OCT.L Regulatory News (OCT)

3 April 2014 Octagonal plc ("Octagonal", the "Company" or the "Group") Annual results for the year ended 31 March 2014 Octagonal plc (AIM: OCT) announces its annual results for the year ended 31March 2014. Chairman's Statement I am pleased to present the annual report and accounts for the year ended 31March 2014. This has been a period of considerable change for the Company, with thedisposal of the Company's operating subsidiary and the Company continuing underits new status as an investing company. After significant work from the directors and its advisors, the Company hasre-emerged as Octagonal Plc ("Octagonal") with a specific focus on acquiringinterests in valuable project opportunities whereby returns can be achieved andwith potential for growth. The board has raised approximately £1.50 million to strengthen the Company'sbalance sheet and provide funds that are to be invested in accordance with theCompany's investing policy. Background Events During the financial year, the Company announced the following: Disposal of IBP Limited ("IBP") As announced on 10 September 2013, the Board considered the ongoing viabilityof the revenue, profits and losses and cash outflows being derived from IBP asnot sufficient to fully offset the central costs associated with the Companybeing quoted on AIM. Disappointingly none of the major contract wins that theCompany had been targeting came to fruition and as a result forecast revenueswere extremely weak. The Board was therefore of the opinion that the disposalof IBP was in the best interests of shareholders. The disposal of IBP wasapproved on 2 October 2013. Capital re-organisation and fundraising On 2 October 2013, at the same time as the disposal of IBP, the Companyundertook a capital reorganisation and fundraising. The existing ordinary shares of 0.05p each were consolidated into ordinaryshares of 0.55p each at a ratio of 11 existing ordinary shares for every 1 newordinary share of 0.55p each; and each of the new ordinary shares of 0.55p eachwas then subdivided into and reclassified as one Redenominated Share (being anordinary share in the capital of the Company with a nominal value of 0.05 peach) and one Deferred Share (being a deferred share in the capital of theCompany of 0.50 p nominal value). The Deferred Shares carry negligible value and will not be admitted to trading.The Deferred Shares have limited rights, and are subject to the restrictions,set out in the Company's articles of association. At the same time the Company raised £250,021 before expenses by way of an issueof 250,021,404 new ordinary shares at an issue price of 0.1p per ordinaryshare. New investing policy Following the disposal of IBP, Octagonal was, having disposed of all of itstrading businesses, reclassified as an Investing Company under Rule 15 of theAIM Rules. The Company's new Investing Policy is to invest in and/or acquire companies and/or projects within the natural resources and/or agriculture sector withpotential for growth. The Company will also consider opportunities in othersectors as they arise if the new Board considers there is an opportunity togenerate an attractive return for Shareholders. Investments may be consideredin all regions to the extent that the Board considers that valuableopportunities exist and returns can be achieved. In selecting investment opportunities, the Board will focus on businesses,assets and/or projects that are available at attractive valuations and holdopportunities to unlock embedded value. The Company changed its name from Suretrack Monitoring plc to Octagonal plc on22 November 2013. Investments Octagonal announced on 27 March 2014 that it was in process of acquiring a9.97% interest in Global Investment Strategy UK Limited ("GIS") which is aLondon headquartered financial services company trading in the Global Markets,including equities, fixed income, commodities, currency and futures, using itsproprietary online trading platforms and clearing and safe custody systems. GIS's global settlement and safe custody clearing business alone transacts forover 300 global hedge funds and family wealth offices. GIS manage on averageover 6,000 transactions per month with monthly settlement values exceeding £400million on behalf of global institutional accounts. GIS is a London StockExchange member firm and is regulated by the FCA. GIS offer a broad scope of settlement, custody, banking, broking and advisoryservices to professional, retail, corporate and eligible counterparty clients.GIS have over 100 counterparty relationships including most of the major localand international investments banks transacting in the UK. In addition to itscore business of global settlement and custodial settlement services, GIS hasan Investment Management Division, managing funds for both domestic andoverseas clients on a discretionary basis. This acquisition is expected to be completed during April 2014. Your board of directors will continue to seek out further investments in linewith the Company's investment strategy and will work closely with GIS on waysof potentially increasing our percentage interest in their operating business. Directors Hamish Harris and Daniel Maling joined the board on 2 October 2013, at whichtime Brian Wise stood down. I joined the board as Non-Executive Chairman on 22November 2013. Results for the period Operating loss for the year to 31 March 2014 amounted to £187,636 (2013: £1,394,591 operating loss). Outlook The present Board considers that the adoption of the new Investing Policy is inthe best interests of the Company and its Shareholders as a whole. The Boardacknowledges this exciting period for the Company as it proceeds to implementits investment strategy and has already commenced acquiring new investments andcontinues to evaluate further investment opportunities as they arise. We believe the Company is now best placed to move forward and to enhance futureshareholder value. The Board would like to take this opportunity to thank our shareholders fortheir continued support. I look forward to reporting further progress over the next period and beyond. Donald Strang Chairman 2 April 2014 For further information please contact: Octagonal plc +44 (0) 20 7440 0640 Hamish Harris/Daniel Maling Sanlam Securities UK Limited - Nominated Adviser and +44 (0) 20 7628 2200Broker Simon Clements / Catherine Miles Statement of Comprehensive Income Year ended 31 March 2014 Year ended Year ended Note 31 March 2014 31 March 2013 £ £ Administrative expenses (132,472) (108,164) Loans to subsidiaries recovered/ 28,516 (392,779)(written-off) Impairment of goodwill in IBP 8 - (885,028) Share based payment charge (83,691) (8,620) Total administrative expenses (187,647) (1,394,591) Loss from operations 5 (187,647) (1,394,591) Finance revenue 4 11 - Loss before taxation (187,636) (1,394,591) Taxation 6 - - Loss before and after taxation, and (187,636) (1,394,591)loss attributable to the equity holdersof the Company Other comprehensive income Change in value of available for sale - -asset Total other comprehensive income forthe period, net of tax - - Total comprehensive loss for the year, (187,636) (1,394,591)attributable to owners of the company Loss per ordinary share Basic and diluted loss per share 7 (0.08) (0.20)(pence) Statement of Financial Position As at 31 March 2014 Notes As at As at 31 March 31 March 2014 2013 £ £ NON-CURRENT ASSETS Investment in subsidiaries 8 - - Available for sale investments 9 100,000 - 100,000 - CURRENT ASSETS Trade and other receivables 10 23,808 11,362 Cash and cash equivalents 11 1,312,583 35,858 1,336,391 47,220 TOTAL ASSETS 1,436,391 47,220 EQUITY SHAREHOLDERS' EQUITY Called up share capital 12 639,737 309,404 Share premium 1,148,187 - Share based payment reserve 14 83,691 - Retained earnings (571,000) (383,364) TOTAL EQUITY 1,300,615 (73,960) LIABILITIES CURRENT LIABILITIES Trade and other payables 13 135,777 121,180 TOTAL LIABILITIES 135,777 121,180 TOTAL EQUITY AND LIABILITIES 1,436,392 47,220 Statement of Changes in Equity Year ended 31 March 2014 Share Share Share Profit and Total capital loss premium Based equity £ account £ Payment £ £ Reserve £ Balance at 1 April 4,170,844 2,091,897 - (4,762,667) 1,500,0742012 Transactions withowners Cancellation of (3,802,670) - - 3,802,670 -deferred share capital Purchase of own shares (58,770) - - (129,293) (188,063) Cancellation of share - (2,091,897) - 2,091,897 -premium account Share based payment - - - 8,620 8,620charge Total transactions (3,861,440) (2,091,897) - 5,773,894 (179,443)with owners Loss & total - - (1,394,591) (1,394,591)comprehensive incomefor the year Balance at 31 March 309,404 - - (383,364) (73,960)2013 Transactions withowners Shares issued 330,333 1,159,687 - - 1,490,020 Share issue costs - (11,500) - - (11,500) Share based payment - - 83,691 - 83,691charge Total transactions 330,333 1,148,187 83,691 - 1,562,211with owners Loss & total - - (187,636) (187,636)comprehensive incomefor the year Balance at 31 March 639,737 1,148,187 83,691 (571,000) 1,300,6152014 Statement of Cash Flows Year ended 31 March 2014 2014 2013 £ £ Cash flow from operating activities Loss after taxation (187,647) (1,394,591) Impairment of goodwill - 885,048 Provision for amounts due from subsidiaries - 392,779 Equity settled share based payments 83,691 8,620 (Increase) in trade and other receivables (12,446) 46,628 Increase in trade and other payables (65,384) 15,414 Net cash (outflow) from operating activities (181,786) (46,102) Cash flows from investing activities Interest received 11 - Net cash inflow from investing activities 11 - Cash flows from financing activities Proceeds from issue of share capital 1,470,000 - Share issue costs (11,500) - Net cash inflow from financing activities 1,458,500 - Net increase/(decrease) in cash and cash 1,276,725 (46,102)equivalents Cash and cash equivalents at beginning of 35,858 81,960period Cash and cash equivalents at end of period 1,312,583 35,858 Notes to the annual report 1 Basis of preparation of the interim report The financial information set out above does not constitute the Company'sstatutory accounts as defined in section 434 of the Companies Act 2006 for theyears ended 31 March 2013 and 2014. The Group's statutory financial statementsfor the year ended 31 March 2013 have been delivered to the Registrar ofCompanies and those for the year ended 31 March 2014 will be deliveredfollowing the Company's annual general meeting. The auditor's report on thosefinancial statements was unqualified and did not contain statements underSection 498(2) or Section 498(3) of the Companies Act 2006. These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards as adopted for use in the European Union andIFRIC interpretations and with those parts of the Companies Act 2006 applicableto companies reporting under IFRS. The financial statements have been preparedunder the historical cost convention, except that they have been modified toinclude the presentation of certain non-current financial assets andliabilities at fair value. The financial statements of Octagonal plc are presented in pounds sterling,which is also the functional currency the company. 2 Segmental information An operating segment is a distinguishable component of the Company that engagesin business activities from which it may earn revenues and incur expenses,whose operating results are regularly reviewed by the Company's chief operatingdecision maker to make decisions about the allocation of resources andassessment of performance and about which discrete financial information isavailable. he chief operating decision maker has defined that the Company'sonly reportable operating segment during the period administrative. Following the disposal of the Company's major trading business subsidiary in2013//2014 the Company is now operating as a single UK based segment,represented as continuing operations in the income statement. The singlereporting entity's primary activity is to invest in businesses so as togenerate a return for the shareholders. Subject to further acquisitions the Company expects to further review itssegmental information during the forthcoming financial year. The Company has not generated any revenues from external customers during theperiod. 3 Loss before income tax The loss before income tax is stated after charging/(crediting): 2014 2013 £ £ Share based payment charge - options 83,691 8,620 Impairment of goodwill in IBP Ltd - 885,028 Auditors' remuneration 15,000 10,000 Loans to subsidiaries written-off (28,516) 392,779 4 Earnings per share Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the period. The diluted earnings per share is calculated using the weighted average numberof shares adjusted to assume the conversion of all dilutive potential ordinaryshares. The diluted loss per share is the same as the basic loss per share as theconversion of share options decreases the basic loss per share, thus beinganti-dilutive. 2014 Earnings Weighted Per-share average number £ of shares amount pence Basic EPS Earnings attributable to ordinary (187,647) 227,895,130 (0.08)shareholders from continuing operations 2013 Earnings Weighted Per-share average number £ of shares amount pence Basic EPS Earnings attributable to ordinary (1,394,591) 694,692,433 (0.20)shareholders from continuing operations(*) (*) Pre 2 October 2013 capital re-organisation. 5 Share capital Ordinary Shares Number of Nominal Value Total ordinary share £ Value £ Issued at 31 March 2012 736,347,670 0.0005 368,174 Purchase of own shares in conjunction (117,538,809) 0.0005 (58,770)with the sale of Sure-Track EuropeLimited (see (1) below) Issued at 31 March 2013 618,808,861 0.0005 309,404 Capital Reorganisation on 2 October2013 (see (2) below); Consolidation on 11:1 basis, ordinary 56,255,351 0.0055 309,404shares of 0.55p each - Sub-division into deferred shares of 56,251,351 0.0050 281,2770.50p - Sub-division into ordinary shares of 56,251,351 0.0005 28,1270.05p Ordinary shares carried forward at 2 56,251,351 0.0005 28,127October 2013 On 2 October 2013, placing for cash at 250,021,404 0.0005 125,0100.1p per share On 3 January 2014, issue of shares for 4,000,000 0.0005 2,000services On 7 February 2014, placing for cash 223,333,334 0.0005 111,667at 0.3p per share On 28 February 2014, placing for cash 183,333,333 0.0005 91,667at 0.3p per share Issued at 31 March 2014 716,943,422 0.0005 358,471 1. On 17 October 2012 the Company received court approval for the cancellation of the deferred shares and the share premium account. The company enacted a Call Option on the former Chief Executives shares. On 22 November 2012 the Company completed the purchase of 117,538,809 shares and this was settled by the cancellation of the long term loan of £188,062. 2. On 2 October 2013, at a General Meeting the shareholders approved a capital reorganisation. The existing ordinary shares of 0.05p were consolidated into 0.55p ordinary shares on an 11:1 basis. These 0.55p ordinary shares were then sub-divided into an ordinary share of 0.05p each and a deferred share of 0.50p each. The rights attached to the new ordinary shares are in all material aspects the same as the rights attaching to the existing ordinary shares. Deferred shares Since 31 July 2010 there have been 400,281,000 deferred shares at a nominalvalue of £0.0095. These shares were cancelled on 17 October 2012 following thecapital reconstruction (1 above) at that date. As in (2) above, 56,255,351 deferred shares of 0.50p each were issued. Thesedeferred shares do not carry voting rights. Total ordinary and deferred shares The issued share capital as at 31 March 2014 is as follows: 6 Availability of the interim report Copies of the Report and Accounts will be posted to shareholders shortly, andwill be available from the registered office of the Company at Suite 3b, 38Jermyn Street, London SW1Y 6DN and from the Company's websitewww.octagonalplc.com.