued from approximately 1.3x to 35x the value at which Legendary initially invested; three have listed; one has a VC invested in it and its CEO has stated its objective to list, possibly on NASDAQ; Legendary has exited two at 4.3x and 1.6x entry price; two have been exited at a loss; and two have been written off.
Progress during the year under review continues this success. In July 2017, Virtualstock, attracted VC investment at a valuation of GBP66m, or 33x the valuation at which Legendary originally invested in 2012. Subsequent to the year end, that has increased to approximately GBP70m or 35x. Legendary was the first outside investor in Virtualstock and remains its largest outside investor.
In August 2017, Legendary negotiated a stake in IBS for nominal value at its establishment. Subsequently, seed funding debt was converted to equity and further equity investment was made at a valuation of NZ$14.4m.
In December 2017, Legendary exchanged a stake in a company holding a gold asset in Kyrgyzstan for a far more promising stake in a company holding an oil asset. Also, in December 2017, Legendary took a stake in a top five crowd funding platform. Both investments have already progressed.
Operating profit for the year under review was GBP678,000 (2017: loss of GBP281,000), and net profit was GBP664,000 (2017: net loss GBP281,000). As at the year end, Legendary's investments (fixed asset investments and current asset investments) were GBP6,150,000 (2017: GBP4,293,000), an increase of 43%. Overall, net and total assets at the year end were GBP5,990,000 (2017: GBP4,729,000) an increase of 27%, and GBP6,277,000 (2017: GBP4,867,000), an increase of 29%, respectively.
As at 17 August 2018, investments, net assets and total assets were higher at GBP6,178,000, GBP6,496,000 and GBP6,531,000 respectively.
Virtualstock Holdings Limited
Virtualstock utilises agile, open source technology to allow information to flow between fragmented systems in a unique way, without disruption to existing IT. 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 costly and time-consuming systems integrations. The "integration" market is worth c.US$300-500 billion per year.
By unlocking and connecting data scattered across disparate parts of the supply chain, Virtualstock's cloud-based solution, The Edge, helps clients drive efficiency, growth and customer satisfaction, supported by an integrated and seamless digital supply chain. The healthcare equivalent, The Edge4Health(TM) helps fuel industry-wide efficiency and operational productivity for both Healthcare Providers and Suppliers.
Legendary initially identified Virtualstock's potential in 2012 when it invested in Virtualstock at a valuation of GBP2m. Since then, Virtualstock has transformed from a small company with revenue in the few hundred thousand pounds to a fast growing and leading company, targeting a doubling of revenue year on year, in the digital supply chain solution space. It has a growing client list that includes several of the top UK retailers, including Tesco, Aldi, Sainsbury's Argos, Kingfisher, Dixons Carphone and John Lewis, and eleven NHS health trusts. Revenue is now measured in the millions of pounds. The most recent investment into Virtualstock was at a valuation of GBP70 million or 35x the initial valuation at which Legendary invested.
Virtualstock's potential was recognised by Notion Capital, a leading European B2B SaaS Venture Capital firm. In July 2017, Notion invested GBP4.5m in Virtualstock at a valuation of GBP66m to support the next phase of Virtualstock's growth. Since then Virtualstock's progress has continued.
In January 2018, Wincanton plc the largest British logistics company, announced a new strategic partnership with Virtualstock. Virtualstock's digital supply chain and marketplace solutions enable retailers to easily and cost-effectively expand their online product range without the need to carry additional stock. Virtualstock's platform delivers integrated "Supplier to Consumer" (S2C) fulfilment functionality, allowing one retailer to sell another retailer or supplier's goods without ever having to stock or deliver them, driving significant opportunities for revenue growth, while protecting margins by mitigating the impact on operating costs. When allied with Wincanton's collaborative logistics capability, the two companies are able to rapidly transform a retailer's ability to quickly respond to an ever-changing market.
In March 2018, Virtualstock partnered with Previse Ltd to deliver a seamless "purchase to pay" supply chain model with cash-on-delivery for suppliers. Previse is an Artificial Intelligence based instant supplier payment decision company. Together, Virtualstock and Pervise are able to deliver a fully integrated purchase to pay supply chain system with cash on delivery for suppliers in the UK.
In line with Legendary's historic transaction based valuation policy, Legendary held its 7.2% stake in Virtualstock at the GBP66m valuation of July 2017, or GBP4.8m. This policy does not take any account of investee companies' progress, nor of their further prospects, since the last transaction. Legendary was the first outside investor into Virtualstock and remains the largest outside investor.
Post the year end, Virtualstock raised an additional GBP3.4m at the same price as the Notion round, valuing Virtualstock at approximately GBP70m and Legendary's resultant stake of 6.8% at GBP4.8m. Also post the year end, Virtualstock appointed Rene Shuster as Chairman. Rene's experience and expertise covers all stages of development of businesses from private equity, through to IPOs to post IPO growth and has been earned with companies whose combined valuation is measured in US$ billions. This will be invaluable to Virtualstock in accelerating its progress and expansion internationally.
Indicators of Virtualstock's outlook and potential include the fact that shortly after the investment by Notion, Virtualstock's CEO stated that Virtualstock intended to list, possibly on the NASDAQ. Valuations in this sector are high, for example, Mulesoft, a West Coast based company that operates in the integration space was purchased in March 2018 by Saleforce.com for US$6.5bn.
IBS Corporation
In August 2017, Legendary negotiated a 12% stake in IBS Corporation for nominal consideration, a newly established New Zealand entity. IBS aims to establish a banking services platform with the ability to provide a range of financial services including investment banking, asset management and debt funding services aimed at corporate and high net worth clients.
The provision of investment banking, asset management and debt based services to New Zealand SMEs is less developed than in other international markets. IBS initially intends to target opportunities in these areas, providing debt funding and taking equity stakes in New Zealand SMEs with strong management and with business models with the potential for internationalisation. These services are intended to be extended into other markets over time.
IBS commenced the process of obtaining the necessary authorities from the New Zealand regulators to be able to conduct these services shortly after establishment.
In November 2017, as a result of the progress made by IBS, initial third party seed debt investment was converted into equity and further equity was invested in IBS at a valuation of NZ$14.4m (GBP7.4m) valuing Legendary's resultant stake of 11.1% at NZ$1.6m (GBP826,000).
In line with Legendary's historic transaction based valuation policy, Legendary holds its stake of 11.1% at the GBP7.4m valuation, or GBP826,000. This policy does not take any account of investee companies' progress, nor of their further prospects since the latest transaction.
Since then, and post the balance sheet date, in April 2018, IBS was granted the authorities to operate by the New Zealand regulatory authorities.
While awaiting the authorities to operate, IBS has scoped several potential transactions. These transactions range in size from a few million dollars to several hundred million dollars plus. Following the granting of authorities to operate, work on making IBS operational has commenced.
With authorities to operate having been granted, IBS can commence providing services as a "challenger" financial services platform, initially focussing in New Zealand and with ambitions to expand further into the most dynamic regions in the world. IBS expects to grow its business and create value rapidly.
Legendary views the investment in IBS as a strategic move which could accelerate the development of Legendary. The activities of IBS are complementary to the activities of Legendary thereby providing opportunities for cooperation and value generation for both Legendary and IBS.
Dunraven Resources plc
In December 2017, Legendary acquired a small interest in Circle Oil Tunisia, which owns the, El Mediouni East and Central oil asset in the Mahdia Permit located in the Gulf of Hammamet off the Tunisian coast, in exchange for its interest in Manas Resources (see below).
Circle Oil Tunisia underwent a restructuring process following the liquidation of its parent company, Circle Oil Plc, and is now under new management. Up to 2016, Circle Oil Plc invested heavily in the El Mediouni oil asset. In August 2014, Circle Oil Plc announced a potential large discovery following preliminary results which were internally estimated by Circle Oil Plc as potentially recoverable prospective resources of approximately 100m barrels of oil.
Post the year end, in June 2018, Legendary reported that in late December 2017 Circle Oil Tunisia was acquired by Dunraven in a share swap. This resulted in Legendary having a 2.0% stake in Dunraven. Dunraven's strategy is to participate in exploration and production projects. Tunisia is the initial focus of Dunraven's activities, where it enjoys established, strategic relationships.
The management team is headed by Alex MacDonald who has more than three decades of oil & gas business and City experience. He has founded and brought companies to AIM and has held senior positions in Whitman-Howard Limited's oil and gas team and Libertas Capital Corporate Finance LLP. He also has experience with oil majors including Conoco Inc. and Chevron Corporation. Dunraven's Board and Executive team have a strong background in exploration and production and strong reputations and relationships with major oil companies and governments at senior levels.
Dunraven has already developed an ambitious 18 month work programme for El Mediouni, including a drilling programme. It is also in negotiations with a major services company to be their technical partner. Additionally, Dunraven intends to make further acquisitions.
In line with Legendary's historic transaction based valuation policy, Legendary holds its stake of 2.0% at GBP175,000. This policy does not take any account of investee companies' progress, nor of their further prospects since the latest transaction.
Crowd for Angels (UK) Limited
In December, Legendary acquired 9.7% of Crowd for Angels at a valuation of GBP3.7m. Crowd for Angels owns and operates the "Crowd for Angels" crowdfunding platform. Crowd for Angels has been at the forefront of crowdfunding since its launch in 2014. It was among the first crowdfunding platforms to become FCA regulated, one of the first to be approved by HMRC to manage the Innovative Finance ISA (IF-ISA) and was the first crowd funding platform to launch its own Liquid Crypto Bond with attached Crypto Tokens through an Initial Coin Offering.
The 9.7% stake was paid for through the issuance to Crowd for Angels of 248,275,862 Legendary ordinary shares of 0.1 pence nominal value each at 0.145 pence per ordinary share.
In line with Legendary's historic transaction based valuation policy, Legendary holds its stake of 9.7% at the GBP3.7m valuation, or GBP360,000. This policy does not take any account of investee companies' progress, nor of their further prospects since the latest transaction.
Since then, and post the balance sheet date, in June 2018, Legendary reported that Crowd for Angels has made significant progress in its business. Its Liquid Crypto Bond and Initial Coin Offering, launched at the end of 2017, expects to see the majority of up to 5bn Crypto Tokens issued to investors. The Crypto Tokens, which are being issued as a reward for investing in the Liquid Crypto Bonds and, to provide liquidity, were listed on the crypto currency exchange GetBTC (https://getbtc.org). In June 2018, the Crypto Tokens were trading at a price of approximately 1.7m Crypto Tokens to 1 Bitcoin. As at 17 August 2018, the price had increased to approximately 1.3m Crypto Tokens to 1 Bitcoin.
The Initial Coin Offering of its Crypto Tokens led to Crowd for Angels raising funds with its ongoing Liquid Crypto Bond issue. Funds raised from the Liquid Crypto Bond have started to be invested in crowd bond issues listed on the Crowd for Angels platform, helping a range of small businesses to finance the next stage of their growth plans. In addition, the experience gained during its Initial Coin Offering has led Crowd for Angels to offer new products and services including crypto backed bonds, private sales for Crypto Tokens and seed capital for crypto companies.
As part of the Initial Coin Offering strategy, the Crypto Tokens are also being used as a marketing tool, rewarding investors for engaging with the Crowd for Angels platform, advertising and media. Using various Crypto Token based marketing strategies, Crowd for Angels has risen from fifth (at the time of Legendary's investment in late December 2017) to third place in the most visited UK crowdfunding platforms (according to Alexa.com) after seeing website visitor figures grow by 290% between March and the end of May this year.
Amedeo Resources PLC
Amedeo Resources is an oil and gas and resources infrastructure investment company. Its principal investment is a 19% stake in Jiangsu Yangzijiang Offshore Engineering Co. Ltd, an offshore marine vessel yard located on approximately 1.6m square metres of prime shorefront land in Taicang, Jiangsu Province on China's East coast, some 50 miles north of Shanghai. Amedeo also has a 49% stake in a commodities broker, MGR Resources Pte Ltd and a 2.5% stake in Ganjine Kani Company, a copper mining company.
Amedeo is a relatively small investment. It is listed on AIM. As at the balance sheet date, Legendary's stake in Amedeo was valued at GBP21,000. As at 17 August 2018, it was valued at GBP19,000.
Legendary's shares in Amedeo were held with Legendary's previous brokers, Beaufort Securities Limited, which is in administration. Legendary expects to recover these shares from the administrator.
Medgold Corporation
Medgold is a TSX-V-listed exploration company focusing on advancing early-stage gold-silver projects in Southern Serbia. 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.
Legendary invested in Medgold at its inception, before it was listed. Medgold has now been listed for several years. As at the balance sheet date, Legendary's stake was valued at GBP34,000. As at 17 August 2018, it was valued at GBP64,000. Medgold is a non-core investment.
Manas Resources LLC
Manas Resources holds a licence to explore for gold in Sultan Sary, Narynskaya Oblast, Kyrgyzstan. The licence area is located in the gold-rich Tien-Shan region of Kyrgyzstan.
Over the last few years progress had been made at Manas, which, during 2016, on the basis of the results from a geophysical work programme, resulted in the identification of promising test drill targets.
From early 2017, Manas began exploring various options, including raising capital, to do this. These discussions were not fruitful. In the second half of calendar 2017, the opportunity arose to exchange Legendary's stake in Manas for a stake in Circle Oil Tunisia. As discussed above, this opportunity was taken. Following this, discussions were held in terms of recovering the GBP259,000 of working capital which Legendary had provided to Manas to develop its operations. It was concluded that this would not be recovered, and it has therefore been written off.
Bosques Energeticos EBE S.A. de C.V
Bosques is an innovation based second generation biodiesel company which has scored many "firsts" during its evolution. Over the last year or so progress has stalled, primarily due to the increasingly malign perception of diesel. In this regard, there have been discussions relating to Bosques using its pongamia trees for reforestation. These discussions have not gained momentum, and as a result, Legendary has decided to write off this investment thereby reducing the fair value to nil. The stake was held on Legendary's balance sheet at GBP83,000.
Financial Review
During the year under review, Legendary made a net gain on fair value of investments of GBP1,238,000 (2017: GBP45,000).
Administrative expenses were GBP560,000 (2017: GBP326,000). The increase resulted primarily from writing off Manas receivables of GBP259,000. Excluding the write off the administrative expenses amounted to GBP301,000 which is 8% lower than 2017 administrative expenses of GBP326,000.
Overall, operating profit for the year was GBP678,000 (2017: loss of GBP281,000).
Finance charges and tax were GBP14,000 (2017: GBPnil), and net profit for the year was GBP664,000 (2017: loss of GBP281,000).
As at the year end, Legendary's investments (fixed asset investments and current asset investments) were GBP6,150,000 (2017: GBP4,293,000).
Trade debtors and other debtors due within one year were GBP80,000 (2017: GBP136,000) and GBPnil (2017: GBP259,000) due in greater than one year. Working capital was provided for various projects including Manas. As mentioned above, it was concluded that the portion relating to Manas should be written off.
Cash amounted to GBP45,000 (2017: GBP176,000) (including GBP1,000 (2017: GBP2,000) in the client account of the Company's accountants and GBP4,000 (2017: GBP4,000) held in Beaufort Securities Limited's client account.).
Current liabilities were GBP287,000 (2017: GBP138,000). The increase was due primarily to the Company drawing a loan of US$250,000 from Alcazar 1 Pte Limited. The loan including interest was repaid in June 2018, post the year end.
Exercise of Warrants
During the year under review, warrants were exercised over a total of 237,272,727 ordinary shares. The total proceeds of the exercises were GBP237,273. Consequently, as at the balance sheet date the total number of ordinary shares in issue was 3,292,912,755.
Change of Broker
On 2 March 2018, Beaufort Securities Limited, Legendary's broker was placed into administration. Legendary held with Beaufort its stake in Amedeo (see above) and a cash balance of GBP4,400. Legendary expects to recover both the shares in Amedeo and the cash balance.
On 28 March 2018, S.P. Angel Corporate Finance LLP were appointed as Legendary's brokers.
May Equity Placing and Fund Raise
Post the year end, in May 2018, Legendary raised an aggregate of GBP550,000 (before expenses) by way of a placing and subscription of 550,000,000 new ordinary shares of 0.1 pence each at a price of 0.1 pence per share. This included 100,000,000 ordinary Shares, which Zafar Karim, Executive Chairman of the Company, is subscribed for on the same terms.
Increase in Total Investments, Net Assets and Total Assets
Subsequent to the year end, as a result of the equity placing and fund raise and the significant increase of the share price of the Medgold Corporation, as at 17 August 2018, the total investments, net assets and total assets of Legendary were GBP6,496,000 and GBP6,531,000 respectively.
Repayment of Facility of US$400,000
Post the year end in, June 2018, Legendary repaid US$275,000 of principal interest to settle the facility with Alcazar 1 Pte Limited.
New Facility Agreement
Post the year end in, June 2018, Legendary entered into a new facility agreement with Alcazar 1 Pte Limited. The facility is for US$250,000 and may be drawn down until 31 January 2019. If drawn down, the facility needs to be repaid on the first anniversary of drawdown and incurs interest of 10%.
Issue of Performance Warrants
Post the year end, 27.5 million performance warrants were issued to consultants. These warrants vest at prices ranging from 0.4 pence to 1.4 pence and have an exercise price of 0.12 pence.
Outlook
Having proved our model, we now plan to take Legendary to the next stage of its development.
We have plans to augment the Board to bring in additional skills, experience and networks. In addition, after a wide ranging consultation, we have found that the name "Legendary" in several circles is associated with its pre 2011 history and management. Consequently, a proposal to change Legendary's name to Eight Peaks Group shall be tabled at the next Annual General Meeting. Another conclusion to result from the same consultation is that Legendary would benefit from a share consolidation. Consequently, a resolution will be tabled at the Annual General Meeting to consolidate the shares in the ratio of approximately 377.19 to 1.
A circular including a notice of the Annual Meeting will be posted to shareholders in due course.
We look to the future with increased confidence and to continuing to build the Company and taking it to its next peak. We thank our shareholders for their continued support.
Statement of Comprehensive Income
For the year ended 31 March 2018
Audited Audited
Note 2018 2017
GBP'000 GBP'000
Net gain on fair value investments 1,238 45
Administrative expenses (560) (326)
Operating profit/(loss) 678 (281)
Profit/(loss) on ordinary activities
before interest and tax 678 (281)
Interest payable (14) -
Profit/(loss) on ordinary activities
before taxation 664 (281)
Tax on profit on ordinary activities 5 - -
Profit/(loss)for the financial year 664 (281)
Other comprehensive income, net of income
tax:
Other comprehensive income, net of tax - -
Total comprehensive income/(loss) for
the year 664 (281)
Earnings (loss)/per share
* basic (pence) 6 0.021p (0.01)p
* diluted (pence) 6 0.018p (0.01)p
All amounts derive from continuing operations.
Statement of Financial Position
For the year ended 31 March 2018
Audited Audited
2018 2017
Notes GBP'000 GBP'000
NON-CURRENT ASSETS
Property, plant and equipment 7 2 3
Other receivables 10 - 259
Investments held at fair value through
profit and loss 8 6,095 4,211
Total non-current assets 6,097 4,473
cURRENT aSSETS
Trade and other receivables 10 80 136
Investments held at fair value through
profit and loss 9 55 82
Cash at bank and in hand 11 45 176
Total current assets 180 394
TOTAL ASSETS 6,277 4,867
equity AND LIABILITIES
Share capital 13 3,293 2,807
Share premium 14 9,048 8,937
Share warrant and option reserve 293 293
Profit and loss account (6,644) (7,308)
Equity attributable to equity holders 5,990 4,729
NON-CURRENT LIABILITIES - -
CURRENT LIABILITIES 12 287 138
TOTAL EQUITY AND LIABILITIES 6,277 4,867
Statement of Changes in Equity
For the year ended 31 March 2018 (Audited)
Attributable to owners of the company
-----------------------------------------------------
Share
warrant Profit
and and loss
Share Share option account Total
capital premium reserve deficit equity
--------- --------- --------- ---------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ---------- --------
Balance at 1 April 2016 2,462 8,345 293 (7,027) 4,073
========= ========= ========= ========== ========
(Loss) for the year - - - (281) (281)
--------- --------- --------- ---------- --------
Total other comprehensive - - - - -
loss
--------- --------- --------- ---------- --------
Total comprehensive income - - - (281) (281)
--------- --------- --------- ---------- --------
Issue of share (net of issue
costs) 345 592 - - 937
Balance at 31 March 2017 2,807 8,937 293 (7,308) 4,729
--------- --------- --------- ---------- --------
Profit for the year - - - 664 664
--------- --------- --------- ---------- --------
Total other comprehensive - - - - -
Income
--------- --------- --------- ---------- --------
Total comprehensive Income - - - 664 664
--------- --------- --------- ---------- --------
Issue of Shares (net of issue
costs) 486 111 - - 597
--------- --------- --------- ---------- --------
Balance at 31 March 2018 3,293 9,048 293 (6,644) 5,990
--------- --------- --------- ---------- --------
Statement of Cash Flows
For the year ended 31 March 2018
Audited Audited
2018 2017
Cash flows from operating activities GBP'000 GBP'000
Profit/(loss) before taxation 664 (281)
Adjustments for:
Interest expense 14 -
Depreciation 1 1
Impairment of other debtors 259 -
Change in fair value of investments (1,238) (18)
-------------------------------- ---------------------
(300) (298)
Changes in working capital:
Decrease/(increase) in trade and other
receivables 56 (336)
(Decrease)/increase in trade and other
payables (42) 46
-------------------------------- ---------------------
14 (290)
-------------------------------------------- -------------------------------- ---------------------
Net cash outflow from operating activities (286) (588)
-------------------------------- ---------------------
Cash flows from investing activities
-
-
-----------------
(2)
-----------------
Purchase of property, plant and equipment - (2)
Purchase of investments (260) -
-------------------------------- ---------------------
(260)
Net cash outflow from investing activities ----- (2)
-------------------------------- ---------------------
Cash flows from financing activities
Proceeds from issues of new ordinary shares 237 1,000
Expenses paid in connection with issue
of shares - (75)
Increase/(repayment) in loan 178 (189)
-------------------------------- ---------------------
Net cash inflow from financing activities 415 736
-------------------------------- ---------------------
Net (decrease)/increase in cash and cash
equivalents (131) 146
Cash and cash equivalents at 1 April 176 30
-------------------------------- ---------------------
Cash and cash equivalents at 31 March 45 176
-------------------------------- ---------------------
Accounting Policies
Corporate information
Legendary Investments PLC (the "Company") is a company incorporated and domiciled in the UK (registered number 0392024). 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 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
No new International Financial Reporting Standards becoming effective in the current year had an impact on the Company's financial statements.
For March 2019, the Company will adopt the following Standards:
IFRS 9 Financial Instruments: Management have assessed that the impact is likely to be immaterial to the financial statements.
IFRS 15 Revenue from Contracts with Customers: Management have assessed that the impact is likely to be immaterial to the financial statements, given the nature of the company.
For March 2020, the Company will adopt the following Standards:
IFRS 16 Leases: Management have assessed that the impact is likely to be immaterial to the financial statements.
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 IAS 39 "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 that would meet the definition as an investment in an associate, 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 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 an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.
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.
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. Freehold land is not depreciated.
The estimated useful lives are as follows: Office 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 recognised 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 on pages 2 to 8.
Legendary had administrative costs for the year ended 31 March 2018 of GBP301,000. Of this amount approximately GBP130,000 are 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 in comparison to other listed companies (Legendary is listed on the AIM market of the LSE).
The fixed costs and cash outflows of Legendary for the next 12 months are expected to be approximately GBP140,000 due to the increase in Broker and Nomad fees, and the current payables of GBP41,000. Legendary expects no other fixed non-discretionary outlays.
Legendary is an investment company and in order to advance its business it needs to make investments and have funds available to do so. Funds can come from three sources, realising existing investments, equity fund raising or debt fund raising. It is Legendary's policy to maintain sufficient liquid resources to cover its working capital needs when it makes new investments.
As at 17 August 2018, Legendary had GBP231,000 of cash and GBP83,000 of listed investments. The listed investments may be realised for cash at short notice (this includes the Amedeo shares valued at approximately GBP19,000 and cash of approximately GBP4,400 held with Beaufort Securities Limited). Together, this gave Legendary, liquid resources of GBP318,000. In addition, Legendary has a facility of US$250,000 (c. GBP190,000) may be drawn down until 31 January 2019. The facility is repayable on the first anniversary of its drawdown plus 10% interest, and may be settled in Legendary shares, at Legendary's option.
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. Warrants are issued in lieu of fees to third parties. 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 over the remaining vesting period. 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.
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. 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. See note 16 for further details.
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 BEFORE TAX 2018 2017
GBP'000 GBP'000
Profit on ordinary activities before tax for the year is stated
after charging:
Impairment loss on the receivable 259 -
Depreciation of tangible fixed assets 1 1
Auditor's remuneration - statutory audit 23 18
-Corporate finance services - 26
------------ --------
The impairment loss relates to working capital provided to progress Manas Resources which was expected to be recovered in the case of Manas Resources having a successful outcome.
4 DIRECTORS 2018 2017
Number Number
NUMBER OF EMPLOYEES
The average monthly number of employees were:
Directors 2 2
------- -------
GBP'000 GBP'000
DIRECTORS' EMOLUMENTS
Directors' salaries 84 82
Social security costs 6 7
------- -------
The related party director transactions are disclosed in note 17.
5 TAX ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES 2018 2017
GBP'000 GBP'000
Analysis of charge/(credit) in the year:
Current tax - -
Deferred tax - -
------------- -------------
- -
------------- -------------
Profit/(loss) on ordinary activities before tax 664 (281)
------------- -------------
Profit/(loss) on ordinary activities multiplied
by standard rate of corporation tax in the UK
20% (2017: 20%) 133 (56)
Expenses not deductible for tax purposes 225 48
Tax losses (utilised)/unutilised (358) 8
------------- -------------
Current tax charge for year - -
------------- -------------
As at 31 March 2018 the Company had capital losses of approximately GBP4.6 million (2017: GBP4.6million) available to carry forward against future capital gains, and trading losses of approximately GBP3.0 million (2017: GBP3.5 million) which includes GBPnil (2017: GBP0.07 million) in respect of tax deductions on share options and warrants. A deferred tax asset of GBP0.6 million (2017: GBP0.7 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.
6 EARNINGS PER ORDINARY SHARE 2018 2017
GBP'000 GBP'000
Profit/(loss) for the financial year 664 (281)
----------- ------------------------
Average number of ordinary shares in issue
(basic) ('000) 3,156,487 2,773,337
Dilutive effect of share options ('000) 443,773 -
Dilutive effect of share warrants ('000) 87,670 -
Diluted weighted average number of shares 3,687,930 -
used for diluted earnings per share
Basic earnings/ (loss) per share (pence) 0.021p (0.01)p
Diluted earnings /(loss) per share (pence) 0.018p (0.01)p
----------- ------------------------
7 PROPERTY, PLANT AND EQUIPMENT Office Equipment
GBP'000
COST
At 1 April 2016 9
Additions 2
At 31 March 2017 and at 1 April 2017 11
Additions -
------------------
At 31 March 2018 11
DEPRECIATION
At 1 April 2016 7
Charge for the year 1
At 31 March 2017 and at 1 April 2017 8
Charge for the year 1
------------------
At 31 March 2018 9
NET BOOK VALUE
At 31 March 2018 2
------------------
At 31 March 2017 3
------------------
At 1 April 2016 2
------------------
8 INVESTMENTS Unlisted
Investments
GBP'000
VALUATION
At 1 April 2016 and 31 March 2017 4,211
At 1 April 2017 4,211
Additions 720
Disposals (100)
Unrealised loss on revaluation (83)
Unrealised gain on revaluation 1,347
----------------------
At 31 March 2018 6,095
----------------------
INVESTMENT Carrying Additions Disposal Unrealised Carrying Fair
value31 value value
March hierarchy
2017 gain/(loss) 31 March
on revaluation 2018
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Bosques
Energeticos Level
S.A de C.V 83 - - (83) - 3
Virtual Stock
Holdings Level
Limited 4,028 260 - 446 4,734 3
Manas
Resources Level
LLC 100 - (100) - - 3
Crowd for Level
Angels - 360 - - 360 3
IBS
Corporation Level
Ltd - - - 826 826 3
Dunraven
Resources
Public
Limited Level
Company - 100 - 75 175 3
Total 4,211 720 (100) 1,264 6,095
------------------- ------------------ ------------------- ------------------- -----------------
Further information in relation to the fair value hierarchy is provided in note 1 and 16 to the financial statements.
The Company held more than 20% of the equity (and no other share or loan capital) of the following undertakings:-
Class of Proportion Nature of Business
Other Participating Interest: holding directly held
Bosques Energeticos EBE Ordinary 40% Development and
S.A. de C.V. cultivation of
renewable energy
crops
Bosques Energeticos EBE S.A. de C.V., in which the Company had more than 20% interest, the fair value of the investment at 31 March 2018 is recognised on the balance sheet at nil.
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 2016 64
Gain on revaluation 18
At 31 March 2017 and 1 April 2017 82
Disposal -
Loss on revaluation (27)
--------------------
At 31 March 2018 55
--------------------
Being:
AIM listed 21
TSX listed 34
--------------------
55
Included in listed investments are the following companies:
INVESTMENT Carrying Disposal Unrealised Carrying Fair value
value gain/(loss) value hierarchy
31 March on revaluation 31 March
2017 GBP'000 2018
GBP'000
GBP'000 GBP'000
Medgold Resources
Corp 39 - (5) 34 Level 1
Amedeo Resources
PLC 43 - (22) 21 Level 1
Total 82 - (27) 55
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 2018 2017
GBP'000 GBP'000
Prepayments 7 6
Other debtors 73 130
--------- ---------
80 136
--------- ---------
Other debtors are an amount of GBP73,000 (2017: GBP117,000) due from a third party.
Non-current receivables 2018 2017
GBP'000 GBP'000
Other debtors - 259
------------ ---------
- 259
------------ ---------
The non-current receivable at 31 March 2017 relates to the working capital loan to Manas Resources which has been written off i.e. fully impaired at 31 March 2018.
11 Cash at bank and in hand 2018 2017
GBP'000 GBP'000
Cash at bank 45 176
--------- ---------
45 176
--------- ---------
Included within the cash at bank is an amount of GBP4,400 due from Beaufort Securities limited that went in to Administration on 1 March 2018. The broker also holds Amedeo resources plc stock. Legendary holdings is fully covered by the Financial Services Compensation Scheme (FSCS). Hence it is anticipated that all clients will receive their assets back in full by means of transferring those assets to another broker, who will then provide access to the assets in the usual manner as per the press release published on 29 June 2018.
12 CURRENT LIABILITIES 2018 2017
GBP'000 GBP'000
Trade creditors 21 85
Accruals 20 18
Loan 222 30
Other creditors 24 5
287 138
-------------- --------------
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 are an amount of GBP24,000 (2017: GBP5,000) due to directors of the Company.
13 CALLED UP SHARE CAPITAL 2018 2017
GBP'000 GBP'000
ALLOTTED, ISSUED AND FULLY PAID
3,292,912,755 (2017: 2,807,364,166)
ordinary shares of GBP0.001 each 3,293 2,807
-------------- --------------
2018 2017
Number Number
(millions) (millions)
At start of the year 2,807 2,462
Issue during the year 486 345
At end of the year 3,293 2,807
----------- -----------
The Company has one class of ordinary shares which carries no right to fixed income and which represents 100% of the total issued nominal value of all share capital. The authorised share capital of the company is 3,292,912,755 (2017: 2,807,364,166).
Each share carries the right to one vote at general meetings of the Company. No person has any special rights of control over the company's share capital and all its issued shares are fully paid.
On 14 May 2018 the company issued 550,000,000 ordinary GBP0.001 shares for GBP0.001 each raising GBP550,000 before expenses.
Reserves
The share premium reserve represents the consideration that has been received in excess of the nominal value of shares on issue of ordinary share capital, net of issue costs.
The share warrant and option reserve arises from the requirement to value share options and warrants in existence at the grant date and recognise the expense over the vesting period.
The profit and loss account represents the cumulative net earnings of the company after paying dividends.
2018 2017
14 SHARE PREMIUM GBP'000 GBP'000
At start of the year 8,937 8,345
Premium on Ordinary Shares Issued of
0.001 each 111 667
Expenses paid in connection with the
share issue - (75)
-------------- --------------
At end of the year 9,048 8,937
-------------- --------------
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 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 2018 31 March 2017
Exercise Exercise
price price
per share Number per share Number
Zafar Karim 0.20p 316,000,000 0.2p 316,000,000
Thomas Reuner 0.35p 5,000,000 0.35p 5,000,000
Thomas Reuner 0.20p 97,000,000 0.2p 97,000,000
418,000,000 418,000,000
Movements in ordinary share options outstanding
31 March 2018 31 March 2017
Weighted average Weighted average
exercise price exercise price
Number pence Number Pence
At start of the year 450,000,000 0.20p 450,000,000 0.20p
Granted during the
year - - - -
At end of the year 450,000,000 0.20p 450,000,000 0.20p
All options were exercisable at the end of the year.
15 SHARE BASED PAYMENT (continued)
Last date when Exercise Granted No. Lapsed Exercised Outstanding
exercisable price No. at 31 March
2018
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
7 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 is estimated at the date of grant using a Black-Scholes option pricing model that uses certain assumptions. No performance conditions were included in the fair value calculations and the options vested immediately. No options were granted during the current or prior year.
15 SHARE BASED PAYMENT (continued)
Warrants
Other than the employee share options set out above, warrants have been granted to third parties in return for providing loan finance or providing public relations services. The exercise prices and dates are shown in the table below.
Last date when Exercise Granted Lapsed Exercised Outstanding
exercisable price No. No. at 31 March
2018
5 August 2017
(1) 0.10p 250,000,000 (15,000,000) (235,000,000) -
21 May 2017
(2) 0.12p 2,272,727 - (2,272,727) -
14 November
2018 (3) 0.10p 32,500,000 - 32,500,000
284,772,727 (15,000,000) (237,272,727) 32,500,000
(1) In 2015, 250,000,000 of the warrants had their life extended by 2 years to 5 August 2017 in exchange for not asking for repayment of the attached loan facility of GBP30,000 made on 5 August 2010 until 5 August 2017. The loan bears no interest and has no fixed repayment terms. Repayment can be requested from 5 August 2017. 235,000,000 of these warrants were exercised for total proceeds of GBP235,000. The remainder lapsed after 5 August 2017.
(2) These warrants were exercised for total proceeds of GBP2,273 during the year
(3) 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 2015 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 2018 31 March 2017
Weighted average Weighted average
exercise price exercise
price
Number Pence Number pence
At start of the year 284,772,727 0.11p 297,272,727 0.11p
Granted during the - - - -
year
Lapsed during the
year (15,000,000) 0.10p - -
Exercised during the
year (237,272,727) 0.10p (12,500,000) -
At end of the year 32,500,000 0.15p 284,772,727 0.11p
The fair value of the warrants is estimated at the date of grant using a stochastic option pricing model that uses certain assumptions. Performance conditions were included in the fair value calculations where relevant. No warrants were issued in the current or previous period.
16 FINANCIAL INSTRUMENTS
Loans and receivables
Loans and receivables include cash at bank and in hand and other debtors.
Financial liabilities
Financial liabilities at amortised cost include trade creditors, other creditors, accruals and loans.
Borrowing facilities
During the year Company had a facility US$400,000 from Alcazar 1 Pte Ltd. US$250,000 of the facility was drawn down. The facility had an interest rate of 10% and was repayable at the end of June 2018. Post the year end in, June 2018, the facility and interest of US$275,000 was repaid.
Post the year end in, June 2018, Legendary entered into a new facility agreement with Alcazar 1 Pte Limited. The facility is for US$250,000 and may be drawn down until 31 January 2019. The facility is repayable with interest of 10% on the anniversary of drawdown.
Capital Management
The Company is financed primarily with equity capital with debt utilised from time to time, 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 any material exposure to interest rate. The Company had a facility at a fixed interest rate of 10% which has been paid (see above).
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. 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.
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.
16 FINANCIAL INSTRUMENTS (continued)
2018
Less than Between 3 months Between Between Over 5
3 months and 1 year 1 2 years
GBP'000 GBP'000 and 2 years and 5 years GBP'000
GBP'000 GBP'000
----------- ---------------- ------------ ------------ ------------
Trade and other payables 45 - - - -
Borrowings - 222 - - -
Accruals 20 - - - -
Other receivables 74 - - - -
2017
Less than Between 3 months Between Between Over 5
3 months and 1 year 1 2 years
GBP'000 GBP'000 and 2 years and 5 years GBP'000
GBP'000 GBP'000
----------- ---------------- ------------ ------------ ------------
Trade and other payables 90 - - - -
Borrowings - 30 - - -
Accruals 18 - - - -
Other receivables 130 - 259 - -
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
Level 1 Level 2 Level 3 Unobservable
'Quoted 'Observable prices'
prices' prices' GBP'000 Total
GBP'000 GBP'000 GBP'000
Year ended 31 March 2018
Investments held at
fair value 55 - 6,095 6,150
Year ended 31 March 2017
Investments held at
fair value 82 - 4,211 4,293
16 FINANCIAL INSTRUMENTS (continued)
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 unlisted investments were valued using the 'price of recent investment' method, in accordance with the company's accounting policy and IPEV guidelines, as the investee companies are in their early stage of development. These were considered level 3 valuations as judgement was required to assess whether adjustments to the values were required. The Directors reviewed the indicators to assess whether the fair value had changed and concluded that no material adjustment was required. They have no information that would suggest that the investments are impaired and will continue to monitor the activity in the investee companies.
17 SUBSEQUENT EVENTS
Equity Placing and Fund Raise
Post the year end, in May 2018, Legendary raised an aggregate of GBP550,000 (before expenses) by way of a placing and subscription of 550,000,000 new ordinary shares of 0.1 pence each ("Ordinary Shares") at a price of 0.1 pence per New Share (the "Fundraising"). This included 100,000,000 Ordinary Shares, which Zafar Karim, Executive Chairman of the Company, subscribed for on the same terms.
Following the subscription, Zafar Karim holds a beneficial interest in 155,727,273 ordinary shares, representing approximately 4.1 percent of the enlarged ordinary share capital of the Company. Mr Karim also holds 316,000,000 options with an exercise price of 0.2 pence per Ordinary Share
Zafar Karim is a related party to Legendary, as defined in the AIM Rules for Companies and the Director Subscription is a related party transaction for the purposes of Rule 13 of the AIM Rules ("Related Party Transaction").
Thomas Reuner, being the Independent Director for the purposes of the Related Party Transaction, considered, having consulted with the Company's nominated adviser, Grant Thornton UK LLP, that the terms and conditions of the Director Subscription are fair and reasonable insofar as the shareholders of the Company are concerned.
Increase in Total Investments, Net Assets and Total Assets
Subsequent to the year end, as a result of the equity placing and fund raise above, and the movement of the share price of the Medgold Corporation, as at 17 August 2018, the total investments, net assets and total assets of Legendary were GBP6,178,000, GBP6,496,000 and GBP6,531,000.
Repayment of Facility of US$400,000
Post the year end in, June 2018, repaid in cash US$275,000 principal and interest to settle the facility with Alcazar 1 Pte Limited.
New Facility Agreement
Post the year end in, June 2018, Legendary entered into a new facility agreement with Alcazar 1 Pte Limited. The facility is for US$250,000 and may be drawn down until 31 January 2019. If drawn down, the facility needs to be repaid on the first anniversary of drawdown and incurs interest of 10%.
Issue of performance warrants
Post the year end, 27.5 million performance warrants were issued to consultants. These warrants vest at prices ranging from 0.4 pence to 1.4 pence and have an exercise price of 0.12 pence.
18 RELATED PARTY TRANSACTIONS
Directors' transactions are detailed in note 4 of the notes to the financial statements.
Post the year end, in May 2018, Legendary raised an aggregate of GBP550,000 (before expenses) by way of a placing and subscription of 550,000,000 new ordinary shares of 0.1 pence each ("Ordinary Shares") at a price of 0.1 pence per New Share (the "Fundraising"). This included 100,000,000 Ordinary Shares, which Zafar Karim, Executive Chairman of the Company, subscribed for on the same terms.
Following the subscription, Zafar Karim holds a beneficial interest in 155,727,273 ordinary shares, representing approximately 4.1 per cent. of the enlarged ordinary share capital of the Company. Mr Karim also holds 316,000,000 options with an exercise price of 0.2 pence per Ordinary Share.
On 13 October 2017 the company announced that Zafar Karim, took a 37% stake in IBS, a company in which Legendary has a 12% stake.
Zafar Karim is a related party to Legendary, as defined in the AIM Rules for Companies and the Director Subscription is a related party transaction for the purposes of Rule 13 of the AIM Rules ("Related Party Transaction").
Thomas Reuner, being the Independent Director for the purposes of the Related Party Transaction, considered, having consulted with the Company's nominated adviser, Grant Thornton UK LLP, that the terms and conditions of the Director Subscription are fair and reasonable insofar as the shareholders of the Company are concerned.
No other related party transactions were undertaken during the year other than those disclosed above.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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(END) Dow Jones Newswires
August 21, 2018 07:50 ET (11:50 GMT)
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