8PG.L Regulatory News (8PG)

23 Sep 2008 07:00



LEGENDARY INVESTMENTS PLC

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2008

HIGHLIGHTS

* Record profit (before and after tax) of £524,000 (2007: £Nil).

* Company net asset position restored, with £484,000 of net assets (2007: £(40,000)).

In the year under review, the Company assessed investments, both on and off-market, where the investee companies might benefit from the Company's hands-on investment process in which the investees are assisted in certain areas such as product development and marketing. No suitable candidates were found.

In order to utilise available assets, certain medium term investments were made in listed equity securities. The Board is pleased to report that the realisation of certain of these trading investments resulted in gains of £633,000. This compares with net losses on investments of £93,000 for the previous year. This year's gains clear the shareholders' deficit of £40,000 and return the Company to positive net assets of £484,000.

Administrative expenses amounted to £110,000. This compares with administrative expenses of £77,000 for last year (see note 2). Last year, the Chief Executive waived his salary of £35,000, whereas this year, in light of the Company's performance, he drew his salary.

Overall, your Company had profit (before and after tax) of £524,000 (2007: £Nil). The balance sheet is also stronger with cash of £711,000 as at the year end.

 

OUTLOOK

The Board looks forward to building on this year's success. The Company will continue to assess investments, both on and off-market, and where appropriate, invest. 

For further information please contact: 

 

PROFIT AND LOSS ACCOUNT

For the year ended 31 March 2008

	Note	2008 £’000	2007 £’000
Net gain/(loss) on investments held for trading		633	(93)
Net administrative (expenses)/income	2	(110)	93
Gross profit		523	-
Interest receivable		1	-
Profit on ordinary activities before taxation	1	524	-
Tax on profit on ordinary activities	4	-	-
Profit for the financial year	10	524	-
Earnings per share - basic and fully diluted	5	0.08p	(0.0p)

 

A separate statement of recognised gains and losses has not been prepared as the Company has no recognised gains or losses in the current or prior period other than the profit noted above.

All activities derive from continuing operations. 

BALANCE SHEET

As at 31 March 2008

		2008	2007
	Notes	£’000	£’000
Current assets
Financial assets held for trading	6	3,125	75
Cash at bank and in hand		711	4
		3,836	79
CREDITORS: amounts falling due within one year	7	(3,352)	(119)
NET ASSETS/(LIABILITIES)		484	(40)
Capital and reserves
Called up share capital	8	628	628
Share premium account		8,270	8,270
Profit and loss reserve - deficit	10	(8,414)	(8,938)
Equity Shareholders’ FUNDS/(DEFICIT)	11	484	(40)

 

 

CASH FLOW STATEMENT

For the year ended 31 March 2008

	Notes	2008 £’000	2007 £’000
Net cash outflow from operating activities	12	(140)	(77)
returns on investments and servicing of finance
Interest received		1	-
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTS
Payments to acquire current asset investments		(7,590)	(199)
Receipts form current asset investments		8,479	132
NET CASH INFLOW/(OUTFLOW) FROM INVESTING ACTIVITIES		889	(67)
NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING		750	(144)
Financing
Director’s loan		(43)	105
INCREASE/(DeCREASE) in cash	14	707	(39)

 

NOTES TO THE PRELIMINARY RESULTS

Accounting convention

The accounts have been prepared in accordance with applicable accounting standards and under the historical cost convention, modified by the revaluation of investments.

Impairment of asset values

Fixed assets are 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. 

Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of net realisable value and value-in-use, are recognised as impairments. Impairments of revalued assets, except those caused by a clear consumption of economic benefit, are recognised in the statement of total recognised gains and losses until the carrying amount reaches depreciated historic cost. All other impairment losses are recognised in the profit and loss account 

Financial instruments

Financial assets and financial liabilities are recognised on the company's balance sheet when the company has become a party to the contractual provisions of the instrument.

All investments are initially recognised at cost, being the fair value of the consideration given.

After initial recognition, investments that are classified as held for trading are measured at fair value. Gains or losses on investments held for trading are recognised in income. 

For investments that are actively traded in organised financial markets, fair value is determined by reference to Stock Exchange quoted bid prices at the close of business on the balance sheet date. Unlisted investments have been based on cost less impairment as there is insufficient information to enable a valuation to be performed. 

Deferred taxation

Deferred tax is recognised in respect of differences between the Company's taxable profits and its results as stated in the financial statements that have originated but not reversed at the balance sheet date.

Deferred tax assets are only recognised where there is an expectation that they will result in a reduction in corporation tax payments in the foreseeable future. 

Deferred tax is measured at the average tax rates that are expected to apply in the periods in which timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis. 

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 and loss account.

Going concern

The directors have carried out cost projections for the company and compared these with the availability of finance. Based on this, the Directors have formed a judgement, at the time of approving the accounts, that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason the Directors continue to adopt the going concern basis in preparing the accounts.

1. PROFIT ON ORDINARY ACTIVITIES BEFORE TAX		2008 £’000	2007 £’000
Profit on ordinary activities before tax for the year is stated after charging/ (crediting):
	Auditor’s remuneration - statutory audit	14	12
	- Services relating to taxation	3	7
	- Other services	4	7
	Waiver of loan	-	(170)

Emoluments amounting to £Nil (2007 - £35,000) have been waived by 1 director. 

4. TAX ON PROFIT ON ORDINARY ACTIVITIES	2008 £’000		2007 £’000
Analysis of charge in the year:
Current tax		-	-
Deferred tax		-	-
		-	-
Factors affecting tax charge for year: The tax assessed for the year is lower than the standard rate of corporation tax in the UK (30%). The differences are explained below:
Profit on ordinary activities before tax		524	-
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK 30% (2007: 30%)		157	-
Expenses not deductible for tax purposes		9	-
Tax losses utilised		(166)	-
Current tax charge for year		-	-

As at 31 March 2008 the Company had corporation tax revenue losses of approximately £5.2m (2007: £5.6m) available to carry forward against future income. No deferred tax asset is recognised in respect of these 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.

5. EARNINGS PER ORDINARY SHARE	2008 £’000	2007 £’000
Profit for the financial year	524	-
Average number of ordinary shares in issue ('000)	627,667	627,667
Basic profit per share (pence)	0.08p	0.0p
Fully diluted profit per share (pence)	0.08p	0.0p

The share options and warrants do not give rise to any dilution and therefore the fully diluted profit per share is equal to the basic profit per share.

6. FINANCIAL ASSETS HELD FOR TRADING	2008 £'000	2007 £'000
Listed investments	3,125	75

7. CREDITORS: amount falling due within one year	2008 £'000	2007 £'000
Trade creditors	3,307	-
Accruals	30	61
Directors' loan (note 16)	15	58
	3,352	119

Trade creditors and directors' loans represent the Company's financial liabilities measured at amortised cost. Due to their short term nature, carrying value approximated to fair value.

  

8. SHARE CAPITAL	2008 £'000	2007 £'000
AUTHORISED 3,000,000,000 ordinary shares of £0.001 each	3,000	3,000
ALLOTTED, CALLED UP AND FULLY PAID
627,667,198 ordinary shares of £0.001 each	628	628

9. Share options

The Company has unapproved and approved share option schemes in which the Directors participate. Details of Directors' outstanding share options are shown below:

		Exercise	Number at	Number at
		Price	31 March	1 April
		(per share)	2008	2007
Eaitisham Ahmed		2p	125,000,000	125,000,000
Zafarullah Karim		0.8p	75,000,000	75,000,000

The options remain extant, as long as their holder remains an employee of the company. All share options are exercisable at 31 March 2008.

The Market price of the Company's ordinary shares ranged from a high of 00.27p to a low of 00.06p during the year and was 00.12p on 31 March 2008. Since 31 March 2008 to the date of this report, no options have been granted or exercised.

There have been no movement in the share options in the current or prior year. The company has not recognised a charge in respect of these options as it would not be material to the financial statements.

10. PROFIT AND LOSS RESERVE		2008 £'000		2007 £'000
At 1 April 2007		(8,938)		(8,938)
Profit for the year		524		-
At 31 March 2008		(8,414)		(8,938)

11. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS/(DEFICIT)	2008 £'000	2007 £'000
Opening shareholders' deficit	(40)	(40)
Profit for the financial year	524	-
Closing shareholders' funds/(deficit)	484	(40)

12. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES	2008 £'000	2007 £'000
Operating profit	524	-
Gains on investment	(633)	93
Waiver of director's loan	-	(170)
Decrease in creditors	(31)	-
Net cash outflow from operating activities	(140)	(77)

13. ANALYSIS OF NET (DEBT)/ FUNDS			At 31 March 2007 £’000	Cash flows £’000	At 31 March 2008 £’000
Cash at bank and in hand			4	707	711
Director’s loan			(58)	43	(15)
			(54)	750	696

 

 

 

14. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)	2008 £’000	2007 £’000
Increase/(decrease) in cash in the year	707	(39)
Cash inflow/(outflow) from financing activities	43	(105)
Non-cash movement	-	170
Net debt at 31 March 2007	(54)	(80)
Net funds/(debt) at 31 March 2008	696	(54)

15. FINANCIAL INSTRUMENTS 

Interest rate risk

Floating rate financial liabilities of £Nil (2007: £Nil) bear interest at rates based on LIBOR plus 1-1.5%. Cash at bank earns interest at floating rates based on LIBOR.

Borrowing facilities

At the year end the company had no overdraft facility (2007: £Nil).

Currency risk

Due to the short term nature of trading in foreign currency investments, the company has limited exposure to currency risk.

Credit risk

The Directors believe that due to the nature of the Company's debtors, primarily brokers, credit risk is limited.

Liquidity risk

The Company manages liquidity risk by investing primarily in listed investments. In addition, the Chief Executive has historically provided to the Company sufficient short term funding to cover its needs. The Directors believe that these factors limit the Company's exposure to liquidity risk.

Market risk

The Company monitors its investments in listed investments on a regular basis, and takes action when it deems appropriate.

  

16. RELATED PARTY TRANSACTIONS

During the year the Company received funding from the Chief Executive and incurred expenditure on his behalf. As at the balance sheet date, the amount advanced by the Chief Executive to the Company amounted to £14,597 (2007: £57,890). This sum is interest free and there are no fixed terms for repayment. The maximum balance that was outstanding during the year was £90,890 (2007: £176,448). 

ENDFR SEEFAESASESU