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Legendary Invest PLC (LEG)

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Tuesday 14 August, 2012

Legendary Invest PLC

Annual Financial Report

RNS Number : 9320J
Legendary Investments PLC
14 August 2012
 



14 August 2012

Legendary Investments Plc

 

("Legendary" or the "Company")

RESULTS FOR THE YEAR ENDED 31 MARCH 2012

 

Legendary investments are pleased to announce its results for the year ended 31 March 2012. The year under review has been one of building on the foundations laid last year. Progress was made with investee companies, several new investments were made and the balance sheet was strengthened. Post the balance sheet date, an investee company generated a return of more than 150 per cent and more investments were made.

In April 2011, an intellectual property licence and service agreement for the supply of elite pongamia scions and grafts to Bosques Energeticos EBE S.A. de C.V. ("Bosques") was entered into. Following this agreement, and in light of the progress made by Bosques, an investment was made in Bosques thereby obtaining a 15.4% stake. In late 2011, Bosques shipped and rooted elite pongamia scions in Mexico. This allowed the creation of the first elite Pongamia mother garden in Mexico. This is believed to be the first reported instance of elite pongamia scions successfully transported from India and rooted in Mexico for commercial use. Accordingly, Legendary increased its stake in Bosques to 30.8%. Bosques' strategy has now been further developed to cultivate large areas of bio diesel producing plantations. A number of parties have shown interest in Bosques and suitable partners to cultivate large plantations are being sought.

In May 2011, Legendary negotiated a 42.5% stake in Undrawn Reality Limited ("UR") (previously Raw Games Limited), a company specialising in the development of computer games on several platforms. Legendary assisted UR in developing a business plan with milestones. In July 2011, the first such milestone was hit and the principals of UR earned back 2.0% of the equity of UR. Legendary then assisted UR in UR's discussions with international games publishers. Progress continued during the course of 2011.

While earlier this year, Legendary reported that UR was progressing, it subsequently became evident that advances with game development and associated discussions had slowed dramatically. From talks with UR, it became clear that the timeframe to develop the game had extended considerably. Post the balance sheet date, Legendary concluded that it would not receive a return on UR in the foreseeable future and wrote its investment down to zero. While disappointing, the investment in UR was nominal (£2,000), and writing the investment to zero made available more time for Legendary to focus on more promising investments.

In May 2011, Legendary invested EUR30,000 in Terra Energy Limited ("Terra"), an oil and gas company. Post the balance sheet date, in June 2012, Terra listed as Fastnet Oil & Gas Plc ("Fastnet") on AIM and the Enterprise Securities Market of the Irish Stock Exchange, following a reverse takeover of Sterling Green Group plc. Legendary continues to hold its stake in Fastnet. Based on the closing price on 10 August 2012 the value of this stake was in excess of 250% on the original investment. The investment demonstrated both the potential of Legendary's strategy of looking for asymmetric returns and Legendary's ability to source and take positions in companies that have a near to medium term catalyst to increase value.

In July 2011, Legendary invested £50,000 in MedGold Resources Limited ("Medgold").  MedGold focuses on the discovery and development of gold and precious metal deposits. Medgold continues to make progress and is expected to seek admission to a public market later in 2012.

In December 2011, Legendary raised £615,000 (before expenses), by way of a placing of 615,000,000 ordinary shares thus significantly strengthening Legendary's balance sheet and providing Legendary with resources to make further investments. Over the following months, further investments were assessed and post the balance sheet date several investments were made.

During the year under review, Legendary changed some of its advisers: Marriott Harrison were appointed as the Company's legal advisers, Grant Thornton were appointed as the Company's nominated adviser and Simple Investments Limited were appointed as the Company's broker.

Post the balance sheet date, in July 2012, Legendary invested £50,000 in a pre-IPO funding round for Sula Iron and Gold plc ("Sula"). Sula holds a 153sq km licence in Sierra Leone, which is considered highly prospective for gold and iron ore. The resource is of particular interest as Sula's territory runs contiguous to the licence containing African Minerals' 12.8 billion tonne Tonkolili mine. Sula is expected to be admitted to a public market before the end of 2012. Legendary's investment is by way of a convertible loan, and if admission to a public market is achieved, Legendary will receive a half-warrant for every share held.

In July 2012 Legendary invested £50,000 in Regency Mines plc ("Regency"). Regency is a mineral exploration and development company focusing on nickel and cobalt in Papua New Guinea (alongside JV partner Direct Nickel) and gold, flake graphite and base metals in Australia. Regency has the potential, for example, with equity leverage to Direct Nickel's potentially revolutionary laterite nickel processing technology, to generate asymmetric returns.

Also in July 2012, Legendary invested £100,000 in cash into Kyrgyzstan based Manas Minerals LLC ("Manas Minerals"). Manas Minerals owns the Padsha Ata Licence to mine for coal in the Chatkal Ridge in the Asksy region of Jalal-Abad, Kyrgyzstan. Soviet surveys suggest that the region contains 182 million tonnes of coal reserves of which 116 million are in the P1 and P2 categories according to the Russian standard for resource reporting. A programme of works is being carried out on this which includes confirmation of the Soviet surveys by an internationally recognised firm of consultants, profiling, trenching, drilling and the improvement of site access. This programme is expected to be completed later this year. The results of qualitative studies conducted to date indicate the coal to be of high calorific value, with energy values in excess of 25 MJ/kg and low ash and sulphur content. Manas Minerals intends to seek further licences in the region, certain of which have already been identified, and combine them into a single entity. Jalal-Abad is strategically located within 200 km of the Chinese border.

Legendary's investment is by way of a convertible loan note which when converted is expected to result in Legendary having a 1.0% stake in Manas Minerals. In addition, Legendary has an option with an exercise price of £50,000 which upon exercise would result in Legendary having an additional 0.5% stake in Manas Minerals. Value crystallisation is expected through Manas Minerals being admitted to trading on a public market.

As with Fastnet, Medgold, Sula and Regency, the Directors believe that the Company's investment in Manas Minerals has the potential for generating asymmetric returns.

During the year under review, Legendary made neither a gain nor a loss on investments (2011: net loss of £10,000). Administrative costs were £189,000 (2011: £170,000). The £189,000 included the non-cash expense of £19,000 in respect of share based payment charge (2011: £62,000). This left the cash costs of £170,000 (2011: £108,000) which included £31,000 of costs associated with the £615,000 of equity raised. The remaining £139,000 increased over last year's £108,000 for several reasons. Total fees paid to our auditors were higher than in the previous year at £36,000 (2011: £18,000) due to various items of one off work. These fees are expected to return to lower levels going forward. Other professional fees were higher at £70,000 (2011: £52,000). Again there were one off items related to changing advisers and updating articles. Additional printing costs associated with updating articles were also incurred. Travel & entertaining increased to £13,000 (2011: £8,000).

With the policy of directors remuneration being success based aligned with shareholder returns, the cash element of director remuneration was only £300 (2011: £7,300). The non-cash share option charge of £19,000 (2011: £62,000) related to the options granted to the Directors in May 2011 and January 2012.

Overall operating loss was £189,000 (2011: £92,000). Last year benefitted from the exceptional cancellation of a loan of £88,000. There were nil finance charges (2011: £21,000).

Overall, Legendary made a net loss of £189,000 (2011: £113,000).

Legendary ended the period with £143,000 of investments and £534,000 cash in bank.

Post the balance sheet date, and as at the date of these accounts Legendary had, conservatively valued at historic cost price, and in the case of Fastnet and Regency, at the market price, investments of £373,000.

 

OUTLOOK

In the last year, Legendary has built upon the foundations laid in the prior period. It has executed on its investment strategy, with its first investment exhibiting a multiple return. It has strengthened its balance sheet and negotiated and made investments with similar potential. Costs have been kept to a minimum with directors' remuneration linked directly to the performance of the Company.

The Board looks confidently to building on the current momentum.

Extracts of the audited results appear below and a full version will be available on the Company's website www.legendaryinvestments.co.uk

 

Contact:



Legendary Investments Plc

Zafar Karim / Rajesh Rai / Thomas Reuner

 

020 8201 3536

Grant Thornton Corporate Finance

 

Colin Aaronson/ Melanie Frean/Jen Clarke

 

020 7383 5100

 Simple Investments                

Nick Emerson/ Andrew Thacker

01483 413500

 

 



 

 

Profit and Loss Account
 
Note
2012
Audited
£’000
2011
Audited
£’000
Net loss on investments held for trading
 
-
(10)
 
 
                          
                          
 
Net administrative expenses
 
(189)
(170)
Exceptional cancellation of loan
2
-
88
 
 
                          
                          
Administrative expenses
 
(189)
(82)
 
 
                          
                          
Operating loss
 
(189)
(92)
 
 
                          
                          
 
Interest payable and similar charges
 
4
-
(21)
 
 
                          
                          
 
 
 
 
 
 
 
 
Loss on ordinary activities before taxation
1
(189)
(113)
Tax on loss on ordinary activities
5
-
-
 
 
                          
                          
Loss for the financial year
16
(189)
(113)
 
 
                          
                          
Loss per share
 
 
 
-          basic and fully diluted (pence)
6
(0.01)p
(0.02)p
 

A separate statement of recognised gains and losses has not been prepared as the Company has no recognised gains or losses in the current or prior period other than the loss noted above.

All activities derive from continuing operations.


Balance Sheet

 

2012

Audited

2011

Audited

 

Notes

£'000

£'000


 

 

 


 

 

 


 

 

 

 

FIXED aSSETS

 

 

 

Tangible Assets

7

5

-

Investments

8

66

-

 

 

                           

                           

 

 

71

-

 

cURRENT aSSETS

 

 

 

Debtors due within one year

10

6

242

Investments

9

77

-

Cash at bank and in hand

 

534

-


 

                           

                           

 

 

617

242

 

CREDITORS: amounts falling due within one year

11

(36)

(35)


 

                           

                           

NET CURRENT ASSETS

 

581

207


 

                           

                           


 

 

 

CREDITORS: Amounts falling due after more than one year

12

(30)

(30)


 

                           

                           


 

 

 

NET ASSETS

 

622

177


 

                           

                           

 

 

Capital and reserves

 

 

 

Called up share capital

13

1,575

960

Share premium account

14

8,309

8,309

Share warrant and option reserve

15

156

137

Profit and loss account - deficit

16

(9,418)

(9,229)


 

                           

                           

Equity Shareholders' FUNDS

17

622

177


 

                           

                           

 



 

                                               

Cash Flow Statement

Notes

2012

£'000

Audited

2011

£'000

Audited

Net cash INFLOW/(outflow) from operating activities                                                                                                

18

98

(304)

 

 

            

            

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Purchase of office equipment

 

(5)

-

Investments made during the year

 

(143)

-

 

 

            

            

Net cash used in Investing activities

 

(148)

-

 

Financing

 

 

 

Increase in debt

 

-

30

Issue of new ordinary shares

 

615

285

Expenses paid in connection with share issues

 

(31)

(11)

 

 

            

            

INCREASE IN CASH IN THE YEAR

 

534

-

 

 

            

            



 

Notes:

 

1              LOSS ON ORDINARY ACTIVITIES BEFORE TAX

2012

£'000

2011

£'000

Loss on ordinary activities before tax  for  the year  is stated after charging:

 

 


 

 

Auditor's remuneration - statutory audit

30

18

- Services relating to taxation

5

5

- Other services

1

5


                           

                           

 

2              EXCEPTIONAL ITEM

2012

£'000

2011

£'000


 

 

Exceptional cancellation of loan

-

88


                           

                           

A loan of £88,379 which was interest free and had no repayment terms was cancelled during the prior year.

 

 

3              DIRECTORS

 

2012

Number

2011

Number

Number of employees

The average monthly number of employees including directors, during the year was:

3

2


                           

                           


£'000

£'000

Directors' emoluments

                Directors' fees

-

7


                           

                           

Other than the director's fees of £300 (2011: £7,300) accrued in the year there were no staff costs paid during the year (2011: £Nil). With respect to directors' share based payments, see note 15.

 

 

4              INTEREST PAYABLE AND SIMILAR CHARGES

 

There was no non-cash finance charge for the year ended 31 March 2012 (2011: £21,000).

 

 

5              TAX ON LOSS ON ORDINARY ACTIVITIES

 

2012

£'000

2011

£'000

Analysis of charge in the year:

 

 

Current tax

-

-

Deferred tax

-

-


                           

                           


-

                          -


                           

                           

 



 

5              TAX ON LOSS ON ORDINARY ACTIVITIES (continued)

 

2012

£'000

2011

£'000


 

 

                Loss on ordinary activities before tax

(189)

(113)


                           

                           

                Loss on ordinary activities multiplied by standard rate of corporation tax in the UK 26% (2011: 28%)

(49)

(32)

Expenses not deductible for tax purposes

19

17

                Tax losses unutilised

30

15


                           

                           

Current tax charge for year

-

-


                           

                           

 

As at 31 March 2012 the Company had losses of approximately £6m (2011: £5.8m) available to carry forward against future income. No deferred tax asset is recognised in respect of these losses due to the uncertainty as to the utilisation of the losses in the foreseeable future.

 

Future tax charges will be dependent on the split of profits for tax purposes as between revenue and capital items, and the utilisation of losses incurred to date.

 



 

6              LOSS PER ORDINARY SHARE

 

2012

£'000

2011

£'000

Loss for the financial year

(189)

(113)

 

                           

                           

Average number of ordinary shares in issue (basic) ('000)

1,113,917

727,251


                           

                           

                Basic and diluted loss per share (pence)

(0.01)p

(0.02)p


                           

                           

Average potential number of ordinary shares in issue (fully diluted) ('000)

1,575,167

1,392,251


                           

                           




The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purposes of calculating the diluted loss per share are identical to those used for basic loss per ordinary share. This is because the exercise of share options and other benefits would have the effect of reducing loss per share and is therefore not dilutive under the terms of FRS 22 Earnings Per Share.

7              TANGIBLE FIXED ASSETS

 

 

2012

Office Equipment

£'000

 

 

 

                COST

 

 

                At 1 April 2011

 

-

                Additions

 

5

 

 

                 

               At 31 March 2012

 

5

 

 

                 

 

 

 

                DEPRECIATION

 

-

                At 1 April 2011

 

-

               Charge for the year

 

-

 

 

                 

               At 31 March 2012

 

5

 

 

                 

                NET BOOK VALUE

 

-

                At 31 March 2012

 

5

 

 

                 

               At 31 March 2011

 

-

 

 

                           

 

 

 

 

8              FIXED ASSET INVESTMENTS

 

 

Other

Investments

Shares

 

 

 

                COST

 

 

                At 1 April 2011

 

-

                Additions

 

66

 

 

                 

               At 31 March 2012

 

66

 

 

                 

 

 

 

                Provisions for impairment

 

 

                At 1 April 2011 and 31 March 2012.

 

-

 

 

                 

                NET BOOK VALUE

 

-

                At 31 March 2012

 

66

 

 

                 

               At 31 March 2011

 

-

 

 

                           

 

 

All investments are initially recognised at cost, being the fair value of the consideration given.

For un-listed investments, fair value is determined by reference to the latest transaction (if any) in that investment and the directors' judgement of the repeatability or otherwise of such transaction. There can be no certainty that fair value thus ascribed may be realised in a short period, or at all.

For listed investments, fair value is determined by reference to the price of the investment on the relevant public market.

 

 

The company holds more than 20% of the equity (and no other share or loan capital) of the following undertakings:-

 

Class of holding

Proportion directly held

Nature of Business

Other Participating Interest:

               

 

 

 

Undrawn Reality Limited

Ordinary

40.5%

Software Development

  Bosques Energeticos EBE SA DE CV

  Ordinary

  30.8%

  Development    and cultivation of renewable energy crops

 

Undrawn Reality Limited and Bosques Energiticos EBE SA DE CV in which the Company has more than 20% interest, are not treated as an associated undertakings. All investments in investee companies are regarded as simple investments for the purposes of FRS9 as all investments made are with the aim of realising capital gain on the investment, which may take less than or more than one year, and the Company does not have on-going participating interests or significant influence in the investments.

 

9              CURRENT ASSET INVESTMENTS

2012

£'000

2011

£'000

 

 

 

                Unlisted investments

             77

              - 

 

77

-

 

                           

                           

 

 

 

 

 

 

As at the balance sheet date neither Terra Energy Limited nor Medgold Resources Limited were listed on a public stock exchange.

 

Post the balance sheet date, Terra Energy Limited listed as Fastnet Oil & Gas PLC on the AIM and ESM markets. As at the date of these accounts, Legendary's holding in Fastnet Oil & Gas Plc was valued at £68,000.

 

 

 

 

 

10           Debtors: amounts due within one year

2012

£'000

2011

£'000

 

 

 

                Prepayments

6

-

                Other Debtors

-

242

 

                 

                 

 

6

242

 

                           

                           

 

 

 

 

11           CREDITORS: amounts falling due within one year

 

2012

£'000

2011

£'000

 

Trade creditors

17

17

Accruals

18

18

Other creditors

1

-

 

                           

                           

 

36

35

 

                           

                           

 

Trade creditors represent the company's financial liabilities measured at amortised cost.  Due to their short term nature, carrying value approximates to fair value.

 

 

12           CREDITORS: amount falling due more than a year

 

2012

£'000

2011

£'000

 

Loan

30

30

 

                           

                           

 

The loan represents the funding of £30,000 that was raised in August 2011 by way of a loan facility. The facility bears no interest and has no fixed date for repayment. The loan is not expected to be paid in the foreseeable future and therefore has been classified as due in more than one year as the directors believe this most appropriately reflects the period over which the loan will be repaid. As part of the terms of the loan, Legendary granted 260,000,000 warrants over new ordinary shares at an exercise price of 0.1p per share.  At that time, the Company's share price was 0.075p.

 

13           CALLED UP SHARE CAPITAL

 

2012

£'000

2011

 

£'000

                AUTHORISED

3,000,000,000 ordinary shares of £0.001 each

3,000

3,000

 

                           

                           

ALLOTTED, ISSUED AND FULLY PAID



1,575,167,198 (2011: 960,167,198) ordinary shares of £0.001 each

1,575

960

 

                           

                           

 

On 29 December 2011, the company placed 615,000,000 ordinary shares of nominal value 0.10p per share at par. The aggregate consideration received was £615,000. Transaction costs amounting to £30,750 were deducted from the consideration and charged to the profit and loss account.

 

14           SHARE PREMIUM

 

2012

£'000

 

2011

£'000

 

                At start of the year

8,309

8,338

                Premium on  Ordinary Shares Issued of 0.1pence each

-

20

                Share issue costs

-

(49)

 

                           

                           

                At end of the year

8,309

8,309

 

                           

                           

 

Transaction costs amounting to £nil (2011: £49,000) in regard to issue of shares were deducted from equity and charged against the share premium account.

 

 

 

15           SHARE BASED PAYMENT

 

The Company has unapproved and approved share option schemes in which the directors participate.

 

Under the Company's approved share option plan, the Company grants options and shares to certain directors and employees of the Company. If the options remain unexercised for a period after 10 years from the date of grant, the options lapse. The options are exercisable immediately on grant.

 

Details of Directors' outstanding share options as at the year ended are shown below.

 

 

31 March 2012

31 March 2011

 

Exercise

 

Exercise

 

 

Price

 

Price

 

 

per share

Number

per share

Number

 

 

 

 

 

 

 

 

 

 

Zafarullah Karim

0.20p

72,000,000

0.20p

55,000,000

Rajesh Rai

0.20p

32,000,000

0.20p

25,000,000

Thomas Reuner

0.35p

5,000,000

-

-

Thomas Reuner

0.20p

11,000,000

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Movements in ordinary share options outstanding

 

 

31 March 2012

 

31 March 2011

 

 

Weighted average exercise price

 

Weighted average exercise price

 

Number

pence

Number

pence

At start of the year

90,000,000

0.20p

250,000,000

0.40p

Granted during the year

35,000,000

0.20p

90,000,000

0.20p

Granted during the year

5,000,000

0.35p

 

 

Cancelled in the year

-

 

(250,000,000)

0.40p

 

 

 

 

 

At end of the year

130,000,000

0.20p

90,000,000

0.20p

 

 

 

 

 

 

All options were exercisable at the end of the year.

 



 

 

 

15           SHARE BASED PAYMENT (continued)

 

Fair value

 

The fair value of the options is estimated at the date of grant using a Black-Scholes option pricing model that uses assumptions noted in the table below. No performance conditions were included in the fair value calculations.

 

 

 

Expected life of options (years)

5

 

Exercise price

0.20p - 0.35p

 

Share price at grant date

0.10p-0.28p

 

Risk free rate

  0.95% 2.25%

 

Expected share price volatility

        50%-65%

 

Expected dividend yield

0.00%

 

Estimate of % of options vesting

100%

 

Assumed staff attrition

0%

 

Fair value of options

0.038p-0.110p

 

The Company uses historical data to estimate option exercise and employee termination within the valuation model. Expected volatilities are based on implied volatilities as determined by simple average of a sample of listed companies base in similar sectors. The risk free rate for the period within the contractual life of the option is based on the UK gilt yield curve at the time of the grant.

 

The share based payment charged for the year was £19,000 (2011: £62,000).

 

Other than the employee share options set out above, warrants have been granted with exercise prices and dates shown in the table below.

 

Last date when exercisable

Exercise price

Granted No.

Lapsed No.

Exercised

Outstanding at 31 March 2012







5 August 2015

0.10p

260,000,000

-

-

260,000,000

6 August 2015

0.20p

10,000,000

-

-

10,000,000

24 November 2015

0.15p

25,000,000

-

-

25,000,000

25 November 2013

0.15p

30,000,000

-

-

30,000,000

29 November 2015

0.20p

20,000,000

-

-

20,000,000

7 March 2014

0.16p

225,000,000

-

-

225,000,000



570,000,000



570,000,000

 

The fair value of warrants granted in the year was £Nil (2011: £75,400).

 



 

15           SHARE BASED PAYMENT (continued)

 

Fair value

 

The fair value of the warrants is estimated at the date of grant using a Black-Scholes option pricing model that uses assumptions noted in the table below. No performance conditions were included in the fair value calculations.

 

 

Expected life of warrants (years)

3 - 5

Exercise price

0.10p - 0.20p

Share price at grant date

0.08p - 0.16p

Risk free rate

0.78% - 2.19%

Expected share price volatility

40% - 60%

Expected dividend yield

0.00%

Estimate of % of options vesting

100%

Assumed staff attrition

0%

Fair value of options

0.006p - 0.069p

 

Other Information

 

The market price of the Company's ordinary shares ranged from a high of 0.335p to a low of 0.0875p during the year.

 

 

16           PROFIT AND LOSS ACCOUNT

 

2012

£'000

2011

£'000

                At the start of the year

(9,229)

(9,239)

                Loss for the financial year

(189)

(113)

                Equity share based payment  reserve movement

-

123

 

                           

                           

                At the end of the year

(9,418)

(9,229)

 

                           

                           

 

 

 

17           RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS/(DEFICIT)

2012

£'000

2011

£'000

                Opening shareholders' funds/(deficit)

177

(83)

                Loss for the financial year

(189)

(113)

Share issue

615

285

Share warrant and option charge

19

137

               Expenses on shares issued (Note 13)

-

(49)

 

                           

                           

                Closing shareholders' funds

622

177


                           

                           

 



 

18           RECONCILIATION OF OPERATING LOSS TO NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES

2012

£'000

2011

£'000

                Operating loss

(189)

(92)

Share option/warrant charge

19

78

Share issue costs

31

-

Cancellation of loan

-

(88)

                Increase in creditors

1

1

                Decrease/(increase) in debtors

236

(203)

 

                           

                           

                Net cash inflow/(outflow) from operating activities      

98

(304)


                           

                           

 

19           ANALYSIS OF NET DEBT

 

At 31 March 2011

£'000

Non-cash Movements

£'000

Cash flows

£'000

At 31 March 2012

£'000

                Cash in hand

-

-

534

534

                Other loan

(30)

-

-

(30)

                Current asset investments

-

-

143

143

 

                   

                   

                   

                   

 

              (30)

             -     

             677

             647

 

20           RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

2012

£'000

2011

£'000

                Increase in cash in the year

534

-

                Cash outflow from financing activities

-

(30)

                Cancellation of loan

-

88

                Cash used to increase liquid resources

143

-

 

                           

                           

               

677

58


                           

                           

 



                Net debt at start of year

(30)

(88)

 

                           

                           

                Net funds/(debt) at end of year

647

(30)


                           

                           

 

21           FINANCIAL INSTRUMENTS

 

Interest rate risk

The Company had no floating rate financial liabilities at 31 March 2012 and 31 March 2011.

 

Borrowing facilities

At the year end the Company had no overdraft facility (2011: £Nil).

 

Capital Management

The Company is financed primarily with equity capital, which is then utilised to meeting operating expenses and make investments. Investments are financed primarily from equity capital, though debt may be utilised where it is felt that it is prudent to do so.

 



 

21           FINANCIAL INSTRUMENTS (continued)

 

Currency risk

The Company makes investments in both UK and foreign companies. In addition, the companies in which the Company invests may or may not have exposure to foreign currency exposure. In this regard the Company has foreign currency exposure. Currency exposure is one the factors considered when making investments, and as such it is implicitly managed at the point of investment.

 

Liquidity risk

The Company makes investments in unlisted and listed entities. Consequently the Company is exposed to the liquidity risk to the extent that it may not be able to find buyers for its unlisted investments and liquidity in its listed investments may be low. Therefore there can be no certainty that the Company would be able to exit its investments.

 

Market risk

The Company monitors its investments on a regular basis, and takes action when it deems appropriate.

 

22           POST BALANCE SHEET EVENTS

 

Post the balance sheet date, in July 2012, Legendary invested £50,000 in a pre-IPO funding round for Sula Iron and Gold plc ("Sula").  Sula is expected to be admitted to a public market, before the end of 2012. Legendary's investment is by way of a convertible loan, and if admission to a public market is achieved, the Legendary will receive a half-warrant for every share held.

In July 2012, Legendary invested £50,000 in Regency Mines plc ("Regency"). Regency is a mineral exploration and development company focusing on nickel and cobalt in Papua New Guinea (alongside JV partner Direct Nickel) and gold, flake graphite and base metals in Australia.

Also in July 2012, Legendary invested £100,000 in cash into Kyrgyzstan based Manas Minerals LLC ("Manas Minerals"). Manas Minerals owns the Padsha Ata Licence to mine for coal in the Chatkal Ridge in the Asksy region of Jalal-Abad, Kyrgyzstan.

Legendary's investment is by way of a convertible loan note which when converted is expected to result in Legendary having a 1.0% stake in Manas Minerals. In addition, Legendary has an option with an exercise price of £50,000 which upon exercise would result in Legendary having an additional 0.5% stake in Manas Minerals or equivalent thereof in any successor entity. Value crystallisation is expected through Manas Minerals being admitted to trading on a public market.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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