Company Registration Number 6048205 TITANIA INVESTMENTS PLC FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 JUNE 2010
FINANCIAL STATEMENTS Contents Pages Company information 1 The directors' report 2 to 5 Independent auditor's report to the shareholders 6 to 7 Profit and loss account 8 Balance sheet 9 Cash flow statement 10 to 11 Notes to the financial statements 12 to 22
COMPANY INFORMATION The board of directors George Angeli Loizos Yerolemou Company secretary Loizos Yerolemou Date of incorporation 10 January 2007 Registered office Crown House 72 Hammersmith Road London W14 8TH Auditor BSG Valentine Chartered Accountants & Statutory Auditor Lynton House 7-12 Tavistock Square London WC1H 9BQ Bankers National Westminster Bank Plc 134 Aldersgate Street London EC1A 4LD Registrars Share Registrars Limited Craven House West Street Farnham Surrey GU9 7EN Solicitors Matthew Arnold & Baldwin 85 Fleet Street London EC4Y 1AE Corporate Advisor Rivington Street Corporate Finance Limited 3 rd Floor 3 London Wall Buildings London Wall London EC2M 5SY - 1 -
THE DIRECTORS' REPORT The directors present their report and the financial statements of the Company for the period from 1 February 2009 to 30 June 2010. PRINCIPAL ACTIVITIES The principal activity of the Company in prior years was to acquire, directly or through options, uranium exploration rights. However, the company changed its principal activity to being that of an investment Company during the year. The Company changed its name from Uranium Prospects PLC to Titania Investments PLC by Special Resolution on 29 August 2009. BUSINESS REVIEW Managing Director's statement Titania Investments Plc announces its audited results for the seventeen month period to 30 June 2010. These results showed a loss of 127,921. During the first six month period to the end of July 2009, the Company ended its involvement in the Grease River project and raised new equity. During August 2009, the Company widened its investment focus and changed its name to Titania Investments Plc. During the next six months to 31 January 2010, the company continued to actively seek suitable acquisitions in line with its investment strategy. One particular prospect, which progressed to an advanced stage of negotiations, was a construction company based in Finland and operating in the nursing homes and eldercare sector. Despite the commercial logic of the deal the debt and equity market conditions severely impacted upon the company's ability to raise the necessary funding. As a result, the company could not progress this transaction and terminated all discussions. During the latter part of the period to 30 June 2010 the Board continued to undertake initiatives to strengthen its balance sheet and as such, has survived on a limited 'care and maintenance' basis. The Company changed its accounting reference date from 31 January to 30 June. Post balance sheet events On 11 August 2010, the Board agreed settlement of creditors amounting to 144,227 by issuing 28,845,321 new ordinary shares at 0.5 pence each. On the same date, the Board also agreed a private placement of 800,000 new shares of 0.5 pence each for a consideration of 4,000. We have made an enormous step towards strengthening the Company's balance sheet and I am delighted that the Company is now largely debt free. This leaves Titania in an excellent position moving forward, as it seeks, in the near term, to further enhance shareholder value. I would like to take this opportunity to thank all shareholders in Titania Investments Plc, for their ongoing support of the Company. I further wish to recognize and thank the Company's former Board member, Jukka Koski for his tireless efforts in trying to resolve our funding requirements. - 2 -
THE DIRECTORS' REPORT (continued) RESULTS AND DIVIDENDS The loss for the period amounted to 127,921. The directors have not recommended a dividend. DIRECTORS The following directors have held office during the period: Marc Sale appointed 14 June 2007; resigned 21 July 2009 Anthony Scutt appointed 31 October 2008; resigned 21 July 2009 Jukka Koski appointed 21 July 2009; resigned 30 September 2010 Loizos Yerolemou appointed 18 June 2007 George Angeli appointed 24 July 2009 DIRECTORS AND SUBSTANTIAL SHAREHOLDINGS The directors who served during the period and their interests including beneficial interests in the share capital of the Company were as follows: Director Shares Held Percentage of Shares in Issue Marc Sale 7,663,332 5.22 % Anthony Scutt 1,453,880 0.99% Jukka Koski 21,000,000 14.30% Loizos Yerolemou 13,313,856 9.07% George Angeli Nil Nil% Substantial shareholdings As at 30 June 2010, the following parties hold more than 3% of the company's issued share capital: Ordinary shares of 0.5p Percentage Jukka Koski 21,000,000 14.30% IdeVest Oy 21,000,000 14.30% Jim Nominees Limited (*) 17,426,795 11.87% Sunvest Corporation plc 15,000,000 10.22% Loizos Yerolemou 13,313,856 9.07% Prism Nominees Ltd 7,823,574 5.33% Marc Sale 7,663,332 5.22% Addworth Plc 6,000,000 4.09% Mark Watson-Mitchell 5,000,000 3.41% (*) JIM Nominees Ltd includes the holding of Terra Vera Investments Plc (formerly known as Yellowcake Plc) amounting to 9,713,645 ordinary shares, representing 6.62% of the Company. There are currently 12,000,000 Warrants at a price of 0.5 pence in issue. George Angeli owns 2,000,000 Warrants that expire on 20 July 2011 and Louis Yerolemou owns the remaining 10,000,000 Warrants which expire on 27 August 2014. IdeVest Oy and Jukka Koski each held 25,000,000 Warrants at a price of 0.5 pence. These Warrants lapsed on 28 August 2010 as the two holders failed to exercise these. There were also Convertible Loan Notes amounting to 78,650 which in turn entitled the holders to 15,730,000 ordinary shares at 0.5 pence. These Loan Notes were converted into 15,730,000 shares on 11 August 2010. PRINCIPAL RISKS AND UNCERTAINTIES The principal risks faced by the company are economic factors, fluctuations in exchange rates, and the ability to secure future investment. - 3 -
FINANCIAL RISK MANAGEMENT TITANIA INVESTMENTS PLC THE DIRECTORS' REPORT (continued) The principal current asset of the business is cash. Therefore the principal financial instruments employed by the Company are cash or cash equivalents and the Directors ensure that the business maintains surplus cash reserves to minimise liquidity risk. Interest rate risk The Company has interest bearing assets which include only cash balances which earn interest at a variable rate. The Directors will revisit the appropriateness of this policy should the Company's operations change in size or nature. POLICY ON THE PAYMENT OF CREDITORS The company does not follow a code or standard on payment practice. Payment terms are normally granted with individual suppliers at the time of order placement and are honoured, provided that goods or services are supplied within the contractual conditions. At the period end, the Company had creditor days of 28 (2009: 43). CORPORATE GOVERNANCE The Directors intend, in so far as is practicable given the Company's size and the constitution of the Board, to comply with the main provisions of the Combined Code: Principles of Corporate Governance and Code of Best Practice which is consistent with the recommendations on Corporate Governance of the Quoted Companies Alliance. The Directors intend to comply with rule 29 of the PLUS rules relating to Directors' dealings as applicable to PLUS companies and will also take all reasonable steps to ensure compliance with Rule 46 by the Company's relevant employees. DIRECTORS' RESPONSIBILITIES The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. - 4 -
In so far as the directors are aware: TITANIA INVESTMENTS PLC THE DIRECTORS' REPORT (continued) there is no relevant audit information of which the company's auditor is unaware; and the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. Registered office: Crown House 72 Hammersmith Road London W14 8TH Signed by order of the directors Approved by the board on 20 December 2010 LOIZOS YEROLEMOU Company Secretary - 5 -
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF TITANIA INVESTMENTS PLC We have audited the financial statements of Titania Investments PLC for the period from 1 February 2009 to 30 June 2010 on pages 8 to 22. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the company's shareholders, as a body, in accordance with Chapter 3 of Section 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's shareholders those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's shareholders as a body, for our audit work, for this report, or for the opinions we have formed. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR As explained more fully in the Directors' Responsibilities Statement set out on pages 4 to 5, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by directors; and the overall presentation of the financial statements. OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: give a true and fair view of the state of the company's affairs as at 30 June 2010 and of its loss for the period then ended; have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and have been prepared in accordance with the requirements of the Companies Act 2006. EMPHASIS OF MATTER - GOING CONCERN In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosures made in note 1 of the financial statements concerning the company's ability to continue as a going concern. The company made a loss of 127,921 during the period ended 30 June 2010, and at that date it's current liabilities exceeded total assets by 142,935. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern. The financial statements do not include the adjustments that would arise if the company was unable to continue as a going concern. OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements. - 6 -
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF TITANIA INVESTMENTS PLC (continued) MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors' remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. ATHANASIOS ATHANASIOU (Senior Statutory Auditor) For and on behalf of BSG VALENTINE Lynton House Chartered Accountants 7-12 Tavistock Square & Statutory Auditor London WC1H 9BQ 20 December 2010-7 -
PROFIT AND LOSS ACCOUNT Period from 1 Feb 09 to Year to Note TURNOVER Administrative expenses (116,718) (1,232,371) -------------------------------- ------------------------------------------ OPERATING LOSS 2/5 (116,718) (1,232,371) Attributable to: Operating loss before exceptional items (101,653) (158,209) Exceptional items 5 (15,065) (1,074,162) -------------------------------- ------------------------------------------ (116,718) (1,232,371) Interest receivable 1,767 Interest payable and similar charges 6 (11,203) (8,264) -------------------------------- ------------------------------------------ LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (127,921) (1,238,868) Tax on loss on ordinary activities 7 -------------------------------- ------------------------------------------ LOSS FOR THE FINANCIAL PERIOD (127,921) (1,238,868) Balance brought forward (1,428,210) (189,342) ------------------------------------------ ------------------------------------------ Balance carried forward (1,556,131) (1,428,210) Earnings per share (pence) Basic 8 (0.10) (1.68) Diluted 8 (0.10) (1.68) All of the activities of the company are classed as continuing. The company has no recognised gains or losses other than the results for the period as set out above. The notes on pages 12 to 22 form part of these financial statements. - 8 -
BALANCE SHEET AS AT 30 JUNE 2010 Note CURRENT ASSETS Debtors 10 8,744 Cash at bank 246 21,790 ----------------------- ---------------------------- 8,990 21,790 CREDITORS: Amounts falling due within one year 11 (151,925) (356,209) -------------------------------- -------------------------------- NET CURRENT LIABILITIES (142,935) (334,419) -------------------------------- -------------------------------- TOTAL ASSETS LESS CURRENT LIABILITIES (142,935) (334,419) CAPITAL AND RESERVES Called-up equity share capital 14 734,186 414,781 Share premium account 15 679,010 679,010 Profit and loss account (1,556,131) (1,428,210) ------------------------------------------ ------------------------------------------ DEFICIT 16 (142,935) (334,419) These financial statements were approved by the directors and authorised for issue on 20 December 2010, and are signed on their behalf by: LOIZOS YEROLEMOU Company Registration Number: 6048205 The notes on pages 12 to 22 form part of these financial statements. - 9 -
CASH FLOW STATEMENT Period from 1 Feb 09 to Year to NET CASH OUTFLOW FROM OPERATING ACTIVITIES (329,746) (925,743) RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 1,767 Interest paid (11,203) (8,264) ---------------------------- ----------------------- NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (11,203) (6,497) TAXATION (1,625) CAPITAL EXPENDITURE Payments to acquire intangible fixed assets (286,924) -------------- -------------------------------- NET CASH OUTFLOW FROM CAPITAL EXPENDITURE (286,924) -------------------------------- ------------------------------------------ CASH OUTFLOW BEFORE FINANCING (340,949) (1,220,789) FINANCING Issue of equity share capital 319,405 414,781 Share premium on issue of equity share capital 679,010 -------------------------------- ------------------------------------------ NET CASH INFLOW FROM FINANCING 319,405 1,093,791 -------------------------------- ------------------------------------------ DECREASE IN CASH (21,544) (126,998) RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Period from 1 Feb 09 to Year to Operating loss (116,718) (1,232,371) (Increase)/decrease in debtors (8,744) 25,672 (Decrease)/increase in creditors (204,284) 280,956 -------------------------------- ------------------------------------------ Net cash outflow from operating activities (329,746) (925,743) - 10 -
CASH FLOW STATEMENT RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Decrease in cash in the period (21,544) (126,998) ---------------------------- -------------------------------- Movement in net funds in the period (21,544) (126,998) Net funds at 1 February 2009 = 21,790 = 18,489 ---------------------------- ---------------------------- Net funds at 30 June 2010 246 21,790 ANALYSIS OF CHANGES IN NET FUNDS At 1 Feb 2009 Cash flows At 30 Jun 2010 Net cash: Cash in hand and at bank 21,790 (21,544) 246 ---------------------------- ---------------------------- -------------- Net funds 21,790 (21,544) 246 = - 11 -
1. ACCOUNTING POLICIES Basis of accounting TITANIA INVESTMENTS PLC NOTES TO THE FINANCIAL STATEMENTS The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. Going concern The company s balance sheet at the period end shows a deficit of 142,935. Since the year end a number of creditors have been converted to equity, which has resulted in the balance sheet becoming a surplus. The company now has no liabilities, and the directors are also hoping to raise additional investment into the company in the near future. Based on this the directors are therefore of the opinion that it is appropriate to prepare the financial statements on a going concern basis. Deferred taxation Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more tax, with the following exceptions: Provision is made for tax on gains arising from the revaluation (and similar fair value adjustments) of fixed assets, and gains on disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at the balance sheet date, there is a binding agreement to dispose of the assets concerned. However, no provision is made where, on the basis of all available evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets and charged to tax only where the replacement assets are sold. Deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date. Foreign currencies Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are taken into account in arriving at the operating profit. Financial instruments Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. - 12 -
Mineral property rights TITANIA INVESTMENTS PLC NOTES TO THE FINANCIAL STATEMENTS The Company is funding the exploration of mineral properties which as yet have not been proven to contain commercially exploitable ore reserves. Expenditures on mineral exploration and development are capitalised on an individual project basis, and are carried at cost until such time as an economic ore deposit is defined, or the project is determined by management to be impaired. The recoverability of the amounts capitalised for mineral property rights is dependent on the determination of economically recoverable ore reserves, confirmation of the Company's interest in the underlying mineral claims, the ability to obtain the necessary financing to to complete their development, and future profitable production or proceeds from the disposition thereof. Equity Called up share capital is recorded on the balance sheet at the nominal value of shares issued. Proceeds received in excess of the nominal value of shares are recorded in the share premium account after deducting only any directly attributable issue costs. Financial instruments The company uses a limited number of financial instruments, comprising cash, and various items such as trade receivables and payables, which arise directly from operations. 2. OPERATING LOSS Operating loss is stated after charging/(crediting): Period from 1 Feb 09 to Year to Auditor's remuneration - as auditor (1,375) 4,188 Net profit on foreign currency translation (136) 3. PARTICULARS OF EMPLOYEES The average number of staff employed by the company during the financial period amounted to: Period from 1 Feb 09 to Year to No No Number of administrative staff 1 1 4. DIRECTORS' REMUNERATION The directors' aggregate remuneration and other payments in respect of qualifying services were: Period from 1 Feb 09 to Year to Fees 18,500 69,228 Compensation for loss of office 18,000 ---------------------------- ---------------------------- 18,500 87,228-13 -
5. EXCEPTIONAL ITEMS TITANIA INVESTMENTS PLC NOTES TO THE FINANCIAL STATEMENTS Period from 1 Feb 09 to Year to Recognised in arriving at operating loss: Write off of mineral property rights 15,065 1,074,162 6. INTEREST PAYABLE AND SIMILAR CHARGES Period from 1 Feb 09 to Year to Other similar charges payable 11,203 8,264 7. TAXATION ON ORDINARY ACTIVITIES Factors affecting current tax charge The tax assessed on the loss on ordinary activities for the period is higher than the standard rate of corporation tax in the UK of 19% (2009-20%). Period from 1 Feb 09 to Year to Loss on ordinary activities before taxation (127,921) (1,238,868) Loss on ordinary activities by rate of tax (24,305) (247,774) Expenses not deductible for tax purposes 6,919 247,774 Trading losses not utilised 17,386 - -------------------------------- ------------------------------------------ Total current tax - - Factors that may affect future tax charges The company has an unrecognised deferred tax asset of 266,840 (2009: 262,583) relating to trading losses not utilised. The deferred tax asset has not been recognised in the financial statements due to the uncertainty surrounding its recoverability. 8. EARNINGS PER SHARE The basic earnings per ordinary share is calculated by dividing profit for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year. The diluted earnings per ordinary share is calculated by dividing profit for the year less non-equity dividends and other appropriations in respect of non-equity shares by the weighted average number of equity shares outstanding during the year (after adjusting both figures for the effect of dilutive potential ordinary shares). - 14 -
NOTES TO THE FINANCIAL STATEMENTS The calculation of basic and diluted earnings per ordinary share is based upon the following data: Earnings Period from 1 Feb 09 to Year to Earnings for the purposes of basic earnings per share (127,921) (1,238,868) -------------------------------- ------------------------------------------ Earnings for the purposes of diluted earnings per share (127,921) (1,238,868) Number of shares Period from 1 Feb 09 to Year to No No Basic weighted average number of shares 128,770,905 73,855,099 --------------------------------------------------- ---------------------------------------------- Weighted average number of shares for the purposes of diluted earnings per share 128,770,905 73,855,099 There are currently 12,000,000 Warrants at a price of 0.5 pence in issue. George Angeli owns 2,000,000 Warrants that expire on 20 July 2011 and Loizos Yerolemou owns the remaining 10,000,000 Warrants which expire on 27 August 2014. IdeVest Oy and Jukka Koski each held 25,000,000 Warrants at a price of 0.5 pence. These Warrants lapsed on 28 August 2010 as the two holders did not exercise these. There were also Convertible Loan Notes amounting to 78,650 which in turn entitled the holders to 15,730,000 ordinary shares at 0.5 pence. These Loan Notes were converted into 15,730,000 shares on 11 August 2010. 9. SEGMENTAL REPORTING As the company had no turnover an analysis of turnover by segment cannot be provided. The Company's activities are carried out in the United Kingdom, Europe and Canada. For the period ended 30 June 2010 the company had only one activity, that being of an investment company. 10. DEBTORS VAT recoverable 5,454 Prepayments and accrued income 3,290 ----------------------- -------------- 8,744-15 -
NOTES TO THE FINANCIAL STATEMENTS 11. CREDITORS: Amounts falling due within one year Trade creditors 9,119 39,977 Loans from related parties 94,833 311,219 Other creditors 3,711 700 Directors current accounts 10,659 Accruals and deferred income 33,603 4,313 -------------------------------- -------------------------------- 151,925 356,209 12. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The company's financial instruments consist of cash, accounts and advances receivable, accounts payable and accrued liabilities and amounts due to related parties that arise directly from its operations. The main purpose of these financial instruments is to provide working capital to the company. The company's policy is to obtain the highest rate of return on its cash balances, subject to having sufficient resources to manage the business on a day to day basis and not expose the company to unnecessary risk of default. Unless otherwise noted, it is management's opinion that the company is not exposed to significant interest, currency or credit risk arising from the financial instruments. The fair value of cash, accounts and advances receivable, accounts payable, accrued liability, and due to related parties approximates their carrying values, due to their short term maturity or capacity of prompt liquidation. Interest rate risk Financial assets comprise cash at bank, which are held in sterling. At 30 June 2010 sterling deposits at the bank attracted interest at the rate of 0.10% (2009: 0.10%) per annum. 13. RELATED PARTY TRANSACTIONS Addworth Plc During the period the following transactions were made between the Company and Addworth Plc:- 2010 2009 Consultancy fees and expenses pursuant to a corporate services agreement dated 29 June 2007-21,150 This agreement was terminated on 31 October 2008. Loan interest charged 2,295 1,356 --------- ---------- Total charges to the Company by Addworth Plc 2,295 22,506 ======== During the period Addworth Plc made the following loans to the Company. 2010 2009 Balance as at 1 February 60,654 757 Loan Advances - 85,306 Loan Repayments (62,949) (26,765) Loan Interest 2,295 1,356 --------- ---------- Balance as at 30 June 2010/ 31 January 2009-60,654 ======== - 16 -
NOTES TO THE FINANCIAL STATEMENTS The loan of NIL (2009: 60,654) is included under Loans from related parties in note 11 and bears interest of 9% per annum. As at 30 June 2010, Addworth Plc held 6,000,000 ordinary shares in the Company. Terra Vera Investments Plc (formerly known as Yellowcake Plc) During the period the following transactions were made between the Company and Terra Vera Investments Plc:- 2010 2009 Services rendered in connection with claims in Sweden - - (This agreement was terminated on 31 October 2008). Loan interest charged 8,908 6,908 --------- ---------- Total charges to the Company by Terra Vera Investments Plc 8,908 6,908 ======== 2010 2009 Balance as at 1 February 236,792 30,884 Loan Advances - 199,000 Loan Repayments (245,700) - Loan Interest 8,908 6,908 --------- ----------- Balance as at 30 June 2010/ 31 January 2009-236,792 ========= The loan of NIL (2009: 236,792) is included under Loans from related parties in note 11 and bears interest of 9% per annum. As at 30 June 2010, Terra Vera Investments Plc held 9,713,645 ordinary shares in the Company. IdeVest Oy During the period IdeVest Oy made the following loans to the company. 2010 2009 Balance as at 1 February - - Loan Advances 139,325 - Loan Repayments (100,000) - --------- ---------- Balance as at 30 June 2010/ 31 January 2009 39,325 - ======== The loan of 39,325 (2009: Nil) is included under Loans from related parties in note 11 is the form of a convertible loan note which bears no interest and is subject to the following conditions. - 17 -
NOTES TO THE FINANCIAL STATEMENTS a) the Company having the sufficient relevant authorities to allot and issue Ordinary shares required by sections 80 and 95 of the Act; b) the number of Ordinary Shares to be issued to a noteholder on conversion does not result in such noteholder (when aggregated with his interests in existing issued Ordinary Shares), being required to make a mandatory bid for all of the Ordinary Shares in the Company under the rules set out in the City Code and most particularly under Rule 9 of the City Code or any equivalent provision which amends or replaces Rule 9 of the City Code; unless a waiver has been granted by the Takeover Panel. c) the loan can be converted into 7,865,000 Ordinary Shares at par value which is 0.5 pence within two years from the date of issue. As at 30 June 2010, IdeVest Oy held 21,000,000 ordinary shares in the Company. As at 30 June 2010 IdeVest Oy also held a warrant certificate with entitlement of 25,00,000 Ordinary Shares in the Company. Subject to the following conditions:- a) the Company having the sufficient relevant authorities to allot and issue Ordinary Shares required by sections 80 and 95 of the Act; b) the number of Ordinary Shares to be issued to the warrant holder on exercise does not result in such holder (when aggregated with his interests in existing issued Ordinary Shares), being required to make a mandatory bid for all of the Ordinary Shares in the Company under the rules set out in the City Code and most particularly under Rule 9 of the City Code or any equivalent provision which amends or replaces Rule 9 of the City Code; unless a waiver has been granted by the Takeover Panel. c) The exercise price of the warrants is 0.5 pence per share within 12 months from the date of issue. This certificate has not been exercised during the exercise period and has now lapsed. Samuli Maenpaa: Samuli Maenpaa is the director and owner of IdeVest Oy which owns 21,000,000 ordinary shares in the Company. During the period Samuli Maenpaa has made unsecured loan advances to the Company amounting to 3,519. As at 30 June 2010 the Company owed Samuli Maenpaa 3,519 (2009: NIL) - 18 -
NOTES TO THE FINANCIAL STATEMENTS Jukka Koski During the period Jukka Koski made the following loans to the company. 2010 2009 Balance as at 1 February - - Loan Advances 147,448 - Loan Repayments (100,000) - ---------- ---------- Balance as at 30 June 2010/ 31 January 2009 47,448 - ========= The loan of 39,325 (2009: Nil) is included under Loans from released parties in note 11 is the form of a convertible loan note which bears no interest and is subject to the following conditions. a) the Company having the sufficient relevant authorities to allot and issue Ordinary Shares required by sections 80 and 95 of the Act; b) the number of Ordinary Shares to be issued to a noteholder on conversion does not result in such noteholder (when aggregated with his interests in existing issued Ordinary Shares), being required to make a mandatory bid for all of the Ordinary Shares in the Company under the rules set out in the City Code and most particularly under Rule 9 of the City Code or any equivalent provision which amends or replaces Rule 9 of the City Code; unless a waiver has been granted by the Takeover Panel. c) the loan can be converted into 7,865,000 Ordinary Shares at par value which is 0.5 pence within two years from the date of issue. The remainder of the loan amounting to 8,123 is in the form of unsecured loan advances made by Jukka Koski to the Company. As at 30 June 2010 the Company owed Jukka Koski 8,123 (2009: NIL) and this amount is reflected in the Directors current accounts in note 11. As at 30 June 2010, Jukka Koski held 21,000,000 ordinary shares in the Company. As at 30 June 2010 Jukka Koski also held a warrant certificate with entitlement to 25,000,000 Ordinary Shares in the company subject to the following conditions:- a) by sections 80 and 95 of the Act; b) the number of Ordinary Shares to be issued to a noteholder on conversion does not result in such noteholder (when aggregated with his interests in existing issued Ordinary Shares), being required to make a mandatory bid for all of the Ordinary Shares in the Company under the rules set out in the City Code and most particularly under Rule 9 of the City Code or any equivalent provision which amends or replaces Rule 9 of the City Code; unless a waiver has been granted by the Takeover Panel. c) the exercise price of the warrants is 0.5 pence per share within 12 months from the date of issue. This certificate has not been exercised during the exercise period and has now lapsed. - 19 -
NOTES TO THE FINANCIAL STATEMENTS Midas Equities Ltd During the period the following transactions were made between the Company and Midas Equities Ltd. 2010 2009 Directors fees - 31,773 Expenses 10,090 - --------- ---------- Total charges to the Company by Midas Equities Ltd 10,090 31,773 ======== During the period Midas Equities made the following loans to the company. 2010 2009 Balance as at 1 February 13,773 - Loan Advances 16,090 31,773 Loan Repayments in shares (17,199) (18,000) --------- ---------- Balance as at 30 June 2010/ 31 January 2009 12,664 13,773 ======== The loan of 12,664 (2009: 13,773) is included under Loans from related parties in note 11 and is unsecured. The amount of 17,199 (2009: 18,000) was settled by the issue of 3,439,770 (2009: 1,800,000) ordinary shares in the Company. Loizos Yerolemou is a director and holder of 100% of the equity in Midas Equities Ltd. Midstone Consulting Ltd During the period the Company was charged 20.125 (2009: NIL), in respect of director s fees and expenses by Midstone Consulting Ltd. The amounts outstanding were settled by the issue of 4,025,000 shares in the Company. Loizos Yerolemou is a holder of 100% of the equity of Midstone Consulting Ltd, a company incorporated and registered in the Cyprus. - 20 -
NOTES TO THE FINANCIAL STATEMENTS 14. SHARE CAPITAL Authorised share capital: 200,000,000 Ordinary shares of 0.005 each 1,000,000 1,000,000 Allotted, called up and fully paid: No No 146,837,275 Ordinary shares (2009-82,956,207) of 0.005 each 146,837,275 734,186 82,956,207 414,781 On 3 February 2009, the Company issued 2,475,000 ordinary shares of 0.5p pence each for a total consideration of 12,375. On 6 April 2009, the Company issued 10,320,624 ordinary shares of 0.5p pence each for a total consideration of 51,603. On 21 July 2009, the Company issued 51,085,444 ordinary shares of 0.5 pence each for a total consideration of 255,427. 15. SHARE PREMIUM ACCOUNT Period from 1 Feb 09 to Year to Balance brought forward 679,010 Premium on shares issued in the period 679,010 -------------------------------- -------------------------------- Balance carried forward 679,010 679,010 16. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Loss for the financial period (127,921) (1,238,868) New ordinary share capital subscribed 319,405 414,781 Premium on new share capital subscribed 679,010 -------------------------------- ------------------------------------------ 191,484 (145,077) -------------------------------- -------------------------------- Net addition/(reduction) to shareholders' deficit 191,484 (145,077) Opening shareholders' deficit (334,419) (189,342) -------------------------------- -------------------------------- Closing shareholders' deficit (142,935) (334,419) - 21 -
17. POST BALANCE SHEET EVENTS Private Placing The Company has agreed a private placing with London based entrepreneur, Segar Karupiah, who has subscribed for 800,000 new Ordinary Shares at a price of 0.5 pence per share, for a total consideration of 4,000. Convertible Loan Notes Idevest Oy and Jukka Koski have notified the Company that they have transferred their Convertible Loan Notes amounting to a total of 78,650 to Midstone Consulting Ltd, a Cyprus based investment company owned by Louis Yerolemou. Midstone Consulting Ltd has converted 78,650 worth of Loan Notes into equity, resulting in the issue of 15,730,000 new Ordinary Shares at 0.5 pence per share. Creditors' Settlement The Board has been in extensive discussions with its creditors and has reached an agreement to settle its outstanding debt of 65,577. This settlement of creditors involves a conversion of debt into equity at a price of 0.5 pence per Ordinary Share resulting in the issue of 13,115,321 new Ordinary Shares. Jukka Koski participated in the creditors' settlement in relation to direct and indirect loan advances made to the Company amounting to 8,150. Loizos Yerolemou participated in the creditors' settlement in relation to direct and indirect loan advances made to the Company amounting to 23,071. As a result of the private placing, the conversion of the Loan Notes and the settlement of creditors, the Company has issued a further 29,645,321 new Ordinary Shares. - 22 -