Vela Technologies Regulatory News (VELA)

Vela Technologies Plc ("Vela" or "the Company") Final results for the year ended 31 March 2013 30 September 2013 chairman's statement I am pleased to welcome you to this my first statement as your new Chairman,covering the Company's year ended 30 June 2013. The period under review has two distinct periods, the first culminating in theCompany Voluntary Arrangement and winding up of legacy investments. The secondperiod breathed new life into the company with a new company name, receipt of £300,000 from the first of two fund raisings, the appointment of two newdirectors and advisors and finally the purchase of two investments after theyear end. I do not propose to dwell on the CVA as this has been well documented inprevious announcements and circulars to shareholders but will spend time on ournew endeavour! The business also disposed of its investments in DGM India, and some of thepreviously impaired inter company receivables with other former investments wasrealised as a result of the sale of assets prior to these businesses beingwound up. The Board was strengthened earlier this year with the appointment of myself andcolleague Antony Laiker. During March Adrian Moss stepped down from the Boardand we thank him for his contribution during the transition period. Shortly after the year-end, the capital reduction approved by shareholders on11 July 2013 was confirmed by the High Court and became effective on 1 August2013, writing off the entire accumulated deficit on the Company's profit andloss account. This was followed by a further placing raising £300,000 andreceipt of an additional £25,000 in respect of an earlier conditional placingto Adrian Moss, to provide funding to evaluate and make new investments. Between the year-end and the date of this report the Company made twoinvestments for a total consideration of £325,000, of which £125,000 wassettled by the issue of new ordinary shares; further investments are underactive consideration. Our first investment was the acquisition for £250,000 of 262,090 shares ineSeekers Ltd which following a corporate restructuring will become an interestof 0.63 per cent in Disruptive Tech Limited. Disruptive Tech managesinvestments in a number of technology enterprises including: Interest Labswhich enables high quality connections between brands and consumers; Netkanwhich delivers on line gaming products; VNU Capital LLC a direct retailer ofconsumer products via ecommerce and high yield consumer credit solutions; andFreeformers which helps global companies understand and leverage technology. For our second investment we invested £75,000 for a 6.25% interest in AdvanceLaser Imaging Limited a recently established company established which useslaser scanning hardware and software applications to produce 360 degree 3Dimages and models. There are many applications of this specialist technology inboth private and public sectors including the Military, property developmentand the Police to name but a few. Further particulars of these investments can be viewed on the Company'swebsite. Following the investment in Advance Laser Imaging, the Company hasimplemented its investing policy for the purposes of AIM Rule 15. Your company is now in a position to move forward and your Board is confidentof taking it forward in a positive manner during the current year. I would like to close by thanking our shareholders and advisers who havecontributed to giving the company a new and hopefully profitable lease of life. Nigel Brent Fitzpatrick MBE Chairman For further Information: Brent Fitzpatrick e-mail brent@lowwave.co.uk Non-Executive Chairman Vela Technologies plc ZAI Corporate Finance, Nomad Tel 0207 060 0220 Peter Trevelyan-Clark/ Tim Cofman/Wei Wang Peterhouse Corporate Finance, Broker Tel 020 7469 0932 Eran Zucker The financial statements for the year ended 31 March 2013 are being posted toshareholders on 30 September 2013 and will shortly be available on the Company'website at www.velatechplc.com. statement of comprehensive income for the year ended 31 March 2013 year ended 15 months ended 31 March 31 March 2013 2012 Notes £'000 £'000 Revenue 1 - - Cost of sales - - Gross profit - - Administrative expenses - depreciation - - - share-based payments (2) (21) - other administrative expenses (561) (452) - Amounts written off in CVA 8 430 - Total administrative expenses and loss from 2 (133) (473)operations Interest payable - - Profit on disposal of subsidiary 7 273 - Profit on disposal of associate - 195 Profit/(loss) before tax 140 (278) Income tax 5 (45) (9) Profit/(loss) and total comprehensive 95 (287)income Attributable to: Equity holders of the company 95 (287) Earnings per share Basic and diluted earnings/(loss)per share 6 0.47 (3.74)(pence) balance sheet as at 31 March 2013 31 March 31 March 2013 2012 Notes £'000 £'000 Assets - - Current assets Trade and other receivables 9 11 51 Cash and cash equivalents 13 104 3 Total current assets 115 54 Non current assets held for sale - 50 Total assets 115 104 Equity and liabilities Equity Called up share capital 11 4,912 4,852 Capital redemption reserve 13,188 13,188 Share-based payment reserve 12 - 1,176 Share premium account 24,032 23,792 Retained earnings (42,093) (43,366) Total equity 39 (358) Current liabilities Trade and other payables 10 76 420 Onerous lease provisions - 42 Total liabilities 76 462 Total equity and liabilities 115 104 These financial statements were approved by the Board, authorised for issue andsigned on their behalf on 30September 2013 by: Nigel Brent Fitzpatrick MBE Chief Executive Officer Company registration number: 03904195 cashflow statement for the year ended 31 March 2013 year ended 15 months ended 31 March 31 March 2013 2012 Notes £'000 £'000 Operating activities Profit/(loss) before tax 140 (278) Share-based payment 2 21 Decrease in receivables 40 709 (Decrease) in payables 86 (455) Gain on Company Voluntary Arrangement (430) - Impairment of group receivables - 422 (Utilisation)/Release of provision for (42) (397)onerous lease Profit on disposal of associates - (195) Profit on disposal of subsidiaries (273) - Tax (charge) (45) (9) Total cash flow from operating activities (522) (182) Investing activities Consideration for disposal of investment 323 -in subsidiary Consideration for disposal of investment - 195in associate Total cash flow from investing activities 323 195 Financing activities Issue of ordinary share capital 60 - Share premium on the issue of ordinary 240 -share Total cash flow from financing activities 300 - Net increase/(decrease) in cash and cash 101 13equivalents Cash and cash equivalents at start of year 3 (10)/period Cash and cash equivalents at the end of 13 104 3the year /period Cash and cash equivalents comprise: Cash and cash in bank 104 3 Cash and cash equivalents at end of year/ 13 104 3period statement of changes in equity for the year ended 31 March 2013 Capital Share-based Share Share Redemption payment Retained Total capital premium Reserve reserve earnings equity £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 April 4,852 23,792 13,188 1,176 (43,366) (358)2012 Share option - - - 2 - 2charge Share options - - - (1,178) 1,178 -lapse Issue of share 60 240 - - - 300capital Transactions with 60 240 - (1,176) 1,178 302owners Profit for the - - - - 95 95year and totalcomprehensiveincome for theyear Balance at 31 4,912 24,032 13,188 - (42,093) (39)March 2013 Balance at 1 4,852 23,792 13,188 1,155 (43,079) (92)January 2011 Share options - - - 21 - 21charge Issue of share - - - - - -capital Transactions with - - - 21 - 21owners Loss for the - - - - (287) (287)period and totalcomprehensive lossfor the period Balance at 31 4,852 23,792 13,188 1,176 (43,366) (358)March 2012 accounting policies - extracts for the year ended March 2013 Presentation of financial statements The financial statements of the Company have been prepared in accordance withInternational Financial Reporting Standards (IFRS), as adopted in the EuropeanUnion and as applied in accordance with the provisions of the Companies Act2006, and under the historical cost convention. In prior years, consolidated financial statements were prepared for the groupheaded by the Company. Consolidated financial statements have not been preparedfor the year ended 31 March 2013 as there were no subsidiaries. Comparativefigures in these financial statements are therefore in respect of the Companyonly and are not consolidated. Whilst the financial information in this announcement has been prepared inaccordance with IFRSs, this announcement does not itself contain sufficientinformation to comply with IFRSs. The financial information set out above doesnot constitute the Company's financial accounts for the year ended 31 March2013 or for the period ended 31 March 2012 but is derived from those accounts.Statutory accounts for the period ended 31 March 2012 have been delivered tothe Registrar of Companies and those for the year ended 31 March 2013 will bedelivered following the Company's annual general meeting. The auditors havereported on those accounts: their reports were unqualified, did not, in respectof the year ended 31 March 2013, draw attention to any matters by way ofemphasis without qualifying their report and did not contain statements undersection 298(2) or (3) Companies Act 2006 or equivalent preceding legislation.The auditor's report in respect of the period ended 31 March 2012, whilst notmodifying the opinion given, contained an emphasis of matter in relation togoing concern. The financial statements for the year ended 31 March 2013 are being posted toshareholders on 30 September 2013 and will shortly be available on the Company'website at www.velatechplc.com. Change of financial yearend In the previous period the financial year end of the Company was changed from31 December 2011 to 31 March 2012. Accordingly, the current financialstatements are prepared for year ended 31 March 2013 and the comparativefigures for the statement of comprehensive income, cash flow statement,statement of changes in equity and related notes are for the 15 months from 1January 2011 to 31 March 2012. notes to the financial statements for the year ended 31 March 2013 1 Revenue and segmental information The Company does not trade and as such there is only one identifiable operatingsegment, being the holding and support of investments. Furthermore the Companyoperates in a single geographic segment being the United Kingdom. The resultsand balance and cashflows of the segment are as presented in the primarystatements. 2 Loss from operations Loss from operations is stated after charging: Year ended 15 months ended 31 March 31 March 2013 2012 £'000 £'000 Auditors' remuneration for auditing of accounts 14 64 Auditors' remuneration for non-audit services 2 31 Operating lease rentals - - Share-based payment charge 2 21 3 Staff costs The average number of persons employed by the Company (including Directors)during the period was as follows: Year ended 15 months ended 31 March 31 March 2013 2012 Directors and senior management 2 2 Management - - Non-management - - Total 2 2 The aggregate payroll costs for these persons were as follows: Year ended 15 months ended 31 March 31 March 2013 2012 Aggregate wages and salaries 271 271 Social security costs - - Share-based payments - - Pensions costs - - 271 271 4 Directors and senior management Directors' remuneration Year ended 31 March 2013 Salary Fees Pension Equity Total £'000 £'000 £'000 £'000 £'000 A Moss (resigned 5 March 2013) 271 - - - 271 N B Fitzpatrick - 3 - - 3 A Laiker - - - - - 271 3 - - 274 15 months ended 31 March 2012 Salary Fees Pension Equity Total £'000 £'000 £'000 £'000 £'000 A Moss 260 - 11 - 271 Directors'and senior management's interests in shares The Directors who held office at 31 March 2013 held the following shares: 31 March 31 March 2013 2012 £'000 £'000 N B Fitzpatrick - - A Laiker 1,916,724 1,916,724 The total share-based payment costs in respect of options granted are: Year ended 15 months ended 31 March 31 March 2013 2012 £'000 £'000 Directors - 18 Non-management 2 3 5 Tax Year ended 15 months ended 31 March 31 March 2013 2013 £'000 £'000 Current tax UK tax 45 9 Tax charge 45 9 The deferred tax asset relating to the losses has not been recognised due touncertainty over the existence of future taxable profits against which thelosses can be used. Tax reconciliation Year ended 15 months ended 31 March 31 March 2013 2012 £'000 £'000 Profit/(Loss) before tax 140 (278) Tax at 24% (2012: 26%) on loss before tax 34 (72) Effects of: Other expenses not deductible 21 81 Utilisation of losses (10) - Current tax expense/(credit) 45 9 6Earnings per share Earnings per share have been calculated on a profit after tax of £95,000(period to 31 March 2012: £287,000 loss) and the weighted number of averageshares in issue for the year of 20,008,076 (31 March 2012: 7,679,309 weighted). Reconciliation of the profit and weighted average number of shares used in thecalculations are set out below: Year ended 31 15 months March 2013 ended 31 March 2013 Profit/(loss) (£'000) 95 (287) Earnings/(loss) per share (pence) 0.47 (3.74) A capital reorganisation was approved at a General Meeting held on 28 May 2012.Each of the Company's existing Ordinary shares of 0.1p each were subdividedinto 1 `New' Ordinary Share of 0.001 pence (`New shares') and 99 New Deferredshares of 0.001 pence (`New Deferred Shares'). The New Shares above wereconsolidated into New Ordinary Shares of 0.1 pence each on the basis of 1 NewOrdinary Share for every 100 New Shares. The Admission of the New OrdinaryShares to trading on AIM took place on 29 May 2012. The Earnings per Share comparatives have been adjusted to reflect theredenomination of the share capital. 7Disposal of subsidiary / Non current assets held for sale Disposal of DGM India Internet Marketing Limited (DGM India) On 4 April 2012, the Board entered into a sale and purchase agreement for thedisposal of the subsidiary, DGM India, to Tyroo Media Private Limited and toInflection Digital Holdings Private Limited (both of which are privatecompanies incorporated and registered in India), for a total grossconsideration of 33,500,000 ruppees (approx £412,760). This transactioncompleted in July 2012. The carrying value of the investment in the subsidiary was recognised as a "noncurrent asset held for sale" as at 31 March 2012. The profit on disposal was calculated as proceeds net of costs (£373,000) lesscarrying value of asset (£50,000) giving the profit recognised of £323,000. At 31 March 2013 all subsidiaries had been disposed of. 8Amounts written off in CVA On 21 December 2012 the Company entered a company voluntary arrangement ("CVA")and on 14th January 2013 the Company's creditors and members approved the CVAproposed by the previous directors of the Company who resigned on 18th January2013. Since this approval the Joint Supervisors have established all claims anddespatched payments in respect of valid claims at the rate set in the approvedarrangement being 17 pence in the pound before administrators' costs. The firstand final dividend was paid on 29 April 2013 at a rate of 15.96 pence in thepound. The CVA was successfully completed on 29 August 2013. In December 2012 new investors conditionally subscribed for a number ofordinary shares, which generated substantial funds into the Company. Net fundsreceived of some £280,000 allowed £99,189 to be used for the benefit of the CVAcreditors, with the balance to allow the Company to fulfill its new investingpolicy. The amount written off represents the difference between the total creditorsapproved and the dividend paid. 9 Trade and other receivables 31 March 31 March 2013 2012 £'000 £'000 Trade receivables - 11 Other receivables 5 - Prepayments and accrued income 6 40 11 51 10Trade and other payables 31 March 31 March 2013 2012 £'000 £'000 Trade payables 14 284 Social security and other taxes - 16 Corporation tax payable 45 - Other payables - 33 Accruals and deferred income 17 87 76 420 11Share capital 31 March 31 March 2013 2012 £'000 £'000 Authorised capital 9,999,520,000 ordinary shares of 0.1 pence each 10,000 10,000 76,025,157,516 deferred shares of 0.001 pence 760 760 4,083,918,156 deferred shares of 0.1 pence each 4,084 4,084 54,952,000 deferred shares of 24 pence each 13,188 13,188 28,032 28,032 Allotted, called up and fully paid capital 67,679,309 (31 December 2010: 7,679,309) ordinary 68 8shares of 0.1 pence each 76,025,157,516 deferred shares of 0.001 pence 760 760 4,083,918,156 deferred shares of 0.1 pence each 4,084 4,084 4,912 4,852 Allotments during the period The Company allotted the following ordinary shares during the year/period: year ended 31 March 2013 Shares in issue at 31 March 2012 7,679,309 Shares issued during the year 60,000,000 Shares in issue at 31 March 2013 67,679,309 15 months ended 31 March 2012 Shares in issue at 1 January 2011 7,679,309 Shares issued during the period - Shares in issue at 31 March 2012 7,679,309 11Share capital continued A capital reorganisation was approved at a General Meeting held on 28 May 2012.Each of the Company's existing Ordinary shares of 0.1p each have beensubdivided into 1 `New' Ordinary Share of 0.001 pence (`New shares') and 99 NewDeferred shares of 0.001 pence (`New Deferred Shares'). The New Shares abovehave been consolidated into New Ordinary Shares of 0.1 pence each on the basisof 1 New Ordinary Share for every 100 New Shares. The Admission of the NewOrdinary Shares to trading on AIM took place on 29 May 2012. The Company's main source of capital is the parent Company's equity shares. Thepolicy is to retain sufficient authorised share capital so as to be able toissue further shares to fund acquisitions, settle share-based transactions andraise new funds. 12Share-based payments During the year, all options lapsed as the employees and directors who held theoptions ceased to be employees or directors. The reserve relating to vestedshare based payments was transferred to retained earnings at the point theoptions lapsed. For the period to 31 March 2013, the movement on options was as follows: Exercise Held at Granted Forfeited Cancelled Held at price Issue 31 during during during 31 December the the the March(pence) date 2010 period period period 2012 124.68 October 2,516 - - - 2,516 2003 356.50 December 3,000 - - - 3,000 2003 510.00 April 300 - - - 300 2004 650.00 April 250 - - - 250 2004 450.00 January 5,000 - - - 5,000 2006 375.00 June 2006 7,500 - - - 7,500 425.00 September 333 - - - 333 2006 350.00 April 9,651 - - (333) 9,318 2007 125.00 May 2008 138,050 - - (17,500) 121,050 125.00 February 91,167 - (4,333) (32,334) 54,500 2009 050.00 January 168,300 - (30,667) - 137,633 2010 050.00 February - 10,000 - - 10,000 2011 050.00 April - 49,833 - - 49,833 2011 426,067 59,833 (35,000) (50,167) 401,233 The above table excludes Directors' options. Options forfeited in the year are in respect of employees leaving theemployment of the Company. 13Cash and cash equivalents Cash and cash equivalents comprise the following: 31 March 31 March 2013 2012 £'000 £'000 Cash and cash in bank: Pound sterling 104 3 Cash and cash equivalents at end of year/period 104 3 14Financial instruments The Company uses various financial instruments which include cash and cashequivalents and various items such trade receivables and trade payables thatarise directly from its operations. The main purpose of these financialinstruments is to raise finance for the Company's operations and manage itsworking capital requirements. The fair values of all financial instruments are considered equal to their bookvalues. The existence of these financial instruments exposes the Company to anumber of financial risks which are described in more detail overleaf. The main risks arising from the Company financial instruments are currencyrisk, credit risk and liquidity risk. The Directors review and agree thepolicies for managing each of these risks and they are summarised overleaf. TheCompany has a sales ledger facility on which interest is charged at a variablerate. The Directors, therefore, do not consider the Company to be exposed tomaterial interest rate risk. Currency risk There was no exposure to foreign exchange fluctuations to 31 March 2013, and assuch sensitivity analysis has not been presented. Credit risk The Company's exposure to credit risk is limited to the carrying amount offinancial assets recognised at the balance sheet date, as summarised below: 31 March 31 March 2013 2012Classes of financial assets - carrying amounts £'000 £'000 Cash and cash equivalents 104 3 Trade receivables - - 104 3 The Company's management considers that all of the above financial assets thatare not impaired for each of the reporting dates under review are of goodcredit quality. None of the Company's financial assets are secured by collateral or othercredit enhancements. Liquidity risk The Company maintains sufficient cash to meet its liquidity requirements.Management monitors rolling forecasts of the Company's liquidity on the basisof expected cash flow in accordance with practice and limits set by theCompany. In addition, the Company's liquidity management policy involvesprojecting cash flows and considering the level of liquid assets necessary tomeet these. Maturity analysis for financial liabilities 31 March 2013 31 March 2012 Within Later Within Later than than 1 year 1 year 1 year 1 year £'000 £'000 £'000 £'000 At amortised costs: Trade payables 14 - 284 - Other payables - - 136 - Lease commitments provision - - - - 14 - 420 - Capital risk management The Company's objectives when managing capital are to safeguard the Company'sability to continue as a going concern in order to provide returns forshareholders and benefits for other stakeholders and to maintain an optimalcapital structure to reduce the cost of capital. This is achieved by makinginvestments commensurate with the level of risk. The Company monitors capital on the basis of the carrying amount of equity. The Company policy is to set the amount of capital in proportion to its overallfinancing structure, i.e. equity and long-term loans. The Company manages thecapital structure and makes adjustments to it in the light of changes ineconomic conditions and the risk characteristics of the underlying assets. Inorder to maintain or adjust the capital structure, the Company may adjust theamount of dividends paid to shareholders, issue new shares or loan notes, orsell assets to reduce debt. On 24th December 2012, the Company conditionally placed 67,400,000 new OrdinaryShares at a price of 0.5 pence raising £337,000 before expenses. The fundsraised allowed the Company to fulfil its obligations under a CVA and allow theCompany to continue to trade. The surplus was retained in the Company to allowthe Company to fulfill its new investing policy. The Company has approved a capital reduction which was finalised after thebalance sheet date. Following the Capital Reduction both classes of DeferredShares and the balances standing to the credit of the share premium account andthe capital redemption reserve of the Company have been cancelled. The balanceon the share premium account includes for this purpose any additional sharepremium arising before 31 July 2013. The Capital Reduction was sufficient towrite off the entirety of the deficit on its profit and loss account, andcreate a small positive balance. Following the Capital Reduction, there was nochange in the number of Ordinary Shares in issue. 15Related party transactions During the period the Company entered into the following related partytransactions. All transactions were made on an arm's length basis: Ocean Park Developments Limited Nigel Brent Fitzpatrick, Non-Executive director is also a director of OceanPark Developments Limited. During the year the Company paid £2,500 (31 March2012 : £nil) in respect of his directors fees to the Company. The balance dueto Ocean Park Developments at the year end was £nil (31March 2012 : £nil) Share Options held by Directors On 21 December 2012, the following share options held by the former directorslapsed when the Company entered a CVA: Adrian Moss - 174,000 options David Lees - 17,500 options Keith Lassman - 12,500 options Placing of shares On 24th December 2012, the Company announced that Adrian Moss, a formerdirector of the company had agreed to place 5,000,000 0.01p shares at a priceof 0.05p for a total consideration of £25,000. This transaction completed on 5September 2013. On completion of this Adrian Moss own 5,995,100 shares in theCompany representing a shareholding of 4.25%. 16Events after the balance sheet date Investment in Disprutive Tech Ltd At a Directors meeting on 14 August 2013 a proposal was approved to acquire262,090 shares, ultimately representing a 0.62% interest in Disruptive Tech Ltd(a Gibraltar Company) for a total of £250,000. The purchase price was satisfiedby a cash payment of £125,000 and the balance of £125,000 by way of the issueof 8,333,333 Ordinary shares of 0.1 pence at a price of 0.15p. Investment in Advance Laser Imaging Limited On 11 September 2013 the Board announced a £75,000 investment in Advance LaserImaging Ltd. The Company has committed £75,000 for a 6.25% interest. Placing of 60,000,000 Ordinary Share A further issue of shares took place on 9 August 2013 with 60,000,000 Ordinaryshares of 0.1 pence being issued at 0.5p each generating gross proceeds of £300,000. Reduction in share capital Following the announcement on 18 June 2013 that the Company proposed to takefurther steps to restructure its balance sheet, a capital reduction wasapproved by shareholders and was confirmed at the final Court Hearing whichtook place on 31 July 2013. Both classes of Deferred Shares and the balancesstanding to the credit of the share premium account and the capital redemptionreserve of the Company were cancelled. This reduction is sufficient to writeoff the entirety of the deficit on its profit and loss account and create asmall positive balance. There were no changes to the number of ordinary sharesin issue.