Web Shareshop (Holdings) Plc
Financial Statements
for the year ended
31 July 2002
Company No. 3981468
Smith & Williamson
Chartered Accountants
Guildford
Web Shareshop (Holdings) Plc
for the year ended 31 July 2002
Contents
Directors and Advisers
Chairman’s Statement
Board of Directors
Report of the Directors
Statement of directors’ responsibilities
Report of the Auditors
Consolidated Profit and Loss Account
Consolidated Balance Sheet
Company Balance Sheet
Consolidated Cash Flow Statement
Statement of Accounting Policies
Notes to the Financial Statements
Notice of 2002 Annual General Meeting
Form of Proxy for Annual General Meeting
Page
1
2
3
4-6
7
8
9
10
11
12
13
14-21
22
23
Director
Secretary
Registered office
Registered number
Nominated advisor
Nominated broker
Solicitors to the Company
Auditors
Bankers
Registrars
Web Shareshop (Holdings) Plc
Directors and Advisers
R Bruce Rowan – Chairman
John Watkins, FCA
John Watkins, FCA
123 Goldsworth Road
Woking
Surrey
GU21 1LR
3981468
Grant Thornton
Manor Court
Barnes Wallis Road
Segensworth
Fareham
Hampshire PO15 5GT
Keith Bayley Rogers & Co Limited
Sophia House
76-80 City Road
London EC1Y 2EQ
Ronaldsons
55 Gower Street
LondonWC1E 6HQ
Smith & Williamson
1 Bishops Wharf
Walnut Tree Close
Guildford
Surrey GU1 4RA
HSBC Bank plc
168 High Street
Guildford
Surrey GU1 3YU
Connaught St Michaels Limited
PO Box 30
Cresta House, Alma Street.
Luton
Bedfordshire LU1 2PU
Page 1
Web Shareshop (Holdings) Plc and Subsidiary
Chairman’s Statement
I am pleased to present the second annual statement to shareholders, my first since assuming the Chairmanship on 31
January 2002. From the half-year statement and other earlier announcements, you will be aware of the Group’s change of
business focus during the year, which was accompanied by a Board restructuring, completed on 31 January 2002.
Results
Results for the 12 months to 31 July 2002 record an operating loss of £360,027, offset by net interest of £10,597, leaving a
loss before taxation for the period of £349,430. For the first six months to January 2002, this loss as disclosed in the half
year statement amounted to £295,000; the balance of £54,000 reflects the reduction in overheads net of interest received.
During the period January to July 2002, the Company supported three young investee companies with subscriptions totaling
£372,500. At 31 July 2002, the company had £125,000 cash in the bank, net current assets of £484,000 and net assets of
£485,000. The investments are held in the books at cost; no profits were taken during the period.
Current trading
Since 31 January 2002, we have reduced the ongoing overheads, including all regulatory costs, to approximately £120,000
per annum. During this time, I have focused on the development of the business of underwriting small company new issues
and initial public offerings. We have supported the following:
•
Franconia Minerals Corporation, a mineral exploration company registered in Alberta Canada whose shares are
quoted on OFEX. The company is prospecting for zinc and platinum in the United States. £112,500 subscribed.
• Hidefield plc, a company which seeks to invest in undervalued mineral exploration projects. The shares are
•
quoted on AIM. £160,000 subscribed.
Southern African Resources plc, an AIM quoted company seeking mineral exploration projects in southern
Africa and which so far has invested in one platinum project. £100,000 subscribed.
It is not your Group’s intention to hold these investments for the long term, but to seek an early opportunity to realise a
profit and so to establish a cash pool to underwrite further ventures as they become available. The stock market volatility
and nervousness during 2002 has so far not allowed us to realise any profits. In the opinion of the Board, the conditions
may not be right until the early part of 2003, but we will keep the matter under constant review and act as soon as
circumstances permit.
At all times we will seek to maintain a risk profile consistent with the Group’s resources and declared objectives.
Based on mid market quotations, at 31 July 2002 the net assets per share were 5.7 pence, fully diluted.
Funding
Because of the cash limitations, we have sought and received approval from Members to raise further funds by way of one
or more placings. After an immediate rise in the share price following an announcement on 15 July of a net asset value of
5.28 pence per share, fully diluted, market sentiment has been such that the Company’s share price has since drifted down.
Accordingly, your Board has decided to delay any such placing until a price of at least 5 pence per share can be achieved.
In conclusion
Finally, I would like to confirm my personal optimism and enthusiasm for the Group’s expanded business focus and look
forward to managing it during its next stage of development towards profitable trading and increased shareholder value.
R Bruce Rowan
4 October 2002
Page 2
Web Shareshop (Holdings) Plc and Subsidiary
Board of Directors
R Bruce Rowan – Chairman and Chief Executive
Bruce Rowan joined the Board on 24 October 2001 and has managed the Company’s operations since becoming Chairman
on 31 January 2002.
Bruce is an entrepreneur who is involved as a major shareholder in a number of companies, particularly in the London AIM
and OFEX markets, as well as being a director of some. In addition, he is a majority shareholder and Chairman of Sunvest
Corporation Limited, a company quoted on the Australian Stock Exchange.
Mr John Watkins, FCA – Finance Director
John Watkins has been in practice as a chartered accountant for over 30 years. Since retiring from Ernst & Young in 1997,
his activities have included a variety of new business and charitable ventures. He is a director of other companies and gives
time to the Group as is required.
Page 3
Web Shareshop (Holdings) Plc and Subsidiary
Directors’ Report
The Directors present their second report on the affairs of the Company and Group, together with the accounts and auditors’ report, for the
year to 31 July 2002.
Principal activities and business review
Until January 2002, the principal activity of the Group was the promotion and facilitation of private investors’ participation in new issues
and the provision of information to actual and potential new issue investors. The market conditions in the second half of 2001, caused the
Directors to seek other ways to generate Shareholder value whilst remaining focused on new issues and pre IPO small company stocks.
Accordingly, the Directors appointed Mr Bruce Rowan as Chief Executive with a view to using his known expertise to underwrite small
company new issues and to trade in pre IPO stocks. This activity was commenced in January 2002, when the Group’s overheads were
significantly reduced and all the previous directors resigned, with the exception of Mr John Watkins.
The Company was incorporated as a public limited company on 20 April 2000. On 30 May 2000 the Company acquired The Web
Shareshop Limited by way of a share for share exchange.
On 9 June 2000 the Company made an offer for subscription through which it raised £1,569,540 of new capital. The Company’s shares
were admitted for trading to the Alternative Investment Market on 5 September 2000. A further 133,330 shares were issued and admitted to
the Alternative Investment Market in October 2000.
On 11 January 2002 the Company raised £161,250 by the issue of 6,450,000 shares which were admitted to the Alternative Investment
Market in January 2002.
The developments during the period are given in the Chairman’s statement.
Results and dividends
The Company’s results are set out in the profit and loss account on page 9. The audited accounts for the year ended 31 July 2002 are set
out on pages 9 to 21.
The Directors do not recommend the payment of a dividend.
Directors and their interests
The Directors who served during the year, together with all their beneficial interests in the shares of the Company at 31 July 2002 are as
follows:
Ronald Bruce Rowan Appointed 24 October 2001
Note 1
7,850,000
29.93
1,400,000
31 July 2002
Percent-
age %
Share
options
Ordinary
shares of
£0.01 each
31 July 2001
Ordinary
shares of
£0.01 each
-
500,000
260,000
Share
options
-
-
-
500,000
260,000
1.91
0.99
700,000
-
-
-
1,964,580
-
1,964,580
John Watkins
Ulick Simon Burke Appointed 20 April 2000,
resigned 11 January 2002
William Jackson
Eirion Andrew
Charles
Neubauer
Appointed 14 December
2000; resigned 31 January
2002
Appointed 20 April 2000;
resigned 11 January 2002
Note 1
Note 2
Note 3
Robert Stephen
Wilkinson
Appointed 20 April 2000;
resigned 11 January 2002
Note 5
400,000
1.53
Note 4
2,900,000
11.06
-
-
2,900,000
400,000
-
-
Note 1:
On 27 June 2002, the Company established the 2002 unapproved share option scheme and granted options over a total of
2,100,000 Ordinary shares of £0.01 at an exercise price of £0.05 per share.
Note 2:
Of these, 120,000 shares are held by ALPs FS Limited of which Simon Burke is a director and major shareholder.
Note 3:
On 21 May 2001, the Company established an unapproved share option scheme and granted options over 1,964,580 Ordinary
shares of £0.01 at an exercise price of £0.05 per share.
Note 4:
Held in trust for the benefit of minor children.
Page 4
Web Shareshop (Holdings) Plc and Subsidiary
Directors’ Report - Continued
Directors and their interests - continued
Note 5: Of these, 200,000 shares are held by his wife, Nicolctte Ann Wilkinson.
Apart from the interests above, no director held any other interests in the share capital of the Company, during the year. No
changes in the interests disclosed above have taken place since the year end.
Non-executive directors
Robert Wilkinson was a non-executive director until he resigned on 11 January 2002. It is the intention of the Directors to
appoint a new non-executive director as soon as a suitable candidate is identified.
Substantial shareholdings
On 31 July 2002, the following were registered as being interested in 3% or more of the Company's ordinary share capital,
there has been no changes in these shareholdings since that date:
John McNair
Eirion Andrew Charles Neubauer
Rock (Nominees) Limited
Ronald Bruce Rowan
Ordinary shares of Percentage of issued
0.01 each share capital
5.73%
1,500,000
11.06%
2,900,000
3.43%
900,000
29.93%
7,850,000
Share capital
Information relating to shares issued during the period is given in note 15 to the accounts.
Payment of suppliers
The Company's policy is to settle terms of payment with suppliers when agreeing terms of business, to ensure that suppliers
are aware of the terms of payment and to abide by them. It is usual for suppliers to be paid within 14 days of receipt of an
invoice. Trade creditors of the Company at the year-end were equivalent to 10 days based on the average daily amount
invoiced by suppliers during the year.
Post balance sheet event
There are no post balance sheet events to be disclosed.
Auditors
The Directors will place a resolution before the annual general meeting to reappoint Smith & Williamson as auditors for the
coming year.
Remuneration
The remuneration of the Directors has been fixed by the board as a whole. This has been achieved acknowledging the need
to maximise the effectiveness of the Company's limited resources during the year.
Full details of the Directors' remuneration for the year to 31 July 2002 are set out in note 6 to the accounts.
Management incentives
The Company has implemented two unapproved share option schemes as described in note 15. Otherwise, the company has
no bonus, share purchase or other management incentive scheme. In accordance with legislation, the Company has
introduced a stakeholders pension plan for the benefit of employees.
Page 5
Web Shareshop (Holdings) Plc and Subsidiary
Directors’ Report - Continued
Corporate Governance
It remains the intention of the board to comply with the recommendations of the Combined Code on corporate governance.
Bearing in mind the immediate requirement to conserve cash resources, such procedures will be established as are
considered to be appropriate for the size of the business as it is developed.
Control procedures
The board has approved financial budgets and cash forecasts; in addition, it has implemented procedures to ensure
compliance with accounting standards and effective reporting.
By order of the board
John Watkins
Director and Company Secretary
4 October 2002
Page 6
Web Shareshop (Holdings) Plc and Subsidiary
Statement of Directors’ Responsibilities
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of
the state of affairs of the group and company and of the profit or loss of the group for that year. In preparing those financial
statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
-
- make judgements and estimates that are reasonable and prudent;
-
state whether applicable 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
group will continue in business.
-
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the group and company and to enable them to ensure that the financial statements comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of the company and group and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
Page 7
Web Shareshop (Holdings) Plc and Subsidiary
Independent Auditors’ Report
We have audited the financial statements of Web Shareshop (Holdings) Plc for the year ended 31 July 2002 on pages 9 to
21. These financial statements have been prepared under the historical cost convention and the accounting policies set out
therein.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable
law and United Kingdom Accounting Standards are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
United Kingdom Auditing Standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors’ Report is not consistent
with the financial statements, if the company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if the information specified by law regarding directors’
remuneration and transactions with the company is not disclosed.
We read other information contained in the Financial Statements and consider whether it is consistent with the audited
financial statements. This other information comprises only the Directors’ Report and the Chairman’s statement. We
consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with
the financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices board.
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements made by the directors in the
preparation of the financial statements, and of whether the accounting policies are appropriate to the company’s
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of the group’s and company’s affairs as at 31
July 2002 and of the group’s loss for the year ended 31 July 2002 and have been properly prepared in accordance with the
Companies Act 1985.
Smith & Williamson
Chartered Accountants and Registered Auditors
Guildford
4 October 2002
Page 8
Web Shareshop (Holdings) Plc and Subsidiary
Consolidated Profit and Loss Account
for the year ended 31 July 2002
Turnover
Cost of sales
Gross Profit
Administrative expenses
Operating loss on ordinary activities
Interest receivable
Interest payable
Loss on ordinary activities before taxation
Tax on loss on ordinary activities
Loss on ordinary activities after taxation
Retained loss for the year
Loss per share
Basic and diluted
Notes
1
2
3
3
4
17
17
8
Year
ended
31 July
2002
£
18 month
period
ended
31 July
2001
£
429
3,385
-
_____
429
(824 )
_____
2,561
(360,456 )
________
(360,027 )
(1,184,108 )
_________
(1,181,547 )
10,609
(12 )
50,456
(223 )
________ _________
(349,430 )
(1,131,314 )
-
________
(349,430 )
________
(349,430 )
=======
-
_________
(1,131,314 )
_________
(1,131,314 )
========
(1.5p )
=======
(6.5p )
=====
The accompanying notes form an integral part of the consolidated profit and loss account.
There are no other recognised gains or losses in either period other than those included in the above profit and loss account.
All of the operations are considered to be continuing.
Page 9
Web Shareshop (Holdings) Plc and Subsidiary
Consolidated Balance Sheet
as at 31 July 2002
Notes
Fixed assets
Intangible assets
Tangible assets
Current assets
Debtors
Trading investments
Cash at bank and in hand
Creditors: Amounts falling due within one year
Net current assets
Total assets less current liabilities
Capital and reserves
Called-up share capital
Share premium account
Profit and loss account
Merger reserve
Shareholders’ funds - equity interest
9
10
12
13
14
15
16
16
16
17
2002
£
-
500
______
500
______
15,393
372,500
125,066
_______
512,959
2001
£
9,000
31,930
_____
40,930
_____
62,454
-
725,097
______
787,551
(28,232 )
_______
484,727
_______
485,227
======
(155,074 )
______
632,477
______
673,407
=====
197,791
262,291
1,227,765
1,324,515
(1,176,559 )
(1,525,989 )
424,410
424,410
_______ _______
673,407
485,227
======
======
The accompanying notes form an integral part of this consolidated balance sheet.
Page 10
Web Shareshop (Holdings) Plc and Subsidiary
Company Balance Sheet
as at 31 July 2002
Fixed assets
Investments
Current assets
Debtors
Net current assets
Total assets less current liabilities
Capital and reserves
Called-up share capital
Share premium account
Profit and loss account
Shareholders’ funds - equity interests
Note
11
12
15
16
16
17
2002
£
2001
£
1,427,573
144,140
161,017
_______
161,017
_______
1,283,433
________
1,283,433
________
1,588,590
=======
1,427,573
=======
262,291
1,324,515
1,784
________
1,588,590
=======
197,791
1,227,765
2,017
________
1,427,573
======
The accounts on pages 9 to 21 were approved by the board of directors on 4 October 2002 and signed on its behalf by:
R Bruce Rowan
Chairman and Chief Executive
John Watkins
Finance Director
The accompanying notes form an integral part of this balance sheet.
Page 11
Web Shareshop (Holdings) Plc and Subsidiary
Consolidated Cash Flow Statement
for the year ended 31 July 2002
Net cash outflow from operating activities
Returns on investments and servicing of finance
Capital expenditure and financial investment
Cash outflow before management of liquid
resources and financing
Management of liquid resources
Financing
Increase/(Decrease) in cash in the year/period
Notes
18
19
19
19
19
Year
ended
31 July
2002
£
18 month
period
ended
31 July
2001
£
(694,173 )
(1,148,747 )
10,597
50,233
15,000
______
(69,465 )
_____
(668,576 )
(1,167,979 )
585,562
(700,562 )
161,250
________
78,236
=======
1,432,016
_______
(436,525 )
======
The accompanying notes form an integral part of this consolidated cash flow statement.
Page 12
Web Shareshop (Holdings) Plc and Subsidiary
Statement of Accounting Policies
for the year ended 31 July 2002
The principal accounting policies are summarised below. They have all been applied consistently throughout the year.
Basis of accounting
The accounts have been prepared under the historical cost convention and in accordance with applicable accounting
standards.
Basis of consolidation
The group accounts consolidate the accounts of Web Shareshop (Holdings) plc and its Subsidiary drawn up to 31 July 2002.
Intangible fixed assets
Acquired ideas, concepts and intellectual property are written off in equal annual instalments over their estimated useful
economic life of 5 years.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost
less estimated residual value of each asset over its expected useful life, as follows:
Computer equipment
Office equipment
50% straight line
20% straight line
Investments
Fixed asset investments are stated at cost less any provision for impairment.
Current asset investments are stated at the lower of cost or mid-market value.
Taxation
Corporation tax payable is provided on taxable profits at the current rate.
Deferred taxation
Deferred tax is provided for on a full provision basis on all timing differences which have arisen but not reversed at the
balance sheet date.
No timing differences are recognised in respect of (i) property revaluation surpluses where there is no commitment to sell
the asset; (ii) gains on sale of assets where those assets have been rolled over into replacement assets; and (iii) additional tax
which would arise if profits of overseas subsidiaries are distributed except where otherwise required by accounting
standards.
A deferred tax asset is not recognised to the extent that the transfer of economic benefit in future is uncertain. Any assets
and liabilities recognised have not been discounted.
Turnover
Turnover represents amounts receivable for goods and services provided in the normal course of business, net of trade
discounts, VAT and other sales-related taxes.
Website design and software development costs
Website design and software development costs are written off to the profit and loss account as incurred.
Page 13
Web Shareshop (Holdings) Plc and Subsidiary
Notes to the Financial Statements
for the year ended 31 July 2002
1. Turnover
The total turnover of the group for the period has been derived from its principal activities and is wholly undertaken in
the United Kingdom.
2. Operating loss
Operating loss is stated after charging:
Auditors remuneration
- audit
- non-audit services
Depreciation of tangible assets
Amortisation of intangible assets
Website design and software development costs
Loss on disposal of tangible fixed assets
Directors emoluments
3.
Interest
Interest receivable:
Bank interest
Interest payable:
Bank loans and overdrafts
4.
Taxation
(a) Domestic current year taxation
Current tax
UK corporation tax on profits for the period
(b) Factors affecting tax charge for period
Year
ended
31 July
2002
£
8,990
7,637
16,430
9,000
-
-
20,862
======
10,609
=====
12
=====
2002
£
18 month
period
ended
31 July
2001
£
15,000
12,000
40,732
5,400
250,000
445
92,382
=====
50,456
=====
223
=====
2001
£
-
======
-
======
The tax losses carried forward are higher than the standard rate of corporation tax for companies in the UK (30%)
(2001 : 30%). The differences are explained below:-
Loss on ordinary activities before taxation
Loss on ordinary activities multiplied by standard rate of
corporation tax for small companies in the UK at 30% (2001 : 30%)
Expenses not deductible for tax purposes
Capital allowances for year in excess of depreciation
Tax losses brought forward
Tax losses carried forward
Current tax charge for period (note a)
2002
£
2001
£
(349,430 ) (1,131,314 )
======
======
(104,829 )
10,964
11,213
(333,635 )
416,287
_______
-
======
(339,394 )
54,892
(49,133 )
-
333,635
_______
-
======
(c) Factors that may affect future tax charges
There are no factors that may affect the future tax charge other than the losses carried forward.
Page 14
Web Shareshop (Holdings) Plc and Subsidiary
Notes to the Financial Statements
for the year ended 31 July 2002
5.
Staff costs
The average monthly number of employees (including executive directors) was:
Management
Administration
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
6. Directors’ emoluments
J Woolgar
R S Wilkinson
E A C Neubauer
U S Burke
Sums paid to third parties for directors’ services
Directors emoluments
2002
Number
2001
Number
2
2
___
4
===
£
23,918
1,436
_______
25,354
======
Year
ended
31 July
2002
£
-
1,146
570
1,146
18,000
_______
20,862
======
7
3
___
10
===
£
120,019
12,364
______
132,383
=====
18 month
period
ended
31 July
2001
£
42,000
13,958
9,250
3,959
23,215
______
92,382
=====
No other directors received any emoluments in the period. Disclosure of director’s related party transactions can be
found in note 21 to the accounts.
Directors’ share options
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares
in the company granted to or held by the directors.
During the year Bruce Rowan was granted options over 1,400,000 ordinary shares at a price of £0.05 per share and
John Watkins was granted options over 700,000 ordinary shares at £0.05 per share. The options are exercisable from
27 June 2002 up to and including 27 June 2007.
During the previous period William Jackson was granted options over 1,964,580 ordinary shares exercisable at a price
of £0.05 per share. The options are exercisable from 21 May 2001 and up to and including 31 January 2003, being
one year following his resignation as Chairman.
7.
Profit attributable to parent undertaking
The loss for the financial year dealt with in the accounts of the parent company was £233 (2001 : profit £2,017). As
permitted by section 230 of the Companies Act 1985, no separate profit and loss account is presented in respect of the
parent company.
Page 15
Web Shareshop (Holdings) Plc and Subsidiary
Notes to the Financial Statements
for the year ended 31 July 2002
8. Loss per share
The basic earnings per share is derived by dividing the loss for the year attributable to ordinary shareholders of
£349,430 by the weighted average number of shares in issue, calculated as 23,419,404.
There were no diluting factors in the period.
9.
Intangible fixed assets - goodwill
Group
Cost
At 1 August 2001
Disposals
At 31 July 2002
Amortisation
At 1 August 2001
Amortisation for the period
On disposals
At 31 July 2002
Net book value
At 31 July 2002
At 31 July 2001
10.
Tangible fixed assets
Group
Cost
At 1 August 2001
Disposals
At 31 July 2002
Depreciation
At 1 August 2001
Charge for the year
On disposals
At 31 July 2002
Net book value
At 31 July 2002
At 31 July 2001
Total
£
18,000
(18,000 )
_____
-
_____
9,000
9,000
(18,000 )
_____
-
_____
-
=====
9,000
=====
Total
£
71,860
(70,610 )
_____
1,250
=====
39,930
16,430
(55,610)
_____
750
=====
500
=====
31,930
=====
Office
Equipment
£
Computer
Equipment
£
1,250
-
_____
1,250
=====
500
250
-
_____
750
=====
500
=====
750
=====
70,610
(70,610 )
_____
-
=====
39,430
16,180
(55,610)
_____
-
=====
-
=====
31,180
=====
Page 16
Web Shareshop (Holdings) Plc and Subsidiary
Notes to the Financial Statements
for the year ended 31 July 2002
11. Fixed asset investments
Company
Cost
At 1 August 2001
Additions
At 31 July 2002
2002
£
144,140
1,283,433
________
1,427,573
=======
2001
£
-
144,140
______
144,140
=====
The parent company and the group hold more than 20% of the share capital of the following company.
Company
Country of registration
Class
Proportion
held by
group
Nature of
business
The Web Shareshop Limited
England & Wales
Ordinary
100%
Underwriting
small company
new issues and
pre IPO stocks
The following dormant companies were struck off the Companies House register during the year.
New Issues On Line Limited
England & Wales
Ordinary
100%
Dormant
The New Issue Investment
Company Limited
England & Wales
Ordinary
100%
Dormant
12. Debtors
Amounts owed by group undertakings
Other debtors
Prepayments and accrued income
13. Current asset investments
Other unlisted investments
Listed investments
Group
2002
£
-
-
15,393
______
15,393
=====
2001
£
-
14,942
47,512
______
62,454
=====
Company
2002
£
2001
£
161,017
-
-
______
161,017
=====
2002
£
112,500
260,000
________
372,500
=======
1,283,433
-
-
________
1,283,433
=======
2001
£
-
-
______
-
=====
The market value of other unlisted investments which are quoted on OFEX is £434,459 and the market value of
investments listed on the Alternative Investment Market is £665,000 as at 31 July 2002.
Page 17
Web Shareshop (Holdings) Plc and Subsidiary
Notes to the Financial Statements
for the year ended 31 July 2002
13. Current asset investments - continued
Significant shareholders
Via the company’s 100% interest in The Web Shareshop Limited it has the following significant shareholdings:
Company
Country of registration or incorporation Shares held
Franconia Minerals Corporation
Hidefield plc
Southern African Resources plc
Canada
England & Wales
England & Wales
14. Creditors: amounts falling due within one year
Bank overdraft
Trade creditors
Other creditors
Accruals and deferred income
15. Called-up share capital
Authorised:
100,000,000 ordinary shares of £0.01 each
Allotted, called up and fully paid
Subscriber shares
Total issued at 1 August 2001
Issued 11 January 2002
Total issued at 31 July 2002
Class
Ordinary
Ordinary
Ordinary
%
25
16
14
Group
2002
£
-
10,108
7,920
10,204
______
28,232
=====
2001
£
92,705
31,440
1,187
29,742
_____
155,074
=====
2002
£
2001
£
1,000,000
=======
1,000,000
======
Number
2
19,779,130
6,450,000
_________
26,229,130
========
£
0
197,791
64,500
_______
262,291
======
During the year, share capital of 6,450,000 1p ordinary shares were issued for consideration of £161,250.
Options have been granted under the company’s unapproved share option schemes to subscribe for ordinary shares
of the company as follows:
Number of shares under option Subscription price per share
1,964,580
2,100,000
£0.05
£0.05
Exercise period
21 May 2002 to 31 January 2003
27 June 2002 to 27 June 2007
Page 18
Web Shareshop (Holdings) Plc and Subsidiary
Notes to the Financial Statements
for the year ended 31 July 2002
16. Reserves
Group
As at 1 August 2001
Issue of shares
Share issue costs
Loss for the period
As at 31 July 2002
Company
As at 1 August 2001
Issue of shares
Retained profit for the period
As at 31 July 2002
17. Movement on equity shareholders’ funds
Group
Loss for the period
Proceeds of share issues, net of costs - see note 19
Net (decrease)/increase in shareholders’ funds
Opening shareholders’ funds
Closing equity shareholders’ funds
Company
(Loss)/profit for the period
Proceeds of share issues, net of costs
Opening shareholders’ funds
Closing equity shareholders’ funds
18. Reconciliation of operating loss to operating cash flows
Operating loss
Depreciation charges
Loss on sale of tangible fixed assets
Amortisation
Decrease/(increase) in debtors
(Decrease)/increase in creditors
Increase in trading investments
Net cash outflow from operating activities
Page 19
Merger
reserve
£
424,410
-
-
-
________
424,410
=======
Share premium
account
£
1,227,765
96,750
-
-
________
1,324,515
=======
£
1,227,765
96,750
-
________
1,324,515
=======
Profit and
loss
account
£
(1,176,559 )
-
-
(349,430 )
________
(1,525,989 )
=======
£
2,017
-
(233 )
______
1,784
=====
2002
£
2001
£
(349,430 )
161,250
________
(188,180 )
673,407
________
485,227
=======
(1,131,314 )
1,432,016
______
300,702
372,705
______
673,407
======
(232 )
161,250
________
161,018
1,427,573
________
1,588,591
=======
2,017
1,425,556
_______
1,427,573
-
_______
1,427,573
=======
2002
£
(360,027 )
16,430
-
9,000
47,061
(34,137 )
(372,500 )
_______
(694,173 )
======
2001
£
(1,181,547 )
40,732
445
5,400
(57,815 )
44,038
-
________
(1,148,747 )
=======
Web Shareshop (Holdings) Plc and Subsidiary
Notes to the Financial Statements
for the year ended 31 July 2002
19. Analysis of cash flows
Returns on investments and servicing of finance
Interest received
Interest paid
Net cash inflow
Capital expenditure and financial investment
Purchase of tangible fixed assets
Sale of tangible fixed assets
Net cash inflow/(outflow)
Management of liquid resources
Cash withdrawn from/(placed on deposit)
Net cash inflow/(outflow)
Financing
Issue of ordinary share capital
Expenses paid in connection with share issues
Net cash inflow
20. Analysis and reconciliation of net funds
Cash in hand and at bank
Overdraft
Cash placed on deposit
Net funds
Increase/(decrease) in cash in the year/period
Movement in net funds in year
Net funds at 1 August 2001
Net funds/(debt) at 31 July 2002
Page 20
Year
ended
31 July
2002
£
18 month
period
ended
31 July
2001
£
10,609
(12 )
_______
10,597
======
50,456
(223 )
_____
50,233
=====
-
15,000
_______
15,000
======
585,562
_______
585,562
======
(70,665 )
1,200
_____
(69,465 )
=====
(700,562 )
_____
(700,562 )
=====
161,250
-
________
161,250
=======
1,760,139
(328,123 )
________
1,432,016
=======
31 July
2001
£
725,097
(92,705 )
(700,562 )
______
(68,170 )
=====
Cash
flow
£
(600,031 )
92,705
585,562
______
78,236
=====
2002
£
78,236
______
78,236
(68,170 )
______
10,066
======
31 July
2002
£
125,066
-
(115,000 )
_____
10,066
=====
2001
£
(436,525 )
______
(436,525 )
368,355
______
(68,170 )
=====
Web Shareshop (Holdings) Plc and Subsidiary
Notes to the Financial Statements
for the year ended 31 July 2002
21. Related party transactions
The director, Bruce Rowan received the sum of £12,000 during the period through his business for normal
professional services. 6,450,000 1p ordinary shares were issued to Bruce Rowan during the year for a consideration
of £161,250.
The director, John Watkins, FCA received the sum of £9,833 (2001 : £4,233) during the period through his business
for normal professional services.
The former director, Andrew Neubauer, is the managing director and a major shareholder of Airtime Interactive
Marketing Limited from which the Company made purchases of £153,422 in the year (2001 : £679,597). The balance
outstanding at the year end was £nil (2001 : £28,742).
The former director, Simon Burke, is a director and a major shareholder of ALPs FS Limited. By an agreement dated
15 August 1999 The Web Shareshop Limited appointed ALPs FS Limited as its authorised representative for the
purpose of compliance with the requirements of the Financial Services Act. This agreement was terminated on 14
January 2002. ALPs FS Limited holds 120,000 ordinary shares of £0.01 each in the company.
The former director, William Jackson, is a director and major shareholder of Panmark Limited from which the
company purchased services to the value of £18,000 (2001 : £37,389) in the year. The balance outstanding at the year
end was £nil.
The subsidiary, The Web Shareshop Limited, issued 4,278,110 ordinary shares of £0.01 each at a price of £0.30 per
share. The consideration of £1,283,433 was satisfied from the inter company loan account balance.
Page 21