Palace Capital Regulatory News (PCA)

27 Jun 2006 10:17

Leo Insurance Services PLC27 June 2006 LEO INSURANCE SERVICES PLC 27 JUNE 2006 Leo Insurance Services plc(("LEO") or the "Company") Chairman's Statement I have pleasure in writing to you for the first time as Chairman of your companysince it acquired a 50% interest in Grafton Insurances Services Limited onJanuary 5, 2006. Being that this date is less than one month from the period end it had littleinfluence on the results and for the period from inception on 14 January 2005 to31 January 2006 the company made an operating loss of £54,766 and its loss pershare is 0.97p. The directors will not be recommending a dividend at this time. Shareholders may recall that long term contracts with both Bizspace Plc andSafeland Plc were put in place at the time of commencement to trade and this hasbeen added to by a small amount of new business. LG Lipman Chairman 27 June 2006 PROFIT AND LOSS ACCOUNT for the period from 14 January 2005 to 31 January 2006 Notes 2006 £ Administrative expenses (54,766) OPERATING LOSS 1 (54,766) Interest receivable 639 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (54,127) Taxation 3 - LOSS ON ORDINARY ACTIVITIES AFTER TAXATION 11 (54,127) LOSS PER ORDINARY SHARE Basic and diluted 4 (0.97p) The operating loss for the period arises from the company's continuingoperations. No separate Statement of Total Recognised Gains and Losses has been presented asall such gains and losses have been dealt with in the profit and loss account. BALANCE SHEET 31 January 2006 Notes 2006 £ FIXED ASSETS Investments 5 50 CURRENT ASSETS Debtors 6 1,314 Cash at bank 107,721 109,035 CREDITORS: amounts falling due within one year 7 (21,827) NET CURRENT ASSETS 87,208 TOTAL ASSETS LESS CURRENT LIABILITIES 87,258 CREDITORS: amounts falling due after more than one year 8 (65,000) NET ASSETS 22,258 CAPITAL AND RESERVES Called up share capital 9 70,624 Share premium account 10 5,761 Profit and loss account 11 (54,127) EQUITY SHAREHOLDERS' FUNDS 12 22,258 CASH FLOW STATEMENT for the period from 14 January 2005 to 31 January 2006 Notes 2006 £ Cash flow from operating activities 13a (29,303) Returns on investments and servicing of finance 13b 639 Taxation - CASH OUTFLOW BEFORE FINANCING (28,664) Financing 13b 136,385 INCREASE IN CASH IN THE PERIOD 107,721 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Notes 2006 £ Increase in cash in the period 107,721 NET FUNDS AT 14 JANUARY 2005 - NET FUNDS AT 31 January 2006 13c 107,721 ACCOUNTING POLICIES for the period from 14 January 2005 to 31 January 2006 BASIS OF ACCOUNTING The financial statements have been prepared under the historical cost conventionand in accordance with applicable United Kingdom accounting standards. Theaccounting policies adopted are set out below. DEFERRED TAXATION Deferred tax is recognised in respect of all timing differences that haveoriginated but not reversed at the balance sheet date where transactions orevents that result in an obligation to pay more tax in the future or a right topay less tax in the future have occurred at the balance sheet date. Timingdifferences are differences between the company's taxable profits and itsresults as stated in the financial statements that arise from the inclusion ofgains and losses in tax assessments in periods different from those in whichthey are recognised in the financial statements. 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. SHARE OPTIONS The cost of share options issued by the company is recognised as an expense inthe profit and loss account and is calculated as the difference between the fairvalue of the shares at the date the options were granted and the exercise price. NOTES TO THE FINANCIAL STATEMENTS for the period from 14 January 2005 to 31 January 2006 1 OPERATING LOSS 2006 £ Operating loss is stated after charging Auditors' remuneration - audit fees 11,750 In addition to the fees disclosed above, fees totalling £29,375 were paid toDeloitte &Touche LLP in connection with the issue of shares and these expenseshave been deducted from the share premium account. 2 EMPLOYEES There were no employees during the period other than the directors. None of the directors received any remuneration during the period. 3 TAXATION 2006 £ Current tax: UK corporation tax on losses of the period - Deferred taxation: Origination and reversal of timing differences - Tax on loss on ordinary activities - Factors affecting tax charge for period: 2006 £ The tax assessed for the period is higher than the standard rate of corporation tax in the UK (30%). The differences are explained below: Loss on ordinary activities before tax (54,127) Loss on ordinary activities multiplied by standard rate of corporation tax in the UK (30%) (16,238) Effects of: Expenses not deductible for tax purposes 5,373 Tax losses carried forward 10,865 Tax charge for period - Factors that may affect future tax charges: At 31 January 2006, the company had tax losses of £36,217 available to carryforward to future periods. A deferred tax asset of £10,865 has not beenrecognised in the financial statements due to the uncertainty as to the timingof future profits. 4 LOSS PER ORDINARY SHARE The calculations of loss per share are based on the following losses and 2006 number of shares: £ Loss for the financial period (54,127) 2006 Number Weighted average number of shares for basic and diluted loss per share 5,579,152 5 FIXED ASSET INVESTMENTS On 5 January 2006, the company acquired 50 £1 "B" ordinary shares in GraftonInsurance Services Limited at par. The company owns 100% of the "B" ordinaryshares which represents 50% of the issued ordinary shares. Grafton InsuranceServices Limited was dormant during the period from incorporation to 5 January2006. The principal activity of Grafton Insurance Services Limited is to tradeas a property insurance broker. 6 DEBTORS 2006 £ Prepayments and accrued income 1,314 7 CREDITORS: Amounts falling due within one year 2006 £ Other creditors 50 Accruals and deferred income 21,777 21,827 8 CREDITORS: Amounts falling after more than one year 2006 £ Redeemable preference shares 65,000 The redeemable preference shares were allotted at par on 6 January 2006 for cashconsideration. Share rights The redeemable preference shares provide for a fixed cumulative dividend at arate of 6% per annum which accrued on a daily basis. The preference shares canbe redeemed by the company at any time on seven days written notice. Thepreference shares can be redeemed by the holder if the dividend is in arrearsfor at least 12 months or, in any event the shares are redeemable, upon thesecond anniversary of issue. If the preference shares are not redeemed by theappropriate date, the dividend rate will increase to 9% per annum. Thepreference shares do not confer a right to attend, speak or vote at any generalmeeting of the company. 9 SHARE CAPITAL 2006 £ Authorised: 20,000,000 ordinary shares of 1p each 200,000 65,000 preference shares of £1 each 65,000 265,000 Allotted, issued and fully paid: 7,062,381 ordinary shares of 1p each 70,624 Share issues: On 14 January 2005, 2 ordinary shares were issued at par on the incorporation ofthe company. On 17 January 2005 the company allotted 51,191,900 ordinary shares of 0.1p atpar for cash consideration. On 30 March 2005 the company allotted 5,000,000 ordinary shares of 0.1p at parto settle expenses. On 5 January 2006, each of the issued and unissued 0.1p ordinary shares wereconsolidated with 1 new ordinary share with a par value of 1p, replacing 10existing ordinary shares of 0.1p each. On the same day, the company'sauthorised share capital was increased by £65,000 by the creation of 65,000preference shares of £1 each. On 6 January 2006, the company allotted 1,443,191 ordinary shares of 1p at 14pper share for total cash consolidation of £202,047. Share options: On 3 February 2005 L Lipman, E Lipman and P Davis were each conditionallygranted options over 911,458 ordinary shares worth £175,000 as valued byreference to the average closing middle market quotation for an ordinary sharefor the three dealing days following admission. Each option is exercisable atthe market value at the date of the grant, being the par value of 1p per share,at any time after 18 months and before 10 years following the date of grant. The company has granted options to subscribe for ordinary shares in the companyequivalent to 1% of the issued share capital on completion of an acquisitionwhich exceeds 75% in any class test within the AIM rules. These options areonly exercisable during the period from date of acquisition to the period ending18 months after that date at a price equivalent to the issue price in connectionwith the acquisition. 10 SHARE PREMIUM ACCOUNT 2006 £ 14 January 2005 - Premium on shares issued in period 187,615 Expenses in connection with shares issued (181,854) 31 January 2006 5,761 11 PROFIT AND LOSS ACCOUNT 2006 £ 14 January 2005 - Loss for the financial period (54,127) 31 January 2006 (54,127) 12 RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS 2006 £ Shares issued in period (net of expenses) 76,385 Loss for the financial period (54,127) Net addition to equity shareholders' funds 22,258 Opening equity shareholders' funds - Closing equity shareholders' funds 22,258 13 CASH FLOWS 2006 £a Reconciliation of operating loss to net cash flow from operating activities Operating loss (54,766) Increase in debtors (1,314) Increase in creditors 21,777 Shares issued to settle expenses 5,000 Net cash flow from operating activities (29,303) 2006 £b Analysis of cash flows for headings netted in the cash flow statement Returns on investments and servicing of finance Interest received 639 Net cash inflow from returns on investments and servicing of finance 639 Financing Issue of ordinary share capital (net of expenses) 71,385 Issue of preference share capital 65,000 Net cash inflow from financing 136,385 At Atc Analysis of net funds 14 January 31 January 2005 Cash flows 2006 £ £ £ Cash at bank and in hand - 107,721 107,721 14 Financial instruments The company's financial instruments during the period comprised only cash andvarious items such as trade creditors that arose directly from its operations.Trade creditors and other short-term items arising directly form operations havebeen excluded from the following disclosures. At 31 January 2006, the company had a cash balance of £107,721 which was held onbank deposit earning interest at variable market rates. There is no material difference between the fair value and book value of thecompany's financial instruments and they are all denominated in sterling. The company has not traded in any financial instruments during the period andthe board does not currently believe there are any material risks arising fromits financial instruments. 15 RELATED PARTY TRANSACTIONS During the period from incorporation on 14 January 2005 to 2 February 2005, thecompany was a wholly owned subsidiary of Safeland Plc. On 2 February 2005,Safeland Plc paid a dividend in specie to which each holder of Safeland Plcreceived 2.5 0.1p ordinary shares in the company for each ordinary share ofSafeland Plc then held. Safeland Plc retained 5,119,190 0.1p ordinary shares inthe company which were consolidated into 511,919 1p ordinary shares and werestill held as at 31 January 2006. LG Lipman, EA Lipman and PM Davis are all directors of both companies. In addition, on 6 January 2006, the company issued 65,000 £1 preference sharesat par for cash consideration to Safeland Plc. Details of the rights of theseshares are disclosed in note 8. 16 COPIES OF THE ACCOUNTS Copies of the accounts have been posted to shareholders today and are availablefree of charge from the Company's registered office one month from the date ofthis announcement: 94-96 Great North Road, London N2 0NL. This information is provided by RNS The company news service from the London Stock Exchange