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Legendary Invest PLC (LEG)

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Tuesday 21 August, 2018

Legendary Invest PLC

AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018

RNS Number : 4486Y
Legendary Investments PLC
21 August 2018
 

21 August 2018

Legendary Investments PLC

 

("Legendary" or the "Company")

AUDITED RESULTS FOR THE YEAR ENDED 31 MARCH 2018

HIGHLIGHTS

·      Value of investments increases to £6.2m (2017: £4.3m), a rise of 44%

 

·      Net assets increase to £6.0m (2017: £4.7m), a rise of 28%

 

·      Net gain on fair value of investments of £1.2m (2017: £45k)

 

·      Net profit at £664k (2017: loss of £281k)

 

·      Post year end net assets higher at £6.5m

 

·      Proposed change of name to Eight Peaks Group plc

 

·      Proposed consolidation of the Company's shares in the ratio of approximately 377.19 to 1

 

- ENDS -

Legendary Investments PLC

Zafar Karim / Thomas Reuner

 

020 8201 3536

Nominated Adviser

 

 

Grant Thornton UK LLP

Broker

Colin Aaronson / Harrison Clarke
Seamus Fricker

020 7383 5100

S.P. Angel Corporate Finance LLP

 

Richard Parlons / Richard Morrison

020 3470 0470

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. 

 

About Legendary Investments PLC

Legendary Investments PLC focuses on assisting companies and making investments which exhibit the potential to generate returns of many multiples through capital appreciation.  Typically, Legendary takes stakes in small companies where there are clear catalysts for value appreciation and the companies are operating in sectors exhibiting long term growth. Examples of such sectors include technology, energy and natural resources.

www.leginvest.com 

 

Executive Chairman's Statement

 

Some seven years ago, Legendary set out its mission to seek out private opportunities, not typically available to public equity investors, that had the potential to generate substantial oversized returns. Having identified those opportunities, Legendary would use its skills, experience and network to nurture such opportunities. The expectation was that successful opportunities would generate returns of many multiples making up for the less successful opportunities. This strategy was balanced by Legendary's approach to fair value being conservative being based on historic transactions value of its investments.

 

Legendary's strategy has worked. In 2010, the year before current management took control of Legendary, it had no investments or capital with which to make them and negative net assets. Since that time, Legendary has raised approximately £3m after costs with which it has run the Company for seven years and made investments of approximately £1.5m.

 

Of the 12 investments made to date: five have been successful and are currently valued from approximately 1.3x to 35x the value at which Legendary initially invested; three have listed; one has a VC invested in it and its CEO has stated its objective to list, possibly on NASDAQ;  Legendary has exited two at 4.3x and 1.6x  entry price; two have been exited at a loss; and two have been written off.

 

Progress during the year under review continues this success. In July 2017, Virtualstock, attracted VC investment at a valuation of £66m, or 33x the valuation at which Legendary originally invested in 2012. Subsequent to the year end, that has increased to approximately £70m or 35x. Legendary was the first outside investor in Virtualstock and remains its largest outside investor.

 

In August 2017, Legendary negotiated a stake in IBS for nominal value at its establishment. Subsequently, seed funding debt was converted to equity and further equity investment was made at a valuation of NZ$14.4m.

 

In December 2017, Legendary exchanged a stake in a company holding a gold asset in Kyrgyzstan for a far more promising stake in a company holding an oil asset. Also, in December 2017, Legendary took a stake in a top five crowd funding platform. Both investments have already progressed.

 

Operating profit for the year under review was £678,000 (2017: loss of £281,000), and net profit was £664,000 (2017: net loss £281,000). As at the year end, Legendary's investments (fixed asset investments and current asset investments) were £6,150,000 (2017: £4,293,000), an increase of 43%. Overall, net and total assets at the year end were £5,990,000 (2017: £4,729,000) an increase of 27%, and £6,277,000 (2017: £4,867,000), an increase of 29%, respectively.

 

As at 17 August 2018, investments, net assets and total assets were higher at £6,178,000, £6,496,000 and £6,531,000 respectively.

 

Virtualstock Holdings Limited

 

Virtualstock utilises agile, open source technology to allow information to flow between fragmented systems in a unique way, without disruption to existing IT. Data is seamlessly collated, enriched, mapped and validated, allowing only trusted, reliable information to be deployed. Virtualstock's solutions are a rapid, flexible and scalable alternative to traditional costly and time-consuming systems integrations. The "integration" market is worth c.US$300-500 billion per year.

By unlocking and connecting data scattered across disparate parts of the supply chain, Virtualstock's cloud-based solution, The Edge, helps clients drive efficiency, growth and customer satisfaction, supported by an integrated and seamless digital supply chain. The healthcare equivalent, The Edge4Health™ helps fuel industry-wide efficiency and operational productivity for both Healthcare Providers and Suppliers.

Legendary initially identified Virtualstock's potential in 2012 when it invested in Virtualstock at a valuation of £2m. Since then, Virtualstock has transformed from a small company with revenue in the few hundred thousand pounds to a fast growing and leading company, targeting a doubling of revenue year on year, in the digital supply chain solution space. It has a growing client list that includes several of the top UK retailers, including Tesco, Aldi, Sainsbury's Argos, Kingfisher, Dixons Carphone and John Lewis,  and eleven NHS health trusts. Revenue is now measured in the millions of pounds. The most recent investment into Virtualstock was at a valuation of £70 million or 35x the initial valuation at which Legendary invested.

 

Virtualstock's potential was recognised by Notion Capital, a leading European B2B SaaS Venture Capital firm. In July 2017, Notion invested £4.5m in Virtualstock at a valuation of £66m to support the next phase of Virtualstock's growth. Since then Virtualstock's progress has continued.

 

In January 2018, Wincanton plc the largest British logistics company, announced a new strategic partnership with Virtualstock. Virtualstock's digital supply chain and marketplace solutions enable retailers to easily and cost-effectively expand their online product range without the need to carry additional stock. Virtualstock's platform delivers integrated "Supplier to Consumer" (S2C) fulfilment functionality, allowing one retailer to sell another retailer or supplier's goods without ever having to stock or deliver them, driving significant opportunities for revenue growth, while protecting margins by mitigating the impact on operating costs.  When allied with Wincanton's collaborative logistics capability, the two companies are able to rapidly transform a retailer's ability to quickly respond to an ever-changing market.

 

In March 2018, Virtualstock partnered with Previse Ltd to deliver a seamless "purchase to pay" supply chain model with cash-on-delivery for suppliers. Previse is an Artificial Intelligence based instant supplier payment decision company. Together, Virtualstock and Pervise are able to deliver a fully integrated purchase to pay supply chain system with cash on delivery for suppliers in the UK.

 

In line with Legendary's historic transaction based valuation policy, Legendary held its 7.2% stake in Virtualstock at the £66m valuation of July 2017, or £4.8m. This policy does not take any account of investee companies' progress, nor of their further prospects, since the last transaction. Legendary was the first outside investor into Virtualstock and remains the largest outside investor.

 

Post the year end, Virtualstock raised an additional £3.4m at the same price as the Notion round, valuing Virtualstock at approximately £70m and Legendary's resultant stake of 6.8% at £4.8m. Also post the year end, Virtualstock appointed Rene Shuster as Chairman. Rene's experience and expertise covers all stages of development of businesses from private equity, through to IPOs to post IPO growth and has been earned with companies whose combined valuation is measured in US$ billions. This will be invaluable to Virtualstock in accelerating its progress and expansion internationally.

 

Indicators of Virtualstock's outlook and potential include the fact that shortly after the investment by Notion, Virtualstock's CEO stated that Virtualstock intended to list, possibly on the NASDAQ. Valuations in this sector are high, for example, Mulesoft, a West Coast based company that operates in the integration space was purchased in March 2018 by Saleforce.com for US$6.5bn.

 

IBS Corporation

 

In August 2017, Legendary negotiated a 12% stake in IBS Corporation for nominal consideration, a newly established New Zealand entity. IBS aims to establish a banking services platform with the ability to provide a range of financial services including investment banking, asset management and debt funding services aimed at corporate and high net worth clients.  

The provision of investment banking, asset management and debt based services to New Zealand SMEs is less developed than in other international markets. IBS initially intends to target opportunities in these areas, providing debt funding and taking equity stakes in New Zealand SMEs with strong management and with business models with the potential for internationalisation. These services are intended to be extended into other markets over time.

IBS commenced the process of obtaining the necessary authorities from the New Zealand regulators to be able to conduct these services shortly after establishment.

In November 2017, as a result of the progress made by IBS, initial third party seed debt investment was converted into equity and further equity was invested in IBS at a valuation of NZ$14.4m (£7.4m) valuing Legendary's resultant stake of 11.1% at NZ$1.6m (£826,000).

In line with Legendary's historic transaction based valuation policy, Legendary holds its stake of 11.1% at the £7.4m valuation, or £826,000. This policy does not take any account of investee companies' progress, nor of their further prospects since the latest transaction.

Since then, and post the balance sheet date, in April 2018, IBS was granted the authorities to operate by the New Zealand regulatory authorities.

While awaiting the authorities to operate, IBS has scoped several potential transactions. These transactions range in size from a few million dollars to several hundred million dollars plus. Following the granting of authorities to operate, work on making IBS operational has commenced.

With authorities to operate having been granted, IBS can commence providing services as a "challenger" financial services platform, initially focussing in New Zealand and with ambitions to expand further into the most dynamic regions in the world. IBS expects to grow its business and create value rapidly.

Legendary views the investment in IBS as a strategic move which could accelerate the development of Legendary. The activities of IBS are complementary to the activities of Legendary thereby providing opportunities for cooperation and value generation for both Legendary and IBS.

Dunraven Resources plc

In December 2017, Legendary acquired a small interest in Circle Oil Tunisia, which owns the, El Mediouni East and Central oil asset in the Mahdia Permit located in the Gulf of Hammamet off the Tunisian coast, in exchange for its interest in Manas Resources (see below).

Circle Oil Tunisia underwent a restructuring process following the liquidation of its parent company, Circle Oil Plc, and is now under new management. Up to 2016, Circle Oil Plc invested heavily in the El Mediouni oil asset. In August 2014, Circle Oil Plc announced a potential large discovery following preliminary results which were internally estimated by Circle Oil Plc as potentially recoverable prospective resources of approximately 100m barrels of oil.

Post the year end, in June 2018, Legendary reported that in late December 2017 Circle Oil Tunisia was acquired by Dunraven in a share swap. This resulted in Legendary having a 2.0% stake in Dunraven. Dunraven's strategy is to participate in exploration and production projects. Tunisia is the initial focus of Dunraven's activities, where it enjoys established, strategic relationships.

The management team is headed by Alex MacDonald who has more than three decades of oil & gas business and City experience. He has founded and brought companies to AIM and has held senior positions in Whitman-Howard Limited's oil and gas team and Libertas Capital Corporate Finance LLP. He also has experience with oil majors including Conoco Inc. and Chevron Corporation. Dunraven's Board and Executive team have a strong background in exploration and production and strong reputations and relationships with major oil companies and governments at senior levels.

Dunraven has already developed an ambitious 18 month work programme for El Mediouni, including a drilling programme. It is also in negotiations with a major services company to be their technical partner. Additionally, Dunraven intends to make further acquisitions.

In line with Legendary's historic transaction based valuation policy, Legendary holds its stake of 2.0% at £175,000. This policy does not take any account of investee companies' progress, nor of their further prospects since the latest transaction.

Crowd for Angels (UK) Limited

 

In December, Legendary acquired 9.7% of Crowd for Angels at a valuation of £3.7m. Crowd for Angels owns and operates the "Crowd for Angels" crowdfunding platform. Crowd for Angels has been at the forefront of crowdfunding since its launch in 2014. It was among the first crowdfunding platforms to become FCA regulated, one of the first to be approved by HMRC to manage the Innovative Finance ISA (IF-ISA) and was the first crowd funding platform to launch its own Liquid Crypto Bond with attached Crypto Tokens through an Initial Coin Offering.

 

The 9.7% stake was paid for through the issuance to Crowd for Angels of 248,275,862 Legendary ordinary shares of 0.1 pence nominal value each at 0.145 pence per ordinary share.

 

In line with Legendary's historic transaction based valuation policy, Legendary holds its stake of 9.7% at the £3.7m valuation, or £360,000. This policy does not take any account of investee companies' progress, nor of their further prospects since the latest transaction.

Since then, and post the balance sheet date, in June 2018, Legendary reported that Crowd for Angels has made significant progress in its business. Its Liquid Crypto Bond and Initial Coin Offering, launched at the end of 2017, expects to see the majority of up to 5bn Crypto Tokens issued to investors. The Crypto Tokens, which are being issued as a reward for investing in the Liquid Crypto Bonds and, to provide liquidity, were listed on the crypto currency exchange GetBTC (https://getbtc.org). In June 2018, the Crypto Tokens were trading at a price of approximately 1.7m Crypto Tokens to 1 Bitcoin. As at 17 August 2018, the price had increased to approximately 1.3m Crypto Tokens to 1 Bitcoin.

 

The Initial Coin Offering of its Crypto Tokens led to Crowd for Angels raising funds with its ongoing Liquid Crypto Bond issue. Funds raised from the Liquid Crypto Bond have started to be invested in crowd bond issues listed on the Crowd for Angels platform, helping a range of small businesses to finance the next stage of their growth plans. In addition, the experience gained during its Initial Coin Offering has led Crowd for Angels to offer new products and services including crypto backed bonds, private sales for Crypto Tokens and seed capital for crypto companies.

As part of the Initial Coin Offering strategy, the Crypto Tokens are also being used as a marketing tool, rewarding investors for engaging with the Crowd for Angels platform, advertising and media. Using various Crypto Token based marketing strategies, Crowd for Angels has risen from fifth (at the time of Legendary's investment in late December 2017) to third place in the most visited UK crowdfunding platforms (according to Alexa.com) after seeing website visitor figures grow by 290% between March and the end of May this year.

Amedeo Resources PLC

               

Amedeo Resources is an oil and gas and resources infrastructure investment company. Its principal investment is a 19% stake in Jiangsu Yangzijiang Offshore Engineering Co. Ltd, an offshore marine vessel yard located on approximately 1.6m square metres of prime shorefront land in Taicang, Jiangsu Province on China's East coast, some 50 miles north of Shanghai. Amedeo also has a 49% stake in a commodities broker, MGR Resources Pte Ltd and a 2.5% stake in Ganjine Kani Company, a copper mining company.

 

Amedeo is a relatively small investment. It is listed on AIM. As at the balance sheet date, Legendary's stake in Amedeo was valued at £21,000. As at 17 August 2018, it was valued at £19,000.

 

Legendary's shares in Amedeo were held with Legendary's previous brokers, Beaufort Securities Limited, which is in administration. Legendary expects to recover these shares from the administrator.

 

Medgold Corporation

 

Medgold is a TSX-V-listed exploration company focusing on advancing early-stage gold-silver projects in Southern Serbia. Run by a highly experienced management team with a successful track record of building value in resource companies, Medgold is aiming to become a leading European gold company.

 

Legendary invested in Medgold at its inception, before it was listed. Medgold has now been listed for several years. As at the balance sheet date, Legendary's stake was valued at £34,000. As at 17 August 2018, it was valued at £64,000.  Medgold is a non-core investment.

 

Manas Resources LLC

 

Manas Resources holds a licence to explore for gold in Sultan Sary, Narynskaya Oblast, Kyrgyzstan. The licence area is located in the gold-rich Tien-Shan region of Kyrgyzstan.

 

Over the last few years progress had been made at Manas, which, during 2016, on the basis of the results from a geophysical work programme, resulted in the identification of promising test drill targets.

 

From early 2017, Manas began exploring various options, including raising capital, to do this. These discussions were not fruitful. In the second half of calendar 2017, the opportunity arose to exchange Legendary's stake in Manas for a stake in Circle Oil Tunisia. As discussed above, this opportunity was taken. Following this, discussions were held in terms of recovering the £259,000 of working capital which Legendary had provided to Manas to develop its operations. It was concluded that this would not be recovered, and it has therefore been written off.

 

Bosques Energeticos EBE S.A. de C.V

 

Bosques is an innovation based second generation biodiesel company which has scored many "firsts" during its evolution. Over the last year or so progress has stalled, primarily due to the increasingly malign perception of diesel. In this regard, there have been discussions relating to Bosques using its pongamia trees for reforestation. These discussions have not gained momentum, and as a result, Legendary has decided to write off this investment thereby reducing the fair value to nil. The stake was held on Legendary's balance sheet at £83,000.

 

Financial Review

 

During the year under review, Legendary made a net gain on fair value of investments of £1,238,000 (2017: £45,000).

 

Administrative expenses were £560,000 (2017: £326,000). The increase resulted primarily from writing off Manas receivables of £259,000. Excluding the write off the administrative expenses amounted to £301,000 which is 8% lower than 2017 administrative expenses of £326,000.

 

Overall, operating profit for the year was £678,000 (2017: loss of £281,000).

 

Finance charges and tax were £14,000 (2017: £nil), and net profit for the year was £664,000 (2017: loss of £281,000).

 

As at the year end, Legendary's investments (fixed asset investments and current asset investments) were £6,150,000 (2017: £4,293,000).

 

Trade debtors and other debtors due within one year were £80,000 (2017: £136,000) and £nil (2017: £259,000) due in greater than one year. Working capital was provided for various projects including Manas. As mentioned above, it was concluded that the portion relating to Manas should be written off.

 

Cash amounted to £45,000 (2017: £176,000) (including £1,000 (2017: £2,000) in the client account of the Company's accountants and £4,000 (2017: £4,000) held in Beaufort Securities Limited's client account.).

 

Current liabilities were £287,000 (2017: £138,000). The increase was due primarily to the Company drawing a loan of US$250,000 from Alcazar 1 Pte Limited. The loan including interest was repaid in June 2018, post the year end.

 

Exercise of Warrants

 

During the year under review, warrants were exercised over a total of 237,272,727 ordinary shares. The total proceeds of the exercises were £237,273. Consequently, as at the balance sheet date the total number of ordinary shares in issue was 3,292,912,755.

 

Change of Broker

 

On 2 March 2018, Beaufort Securities Limited, Legendary's broker was placed into administration. Legendary held with Beaufort its stake in Amedeo (see above) and a cash balance of £4,400. Legendary expects to recover both the shares in Amedeo and the cash balance.

 

On 28 March 2018, S.P. Angel Corporate Finance LLP were appointed as Legendary's brokers.

 

May Equity Placing and Fund Raise

 

Post the year end, in May 2018, Legendary raised an aggregate of £550,000 (before expenses) by way of a placing and subscription of 550,000,000 new ordinary shares of 0.1 pence each at a price of 0.1 pence per share. This included 100,000,000 ordinary Shares, which Zafar Karim, Executive Chairman of the Company, is subscribed for on the same terms.

Increase in Total Investments, Net Assets and Total Assets

Subsequent to the year end, as a result of the equity placing and fund raise and the significant increase of the share price of the Medgold Corporation, as at 17 August 2018, the total investments, net assets and total assets of Legendary were £6,496,000 and £6,531,000 respectively.

Repayment of Facility of US$400,000

 

Post the year end in, June 2018, Legendary repaid US$275,000 of principal interest to settle the facility with Alcazar 1 Pte Limited.

 

New Facility Agreement

 

Post the year end in, June 2018, Legendary entered into a new facility agreement with Alcazar 1 Pte Limited. The facility is for US$250,000 and may be drawn down until 31 January 2019. If drawn down, the facility needs to be repaid on the first anniversary of drawdown and incurs interest of 10%.

 

Issue of Performance Warrants

 

Post the year end, 27.5 million performance warrants were issued to consultants. These warrants vest at prices ranging from 0.4 pence to 1.4 pence and have an exercise price of 0.12 pence.

 

Outlook

 

Having proved our model, we now plan to take Legendary to the next stage of its development.

 

We have plans to augment the Board to bring in additional skills, experience and networks. In addition, after a wide ranging consultation, we have found that the name "Legendary" in several circles is associated with its pre 2011 history and management. Consequently, a proposal to change Legendary's name to Eight Peaks Group shall be tabled at the next Annual General Meeting. Another conclusion to result from the same consultation is that Legendary would benefit from a share consolidation. Consequently, a resolution will be tabled at the Annual General Meeting to consolidate the shares in the ratio of approximately 377.19 to 1.

 

A circular including a notice of the Annual Meeting will be posted to shareholders in due course.

 

We look to the future with increased confidence and to continuing to build the Company and taking it to its next peak. We thank our shareholders for their continued support. 

 

 

 

 

Statement of Comprehensive Income

For the year ended 31 March 2018

 

 

 

Note

Audited

2018

£'000

Audited

2017

£'000

Net gain on fair value investments

 

1,238

45

 

Administrative expenses

 

(560)

(326)

 

 

                           

                           

Operating profit/(loss)

 

678

(281)

 

 

                           

                           

 

 

 

 

Profit/(loss) on ordinary activities before interest and tax

 

678

(281)

Interest payable

 

(14)

-

 

 

                           

                           

Profit/(loss) on ordinary activities before taxation

 

664

(281)

Tax on profit on ordinary activities

5

-

-

 

 

                           

                           

Profit/(loss)for the financial year

 

664

(281)

 

 

                           

                           

 

 

 

 

Other comprehensive income, net of income tax:

 

 

 

Other comprehensive income, net of tax

 

-

-

Total comprehensive income/(loss) for the year

 

664

(281)

 

 

                           

                           

 

 

 

 

Earnings (loss)/per share

 

 

 

-       basic (pence)

6

0.021p

(0.01)p

-       diluted (pence)

6

0.018p

(0.01)p

 

 

All amounts derive from continuing operations.

 

 

 

 

Statement of Financial Position

For the year ended 31 March 2018

 

 

 

Audited

2018

Audited

2017

 

Notes

£'000

£'000

 

NON-CURRENT ASSETS

 

 

 

Property, plant and equipment

7

2

3

Other receivables

10

-

259

Investments held at fair value through profit and loss

8

6,095

4,211

 

 

                           

                           

Total non-current assets

 

6,097

4,473

 

 

                           

                           

 

cURRENT aSSETS

 

 

 

Trade and other receivables

10

80

136

Investments held at fair value through profit and loss

9

55

82

Cash at bank and in hand

11

45

176

 

 

                           

                           

Total current assets

 

180

394

 

 

                           

                           

TOTAL ASSETS

 

6,277

4,867

 

 

                           

                           

 

equity AND LIABILITIES

 

 

 

Share capital

13

3,293

2,807

Share premium

14

9,048

8,937

Share warrant and option reserve

 

293

293

Profit and loss account

 

(6,644)

(7,308)

 

 

                           

                           

Equity attributable to equity holders

 

5,990

4,729

 

 

                           

                           

 

NON-CURRENT LIABILITIES

 

-

-

 

 

                           

                           

 

CURRENT LIABILITIES

12

    287

    138

 

 

                           

                           

 

TOTAL EQUITY AND LIABILITIES

 

6,277

4,867

 

 

                           

                           

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Changes in Equity

For the year ended 31 March 2018 (Audited)

 

 

Attributable to owners of the company

 

Share capital

Share premium

Share warrant and option reserve

Profit and loss account deficit

Total equity

 

£'000

£'000

£'000

£'000

£'000

Balance at 1 April 2016

2,462

8,345

293

(7,027)

4,073

(Loss) for the year

-

-

-

(281)

(281)

Total other comprehensive loss

-

-

-

-

-

Total comprehensive income

-

-

-

(281)

(281)

Issue of share (net of issue costs)

345

592

-

-

937

Balance at 31 March 2017

2,807

8,937

293

(7,308)

4,729

Profit for the year

-

-

-

664

664

Total other comprehensive Income

-

-

-

-

-

Total comprehensive Income

-

-

-

664

664

Issue of Shares (net of issue costs)

486

111

-

-

597

Balance at 31 March 2018

3,293

9,048

293

(6,644)

5,990

 

 

 

Statement of Cash Flows

For the year ended 31 March 2018

 

 

 

 

Audited

2018

 

Audited

2017

 

Cash flows from operating activities

 

 

£'000

 

£'000

 

Profit/(loss) before taxation

 

 

 664

 

(281)

 

Adjustments for:

Interest expense

 

 

14

 

-

 

Depreciation

 

 

                       1

 

1

 

Impairment of other debtors

 

 

                   259

 

-

 

Change in fair value of investments

 

 

               (1,238)

 

     (18)

 

 

 

 

(300)

 

(298)

 

Changes in working capital:

Decrease/(increase) in trade and other receivables

 

 

56

 

(336)

 

(Decrease)/increase in trade and other payables

 

 

(42)

 

46

 

 

 

 

14

 

(290)

 

Net cash outflow from operating activities

 

 

(286)

 

(588)

 

 

Cash flows from investing activities

Purchase of property, plant and equipment

 

 

-

       -

    (2)

-

 

(2)

 

Purchase of investments

 

 

                (260)

 

       -

 

Net cash outflow from investing activities

 

 

 (260)

 

 

    (2)

 

 

Cash flows from financing activities

Proceeds from issues of new ordinary shares

 

 

237

 

1,000

 

Expenses paid in connection with issue of shares

 

 

-

 

(75)

 

Increase/(repayment) in loan

 

 

178

 

(189)

 

Net cash inflow from financing activities

 

 

415

 

736

 

 

Net (decrease)/increase in cash and cash equivalents

 

 

 

(131)

 

 

  146

 

Cash and cash equivalents at 1 April

 

 

176

 

30

 

Cash and cash equivalents at 31 March

 

 

45

 

176

 

 

 

 

Accounting Policies

 

Corporate information

 

Legendary Investments PLC (the "Company") is a company incorporated and domiciled in the UK (registered number 0392024). The address of the registered office is Jubilee House, Townsend Lane, London, NW9 8TZ. The Company's principal activity is that of an investment company.

 

Basis of preparation

 

The company prepares its financial statements in accordance with applicable International Financial Reporting Standards as adopted by the European Union ("IFRS"), and with those parts of the Companies Act 2006 as applicable to companies reporting under IFRS.

 

The financial statements have been prepared on a historical cost basis, except for the revaluation of certain financial instruments.

 

The financial statements are presented in thousands of pounds sterling ("£'000") except when otherwise indicated.

 

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all periods presented, unless otherwise stated.

 

New standards, amendments and interpretations

 

No new International Financial Reporting Standards becoming effective in the current year had an impact on the Company's financial statements.

 

For March 2019, the Company will adopt the following Standards:

 

IFRS 9 Financial Instruments: Management have assessed that the impact is likely to be immaterial to the financial statements.

 

IFRS 15 Revenue from Contracts with Customers: Management have assessed that the impact is likely to be immaterial to the financial statements, given the nature of the company.

 

For March 2020, the Company will adopt the following Standards:

 

IFRS 16 Leases: Management have assessed that the impact is likely to be immaterial to the financial statements.

 

Impairment of asset values

 

Property, plant and equipment is reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable or as otherwise required by relevant accounting standards.

 

Investments and financial instruments

 

Investments, financial assets and financial liabilities are recognised on the Company's statement of financial position when the Company has become a party to the contractual provisions of the instrument.

Fixed asset investments include investments in investee companies where the time horizon for realisation of the investment is considered to be longer than one year. Investments in investee companies where the time horizon for realisation of the investment is considered to be less than one year are classified as current assets.

 

All investments have been designated as fair value through profit or loss, and are initially measured at cost that is the best estimate of fair value. Thereafter, the investments are measured at subsequent balance sheet dates at fair value. A financial asset is designated in this category if it is acquired to be managed and its performance is evaluated on a fair value basis with a view to selling after a period of time. Listed investments and investments traded on AIM or overseas stock exchanges are stated at current price at the balance sheet date provided the market is active. Unlisted investments are stated at directors' valuation with reference to the International Private Equity and Venture Capital Valuation Guidelines ("IPEVG") and in accordance with IAS 39 "Financial Instruments: Recognition and Measurement":

Investments which have been made within the last twelve months or where the investee company is in the early stage of development will usually be valued at the price of recent investment except where the company's performance against plan is significantly different from expectations on which the investment was made in which case a different valuation methodology will be adopted.

 

For investments that would meet the definition as an investment in an associate, IAS 28 states that venture capital companies have the option of recording investments on the balance sheet according to the equity method or at fair value in accordance with IAS 39 "Financial Instruments: Recognition and Measurement". Management makes use of this option and assesses the associates at fair value through profit or loss. In the current and prior year, the conditions for exercising this option were fulfilled for Bosques Energeticos EBE S.A. de C.V; the value of which is included at fair value through profit or loss.

 

Any realised and unrealised gains or losses on investments are taken to the profit and loss account.

 

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

 

•     In the principal market for the asset or liability; or

•     In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

 

A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits from the asset's highest and best use or by selling it to another market participant that would utilise the asset in its highest and best use.

 

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

 

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy. This is described, as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

•     Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

•     Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

•     Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

 

Financial assets classification

Management determines the classification of its financial assets at initial recognition.

 

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are initially recognised at fair value, and are subsequently stated at amortised cost using the effective interest method. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. Loans and receivables comprise mainly cash and cash equivalents and trade and other receivables.

 

Impairment of financial assets

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty, default or significant delay in payment, disappearance of active market for that financial asset, or bankruptcy or financial reorganisation of borrowers) that the Company will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable.

 

For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

 

Financial liabilities and equity

Debt and equity instruments issued by a group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

 

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.

 

 

Cash and cash equivalents

The Company considers any cash on short-term deposits and other short term investments to be cash equivalents.

 

Trade payables

Trade payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

 

Loans

Loans are initially recognised at fair value and subsequently at amortised cost.

 

Property, plant and equipment

Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. When parts of an item of property, plant and equipment have different useful lives, those components are accounted for as separate items of property, plant and equipment.

 

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income statement.

 

Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Freehold land is not depreciated.

 

The estimated useful lives are as follows: Office equipment - 4 years

The useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

 

Taxation

 

The tax currently payable is based on the taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

 

Deferred income tax is recognised on temporary timing differences at the balance sheet date between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised in full for all temporary differences. Deferred income tax assets are recognised for all deductible temporary differences carried forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, and carry-forward of unused tax credits and unused losses can be utilised. The carrying amount of deferred income tax assets is assessed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that is probable that future taxable profits will allow the deferred income tax asset to be recovered. Consideration is given to both capital and trading losses, and to the extent that the company is able to realise a deferred tax asset and settle any taxation liabilities simultaneously, these amounts are offset.

 

Foreign currency translation

 

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the accounting date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit or loss.

 

Segment reporting

 

Operating segments are reported in a manner consistent with the internal reporting to the Board of Directors which has been identified as the chief operating decision maker ("CODM"). The Board of Directors consists of the Executive Directors. Please refer to note 2 for segmental information.

 

Going concern

 

The Company's business activities, together with the financial position of the Company and the factors likely to affect its future development, performance and position are set out in the Executive Chairman's Statement on pages 2 to 8.

 

Legendary had administrative costs for the year ended 31 March 2018 of £301,000. Of this amount approximately £130,000 are related to the fixed costs of running Legendary and maintaining its listing.

 

The directors take steps to keep the running costs of Legendary low. This is evidenced by the costs themselves in comparison to other listed companies (Legendary is listed on the AIM market of the LSE).

 

The fixed costs and cash outflows of Legendary for the next 12 months are expected to be approximately £140,000 due to the increase in Broker and Nomad fees, and the current payables of £41,000. Legendary expects no other fixed non-discretionary outlays.

 

Legendary is an investment company and in order to advance its business it needs to make investments and have funds available to do so. Funds can come from three sources, realising existing investments, equity fund raising or debt fund raising. It is Legendary's policy to maintain sufficient liquid resources to cover its working capital needs when it makes new investments.

 

As at 17 August 2018, Legendary had £231,000 of cash and £83,000 of listed investments.  The listed investments may be realised for cash at short notice (this includes the Amedeo shares valued at approximately £19,000 and cash of approximately £4,400 held with Beaufort Securities Limited). Together, this gave Legendary, liquid resources of £318,000. In addition, Legendary has a facility of US$250,000 (c. £190,000) may be drawn down until 31 January 2019. The facility is repayable on the first anniversary of its drawdown plus 10% interest, and may be settled in Legendary shares, at Legendary's option.

 

On the basis of the above, the Directors believe that sufficient funds will be available to support the going concern status of the Company over the next 12 months following the approval of these financial statements. Consequently, the Directors believe that it is appropriate to prepare the Company's financial statements on a going concern basis. This assumes that the Company is to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements.

 

Share based payments

 

The Company issues equity-settled share based payments to certain employees in the form of options. Warrants are issued in lieu of fees to third parties. A fair value for the equity-settled share awards is measured at the date of the grant. The fair value is measured using the Black Scholes method of valuation, which is considered to be the most appropriate valuation technique. The valuation takes into account factors such as non-transferability, exercise restrictions and behavioural considerations.

 

An expense is recognised to spread the fair value of each award over the vesting period on a straight-line basis, after allowing for an estimate of the share awards that will actually vest. The estimate of vesting is reviewed annually, with any impact on the cumulative charge being recognised over the remaining vesting period. Amounts to be settled in shares are presented within equity, representing the expected time-apportioned fair value of the awards that are expected to vest.

 

 

1           CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

 

The preparation of the Company's financial statements under IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

 

The Directors consider that the following estimates and judgements are likely to have the most significant effect on the amounts recognised in the financial statements:

 

Valuation of investments:

 

The Company's financial instruments are measured at fair value in the statement of financial position and it is usually possible to determine their fair values within a reasonable range of estimates. For actively traded financial instruments, quoted market prices are readily available. For other financial instruments, such as unlisted securities, valuation techniques are used to estimate fair value. Fair value estimates are made at a specific point in time, based on market conditions and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgement and therefore cannot be determined with precision. See note 16 for further details.

 

Share based payments:

 

In order to calculate the charge for share-based compensation as required by IFRS 2, the Group makes estimates principally relating to the assumptions used in its option-pricing model as set out in note 15.

 

2           SEGMENTAL ANALYSIS

 

The Company only has one class of business and only operates within the United Kingdom.

3          PROFIT ON ORDINARY ACTIVITIES BEFORE TAX

2018

£'000

 

2017

£'000

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

Impairment loss on the receivable

          259

 

-

 

 

 

 

Depreciation of tangible fixed assets

1

 

1

Auditor's remuneration - statutory audit

23

 

18

-Corporate finance services

-

 

26

 

The impairment loss relates to working capital provided to progress Manas Resources which was expected to be recovered in the case of Manas Resources having a successful outcome.

 

 

4          DIRECTORS

2018

Number

 

2017

Number

NUMBER OF EMPLOYEES

The average monthly number of employees were: Directors

 

 

2

 

 

 

2

 

£'000

 

£'000

DIRECTORS' EMOLUMENTS

Directors' salaries

Social security costs

 

84

6

 

 

82

7

               

                The related party director transactions are disclosed in note 17.

 

 

5          TAX ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES

2018

£'000

 

2017

£'000

Analysis of charge/(credit) in the year:

 

Current tax

-

 

-

Deferred tax

-

 

-

 

-

 

-

 

Profit/(loss) on ordinary activities before tax

 

 

664

 

 

(281)

Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK 20% (2017: 20%)

 

133

 

 

(56)

Expenses not deductible for tax purposes

225

 

48

Tax losses (utilised)/unutilised

(358)

 

8

Current tax charge for year

-

 

-

 

As at 31 March 2018 the Company had capital losses of approximately £4.6 million (2017: £4.6million) available to carry forward against future capital gains, and trading losses of approximately £3.0 million (2017: £3.5 million) which includes £nil (2017: £0.07 million) in respect of tax deductions on share options and warrants. A deferred tax asset of £0.6 million (2017: £0.7 million) is not recognised in respect of these trading losses due to the uncertainty as to the utilisation of the losses in the foreseeable future.

6          EARNINGS PER ORDINARY SHARE

2018

£'000

 

2017

£'000

Profit/(loss) for the financial year

664

 

(281)

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

3,156,487

 

2,773,337

Dilutive effect of share options ('000)

443,773

 

                   -

Dilutive effect of share warrants ('000)

87,670

 

                   -

Diluted weighted average number of shares used for diluted earnings per share

3,687,930

 

                        -

Basic earnings/ (loss) per share (pence)

      0.021p

 

(0.01)p

Diluted earnings /(loss) per share (pence)

      0.018p

 

(0.01)p

 

 

7          PROPERTY, PLANT AND EQUIPMENT

Office Equipment

              £'000

COST

At 1 April 2016

9

Additions

2

At 31 March 2017 and at 1 April 2017

11

Additions

-

At 31 March 2018

11

DEPRECIATION

At 1 April 2016

7

Charge for the year

1

At 31 March 2017 and at 1 April 2017

Charge for the year

1

At 31 March 2018

9

NET BOOK VALUE

At 31 March 2018

2

At 31 March 2017

3

At 1 April 2016

2

 

 

 

8          INVESTMENTS

Unlisted Investments

£'000

 

VALUATION

 

At 1 April 2016 and 31 March 2017

4,211

 

 

 

 

At 1 April 2017

4,211

Additions

720

Disposals

(100)

Unrealised loss on revaluation

(83)

Unrealised gain on revaluation

          1,347

At 31 March 2018

          6,095

       

 

 

 

INVESTMENT

Carrying value31 March

Additions

Disposal

Unrealised

Carrying value

Fair value hierarchy

 

2017

 

 

gain/(loss) on revaluation

31 March 2018

 

 

£'000

£'000

£'000

£'000

£'000

 

Bosques Energeticos S.A de C.V

  83

  -  

-

 (83)

 -  

Level 3

Virtual Stock Holdings Limited

4,028

              260

 -  

              446

 4,734

Level 3

Manas Resources LLC

             100

                 -  

 (100)

-  

 -  

Level 3

Crowd for Angels

                  -  

360

                 

-  

                 

-  

360

Level 3

 

IBS Corporation Ltd

 -  

 -  

 -  

              826

              826

Level 3

Dunraven Resources Public Limited Company

                 -  

 100

               -  

               75  

             175

Level 3

Total

4,211

720

(100)

1,264

6,095

 

 

 

 

 

 

 

Further information in relation to the fair value hierarchy is provided in note 1 and 16 to the financial statements.

 

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

 

 

Other Participating Interest:

Class of holding

Proportion directly held

Nature of Business

Bosques Energeticos EBE S.A. de C.V.

Ordinary

40%

Development and cultivation of renewable energy crops

 

Bosques Energeticos EBE S.A. de C.V., in which the Company had more than 20% interest, the fair value of the investment at 31 March 2018 is recognised on the balance sheet at nil.

 

All investments are measured at fair value through profit and loss as detailed in the accounting policy.

9          CURRENT ASSET INVESTMENTS

Listed Investments

£'000

VALUATION

At 1 April 2016

64

Gain on revaluation

  18

At 31 March 2017 and 1 April 2017

82

Disposal

             -

Loss on revaluation

            (27)

At 31 March 2018

          55

Being:

AIM listed

        21

TSX listed

        34

 

       55

 

Included in listed investments are the following companies:

 

INVESTMENT

Carrying value

31 March

2017

 

£'000

       Disposal

 



£'000

Unrealised gain/(loss) on revaluation

£'000

Carrying value

31 March

2018

 

£'000

Fair value hierarchy

 

Medgold Resources Corp

 

39

 

-

 

(5)

 

34

 

Level 1

Amedeo Resources PLC

43

-

(22)

21

Level 1

Total

82

-

(27)

55

 

 

Further information in relation to the fair value hierarchy is provided in notes 1 and 16 to the financial statements.

 

10        TRADE AND OTHER RECEIVABLES

 

2018

£'000

 

 

2017

£'000

 

Prepayments

 

7

 

 

        6

 

Other debtors

 

      73

 

 

130

 

 

 

      80

 

 

136

 

 

Other debtors are an amount of £73,000 (2017: £117,000) due from a third party.

 

 

 

           Non-current receivables

 

2018

£'000

 

 

2017

£'000

 

Other debtors

 

    -

 

 

259

 

 

 

    -

 

 

259

 

 

The non-current receivable at 31 March 2017 relates to the working capital loan to Manas Resources which has been written off i.e. fully impaired at 31 March 2018.

 

11     Cash at bank and in hand

 

2018

£'000

 

 

2017

£'000

 

Cash at bank

 

45

 

 

176

 

 

 

45

 

 

176

 

 

 

 

 

 

 

 

 

Included within the cash at bank is an amount of £4,400 due from Beaufort Securities limited that went in to Administration on 1 March 2018. The broker also holds Amedeo resources plc stock. Legendary holdings is fully covered by the Financial Services Compensation Scheme (FSCS). Hence it is anticipated that all clients will receive their assets back in full by means of transferring those assets to another broker, who will then provide access to the assets in the usual manner as per the press release published on 29 June 2018.

 

 

12        CURRENT LIABILITIES

2018

£'000

 

2017

£'000

 

Trade creditors

          21

 

85  

 

Accruals

          20

 

18

 

Loan

222

 

30

 

Other creditors      

           24

 

    5

 

 

        287

 

138

 

 

Trade creditors, other creditors and accruals represent the Company's financial liabilities measured at amortised cost. Due to their short term nature, carrying value approximates to fair value. Other creditors are an amount of £24,000 (2017: £5,000) due to directors of the Company.

 

 

 

13        CALLED UP SHARE CAPITAL

2018

£'000

 

2017

£'000

 

ALLOTTED, ISSUED AND FULLY PAID

3,292,912,755 (2017: 2,807,364,166)

ordinary shares of £0.001 each

 

3,293

 

 

2,807

 

 

 

 

2018

Number (millions)

 

2017

Number (millions)

 

At start of the year

2,807

 

2,462

 

Issue during the year

486

 

345

 

At end of the year

3,293

 

2,807

 

 

 

 

The Company has one class of ordinary shares which carries no right to fixed income and which represents 100% of the total issued nominal value of all share capital. The authorised share capital of the company is 3,292,912,755 (2017: 2,807,364,166).

 

Each share carries the right to one vote at general meetings of the Company. No person has any special rights of control over the company's share capital and all its issued shares are fully paid.

 

On 14 May 2018 the company issued 550,000,000 ordinary £0.001 shares for £0.001 each raising £550,000 before expenses.

 

Reserves

 

The share premium reserve represents the consideration that has been received in excess of the nominal value of shares on issue of ordinary share capital, net of issue costs.

 

The share warrant and option reserve arises from the requirement to value share options and warrants in existence at the grant date and recognise the expense over the vesting period.

 

The profit and loss account represents the cumulative net earnings of the company after paying dividends.

 

14        SHARE PREMIUM

2018

£'000

 

2017

£'000

 

At start of the year

8,937

 

8,345

 

Premium on Ordinary Shares Issued of 0.001 each

111

 

 

             667

 

 

Expenses paid in connection with the share issue

 

-

 

 

(75)

 

At end of the year

9,048

 

8,937

 

 

15        SHARE BASED PAYMENT

             Share Options

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 of the Company. If the options remain unexercised for a period of 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 2018

31 March 2017

 

Exercise

 

Exercise

 

 

price

 

price

 

 

per share

Number

per share

Number

 

 

 

 

 

Zafar Karim

0.20p

316,000,000

0.2p

316,000,000

Thomas Reuner

0.35p

5,000,000

0.35p

5,000,000

Thomas Reuner

0.20p

97,000,000

0.2p

97,000,000

 

 

                     

 

                       

 

 

418,000,000

 

418,000,000

 

 

                     

 

                      

 

Movements in ordinary share options outstanding

 

 

 

31 March 2018

 

31 March 2017

 

 

Weighted average exercise price

 

Weighted average

 exercise price

 

Number

pence

Number

Pence

At start of the year

450,000,000

0.20p

450,000,000

0.20p

Granted during the year

-

-

-

-

 

                   

 

                     

 

At end of the year

450,000,000

0.20p

450,000,000

0.20p

 

                   

 

                     

 

 

 

 

 

 

All options were exercisable at the end of the year.

 

 

 

15        SHARE BASED PAYMENT (continued)

 

Exercise price

Granted No.

Lapsed No.

Exercised

Outstanding at 31 March 2018

 

 

 

 

 

0.20p

80,000,000

-

-

80,000,000

0.35p

5,000,000

-

-

5,000,000

0.20p

35,000,000

-

-

35,000,000

0.20p

50,000,000

-

-

50,000,000

0.20p

80,000,000

-

-

80,000,000

0.20p

100,000,000

-

-

100,000,000

0.20p

100,000,000

-

-

100,000,000

 

                      

 

 

                      

 

450,000,000

 

 

450,000,000

 

                      

 

 

                      

 

Fair value

 

The fair value of the options granted is estimated at the date of grant using a Black-Scholes option pricing model that uses certain assumptions. No performance conditions were included in the fair value calculations and the options vested immediately. No options were granted during the current or prior year.

 

 

 

 

 

15        SHARE BASED PAYMENT (continued)

 

Warrants

 

Other than the employee share options set out above, warrants have been granted to third parties in return for providing loan finance or providing public relations services. The exercise prices and dates are shown in the table below.

 

Last date when exercisable

Exercise price

Granted No.

Lapsed No.

Exercised

Outstanding at 31 March 2018

 

 

 

 

 

 

5 August 2017 (1)

0.10p

250,000,000

(15,000,000)

(235,000,000)

-

21 May 2017 (2)

0.12p

2,272,727

-

(2,272,727)

-

14 November 2018 (3)

      0.10p

32,500,000

-

 

32,500,000

 

 

                     

                    

                    

                      

                 

 

284,772,727

(15,000,000)

(237,272,727)

32,500,000

 

 

                     

                    

                   

                      

 

(1)    In 2015, 250,000,000 of the warrants had their life extended by 2 years to 5 August 2017 in exchange for not asking for repayment of the attached loan facility of £30,000 made on 5 August 2010 until 5 August 2017. The loan bears no interest and has no fixed repayment terms. Repayment can be requested from 5 August 2017. 235,000,000 of these warrants were exercised for total proceeds of £235,000. The remainder lapsed after 5 August 2017.

 

(2)    These warrants were exercised for total proceeds of £2,273 during the year

 

(3)    On 15 November 2015, 45,000,000 performance related warrants to purchase one ordinary share each were issued with the performance period from 15 November 2015 to 14 November 2018. The performance warrants are subject to absolute share price target between 0.15p - 1.00p.

 

 

Movements in warrants outstanding

 

 

31 March 2018

 

31 March 2017

 

 

Weighted average exercise price

 

Weighted average

 exercise price

 

Number

Pence

Number

pence

At start of the year

284,772,727

0.11p

297,272,727

0.11p

Granted during the year

-

-

-

-

Lapsed during the year

(15,000,000)

0.10p

-

-

Exercised during the year

(237,272,727)

0.10p

(12,500,000)

-

 

                   

 

                   

 

At end of the year

32,500,000

0.15p

284,772,727

0.11p

 

                   

 

                   

 

 

The fair value of the warrants is estimated at the date of grant using a stochastic option pricing model that uses certain assumptions. Performance conditions were included in the fair value calculations where relevant. No warrants were issued in the current or previous period.

 

 

 

 

 

16        FINANCIAL INSTRUMENTS

 

Loans and receivables

Loans and receivables include cash at bank and in hand and other debtors.

 

Financial liabilities

Financial liabilities at amortised cost include trade creditors, other creditors, accruals and loans.

 

Borrowing facilities

During the year Company had a facility US$400,000 from Alcazar 1 Pte Ltd. US$250,000 of the facility was drawn down. The facility had an interest rate of 10% and was repayable at the end of June 2018. Post the year end in, June 2018, the facility and interest of US$275,000 was repaid.

 

Post the year end in, June 2018, Legendary entered into a new facility agreement with Alcazar 1 Pte Limited. The facility is for US$250,000 and may be drawn down until 31 January 2019. The facility is repayable with interest of 10% on the anniversary of drawdown.

 

Capital Management

The Company is financed primarily with equity capital with debt utilised from time to time, which is then utilised to meet 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.

 

Interest rate risk

The Company does not have any material exposure to interest rate.   The Company had a facility at a fixed interest rate of 10% which has been paid (see above). 

 

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. 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. The table below analyses the Company's non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

 

 

 

16        FINANCIAL INSTRUMENTS (continued)

 

2018

 

Less than 3 months

£'000

Between 3 months

and 1 year

£'000

Between 1

and 2 years

£'000

Between 2

and 5 years

£'000

Over 5 years

£'000

 

Trade and other payables

45

-

-

-

-

 

Borrowings

-

222

-

-

-

 

Accruals

20

-

-

-

-

 

Other receivables

74

-

-

-

-

 

 

2017

 

Less than 3 months

£'000

Between 3 months

and 1 year

£'000

Between 1

and 2 years

£'000

Between 2

and 5 years

£'000

Over 5 years

£'000

 

Trade and other payables

90

-

-

-

-

 

Borrowings

-

30

-

-

-

 

Accruals

18

-

-

-

-

 

Other receivables

130

-

259

-

-

 

 

Market risk

The Company monitors the value of its investments on a regular basis and takes action to decrease or dispose of investments when it deems appropriate.

 

Credit risk

The bank account of the Company and of the client account held by PSB Accountants Limited is held with well-established financial institutions of high quality credit standing.

 

Fair value hierarchy

 

 

Level 1 'Quoted prices'

£'000

Level 2 'Observable prices'

£'000

Level 3 Unobservable prices'

£'000

 

 

Total

£'000

Year ended 31 March 2018

Investments held at fair value

55

-

6,095

6,150

Year ended 31 March 2017

Investments held at fair value

82

           -

4,211

    4,293

 

 

 

16        FINANCIAL INSTRUMENTS (continued)

 

Financial assets and liabilities measured at fair value are disclosed using a fair value hierarchy that reflects the significance of the inputs used making the fair value measurements, as follows -

•      Level 1 - Unadjusted quoted prices in active markets for identical asset or liabilities ('quoted prices'),

•      Level 2 - Inputs (other than quoted prices in active markets for identical assets or liabilities) that are directly or indirectly observable for the asset or liability ('observable inputs'), or

•      Level 3 - Inputs that are not based on observable market data ('unobservable inputs')

 

The unlisted investments were valued using the 'price of recent investment' method, in accordance with the company's accounting policy and IPEV guidelines, as the investee companies are in their early stage of development. These were considered level 3 valuations as judgement was required to assess whether adjustments to the values were required. The Directors reviewed the indicators to assess whether the fair value had changed and concluded that no material adjustment was required. They have no information that would suggest that the investments are impaired and will continue to monitor the activity in the investee companies.

 

17        SUBSEQUENT EVENTS

 

Equity Placing and Fund Raise

 

Post the year end, in May 2018, Legendary raised an aggregate of £550,000 (before expenses) by way of a placing and subscription of 550,000,000 new ordinary shares of 0.1 pence each ("Ordinary Shares") at a price of 0.1 pence per New Share (the "Fundraising"). This included 100,000,000 Ordinary Shares, which Zafar Karim, Executive Chairman of the Company, subscribed for on the same terms.

Following the subscription, Zafar Karim holds a beneficial interest in 155,727,273 ordinary shares, representing approximately 4.1 percent of the enlarged ordinary share capital of the Company. Mr Karim also holds 316,000,000 options with an exercise price of 0.2 pence per Ordinary Share

Zafar Karim is a related party to Legendary, as defined in the AIM Rules for Companies and the Director Subscription is a related party transaction for the purposes of Rule 13 of the AIM Rules ("Related Party Transaction").

Thomas Reuner, being the Independent Director for the purposes of the Related Party Transaction, considered, having consulted with the Company's nominated adviser, Grant Thornton UK LLP, that the terms and conditions of the Director Subscription are fair and reasonable insofar as the shareholders of the Company are concerned.

Increase in Total Investments, Net Assets and Total Assets

 

Subsequent to the year end, as a result of the equity placing and fund raise above, and the movement of the share price of the Medgold Corporation, as at 17 August 2018, the total investments, net assets and total assets of Legendary were £6,178,000, £6,496,000 and £6,531,000. 

Repayment of Facility of US$400,000

 

Post the year end in, June 2018,  repaid in cash US$275,000 principal and interest to settle the facility with Alcazar 1 Pte Limited.

 

New Facility Agreement

Post the year end in, June 2018, Legendary entered into a new facility agreement with Alcazar 1 Pte Limited. The facility is for US$250,000 and may be drawn down until 31 January 2019. If drawn down, the facility needs to be repaid on the first anniversary of drawdown and incurs interest of 10%.

Issue of performance warrants

Post the year end, 27.5 million performance warrants were issued to consultants. These warrants vest at prices ranging from 0.4 pence to 1.4 pence and have an exercise price of 0.12 pence.

 

18        RELATED PARTY TRANSACTIONS

 

Directors' transactions are detailed in note 4 of the notes to the financial statements.

Post the year end, in May 2018, Legendary raised an aggregate of £550,000 (before expenses) by way of a placing and subscription of 550,000,000 new ordinary shares of 0.1 pence each ("Ordinary Shares") at a price of 0.1 pence per New Share (the "Fundraising"). This included 100,000,000 Ordinary Shares, which Zafar Karim, Executive Chairman of the Company, subscribed for on the same terms.

Following the subscription, Zafar Karim holds a beneficial interest in 155,727,273 ordinary shares, representing approximately 4.1 per cent. of the enlarged ordinary share capital of the Company. Mr Karim also holds 316,000,000 options with an exercise price of 0.2 pence per Ordinary Share.

On 13 October 2017 the company announced that Zafar Karim, took a 37% stake in IBS, a company in which Legendary has a 12% stake.

Zafar Karim is a related party to Legendary, as defined in the AIM Rules for Companies and the Director Subscription is a related party transaction for the purposes of Rule 13 of the AIM Rules ("Related Party Transaction").

Thomas Reuner, being the Independent Director for the purposes of the Related Party Transaction, considered, having consulted with the Company's nominated adviser, Grant Thornton UK LLP, that the terms and conditions of the Director Subscription are fair and reasonable insofar as the shareholders of the Company are concerned.

No other related party transactions were undertaken during the year other than those disclosed above.

 

 

 

 

 

 


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