LSAI.L Regulatory News (LSAI)

LONGSHIPS PLC

("Longships" or the "Company")

ANNUAL REPORT FOR THE YEAR ENDED 31st DECEMBER 2010

 Longships is pleased to announce its annual results for the year ending 31st December 2010.

The accounts are today being posted to the shareholders and are available on the Company's website, www.longshipsplc.com.

Enquiries:

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 31st DECEMBER 2010

Dear Shareholder,

I am pleased to present my Chairman's report covering the year ended 31st December 2010. During the year under review, the Company reported a loss of £82,439 and as at 31st December 2010 had liquid cash balances of £3,188,206(2009: £3,269,514). Various investment propositions were reviewed during the year and the overheads reflect the abortive costs of proposed transactions. Although none as yet have met the Board's investment criteria, the search continues for a suitable opportunity. I look forward to updating shareholders on progress in due course.

Malcolm Burne

Chairman

28th March 2011

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31st DECEMBER 2010

STATEMENT OF FINANCIAL POSITION

AS AT 31st DECEMBER 2010

The financial statements were approved and authorised for issue by the Directors on 28th March 2011 and were signed on their behalf by:

Charles Cannon Brookes

Director

CASH FLOW STATEMENT

FOR THE YEAR ENDED 31st DECEMBER 2010

STATEMENT OF CHANGES IN NET EQUITY

FOR THE YEAR ENDED 31st DECEMBER 2009

STATEMENT OF CHANGES IN NET EQUITY

FOR THE YEAR ENDED 31st DECEMBER 2010

1. ACCOUNTING POLICIES

Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union.

Trading income

Trading income is recognised to the extent that it is probable that economic benefit will flow to the Company and the trading income can be reliably measured.

Cash and cash equivalents

Cash and cash equivalents are defined as cash in hand, demand deposits and short-term, highly liquid investments which are readily convertible to known amounts of cash, subject to insignificant risk of changes in value, and have a maturity of less than 3 months from the date of acquisition.

For the purposes of the cash flow statement, cash and cash equivalents consist of cash in hand and bank deposits.

Taxation

The tax currently payable is based on the taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred taxation

Deferred income tax is provided for using the liability method on temporary timing differ-ences at the balance sheet date between tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised in full for all temporary differences. Deferred tax assets are recognised for all deductible temporary differ-ences carried forward of unused tax credits and unused tax losses to the extent that it is prob-able that taxable profit will be available against which the deductible temporary differences, and carry-forward of unused tax credits and unused losses can be utilised.

The carrying amount of deferred income tax assets is assessed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that is probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.

Share-based payments

Certain Directors of the Company receive remuneration in the form of share-based payment transactions (equity-settled transactions).

The cost of equity-settled transactions is determined with reference to the fair value at the date on which they were granted. The fair value is determined by using the Black-Scholes option pricing model.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("the vesting date"). The cumulative expense recognised for equity-settled transactions at each re-porting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

The dilutive effect of the outstanding options is reflected as additional dilution in the compu-tation of earnings per share.

Financial instruments

Financial assets and financial liabilities are recognised on the Company's balance sheet when the Company becomes a contractual party to the instrument.

Trade receivables

Trade receivables are recognised initially at their fair value which equates to their nominal value as reduced by appropriate provision for irrecoverable amounts and subsequently at amortised cost.

Trade payables

Trade payables are recognised initially at their fair value and subsequently at amortised cost.

Accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in accordance with IFRSs requires management to make estimates and assumptions in certain circumstances that affect reported amounts. The most sensitive estimate affecting the financial statements is the area of share based payments. Actual outcomes may therefore differ from these estimates and assumptions.

In determining the fair value of equity settled share based payments and the related charge to the income statement, the Company makes assumptions about future events and market conditions. In particular, judgment must be made as to the likely number of shares that will vest and the fair value of each award granted. The fair value is determined using a valuation model which is dependent on further estimates including the Company's future dividend policy, employee turnover, the timing of the exercise of options and the future volatility in the price of the Company's shares.

Such assumptions are based on publicly available information and reflect market expectations. Different assumptions from those used could materially affect the reported value of share based payments. The Company has recognised a corresponding increase in equity in accordance with IFRS 2: Share based payments by crediting "Share based payment reserve" (a component of equity) for the issue of shares in connection with the share options.

Standards becoming effective in the year

The following new and amended IAS, IFRS and IFRIC Interpretations became effective in the year:

·; Revised IFRS 3 Business Combinations

·; Amendments to IAS 27 Consolidated and Separate Financial Statements

·; Amendment to IAS 39 Financial Instruments: Recognition and Measurement: Eligible Hedged Items

·; IFRIC 17 Distributions of Non-cash Assets to Owners Revised IFRS 1 First-time Adoption of International Financial Reporting Standards

·; IFRIC 18 Transfer of Assets from Customers

·; Improvements to IFRSs

·; Group Cash-settled Share-based Payment Transactions (Amendments to IFRS 2)

·; Additional Exemptions for First-time Adopters (Amendments to IFRS 1)

·; Classification of Rights Issues IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments

The Directors consider that the introduction of these Standards and Interpretations has no material impact on the financial statements of the Company in its current form.

Standards and Interpretations issued but not yet effective

The Company has not early adopted the following new and amended IAS, IFRS and IFRIC Interpretations issued. The relevant new and amended IAS, IFRS and IFRIC Interpretations will be adopted when they become effective.

·; Amendments to IFRIC 14 IAS 19 - Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (effective for accounting periods beginning on or after 1st January 2011)

The Directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Company in its current form.

2. AUDITORS' REMUNERATION

3. PARTICULARS OF EMPLOYEES

The average number of employees of the Company in the year was:

Other fees paid comprise £5,875 (2009: £5,750) paid to Munslows, a firm in which Nathan Steinberg is a partner, in respect of his services as a Director of the Company. A further £1,175 (2009: £nil) was paid to Munslows in respect of accountancy services.

4. INCOME TAX EXPENSE

(a) Analysis of charge in the year

(b) Factors affecting the tax charge for the year

The tax assessed for the year does not reflect an expense equivalent to the loss before tax multiplied by the standard rate of corporation tax of 21% (2009: 21%).

The Company has corporation tax losses available for offset against future profits of the same trade of £165,244 (2009: £83,856). The deferred taxation asset not provided for in the accounts due to the uncertainty that future taxable profits will be available to allow recovery of the asset is approximately £33,049 (2009: £16,707).

5. LOSS PER SHARE

The calculation of loss per share is based on the loss of £82,439 (2009: £83,962) and on the number of shares in issue, being the weighted average number of shares in issue during the year of 23,080,002 (2009: 23,080,002) ordinary £0.01 shares. There is no dilutive effect of share options on the basic earnings per share.

6. TRADE AND OTHER RECEIVABLES

The Directors consider that the carrying value of each class of receivable approximates its fair value.

7. TRADE AND OTHER PAYABLES

8. SHARE CAPITAL

Share options

The Company granted and issued share options over ordinary shares in the Company as follows:

Authorised share capital:

Allotted, called up and fully paid:

9. CASH FLOWS FROM OPERATING ACTIVITIES

10. FINANCIAL INSTRUMENTS

Financial assets and liabilities were held as follows:

The Directors consider that the carrying value of the financial assets and liabilities approximates their fair value.

11. GENERAL INFORMATION

Longships Plc is a public limited company incorporated and domiciled in England and Wales. The Company does not have an ultimate controlling party.