Vela Technologies plc

("Vela" or the "Company")

Final results for the year ended 31 March 2015

The Board of Vela (AIM: VELA), the investing company focused on early-stage and pre-IPO disruptive technology investments, is pleased to announce the Company's results for the year ended 31 March 2015.

Highlights:

·        Further investment of £150,000 in Portr, the owner of on-line airport luggage transfer service, Airportr

·        Investment of £100,000 in Social Superstore which is developing an online retail / social media platform

·        Investment of £40,344 in 3Legs Resources, a cash shell at the time of investment

·       £300,000 raised by way of a placing, supported by new and existing investors as well as management

Brent Fitzpatrick, Non-Executive Chairman of the Company, commented "During this last financial year the Board were able to announce positive news from within our portfolio as some of our investee companies started to demonstrate that their potential value is materially higher than the value at the time of our investment. This has continued into the current year, with more valuation events from within the portfolio.

"We look forward to updating shareholders further in due course. In the meantime, based either on valuation events or the market value of portfolio investments, the board of Vela believes the value of the underlying portfolio is significantly higher than the value attributed by the market to Vela at this current time"

A copy of the annual report and accounts has been posted to shareholders, along with notices convening:

·        an annual general meeting, to be held at the offices of Allenby Capital Limited, 3 St. Helen's Place, London EC3A 6AB at 10.00am on 25 September 2015; and

·        a general meeting, to be held at the offices of Allenby Capital Limited, 3 St. Helen's Place, London EC3A 6AB at 10.00am on 18 September 2015.

A copy of the audited accounts and meeting notices will shortly be available for download from the Company's website, www.velatechplc.com.

For further information please contact:

chairman's statement

for the year ended 31 March 2015

It is with pleasure that I present the annual report to shareholders for the year ended 31 March 2015.

The year has been one of strong progress among most of Vela's investments notably, Portr Limited, StreamTV Networks Inc and Disruptive Tech Limited. It has also been a year of considering many potential investments that might fit with our policy of investing in businesses that, the directors believe, have the potential to disrupt the natural manner in which that business might have operated. As a result we have made two further investments recently, in 3Legs Resources towards the end of the financial year and, more recently, in Revolve Performance Limited ("Revolve Technologies").

Towards the end of the financial year we raised additional funds to support further investments. As part of this Vela has a number of new shareholders who are supportive of what we are doing and understand the potential for a very significant uplift in the value of our investments in the future.

Since the update provided to the market in April we have invested in Revolve Perfomance. Revolve Performance is a profitable powertrain and performance engineering group that owns the leading performance parts brand, Mountune. The Mountune division, whose products are used by consumers and racing teams to enhance engine performance, has grown rapidly in the UK as well as in the US, where it was launched in 2013, with exclusive access to the Ford dealership network in both territories.

Summary of investment portfolio

The Company's investment portfolio consists of the following investments:

·      Portr Limited - a private UK Company that is the owner of an on-demand airport luggage transfer service, AirPortr. Portr employs leading-edge technology across its web booking platform and logistics engine in the development of convenience-orientated services for customers.

·      StreamTV Networks Inc. - a private US Company that has developed a technology called Ultra-D that enables the viewing of 3D media without glasses and from any angle.

·      Disruptive Tech Limited - a private technology investment business focusing on companies that can "disrupt" and which owns and manages investments in six technology businesses.

·      3Legs Resources plc (AIM: 3LEG) - AIM quoted investing Company that adopted an investment policy to invest in and/or acquire companies within the technology sector or within the resources sector where a resource can be brought into production through the application of modern technologies.

·      Advance Laser Imaging Limited - a private Company which uses laser scanning hardware and software applications to produce 360 degree 3D images and models.

·      Rosslyn Data Technologies plc (AIM: RDT) - AIM quoted Company whose cloud-based service provides a fast and efficient way for Companies to use and understand their data.

·      The Social Superstore Limited - a private Company developing an online social commerce platform with a view to full launch in the UK towards the end of 2015.

·      Imaginatik plc (AIM: IMTK) - AIM quoted Company which is the world's first full service innovation provider offering a range of technology products and consultancy.

At 31 March 2015, the Company had estimated cash balances of £156,000 (based on unaudited management accounts) reflecting the recent investments made.

Update on investment portfolio

There have been a number of significant developments within the Company's portfolio in recent months. The following summary includes a number of updates recently provided by the investee companies to the board of Vela.

Portr Limited ("Portr") (£200,000 invested, 4.4 per cent. equity interest)

Portr, the owner of on-demand airport luggage transfer service, AirPortr, reported an encouraging initial nine months of trading since launching its first location, London City Airport ("London City"), in the summer of 2014.

Since launching this new way to travel, thousands of passengers flying via London City have embraced the concept of travelling around the city without their luggage in tow, while it is delivered between their London location and the airport same day, something Portr calls "Luggage Freedom". During this period Portr can report an unblemished record with every item delivered on or before time. In addition to this the company has seen a high percentage of repeat journeys by users (20% of deliveries are repeat customers) particularly amongst frequent business travellers. In addition to this Portr's user base is more diverse than originally anticipated with stronger than expected demand from leisure travellers and London residents, when the service was originally predominantly targeting the foreign inbound business traveller market, staying in hotels.

Shortly after launching the Standard AirPortr delivery service, Portr announced a collaboration with British Airways in delivering a first of its kind Carousel Collection and Delivery service, enabling arriving passengers to also skip the wait at the baggage reclaim. AirPortr's mobile airport Concierges can now collect and clear passengers' luggage direct from the baggage reclaim before delivering into London within hours, an experience British Airways named 'Land & Leave'. Having been initially trialled with British Airways Executive Club on two key domestic routes the service was recently rolled out onto all domestic routes for all British Airways passengers following positive feedback, which:

·      helped reduce travel costs with frequent business travellers opting to use public transport when alleviated of their bags;

·      enabled quicker and easier travel around London, driving productivity; and

·      resulted in journey time savings of up to an hour, allowing passengers to either fit in another meeting or catch a later flight into London City.

Portr has made a Border Force policy submission in a bid to now extend this service to EU arrivals; something the Company is hoping to secure clearance for later this year, with a report having been produced by senior security and border experts endorsing the service due to its ability to enhance border integrity with the advanced technology developed and deployed by Portr. British Airways has confirmed that it plans to extend the service (Carousel Collection) to international destinations within Europe when such clearance can be obtained.

Following proof of concept and service delivery at London City, Portr progressed plans with two additional London airport locations for the roll out of AirPortr.  On 27 July 2015 Portr announced it was launching its service at Gatwick airport.

In line with Portr's expansion and rollout in larger London airports, to support a number of 'superbrand' partnerships such as British Airways and a pipeline of product development further simplifying the end-to-end passenger journey, Portr announced a £3 million Series A funding round at the end of 2014. Having secured the backing of existing shareholders, new angel investors and a well-known venture capital trust, Portr expects to announce completion of the round in the coming weeks giving a post-money valuation of £15 million.

StreamTV Networks Inc. ("StreamTV") ($100,000 invested by way of convertible loan note)

StreamTV has developed a technology called Ultra-D that enables the viewing of 3D media without glasses and from any angle. As a licensing type business model, StreamTV is expected to generate positive cash flow once its licensing partners commence small sales.

In October 2013 Vela made a minority investment of $100,000 in StreamTV by way of a convertible loan note. The loan notes accrued interest at the rate of 12% annually until 31 December 2014 and are currently accruing interest at the rate of 13% annually. The final maturity date on the loan notes is 31 December 2015.

StreamTV has made a number of operational developments over recent months. New machinery to enable sophisticated gluing of the 3D optical system to the underlying 2D panel was deployed in China and is running effectively. Two automated machines, with a higher capacity and higher yields, have been ordered. The intention is for one machine to be deployed in Q2 2015 and the other in Q3 2015. The automated machines will be housed at StreamTV's large manufacturing partner's facility to establish the foundation for scaling the volume of production.

StreamTV has formally commenced its next round of capital raise. The capital raise is primarily earmarked for enabling cost-downs for the devices and allow more vertical business opportunities to be commenced much sooner than by way of using only operational cash flow.

Just as StreamTV had expected, the fact that it is are close to producing and entering the TV/display market has accelerated interest in their tablet device opportunity. The company had a tablet sample based on its 3D Ultra-D technology at the Consumer Electronics Show in Las Vegas this past January. However the company has since improved that sample with even newer optics and the company is in discussions about a possible collaboration with one of the largest tablet makers globally.

StreamTV is also in ongoing discussions with critical component suppliers who are providing support and important product improvements. The company now engages directly with a large global chip company to provide a supply of a type of chip called an FPGA, rather than engaging with distributors, and this has reduced the order lead times.

StreamTV is also in discussions with a number of other partners including an Asian-based chip company that supplies chips used for TVs and who have informed StreamTV that they would seek to allow them access to their latest chips to integrate into their devices. This opportunity would help strengthen StreamTV's foothold in the TV industry and allow increased TV-type functionality than is currently experienced in the current models.

In summary, operations and capital efforts are all on track to establish a good foundation for manufacturing operations in China this summer and generate sales through the second half of the year. The goal for 2015 is that the Company's 2015 Ultra-D technology  creates technology awareness in each marketplace from early sales and also establishes, through its partners, a solid manufacturing base of operations so that 2016 can yield a steady and fast paced sales growth.

Disruptive Tech Limited ("DTL") (£250,000 invested, 0.63 per cent. equity interest)

DTL invests in technology businesses that have the potential to disrupt, typically investing alongside seasoned entrepreneurs who have been successful in their marketplaces previously.

Vela originally acquired 262,090 Ordinary Shares in eSeekers Limited for £250,000.  Following an agreed corporate restructuring, the Company ended up with an equivalent interest in DTL, a Gibraltar-based technology-focused investing Company.

DTL has a portfolio of 6 investments, including Nektan plc (13%), VNU Holdings (65%) and Freeformers (5%).  The normal timeframe for investments is 3 to 4 years following which DTL looks to exit an investment and dispense proceeds back to shareholders.

It is currently anticipated that the process of divesting of investments, which commenced with the listing of Nektan on AIM in November 2014, will continue, which could result in a significant uplift in the value of the DTL portfolio.

3Legs Resources plc ("3Legs") (£40,344 invested, 4.41 per cent. equity interest)

3Legs is an Isle of Man incorporated investing Company whose shares are traded on AIM. In February 2015, 3Legs completed a corporate reorganisation which included the adoption of a new investing policy to invest in and/or acquire companies within the technology sector or within the resources sector, particularly where a resource can be brought into production through the application of modern technologies.

Between 27 February 2015 and 25 March 2015, Vela acquired a total of 19,000,000 shares in 3Legs at an average price of 0.21 pence per share for a total consideration of £40,344.

As at the period end Vela's interest in 3Legs was valued at £62,700 (as referenced to 3Legs's closing mid-market share price on 31 March 2015).

Since the period end, on 13 May 2015, the Company acquired a further 4,500,000 shares in 3Legs at a price of 0.215 pence per share.  The Company's resultant holding in 3Legs is 23,500,000 shares, representing 5.42% of the total voting rights of 3Legs. Vela's shareholding in 3Legs has been acquired at an average price of 0.213 pence per share for a total consideration of approximately £50,090

Advance Laser Imaging Limited ("ALI") (£75,000 invested, 6.25 per cent. equity interest)

Vela made a £75,000 investment in ALI in September 2013, a Company which uses laser scanning hardware and software applications to produce 360 degree 3D images and models. Such images can be created for anything from small components or pieces of forensic evidence at a micron level, up to buildings, industrial plants or areas of a town and can be utilised and manipulated to view scenes from multiple perspectives at varying levels of detail, without any further scanning or photography. The 3D scenes are used in crime scene investigations and specialist techniques are used to establish anything from bullet trajectory to suspect biometric information. The technology also has a number of applications for counter terror, resilience and safer cities.

There are markets in both the private and public sectors including the military, property development and services, police/blue light services, architecture, insurance and legal services, both in the UK and abroad.

ALI raised £300,000 in September 2013 to launch the business and is in the process of raising additional funds to invest in further research and development into new products and applications in both core and new markets.

ALI won its first commercial contract in December 2013 and the company has subsequently begun to generate revenues. With the company's low cost base, ALI is currently cash flow positive as they continue to penetrate further into existing markets and open up new markets. The Company is focused on developing the forensic and counter terrorism policing market in the UK but also establishing a high value business in very specific export markets in the Middle East and the United States over the next year.

Rosslyn Data Technologies plc ("Rosslyn" or "RDT") (£130,226 invested, 0.53 per cent. equity interest)

The Company invested £100,000 in October 2013 in Rosslyn Analytics Ltd, RDT's main operating subsidiary in the UK. Rosslyn was the first of the Company's investment portfolio to achieve a flotation having floated on AIM in April 2014. Subsequent to the flotation of RDT, Vela invested a further £30,226 in Rosslyn and, as at the date of this announcement, Vela owns 403,368 shares in RDT.

RDT's cloud-based service provides a fast and efficient way for companies to use and understand their data. The Company recently announced a new major partnership in the US higher education sector.

The Company's holding in RDT was valued at the period end at £47,920 (as referenced to Rosslyn's closing mid-market share price on 31 March 2015).

The Social Superstore Limited ("The Social Superstore") (£100,000 invested, 2.5 per cent. equity interest)

In May 2014 Vela made an investment of £100,000 in the £1m seed funding of The Social Superstore, valuing the Social Superstore at £4m.

The Social Superstore is developing a peer to peer platform allowing users to recommend products to their friends and gain rewards for doing so and is aiming to combine online retailing with social media in a unique way. The Social Superstore continues to build its social commerce platform with a view to full launch towards the end of 2015, initially in the UK. There are a number of key user groups that have been identified and who the Company has access to.

The Directors of The Social Superstore continue to believe that social commerce represents a significant opportunity which has not been fully exploited by a single Company.

Imaginatik plc ("Imaginatik") (£35,000 invested, 0.67 per cent. equity interest)                                       

The Company invested £35,000 in Imaginatik in April 2014. Imaginatik is an AIM quoted Company that provides a range of innovation solutions comprised of consultancy, enterprise software and program management to deliver innovation results to companies such as The World Bank, The Chubb Group of Insurance Companies, State Farm, Exxon Mobil, Pfizer, Goodyear, the Yorkshire Building Society, Pitney Bowes and Cargill.

Vela sold the following shares in Imaginatik;

14 April 2015 sold 100,000 at a price of 3.625 pence per share for a consideration of £3,585

12 June 2015 sold 225,000 at a price of 3.000 pence per share for a consideration of £6,699

15 June 2015 sold 200,000 at a price of 3.000 pence per share for a consideration of £5,955

As at the date of this announcement Vela has no interest in Imaginatik.

Post period end and outlook

On 28 August 2015 the Company announced that it had conditionally raised £250,000 via a placing at 0.2 pence. It is the intention of the Board to invest approximately £175,000 of the net proceeds of the Placing to acquire an equity stake in Blockchain Tech Limited ("BTL"), a technology company incorporated in the Isle of Man. BTL, headquartered in Vancouver, Canada, is exploring applications of blockchain technology in a variety of existing industries, including money transmission, insurance, voting and smart contracts. BTL's current focus is on developing a remittance solution, Interbit, as well as providing consultancy services to firms looking to leverage blockchain technology. Interbit, based in London, is developing blockchain technology to offer remittances to up to 20 countries at competitive prices against the costs of existing remittance services. This investment is conditional on the passing of certain resolutions at the Company's upcoming general meeting and on the completion of the acquisition of BTL by Northern Aspect Resources Ltd, further details of which were previously announced by Vela.

Quoted investments

The valuation of the quoted investments held by Vela Technologies Plc as stated in these financial statements as at 31 March 2015 is summarised as follows:

Your Directors will continue to review projects where we believe value can be created for the benefit of shareholders

Nigel Brent Fitzpatrick MBE

Non-Executive Director

statement of comprehensive income

for the year ended 31 March 2015

balance sheet

as at 31 March 2015

These financial statements were approved by the Board, authorised for issue and signed on their behalf on 2 September 2015 by:

Nigel Brent Fitzpatrick MBE

Non-Executive Director

Company registration number: 03904195

cashflow statement

for the year ended 31 March 2015

statement of changes in equity

for the year ended 31 March 2015

notes to the financial statements

for the year ended 31 March 2015

1 Revenue and segmental information

The Company is an investment Company and as such there is only one identifiable operating segment, being the holding and support of investments.  Furthermore the Company operates in a single geographic segment being the United Kingdom.  The results and balance and cashflows of the segment are as presented in the primary statements.  Revenue received in the period under review represents the accrued value for interest receivable from loan notes held in Stream TV Networks.

2 Loss from operations

Loss from operations is stated after charging:

3 Staff costs

The average number of persons employed by the Company (including Directors) during the period was as follows:

The aggregate payroll costs for these persons were as follows:

4 Directors and senior management

Directors' remuneration

Directors' and senior management's interests in shares

The Directors who held office at 31 March 2015 held the following shares:

The total share-based payment costs in respect of options granted are:

On 8 April 2014 the Company announced that it granted options over a total of 8,235,294 ordinary shares of 0.1 pence each ("Ordinary Shares") representing approximately 3.7 per cent of the Company's issued ordinary share capital at the time of the grant, at an exercise price of 0.85 pence per share. The options were granted equally (4,117,647 each with a total exercise price of £35,000 per Director) to Directors, Brent Fitzpatrick and Antony Laiker, and vest as to one third on grant and one third on each of the first and second anniversaries of grant. They are not subject to any performance conditions and will lapse 7 years from the date of grant.

The exercise price of the options is at a discount of 38.2 per cent. to the mid market price on 8 April 2014 of 1.375p per share and at a premium of 70 per cent. to the Company's most recent placing announced on 25 March 2014.

On 2 October 2014 the Company announced that it granted options over a further 4,000,000 ordinary shares of 0.1 pence each, representing approximately 1.6 per cent of the Company's issued ordinary share capital at the time of the grant, at an exercise price of 0.325 pence per share. The options were granted equally to the Directors, taking their holding to 6,117,647 options each as at 31 March 2015. The options vest as to one third on grant and one third on each of the first and second anniversaries of grant. They are not subject to any performance conditions and will lapse 7 years from the date of grant.

The options have been valued using the Black-Scholes method and the appropriate charge made to the financial statements during the year under review. Further details regarding the valuation methodology are provided in note 13 to the financial statements.

5 Tax

A deferred tax asset relating to losses carried forward has not been recognised due to uncertainty over the existence of future taxable profits against which the losses can be used.  The Company has unused tax losses of £4,010,000 (2014: £3,736,000).

Tax reconciliation

6 Earnings per share

Earnings per share has been calculated on a loss after tax of £303,000 loss (31 March 2014: £118,000 loss) and the weighted number of average shares in issue for the year of 263,087,300 (31 March 2014: 122,943,751 weighted).

Reconciliation of the profit and weighted average number of shares used in the calculations are set out below:

7 Investments

IPO of Rosslyn Analytics

On 8^th May 2014 the Company announced the successful flotation on AIM of Rosslyn Data Technologies plc on 29^th April 2014, a Company in which it holds a £100,000 investment.  On 12 June 2014 the Company invested a further £30,226 into Rosslyn Data Technologies Plc.  Rosslyn is the first investment of the Company to achieve flotation and the Directors are confident that the IPO enhances the prospects of Rosslyn going forward. 

Further investment in Portr

On 12^th May 2014, the Company announced a further investment of £50,000 by way of a cash subscription for 17,235 new ordinary shares of 0.01p each in investee Company, Portr. The additional investment by Vela is part of a £500,000 funding round by Portr at a price of some 290p per share and brings Vela's total investment in Portr to £100,000, with an enlarged shareholding of 49,731 shares representing approximately 2.9 per cent of Portr's enlarged issued share capital.

Investment in The Social Superstore Limited ("Social Superstore")

On 22^nd May 2014 the Company announced an investment of £100,000 in the £1m series B funding of The Social Superstore Limited, a social commerce platform which is being built with a view to launch in Q4 2014, initially in the UK. This funding will be applied to building the back end of the platform and places a pre-money valuation on The Social Superstore of £3m, giving Vela a 2.5 per cent.interest.

Further acquisition of interest in Portr and issue of equity

On 24^th July 2014 the Company announced the acquisition of a further 38,314 shares in Portr for a consideration of £100,000 which has been wholly satisfied  through the issue of 20,000,000 new ordinary shares in Vela (the "Consideration Shares") at 0.5 pence per share (the "Transaction").  The vendor of the 38,314 shares in Portr is John Garner. The 20,000,000 Consideration Shares were admitted to trading on AIM ("Admission") on 31^st July 2014. Following completion of the Transaction Vela will have an enlarged shareholding of 87,685 shares in Portr representing approximately 5% of Portr's issued share capital.

Following the issue of the Consideration Shares, John Garner is interested in 20,000,000 ordinary shares in the Company representing 4.36% of the issued share capital in the Company.

Investment in 3Legs Resources plc ("3Legs")

On 10^th March 2015 the Company announced an investment of £36,875 in 3Legs.  The Company acquired a total of 17,500,000 existing ordinary shares in 3Legs (AIM: 3LEG) at an average price of 0.212 pence per share. Vela's holding of 19,000,000 shares in 3Legs represents 4.06% of the total voting rights of 3Legs.

3Legs is an Isle of Man incorporated investing Company whose shares are traded on AIM. In February 2015, 3Legs completed a corporate reorganisation which included the adoption of a new investing policy to invest in and/or acquire companies within the technology sector or within the resources sector, particularly where a resource can be brought into production through the application of modern technologies. As part of the above reorganisation, 3Legs raised £800,000 through a subscription for new ordinary shares at a price of 0.232 pence per share which valued 3Legs at approximately £1 million with the funds to be used by 3Legs in connection with the implementation of the new investing policy.

The shares in 3Legs were acquired in the market by Vela between 27 February 2015 and 9 March 2015 as follows:

8 Trade and other receivables       

9 Trade and other payables

10 Share capital

Allotments during the period

The Company allotted the following ordinary shares during the year/period:

10 Share capital

On 30 July 2014 the Company issued 20,000,000 new ordinary shares of 0.1p each for consideration for an investment in Portr at a price of 0.5p per share, totalling £100,000.

On 31 July 2014 the Company issued 7,000,000 new ordinary shares of 0.1p each to a consultant in lieu of fees.  The shares were issued at a price of 0.5p per share, totalling £35,000.

On 2 October 2014 the Company issued 6,000,000 new ordinary shares of 0.1p each in settlement of certain Directors fees.  The shares were issued at 0.4p each, totalling £24,000.

On 13 February 2015 the Company issued 4,000,000 new ordinary shares of 0.1p each in settlement of certain fees for Mr Antony Laiker, a Director of the Company.  The shares were issued at 0.15p each, totalling £6,000.

On 2 October 2014 the Company placed 200,000,000 new ordinary shares of 0.1p each.  The shares were issued at 0.15p each, totalling £300,000. Mr Antony Laiker, a Director of the Company, subscribed for 15,000,000 of the placing shares.

11 Cash and cash equivalents

Cash and cash equivalents comprise the following:

12 Financial instruments

The Company uses various financial instruments which include cash and cash equivalents and various items such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company's operations and manage its working capital requirements.

The fair values of all financial instruments are considered equal to their book values. The existence of these financial instruments exposes the Company to a number of financial risks which are described in more detail overleaf.

The main risks arising from the Company financial instruments are currency risk, credit risk and liquidity risk. The Directors review and agree the policies for managing each of these risks and they are summarised overleaf. The Company does not have sales ledger facility on which interest is charged at a variable rate. The Directors, therefore, do not consider the Company to be exposed to material interest rate risk.

Currency risk

There was minimal exposure to foreign exchange fluctuations to 31 March 2015, and as such sensitivity analysis has not been presented.

Credit risk

This section along with the liquidity risk and capital risk management sections below also form part of the strategic report.

The Company's exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date, as summarised below:

The Company's management considers that all of the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality.

None of the Company's financial assets are secured by collateral or other credit enhancements.

The Company is required to report the category of fair value measurements used in determining the value of its investments, to be disclosed by the source of its inputs, using a three-level hierarchy. There have been no transfers between Levels in the fair value hierarchy.

Quoted market prices in active markets - "Level 1"

Inputs to Level 1 fair values are quoted prices in active markets for identical assets.  An active market is one in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis.  The Company has three investments classified in this category. The aggregate historic cost of the three investments is £199,972 and the fair value as at 31 March 2015 was £127,683, giving rise to a net loss of £72,289 charged to Other Comprehensive Income.

Valued using models with significant observable market parameters - "Level 2"

Inputs to Level 2 fair values are inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly.  The Company has one unquoted investment classified in this category. The historic cost of this investment is £200,000 and the fair value as at 31 March 2015 was £525,444, giving rise to a gain of £325,444 credited to Other Comprehensive Income. The investment was valued using the transaction price ascribed to the shares following a placing by the investee Company in February 2015.

Valued using models with significant unobservable market parameters - "Level 3"

Inputs to Level 3 fair values are unobservable inputs for the asset.  Unobservable inputs may have been used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date (or market information for the inputs to any valuation models).  As such, unobservable inputs reflect the assumptions the Company considers that market participants would use in pricing the asset.  The Company has four investments that fall into this category.

Liquidity risk

The Company maintains sufficient cash to meet its liquidity requirements. Management monitors rolling forecasts of the Company's liquidity on the basis of expected cash flow in accordance with practice and limits set by the Company. In addition, the Company's liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet these.

Maturity analysis for financial liabilities

Capital risk management

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. This is achieved by making investments commensurate with the level of risk. The Company is performing in line with the expectations of the Directors.

The Company monitors capital on the basis of the carrying amount of equity.

The Company policy is to set the amount of capital in proportion to its overall financing structure, i.e. equity and long-term loans. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares or loan notes, or sell assets to reduce debt.

13 Share-based payments

During the year 12,235,294 options were issued to the Directors of the Company. The options were issued in two tranches, with 8,235,294 issued on 8 April 2014 and 4,000,000 issued on 2 October 2014. The fair values of the options granted during the year were determined using the Black Scholes valuation model. The model has been applied to each issue of options incorporating the share price prevailing at the time the options were granted.

The model takes into account volatility rates of 74.23% at 8 April 2014 and 95.16% at 2 October 2014, which have been derived from historical experience. A weighted average risk-free interest rate of 2.0% has been applied. The share price was 1.5 pence as at 8 April 2014 and 0.325 pence as at 2 October 2014 and the exercise prices of the options were 0.85 pence and 0.325 pence at 8 April 2014 and 2 October 2014 respectively.

The options are not subject to any performance conditions and will lapse 7 years from the date of grant.  All share options granted during the year are equity settled.

The amount of remuneration expense in respect of the share options granted amounts to £107,000 (period ended 31 March 2014: £nil).

The inputs to the option pricing model are as follows:

There were no share options in existence at the start of the year. During the year 12,235,294 options were granted, as described above, and no options were exercised, forfeited or cancelled.

As at 31 March 2015 there were 8,235,294 options in issue with an exercise price of 0.85 pence and 4,000,000 with an exercise price of 0.325 pence.

14 Related party transactions

During the period the Company entered into the following related party transactions. All transactions were made on an arm's length basis

Ocean Park Developments Limited

Nigel Brent Fitzpatrick, Non-Executive Director, is also a Director of Ocean Park Developments Limited.  During the year the Company paid £21,000 (31 March 2014: £12,000) in respect of his Directors fees to the Company.  The balance due to Ocean Park Developments Limited at the year end was £nil (31 March 2014: £nil)

Risk Alliance Insurance Brokers Limited

Nigel Brent Fitzpatrick, Non-Executive Director, is also a Director of Risk Alliance Insurance Brokers Limited.  During the year the Company paid £5,830 (31 March 2014: £3,975) in respect of insurance fees at arm's length, for the Company.  The balance due to Risk Alliance Insurance Brokers Limited at the year end was £nil (31 March 2014: £nil)

Widdington Limited

Antony Laiker, Director, is also a Director of Widdington Limited.  During the year the Company paid £23,000 (31 March 2014: £nil) in respect of his Directors fees to the Company.  The balance due to Widdington Limited at the year end was £nil (31 March 2014: £nil).

15 Events after the balance sheet date

Further investment in 3Legs Resources Plc

On 13^th May 2015 the Company acquired a further 4,500,000 shares in 3Legs at a price of 0.215 pence per share.  The Company's resultant holding in 3Legs is 23,500,000 shares, representing 5.42% of the total voting rights of 3Legs. Vela's shareholding in 3Legs has been acquired at an average price of 0.213 pence per share for a total consideration of approximately £50,090

Investment in Revolve Performance

On 19^th June 2015, the Company announced it had invested £50,000 in Revolve Performance.  Revolve Performance is a newly incorporated Company that has acquired 100% of the share capital of Nitec Limited, a non-operating holding Company that owns 100% of the UK operating Company, Revolve Technologies Limited ("Revolve Technologies"), and 91% of Mountune LLC, the US operating Company.

Revolve Performance has raised £1.5 million through an equity investment to support expansion in the US and £1.5 million through a loan investment which will be used mainly to refinance existing debt and capital expenditure in the UK. Vela has invested £50,000 in the equity investment round for a minority interest in the share capital of Revolve Performance.

Revolve Performance was incorporated on 17th April 2015 for the purposes of the transaction and has therefore not produced any accounts to date. For the year ended 31 December 2014, Nitec Limited generated revenue of £7.82 million and an operating profit of £0.20 million. Net assets of Nitec Limited as at 31 December 2014 were £2.22 million. Results for the first quarter of 2015 were ahead of internal forecasts with sales at Mountune LLC at record levels and growing.

Extraction of information in this announcement

The financial information, which comprises the statement of comprehensive income, balance sheet, cashflow statement, statement of changes in equity, and related notes to the financial statements, is derived from the full Company financial statements for the year ended 31 March 2015, which have been prepared under European Union endorsed International Financial Reporting Standards (IFRS) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

It does not constitute full financial statements within the meaning of section 434 of the Companies Act 2006. This financial information has been agreed with the auditor for release. The Company's full financial statements (comprising the statement of comprehensive income, balance sheet, cashflow statement, statement of changes in equity, and related notes to the financial statements) will be available for download on the Company's website from 02 September 2015.

The full annual report and financial statements for the year ended 31 March 2015 on which the auditor has given an unqualified report and which does not contain a statement under section 498 of the Companies Act 2006, will be delivered to the Registrar of Companies in due course.

The accounting policies used in completing this financial information have been consistently applied in all periods shown.  These accounting policies are detailed in the Company's financial statements for the year ended 31 March 2015 and will be available for download on the Company's website from 02 September 2015.