TIDMTEX
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 GBP
164,776 (2009: GBP10,334) resulting in a loss from operations of GBP56,797 (2009: GBP
205,840). The loss before and after taxation was GBP86,458 compared to the loss
before and after taxation of GBP215,009 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 GBP20,000 and in addition, SL has been granted
exclusive rights to develop and modify the electronic platform for a quarterly
fee of GBP230,000 ("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 Kynoch
Chairman
28 June 2011
Audited Consolidated Statement of Comprehensive Income for the year ended 31
December 2010
2010 2009
GBP GBP
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
GBP GBP
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
GBP GBP
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 31
December 2010
Share Share Accumulated
capital premium losses Total
GBP GBP GBP GBP
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 GBP86,458
(2009: GBP215,009) and at 31 December 2010 had net liabilities of GBP728,446 (2009:
GBP641,988).
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 GBP(86,458) GBP(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
GBP GBP
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
GBP GBP
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
569,965 307,368
6 Share capital
2010 2009 2010 2009
Number Number GBP GBP
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 3,960,000
each
4,060,000 4,060,000
Allotted, called up and
fully paid
Ordinary Shares 0.01p 399,999,999 399,999,999 40,000 40,000
each
Deferred shares of 0.99p 224,543,426 224,543,426 2,222,980 2,222,980
each
2,262,980 2,262,980
Ordinary Shares Deferred shares
Number GBP Number GBP
Share capital at 1 399,999,999 40,000 224,543,426 2,222,980
January 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 24.08.2011
Plan
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 GBP1,000,000 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
END
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