29th Jun 2011 07:44
29 June 2011 TEP EXCHANGE GROUP PLC ("TEP" or "the Company") Final Results for the year ended 31 December 2010
Chairman's statement
I am duly reporting the results for the Company and subsidiaries (together "the Group") for the year ended 31 December 2010. Revenue for the year totalled £ 164,776 (2009: £10,334) resulting in a loss from operations of £56,797 (2009: £ 205,840). The loss before and after taxation was £86,458 compared to the loss before and after taxation of £215,009 in 2009. The basic loss per share was 0.02 pence (2009: 0.05 pence).
Revenue increased significantly in 2010 compared with 2009 due to the receipt of fees from licensing of the electronic platform and all technology to SL Investment Management Limited, ("SL"), a 48.26 per cent. shareholder in the Company. The licensing arrangements with SL were set out in the Company's announcement of the contract on 12 November 2010. In summary the Company has licensed its electronic platform and all technology to SL and in consideration will receive a quarterly fee of £20,000 and in addition, SL has been granted exclusive rights to develop and modify the electronic platform for a quarterly fee of £230,000 ("the Licence Agreement"). The Licence Agreement is for a period of ten years; however, SL may terminate the agreement on 30 April of each year. As a result of these arrangements and the expected profitability of them, the directors consider it appropriate to prepare the financial statements on a going concern basis.
The market demand for traded endowment policies still remains extremely depressed but the Company continues to work closely with market makers in anticipation of increasing demand for policies. In the meantime, the Directors are continuing to maintain strong controls over the Company's cost base.
Your Board is not proposing a dividend for the year under review.
G KynochChairman28 June 2011Audited Consolidated Statement of Comprehensive Income for the year ended 31December 2010 2010 2009 £ £ Revenue 164,776 10,334 Administrative expenses (221,573) (216,174) Loss from operations (56,797) (205,840) Finance income - - Finance costs (29,661) (9,169) Loss before income tax (86,458) (215,009) Income tax expense - -
Loss attributable to owners of the parent and total (86,458) (215,009) comprehensive income for the year
Loss per share [Note 2] Basic and diluted loss per share (0.02)p (0.05)p
Audited Consolidated Statement of Financial Position at 31 December 2010
2010 2009 £ £ Assets Current assets Inventories 3,403 3,285 Trade and other receivables [Note 4] 323,073 22,750 Cash and cash equivalents 49,043 2,345 Total current assets 375,519 28,380 Total assets 375,519 28,380 Liabilities Current liabilities Borrowings (534,000) (363,000) Trade and other payables [Note 5] (569,965) (307,368) Total current liabilities (1,103,965) (670,368) Total liabilities (1,103,965) (670,368) Net liabilities (728,446) (641,988) Equity attributable to owners of the parent Share capital [Note 6] 2,262,980 2,262,980 Share premium reserve 3,951,948 3,951,948 Accumulated losses (6,943,374) (6,856,916) Total equity (728,446) (641,988)
Audited Consolidated Statement of Cash Flow for the year ended 31 December 2010
2010 2009 £ £ Cash flows from operating activities Operating loss (86,458) (215,009) Increase in inventories (118) (120)
(Increase)/decrease in trade and other receivables (300,323) 45,222
Increase/(decrease) in trade and other payables 262,597 (219,796) Cash used in operating activities (124,302) (389,703) Cash flows from financing activities Increase in borrowings 171,000 363,000
Net increase/(decrease) in cash and cash equivalents 46,698 (26,703)
Cash and cash equivalents at beginning of year 2,345 29,048 Cash and cash equivalents at end of year 49,043 2,345 Cash and cash equivalents comprise: Cash available on demand 49,043 2,345 Audited Consolidated Statement of Changes in Equity for the year ended 31December 2010 Share Share Accumulated capital premium losses Total £ £ £ £ At 1 January 2009 2,262,980 3,951,948 (6,641,907) (426,979) Total comprehensive income for - - (215,009) (215,009)the year At 1 January 2010 2,262,980 3,951,948 (6,856,916) (641,988) Total comprehensive income for - - (86,458) (86,458)the year At 31 December 2010 2,262,980 3,951,948 (6,943,374) (728,446)
Share capital is the amount subscribed for ordinary shares and deferred shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal value of these shares net of share issue expenses.
Accumulated losses represent cumulative losses of the Group attributable to equity holders.
Notes to the Audited Preliminary Results for the year ended 31 December 2010
1 Basis of preparation
This announcement of the financial results has been prepared in accordance with the International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by European Union ("adopted IFRSs"), and are in accordance with IFRS as issued by the IASB.
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2010 and 2009, but is derived from those accounts. Statutory accounts for 2009 have been delivered to the Registrar of Companies and those for 2010 will be delivered following the Company's Annual General Meeting. Auditors have reported on those accounts; their reports were unqualified. Their report for 2009 did not contain a statement under s237(2) or s237(3) of the Companies Act 1985 and their report for 2010 did not contain a statement under s498(2) or s498(3) of the Companies Act 2006. The auditors' report on the accounts for 31 December 2009 referred to a matter concerning the company's ability to continue as a going concern to which the auditors' drew attention by way of emphasis without qualifying their opinion.
Going concern
During the year ended 31 December 2010 the Group incurred a loss of £86,458 (2009: £215,009) and at 31 December 2010 had net liabilities of £728,446 (2009: £641,988).
In reaching a decision as to whether the Company remains a going concern, the Directors have given due regard to the following factors:
* During 2010, the Group entered into a 10 year licence agreement with SL Investment Management Limited ("SL"), which will generate significant revenue and cash for the Group in 2011. The licence agreement remains in place until at least 30 April 2012, at which point sufficient revenue and cash will have been generated to take the Group to a net asset position and enable the Group to meet its liabilities as they fall due for the foreseeable futures * The current financial position of SL
On the basis of the above, and all other available information, the Directors consider that it is appropriate to prepare the financial statements on the going concern basis.
2 Loss per share
The calculation of the basic and diluted loss per share is based upon:
2010 2009 Basic and diluted loss per share (pence) (0.02)p (0.05)p Loss attributable to equity shareholders £(86,458) £(215,009) Number Number Weighted average number of shares 399,999,999 399,999,999
The options, warrants and deferred shares in issue at the 31 December 2009 and 31 December 2010, which are disclosed in note 6, are antidilutive and have therefore been excluded from the calculation of diluted earnings per share. However, such options may be dilutive in future periods.
3 Dividends
The Directors are not proposing the payment of a dividend in respect of the year ended 31 December 2010.
4 Trade and other receivables
2010 2009 £ £ Trade receivables 295,736 523 Other receivables 6,902 - Prepayments and accrued income 20,435 22,227 323,073 22,750
5 Trade and other payables: amounts falling due within one year
2010 2009 £ £ Trade payables 199,980 58,616 Other payables 3,500 3,500 Creditors for taxation and social security 86,035 160,063 Accrued liabilities and deferred income 280,450 85,189 569,965 307,3686 Share capital 2010 2009 2010 2009 Number Number £ £ Authorised
Ordinary Shares of 0.01p 1,000,000,000 1,000,000,000 100,000 100,000 each
Deferred shares of 0.99p 400,000,000 400,000,000 3,960,000 3,960,000each 4,060,000 4,060,000 Allotted, called up and fully paid Ordinary Shares 0.01p 399,999,999 399,999,999 40,000 40,000each Deferred shares of 0.99p 224,543,426 224,543,426 2,222,980 2,222,980each 2,262,980 2,262,980 Ordinary Shares Deferred shares Number £ Number £ Share capital at 1 399,999,999 40,000 224,543,426 2,222,980January 2010 New share capital issued - - - - Share capital at 399,999,999 40,000 224,543,426 2,222,980 31 December 2010
Details of the two equity settled share option schemes are shown below:
Exercise period Number of Exercise From To shares under price option Enterprise Management Incentive Scheme 1,027,879 3p 16.02.2004 16.02.2011 600,000 8p 06.09.2004 06.09.2011 582,818 10p 16.02.2004 16.02.2011 1,500,000 12p 06.09.2004 06.09.2011 3,710,697 Unapproved Share Option 200,000 8p 24.08.2004 24.08.2011Plan 3,910,697
There were no changes to the number of options in issue in either the current or prior period.
On 14 March 2007, each of the 224,543,426 issued Ordinary Shares of 1p each in the Company was subdivided into one Ordinary Share of 0.01p each and one deferred share of 0.99p each credited as fully paid.
On 15 March 2007, the Company issued 175,456,573 Ordinary Shares of 0.01p each at a premium of 0.19p per share.
The main rights and restrictions attaching to the deferred shares are as follows:
• no entitlement to receive dividends or other distributions;
• no entitlement to receive notice of or attend of vote at any general meeting of the Company; and
• on a return of capital on a winding in the holders of deferred shares shall only be entitled to receive the amount paid up on such shares after the holders of the Ordinary Shares have received the sum of £1,000,000 for each Ordinary Share held by them and shall have no other right to participate in the assets of the Company.
There were no changes to the number of options in issue in either the current or prior period.
On 14 March 2007, the Company issued warrants to subscribe for up to 35,000,000 Ordinary Shares in cash at 0.2p per share. Each warrant confers on the warrantholder the right to subscribe in cash for Ordinary Shares to be issued to the warrant holder or such person as the warrantholder may direct. The warrants are not intended to be listed or dealt on any recognised investment exchange. Ordinary Shares issued on exercise of warrants will qualify for all dividends and distribution declared, made or paid after their date of issue.
The warrants may only be exercised upon certain performance criteria being met criteria in each of any two consecutive financial years over the five years commencing 1 January 2007 and ending 31 December 2011. No cash was received for the warrants and therefore no charge to the statement of comprehensive income statement arises under IFRS 2.
The warrants may be exercised in whole or in part or in parts. The exercise price of the warrants must be paid at the time the rights are exercised.
Any rights not exercised prior to 30 June 2012 will lapse on that date.
7 Copies of the final results for the year ended 31 December 2010 will be sent to shareholders shortly and will be available from the Company's office at 12 Grosvenor Court, Foregate Street, Chester CH1 1HG and are available for download from the Company's website www.tepexchange.com
Further enquiries:TEP Exchange Group plc David Roxburgh 00 353 87 2431 665 Merchant Securities Limited John East/Simon Clements 020 7628 2200
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