Registration number 03904195
Vela Technologies PLC (formerly Asia Digital Holdings
PLC)
Annual Report and Accounts 2013
vela technologies PLC
annual report and accounts 2013
1
table of contents
03
04
05
07
09
13
14
19
20
21
22
23
Chairman’s statement
Directors and advisers
Corporate governance
Report on remuneration
Report of the directors
Independent auditor’s report
Accounting policies
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes to the financial statements
vela technologies PLC
annual report and accounts 2013
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chairman’s statement
I am pleased to welcome you to this my first statement as your new Chairman, covering the Company’s
year ended 30 June 2013.
The period under review has two distinct periods, the first culminating in the Company Voluntary
Arrangement and winding up of legacy investments. The second period breathed new life into the
company with a new company name, receipt of £300,000 from the first of two fund raisings, the
appointment of two new directors and advisors and finally the purchase of two investments after the
year end.
I do not propose to dwell on the CVA as this has been well documented in previous announcements and
circulars to shareholders but will spend time on our new endeavour! (further details on page 7).
The business also disposed of its investments in DGM India, and some of the previously impaired inter
company receivables with other former investments was realised as a result of the sale of assets prior to
these businesses being wound up.
The Board was strengthened earlier this year with the appointment of myself and colleague Antony
Laiker. In March 2013 Adrian Moss stepped down from the Board and we thank him for his contribution
during the transition period.
A capital reduction approved by shareholders on 11 July 2013 was confirmed by the High Court and
became effective on 1 August 2013, writing off the entire accumulated deficit on the Company’s profit
and loss account. This was followed by a further placing raising £300,000 and receipt of an additional
£25,000 in respect of an earlier conditional placing to Adrian Moss, to provide funding to evaluate and
make new investments.
Between the year-end and the date of this report the Company made two investments for a total
consideration of £325,000, of which £125,000 was settled by the issue of new ordinary shares; further
investments are under active consideration.
Our first investment was the acquisition for £250,000 of 262,090 shares in Disruptive Tech Ltd (formerly
eSeekers Ltd which following a corporate restructuring will become an interest of 0.63 per cent in
Disruptive Tech Limited. Disruptive Tech manages investments in a number of technology enterprises
including: Interest Labs which enables high quality connections between brands and consumers; Netkan
which delivers on line gaming products; VNU Capital LLC a direct retailer of consumer products via
ecommerce and high yield consumer credit solutions; and Freeformers which helps global companies
understand and leverage technology.
For our second investment we invested £75,000 for a 6.25% interest in Advance Laser Imaging Limited
a recently established company which uses laser scanning hardware and software applications to
produce 360 degree 3D images and models. There are many applications of this specialist technology in
both private and public sectors including the Military, property development and the Police to name but a
few.
Further particulars of these investments can be viewed on the Company’s website. Following the
investment in Advance Laser Imaging, the Company has implemented its investing policy for the
purposes of AIM Rule 15.
Your company is now in a position to move forward and your Board is confident of taking it forward in a
positive manner during the current year, through the making of carefully considered investments.
I would like to close by thanking our shareholders and advisers who have contributed to giving the
company a new and hopefully profitable lease of life.
Nigel Brent Fitzpatrick MBE
Chairman
vela technologies PLC
annual report and accounts 2013
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directors and advisers
Nigel Brent Fitzpatrick MBE
Chairman
Mr Fitzpatrick has over 20 years’ experience as a corporate finance consultant. In the last 15 years he
has been instrumental in advising a number of companies on their acquisitions, funding and subsequent
flotations. Mr Fitzpatrick was Chairman of Global Marine Energy PLC, a listed oil services Company. He
is currently Chairman of RiskAlliance Group Ltd, Halcyon Oil & Gas Limited and Aboyne-Clyde Rubber
Estates of Ceylon Limited. He is a member of the Audit Committee Institute. In the Queen’s Birthday
Honours List 2012, Mr Fitzpatrick was awarded an MBE for services to education.
Antony Jon Laiker
Director
Mr Laiker has over 32 years of experience as a stockbroker, the last 22 years of which have been
largely focused on managing assets and advising a wide range of clients on UK equities as well as
assisting companies to raise funds. He is a member of the Chartered Institute for Securities and
Investment.
Directors
Nigel Brent Fitzpatrick MBE
Chairman
Antony Jon Laiker
Director
Registered office
7 Granard Business Centre
Bunns Lane
Mill Hill
London NW7 2DQ
Nominated adviser
ZAI Corporate Finance Limited
1 Hobhouse Court
Suffolk Street
London SW1Y 4HH
Auditors
Grant Thornton UK LLP
Grant Thornton House
The Explorer Building
Fleming Way
Manor Royal
Gatwick RH10 9GT
Broker
Peterhouse Corporate Finance
Limited
31 Lombard Street
London EC3V 9BQ
Solicitors
Moorhead James LLP
Kildare House
3 Dorset Rise
London EC4Y 8EN
Bankers
Barclays Bank plc
27 Soho Square
London W1D 3QR
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Accountants
Bailey Wilson
47 Baildon Mills
Northgate
Baildon BD17 6JX
vela technologies PLC
annual report and accounts 2013
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corporate governance
for the year ended 31 March 2013
The Company is committed to applying the highest principles of corporate governance commensurate
with its size.
Compliance
As the Company is listed on AIM, it is not required to comply with the provisions set out in the UK
Corporate Governance Code issued by Financial Reporting Council, nor is it required to comment on its
compliance with such provisions.
However, the following information is provided, which describes how the principles of corporate
governance are applied by the Company.
Directors
The Company supports the concept of an effective Board leading and controlling the Company. The
Board is responsible for approving Company policy and strategy and meets regularly. Executive
management supplies the Board with appropriate and timely information and the Directors are free to
seek any further information they consider necessary. All Directors have access to advice from the
Company Secretary and independent professionals at the Company’s expense. Training is available for
new Directors and other Directors as necessary.
The Board consists of two Directors, who bring a breadth of experience and knowledge.
The Chairman of the Board is Brent Fitzpatrick. The Board members are described on page 2 to the
financial statements. All Directors are subject to re-election every three years and at the first Annual
General Meeting (AGM) after their appointment. The Board has not appointed a Nomination Committee.
Relations with shareholders
The Company values the views of its shareholders and recognises their interest in the Company’s
strategy and performance, Board membership and quality of management. It therefore holds regular
meetings with its institutional shareholders to discuss objectives.
The AGM is used to communicate with investors and they are encouraged to participate. The Chairman
is available to answer questions. Separate resolutions are proposed on each issue so that they can be
given proper consideration and there is a resolution to approve the annual report and accounts. The
Company counts all proxy votes and will indicate the level of proxies lodged on each resolution after it
has been dealt with by a show of hands.
Accountability and audit
The Board presents a balanced and understandable assessment of the Company’s position and
prospects in all interim and price-sensitive reports and reports to regulators, as well as in the information
required to be presented by statutory requirements.
The Company does not require a separate committee and as such the board as a whole reviews the
independence and objectivity of the external auditor. This includes reviewing the nature and extent of
non-audit services supplied by the external auditor to the Company, seeking to balance objectivity and
value for money.
Internal controls
The Board is responsible for maintaining a sound system of internal controls to safeguard both the
shareholders’ investment and the Company’s assets.
The Board has reviewed its risk management framework to identify areas where procedures need to be
changed or installed.
The Board has considered the need for an internal audit function but has decided that the size of the
Company does not justify this at present. However, it will keep the decision under review. The Board
has reviewed the operation and effectiveness of the Company’s system of internal control for the
financial period and the period up to the date of approval of the financial statements.
The Directors are responsible for the Company’s system of internal control and reviewing its
effectiveness. The system of internal control is designed to provide reasonable, but not absolute,
assurance against material misstatement or loss.
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annual report and accounts 2013
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corporate governance
for the year ended 31 March 2013
The key features of the Company’s system of internal control are as follows:
Steps taken to ensure an appropriate control environment
The Board has put into place a management structure with clearly defined responsibilities for internal
financial control.
Process used to identify major business risks and to evaluate their financial implications
The identification of major business risks is carried out in conjunction with operational management and
steps are taken to mitigate or manage these risks where possible.
Major information systems that are in place
There are comprehensive financial management reporting systems in place, which involve the
preparation of detailed annual budgets by the Company and longer-term financial forecasting. The
budgets are generated by the responsible member of the management team and passed to the Board
for approval. The Board monitors performance against budget on a regular basis.
Main control procedures which address the financial implications of the major business risks
The Company maintains financial controls and procedures appropriate to the business environment
conforming to overall standards and guidelines, which are set by the Board.
Monitoring system the Board uses to check the system is operating effectively
The external auditors review the control procedures to the extent necessary for expressing their audit
opinion and report on any weakness arising during the course of their audit work. The Board has
reviewed the operation and effectiveness of the Company’s system of internal financial control for the
financial period and for the period up to the date of the approval of these financial statements.
Going concern
After making appropriate enquiries (described in page 12 of the financial statements), the Directors have
a reasonable expectation that the Company will have adequate resources to continue in operational
existence for the foreseeable future (in accordance with the Report of the Directors). For this reason,
they continue to adopt the going concern basis in preparing the financial statements.
Nigel Brent Fitzpatrick MBE
Chairman
vela technologies PLC
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report on remuneration
for the year ended 31 March 2013
Directors’ remuneration
The Board recognises that Directors’ remuneration is of legitimate concern to shareholders and is
committed to following current best practice. The Company operates within a competitive environment
and its performance depends on the individual contributions of the Directors and employees. It believes
in rewarding vision and innovation. The Board has decided to present this remuneration report for
shareholder approval.
Policy on Executive Directors’ remuneration
The policy of the Board is to provide an executive remuneration package designed to attract, motivate
and retain Directors of the calibre necessary to maintain the Company’s position and to reward them for
enhancing shareholder value and return. It aims to provide sufficient levels of remuneration to do this
but to avoid paying more than is necessary. The remuneration should also reflect the Directors’
responsibilities and include incentives to deliver the Company’s objectives. The notice period for
termination of the Executive Director’s service contract is 12 months.
As the Company is in the early stages of building an investment portfolio the Company has elected not
to have a separate remuneration committee. The Board as a whole will instead review the scale and
structure of Directors’ fees, taking into account the interests of shareholders and the performance of the
Company.
Main elements of executive remuneration
There are four proposed elements of the Executive Director’s remuneration package:
i.
ii.
iii.
iv. pension contributions.
fees;
annual bonus payments;
share-based payments; and
Fees
The Executive Director’s basic salary is reviewed by the Board. In deciding upon appropriate levels of
remuneration, the Board believes that the Company should offer average levels of base pay reflecting
individual responsibilities compared to similar jobs in comparable companies, as well as internal factors
such as performance.
Annual bonus payments
The Committee establishes the objectives which must be met for a bonus to be paid. A performance
related award scheme incorporating audited earnings per share, share price performance and Company
profitability has been established which recognises the success of the business for which the Executive
Director is responsible. Bonus payments are non-pensionable.
Share-based payments
The Directors’ interest in the shares of the Company are detailed in notes 4 and 12 to the financial
statements.
Pension contributions
All pension entitlements for the Directors are disclosed in note 4 to the financial statements.
Non-Executive Directors
The Board as a whole determines the remuneration of the Non-Executive Directors. Non-Executive
Directors do not have contracts of service but letters of appointment.
vela technologies PLC
annual report and accounts 2013
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report on remuneration
for the year ended 31 March 2013
Details of Directors’ remuneration
This report should be read in conjunction with notes 4 and 12 to the financial statements, which also
form part of this report. Full details of all elements of the remuneration package of each Director are
given in note 4 to the financial statements, together with details of Directors’ share interests.
Nigel Brent Fitzpatrick MBE
Chairman
vela technologies PLC
annual report and accounts 2013
8
report of the directors
for the year ended 31 March 2013
The Directors present their report together with the financial statements for the year ended 31 March
2013.
Principal activity
The Company became an investment Company in 2012 following the disposal and closure of its then
existing operations. The Company’s focus will be predominantly, but not restricted to, searching for
companies which are based in the UK or Europe where there may be a number of opportunities to
acquire interests in undervalued or pre-commercialisation technologies.
Business review
A review of the business during the period and an indication of likely future developments are found in
the Chairman’s statement.
The profit for the financial year after taxation amounted to £95,000 (15 months to 31 March 2012 :
£287,000 loss). In view of the historic losses and the lack of distributable reserves, the Directors cannot
recommend a payment of a dividend.
Future developments
An indication of likely future developments is found in the Chairman’s statement in pages 1.
Key performance indicators (KPIs)
Measuring performance is integral to the next phase of our strategic growth. Management has selected
KPIs to benchmark to the Company’s progress. Management considers that going forward, investment
income and profit before tax as KPIs in measuring Company performance.
Key trading risks and uncertainties
•
the Company’s previous investments were affected by general economic downturns. Forward-
looking indicators were regularly reviewed to identify deteriorating market conditions. The cost base
was reviewed regularly and there was a management structure in place to enable a rapid response
to changing circumstances;
the Company was affected by liquidity, currency and credit risks. Financial risks were managed at
Company level as set out in note 17 to the financial statements; and
•
In July 2012, the Company disposed of its active trading operations. This followed a decision by the
Board, which was subsequently approved by shareholders, to dispose or close all operations. The
Company is now considered an investing Company and a new investment policy was approved by
shareholders at a general meeting held in January 2013 which the Company has now implemented for
the purposes of AIM rule 15.
In order to increase the Company’s ability to make further investments, additional long term funding may
be sought.
Directors
The Directors of the Company and their interests in the shares of the Company at the start of the period,
or when appointed, and at the end of the period, or on resignation, are set out in note 4 to the financial
statements.
In accordance with the terms of the Company’s Articles of Association, both Nigel Brent Fitzpatrick and
Antony Jon Laiker will retire and will offer themselves for re-election at the AGM.
The Directors who served during the period under review are:
N B Fitzpatrick (appointed 18 January 2013)
A Laiker (appointed 24 January 2013)
A Moss (resigned 5 March 2013)
K Lassman (resigned 18 January 2013)
D Lees (resigned 18 January 2013)
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annual report and accounts 2013
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report of the directors
for the year ended 31 March 2013
Company voluntary arrangement
On 14th January 2013 the Company’s creditors and members approved a company voluntary
arrangement (“CVA”) proposed by the previous directors of the Company who resigned on 18th January
2013. Since this approval the Joint Supervisors have established all claims and despatched payments
in respect of valid claims at the rate set in approved arrangement being 17 pence in the pound before
administrators costs. The first and final dividend was paid on 29 April 2013 at a rate of 15.96 pence in
the pound. The CVA was successfully completed on 29 August 2013, having been approved by creditor
quorum in Jan 2013.
In Dec 2012 new investors conditionally subscribed for a number of ordinary shares, which generated
substantial funds into the Company. Net funds receivable of some £280,000 allowed £99,189 to be used
for the benefit of the CVA creditors, with the balance to be used to allow the Company to fulfil its new
investing policy.
Payment policy
Since the approval of the Company’s CVA, it is the Company’s policy to settle debts with its creditors on
a timely basis taking into consideration the terms and conditions offered by each supplier. At 31 March
2013 the number of creditor days outstanding for the Company was nil (31 March 2012 : 121 days).
Financial risk management objectives and policies
The Directors constantly monitor the financial risks and uncertainties facing the Company with particular
reference to the exposure to price, currency, credit, liquidity and cash flow risk. They are confident that
suitable policies are in place and that all material financial risks have been considered. More detail is
given in note 14 to the financial statements.
Substantial shareholders
At 31 March 2013 the following had notified the Company of disclosable interests in 3% or more of the
nominal value of the Company’s shares, save for the Directors whose interests are disclosed in note 4
to the financial statements:
Jim Nominees Limited
Forest Nominees Limited
Peel Hunt Holdings Limited
Brewin Nominees Limited
Shareholding
%
45,411,026
8,952,000
3,429,167
1,866,051
67
13
5
3
vela technologies PLC
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report of the directors
for the year ended 31 March 2013
Going concern
The Company’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Chairman’s statement on page 1. In addition, note 11
includes the Company’s objectives, policies and processes for managing its capital; note 14 to the
financial statements includes its financial risk management objectives, details of its financial instruments
and its exposures to credit risk and liquidity risks.
The company has successfully completed a Company Voluntary Arrangement, full details are disclosed
above.
The Directors have a reasonable expectation that the Company will have adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they adopt the going concern
basis in preparing the annual report and accounts.
Directors’ responsibilities statement
The Directors are responsible for preparing the Report of the Directors 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 elected to prepare the financial statements in accordance with International
Financial Reporting Standards as adopted by the European Union (IFRS) 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 for that period. In preparing these
financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether applicable IFRS have been followed, subject to any material departures disclosed and
explained in the financial statements; and
• 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 enable them to ensure that the financial statements comply with the
Companies Act 2006 and they are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Insofar as each of the Directors is aware:
•
•
there is no relevant audit information of which the Company’s auditors are 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 auditors are 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.
•
the management report includes a fair review of the development and performance of the business
and the position of the Company together with a description of the principal risks and uncertainties
that they face.
vela technologies PLC
annual report and accounts 2013
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report of the directors
for the year ended 31 March 2013
Post balance sheet events
Investment in Disruptive Tech Ltd
At a Directors meeting on 14 August 2013 a proposal was approved to acquire 262,090 shares,
ultimately representing a 0.63% interest in Disruptive Tech Ltd (a Gibraltar Company) for a total of
£250,000. The purchase price was satisfied by a cash payment of £125,000 and the balance of
£125,000 by way of the issue of 8,333,333 Ordinary shares of 0.1 pence at a price of 0.15p.
Investment in Advance Laser Imaging Limited
On 11 September 2013 the Board announced a £75,000 investment in Advance Laser Imaging Ltd. The
Company has committed £75,000 for a 6.25% interest.
Placing of 60,000,000 Ordinary Share
A further issue of shares took place on 9 August 2013, 60,000,000 Ordinary shares of 0.1 pence being
issued at 0.5p each generating gross proceeds of £300,000.
Reduction in share capital
Following the announcement on 18 June 2013 that the Company proposed to take further steps to
restructure its balance sheet, a capital reduction was approved by shareholders and was confirmed at
the final Court Hearing which took place on 31 July 2013. Both classes of Deferred Shares and the
balances standing to the credit of the share premium account and the capital redemption reserve of the
Company were cancelled. This reduction is sufficient to write off the entirety of the deficit on its profit
and loss account and create a small positive balance. There were no changes to the number of
ordinary shares in issue.
Auditors
Grant Thornton UK LLP has expressed their willingness to continue in office and a resolution that they
be re-appointed will be proposed at the AGM in accordance with Section 489(1) of the Companies Act
2006.
On behalf of the Board
Nigel Brent Fitzpatrick MBE
Chief Executive Officer
vela technologies PLC
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independent auditors report
for the year ended March 2013
We have audited the financial statements of Vela Technologies Plc for the year ended 31 March 2013
which comprise the accounting policies, the statement of comprehensive income, the balance sheet, the
cashflow statement, the statement of changes in equity, and the related notes. The financial reporting
framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
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 on pages 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 company's affairs as at 31 March 2013 and of its profit
for the year then ended;
have been properly prepared in accordance with IFRS as adopted by the European Union; and
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 parent company 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 Company, or returns adequate for our audit
have not been received from branches not visited by us; or
• the 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.
Nicholas Page
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Gatwick
vela technologies PLC
annual report and accounts 2013
13
accounting policies
for the year ended March 2013
1a Presentation of financial statements
The financial statements of the Company have been prepared in accordance with International Financial
Reporting Standards (IFRS), as adopted in the European Union and as applied in accordance with the
provisions of the Companies Act 2006, and under the historical cost convention.
In prior years, consolidated financial statements were prepared for the group headed by the Company.
Consolidated financial statements have not been prepared for the year ended 31 March 2013 as there
were no subsidiaries.
Change of financial year end
In the previous period the financial year end of the Company was changed from 31 December 2011 to
31 March 2012. Accordingly, the current financial statements are prepared for year ended 31 March
2013 and the comparative figures for the statement of comprehensive income, cash flow statement,
statement of changes in equity and related notes are for the 15 months from 1 January 2011 to 31
March 2012.
The first time adoption of International Financial Reporting Standards
At 1 April 2012, the Company adopted the International Financial Reporting Standards and
Interpretations issued by the International Accounting Standards Board (IASB) and the International
Financial Reporting Interpretations Committee (IFRIC) of the IASB that are relevant to its operations and
effective for accounting periods beginning on 1 April 2012. These have not had a significant impact on
these financial statements.
This is the Company’s first year of preparing the financial statements under IFRS and as such, it is
required to comply with International Financial Reporting Standard No 1, relating to first year adoption of
IFRS. However, as the adoption of IFRS has not affected the financial position, financial performance,
or the cashflows as previously presented under United Kingdom Generally Accepted Accounting
Practice (UK GAAP), it has not been deemed necessary to present the following in the financial
statements;
•
The reconciliation of the Equity balances as presented under the two frameworks at the
comparative period and current period end, as there is no difference to be reconciled,
The total comprehensive income as at the comparative period end, as this was substantially
presented under UK GAAP, to the same value.
•
A cashflow was not required previously, but had one been presented, again, it would be consistent with
the comparative cashflow statement as presented under IFRS.
Changes in accounting policy
At the date of authorisation of these financial statements the following standards and interpretations
were in issue but not yet effective and therefore have not been applied in these financial statements:
• IFRS 9 Financial Instruments (effective 1 January 2015) (not yet EU adopted)
• IFRS 10 Consolidated Financial Statements (effective 1 January 2014)
• IFRS 11 Joint Arrangements (effective 1 January 2014)
• IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2014)
• IFRS 13 Fair Value Measurement (effective 1 January 2013)
• 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)
• Disclosures - Transfers of Financial Assets - Amendments to IFRS 7 (effective 1 January
2013)
• 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)
• Government Loans – Amendments to IFRS 1 (effective 1 January 2013)
• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine (effective 1 January
2013)
• Annual Improvements 2009-2011 Cycle (effective 1 January 2013)
• Transition Guidance – Amendments to IFRS 10, IFRS 11 and IFRS 12 (effective 1 January
2013)
vela technologies PLC
annual report and accounts 2013
14
accounting policies
for the year ended March 2013
Changes in accounting policy continued
Investment Entities – Amendments to IFRS 10, IFRS 12 and IAS 27 (effective 1 January 2014)
• Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)
(effective 1 January 2014)
• Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39)
(effective 1 January 2014)
The Directors anticipate that the adoption of these standards and interpretations in future periods will
have no material impact on the financial statements of the Company, with the exception of IFRS 9 which
has not yet been finalised and so the Directors are not able to fully assess the potential impact.
1b Going concern
The Company’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Chairman’s statement on page 1. The financial position of
the Company, its cash flows and liquidity position are described in the Chairman’s statement on page 1.
In addition, pages 3 to 4 include the Company’s objectives, policies and processes for managing its
capital; note 14 to the financial statements includes its financial risk management objectives, details of
its financial instruments and its exposures to credit risk and liquidity risks.
The company has successfully completed a Company Voluntary Arrangement, full details are disclosed
on page 7.
A further issue of shares on 9 August 2013 took place. 60,000,000 Ordinary shares of 0.1 pence were
issued at 0.5p each generating gross proceeds of £300,000.
The Directors have a reasonable expectation that the Company will have adequate resources to
continue in operational existence for the foreseeable future. Accordingly, they adopt the going concern
basis in preparing the annual report and accounts.
1c Summary of significant accounting policies
Share-based payments
Share-based payments that are within the scope of IFRS 2 Share-based Payment have been
recognised in the financial statements in accordance with that standard. This has been applied to
arrangements granted after 7 November 2002.
Where employees are rewarded using share-based payments, the fair value of employees’ services is
determined indirectly by reference to the fair value of the instrument granted to the employee. This fair
value is appraised at the grant date and, in accordance with IFRS 2, excludes the impact of non-market
vesting conditions.
Equity-settled share-based payments are recognised as an expense in the profit or loss in accordance
with IFRS 2 with a corresponding credit to equity.
If a service period or other non-market vesting conditions apply, the expense is allocated over the
vesting period based on the best available estimate of the number of share options expected to vest.
Estimates are subsequently revised if there is any indication that the number of share options 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 of share options ultimately exercised
that are different from the number that actually vested. Upon exercise of share options, the proceeds
received net of attributable transaction costs are credited to share capital and where appropriate share
premium.
Fair values of share options or awards, measured at the date of the grant of the option or award, are
determined using a binomial model methodology.
Where share options have lapsed as a result of the employees or directors leaving the Company, the
accumulated share based payment reserves relating to the option held by these individuals is
transferred out of the share based payment reserve and into the profit and loss reserve.
vela technologies PLC
annual report and accounts 2013
15
accounting policies
for the year ended March 2013
Taxation
Current tax is the tax currently payable based on taxable profit for the period.
Deferred income taxes are calculated using the liability method on temporary differences. Deferred tax
is generally provided on the difference between the carrying amounts of assets and liabilities and their
tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the initial
recognition of an asset or liability unless the related transaction is a business combination or affects tax
or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries is not
provided if reversal of these temporary differences can be controlled by the Company and it is probable
that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried
forward as well as other income tax credits to the Company are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the
extent that it is probable that the underlying deductible temporary differences will be able to be offset
against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates
that are expected to apply to their respective period of realisation, provided they are enacted or
substantively enacted at the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the profit
or loss income statement, except where they relate to items that are recognised in other comprehensive
income in which case the related deferred tax is also charged or credited directly to equity.
Leased assets
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to
ownership. All other leases are classified as operating leases. Classification is made at the inception of
the lease. Payments made under operating leases are charged to the profit or loss on a straight-line
basis over the lease term. Finance leases are capitalised at the lease’s commencement at the lower of
the fair value of the leased property, plant or equipment and the present value of the minimum lease
payments.
Financial instruments
A financial instrument refers to a contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity and is recognised on the Company’s balance sheet when
the Company becomes a party to the contractual terms of the instrument. Financial instruments include
cash and deposits, trade receivables and payables, and equity securities, etc.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and, subsequently, measured at
amortised cost using the effective interest method, less provision for impairment. A provision for
impairment of trade and other receivables is established when there is objective evidence that the
Company will not be able to collect all amounts due according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation and changes to debtor payment patterns are considered indicators that the trade
receivable may be impaired.
The amount of the provision is the difference between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the original effective interest rate.
Trade and other payables
Trade and other payables are not interest-bearing and are stated at their fair value on initial recognition.
They are then measured at amortised cost. Where arrangements (eg Company Voluntary
Arrangements) are made with the creditors, the difference between the carrying value of the payables,
and the revised cost to settle those liabilities is recognised through the profit and loss account.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks that are readily
convertible into known amounts of cash and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities on the balance sheet.
vela technologies PLC
annual report and accounts 2013
16
accounting policies
for the year ended March 2013
1c Summary of significant accounting policies continued
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct costs.
Equity
Equity comprises the following:
Share capital
Capital redemption reserve
Share premium
Retained earnings
Share-based payment reserve
–
–
–
–
–
represents the nominal value of equity shares
represents the reserve fund for shares redemption or buy-
back
represents the excess over the nominal value of the fair value
of consideration for shares issued
represents the accumulated retained profits
represents the cumulative charges for share-based payments
Foreign currencies
The presentational currency is sterling. The Company’s functional currency is sterling.
Transactions in foreign currencies are translated into the functional currency at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities
that are denominated in foreign currencies are retranslated at the rates prevailing at the balance sheet
date. Gains and losses arising on retranslation of monetary are included in net profit or loss for the
period.
Segmental reporting
An operating segment is a component of the Company:
•
that engages in business activities from which it may earn revenues and incur expenses (including
revenues and expenses relating to transactions with other components of the Company);
• whose operating results are reviewed regularly by the Company’s chief decision maker to make
decisions about resources to be allocated to the segment and assess its performance; and
for which discrete financial information is available.
•
The Company historically invested in online marketing services investments. These were divested at
the start of the year. The Company now comprises a single operating segment being an investment
Company operating solely within the United Kingdom. Further information on the segments is disclosed
in note 1 to the financial statements.
Non-current assets classified as held for sale
Non-current assets classified as held for sale are measured at the lower of carrying amount and fair
value less costs to sell.
Non-current assets are classified as held for sale if their carrying amounts will be recovered through a
sale transaction rather than through continuing use. This condition is regarded as met only when the
sale is highly probable, and the asset is available for immediate sale in its present condition subject only
to terms that are usual or customary for sales of such assets. Management must be committed to the
sale, which should be expected to qualify for recognition as a completed sale within one year from the
date of classification as held for sale.
Property, plant, equipment and intangible assets once classified as held for sale are not depreciated.
If a non-current asset has been classified as held for sale, but subsequently ceases to meet the criteria
to be classified as held for sale, the Company ceases to classify the asset as held for sale. Non-current
assets that cease to be classified as held for sale are measured at the lower of carrying amount before
the asset was classified as held for sale (adjusted for any depreciation, amortisation or revaluation that
would have been recognised has the asset been classified as held for sale) and its recoverable amount
on the date of the subsequent decision not to sell.
vela technologies PLC
annual report and accounts 2013
17
accounting policies
for the year ended March 2013
1d Accounting estimates and judgments
Significant judgments in applying the Company’s accounting polices
In the process of applying the Company’s accounting policies, management has made the following
judgments that have the most significant effect on the amounts recognised in the financial statements.
Recognition of deferred tax assets
The Directors have also used their judgment in not recognising deferred tax assets as explained in note
5 to the financial statements.
Estimates
Management have made a significant estimate in preparing these financial statements. The tax charge
for the year has been based on a cautious assessment of the potential tax liability of the gain made on
the CVA, and the disposal of the subsidiary. While there may be potential to utilise some of the tax
losses to relieve the tax charge, at the point of drawing up these accounts this remained uncertain, and
therefore the potential benefit of this has not been recognised.
vela technologies PLC
annual report and accounts 2013
18
statement of comprehensive income
for the year ended 31 March 2013
year ended
15 months
ended
31 March
31 March
2013
£’000
2012
£’000
Notes
1
8
2
7
5
-
-
-
-
(2)
(561)
430
(133)
-
273
-
140
(45)
95
-
-
-
-
(21)
(452)
-
(473)
-
-
195
(278)
(9)
(287)
95
(287)
Revenue
Cost of sales
Gross profit
Administrative expenses
– depreciation
– share-based payments
– other administrative expenses
– Amounts written off in CVA
Total administrative expenses and loss from
operations
Interest payable
Profit on disposal of subsidiary
Profit on disposal of associate
Profit/(loss) before tax
Income tax
Profit/(loss) and total comprehensive income
Attributable to:
Equity holders of the company
Earnings per share
Basic and diluted earnings/(loss) per share (pence)
6
0.47
(3.74)
vela technologies PLC
annual report and accounts 2013
19
balance sheet
as at 31 March 2013
Assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Non current assets held for sale
Total assets
Equity and liabilities
Equity
Called up share capital
Capital redemption reserve
Share-based payment reserve
Share premium account
Retained earnings
Total equity
Current liabilities
Trade and other payables
Onerous lease provisions
Total liabilities
Total equity and liabilities
31 March
31 March
2013
£’000
2012
£’000
Notes
9
13
11
12
10
–
11
104
115
–
115
4,912
13,188
–
24,032
(42,093)
39
76
–
76
115
–
51
3
54
50
104
4,852
13,188
1,176
23,792
(43,366)
(358)
420
42
462
104
These financial statements were approved by the Board, authorised for issue and signed on their behalf
on 30 September 2013 by:
Nigel Brent Fitzpatrick MBE
Chief Executive Officer
Company registration number: 03904195
vela technologies PLC
annual report and accounts 2013
20
cashflow statement
for the year ended 31 March 2013
Operating activities
Profit/(loss) before tax
Share-based charge
Decrease in receivables
Increase / (Decrease) in payables
Gain on Company Voluntary Arrangement
Impairment of group receivables
(Utilisation) of provision for onerous lease
Profit on disposal of associates
Profit on disposal of subsidiaries
Tax charge
Total cash flow from operating activities
Investing activities
Consideration for disposal of investment in subsidiary
Consideration for disposal of investment in associate
Total cash flow from investing activities
Financing activities
Issue of ordinary share capital
Share premium on the issue of ordinary share
Total cash flow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at start of year/period
Cash and cash equivalents at the end of the
year/period
Notes
13
Cash and cash equivalents comprise:
Cash and cash in bank
Cash and cash equivalents at end of year/period
13
year ended
15 months
ended
31 March
31 March
2013
£’000
140
2
40
86
(430)
-
(42)
-
(273)
(45)
(522)
323
-
323
60
240
300
101
3
104
104
104
2012
£’000
(278)
21
709
(455)
-
422
(397)
(195)
-
(9)
(182)
-
195
195
-
-
-
13
(10)
3
3
3
vela technologies PLC
annual report and accounts 2013
21
statement of changes in equity
for the year ended 31 March 2013
Capital
Share-
based
Share
Share Redemption payment Retained
Total
capital premium
Reserve
reserve
earnings
equity
£’000
£’000
£’000
£’000
£’000
£’000
Balance at 1 April 2012
4,852
23,792
13,188
1,176
(43,366)
(358)
Share option charge
Share options lapse
Issue of share capital
Transactions with
owners
Profit for the year and
total comprehensive
income for the year
Balance at 31 March
2013
Balance at 1 January
2011
Share options charge
Issue of share capital
Transactions with
owners
Loss for the period and
total comprehensive
loss for the period
Balance at 31 March
2012
–
–
60
60
–
–
–
240
240
–
–
–
–
–
–
2
–
(1,178)
1,178
–
–
(1,176)
1,178
2
-
300
302
–
95
95
4,912
24,032
13,188
–
(42,093)
(39)
4,852
23,792
13,188
1,155
(43,079)
(92)
–
–
–
–
–
–
–
–
–
–
–
–
21
–
21
–
–
–
21
–
21
–
(287)
(287)
4,852
23,792
13,188
1,176
(43,366)
(358)
vela technologies PLC
annual report and accounts 2013
22
notes to the financial statements
for the year ended 31 March 2013
1 Revenue and segmental information
The Company does not trade and as such there is only one identifiable operating segment, being the
holding and support of investments. Furthermore the Company operates in a single geographic
segment being the United Kingdom. The results and balance and cashflows of the segment are as
presented in the primary statements.
2 Loss from operations
Loss from operations is stated after charging:
Auditors’ remuneration for auditing of accounts
Auditors’ remuneration for non-audit services
Operating lease rentals
Share-based payment charge
Year ended
15 months
ended
31 March
31 March
2013
£’000
14
2
–
2
2012
£’000
64
31
-
21
3 Staff costs
The average number of persons employed by the Company (including Directors) during the period was
as follows:
Directors and senior management
Management
Non-management
Total
The aggregate payroll costs for these persons were as follows:
Aggregate wages and salaries
Social security costs
Share-based payments
Pensions costs
Year ended
31 March
2013
15 months
ended
31 March
2012
2
-
-
2
2
-
-
2
Year ended
31 March
2013
15 months
ended
31 March
2012
271
271
-
-
-
-
-
-
271
271
vela technologies PLC
annual report and accounts 2013
23
notes to the financial statements
for the year ended 31 March 2013
4 Directors and senior management
Directors’ remuneration
A Moss (resigned 5 March 2013)
N B Fitzpatrick
A Laiker
A Moss
Salary
£’000
271
-
-
271
Year ended 31 March 2013
Fees Pension
Equity
£’000
£’000
£’000
–
3
-
3
–
-
-
-
–
-
-
–
Total
£’000
271
3
-
274
15 months ended 31 March 2012
Salary
£’000
260
Fees
Pension
Equity
£’000
£’000
£’000
–
11
–
Total
£’000
271
Directors’ and senior management’s interests in shares
The directors who held office at 31 March 2013 held the following shares:
A Moss (resigned 5 March 2013)
N B Fitzpatrick
A Laiker
31 March
2013
31 March
2012
-
-
-
-
1,916,724
1,916,724
The total share-based payment costs in respect of options granted are:
Directors
Non-management
Year ended
31 March
2013
£’000
-
2
15 months
ended
31 March
2012
£’000
18
3
vela technologies PLC
annual report and accounts 2013
24
notes to the financial statements
for the year ended 31 March 2013
5 Tax
Current tax:
UK tax
Tax charge
Year ended 31
March 2013
15 months
ended 31 March
2013
£’000
£’000
45
45
9
9
The deferred tax asset relating to the losses has not been recognised due to uncertainty over the
existence of future taxable profits against which the losses can be used.
Tax reconciliation
Profit/(Loss) before tax
Tax at 24% (2012: 26%) on loss before tax
Effects of:
Other expenses not deductible
Utilisation of losses
Current tax expense/(credit)
Year ended
31 March
15 months
ended
31 March
2013
£’000
140
34
21
(10)
45
2012
£’000
(278)
(72)
81
-
9
vela technologies PLC
annual report and accounts 2013
25
notes to the financial statements
for the year ended 31 March 2013
6 Earnings per share
Earnings per share has been calculated on a profit after tax of £95,000 (period to 31 March 2012:
£287,000 loss) and the weighted number of average shares in issue for the year of 20,008,076
weighted (31 March 2012: 7,679,309 weighted).
Reconciliation of the profit and weighted average number of shares used in the calculations are set out
below:
Profit/(loss) (£’000)
Earnings per share (pence)
Year ended 31
March 2013
95
0.47
15 months
ended 31
March 2013
(287)
(3.74)
A capital reorganisation was approved at a General Meeting held on 28 May 2012. Each of the
Company’s existing Ordinary shares of 0.1p each have been subdivided into 1 ‘New’ Ordinary Share of
0.001 pence (‘New shares’) and 99 New Deferred shares of 0.001 pence (‘New Deferred Shares’). The
New Shares above have been consolidated into New Ordinary Shares of 0.1 pence each on the basis of
1 New Ordinary Share for every 100 New Shares. The Admission of the New Ordinary Shares to
trading on AIM took place on 29 May 2012.
The Earnings per Share comparatives have been adjusted to reflect the redenomination of the share
capital.
7 Disposal of subsidiary / Non current assets held for sale
Disposal of DGM India Internet Marketing Limited (DGM India)
On 4 April 2012, the Board entered into a sale and purchase agreement for the disposal of the
subsidiary, DGM India, to Tyroo Media Private Limited and to Inflection Digital Holdings Private Limited
(both of which are private companies incorporated and registered in India), for a total gross
consideration of 33,500,000 ruppees (approx £412,760). This transaction completed in July 2012.
The carrying value of the investment in the subsidiary was recognised as a “non current asset held for
sale” as at 31 March 2012.
The profit on disposal was calculated as proceeds net of costs (£373,000) less carrying value of asset
(£50,000) giving the profit recognised of £323,000.
At 31 March 2013 all subsidiaries had been disposed of.
8 Amounts written off in CVA
On 21 December 2012 the Company entered a company voluntary arrangement (“CVA”) and on 14th
January 2013 the Company’s creditors and members approved the CVA proposed by the previous
directors of the Company who resigned on 18th January 2013. Since this approval the Joint Supervisors
have established all claims and despatched payments in respect of valid claims at the rate set in the
approved arrangement being 17 pence in the pound before administrators’ costs. The first and final
dividend was paid on 29 April 2013 at a rate of 15.96 pence in the pound. The CVA was successfully
completed on 29 August 2013.
In December 2012 new investors conditionally subscribed for a number of ordinary shares, which
generated substantial funds into the Company. Net funds received of some £280,000 allowed £99,189
to be used for the benefit of the CVA creditors, with the balance to allow the Company to fulfil its new
investing policy.
The amount written off represents the difference between the total creditors approved and the dividend
paid.
vela technologies PLC
annual report and accounts 2013
26
notes to the financial statements
for the year ended 31 March 2013
9 Trade and other receivables
Trade receivables
Other receivables
Prepayments and accrued income
10 Trade and other payables
Trade payables
Social security and other taxes
Corporation tax payable
Other payables
Accruals and deferred income
11 Share capital
Authorised capital
9,999,520,000 ordinary shares of 0.1 pence each
76,025,157,516 deferred shares of 0.001 pence
4,083,918,156 deferred shares of 0.1 pence each
54,952,000 deferred shares of 24 pence each
Allotted, called up and fully paid capital
67,679,309 (31 December 2010: 7,679,309) ordinary shares of 0.1
pence each
76,025,157,516 deferred shares of 0.001 pence
4,083,918,156 deferred shares of 0.1 pence each
Allotments during the period
The Company allotted the following ordinary shares during the year/period:
31 March
2013
£’000
31 March
2012
£’000
–
5
6
11
31 March
2013
£’000
14
-
45
–
17
76
11
-
40
51
31 March
2012
£’000
284
16
-
33
87
420
31 March
2013
£’000
31 March
2012
£’000
10,000
760
4,084
13,188
28,032
68
760
4,084
4,912
10,000
760
4,084
13,188
28,032
8
760
4,084
4,852
Shares in issue at 31 March 2012
Shares issued during the year
Shares in issue at 31 March 2013
Shares in issue at 1 January 2011
Shares issued during the period
Shares in issue at 31 March 2012
vela technologies PLC
annual report and accounts 2013
year ended 31 March 2013
7,679,309
60,000,000
67,679,309
15 months ended 31 March 2012
7,679,309
-
7,679,309
27
notes to the financial statements
for the year ended 31 March 2013
11 Share capital continued
A capital reorganisation was approved at a General Meeting held on 28 May 2012. Each of the
Company’s existing Ordinary shares of 0.1p each have been subdivided into 1 ‘New’ Ordinary Share of
0.001 pence (‘New shares’) and 99 New Deferred shares of 0.001 pence (‘New Deferred Shares’). The
New Shares above have been consolidated into New Ordinary Shares of 0.1 pence each on the basis of
1 New Ordinary Share for every 100 New Shares. The Admission of the New Ordinary Shares to
trading on AIM took place on 29 May 2012.
The Company’s main source of capital is the parent Company’s equity shares. The policy is to retain
sufficient authorised share capital so as to be able to issue further shares to fund acquisitions, settle
share-based transactions and raise new funds.
12 Share-based payments
During the year, all options lapsed as the employees and directors who held the options ceased to be
employees or directors. The reserve relating to vested share based payments was transferred to
retained earnings at the point the options lapsed.
For the period to 31 March 2012, the movement on options was as follows:
Exercise
Held at Granted Forfeited Cancelled Held at
31
December
during
the
2010
period
during
the
period
During
the
period
price
Issue date
(pence)
124.68
356.50
October
2003
December
2003
510.00
April 2004
650.00
April 2004
450.00
January
2006
375.00
June 2006
September
2006
425.00
350.00
125.00
125.00
050.00
050.00
February
2009
January
2010
February
2011
050.00
April 2011
31
March
2012
2,516
3,000
300
250
5,000
7,500
333
–
–
–
–
–
–
–
2,516
3,000
300
250
5,000
7,500
333
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
April 2007
9,651
May 2008
138,050
(333)
9,318
(17,500) 121,050
91,167
(4,333)
(32,334)
54,500
168,300
–
(30,667)
– 137,633
–
–
10,000
49,833
–
–
–
–
10,000
49,833
426,067
59,833
(35,000)
(50,167) 401,233
The above table excludes Directors’ options.
Options forfeited in the period are in respect of employees leaving the employment of the Company.
vela technologies PLC
annual report and accounts 2013
28
notes to the financial statements
for the year ended 31 March 2013
13 Cash and cash equivalents
Cash and cash equivalents comprise the following:
Cash and cash in bank:
Pound sterling
Cash and cash equivalents at end of year/period
31 March
2013
£’000
31 March
2012
£’000
104
104
3
3
14 Financial instruments
The Company uses various financial instruments which include cash and cash equivalents and various
items such trade receivables and trade payables that arise directly from its operations. The main
purpose of these financial instruments is to raise finance for the Company’s operations and manage its
working capital requirements.
The fair values of all financial instruments are considered equal to their book values. The existence of
these financial instruments exposes the Company to a number of financial risks which are described in
more detail overleaf.
The main risks arising from the Company financial instruments are currency risk, credit risk and liquidity
risk. The Directors review and agree the policies for managing each of these risks and they are
summarised overleaf. The Company has a sales ledger facility on which interest is charged at a variable
rate. The Directors, therefore, do not consider the Company to be exposed to material interest rate risk.
Currency risk
There was no exposure to foreign exchange fluctuations to 31 March 2013, and as such sensitivity
analysis has not been presented.
Credit risk
The Company’s exposure to credit risk is limited to the carrying amount of financial assets recognised at
the balance sheet date, as summarised below:
Classes of financial assets – carrying amounts
Cash and cash equivalents
Trade receivables
31 March
2013
£’000
31 March
2012
£’000
104
–
104
3
-
3
The Company’s management considers that all of the above financial assets that are not impaired for
each of the reporting dates under review are of good credit quality.
None of the Company’s financial assets are secured by collateral or other credit enhancements.
vela technologies PLC
annual report and accounts 2013
29
notes to the financial statements
for the year ended 31 March 2013
Liquidity risk
The Company maintains sufficient cash to meet its liquidity requirements. Management monitors rolling
forecasts of the Company’s liquidity on the basis of expected cash flow in accordance with practice and
limits set by the Company. In addition, the Company’s liquidity management policy involves projecting
cash flows and considering the level of liquid assets necessary to meet these.
Maturity analysis for financial liabilities
At amortised costs:
Trade payables
Other payables
Lease commitments provision
31 March 2013
31 March 2012
Within Later than
Within Later than
1 year
£’000
1 year
£’000
1 year
£’000
1 year
£’000
14
–
–
14
–
–
–
–
284
136
-
420
–
–
–
–
Capital risk management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as
a going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital. This is achieved by making
investments commensurate with the level of risk.
The Company monitors capital on the basis of the carrying amount of equity.
The Company policy is to set the amount of capital in proportion to its overall financing structure, i.e.
equity and long-term loans. The Company 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 Company may adjust the amount of dividends paid to
shareholders, issue new shares or loan notes, or sell assets to reduce debt.
On 24th December 2012, the Company conditionally placed 67,400,000 new Ordinary Shares at a price
of 0.5 pence raising £337,000 before expenses. The funds raised allowed the Company to fulfil its
obligations under a CVA and allow the Company to continue to trade. The surplus was retained in the
Company to allow the Company to fulfil its new investing policy.
The Company has approved a capital reduction which was finalised after the balance sheet date.
Following the Capital Reduction both classes of Deferred Shares and the balances standing to the credit
of the share premium account and the capital redemption reserve of the Company have been cancelled.
The balance on the share premium account includes for this purpose any additional share premium
arising before 31 July 2013. The Capital Reduction was sufficient to write off the entirety of the deficit on
its profit and loss account, and create a small positive balance. Following the Capital Reduction, there
was no change in the number of Ordinary Shares in issue.
vela technologies PLC
annual report and accounts 2013
30
notes to the financial statements
for the year ended 31 March 2013
15 Related party transactions
During the period the Company entered into the following related party transactions. All transactions
were made on an arm’s length basis:
Ocean Park Developments Limited
Nigel Brent Fitzpatrick, Non-Executive director is also a director of Ocean Park Developments Limited.
During the year the Company paid £2,500 (31 March 2012 : £nil) in respect of his directors fees to the
Company. The balance due to Ocean Park Developments at the year end was £nil (31March 2012 :
£nil)
Share Options held by Directors
On 21 December 2012, the following share options held by the former directors lapsed when the
Company entered a CVA:
Adrian Moss – 174,000 options
David Lees – 17,500 options
Keith Lassman – 12,500 options
Placing of shares
On 24th December 2012, the Company announced that Adrian Moss, a former director of the company
had agreed to place 5,000,000 0.01p shares at a price of 0.05p for a total consideration of £25,000. This
transaction completed on 5 September 2013. On completion of this Adrian Moss will own 5,995,100
shares in the Company representing a shareholding of 4.25%.
16 Events after the balance sheet date
Investment in Disruptive Tech Ltd
At a Directors meeting on 14 August 2013 a proposal was approved to acquire 262,090 shares,
ultimately representing a 0.62% interest in Disruptive Tech Ltd (a Gibraltar Company) for a total of
£250,000. The purchase price was satisfied by a cash payment of £125,000 and the balance of
£125,000 by way of the issue of 8,333,333 Ordinary shares of 0.1 pence at a price of 0.15p.
Investment in Advance Laser Imaging Limited
On 11 September 2013 the Board announced a £75,000 investment in Advance Laser Imaging Ltd. The
Company has committed £75,000 for a 6.25% interest.
Placing of 60,000,000 Ordinary Shares
A further issue of shares took place on 9 August 2013, 60,000,000 Ordinary shares of 0.1 pence being
issued at 0.5p each generating gross proceeds of £300,000.
Reduction in share capital
Following the announcement on 18 June 2013 that the Company proposed to take further steps to
restructure its balance sheet, a capital was approved by shareholders and was confirmed at the final
Court Hearing which took place on 31 July 2013. Both classes of Deferred Shares and the balances
standing to the credit of the share premium account and the capital redemption reserve of the Company
were cancelled. This reduction is sufficient to write off the entirety of the deficit on its profit and loss
account and create a small positive balance. There were no changes to the number of ordinary shares
in issue.
vela technologies PLC
annual report and accounts 2013
31