Final Results

RNS Number : 8678Z

Baydonhill PLC

29 September 2009

 



29 September 2009

Baydonhill Plc

('Baydonhill' or the 'Company')

Final results for the year ended 31 March 2009

Baydonhill (AIM: BHL), one of the UK's leading foreign exchange specialists, announces its final results for the year ended 31 March 2009.

CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S STATEMENT

Introduction

During the year under review the Company has made significant progress, particularly in the development of its corporate client business. This has resulted in a substantial growth in the Company's gross revenue despite the continued challenges resulting from the downturn in the market for the private client foreign exchange business. Ongoing enhancements to the online trading platform have resulted in a very positive response from corporate clients and enabled significant improvements in operational processes.  

While the Private Client Division has seen further declines in revenue and in the growth of new client numbers due to the current economic conditions, repeat business from the large existing private client base has lessened the impact.

Financial Review

The loss for the financial year was £1.4 million, compared to £1.5 million in 2008. This includes an operating loss of £1.06 million from the Corporate Division which relates to costs primarily associated with sales staff and the depreciation of the online system. This year was the first full year of sales activity for the Corporate Division and, as a result, operating costs remain high in relation to turnover as this side of the business becomes established. This is indicative of the corporate sales model and the directors expect this trend to reduce in the current financial year.

The operating loss of £1.3 million in 2009 (2008: £1.6 million) is after  transaction charges of £250,000 (2008: £30,000) in the second half of the year, resulting from a change in Bank of Ireland's charging structure and a depreciation charge in respect of the online platform of £137,000 (2008: £30,081). In 2009 no adjustment is required in respect of FRS20 (share based payments) as all the options in issue at 31 March 2009 had vested (2008: credit £82,000). The underlying operating performance has therefore improved in the year by approximately £740,000. The Company is working on a series of plans to reduce the transaction charges as a percentage of revenue in the next fiscal year. 

Gross turnover for the Company for the year under review was £460 million, an increase of 56 per cent from the previous year's figure of £294 million. Gross profit (representing foreign exchange commissions earned net of payments to affiliates and bank charges) increased by 29 per cent to £2.7 million from £2.1 million in the previous year.

Shareholders' deficit at 31 March 2009 amounted to £1.6 million compared to a deficit of £0.3 million at 31 March 2008.

Sector Review

The Corporate Division has expanded rapidly with gross turnover of £314 million compared to £67 million in the prior year. Allowing for seasonal variations, the growth in revenue is strong and consistent with average monthly revenues in the last quarter and double that of the first quarter. As a result of the strong performance, the sales team was expanded in the third quarter of 2008.

The Private Client foreign exchange sector has experienced another challenging year, resulting in the Private Client Division's turnover dropping from £226 million in 2008 to £146 million in 2009.  

Fundraising

Due to the downturn experienced by the Private Client Division and the delay in the launch of the Corporate Division's online trading platform, a facility of £600,000 was provided on 30 June 2008 by Wallich & Matthes BV, a wholly owned subsidiary of Ekwienox Limited. In addition, the remaining balance of £150,000 of the £700,000 convertible loan note issued by Ekwienox Fx Limited was drawn down during the year. The Company is pleased to confirm that the repayment dates for these loans have been extended to 30 September 2010.

On 20 April 2009 Ekwienox FX Limited ('Ekwienox') exercised warrants over 1,739,130 shares at 5.75 pence per share. On 2 June 2009 Ekwienox exercised warrants over 3,500,000 shares also at 5.75 pence per share. Furthermore, on 31 July 2009 Ekwienox exercised warrants over 1,749,070 and 560,000 shares at 5.75 pence per share and 6.25 pence per share, respectively. The exercise of these warrants raised £437,000 of additional working capital for the Company.

People

There has been a change to the composition of the Board in the period under review. Our thanks go to Ian Collins who left during the year.

The Company's employees have responded magnificently to the challenges that they have encountered throughout the year and the Board would like to thank them for their continuing dedication and support.

Outlook

The Directors expect that during 2010 there will be continued significant growth from the Corporate Division. In the first quarter of the fiscal year 2010, corporate revenue increased by 160 per cent and total revenue increased by 29 per cent over the same period in the fiscal year 2009. The increase in corporate revenue is a combination of new business and existing recurring business. The nature of the corporate sales model lends itself to a high level of first year costs associated with winning new business. The year under review was the first full year of sales activity and your Board expect the ratio of costs to revenue in subsequent years to reduce significantly.

The Directors believe that the current financial year will continue to be challenging for the Private Client Division. However, while the Company believes that this sector is unlikely to improve in the short term, it is possible to increase market share.  With this in mind, it has developed a new marketing strategy which involves certain changes to the Company's website and increased targeted advertising spend. The Company will also be rebranding its operations as 'Baydonhill fx' to improve product recognition.

Following the investment in the Corporate Division and the corresponding increase in revenue growth, the Directors are very focused on achieving breakeven on a monthly basis. A series of cost cutting initiatives have been put in place with effect from September 2009 to assist the Company to achieve this goal.

Revenue in the forthcoming year is expected to be generated primarily from the Corporate Division although the Private Client Division is still expected to make a significant contribution. In the current economic environment it is expected that the majority of the Company's growth will be derived from the Corporate Division

Sir Eric Peacock KCMG Chairman

Wayne Mitchell Chief Executive

 FURTHER ENQUIRIES

Baydonhill Plc
Eric Peacock	020 7594 0515
Wayne Mitchell
John East & Partners Limited, a subsidiary of Merchant Securities plc
Bidhi Bhoma	020 7628 2200

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2009

	Note	2009 £	2008 £
Turnover	2(c)	460,436,851	293,792,374
Cost of sales		(457,743,038)	(291,647,277)
Gross profit		2,693,813	2,145,097
Administrative expenses		(3,954,516)	(3,737,519)
Operating loss	3	(1,260,703)	(1,592,422)
Interest receivable and similar income		99,310	177,863
Interest payable and similar charges		(214,009)	(55,624)
Loss on ordinary activities before taxation		(1,375,402)	(1,470,183)
Taxation	4	-	-
Loss for the financial year		(1,375,402)	(1,470,183)
Basic loss per share	5	(5.64p)	(6.29p)
Fully diluted loss per share	5	(5.64p)	(6.29p)

  BALANCE SHEET AS AT 31 MARCH 2009

	Note	£	2009 £	£	2008 £
FIXED ASSETS
Tangible	6		728,572		590,027
Investments	7		10		10
			728,582		590,037
CURRENT ASSETS
Debtors due within one year	8	39,917,677		19,201,359
Cash at bank and in hand		2,710,550		3,892,481
		42,628,227		23,093,840
CREDITORS: amounts falling due within one year	9	(42,778,505)		(22,801,713)
NET CURRENT (LIABILITIES)/ASSETS			(150,278)		292,127
TOTAL ASSETS LESS CURRENT LIABILITIES			578,304		882,164
CREDITORS: amounts falling due after one year	9		(2,201,824)		(1,135,732)
NET LIABILITIES			(1,623,520)		(253,568)
CAPITAL AND RESERVES
Called up share capital	12		243,841		243,841
Share premium account	13		3,005,551		3,005,551
Profit and loss account	13		(4,930,800)		(3,555,398)
Equity component of convertible loans	13		57,888		52,438
EQUITY SHAREHOLDERS' (DEFICIT)			(1,623,520)		(253,568)

   CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2009

	2009 £	2008 £
Reconciliation of operating loss to net cash flow from operating activities
Operating loss	(1,260,703)	(1,592,422)
Depreciation of tangible fixed assets	188,629	93,404
Increase in debtors	(20,716,318)	(9,954,686)
Increase in creditors	20,163,333	10,010,174
Share - based (credit) / charge	-	(82,186)
Net cash outflow from operating activities	(1,625,059)	(1,525,716)
CASH FLOW STATEMENT (note 14)
Net cash outflow from operating activities	(1,625,059)	(1,525,716)
Returns on investments and servicing of finance	20,302	122,239
Taxation	-	-
Capital expenditure	(327,174)	(340,249)
Cash outflow before use of liquid resources and financing	(1,931,931)	(1,743,726)
Management of liquid resources	119,200	-
Financing - Convertible Loans	150,000	1,026,000
- Issue of shares	-	503,782
- Loan facility	600,000	-
Decrease in cash in the year	(1,062,731)	(213,944)
Reconciliation of net cash flow to movement in net funds (note 16)
Decrease in cash in the period	(1,062,731)	(213,944)
Cash inflow from decrease in liquid resources	(119,200)	-
Convertible loan note	(175,293)	(973,562)
Fixed interest loan	(600,000)	-
Net funds at 1 April 2008	2,918,919	4,106,425
Net funds at 31 March 2009	961,695	2,918,919

NOTES TO THE PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2009

• Publication of Non-Statutory Accounts

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2008 and 2009, but is derived from those accounts. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered following the Company's Annual General Meeting. The Auditors have reported on those accounts; their reports were unqualified and did not contain statements under the Companies Act 1985, sections 237(2) or (3).

          2.       Accounting Policies

(a)    Basis of preparation

As a result of the company's continued investment in its corporate division offering and the development of its online trading platform, the company incurred a loss for the year of £1.4 million and at 31 March 2009 had net liabilities of £1.6 million, including convertible and unsecured loans due to its parent undertaking and related parties of £1.75 million. Both prior to and subsequent to the year end, the repayment date of these loans was formally extended to 30 September 2010. In addition, subsequent to the year end the parent undertaking, Ekwienox Limited, and one of that company's subsidiaries, Ekwienox FX Limited, exercised warrants which in aggregate raised additional equity of £437,000. Furthermore, Ekwienox Limited is also at an advanced stage of negotiations with the company to make available additional funds of up to £350,000, should it be needed.  

Having regard to the above and in the context of both current and future trading, and the related cash flow projections prepared by the directors, the directors consider that, barring unforeseen circumstances, the company will have adequate resources to meet its liabilities as they fall due for at a period of at least twelve months from the date of approval of these financial statements. Accordingly, they consider it appropriate to continue to prepare the financial statements on a going concern basis.

(b)    Accounting Convention

The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. A summary of the more important accounting policies, which have been consistently applied except where noted, is set out below.

(c)    Turnover and revenue recognition

Turnover represents:

1.    The gross value of foreign exchange currency transactions undertaken by the Company's foreign currency business. Purchases of currency relating to such transactions are treated as cost of sales. Turnover is recognised after receiving the client's authorisation. Where the Company enters into contracts with its clients, it also enters into matched contracts with its bankers.

2.    Commissions earned from arranging property finance. Such revenue is recognised when the client has entered into irrevocable arrangements with the loan provider or underwriter.

3.    Operating Loss

The operating loss is stated after charging:

	2009 £	2008 £
Depreciation of tangible fixed assets	188,629	93,404
Operating lease rentals - land and buildings	142,500	142,500
Exceptional item - development of Corporate Foreign Exchange division	-	1,122,000

4.    Taxation

	2009 £	2008 £
a)    Analysis for the year
Current tax:
UK corporation tax on loss for the year	-	-
Adjustment in respect of previous years	-	-
Total current tax (note 4(b))	-	-
Total deferred tax	-	-
Total tax for the year	-	-
b)    Factors affecting tax for year
Loss on ordinary activities before tax	(1,375,402)	(1,470,183)
Expected tax at 28% (2008: 30%)	(385,113)	(441,055)
Expenses not deductible for tax purposes	28,445	34,528
Depreciation in excess of capital allowances / (capital allowances     in excess of depreciation)	52,816	(37,514)
Share-based payments / credit not deductible / assessable for     tax purposes	-	(24,656)
Losses arising in the period carried forward	303,852	468,697
Actual tax	-	-

c)    Deferred tax

	Tax Losses £	Short term Timing differences £	Accelerated capital Allowances £	Potential deferred tax not recognised £	Total Recognised £
At 1 April 2008	831,571	10,720	19,691	(861,982)	-
For the year	290,159	20,863	123,560	(434,582)	-
At 31 March 2009	1,121,730	31,583	143,251	(1,296,564)	-

d)    Other factors affecting future tax

As at 31 March 2009, trading losses of approximately £3,980,000 (2008: £2,970,000) are available to carry forward against future profits of the same trade. These tax losses will reduce the corporation tax charge in future years until they have been utilised. No deferred tax asset in respect of these losses has been recognised as there is currently uncertainty as to the precise timing over which the asset will be recovered.

5.    Loss per share

Both basic loss per share and diluted loss per share are based on a loss after tax of £1,375,402 (2008: £1,470,183). The basic loss per share has been calculated on a weighted average of 24,384,015 (2008: 23,354,859) ordinary shares in issue. Diluted loss and loss per share is calculated on the same basis as basic loss and loss per share because the effect of the potential ordinary shares (share options and warrants) reduces the net loss per share and is therefore anti-dilutive.

Shares issued after 31 March 2009 are disclosed in note 12.

6.    Tangible Fixed Assets

	On-line system	Leasehold improvements	Office equipment	Total
		£	£	£
Cost
At 1 April 2008	566,786	165,358	600,375	1,332,519
Additions	312,425	-	14,749	327,174
At 31 March 2009	879,211	165,358	615,124	1,659,693
Depreciation
At 1 April 2008	41,609	165,327	535,556	742,492
Charge for period	137,404	31	51,194	188,629
At 31 March 2009	179,013	165,358	586,750	931,121
Net book amount
At 31 March 2009	700,198	-	28,374	728,572
At 31 March 2008	525,177	31	64,819	590,027

7.    Fixed Asset Investments

	Shares in subsidiary undertakings
	2009	2008
	£	£
Cost
At 1 April 2008 and 31 March 2009	10	10

The Company holds 100% of the ordinary share capital of Baydonhill International Mortgages Limited and FLG Insurance Brokers Limited. The net assets and trade of these subsidiaries were transferred to Baydonhill plc on 31 March 2007 and, since that date, the two companies have remained dormant.

The Company also holds 100% of the ordinary share capital of www.fx4less.com Limited, Boatfinance4less Limited, Currencies4less Limited and FLG Corporate Services Limited, all of which are dormant. All subsidiaries are registered in England and Wales.

8.    Debtors

	2009 £	2008 £
Due within one year
Trade debtors	39,758,114	18,985,503
Prepayments and accrued income	159,563	215,856
	39,917,677	19,201,359

9.    Creditors

	2009 £	2008 £
Amounts falling due within one year
Trade creditors	41,654,912	21,947,213
Amounts owed to Group undertakings	389,206	588,146
Other tax and social security	99,251	54,151
Accruals and deferred income	510,732	190,531
Other creditors	124,404	21,672
	42,778,505	22,801,713
Amounts falling due after one year
Convertible Loan Note dated 8 May 2007	470,069	449,899
Convertible Loan Note dated 23 August 2007	678,816	523,663
Net debt element	1,148,885	973,562
Amounts due to Group undertakings	452,939	162,170
Unsecured loan dated 30 June 2008	600,000	-
	2,201,824	1,135,732

In May 2007 the Company entered into a Convertible Loan with the Ekwienox Group in the sum of £476,000, and in August 2007 it entered into a second Convertible Loan with the Ekwienox Group in the sum of £700,000, both at rates of interest based on LIBOR. At 31 March 2009 both the loans had been fully drawn down.

In 2008 the Company entered into a loan agreement with the Ekwienox Group in the sum of £600,000 with an interest rate of 12% per annum. At 31 March 2009 the loan had been fully drawn down.

10.    Financial Instruments

Treasury activities take place under procedures and policies monitored by the Board. They are designed to minimise the financial risks faced by the Company which primarily arise from interest rate, currency, and liquidity risks and information is given below. As permitted by FRS13 Derivatives and other financial instruments, no further details are set out in respect of short-term debtors and creditors.

Interest rate risks

The Company has financed its operations primarily through both the issue of equity shares and through loans and convertible loans.  

Floating rate loans

Floating rate assets comprise cash at bank and the Company receives interest on cash balances at rates linked to the Company's banker's base rate. At the year end, the Company had borrowings as a result of drawdowns from the loan notes amounting to £1,176,000 (2008 : £1,026,000) at rates of interest based on LIBOR.  

Fixed rate loans

At the year end the Company owed ASPone Limited, the sum of £699,385 (2008 : £416,557) which bears interest at fixed rate of 10% per annum. At the year end the Company had borrowings as a result of drawdowns from the loan extended by Wallich & Matthes Holding BV of £600,000, which bears interest at a fixed rate of 12% per annum. Both rates are fixed for the term of the loan.

The Company has no other assets or liabilities that are subject to interest rate fluctuations.

Liquidity risk

The Company's treasury management policies are designed to ensure the continuity of funding. The Company has surplus cash at the year end. 

Foreign currency risk

The Company does not have any significant foreign currency exposure as all foreign currency is acquired under matched contracts to fulfil contracts with clients and therefore no further analysis is required under FRS 13.

In the opinion of the directors the fair value of the financial assets and liabilities was not materially different to the carrying value.

11.    Forward Delivery Contracts and Monies Due From Clients

At the year end, the amount due from clients in respect of open contracts was £36,491,535 (2008: £18,975,201).

At the year end, the Company had committed to purchase currency at fixed rates from its bankers, in respect of clients, amounting to £41,370,000 (2008: £18,586,041). The fair value of these forward foreign currency exchange contracts at the year end would give rise to a credit of £1,028,000 (2008: liability of £41,000).

12.    Share Capital

Ordinary shares of 1p each

	Authorised		Allotted, called up and fully paid
	No.	£	No.	£
As at 1 April 2008 and 31 March 2009	75,000,000	750,000	24,384,015	243,841

At the end of the year the Company had granted the following warrants in respect of Ordinary shares:

	Number of warrants granted	Exercise  price	Exercise date
Blue Oar Securities Limited	79,762	23p	4 April 2009
Ekwienox FX Limited	5,552,295	5.75p	31 March 2011
Ekwienox FX Limited	1,780,905	5.75p	31 March 2011
Ekwienox FX Limited	560,000	6.25p	30 April 2010

On 8 May 2007 Ekwienox FX Limited entered into an investment agreement with Baydonhill plc whereby Ekwienox FX Limited acquired 8,695,652 shares at a price of 5.75p. Additionally, the existing warrants and additional subscription rights held by Ekwienox FX were re-priced from 23p per share to 5.75p per share.

On the same date Ekwienox FX Limited entered into a Convertible Loan Agreement with Baydonhill plc whereby it agreed to extend to Baydonhill plc a convertible loan of £476,000 bearing interest at the rate of 3.75% above LIBOR and with conversion rights at a price of 5.75p per share.

In an investment agreement dated 8 May 2007, Wayne Mitchell subscribed for 260,869 shares, Tim Sullivan 86,956 shares and Ian Collins 69,565 shares, all at a price of 5.75p per share. Additionally, and under the terms of their Contracts of Employment, Wayne Mitchell was granted 672,268 shares and another employee 100,000 shares all at par.

On 23 August 2007 Ekwienox FX Limited entered into a Convertible Loan agreement with Baydonhill plc whereby it agreed to extend to Baydonhill plc a Convertible Loan of £700,000 bearing interest at the rate of 4.00% above LIBOR and with conversion rights at a price of 6.00p per share. In addition, the Company granted a warrant to Ekwienox FX Limited to subscribe for 560,000 Ordinary Shares at a subscription price of 6.25p exercisable at any time prior to 30 April 2010.

On 20 April 2009 Ekwienox FX Ltd exercised warrants for 1,739,130 shares at 5.75p. On 2 June 2009 Ekwienox Ltd exercised warrants for 3,500,000 shares at 5.75p. On 31 July 2009 Ekwienox FX Ltd exercised warrants for 1,749,070 shares and 560,000 shares at 5.75p and 6.25p respectively.

13.    Reserves

Share premium account
At 1 April 2008 and 31 March 2009		3,005,551
	2009 £	2008 £
Profit and loss account
At beginning of year	(3,555,398)	(2,003,029)
(Loss) for year	(1,375,402)	(1,470,183)
Share-based payments	-	(82,186)
At end of year	(4,930,800)	(3,555,398)
Equity element of convertible loans
At beginning of year	52,438	-
Movement in the year	5,450	52,438
At end of year	57,888	52,438

14.    Gross Cash Flows

	2009	2008
	£	£
Returns on investments and servicing of finance
Interest received	99,310	177,863
Interest paid	(79,008)	(55,624)
	20,302	122,239
Capital expenditure
Payments to acquire tangible fixed assets	(327,174)	(340,249)
Financing
Issue of share capital	-	531,724
Expenses paid in connection with share issues	-	(27,942)
	-	503,782
Management of liquid resources
Cash added to security deposit	119,200	-

15.    Equity Shareholders' (Deficit)/Funds

	2009 £	2008 £
At beginning of year	(253,568)	742,581
Loss for the year	(1,375,402)	(1,470,183)
New shares issued	-	531,724
Costs incurred in respect of Placing	-	(27,942)
Share-based payments	-	(82,186)
Equity element of convertible loans	5,450	52,438
At end of year	(1,623,520)	(253,568)

16.    Analysis of Changes in Net Funds

	At 1 April 2008	Cash  Flows	Other non-cash movements	At 31 March 2009
	£	£	£	£
Cash at bank and in hand	3,442,481	(1,301,131)	-	2,141,350
Liquid resources	450,000	119,200	-	569,200
Debt due after one year	(973,562)	(750,000)	(25,293)	(1,748,855)
Total	2,918,919	(1,931,931)	(25,293)	961,695

17.    Transactions with Related Parties

During the year the Company entered into contracts to purchase foreign exchange on an arms length basis on behalf of the following related parties. The total value of the transactions during the year were: 

Sail Croatia Limited, a company controlled by Mr A. Hughes	£420,239	(2008 : £408,208)
Hidden Croatia Limited, a company controlled by Mr A. Hughes	£1,251,111	(2008 : £645,535)
Ekwienox Limited, the ultimate parent Company	£611,932	(2008 : £2,337,680)
Sarah Collis, a director of the Company	£ Nil	(2008 : £345,686)
Arthur Hughes, the ultimate controlling party	£8,100,610	(2008 : £824,168)
Charles McLeod, a director of the Company	£107,736	(2008 : £583,686)
Ian Collins, a director of the Company (until 11 August 2008)	£ Nil	(2008 : £53,547)

During the year the Company incurred the following costs from related parties:    

Ekwienox Limited, in respect of executive, non-executive fees and insurance recharges	£48,400	(2008 : £46,000)
Ekwienox FX Limited, fees in connection with the 2008 Placing	£ Nil	(2008 : £30,000)
ASPone Limited, a company controlled by Ekwienox Limited, in respect of the development of an online trading system and associated hosting and consultancy charges	£871,346	(2008 : £483,959)
Ekwienox FX Limited, interest payable on convertible loan notes	£102,332	(2008 : £29,363)
Wallich & Matthes Holding BV, interest on loan note	£30,260	(2008 : £ Nil)

At the end of the year the following amounts were owed from related parties:        

Arthur Hughes	£ 24,975	(2008 : £ Nil)
Charles McLeod	£10,911	(2008 : £ Nil)

At the end of the year the following amounts were owed to related parties:        

Ekwienox Limited	£20,000	(2008 : £333,759)
ASPone Limited	£717,589	(2008 : £416,557)
Sail Croatia Limited	£ Nil	(2008 : £ Nil)
Hidden Croatia Limited	£ Nil	(2008 : £27,883)
Charles McLeod	£ Nil	(2008 : £62,179)
Ekwienox FX Limited	£1,250,296	(2008 : £1,026,000)
Wallich & Matthes Holding BV	£630,260	(2008 : £Nil)

18.    Commitments and Guarantees

The Company has a facility with its bankers for spot and forward foreign exchange trading up to a maximum contingent risk amount outstanding (as determined by the bank) of £2,500,000 (2008: £2,000,000). The contingent risk at the year end amounted to £2,557,000 (2008: £1,372,000). Subsequent to the year end the maximum contingent risk amount outstanding has been increased to £3,500,000.

The Company had no capital commitments not provided for at the year end (2008: £ NIL).

19.    Share Based Payment

At the end of the year the Company had, under a previously approved Enterprise Management Incentive Plan, granted options in April 2004 and February 2005.

All options are settled by the issue of shares. The principal terms and conditions of the options outstanding at the year end are as follows:

Date of grant	Entitled  employees	Number of  options	Exercise  price	Vesting period  from grant	Exercise Period
April 2004	Employees and certain directors	40,000	60p	3 years	April 2007 - April 2014
February 2005	Director	50,000	55p	3 years	February 2008 - February 2015
July 2005	Former Director	600,000	28p	0 years	July 2005 - July 2010

	2009		2008
	Number of options	Weighted average exercise price	Number of options	Weighted average exercise price
Outstanding at the beginning of the year	878,333	33p	2,881,833	45p
Forfeited during the year	(188,333)	36p	(1,928,095)	49p
Exercised during the year	-	1p	(75,405)	1p
Outstanding at the year end	690,000	32p	878,333	33p
Exercisable at the end of the year	690,000	32p	878,333	33p

The options outstanding at 31 March 2009 had exercise prices ranging from 28p to 60p and the weighted average remaining contractual life was 2 years.

The fair value of the options and shares granted have been measured using the Black Scholes valuation model. In arriving at the fair value, each option grant has been valued separately, with the exception of certain options which were issued simultaneously on identical terms which have been aggregated. Volatility has been estimated by reference to the historical volatility in the Company's share price over a period of one year prior to each grant date.

The following table lists the main assumptions used in the models:

Volatility (%)	18.0 - 113.7
Risk-free interest rate (%)	4.22 - 4.86
Expected life of options (years)	10
Expected life of share-based payments (years)	1.25
Weighted average share price - options (price)	40
Weighted average share price - share based payments (pence)	11
Expected dividends	None

The credit recognised for share based payments in respect of lapsed options during the year was £Nil (2008: £82,186).

20.    Post Balance Sheet Events

On 23 September 2009 Ekwienox FX Ltd, a subsidiary of Ekwienox Ltd agreed to extend the maturity of the convertible loans in issue to 30 September 2010. All other terms of the convertible loan are unchanged.

21.    Dividend

No dividend is proposed for the year ended 31 March 2009.

22.    Copies of Annual Report & Accounts

Copies of the Report and Accounts will be posted to shareholders 30 September 2009. They will be available from the Company's registered office at 160 Brompton Road, Knightsbridge, London SW3 1HW and are available from the Company's website www.baydonhill.com.

 

END

 

 

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