8PG.L Regulatory News (8PG)

26 Sep 2006 16:15

Legendary Investments PLC26 September 2006 LEGENDARY INVESTMENTS PLC (LEG) Preliminary results for the year ended 31 March 2006 CHIEF EXECUTIVE'S STATEMENT REVIEW OF ACTIVITIES In the year under review, your Company continued to assess investments, both onand off-market, where the investee companies might benefit from your Company'shands-on investment process in which the investee companies are assisted incertain areas such as product development and marketing. Despite reviewingseveral opportunities, no suitable new investments were found. In line with the company's policy of utilising available funds, certain mediumterm investments had been made in listed securities. During the year underreview, several of these investments were realised at a loss due to thenon-occurrence of certain anticipated corporate events. In total, theseinvestments resulted in net losses of £452,000. This compares with net losses oninvestments of £945,000 for the previous year. Administrative expenses amounted to £58,000. This compares with administrativeexpenses of £149,000 for the previous year. The fall in administrative expenseswas due to the abatement and write back of certain administrative expenses. In total net losses for the year under review amounted to £510,000. Thiscompares with a net loss of £1,094,000 for the previous year. The Company has adopted FRS 26 ("Financial Instruments - recognition andmeasurement") in the year which has required changes to the descriptions andclassifications of the investments traded by the Company. The impact of this hasbeen to restate headings within the profit and loss account, balance sheet, cashflow statement and related notes. There has been no impact on the loss, netassets/liabilities, or cash flows for either the current or prior years as aresult of the adoption of this standard. OUTLOOK The last remaining investments were liquidated following the year end. TheCompany continues to review further investments. The losses in the year underreview have resulted in a deficit in the shareholders' funds. The Board isexploring various options to address this issue, including strengthening thebalance sheet. In addition an extraordinary general meeting will be convened todiscuss the deficit in the shareholders' funds. Eaitisham Ahmed Chief Executive 26 September 2006 Registered Office: 2nd FloorBerkeley Square HouseBerkeley SquareLondon W1J 6BD For further information please contact: Zafar Karim Legendary Investments 0207 887 1335 Barry Saint City Financial Associates 0207 090 7800 PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31 MARCH 2006 Note 2006 2005 £'000 (restated see note 1) £'000 Net losses on investments held for trading (452) (945)Administrative expenses (58) (149) Loss on ordinary activities before taxation 2 (510) (1,094)Taxation 4 - - Loss for the financial period 13 (510) (1,094) Loss per share (0.1p) (0.2p) - basic and fully diluted 5 A separate statement of recognised gains and losses has not been prepared as theCompany has no recognised gains or losses in the current or prior period otherthan the losses for the periods. All activities are continuing. BALANCE SHEETAS AT 31 MARCH 2006 2006 2005 (restated see note 1) Notes £'000 £'000 FIXED ASSETS Available for sale investments 7 9 - CURRENT ASSETS Debtors 8 - 26Investments held for trading 9 91 158Cash at bank and in hand 43 430 134 614CREDITORS: amounts falling due within one year 10 (183) (144) NET CURRENT (LIABILITIES)/ASSETS (49) 470 NET (LIABILITIES)/ ASSETS (40) 470 CAPITAL AND RESERVES Called up share capital 11 628 628Share premium account 12 8,270 8,270Profit and loss account - deficit 13 (8,938) (8,428) EQUITY SHAREHOLDERS' (DEFICIT)/funds 14 (40) 470 CASH FLOW STATEMENTFOR THE YEAR ENDED 31 MARCH 2006 Notes 2006 2005 £'000 (restated see note 1) £'000 NET CASH OUTFLOW FROM OPERATING ACTIVITIES 15 (506) (450) FINANCINGDirector's loan 122 (435) (DECREASE)/INCREASE IN CASH 16 (384) 15 1 ACCOUNTING POLICIES Accounting convention The accounts have been prepared in accordance with applicableaccounting standards and under the historical cost convention, modified by therevaluation of investments. Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation isprovided at rates calculated to write off the cost less the estimated residualvalue of each asset over its expected useful life, as follows: Office equipment, furniture and fittings 3 - 4 years Impairment of asset values Where asset values are impaired, they are written down to their economic valueto the business. Financial instruments Financial assets and financial liabilities are recognised on the company'sbalance sheet when the company has become a party to the contractual provisionsof the instrument. All investments are initially recognised at cost, being the fair value of theconsideration given and including acquisition charges associated with theinvestment. After initial recognition, investments that are classified as held for tradingare measured at fair value. Gains or losses on investments held for trading arerecognised in income. For investments that are actively traded in organised financial markets, fairvalue is determined by reference to Stock Exchange quoted market bid and offerprices at the close of business on the balance sheet date. Unlisted investmentshave been based on cost less impairment as there is insufficient information toenable a valuation to be performed. Derivative financial instruments The company's activities expose it primarily to market risk. The company usesderivatives to minimise the initial monetary investment required. Derivative financial instruments are carried at fair market value and resultantprofit and losses are included in the profit and loss account. Assets orliabilities resulting from gains or losses on open positions are reported asderivative financial assets or liabilities. Fair value is determined byreference to third party market values. The company does not use derivativefinancial instruments for hedge accounting purposes. Deferred taxation Deferred tax is recognised in respect of differences between the Company'staxable profits and its results as stated in the financial statements that haveoriginated but not reversed at the balance sheet date. Deferred tax assets are only recognised where there is an expectation that theywill result in a reduction in corporation tax payments in the foreseeablefuture. Deferred tax is measured at the average tax rates that are expected to apply inthe periods in which timing differences are expected to reverse, based on taxrates and laws that have been enacted or substantially enacted by the balancesheet date. Deferred tax is measured on a non-discounted basis. Foreign currency translation Monetary assets and liabilities denominated in foreign currencies are translatedinto sterling at the rates of exchange ruling at the accounting date.Transactions in foreign currencies are recorded at the rate ruling at the dateof the transaction. All differences are taken to profit and loss account. Prior period adjustment The company has adopted FRS26 ("Financial Instruments - recognition andmeasurement") in the year. As a result, the 2005 figures have been restated toreflect the revised classification of the trading activities of the company.There has been no impact on loss for the year, net (liabilities)/assets, or(decrease)/increase in cash for either the current or prior years. Going concern The company incurred a net loss of £510,000 in the year and the liabilities at31 March 2006 exceeded assets by £40,000. The directors have carried out costprojections for the company and compared these with the availability of financefrom the director's loan facility. Based on this, the Directors have formed ajudgement, at the time of approving the accounts, that there is a reasonableexpectation that the Company has adequate resources to continue in operationalexistence for the foreseeable future. For this reason the Directors continue toadopt the going concern basis in preparing the accounts. 2 LOSS ON ORDINARY ACTIVITIES BEFORE TAX 2006 2005 £'000 £'000Loss on ordinary activities before tax for the year is stated aftercharging: Auditor's remuneration - statutory audit 12 14Services relating to taxation 8 7Other services 8 7 3 DIRECTORS 2006 2005 Number NumberNUMBER OF EMPLOYEES The average number of employees, including directors, during the yearwas: 2 2 £'000 £'000 DIRECTORS' EMOLUMENTS Aggregate emoluments 47 47 EMOLUMENTS OF HIGHEST PAID DIRECTOR: Remuneration 35 35 The company was charged salary related costs of £Nil (2005: £27,000) in respectof services provided to the company by a company controlled by S Ahmed. 4 TAX ON PROFIT ON ORDINARY ACTIVITIES 2006 2005 £'000 £'000Analysis 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 standardrate of corporation tax in the UK (30%). The differences are explainedbelow: Loss on ordinary activities before tax (510) (1,094) Loss on ordinary activities multiplied by standard rate of corporation tax in the UK 30% (2005: 30%) (153) (328)Expenses not deductible for tax purposes 2 265Tax losses carried forward 151 63 Current tax charge for year - - 4 TAXATION (continued) The reported losses include losses on fixed asset investments which are onlyrelievable against future capital profits. As at 31 March 2006 the Company had corporation tax revenue losses ofapproximately £5.9 million (2005: £5.4m) available to carry forward againstfuture income. No deferred tax asset is recognised in respect of these lossesdue to the uncertainty as to the utilisation of the losses in the foreseeablefuture. Future tax charges will be dependent on the split of profits for tax purposes asbetween revenue and capital items, and the utilisation of losses incurred todate. 2006 20055 LOSS PER ORDINARY SHARE £'000 £'000 Attributable loss (£'000) (510) (1,094) Average number of ordinary shares in issue ('000) 627,667 627,667 Average number of ordinary shares in issue and over which options have been granted ('000) 627,667 627,667 Basic loss per share (pence) 0.1p 0.2p Fully diluted loss per share (pence) 0.1p 0.2p The share options and warrants do not give rise to any dilution and thereforethe fully diluted loss per share is equal to the basic loss per share. 6 TANGIBLE ASSETS Office equipment, furniture & fittings £'000 COST At 31 March 2005 and 31 March 2006 12 DEPRECIATION At 31 March 2005 and 31 March 2006 12 NET BOOK VALUE At 31 March 2006 and 31 March 2005 - 7 AVAILABLE FOR SALE FINANCIAL ASSETS 2006 2005 £'000 (restated see note 1) £'000 Unlisted investments 9 - 8 DEBTORS 2006 2005 £'000 £'000 Trade debtors - 21Prepayments and accrued income - 5 - 26 9 FINANCIAL ASSETS HELD FOR TRADING 2006 2005 £'000 (restated see note 1) £'000 Listed investments 91 158 10 CREDITORS: amount falling due within one year 2006 2005 £'000 (restated see note 1) £'000 Bank overdraft - 3Derivative financial liabilities - 58Other creditors - 15Accruals 60 67Directors' loan (note 19) 123 1 183 144 11 SHARE CAPITAL AND SHARE OPTIONS 2006 2005 £'000 £'000 AUTHORISED 3,000,000,000 ordinary shares of £0.001 each 3,000 3,000 ALLOTTED, CALLED UP AND FULLY PAID627,667,198 ordinary shares of £0.001 each 628 628 SHARE OPTIONS The Company has unapproved and approved share option schemes in which theDirectors participate. During the year, 75,000,000 options were granted toZafarullah Karim (on 1 April 2005). Details of Directors' outstanding shareoptions are shown below: Exercise Number at Number at Price 31 March 1 April (per share) 2006 2005 Eaitisham Ahmed 2p 125,000,000 125,000,000Zafarullah Karim 0.8p 75,000,000 75,000,000 The options remains extant, as long as their holder remains an employee of thecompany. The Market price of the Company's ordinary shares ranged from a high of 0.24p toa low of 0.09p during the year and was 0.09p on 31 March 2006. Since 31 March2006 to the date of this report, no options have been granted or exercised. 12 SHARE PREMIUM ACCOUNT 2006 2005 £'000 £'000 At 31 March 8,270 8,270 13 PROFIT AND LOSS ACCOUNT 2006 2005 £'000 £'000 At 1 April 2005 (8,428) (7,334) Loss for the year (510) (1,094) Loss carried forward (8,938) (8,428) 14 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2006 2005 £'000 £'000 Opening shareholders' funds 470 1,564 Loss for the financial year (510) (1,094) Closing shareholders' funds (40) 470 15 RECONCILIATION OF OPERATING LOSS TO NET CASH 2006 2005(OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES £'000 (restated see note 1) £'000 Operating loss (510) (1,094) Impairment of financial asset investments - 1,566 Decrease in debtors 26 1 Decrease in creditors (22) (23) Net cash (outflow)/inflow from operating activities (506) 450 16 ANALYSIS OF NET (DEBT)/ FUNDS At 31 March 2005 Cash flows At 31 March 2006 £'000 £'000 £'000 Cash at bank and in hand 430 (387) 43 Bank overdraft (3) 3 - 427 (384) 43 Director's loan (1) (122) (123) 426 (506) (80) 17 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT £'000 (Decrease) in cash in the year (384) Cash (inflow) from financing activities (122) Net debt at 31 March 2005 426 Net (debt)/ funds at 31 March 2006 (80) 18 FINANCIAL INSTRUMENTS Short term debtors and creditors Short term debtors and creditors have been excluded from all the followingdisclosures other than currency risk disclosure. Interest rate risk Floating rate financial liabilities of £3,000 (2005: £nil) bear interest atrates based on LIBOR plus 1-1.5%. Cash at bank earns interest at floating ratesbased on LIBOR. Borrowing facilities At the year end the company had no overdraft facility (2005: £Nil). Currency risk During the year, the company had no exposure to currency risk. 19 RELATED PARTY TRANSACTIONS During the year the company received funding from the Chief Executive andincurred expenditure on his behalf. As at the balance sheet date, the amountlent by the Chief Executive to the company amounted to £123,220 (2005: £870).This sum is interest free and there are no fixed terms for repayment. Themaximum balance outstanding during the year was £435,750 (2005: £435,750) owedto the Chief Executive by the company. This information is provided by RNS The company news service from the London Stock Exchange