TIDMLGN
RNS Number : 9648A
Lagan Capital PLC
05 April 2012
5 April 2012
LAGAN CAPITAL PLC
("Lagan Capital" or the "Company")
Report and Accounts for the year ended 30 June 2011
Chairman's review
Introduction
The twelve month period to 30 June 2011 saw the Company continue
to support its investment made in Evolving Outsourcing Limited
("Evolving").
The Company initially invested EUR20,000 for 20 per cent of the
issued share capital of Evolving with provision for a further
GBP500,000 being made available by way of three year loan notes
with a 10 per cent coupon. The Company has now subscribed for the
full amount of these three year loan notes. The trading targets of
Evolving were not met in the 12 month period to 30 June 2011 and
having carried out an assessment of the revised forecasts of the
Evolving business, the Directors have made a provision for
potential impairment in respect of these loan notes. The impairment
loss has been included in the Group's operating loss for the year
ended 30 June 2011.
Since the year end, the Company has increased its participation
in its existing investment in Evolving from 20 per cent to 49 per
cent in exchange for providing additional finance on the same terms
outlined above. The consideration paid for these shares was
nil.
Ocuco Holdings Limited ("Ocuco") is the holding company for
Ocuco Limited in which it holds 67 per cent of the issued share
capital, the other 33 per cent being held mainly by the management
of Ocuco with less than 2 per cent held by external investors.
Ocuco Limited was established in 1995. Its main product, Acuitas,
which is sold internationally, is an Oracle based product designed
for optician retail chains. Ocuco Limited's other international
product is Innovations, a retail orientated laboratory
manufacturing package.
In June 2010 The Company invested GBP300,000 in Ocuco under a 9
month rolling loan note with a coupon of 12 per cent; this
investment was subsequently disposed of on 31 January 2011
following full repayment of the loan. The carrying value of the
loan at the time of disposal was equal to the amount repaid.
Since the disposal of the investment in Ocuco, the Company's
Directors have been seeking further investment opportunities for
the Company and to once again fully implement the Company's
investing policy which was set when the Company became an investing
company.
As at 7 February 2012, being 12 months following the disposal of
the investment in Ocuco, no further investment had been identified
and made by the Directors. Accordingly, with the Company's
investing policy not being fully implemented in accordance with
Rule 15 of the AIM Rules for Companies, and notwithstanding the
publication of the Company's Annual Report and Accounts for the
year ended 30 June 2011 and the Interim Report for the period ended
31 December 2011, trading in the Company's shares will continue to
be suspended until a further significant investment has been made.
Shareholders should be aware that if no such investment can be made
by 22 June 2012, being 6 months from the date when trading in the
Company's shares were suspended, then the Company's listing on AIM
will be cancelled.
The Directors continue to maintain the Company on a very modest
cash cost base whilst actively pursuing suitable investments for
the Company. Shareholders should be aware that if suitable
investment opportunities are identified these may require the
raising of additional funds .
On behalf of the Board
Peter J Holmes
Chairman
4 April 2012
For further information:
Peter Holmes, Chairman +44 (0) 1908 588800
Stephen Casey +353 872 844 7797
Lagan Capital Plc
Luke Cairns / Rod Venables +44 (0) 20 7796 8800
Northland Capital Partners
Limited
(Nominated Adviser)
The Report and Accounts for the year ended 30 June 2011 (the
"2011 Report and Accounts") set out below will be posted to
shareholders on or before 20 April 2012 and will also be available
on that date on the Company's web site: www.lagancapital.com
Lagan Capital Plc
Report and financial statements
2011
Chairman's review
Introduction
The twelve month period to 30 June 2011 saw the Company continue
to support its investment made in Evolving Outsourcing Limited
("Evolving").
The Company initially invested EUR20,000 for 20 per cent of the
issued share capital of Evolving with provision for a further
GBP500,000 being made available by way of three year loan notes
with a 10 per cent coupon. The Company has now subscribed for the
full amount of these three year loan notes. The trading targets of
Evolving were not met in the 12 month period to 30 June 2011 and
having carried out an assessment of the revised forecasts of the
Evolving business, the Directors have made a provision for
potential impairment in respect of these loan notes The impairment
loss has been included in the Group's operating loss for the year
ended 30 June 2011.
Since the year end, the Company has increased its participation
in its existing investment in Evolving from 20 per cent to 49 per
cent in exchange for providing additional finance on the same terms
outlined above. The consideration paid for these shares was
nil.
Ocuco Holdings Limited ("Ocuco") is the holding company for
Ocuco Limited in which it holds 67 per cent of the issued share
capital, the other 33 per cent being held mainly by the management
of Ocuco with less than 2 per cent held by external investors.
Ocuco Limited was established in 1995. Its main product, Acuitas,
which is sold internationally, is an Oracle based product designed
for optician retail chains. Ocuco Limited's other international
product is Innovations, a retail orientated laboratory
manufacturing package.
In June 2010 The Company invested GBP300,000 in Ocuco under a 9
month rolling loan note with a coupon of 12 per cent; this
investment was subsequently disposed of on 31 January 2011
following full repayment of the loan. The carrying value of the
loan at the time of disposal was equal to the amount repaid.
Since the disposal of the investment in Ocuco, the Company's
Directors have been seeking further investment opportunities for
the Company and to once again fully implement the Company's
investing policy which was set when the Company became an investing
company.
As at 7 February 2012, being 12 months following the disposal of
the investment in Ocuco, no further investment had been identified
and made by the Directors. Accordingly, with the Company's
investing policy not being fully implemented in accordance with
Rule 15 of the AIM Rules for Companies, and notwithstanding the
publication of the Company's Annual Report and Accounts for the
year ended 30 June 2011 and the Interim Report for the period ended
31 December 2011, trading in the Company's shares will continue to
be suspended until a further significant investment has been made.
Shareholders should be aware that if no such investment can be made
by 22 June 2012, being 6 months from the date when trading in the
Company's shares were suspended, then the Company's listing on AIM
will be cancelled.
The Directors continue to maintain the Company on a very modest
cash cost base whilst actively pursuing suitable investments for
the Company. Shareholders should be aware that if suitable
investment opportunities are identified these may require the
raising of additional funds.
On behalf of the Board
Peter J Holmes
Chairman
4 April 2012
Directors' report
The Directors present their report and financial statements for
the year ended 30 June 2011.
Business Review
The Board monitors the performance of the Group on a regular
basis. To aid their review the Directors use a number of financial
and non-financial key performance indicators (KPIs). These
include:
Financial KPIs
-- -Interest/Investing income over financial investments: We aim
to generate enough interest to contribute to running costs and to
structure investments to participate in any future disposals or
enhanced valuations. In this regard we have earned investing
interest income to meet 22 per cent (2010: 15 per cent) of our cash
operating costs and aim to increase this in following years. Our
2010 investment in Ocuco was structured to convert up to 20 per
cent of the equity in that company in the event of a disposal. This
investment was disposed of on 31 January 2011.
Non-financial KPIs
-- -Trading volumes of stock and attendance at general meetings
which indicate the level of shareholder interest in the Company; we
intend to increase both metrics through enhanced communication.
Principal activity
The parent company of the Group is an investing company, the
investing policy of which is as follows:
The Directors intend to focus on investing in businesses which,
in the opinion of the Directors, possess the opportunity for high
growth, generally through exploitation of intellectual property.
The main focus for identifying such businesses will be in the
communications, energy, resources and infrastructure sectors in
diverse geographic locations including Europe and North America.
The Directors anticipate that each such business will have the
management necessary to operate and develop that business.
The intention is to develop a diverse portfolio of such
opportunities and the Group is likely to raise further capital,
either by way of debt or equity issues, once it has invested a
significant proportion of its initial asset base.
The investments will be structured using both debt and/or equity
instruments, and derivatives thereof. The Group may act as either a
passive or an active investor. In the latter case, the Directors
anticipate being able to charge management and other advisory fees.
The Directors expect that each investment will be held for
approximately four years, with exits being achieved by way of a
trade sale or flotation. Initially, the proceeds arising from these
exits will be re-invested in building the capital base of the
Group.
The Directors believe that their broad collective experience
together with their extensive network of contacts will assist them
in the identification, evaluation and funding of investment
opportunities. When necessary, other external professionals will be
engaged to assist in the due diligence of prospective targets. The
Directors would also consider appointing additional directors with
relevant experience if required. The Directors recognise this
investing policy carries a high degree of risk, however they
believe that the successful prosecution of such an investing policy
will result in strong capital growth for shareholders.
Principal risks and uncertainties
The principal risks and uncertainties encompass the risk of
making an inappropriate investment, credit risk in respect of
financial assets held at amortised cost (see note 8.1 to the
financial statements), the risk of failing to raise finance if
required and the risk of failing to identify a significant
investment. An inappropriate investment could cause a reduction in
shareholder value and to mitigate this risk the Board carefully
reviews all investments and consults with outside advisers when
required and has the discipline to reject what it considers to be
inappropriate levels of risk. The risk of failing to raise any
finance required could cause a loss of liquidity. Accordingly, to
mitigate this the Board only considers investments which it can
fund in advance and has structured the Group's cost base to ensure
that receipts from investments meet all or substantially all of its
cash requirements. The risk of failing to identify a significant
investment could cause the company to lose its AIM listing,
accordingly the Board will consult external professional advisers
to source an investment.
Financial review
Turnover for the year of GBP52,000 (2010: GBP38,000) produced an
operating loss of GBP495,000 (2010: loss GBP83,000) after taking
into account an impairment charge of GBP296,000 (2010: nil) in
respect of loans and receivables. The Group incurred a loss for the
year after interest and taxation of GBP495,000 (2010: loss
GBP66,000).
There was no gain from taxation recorded for the year (2010:
nil) and the value of tax losses available to offset future trading
profits are estimated at GBP1,436,000 (2010: GBP1,277,000).
The basic loss per share for the year was 9.46p (2010: loss of
1.29p).
Net assets of the Group of GBP471,000 (2010: GBP944,000) include
net current assets of GBP335,000 (2010: assets of GBP718,000).
Liquidity
The statement of cash flows illustrates that there was a
decrease in cash for the year of GBP251,000 (2010: decrease of
GBP322,000). This is stated after the inflow of cash from operating
activities of GBP64,000 (2010: inflow GBP172,000) and the outflow
of cash for financial investments of GBP337,000 (2010:
GBP526,000).
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the business review and the financial position of
the Group, its cash flows and liquidity position are described in
the financial review. In addition, the directors' report includes
the Group's objectives, policies and processes for managing its
capital and its financial risk management objectives. Further
details of the Company's financial instruments and hedging
activities and its exposure to credit risk and liquidity risk are
detailed below. In considering going concern, the Directors have
prepared detailed cash flow forecasts to June 2013. The forecasts
are based on the assumption that the Group will not generate any
cash inflows during this period in respect of its current
investments and that working capital requirements will be
maintained at current levels. Based on this assessment, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Thus they continue to adopt the going concern basis of
accounting in preparing the annual financial statements.
Directors and their interests
The directors, all of whom served throughout the year, are as
follows:
P J Holmes
S Casey
The directors had the following beneficial interests in the
Ordinary Shares of 1 pence in the capital of the Company:
At 30 June At 1 July
2011 2010
Number of Number of
Shares Shares
---------------------- ----------- -----------
Executive directors:
---------------------- ----------- -----------
P J Holmes 84,750 84,750
---------------------- ----------- -----------
S Casey 470,000 170,000
---------------------- ----------- -----------
There have been no changes in directors' shareholdings since the
year end and up to the date of these accounts. The market price of
the Company's Ordinary Shares on 30 June 2011 was 7.25 pence and
the high and low share prices during the year were 13.5 pence and
7.25 pence respectively.
Financial instruments
The Group's principal financial instruments comprise investment
notes and cash. The main purpose of these financial instruments is
to generate returns for shareholders and fund future investments.
The Group has various other financial instruments such as trade
payables that arise directly from its operations.
The main risks arising from the Group's financial instruments
are interest rate risk, liquidity risk, credit risk and foreign
currency risk. The Board has policies for managing each of these
risks and they are summarised below.
Interest rate risk
The Group invests in cash deposits at floating rate and interest
on loan notes is at a fixed rate, which means that the Group is
exposed to cash flow interest rate risk and fair value interest
rate risk. The Group's exposure to interest rate fluctuations will
continue to be monitored.
Liquidity risk
The Group's objective is to maintain sufficient liquid resources
such as cash and cash equivalents. To this end the Group monitors
all liabilities and ensures sufficient assets are on hand and that
investments are structured to mature conterminously with such
liabilities.
Credit risk
The Group reviews each investment under standard criteria to
determine the appropriate credit risk and so determines any
mitigating steps to be taken to hedge such risk. To date this has
entailed registering charges against any assets pledged as
collateral security and placing nominee directors upon the Boards
of investee entities.
Foreign currency risk
The Group has limited exposure to transactional currency risk.
This occurs as a result of operational expenses incurred in
currencies other than Sterling, typically Euros. The Group will
continue to monitor and manage its exposure to this risk. One
option might be for the Group to invoice for advisory services in
Euros where appropriate.
Supplier payment policy
The Group's policy is to agree the terms of payment with
suppliers when agreeing the terms of each transaction or series of
transactions. The Group's policy is then to abide by those
pre-arranged terms for payment. At the year end the Group had an
average of 40 days (2010: 40 days) purchases outstanding in trade
payables.
Share option scheme
The Group operates a share option scheme, the Lagan Capital plc
Executive Share Option Scheme, for directors or employees of any
company over which the Company has control, or such person as
determined by the Board in their absolute discretion. The Scheme
was adopted on 25 October 1999. The maximum number of shares over
which the eligible party may be granted an option is determined at
the absolute discretion of the Board.
The subscription price in respect of an option shall be
determined by the Board but shall not be less than the market value
of an Ordinary Share on the dealing date immediately preceding the
day on which the option is granted.
The Directors who held office at 30 June 2011 had the following
beneficial interests in options to subscribe for Ordinary Shares at
30 June 2011:
No of ordinary
shares Expiry date Exercise
under options Date of of options price
grant per share
------------- --------------- ---------- ------------- -----------
P J Holmes 200,000 05.10.09 05.10.19 10p
------------- --------------- ---------- ------------- -----------
S Casey 200,000 05.10.09 05.10.19 10p
------------- --------------- ---------- ------------- -----------
On 26 April 2010 150,000 Ordinary Shares were issued to a
director of the Group, Stephen Casey, in lieu of payment of
directors fees of GBP15,000. The issue price was determined by
using a premium over the quoted share price immediately prior to
issue. On 22 June 2011 300,000 Ordinary Shares were issued to a
director of the group, Stephen Casey, in lieu of payment of
directors fees of GBP21,750. The issue price was set at 7.25 pence
per share representing the quoted share price immediately prior to
issue.
Directors' remuneration
Emoluments Pension contributions
total total
----------- ------------ -----------------------
GBP000 GBP000
----------- ------------ -----------------------
P J Holmes 15 -
----------- ------------ -----------------------
S Casey 22 -
----------- ------------ -----------------------
AIM compliance committee
In accordance with Rule 31 of the AIM Rules for Companies ("AIM
Rules") , the Company is required to have in place sufficient
procedures, resources and controls to enable its compliance with
the AIM Rules; seek advice from its nominated adviser ("Nomad"),
Northland Capital Partners Limited, regarding its compliance with
the AIM Rules whenever appropriate and take that advice into
account; provide the Company's Nomad with any information it
requests in order for the Nomad to carry out its responsibilities
under the AIM Rules and the AIM Rules for Nominated Advisers;
ensure that each of the directors accepts full responsibility,
collectively and individually, for compliance with the AIM Rules;
and ensure that each director discloses without delay all
information which the Group needs in order to comply with Rule 17
of the AIM Rules (Disclosure of Miscellaneous Information) insofar
as that information is known to the director or could with
reasonable diligence be ascertained by the director. In order to
ensure that these obligations are being discharged, the Board, as a
committee, regularly liaises with the Company's Nomad to maintain
compliance. Having reviewed its procedures and controls, relevant
Board papers and its contact with the Company's Nomad, the Board is
satisfied that the Group's obligations under Rule 31 of the AIM
Rules have been satisfied during the year under review.
The Company's principal risk relates to Capital Management
The Company's capital management objectives are:
-- to ensure the Group's ability to continue as a going concern;
and
-- to provide an adequate return to shareholders through
implementation of its investing policy.
The Board monitors capital on the basis of the carrying amount
of equity plus any debt, where said debt has been so reduced by any
cash and cash equivalents, as presented on the face of the balance
sheet.
The Board sets the amount of capital in proportion to its
overall financing structure, i.e. equity plus debt. The Group
manages the capital structure and makes adjustments to it in the
light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Board may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares, or sell assets to reduce debt.
Capital for the reporting years under review is summarised as
follows:
2011 2010
-------- ------- -------
GBP000 GBP000
-------- ------- -------
Equity 471 944
-------- ------- -------
Debt - -
-------- ------- -------
Other significant shareholders
Directors' interests in the issued Ordinary Shares of the
Company as at 30 June 2011 have been disclosed above. The other
significant shareholdings of 3 per cent or more of the issued
Ordinary Shares in the Company are as follows:
Percentage
holding
------------------------ -----------
Mansard Limited 14.9%
------------------------ -----------
Mr James Brian Ennis 16.9%
------------------------ -----------
Pershing International
Nominees 7.1%
------------------------ -----------
Crumlin Picture House
Ltd 4.8%
------------------------ -----------
Ashdale Investment
Trust Services 3.5%
------------------------ -----------
On behalf of the Board
Stephen Casey
Secretary
4 April 2012
Directors' Responsibilities Statement
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the directors
have to prepare the Group financial statements in accordance with
International Financial Reporting Standards as adopted by the
European Union (IFRSs) and have elected to prepare Parent Company
financial statements in accordance with United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice).
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs and profit or loss of the Company and
the Group for that period. In preparing these financial statements,
the directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and accounting estimates that are reasonable and prudent;
-- state whether applicable IFRSs or UK Accounting Standards
have been followed, subject to any material departures disclosed
and explained in the financial statements;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and Group and enable them to
ensure that the financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the assets of the
Company and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
In so far as each of the directors is aware:
-- there is no relevant audit information of which the Company's auditor is unaware; and
-- the directors have taken all steps that they ought to have
taken to make themselves aware of any relevant audit information
and to establish that the auditor is aware of that information.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
By order of the Board
Stephen Casey
Secretary
4 April 2012
Independent auditor's report
to the members of Lagan Capital Plc
We have audited the financial statements of Lagan Capital Plc
for the year ended 30 June 2011 which comprise the consolidated
statement of comprehensive income, the consolidated balance sheet,
the consolidated cash flow statement, the consolidated statement of
changes in equity, the parent company balance sheet and the related
notes. The financial reporting framework that has been applied in
the preparation of the Group financial statements is applicable law
and International Financial Reporting Standards (IFRSs) as adopted
by the European Union. The financial reporting framework that has
been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting
Practice).
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities
Statement set out on page 8 the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view. Our responsibility is to audit
and express an opinion on the financial statements in accordance
with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing
Practices Board's (APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the APB's website at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the parent company's affairs as at 30
June 2011 and of the Group's loss for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with IFRS as adopted by the European Union;
-- the parent company financial statements have been properly
prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' report
for the financial year for which the financial statements are
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
John Corbishley
Senior Statutory Auditor
for and on behalf of
GRANT THORNTON UK LLP
Statutory Auditor, Chartered Accountants
Milton Keynes
4 April 2012
Consolidated statement of comprehensive income
for the year ended 30 June 2011
Year ended Year ended
30 June 30 June
2011 2010
----------------------- ------ -------------------------- -----------
Total Total
----------------------- ------ -------------------------- -----------
Notes GBP000 GBP000
----------------------- ------ -------------------------- -----------
Revenue 52 38
----------------------- ------ -------------------------- -----------
Gross profit 52 38
----------------------- ------ -------------------------- -----------
Admin expenses (547) (121)
----------------------- ------ -------------------------- -----------
Operating loss (495) (83)
----------------------- ------ -------------------------- -----------
Finance income - 17
----------------------- ------ -------------------------- -----------
Pre-tax loss for
the year (495) (66)
----------------------- ------ -------------------------- -----------
Tax 6 - -
----------------------- ------ -------------------------- -----------
Net loss for the
year and total
comprehensive income (495) (66)
----------------------- ------ -------------------------- -----------
Loss per share
----------------------- ------ -------------------------- -----------
- basic 7 (9.46p) (1.29p)
----------------------- ------ -------------------------- -----------
- diluted 7 (9.46p) (1.29p)
----------------------- ------ -------------------------- -----------
The accompanying accounting policies and notes form part of
these financial statements.
For the year ended 30 June 2011 and 30 June 2010 all of the
above operations are continuing.
There was no other comprehensive income in the year (2010:
nil).
Consolidated balance sheet
as at 30 June 2011
30 June 30 June
2011 2010
----------------------------------- ------ ------------------------------ --------
Notes GBP000 GBP000
----------------------------------- ------ ------------------------------ --------
ASSETS
----------------------------------- ------ ------------------------------ --------
Non-current assets
----------------------------------- ------ ------------------------------ --------
Investments held at fair
value
----------------------------------- ------ ------------------------------ --------
through profit and loss 8 - 17 17
----------------------------------- ------ ------------------------------ --------
Loans and receivables 8 281 209
----------------------------------- ------ ------------------------------ --------
281 226
----------------------------------- ------ ------------------------------ --------
Current assets
----------------------------------- ------ ------------------------------ --------
Trade and other receivables 8 331 560
----------------------------------- ------ ------------------------------ --------
Cash and cash equivalents 10 28 279
----------------------------------- ------ ------------------------------ --------
359 839
----------------------------------- ------ ------------------------------ --------
Total assets 640 1,065
----------------------------------- ------ ------------------------------ --------
EQUITY
----------------------------------- ------ ------------------------------ --------
Capital and reserves attributable
to the Company's equity
holders
----------------------------------- ------ ------------------------------ --------
Share capital 11 2,539 2,536
----------------------------------- ------ ------------------------------ --------
Share premium account 7,633 7,614
----------------------------------- ------ ------------------------------ --------
Retained earnings (9,701) (9,206)
----------------------------------- ------ ------------------------------ --------
Total equity 471 944
----------------------------------- ------ ------------------------------ --------
LIABILITIES
----------------------------------- ------ ------------------------------ --------
Current liabilities
----------------------------------- ------ ------------------------------ --------
Trade and other payables 12 24 121
----------------------------------- ------ ------------------------------ --------
Non-current liabilities
----------------------------------- ------ ------------------------------ --------
Trade and other payables 12 145 -
----------------------------------- ------ ------------------------------ --------
Total liabilities 169 121
----------------------------------- ------ ------------------------------ --------
Total equity and liabilities 640 1,065
----------------------------------- ------ ------------------------------ --------
The accompanying accounting policies and notes form part of
these financial statements
The financial statements were approved by the Board of Directors
on 4 April 2012.
Stephen Casey P J Holmes
Director Director
4 April 2012 4 April 2012
Company number: 03744133
Consolidated cash flow statement
for the year ended 30 June 2011
Year ended Year ended
30 June 30 June
2011 2010
------------------------------------ ---------------------------- -----------
GBP000 GBP000
------------------------------------ ---------------------------- -----------
Operating activities
------------------------------------ ---------------------------- -----------
Loss for the year before
tax (495) (66)
------------------------------------ ---------------------------- -----------
Share based payment expense - 11
------------------------------------ ---------------------------- -----------
Fair value losses on financial
assets recognised in profit 17 -
or loss
------------------------------------ ---------------------------- -----------
Impairment on financial 296 -
assets
------------------------------------ ---------------------------- -----------
Change in trade and other
receivables 229 140
------------------------------------ ---------------------------- -----------
Change in trade and other
payables 48 104
------------------------------------ ---------------------------- -----------
Interest received - (17)
------------------------------------ ---------------------------- -----------
Interest accrued on financial (31) -
assets
------------------------------------ ---------------------------- -----------
Net cash inflow from operating
activities 64 172
------------------------------------ ---------------------------- -----------
Investing activities
------------------------------------ ---------------------------- -----------
Additions to financial investments (337) (526)
------------------------------------ ---------------------------- -----------
Interest received - 17
------------------------------------ ---------------------------- -----------
Net cash outflow from investing
activities (337) (509)
------------------------------------ ---------------------------- -----------
Financing activities
------------------------------------ ---------------------------- -----------
Shares issued 22 15
------------------------------------ ---------------------------- -----------
Net cash inflow from financing
activities 22 15
------------------------------------ ---------------------------- -----------
Net
------------------------------------ ---------------------------- -----------
Cash and cash equivalents,
beginning of year 279 601
------------------------------------ ---------------------------- -----------
Net decrease in cash and
cash equivalents (251) (332)
------------------------------------ ---------------------------- -----------
Cash and cash equivalents,
end of year 28 279
------------------------------------ ---------------------------- -----------
The accompanying accounting policies and notes form part of
these financial statements
Consolidated statement of changes in equity
for the year ended 30 June 2011
Share Share Profit & Total
capital Premium loss equity
GBP000 GBP000 GBP000 GBP000
---------------------------- --------- --------- --------- --------
Balance as at 30 June
2009 2,535 7,600 (9,151) 984
---------------------------- --------- --------- --------- --------
Share options expense - - 11 11
---------------------------- --------- --------- --------- --------
Shares issued 1 14 - 15
---------------------------- --------- --------- --------- --------
Transactions with owners 1 14 11 26
---------------------------- --------- --------- --------- --------
Loss for the year - - (66) (66)
---------------------------- --------- --------- --------- --------
Total comprehensive income
for
the year - - (66) (66)
---------------------------- --------- --------- --------- --------
Balance as at 30 June
2010 2,536 7,614 (9,206) 944
---------------------------- --------- --------- --------- --------
Shares issued 3 19 - 22
---------------------------- --------- --------- --------- --------
Transactions with owners 3 19 - 22
---------------------------- --------- --------- --------- --------
Loss for the year - - (495) (495)
---------------------------- --------- --------- --------- --------
Total comprehensive income
for
the year - - (495) (495)
---------------------------- --------- --------- --------- --------
Balance as at 30 June
2011 2539 7633 (9701) 471
---------------------------- --------- --------- --------- --------
The accompanying accounting policies and notes form part of
these financial statements
Notes to the consolidated financial statements
for the year ended 30 June 2011
1 General information
Lagan Capital plc is a public limited company incorporated and
domiciled in the United Kingdom. The address of the registered
office is Kingfisher House, 1 Gilders Way, St James Place, Norwich,
Norfolk NR3 1UB. The shares of Lagan Capital plc are listed on the
AIM Market of the London Stock Exchange. Lagan Capital Plc has a
subsidiary company Lagan Capital Investments Limited, incorporated
in the Republic of Ireland, which has not traded to date and
together these entities comprise the Group. These financial
statements have been approved for issue by the Board of Directors
on 4 April 2012.
2 Summary of significant accounting policies
2.1 Basis of preparation
The financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union. The financial statements have
been presented in accordance with IAS 1 Presentation of Financial
Statements (Revised 2007). The Group has elected to present a
"statement of comprehensive income" as one statement.
The Directors have prepared these accounts on a going concern
basis, since they believe that the Group will be able to pay its
liabilities as they fall due. The accounts are prepared according
to the historic cost convention with the exception of investments
designated at fair value through profit and loss.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to both years presented, unless otherwise
stated.
2.2 Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Business review of the Directors' report and the
financial position of the Group, its cash flows, liquidity position
and borrowing facilities are described in the Financial review of
the Directors' report. In addition, notes 1 to 14 to the financial
statements include the Group's objectives, policies and processes
for managing its capital; its financial risk management objectives;
details of its financial instruments and hedging activities; and
its exposures to credit risk and liquidity risk. In considering
going concern, the Directors have prepared detailed cash flow
forecasts to June 2013. The forecasts are based on the assumption
that the group will not generate any cash inflows during this
period in respect of its current investments and that working
capital requirements will be maintained at current levels. Based
upon this assessment the Group has adequate financial resources and
as a consequence, the Directors believe that the Group is well
placed to manage its business risks successfully despite the
current uncertain economic outlook. The Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
2.3 Key assumptions and judgements
The directors have identified the following as key judgements in
the preparation of the Group accounts:
-- going concern
The ability of the Company to continue as a going concern is
dependent upon its ability to raise additional capital or to ensure
that expenses and cash liabilities do not exceed liquid assets.
Specifically, trade and other receivables include amounts due from
Median Limited and Integrated Medical Solutions Limited as detailed
in note 5 and the company is dependent on these debts being paid in
order to continue funding the business. The balance owed by
Integrated Medical Solutions Limited has been paid in full
subsequent to the year end. The balance due from Median Limited has
also been repaid in full and the Company has advanced an additional
GBP135,000 to Median Limited subsequent to the year-end which
remained unpaid at the date the financial statements were approved.
The Directors have considered the creditworthiness of the balance
due to the company and are confident that payment will be received
before the funds are required. This is a key assumption made by the
Directors in preparing cash flow forecasts on which their going
concern assessment has been based. The accompanying financial
statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
-- estimation of fair values of share options (see note 11)
Share based payment expenses are calculated by reference to the
estimated fair values of share options as at their date of grant.
These fair values have been estimated using a Black - Scholes
option valuation model. For each option the exercise price is
equivalent to the quoted share price immediately prior to issue
-- carrying value of financial assets (see note 8)
Financial assets classified as loans or receivables are shown at
amortised cost less amounts written off. Carrying values of
financial assets are reviewed for impairment in years if events or
changes in circumstances indicate the carrying value may not be
recoverable. The key factors influencing any such impairment are
changes to discounted cash flows or credit risk. Financial assets
at fair value through profit and loss comprise investments in the
equity of investee companies. The directors have performed an
evaluation of expected cash flows arising from the investee
entities and valued the investments accordingly.
2.4 Segment reporting
With reference to IFRS8 the Group's operations are uncomplicated
and management monitor performance upon the basis that it comprises
only one segment
2.5 Foreign currency translation
Functional and presentation currency
Items included in the financial statements are measured using
the currency of the primary economic environment in which the
entity operates (the "functional currency"). The financial
statements are presented in sterling, which is the functional
currency of the parent company.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation of
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income
statement.
2.6 Financial assets
For the purpose of subsequent measurement, financial assets are
classified into the following categories upon initial
recognition:
-- loans and receivables;
-- financial assets at fair value through profit or loss;
The category determines subsequent measurement and whether any
resulting income and expense is recognised in profit or loss.
Loans and receivables are subject to review for impairment at
least at each reporting date. Financial assets are impaired when
there is any objective evidence that a financial asset or a group
of financial assets is impaired. Different criteria to determine
impairment are applied for each category of financial assets, which
are described below.
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. After initial recognition at fair value, these are measured
at amortised cost using the effective interest method, less
provision for impairment. Loans made to investee companies are
included within this category and the interest income earned is
included within revenue. Discounting is omitted where the effect of
discounting is immaterial. The Group's cash and cash equivalents,
trade and most other receivables fall into this category of
financial instruments.
Individually significant receivables are considered for
impairment when they are past due or when other objective evidence
is received that a specific counterparty will default. Receivables
that are not considered to be individually impaired are reviewed
for impairment in groups, which are determined by reference to the
industry and region of counterparty and other available features of
shared credit risk characteristics. The percentage of the write
down is then based on recent historical counterparty default rates
for each identified group member. Impairments of loans and
receivables are presented within 'other expenses'.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include
financial assets that are either classified as held for trading or
that meet certain conditions and are designated at fair value
through profit or loss upon initial recognition. The equity
investments made by the Group are designated within this category
on inception and all derivative financial instruments fall into
this category.
Assets in this category are measured at fair value with gains or
losses recognised in profit or loss. The fair values of derivative
financial instruments are determined by reference to active market
transactions or using a valuation technique where no active market
exists.
2.7 Equity
Share capital is determined using the nominal value of shares
that have been issued. Share premium includes any premiums received
on the initial issuing of the share capital. Any transaction costs
associated with the issuing of shares are deducted from share
premium to the extent of any premium arising on that issue of
shares, net of any related income tax benefits.
Retained earnings include all current and prior year results as
disclosed in the statement of comprehensive income and statement of
changes in equity.
2.8 Share grants
The Group makes grants of shares and share options to management
as incentives. Where shares are granted this is in lieu of
contractual salary and the number of shares issued is determined by
reference to the market price of the shares and the fair value of
the services rendered by the director. For share options the fair
value shares of the options granted is appraised at the grant date
using an option pricing model. The cost of such grants is
recognised as an expense in the Consolidated Statement of
Comprehensive Income with a corresponding credit to the equity
reserve. If the options vest over a number of years, the expense is
spread over the vesting period to recognise an expense based on the
best available estimate of the number of shares ultimately expected
to vest. Estimates are subsequently revised if there is any
indication that the number of shares expected to vest differs from
previous estimates. Any cumulative adjustment prior to vesting is
recognised in the current period. No adjustment is made to any
expense recognised in prior periods if share options ultimately
exercised are different to that estimated on vesting. Upon exercise
of share options, the proceeds received net of any directly
attributable transaction costs up to the nominal value of the
shares issued are allocated to share capital with any excess being
recorded as share premium.
2.9 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand
deposits, together with other short-term, highly liquid investments
that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value.
2.10 Deferred income tax
Deferred income tax is provided in full, using the liability
method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the
consolidated financial statements. The deferred income tax is not
accounted for if it arises from initial recognition of an asset or
liability in a transaction, other than a business combination, that
at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted by
the balance sheet date and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax
liability is settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
2.11 Revenue recognition
Loan interest is recognised upon an accrual basis in accordance
with the terms of the underlying instrument. Advisory fees and
other services are recognised when performed and once payment is
certain.
2.12 Financial liabilities
Financial liabilities are obligations to pay cash or other
financial assets and are recognised when the Company becomes a
party to the contractual provisions of the instrument. All other
financial liabilities are recorded initially at fair value, net of
direct issue costs.
Financial liabilities are measured at amortised cost using the
effective interest method, with interest-related charges recognised
as an expense in finance cost in the income statement. Finance
charges, including premiums payable on settlement or redemption and
direct issue costs, are charged to the income statement on an
accruals basis using the effective interest method and are added to
the carrying amount of the instrument to the extent that they are
not settled in the year in which they arise.
A financial liability is derecognised only when the obligation
is extinguished; that is, when the obligation is discharged or
cancelled or expires.
Trade payables
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
New standards and interpretations currently in issue but not
effective for accounting periods commencing on 1 July 2010 are:
-- IFRS 9 Financial Instruments (effective 1 January 2015)
-- IFRS 10 Consolidated Financial Statements (effective 1 January 2013)
-- IFRS 11 Joint Arrangements (effective 1 January 2013)
-- IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2013)
-- IFRS 13 Fair Value Measurement (effective 1 January 2013)
-- IAS 24 (Revised 2009) Related Party Disclosures (effective 1 January 2011)
-- IAS 19 Employee Benefits (Revised June 2011) (effective 1 January 2013)
-- IAS 27 (Revised), Separate Financial Statements (effective 1 January 2013)
-- IAS 28 (Revised), Investments in Associates and Joint Ventures (effective 1 January 2013)
-- Prepayments of a Minimum Funding Requirement - Amendments to
IFRIC 14 (effective 1 January 2011)
-- Improvements to IFRS issued May 2010 (changes that are effective 1 January 2011)
-- Disclosures - Transfers of Financial Assets - Amendments to IFRS 7 (effective 1 July 2011)
-- Deferred Tax: Recovery of Underlying Assets - Amendments to
IAS 12 Income Taxes (effective 1 January 2012)
-- Presentation of Items of Other Comprehensive Income -
Amendments to IAS 1 (effective 1 July 2012)
-- Disclosures - Offsetting Financial Assets and Financial
Liabilities - Amendments to IFRS 7 (effective 1 January 2013)
-- Offsetting Financial Assets and Financial Liabilities -
Amendments to IAS 32 (effective 1 January 2014)
-- Mandatory Effective Date and Transition Disclosures -
Amendments to IFRS 9 and IFRS 7 (effective 1 January 2015)
-- IFRIC 20 Stripping Costs in the Production Phase of a Surface
Mine (effective 1 January 2013)
There is no substantial effect upon the financial statements of
the adoption of these standards in the year.
3 Expenses by nature
Year ended Year ended
30 June 30 June
2011 2010
GBP000 GBP000
-------------------------------------------- ----------- -----------
Auditor's remuneration
-------------------------------------------- ----------- -----------
Audit
-------------------------------------------- ----------- -----------
- audit fee of parent company's auditor
in respect of the audit of parent company 18 15
-------------------------------------------- ----------- -----------
Non-audit
-------------------------------------------- ----------- -----------
- taxation - 3
-------------------------------------------- ----------- -----------
- other services - 8
-------------------------------------------- ----------- -----------
Share based payment expense - 11
-------------------------------------------- ----------- -----------
Total 18 37
-------------------------------------------- ----------- -----------
Classified as:
-------------------------------------------- ----------- -----------
- administrative expenses 18 37
-------------------------------------------- ----------- -----------
18 37
-------------------------------------------- ----------- -----------
4 Employee benefit expense
Expense recognised for employee benefits including directors'
remuneration is analysed below:
Year ended Year ended
30 June 30 June
2011 2010
GBP000 GBP000
-------------------------------------- ----------- -----------
Wages and salaries 37 30
-------------------------------------- ----------- -----------
Social security costs - -
-------------------------------------- ----------- -----------
Pensions - defined contribution plan - -
-------------------------------------- ----------- -----------
Share based payments - 11
-------------------------------------- ----------- -----------
37 41
-------------------------------------- ----------- -----------
On 26 April 2010 150,000 Ordinary Shares were issued to a
director of the Company, Stephen Casey, in lieu of payment of
directors fees of GBP15,000. The issue price was set at 10.0 pence
per share.
On 22 June 2011 300,000 Ordinary Shares were issued to a
director of the Group, Stephen Casey, in lieu of payment of
directors fees of GBP21,750. The issue price was set at 7.25 pence
per share representing the quoted share price immediately prior to
issue.
The average number of employees including directors during the
year was made up as follows:
Year ended Year ended
30 June 30 June
2011 2010
---------------- ----------- -----------
No. No.
---------------- ----------- -----------
Administration 2 2
---------------- ----------- -----------
2 2
---------------- ----------- -----------
5 Related party transactions
(a) Transactions with key management personnel
Key management personnel remuneration includes the following
expenses:
2011 2010
--------------------------------------- ------- -------
GBP000 GBP000
--------------------------------------- ------- -------
Short term employee benefits
--------------------------------------- ------- -------
- Wages, salaries and fees 37 30
--------------------------------------- ------- -------
- Social security costs - -
--------------------------------------- ------- -------
- Share based payments - 11
--------------------------------------- ------- -------
37 41
--------------------------------------- ------- -------
Post-employment benefits, relating to
--------------------------------------- ------- -------
- Defined benefit pension schemes - -
--------------------------------------- ------- -------
Total 37 41
--------------------------------------- ------- -------
(b) Transactions with other related parties
The interests of the directors in the share capital of the
Company and its subsidiary Companies at 30 June 2011 have been
detailed in the Directors' report. One of the directors received
shares in lieu of outstanding fees; details of this are shown in
note 4. During the year ending 30 June 2011 the Company had the
following transactions with related parties:
Median Limited - a company incorporated in Ireland is related to
Lagan Capital Plc by virtue of James Brian Ennis being a major
shareholder of the company and also a Director and shareholder of
Median Limited. During the year Lagan Capital Plc was repaid funds
of GBP90,000 by Median Limited. At 30 June 2011 the balance owed by
Median Limited was GBP85,000 (2010: GBP175,000).
James Brian Ennis is related to Lagan Capital Plc by virtue of
the fact that he is a major shareholder and continues to provide
the Company with additional short term financing. During the year,
James Brian Ennis advanced funds of GBP85,000 to the Company. At 30
June 2011 the balance owed to James Brian Ennis was GBP85,000
(2010: nil).
(c) Transactions with other parties
During the year Lagan Capital Plc repaid funds of GBP89,515 to
Irish Medical Systems (Computers) Limited. At 30 June 2011 the
balance owed to Irish Medical Systems (Computers) Limited was
GBPnil (2010: GBP89,515).
During the year Irish Medical Systems (Holdings) Limited repaid
funds to Lagan Capital Plc of GBP84,980. At 30 June 2011 the
balance owed by Irish Medical Systems (Holdings) Limited was GBPnil
(2010: GBP84,980).
During the year Lagan Capital Plc repaid funds of GBP21,538 to
Integrated Medical Solutions Limited and advanced funds of
GBP238,138 to Integrated Medical Solutions Limited At 30 June 2011
the balance owed by Integrated Medical Solutions Limited was
GBP238,138 (2010: owed by Lagan Capital Plc to Integrated Medical
Solutions Limited GBP21,538).
6 Income tax
The tax assessed on the loss on ordinary activities assessed for
the year is different from the weighted average standard rate of
corporation tax in the UK of 26.5% (2010: domestic tax rates
applicable to profits in the respective countries). The differences
are reconciled below:
2011 2010
------------------------------------------------ ------- -------
GBP000 GBP000
------------------------------------------------ ------- -------
Loss before tax (495) (66)
------------------------------------------------ ------- -------
Tax calculated at standard rate of corporation
tax in the UK 129 18
------------------------------------------------ ------- -------
Adjustments for non-deductible expenses/tax
credit (88) (11)
------------------------------------------------ ------- -------
Losses carried forward (41) (7)
------------------------------------------------ ------- -------
Tax charge for period - -
------------------------------------------------ ------- -------
The weighted average applicable tax rate was 0% (2010: 0%).
7 Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of Ordinary Shares in issue during the year.
Year ended Year ended
30 June 30 June
2011 2010
---------------------------------------- ----------- -----------
Total Total
---------------------------------------- ----------- -----------
GBP000 GBP000
---------------------------------------- ----------- -----------
Loss attributable to equity holders
of the Company (495) (66)
---------------------------------------- ----------- -----------
Weighted average number of Ordinary
Shares in issue
---------------------------------------- ----------- -----------
Basic 5,226,075 5,096,212
---------------------------------------- ----------- -----------
Dilutive effect of outstanding options - -
---------------------------------------- ----------- -----------
Basic and diluted (9.46p) (1.29p)
---------------------------------------- ----------- -----------
The exercise price of the options is in excess of the share
price as at the year-end 30 June 2010 and year end 30 June 2011,
therefore these options are anti-dilutive and as such have been
excluded from the diluted EPS calculation.
8 Financial instruments
8.1 Categories of financial assets
The carrying amounts presented in the statement of financial
position relate to the following categories of assets:
2011 2010
----------------------------------------- ------- -------
GBP000 GBP000
----------------------------------------- ------- -------
Financial assets
----------------------------------------- ------- -------
Financial assets at fair value through
profit and loss - 17
----------------------------------------- ------- -------
Loans held at amortised cost 577 209
----------------------------------------- ------- -------
Provision for impairment of loans held (296) -
at amortised cost
----------------------------------------- ------- -------
Carrying value of financial assets held
at amortised cost 281 209
----------------------------------------- ------- -------
Total non-current financial assets 281 226
----------------------------------------- ------- -------
Trade and other receivables 331 560
----------------------------------------- ------- -------
Cash and cash equivalents 28 279
----------------------------------------- ------- -------
Total financial assets 640 1,065
----------------------------------------- ------- -------
Gains/(Losses) on financial assets
----------------------------------------- ------- -------
Net loss on financial assets held at
fair value through profit and loss (17) -
----------------------------------------- ------- -------
Provision for impairment of financial
assets (296) -
held at amortised cost
----------------------------------------- ------- -------
Total net loss in financial assets (313) -
----------------------------------------- ------- -------
In determining whether there was any objective evidence of
impairment in respect of the financial assets held at amortised
cost, the Directors have considered the current performance of the
investee company and assessed whether it will have generated
sufficient cash to repay the loan notes as they fall due. The
investee company did not meet its trading targets for the year and
although the company has now started to generate cash, the
directors consider it unlikely that they will generate sufficient
cash to repay the loan notes in full as they fall due and therefore
an impairment provision has been made. The impairment provision was
determined using a discounted cash flow method based upon the
original effective rate implicit in the instrument of 10% over a 48
month period and a zero residual value at the end of that
period.
The Company's policies in relation to Financial Risk Management
and Capital Management are detailed in the Directors' report.
Credit risk
The Company reviews each investment under standard criteria to
determine the appropriate credit risk and so determines any
mitigating steps to be taken to hedge such risk. At present all of
the non-current financial assets held by the company are in respect
of loan notes issued by Evolving Outsourcing Limited. To date,
steps taken to mitigate credit risk in respect of these assets has
entailed seeking information from the Boards of investee entities.
Trade and other receivables include GBP238,138 owed by Integrated
Medical Solutions Limited and GBP85,000 owed by Median Limited both
of whom are related parties disclosed in note 5 above. The company
has strong relationships with both of these parties and does not
consider there to be any significant credit risk in relation to
these balances.
The Group's maximum exposure to credit risk is limited to the
carrying value of financial assets recognised at the reporting date
as summarized above.
2011 2010
------------------------------------- ------- -------
GBP000 GBP000
------------------------------------- ------- -------
Trade and other receivables
------------------------------------- ------- -------
Loans and receivables - current not
past due 331 560
------------------------------------- ------- -------
Total current financial asset 331 560
------------------------------------- ------- -------
The carrying amounts of trade and other receivables approximate
their fair values.
Financial assets at fair value through the profit and loss
At 30 June 2011 the Group held investments in the ordinary
shares and voting rights of the following undertakings:
Proportion of
voting rights Principal
and activity
shares held
----------------------------- --------------- ------------------------
Incorporated in Republic
of Ireland
----------------------------- --------------- ------------------------
Evolving Outsourcing Limited 19% Provision of outsourced
services
----------------------------- --------------- ------------------------
At 30 June 2010 the Group held investments in loan notes issued
by Ocuco Holdings Limited by way of a GBP300,000 9 month rolling
loan note with a coupon of 12% which may be converted into 20% of
the equity of Ocuco (Holdings) Limited - but only in event of a
default on the loan note, this loan note was redeemed in full in
January 2011. A 3-year 10% rolled up loan note issued by Evolving
Outsourcing Limited of which GBP546,000 was drawn down by 30 June
2011. At 30 June 2011 the Group was due receivables of GBP238,138
from Integrated Medical Solutions Limited and its subsidiaries.
2011 2010
---------------------------------------- -------- -------
GBP000 GBP000
---------------------------------------- -------- -------
Financial assets
---------------------------------------- -------- -------
Financial assets at fair value through
profit and loss - 17
---------------------------------------- -------- -------
8.2 Financial Instruments measured at fair value
The following table presents financial assets and liabilities
measured at fair value in the balance sheet in accordance with the
fair value hierarchy. This hierarchy groups financial assets and
liabilities into three levels based on the significance of inputs
used in measuring the fair value of the financial assets and
liabilities. The fair value hierarchy has the following levels:
- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities;
- Level 2: inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly
(ie as prices) or indirectly (ie derived from prices); and
- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
The level within which the financial asset or liability is
classified is determined based on the lowest level of significant
input to the fair value measurement.
The financial assets and liabilities measured at fair value in
the Consolidate Balance Sheet are considered to be level 2.
2011 2010
---------------------------------------- -------- -------
GBP000 GBP000
---------------------------------------- -------- -------
30 June 2011
---------------------------------------- -------- -------
Assets
---------------------------------------- -------- -------
Investments held at fair value through
profit and loss - 17
---------------------------------------- -------- -------
Total - 17
---------------------------------------- -------- -------
There have been no transfers between levels 1 and 2 in the
reporting period.
2011 2010
----------------------------------------- ------- -------
GBP000 GBP000
----------------------------------------- ------- -------
Financial liabilities
----------------------------------------- ------- -------
Financial liabilities at amortised cost 154 121
----------------------------------------- ------- -------
The maturity of financial liabilities
is as follows
----------------------------------------- ------- -------
2011 2010
----------------------------------------- ------- -------
GBP000 GBP000
----------------------------------------- ------- -------
Within one month 9 121
----------------------------------------- ------- -------
After one year but within two years 145 -
----------------------------------------- ------- -------
154 121
----------------------------------------- ------- -------
Measurement of fair value
Investments in equity
The fair value of the equity investment value is based on the
cost price of the shares as at the purchase date being 8 June 2010
less fair value of any adjustments since. A provision for the
diminution in the fair value of the asset was made following a
review of the circumstances under which the shares are held; the
restrictions upon the transfer of the shares under a shareholders'
agreement and the performance of the underlying business.
8.3 Finance income
Finance income may be analysed as follows for the reporting
periods presented:
Year ended Year ended
30 June 30 June
2011 2010
-------------------------------------------- ----------- -----------
GBP000 GBP000
-------------------------------------------- ----------- -----------
Interest income from loans and receivables 52 20
-------------------------------------------- ----------- -----------
52 20
-------------------------------------------- ----------- -----------
Interest income of GBP21,000 (2010: GBP3,000), GBP31,000 (2010:
nil) and nil (2010: GBP17,500) was recognised from Ocuco Holdings
Limited, Evolving Outsourcing Limited and Integrated Medical
Software Limited respectively. The interest income received from
Ocuco Holdings Limited has been included in revenue in the
Consolidated Statement of Comprehensive Income and the interest
received from Integrated Medical Software Limited has been included
in finance income for 30 June 2010, on the basis that the income
did not relate to the operating activities of the Company. In 2011
all interest income has been included in revenue as it relates to
investments held by the Company and is therefore generated from
operating activity.
Total interest income recognised in respect of impaired assets
it GBP31,000 (2010: GBPnil).
9 Deferred income tax assets and liabilities
Deferred income taxes and liabilities are offset when there is a
legally enforceable right to offset; there were no such amounts
this year. Deferred taxes arising from temporary differences and
unused tax losses can be summarised as follows:
Deferred Deferred
tax assets tax liabilities Deferred Deferred
2011 2011 tax assets tax liabilities
GBP000 GBP000 2010 2010
GBP000 GBP000
------------------- ------------ ----------------- ------------ -----------------
Unused tax losses 1,436 - 1,285 -
------------------- ------------ ----------------- ------------ -----------------
Total 1,436 - 1,285 -
------------------- ------------ ----------------- ------------ -----------------
Deferred tax assets are recognised for tax loss carry-forwards
to the extent that the realisation of the related tax benefit
through future taxable profits is probable. Any potential deferred
tax asset is not recognised in the financial statements as the
directors consider that there are not suitable tax profits
available to support its recognition.
10 Cash and cash equivalents
2011 2010
-------------------------- ------- -------
GBP000 GBP000
-------------------------- ------- -------
Cash at bank and in hand 28 279
-------------------------- ------- -------
11 Share capital
Ordinary shares
The nominal value of the Ordinary Shares is 1 pence per share
and the nominal value of the Deferred Shares is GBP245 per
share.
Issued Authorised
----------------------- ------------------ ------------------
Number Number
('000) GBP000 ('000) GBP000
----------------------- -------- -------- -------- --------
Ordinary shares
----------------------- -------- -------- -------- --------
At 1 July 2010 5,220 52 500,000 9,900
----------------------- -------- -------- -------- --------
Issued 22 June 2011 300 3 - -
----------------------- -------- -------- -------- --------
Total at 30 June 2011 5,520 55 500,000 9,900
----------------------- -------- -------- -------- --------
Deferred shares
----------------------- -------- -------- -------- --------
At 1 July 2010 10 2,484 20 4,900
----------------------- -------- -------- -------- --------
Total at 30 June 2011 10 2,484 20 4,900
----------------------- -------- -------- -------- --------
At 30 June 2011 5,520 2,539 500,020 9,900
----------------------- -------- -------- -------- --------
At 30 June 2010 5,230 2,536 500,020 9,900
----------------------- -------- -------- -------- --------
The Deferred Shares have no voting rights and do not carry any
entitlement to attend general meetings of the Company. They carry
only the right to participate in any return of capital or dividends
limited to the extent of 1 pence per Deferred Share but only after
each Ordinary Share has received aggregate capital or dividend
payments totalling GBP1million per Ordinary Share. The Ordinary
Shares are not otherwise restricted. Neither the Deferred Shares
nor the Ordinary Shares are entitled to any dividend nor preference
whatsoever otherwise than set out herein. The Ordinary Shares are
equally eligible to receive dividends; participate in any capital
distributions and represent one vote each at shareholders'
meetings.
On 26 April 2010, 150,000 Ordinary Shares were allotted and
issued to a director of the Company, Stephen Casey, in lieu of
payment of directors fees. On 22 June 2011 300,000 Ordinary Shares
were issued to a director of the Company, Stephen Casey, in lieu of
payment of directors fees.
Options to acquire ordinary shares
Share options and weighted average exercise prices are as
follows for the reporting periods presented:
Weighted Weighted
average average
exercise exercise
price 2011 price 2010
pence pence
Number Number
2011 2010
('000) ('000)
---------------------- -------- ------------ -------- ------------
Granted as of 1 July 400,000 10 - -
---------------------- -------- ------------ -------- ------------
Exercised during - - - -
the year
---------------------- -------- ------------ -------- ------------
Granted during the
year - - 400,000 10
---------------------- -------- ------------ -------- ------------
Lapsed during the - - - -
year
---------------------- -------- ------------ -------- ------------
Granted as of 30
June 400,000 10 400,000 10
---------------------- -------- ------------ -------- ------------
The options granted to all directors under the plan are measured
at fair value at the date of grant using the Black-Scholes model.
Significant inputs into the calculation include a weighted average
share price of 10.68 pence and an exercise price of 10 pence.
Furthermore the calculation takes into account a volatility rate of
11%, based on historic share price movements. The risk-free
interest rate was taken at 2.5%.
The underlying expected volatility was determined by reference
to historical data. No special features immanent to the options
granted were incorporated into the measurement of fair value. No
dividends were assumed to be payable during the life of the options
which expire in full on 5 October 2019.
At the end of the year 400,000 options were vested and
exercisable (2010: 400,000).
12 Trade and other payables
2011 2010
------------------------------ ------- ----------------------
GBP000 GBP000
------------------------------ ------- ----------------------
Trade payables 9 12
------------------------------ ------- ----------------------
Other creditors and accruals 160 109
------------------------------ ------- ----------------------
169 121
------------------------------ ------- ----------------------
The carrying amounts of trade and other payables approximate
their fair values.
13 Post Balance Sheet events
In September 2011 the Company agreed to provide Evolving
Outsourcing Limited with additional funding and as a consequence
the Company's equity interest increased from 19% to 49%.
14 Capital management policy
The Group considers capital to be the carrying amount of its
equity plus net debt. It is not subject to externally imposed
capital requirements. The Group's principal capital management
objectives are to enable the Company to continue as a going concern
and to fund new investment with a view to generating a return for
shareholders in the medium to long term. The Group has met its
objectives in the year by disposing of its short term investment in
Ocuco in order the fund further investment in Evolving Limited
which the Company believes will generate a return in the medium to
long term. There has been no change in the Group's policies in the
year.
The carrying amount of Group's equity is GBP471,000 (2010:
GBP944,000). The Group did not have any debt in 2010 or 2011.
Company balance sheet
as at 30 June 2011
30 June 30 June
2011 2010
Notes GBP000 GBP000
--------------------------------------- -------- --------- ---------------------
Fixed assets
--------------------------------------- -------- --------- ---------------------
Investments B 298 526
--------------------------------------- -------- --------- ---------------------
Current assets
--------------------------------------- -------- --------- ---------------------
Debtors C 331 260
--------------------------------------- -------- --------- ---------------------
Cash at bank and in hand 28 279
------------------------------------------------- --------- ---------------------
657 1,065
------------------------------------------------ --------- ---------------------
Creditors: amounts falling due within
one year D (24) (121)
--------------------------------------- -------- --------- ---------------------
Net current assets/(liabilities) 335 418
------------------------------------------------- --------- ---------------------
Total assets less current liabilities 633 944
------------------------------------------------- --------- ---------------------
Creditors: amounts falling due more E (145) -
than one year
--------------------------------------- -------- --------- ---------------------
488 944
------------------------------------------------ --------- ---------------------
Capital and reserves
--------------------------------------- -------- --------- ---------------------
Called up share capital F 2,539 2,536
--------------------------------------- -------- --------- ---------------------
Share premium account G 7,633 7,614
--------------------------------------- -------- --------- ---------------------
Profit and loss account G (9,684) (9,206)
--------------------------------------- -------- --------- ---------------------
488 944
------------------------------------------------ --------- ---------------------
The accompanying accounting policies and notes form part of
these financial statements
The financial statements were approved by the Board of Directors
on 21 March 2012.
Stephen Casey P J Holmes
Director Director
4 April 2012 4 April 2012
Notes to the Company balance sheet
for the year ended 30 June 2011
A Company accounting policies
The policies have remained unchanged from the previous period
and are set out below.
Basis of preparation and going concern
The financial statements are prepared in accordance with
applicable United Kingdom accounting standards and under the
historical cost convention. The Company has taken advantage of the
exemption under Section 408 of the Companies Act 2006 from
publishing a profit and loss account for the Company.
Investments
Fixed asset investments are shown at cost less amounts written
off. Carrying values of fixed asset investments are reviewed for
impairment in years if events or changes in circumstances indicate
the carrying value may not be recoverable.
Deferred taxation
Deferred taxation is recognised in respect of all timing
differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an
obligation to pay more, or a right to pay less or receive more tax
have occurred by the balance sheet date. Deferred tax assets are
recognised only to the extent that the directors consider that it
is more likely than not that there will be suitable taxable profits
from which the future reversal of the underlying timing differences
can be deducted.
Deferred tax is measured on a non-discounted basis at the tax
rates that are expected to apply in the years in which timing
differences reverse, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.
Financial Instruments
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered
into. An equity instrument is any contract that evidences a
residual interest in the assets of the entity after deducting all
of it financial liabilities. Where the contractual obligations of
financial instruments (including share capital) are equivalent to a
similar debt instrument, those financial instruments are classed as
financial liabilities. Financial liabilities are presented in the
balance sheet. Finance costs and gains or losses relating to
financial liabilities are included in the profit and loss account.
Finance costs are calculated so as to produce a constant rate of
return on the outstanding liability. Where the contractual terms of
share capital do not have any terms meeting the definition of a
financial liability then this is classed as an equity instrument.
Dividends and distributions relating to equity instruments are
debited direct to equity.
Foreign currency
Transactions denominated in foreign currencies are recorded
initially at the actual exchange rate at the date of the
transaction. Monetary assets and liabilities denominated in foreign
currencies at the year-end are retranslated at the rate of exchange
prevailing at the year end. Any gain or loss arising from a change
in exchange rates subsequent to the date of the transaction is
included as an exchange gain or loss in the profit and loss
account.
B Fixed assets
30 June 30 June
2011 2010
GBP000 GBP000
------------------------------------ ----------------------- ----------------------
Equity investment 17 17
------------------------------------ ----------------------- ----------------------
Loan instruments 577 509
------------------------------------ ----------------------- ----------------------
Less provision for impairment (296) -
------------------------------------ ----------------------- ----------------------
Carrying value of loan instruments 281 509
------------------------------------ ----------------------- ----------------------
Total fixed assets 298 526
------------------------------------ ----------------------- ----------------------
The equity investment value is based on the cost price of the
shares as at the purchase date 8 June 2010
C Debtors
30 June 30 June
2011 2010
GBP000 GBP000
-------------------------------------- -------- --------
Amounts falling due within one year:
-------------------------------------- -------- --------
Prepayments 8 -
-------------------------------------- -------- --------
Amounts owed by related parties 323 260
-------------------------------------- -------- --------
331 260
-------------------------------------- -------- --------
D Creditors: amounts falling due within one year
30 June 30 June
2011 2010
GBP000 GBP000
-------------------------------------- -------- --------
Trade creditors 9 12
-------------------------------------- -------- --------
Accruals and amounts owed to related
parties 15 109
-------------------------------------- -------- --------
24 121
-------------------------------------- -------- --------
E Creditors: amounts falling due more than one year
30 June 30 June
2011 2010
GBP000 GBP000
------------------------------------- -------- --------
Accruals and amounts owed to related 145 -
parties
------------------------------------- -------- --------
145 -
------------------------------------- -------- --------
F Share capital
Ordinary Shares
The nominal value of the Ordinary Shares is 1p per share and the
nominal value of the Deferred Shares is GBP245 per share.
Issued Authorised
----------------------- ------------------------------- ------------------
Number Number
('000) GBP000 ('000) GBP000
----------------------- -------- --------------------- -------- --------
Ordinary Shares
----------------------- -------- --------------------- -------- --------
At 1 July 2010 5,220 52 500,000 9,900
----------------------- -------- --------------------- -------- --------
Issued 22 June 2011 300 3 - -
----------------------- -------- --------------------- -------- --------
Total at 30 June 2011 5,520 55 500,000 9,900
----------------------- -------- --------------------- -------- --------
Deferred Shares
----------------------- -------- --------------------- -------- --------
At 1 July 2010 10 2,484 20 4,900
----------------------- -------- --------------------- -------- --------
Total at 30 June 2011 10 2,484 20 4,900
----------------------- -------- --------------------- -------- --------
At 30 June 2011 5,520 2,539 500,020 9,900
----------------------- -------- --------------------- -------- --------
At 30 June 2010 5,230 2,536 500,020 9,900
----------------------- -------- --------------------- -------- --------
The Deferred Shares have no voting rights and do not carry any
entitlement to attend general meetings of the Company. They carry
only the right to participate in any return of capital or dividends
limited to the extent of 1 pence per Deferred Share but only after
each Ordinary Share has received aggregate capital or dividend
payments totalling GBP1million per Ordinary Share. The Ordinary
Shares are not otherwise restricted. Neither the Deferred Shares
nor the Ordinary Shares are entitled to any dividend nor preference
whatsoever otherwise than set out herein. The Ordinary Shares are
equally eligible to receive dividends; participate in any capital
distributions and represent one vote each at shareholders'
meetings.
On 26 April 2010 150,000 Ordinary Shares were allotted and
issued to a director of the Company, Stephen Casey, in lieu of
payment of directors fees. On 22 June 2011 300,000 Ordinary Shares
were issued to a director of the Company, Stephen Casey, in lieu of
payment of directors fees.
Options to acquire Ordinary Shares
Share options and weighted average exercise prices are as
follows for the reporting periods presented:
Weighted Weighted
average exercise average exercise
price price
2011 2010
Number pence Number pence
2011 2010
('000) ('000)
------------------- -------- ------------------ -------- ------------------
Granted as of 1
July 400,000 10 - -
------------------- -------- ------------------ -------- ------------------
Exercised during - - - -
the year
------------------- -------- ------------------ -------- ------------------
Granted during
the year - - 400,000 10
------------------- -------- ------------------ -------- ------------------
Lapsed during the - - - -
year
------------------- -------- ------------------ -------- ------------------
Granted as of 30
June 400,000 10 400,000 10
------------------- -------- ------------------ -------- ------------------
The options granted to all directors under the plan are measured
at fair value at the date of grant using the Black-Scholes model.
Significant inputs into the calculation include a weighted average
share price of 10.68 pence and an exercise price of 10 pence.
Furthermore the calculation takes into account a volatility rate of
11%, based on historic share price movements. The risk-free
interest rate was taken at 2.5%.
The underlying expected volatility was determined by reference
to historical data. No special features immanent to the options
granted were incorporated into the measurement of fair value. No
dividends were assumed to be payable during the life of the options
which expire in full on 5 October 2019.
At the end of the year 400,000 options were vested and
exercisable (2010: 400,000).
G Reconciliation of shareholders' funds and movement on
reserves
The movements in the year were as follows:
Share Profit Total shareholders'
Share premium account and loss funds
capital GBP000 account GBP000
GBP000 GBP000
------------------- --------- ----------------- ---------- --------------------
At 1 July 2010 2,536 7,614 (9,206) 944
------------------- --------- ----------------- ---------- --------------------
Loss for the year
2011 - - (478) (478)
------------------- --------- ----------------- ---------- --------------------
Shares Issued 3 19 - 22
------------------- --------- ----------------- ---------- --------------------
At 30 June 2011 2,539 7,633 (9,684) 488
------------------- --------- ----------------- ---------- --------------------
All reserves, with the exception of the profit and loss account,
are regarded as non-distributable.
H Post Balance Sheet events
In September 2011 the Company agreed to provide Evolving
Outsourcing Limited with additional funding and as a consequence
the Company's equity interest increased from 19% to 49%.
I Related party transactions
The Company is exempt from disclosure of transactions with other
wholly owned Group companies under the provision of FRS 8. Other
related party transactions in respect of the Company are the same
as for the Group and disclosed in note 5 to the consolidated
financial statements.
Directors and Advisers
Directors
P J Holmes
S Casey
Secretary
S Casey
Registered office
Kingfisher House 1 Gilders Way St James Place Norwich Norfolk
NR3 1UB
Registered number
03744133
Auditor
Grant Thornton UK LLP
Grant Thornton House
202 Silbury Boulevard
Central Milton Keynes
MK9 1LW
Bankers
Natwest Bank Plc
215 Queensway
Bletchley
Milton Keynes
Bucks
MK2 2YY
Legal advisers
L K Shields
39/40 Upper Mount Street
Dublin 2, Ireland
Nominated Adviser and Nominated Broker
Northland Capital Partners Limited
60 Gresham Street
London
EC2V 7BB
Registrars and Transfer Office
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
This information is provided by RNS
The company news service from the London Stock Exchange
END
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