Daily Internet plc
Annual Report 2012
Company Number 06172239
Contents
---------------------------------------------------------------------------------------------------------------
Introduction & Highlights 2
Chairman's Statement 3
Operational & Financial Review 4
Board of Directors and Senior Managers 6
Report of the Directors 7
Directors' Remuneration Report 9
Statement of the Directors' Responsibilities 11
Report of the Independent Auditors 12
Consolidated Profit and Loss Account 14
Consolidated Balance Sheet 15
Company Balance Sheet 16
Consolidated Cash Flow Statement 17
Notes to the Accounts 18
Corporate Information 30
Notice of Meeting 31
Introduction and Highlights
Strategy
- To become one of the leading providers of Internet hosting solutions to small and medium sized
businesses (SMEs) by focusing on delivering scalable market leading hosting products at competitive pricing
- To continue to extend our range of products and services to provide our customers with a one-stop shop
for all their internet requirements
- To maintain and expand our highly automated system to minimise overheads and maximise efficiency
- To continue to provide a high level of customer service to meet the exacting standards of our business
customers, in order to promote repeat purchase, recommendation by existing customers and maintenance of high
renewal rates
Highlights
2012 2011
---------------------------------------------------------------------------------------------------------
Turnover £ 1,451,246 £1,267,978
Earnings before interest, taxation, depreciation, amortisation and
FRS 20 share based payments £ (140,458) £ (208,283)
Number of customers 61,036 53,213
Number of Active domains 154,072 131,765
Number of Active hosting services 20,581 18,708
---------------------------------------------------------------------------------------------------------
To view the graph associated with this announcement, please open the following link in a new window:
http://media3.marketwire.com/docs/TotalServiceNumbers.jpg
- Revenue up by 14.5% reflecting good organic growth
- Number of active domains up by 16.9%
- Number of active hosting services up by 10.0%
- £124,000 investment in infrastructure
- £51,000 investment in additional staff to enable expansion into the next phase of development
Chairman's Statement
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
I am delighted to present the 31 March 2012 financial results for Daily Internet plc.
Performance Summary
Daily continued to make good progress during the financial year, and as promised in last year's Chairman's
Statement achieved cash flow break even at the operating level in 2012.
The Daily brand continues to be well regarded in the marketplace as demonstrated by continued organic growth
against a backdrop of a flat UK economy. Our continually improving renewal rates are evidence of our ability
to deliver excellent customer service and value.
Daily has now developed a complete portfolio of hosting products, email and domain name registration services
to provide both the small business user and consumer with all their hosting requirements. Our customer base has
continued to grow and from this we have built a recurring revenue base that will provide funding to develop and
maintain the current product set for the foreseeable future.
That effectively was the end of Phase One in our corporate strategy.
Outlook
As companies, large and small, continue to seek improvements in profitability, outsourcing of hosting remains
paramount in a business strategy is an important avenue to deliver savings. With this in mind and with the
increasing public awareness of Cloud hosting and the savings this can deliver to businesses, Daily's Second
Phase, which has already begun, aims to extend its reach into this market and further develop its Managed
Hosting Solutions to excel at and to become a complete one stop outsourcing partner. Such solutions are
expected to bring higher revenue per customer and boost our gross margin.
The management team at Daily will continue to work hard with enthusiasm and energy seeking out new technologies
to further capture market share, increase revenue and consolidate our position; at the same time endeavouring
to seek out accretive acquisitions to enable us to extend our reach into new markets with new brands.
Placing
The Company has today announced the proposed placing of up to £600,000 of new Ordinary Shares at £0.02 (2
pence) per share. Of this, £500,000 has been irrevocably applied for conditional upon obtaining approval from
shareholders to allot the Placing Shares on a non pre-emptive basis pursuant to the offer. The Company has
already received irrevocable commitments from over 55% of shareholders to vote in favour of this proposal.
The Board has considered this carefully and believes that raising this limited amount of funds for the next
stage of growth is in the Company's best interests. The Board is mindful of the dilutive effect the Placing
could have on existing shareholders. We greatly appreciate the support from shareholders from inception, so, in
addition, is offering Shareholders the opportunity to subscribe for new Ordinary Shares pursuant to the Placing
should they so wish.
Conclusion
I take this opportunity to thank all our shareholders for their continued support and to Daily staff for their
passion, dedication and commitment to the company and our customers.
And finally, you will recall that at our AGM on 23 Sept 2008 it was unanimously agreed that all correspondence
from the Board in future should be sent electronically. It is intended that this is the last printed document
that will be sent to you and all future correspondence with shareholders will be by email. Could I therefore
ask you, to ensure that our records are correct, to send by email your name and current email address to
bridget.xiros@daily.co.uk. Thank you.
Michael Edelson
Chairman
23 August 2012
Operational and Financial Review
---------------------------------------------------------------------------------------------------------------
Profit and Loss
2011/12 has been another year of continued revenue growth and reductions in operating loss. Revenue for the
Group reached nearly £1.5 million for the year to 31 March 2012, an increase of 14% compared to the previous
year and operating loss before amortisation, depreciation and costs associated with Daily's second
phase reduced to £88,000 a reduction of 58%.
Daily offers hosting services paid for on a variable subscription basis. Where the subscription is paid for on
an annual basis, sales attributable to future periods are deferred. As such, revenue reported in the accounts
is different to actual cash received. The Group's cash receipts for the year amounted to £1,503,000 compared
to £1,287,000 for the previous year; an increase of 17%. The amount of cash received which has been
deferred to future periods at 31 March 2012 is £283,000.
Marketing along with staff costs represents the majority of our operating expenses. During 2012 we have
continued to improve marketing efficiencies by using social media channels, improving our brand recognition
and increasing our market reputation. 'Word of mouth' business is now a key driver for new sales and customer
acquisition, as such marketing spend for the year reduced by 9% to £224,000 and customer signups increased
by 14% to a total of 60,300 by the end of March 2012.
Focus on excellent customer service and continued systems improvements have driven increased revenue per
operational head. In the coming year we aim to continue to drive additional new sales within our current
product set and maintain our renewal base without incurring additional staff costs.
EBITDA* for the year to 31 March 2012 is reported in the financial statements at £139,000. Included within
this figure are additional costs of £51,000 which are mainly attributable to additional headcount and
have been incurred during the year to facilitate the Group in bringing to market Cloud hosting solutions
and managed services (Daily's Phase 2). The underlying EBITDA on our current product set for comparison
to previous years is £88,000.
To view the graphs associated with this announcement, please open the following link in a new window:
http://media3.marketwire.com/docs/Graphs2.jpg
*EBITDA - Earnings before interest, taxation, depreciation and amortisation
Balance sheet and Treasury
The Group has continued to invest in its infrastructure during the year to 31 March 2012, having spent £124,000
during the year, with a further spend of £43,000 in April 2012, (2011:£25,000) on the maintenance and expansion
of its core products. The total investment at 31 March 2012 in the Group's tangible and intangible fixed assets
amounts to £811,000 (2011:£689,000), these are written down over time in accordance with the Company's
depreciation policy and the fair value of these assets is reported at £192,000 (2011:£136,000).
Net cash outflow from operating activities during the year reduced to £9,000 (2011:£189,000). Cash at bank at
31 March 2012 was ahead of plan at £108,000 (2011:£99,000). A facility of £480,000, which is available until 30
November 2013, has been arranged for working capital requirements, of which £130,000 was drawn down during the
year, with £405,000 utilised in total to 31 March 2012. The Directors are confident that this amount is
sufficient to allow the Group to continue its organic growth and to achieve an overall cash-flow breakeven
position in the current financial year. The proposed share placing will help to accelerate Daily's next phase
of development into Managed Services and Cloud Hosting Solutions. Further fundraising may be required should an
acquisition target become available.
Creditors falling due within one year are reported at £709,000 (2011:£545,000). This figure includes an amount
of £283,000 (2010:£242,000) for deferred revenue which will be released to profit in future years.
Creditors falling due after one year are reported at £708,000 (2011:£554,000). This includes an amount of
£269,000 (2011:£269,000) for the fair value of convertible loan notes which were renewed on 9 January 2012.
Julie Joyce
Finance Director
23 August 2012
Board of Directors and Senior Managers
---------------------------------------------------------------------------------------------------------------
Board
John Michael Edelson - Non-Executive Chairman
Michael Edelson brings a wealth of experience as a Board Director to Daily Internet plc.
He is executive chairman of London & City Credit Corporation Limited and has been on the board of Manchester
United Football Club Limited since 1982. Historically, he has been a director of a number of companies admitted
to trading on AIM, including ASOS plc, Crawshaw Group plc (formerly known as Felix Group plc), Prestbury Group
plc, Chelford Group plc, Knutsford Group plc, Mercury Recycling Group plc and Singer and Friedlander AIM3 VCT
plc.
Furthermore, Mr. Edelson was Non-Executive Chairman of Bramhall plc (subsequently named Host Europe plc), which
acquired Magic Moments Design Limited in September 1999, a company of which Abby Hardoon was an instrumental
founder. Mr. Edelson remained a non-executive Chairman of Host Europe plc until early 2001.
Mr. Edelson's current directorships also include being the non-executive chairmanships of both EXC plc and
Fastnet Oil & Gas plc, both being companies admitted to trading on AIM.
Abby Hardoon - Managing Director
Mr Hardoon, the founding shareholder of Daily Internet plc is a Business Administration graduate from George
Washington University. He was a founder of NETDesign Limited and Magic Moments Internet plc. Following the
admission of Magic Moments to trading on AIM in September 1999 he served as Chief Executive Officer. Magic
Moments was then renamed Host Europe plc and, under Mr Hardoon's leadership, acquired two other Hosting
companies, WebFusion Internet Solutions Limited and One2One Limited. Mr Hardoon successfully grew the combined
business into profitability until it was sold in April 2004 to PIPEX Communications plc for over £30 million.
Julie Joyce - Finance Director
Mrs. Joyce is a Fellow of the Chartered Association of Certified Accountants. She was employed as Finance
Manager of WebFusion Internet Solutions Limited, an Internet Hosting company which was sold to Magic Moments
Internet plc in May 2000. She became Group Financial Controller for Host Europe plc and its group companies and
continued in this role for the SME hosting division of PIPEX Communications plc after the sale to PIPEX in
April 2004. She also has extensive auditing and private practice experience, having spent ten years in this
sector prior to her move into commerce and industry.
Robert Khalastchy - Non-Executive Director
Mr Khalastchy is a graduate from the University of Sussex where he received a degree in Electronic Engineering.
For the past 20 years he has worked in property management. In 2001 he set up RK Management, a property
management company handling a commercial portfolio in excess of £35 million. In 2011 he set up Sterling
Property Management, a residential block property management company which manages several prestigious blocks
in Central and West London.
Senior Managers
Alison Curry-Taylor - Operations Director
Mrs Curry-Taylor worked with WebFusion Internet Solutions Limited since its formation and continued to work for
Host Europe plc post-acquisition. During her tenure with both companies, she successfully directed the growth
of the SME hosting business unit and was responsible for delivering several key projects and products.
Simon Amor - Research & Development Director
Mr Amor worked with WebFusion Internet Solutions Limited and Host Europe plc for nearly 6 years. He was pivotal
in the development of the major systems deployed by Host Europe plc. In addition to his technical contribution
to Host Europe he also successfully managed the Research and Development team.
Report of the Directors
---------------------------------------------------------------------------------------------------------------
The Directors present their Annual Report and Audited Financial Statements for the year ended 31 March 2012.
Principal Activities
The principal activities of the Group during the year were the provision of web hosting, e-mail and
domain name registration services.
Business Review and Future Developments
A review of the Group's operations and performance during the financial year, setting out the position at the
year end, significant changes in the year and providing an indication of the outlook for the future is
contained in the Chairman's Report on page 3 and the Operational and Financial Review on pages 4 to 5.
Principal risks and uncertainty
In line with the nature, size and complexity of the business the senior management team work very closely
to identify and evaluate areas of risk, and to develop and monitor action plans to deal with any potential
threats. All outcomes are reported to the Board and support is given as necessary to ensure actions are
carried out.
Identifiable areas of risk include:
- Moving the Group to a cash flow generative position
- Market pressures on product pricing
- Dependency on key suppliers
- Customer retention
- Best use of marketing spend to maximise growth and profitability
- Optimisation of human resource skills and retention of key members of staff
Results and Dividends
The consolidated Profit and Loss account for the year is set out on page 14. The Directors do not propose
the payment of a dividend for the year ended 31 March 2012.
Directors
The Directors of the Company who held office during the year are as follows:
- Michael Edelson - Chairman
- Abby Hardoon - Managing Director
- Julie Joyce - Finance Director
- Robert Khalastchy - Non-Executive Director
Significant Shareholdings
As of 2 August 2012 the Company has been notified of the following significant shareholdings:
%
---------------------------------------------------
Abby Hardoon 32.1
Pentagon Sterling Satellite Fund Limited 7.2
Loeb Aron & Company Ltd and connected persons 7.1
---------------------------------------------------
Employees
It is the policy of the Group that there should be no unfair discrimination in recruiting and promoting
staff, including applicants who are disabled. The Directors are committed to maintaining and
developing communication and consultation processes with employees, who in turn are encouraged to develop an
awareness of the issues affecting the group. The Directors place considerable emphasis on employees sharing in
the success of the group. This is achieved through the participation in share option schemes. Due to the nature
and size of the business, employees are constantly encouraged to communicate with the Company's senior
management to discuss business issues and potential improvements.
The interest of current Directors in shares and options are detailed in the Directors' Remuneration Report on page 9.
Supplier Payment Policy
It is the Company's policy to settle debts with its suppliers, in the absence of any dispute, in accordance
with the terms and conditions agreed with each supplier. The average number of supplier days outstanding at
31 March 2012 based on the amounts invoiced by suppliers during the financial year was 51 days (2011:45 days).
Disclosure of information to auditors
The Directors who held office at the date of approval of this Directors' report confirm that, so far as
they are each aware, there is no relevant audit information of which the Company's auditors are unaware; and each
Director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant
audit information and to establish that the Company's auditors are aware of that information.
Political and charitable donations
The Company made no political or charitable donations during the year but supports charities through the
provision of discounted services.
Going Concern
The Directors have reasonable expectation that the Group has adequate resources to continue to operate for the
foreseeable future. For this reason they adopt the going concern basis for preparing the financial statements.
Annual General Meeting
The Annual General Meeting will be held on 27 September 2012 at 10.00 am at The Company's registered
office at Number 14 Riverview Vale Road, Heaton Mersey, Stockport, Cheshire, SK4 3GN.
The full wording of the resolutions to be tabled at the forthcoming Annual General Meeting is set out in the notice
of the meeting on pages 31 to 33.
Auditors
In accordance with section 489 of the Companies Act 2006, a resolution proposing that Hazlems Fenton LLP be
reappointed as auditors of the Company will be put to the Annual General Meeting.
By order of the Board
Julie Joyce
Finance Director
23 August 2012
Directors' Remuneration Report
---------------------------------------------------------------------------------------------------------------
Introduction
Whilst the Group is not obliged to comply with the Directors' Remuneration Report Regulations 2007, the
Directors have agreed to adopt the ethos of those regulations and to disclose information relating to the
current Directors.
The report is not subject to audit.
Remuneration Policy
Daily Internet plc has a policy to attract, motivate and reward individuals of the highest calibre who are
committed to growing the value of the Group's business and to maximising returns to shareholders.
The policy is as relevant to Executive Directors as it is to employees, as we aim to reward Executive
Directors and senior employees aligned to the performance of the Group.
The remuneration structure for all employees considers remuneration rates of competitors to ensure
continuity and commitment.
Directors' Service Contracts
Copies of Directors' service contracts will be available for inspection at the annual general meeting.
Pension Arrangements
The Group does not operate a final salary pension scheme. Executive Directors who are entitled to receive
pension contributions may nominate a defined contribution scheme into which the Company makes payments on
their behalf.
Directors' Remuneration
A summary of the total remuneration paid to current Directors is set out below:
2012 2011
------------------------------------------------------------------------------------
Fees Benefits Fees Benefits
Salary in kind Total Salary in kind Total
£000 £000 £000 £000 £000 £000
---------------------------------------------------------------------------------------------------------------
Michael Edelson 36 - 36 36 - 36
Abby Hardoon 3 2 5 10 2 12
Julie Joyce 74 2 76 75 2 77
Robert Khalastchy 6 - 6 6 - 6
---------------------------------------------------------------------------------------------------------------
Directors' Interests in Ordinary Shares of Daily Internet plc
The Directors in office at the end of the year had interests in the Number of Percentage
ordinary share capital of the Company as shown below: Ordinary Shares Interest
---------------------------------------------------------------------------------------------------------------
Michael Edelson 2,714,285 4.3%
Abby Hardoon 20,233,627 32.3%
Julie Joyce 150,000 0.2%
Robert Khalastchy 253,846 0.4%
---------------------------------------------------------------------------------------------------------------
Directors' Interests in Share Options
The Directors had interests in options over ordinary shares of the Company as shown below:
No. of Ordinary Shares and Price
-------------------------------------------------------- Grant Expiry
Date Date
Employee 0.7p** 5p* 10p* 15p* 20p* Total
---------------------------------------------------------------------------------------------------------------
Michael 714,286 - - - - 714,286 23.03.07 30.07.17
Edelson
Abby Hardoon - - - 250,000 100,000 350,000 24.08.07 24.08.17
Julie Joyce - 25,000 25,000 200,000 100,000 350,000 24.08.07 24.08.14
Robert - 15,000 5,000 100,000 100,000 220,000 24.08.07 24.08.17
Khalastchy
---------------------------------------------------------------------------------------------------------------
*Options cannot be exercised until their 3rd anniversary and have no performance criteria attached to them.
**Options are exercisable immediately and have no performance criteria attached to them.
Directors' Warrants
The Directors held the following warrants over the ordinary shares of the Company:
Employee Exercise price No. of Warrants Grant Date Expiry Date
---------------------------------------------------------------------------------------------------------------
Abby Hardoon 15p 1,050,000 09.01.08 08.01.13
Michael Edelson 5p 100,000 09.01.12 08.01.22
---------------------------------------------------------------------------------------------------------------
Mr Hardoon's warrants can be exercised at any time up to the expiry date. Mr Edelson's warrants are
exercisable at any time before 8 January 2022, provided that the Company may require the exercise of these
Warrants if its shares are traded at a price in excess of 8p per share for a period of 60 business days and
an aggregate value of bargains exceeding £60,000 occurs over that period.
Statement of the Directors' Responsibilities in Respect of the Annual Report and the Financial Statements
---------------------------------------------------------------------------------------------------------------
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 Group and the parent company 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 Group and the Company, and of
the profit or loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments 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; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group and the parent 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 the Group 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 that of the
Group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company's website. Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Independent Auditor's Report to the Members of Daily Internet plc
---------------------------------------------------------------------------------------------------------------
We have audited the financial statements of Daily Internet Plc for the year ended 31 March 2012 set out on
pages 14 to 29 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 members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members
those matters we are required to state to them in an auditors' 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 members as a body, for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of the directors and auditor
As explained more fully in the Directors' Responsibilities Statement set out on page 11, 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 and express an opinion on 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 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 Group and parent's circumstances and have been consistently applied and adequately
disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall
presentation of the financial statements. In addition, we read all the financial and non-financial
information in the Annual Report to identify material inconsistencies with the audited financial
statements. If we become aware of any apparent material misstatements or inconsistencies we consider the
implications for our report.
Opinion on financial statements
In our opinion the financial statements:
- give a true and fair view of the state of the Group's and of the parent company's affairs as at
31 March 2012 and of the group's loss for the year 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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report for the financial year for which the
financial statements are prepared is consistent with the financial statements.
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 by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
- the parent company's 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.
Stephen Fenton FCA (Senior Statutory Auditor)
for and on behalf of Hazlems Fenton LLP
Chartered Accountants
Statutory Auditor
Chartered Accountants
Palladium House
1-4 Argyll Street
London
W1F 7LD
23 August 2012
Consolidated Profit and Loss Account
for the Year Ended 31 March 2012
---------------------------------------------------------------------------------------------------------------
2012 2011
Group Group
Notes £,000 £,000
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Revenue 2 1,451 1,268
Cost of sales (695) (608)
---------------------------------------------------------------------------------------------------------------
Gross profit 756 660
---------------------------------------------------------------------------------------------------------------
Operating expenses before amortisation, depreciation and share
based payments 895 868
Goodwill amortisation 170 170
Depreciation and other amortisation 68 74
Share based payments - 4
---------------------------------------------------------------------------------------------------------------
Administrative expenses (1,133) (1,116)
---------------------------------------------------------------------------------------------------------------
Operating loss 3 (377) (456)
---------------------------------------------------------------------------------------------------------------
Interest receivable and similar income - -
Interest payable and similar charges 6 (63) (39)
---------------------------------------------------------------------------------------------------------------
Loss before taxation (440) (495)
Taxation 7 - -
---------------------------------------------------------------------------------------------------------------
Retained loss for the year (440) (495)
---------------------------------------------------------------------------------------------------------------
Basic and fully diluted loss per share 24 £0.01 £0.01
---------------------------------------------------------------------------------------------------------------
Consolidated Balance Sheet as at 31 March 2012
---------------------------------------------------------------------------------------------------------------
2012 2011
Notes £,000 £,000 £,000 £,000
---------------------------------------------------------------------------------------------------------------
Fixed assets
Goodwill 8 189 359
Intangible assets 8 9 28
Tangible assets 9 183 108
---------------------------------------------------------------------------------------------------------------
381 495
Current assets
Debtors 11 47 27
Cash at bank and in hand 23 108 99
---------------------------------------------------------------------------------------------------------------
155 126
Creditors: amounts falling due within one year 12 (709) (545)
---------------------------------------------------------------------------------------------------------------
Net current assets (liabilities) (554) (419)
---------------------------------------------------------------------------------------------------------------
Total assets less current liabilities (173) 76
Creditors: amounts falling due after one year 13 (708) (554)
---------------------------------------------------------------------------------------------------------------
Net assets (881) (478)
---------------------------------------------------------------------------------------------------------------
Capital and reserves
Called up share capital 16 313 305
Share premium account 17 2,629 2,600
Other reserves 17 242 242
Profit and loss account 17 (4,065) (3,625)
---------------------------------------------------------------------------------------------------------------
Shareholders' funds (881) (478)
---------------------------------------------------------------------------------------------------------------
Approved by the Board and authorised for issue on 23 August 2012
J. Joyce
Director
Registered number 06172239
Company Balance Sheet as at 31 March 2012
---------------------------------------------------------------------------------------------------------------
2012 2011
Notes £,000 £,000 £,000 £,000
---------------------------------------------------------------------------------------------------------------
Fixed assets
Investments 10 1,722 1,722
---------------------------------------------------------------------------------------------------------------
1,722 1,722
Current assets
Debtors 11 2,347 2,280
Cash at bank and in hand 1 4
---------------------------------------------------------------------------------------------------------------
2,348 2,284
Creditors: amounts falling due within one year 12 (16) (19)
---------------------------------------------------------------------------------------------------------------
Net current assets (liabilities) 2,332 2,265
---------------------------------------------------------------------------------------------------------------
Total assets less current liabilities 4,054 3,987
Creditors: amounts falling due after one year 13 (1,534) (1,404)
---------------------------------------------------------------------------------------------------------------
Net assets 2,520 2,583
---------------------------------------------------------------------------------------------------------------
Capital and reserves
Called up share capital 16 313 305
Share premium account 17 2,629 2,600
Other reserves 17 102 102
Profit and loss account 17 (524) (424)
---------------------------------------------------------------------------------------------------------------
Shareholders' funds 2,520 2,583
---------------------------------------------------------------------------------------------------------------
Approved by the Board and authorised for issue on 23 August 2012
J. Joyce
Director
Registered number 06172239
Consolidated Cash Flow Statement
for the Year Ended 31 March 2012
---------------------------------------------------------------------------------------------------------------
2012 2011
Notes £,000 £,000
---------------------------------------------------------------------------------------------------------------
Operating loss (377) (456)
Goodwill amortisation 170 170
Depreciation and other amortisation 68 74
Share based payments - 4
Decrease (increase) in debtors (20) 9
(Decrease) Increase in creditors 150 10
---------------------------------------------------------------------------------------------------------------
Net cash outflow from operating activities (9) (189)
---------------------------------------------------------------------------------------------------------------
Returns on investments and servicing of finance
Interest element of finance lease payments (3) (1)
Interest paid (36) (14)
Loan Note interest paid (24) (24)
Net cash outflow from investments and servicing of finance (63) (39)
---------------------------------------------------------------------------------------------------------------
Capital expenditure
Payments to acquire tangible assets 8 (124) (25)
Net cash outflow from capital expenditure (124) (25)
---------------------------------------------------------------------------------------------------------------
Net cash outflow before management of
liquid resources and financing (196) (253)
---------------------------------------------------------------------------------------------------------------
Financing
Issue of ordinary share capital (net of expenses) 37 -
Drawdown of loan facility 130 275
Drawdown of new finance leases 51 -
Capital element of finance lease repayments (13) (4)
---------------------------------------------------------------------------------------------------------------
Net cash (inflow) outflow from financing 205 271
---------------------------------------------------------------------------------------------------------------
Increase (Decrease in) cash in the period 9 18
---------------------------------------------------------------------------------------------------------------
Notes to the Consolidated Financial Statements
for the year ended 31 March 2012
---------------------------------------------------------------------------------------------------------------
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are
considered material in relation to the financial information presented.
Basis of preparation
The accounts have been prepared in accordance with applicable United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice), which have been applied consistently.
Going Concern
The Directors have prepared the financial statements on a going concern basis as cash flow projections
show that the loan facility with Abby Hardoon, a director and major shareholder, John Thompson and
Hawkstone Capital Limited is sufficient to allow the Group to continue to develop new products and
achieve a breakeven position. The proposed shared placing of up to £600,000 of which £500,000 has been
irrevocably applied for will also ensure the continued development of new products into new markets.
Basis of consolidation
The consolidated accounts include the accounts of the Company and its subsidiary undertakings made up
to 31 March 2012. The acquisition method of accounting has been adopted. Under this method, the results
of subsidiary undertakings acquired or disposed of in the year are included in the consolidated Profit
and Loss Account from the date of acquisition or up to the date of disposal. Intra group sales and
profits are eliminated fully on consolidation.
Under Section 408(4) of the Companies Act 2006 the Company is exempt from the requirement to present
its own Profit and Loss Account.
Goodwill
The goodwill is the purchased goodwill on the acquisition of Daily Internet Services Limited and
Lambolle Partners plc by Daily Internet plc and is stated at cost. The goodwill is being written off
over its estimated economic life of 5 years.
Revenue recognition
Revenue from the sale of domain name registrations is recognised when the domain name is registered or
renewed. Revenue from value added services is recognised as these services are delivered. Revenue from
hosting services is recognised over the life of each contract.
Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the
rate of exchange ruling at the balance sheet date and the gains or losses on translation are included
in the profit and loss account.
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.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates
calculated to write off the cost less estimated residual value of each asset over its expected useful
life, as follows:
Website design 33.3% straight line
Furniture and equipment 20% - 33.3% reducing balance
Research and Development
Research expenditure is written off to the profit and loss account in the year in which the expenditure
occurs. Development expenditure is treated in the same way unless the Directors are satisfied as to the
technical, commercial and financial viability of individual projects. In this situation, the
expenditure is deferred and amortised over the years during which the company is to benefit.
Investments
Fixed asset investments are stated at cost less provision for diminution in value.
Deferred Taxation
Deferred Taxation is provided in full in respect of taxation deferred by timing differences between
certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
Leases
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and
depreciated over the shorter of the lease term and their useful lives. Obligations under such
agreements are included in creditors net of the finance charge allocated to future periods. The finance
element of the rental payment is charged to the profit and loss account so as to produce a constant
periodic rate of charge on the net obligation outstanding in each period.
Rentals payable under operating leases are charged against income on a straight line basis over the
lease term.
Share based payments
The fair value of employee options granted is recognised as an expense within the profit and loss
account with a corresponding increase in equity. The fair value is measured at grant date and spread
over the year during which the employees become unconditionally entitled to the options.
The fair value of supplier warrants is recognized as an expense within the profit and loss account with
a corresponding increase in equity. The fair value is measured at grant date and charged against
profit when the services are received.
The fair value of the options granted is measured using the Black Scholes pricing model, taking into
account the terms and conditions upon which the options were granted.
2 Analysis of turnover and operating loss
Revenue, all of which arises from the group's principal activity, is generated using a common
infrastructure and support function, therefore in the opinion of the Directors its activities
constitute one operating segment which can be analysed into its main components as follows:
2012 2012 2011 2011
£'000 % £'000 %
--------------------------------------------------------------------------------------------------------
Revenue by Service
Domain Names 720 49.6% 650 51.3%
Hosting 659 45.4% 548 43.2%
Other 72 5.0% 70 5.5%
--------------------------------------------------------------------------------------------------------
1451 1268
--------------------------------------------------------------------------------------------------------
The Group's operating loss, assets and liabilities cannot be accurately allocated to the services
shown above as these services are operated by a fully integrated and inseparable infrastructure.
The Group operates out of the UK but sells services to the following geographical locations.
By geographical location
UK 1378 95.0% 1213 95.7%
Europe 27 1.9% 26 2.1%
Rest of World 46 3.2% 29 2.3%
--------------------------------------------------------------------------------------------------------
1451 1268
--------------------------------------------------------------------------------------------------------
3 Loss on ordinary activities before taxation
2012 2011
£,000 £,000
-----------------------------------------------------------------------------------------------------------
Auditors' remuneration:
Group: Audit 15 20
Company: Audit 4 4
Depreciation of tangible fixed assets:
Owned 40 37
Held under finance leases 9 13
Amortisation of intangible fixed assets 19 24
Goodwill amortisation 170 170
Share based payments - 4
Finance charge - finance lease 3 1
Rentals payable under operating leases 28 28
------------------------------------------------------------------------------------------------------------
4 Staff numbers and costs
The average number of full time persons employed by the Group, including executive directors during the
year was:
2012 2011
------------------------------------------------------------------------------------------------------------
Research and Development 4 4
Technical Support 5 5
Executive and Administration 5 4
------------------------------------------------------------------------------------------------------------
14 13
------------------------------------------------------------------------------------------------------------
The aggregate payroll costs including executive Directors were as follows:
2012 2011
£,000 £,000
------------------------------------------------------------------------------------------------------------
Wages and salaries 415 388
Social security costs 42 42
Benefits in kind 6 6
Staff option costs - 4
------------------------------------------------------------------------------------------------------------
463 440
------------------------------------------------------------------------------------------------------------
The emoluments paid to the highest paid Director during the year were £76,000. More information regarding
directors' remuneration and share options can be found in the Directors' Remuneration Report on pages 9
to 10.
5 Share based payments and warrants
The Company has adopted an approved employee share option scheme. Under the Scheme the directors
have the discretion to grant options to subscribe for ordinary shares up to a maximum of 10 per
cent of the Company's issued share capital. Options can be granted to any employee of the Company.
The options cannot be exercised for at least three years from the date of grant. Options must be
exercised in their entirety or not at all. There is no performance criteria associated with the
options. The weighted average exercise price is 6.9p per share.
At 31 March 2012 rights to options over ordinary shares of the Company were outstanding as
follows:
No. of Ordinary Shares
----------------------------------------------------
Grant date Exercise period Exercise At 31 March Granted Exercised At 31 March
price 2011 lapsed 2012
cancelled
------------------------------------------------------------------------------------------------------------
25-May-07 25 May 2011 to 24 May 2017 2.5p 38,462 38,462
25-May-07 25 May 2011 to 24 May 2017 5p 38,462 38,462
25-May-07 25 May 2011 to 24 May 2017 10p 76,924 76,924
25-May-07 25 May 2011 to 24 May 2017 15p 423,077 423,077
25-May-07 25 May 2011 to 24 May 2017 20p 192,307 192,307
24-Aug-07 24 Aug 2011 to 23 Aug 2017 5p 25,000 25,000
24-Aug-07 24 Aug 2011 to 23 Aug 2017 10p 25,000 25,000
24-Aug-07 24 Aug 2011 to 23 Aug 2017 15p 200,000 200,000
24-Aug-07 24 Aug 2011 to 23 Aug 2017 20p 100,000 100,000
24-Aug-07 24 Aug 2011 to 23 Aug 2014 5p 15,000 15,000
24-Aug-07 24 Aug 2011 to 23 Aug 2014 10p 5,000 5,000
24-Aug-07 24 Aug 2011 to 23 Aug 2014 15p 350,000 350,000
24-Aug-07 24 Aug 2011 to 23 Aug 2014 20p 200,000 200,000
24-Aug-07 31 July 2007 to 30 July 2017 0.7p 2,321,428 2,321,428
------------------------------------------------------------------------------------------------------------
4,010,660 - - 4,010,660
------------------------------------------------------------------------------------------------------------
The options have been valued, using the Black Scholes method, using the following assumptions:
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Number of instruments granted 38,462 38,462 76,924 423,077 192,307
Grant date 25-May-07 25-May-07 25-May-07 25-May-07 25-May-07
Expiry date 24-May-17 24-May-17 24-May-17 24-May-17 24-May-17
Contract term (years) 10 10 10 10 10
Exercise price 2.5p 5p 10p 15p 20p
Share price at granting 5p 5p 5p 5p 5p
Annual risk free rate (%) 5% 5% 5% 5% 5%
Annual expected dividend yield (%) 0% 0% 0% 0% 0%
Volatility (%) 50% 50% 50% 50% 50%
Fair value per grant instrument 3.96p 3.36p 2.64p 2.19p 1.88p
------------------------------------------------------------------------------------------------------------
Number of instruments granted 25,000 25,000 200,000 100,000 15,000
Grant date 24-Aug-07 24-Aug-07 24-Aug-07 24-Aug-07 24-Aug-07
Expiry date 23-Aug-17 23-Aug-17 23-Aug-17 23-Aug-17 23-Aug-14
Contract term (years) 10 10 10 10 7
Exercise price 5p 10p 15p 20p 5p
Share price at granting 5p 5p 5p 5p 5p
Annual risk free rate (%) 5% 5% 5% 5% 5%
Annual expected dividend yield (%) 0% 0% 0% 0% 0%
Volatility (%) 50% 50% 50% 50% 50%
Fair value per grant instrument 3.36p 2.64p 2.19p 1.88p 2.9p
------------------------------------------------------------------------------------------------------------
Number of instruments granted 5,000 350,000 200,000 2,321,428
Grant date 24-Aug-07 24-Aug-07 24-Aug-07 23-Mar-09
Expiry date 23-Aug-14 23-Aug-14 23-Aug-14 30-Jul-17
Contract term (years) 7 7 7 8.2
Exercise price 10p 15p 20p 0.7p
Share price at granting 5p 5p 5p 5p
Annual risk free rate (%) 5% 5% 5% 5%
Annual expected dividend yield (%) 0% 0% 0% 0%
Volatility (%) 50% 50% 50% 50%
Fair value per grant instrument 2.02p 1.54p 1.21p 4.58p
Share Warrants
At 31 March 2012 there were 11,869,500 outstanding warrants to subscribe for the ordinary share
capital of the Company as follows:
No. of Warrants and Exercise price
------------------------------------------------------------------------------------------------------------
Grant date Expiry Date 5p 10p 15p Total
------------------------------------------------------------------------------------------------------------
09.01.08 08.01.13 - - 2,800,000 2,800,000
11.03.08 10.03.15 - 3,469,500* - 3,469,500
09.01.12 08.01.22 5,600,000 - - 5,600,000
------------------------------------------------------------------------------------------------------------
The shares will have the same dividend and voting rights as the existing ordinary shares in issue.
The fair value of arranger warrants* has been calculated at 2.8p based on the following assumptions -
share price at granting 6p, annual risk free rate 5%, volatility 50%.
6 Interest payable and similar charges
2012 2011
£,000 £,000
------------------------------------------------------------------------------------------------------------
Interest payable on finance leases 3 1
Interest payable on loan notes 24 24
Other Interest payable 36 14
------------------------------------------------------------------------------------------------------------
63 39
------------------------------------------------------------------------------------------------------------
7 Taxation
2012 2011
£,000 £,000
------------------------------------------------------------------------------------------------------------
Current tax charge - -
------------------------------------------------------------------------------------------------------------
Deferred tax
Timing differences - -
------------------------------------------------------------------------------------------------------------
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation (440) (495)
------------------------------------------------------------------------------------------------------------
Loss on ordinary activities before taxation multiplied by the Standard rate (114) (139)
of UK corporation tax of 26% (2011:28%)
Effects of:
Other adjustments 114 139
------------------------------------------------------------------------------------------------------------
Current tax charge - -
------------------------------------------------------------------------------------------------------------
8 Intangible fixed assets
Research and Positive
Group development Goodwill Total
£,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Cost
At 1 April 2011 232 849 1081
Additions - - -
Disposals - - -
------------------------------------------------------------------------------------------------------------
At 31 March 2012 232 849 1081
------------------------------------------------------------------------------------------------------------
Amortisation
At 1 April 2011 204 490 694
On disposals - - -
Charge for the year 19 170 189
------------------------------------------------------------------------------------------------------------
At 31 March 2012 223 660 883
------------------------------------------------------------------------------------------------------------
Net book value
At 31 March 2012 9 189 198
At 31 March 2011 28 359 387
The Company held no intangible fixed assets at 31 March 2012 or 31 March 2011.
9 Tangible fixed assets
Furniture
Website and
Group design equipment Total
£,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Cost
At 1 April 2011 166 291 457
Additions - 124 124
Disposals - (2) (2)
At 31 March 2012 166 413 579
Depreciation
At 1 April 2011 166 183 349
On disposals - (2) (2)
Charge for the year - 49 49
At 31 March 2012 166 230 396
Net book value
At 31 March 2012 - 183 183
At 31 March 2011 - 108 108
Included in the net book value of £183,000 are leased assets of £66,000 (2011:£25,000).
The depreciation for the year on these assets was £9,000 (2011:£13,000).
The Company held no tangible fixed assets at 31 March 2012 or 31 March 2011.
10 Investments
Company Company
2012 2011
£,000 £,000
------------------------------------------------------------------------------------------------------------
Investment in Subsidiaries
At 1 April 2011 1,722 1,722
Additions - -
Disposals - -
------------------------------------------------------------------------------------------------------------
At 31 March 2012 1,722 1,722
------------------------------------------------------------------------------------------------------------
The Company's subsidiary undertakings, all of which are wholly owned and included in the consolidated
accounts, are:
Undertakings Registration Principal activity
------------------------------------------------------------------------------------------------------------
Daily Internet Services Limited England Web hosting and domain
name registration
Lambolle Partners plc England Investment Company
------------------------------------------------------------------------------------------------------------
11 Debtors
Group Company Group Company
2012 2012 2011 2011
£,000 £,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Amounts due within one year:-
Trade debtors - - 2 -
Other debtors - 1 - 1
Prepayments and accrued income 47 22 25 4
------------------------------------------------------------------------------------------------------------
47 23 27 5
------------------------------------------------------------------------------------------------------------
Amounts due after more than one year:-
------------------------------------------------------------------------------------------------------------
Amounts owed by subsidiary undertakings - 2,324 - 2,275
------------------------------------------------------------------------------------------------------------
- 2,324 - 2,275
------------------------------------------------------------------------------------------------------------
Total Debtors 47 2,347 27 2,280
------------------------------------------------------------------------------------------------------------
12 Creditors: amounts falling due within one year
Group Company Group Company
2012 2012 2011 2011
£,000 £,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Trade creditors 203 9 147 9
Other taxes and social security costs 31 1 30 1
Other creditors 109 - 61 -
Accruals and deferred income 344 6 299 9
Finance lease 22 - 8 -
------------------------------------------------------------------------------------------------------------
709 16 545 19
------------------------------------------------------------------------------------------------------------
13 Creditors: amounts falling due after one year
Group Company Group Company
2012 2012 2011 2011
£,000 £,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Finance lease 34 - 10 -
Other loans 405 405 275 275
Amounts due to subsidiary undertakings - 860 - 860
Convertible loan note 269 269 269 269
------------------------------------------------------------------------------------------------------------
708 1,534 554 1,404
------------------------------------------------------------------------------------------------------------
The maturity of obligations under finance leases are as follows:
Within one year 22 - 8 -
Within two to three years 34 - 10 -
------------------------------------------------------------------------------------------------------------
56 - 18 -
------------------------------------------------------------------------------------------------------------
The maturity of other debt is as follows:
Within two to three years 674 674 544 544
Over five years - 860 - 860
------------------------------------------------------------------------------------------------------------
674 1,534 544 1,404
------------------------------------------------------------------------------------------------------------
14 Operating Leases
The Group had commitments to make annual payments under non cancellable operating leases which expire
as follows:
Leasehold Other Leasehold Other
Property Property
2012 2012 2011 2011
£,000 £,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Within two and five years 28 - 28 -
------------------------------------------------------------------------------------------------------------
28 - 28 -
------------------------------------------------------------------------------------------------------------
15 Financial instruments
The Group's financial instruments comprise cash and liquid resources, convertible bonds and
various items such as trade debtors and trade creditors that arise directly from its operations.
There have been no substantive changes in the Groups objectives, policies and processes for
managing those risks or the methods used to measure them from previous periods.
The Group's objective is to ensure adequate funding for continued growth and expansion.
Given the nature of the Group's borrowings, interest rate risk is not significant. The main risk
arising from the Group's financial instruments is liquidity risk. There is no foreign currency
risk.
Convertible Loan note
Fifty six £5,000 Convertible loan notes were issued on 9 January 2008. The notes were due to be
redeemed on 9th January 2012. Following discussions with all holders of 2012 Loan Notes a
resolution was passed unanimously at the General Meeting of Noteholders held on 4th January 2012 to
exchange the 2012 Loan Notes with New Loan Notes expiring in 2015.
The 2015 Loan Notes offer a rate of interest of 9 per cent and are convertible at a conversion
price of 3p per share. The Company is able to redeem a minimum of £1,000 nominal value of each New
Loan Note as cash flow allows by repaying the redeemed nominal value plus six months' pro rata
interest, subject to the relevant holders being entitled to convert such loan notes into ordinary
shares in the capital of the Company at their election at 3p per share.
The exchange of each 2012 Loan Note for a 2015 Loan Note is accompanied by a Warrant entitling the
holder to subscribe for 100,000 ordinary shares at a price of 5p per share, exercisable at any time
before 8 January 2022, provided that the Company may require the exercise of these Warrants if its
shares are traded at a price in excess of 8p per share for a period of 60 business days and an
aggregate value of bargains exceeding £60,000 occurs over that period. The value of the convertible
loan notes recognised in the balance sheet is calculated as follows:
2012 2011
£,000 £,000
------------------------------------------------------------------------------------------------------------
Face value 280 280
Costs of issue (11) (8)
------------------------------------------------------------------------------------------------------------
Net proceeds 269 272
Equity component - (3)
------------------------------------------------------------------------------------------------------------
Liability component at 31 March 2012 269 269
------------------------------------------------------------------------------------------------------------
16 Share capital
Group Company Group Company
2012 2012 2011 2011
£,000 £,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Authorised
150,000,000 Ordinary shares of 0.5p each 750 750 750 750
------------------------------------------------------------------------------------------------------------
750 750 750 750
------------------------------------------------------------------------------------------------------------
Allotted, called up and fully paid
At start of year 61,123,550 Ordinary shares of 0.5p
each 305 305 305 305
Issued during the year 1,500,000 Ordinary shares of
0.5p 8 8 - -
------------------------------------------------------------------------------------------------------------
At end of year 62,623,550 Ordinary shares of 0.5p 313 313 305 305
------------------------------------------------------------------------------------------------------------
During the year the Company issued 1,500,000 ordinary shares in fulfilment of fees due to its PLUS
Markets Corporate Advisor.
17 Statement of movements in reserves
Share Other Profit and Total
premium reserves loss
account account
£,000 £,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Group
At 1 April 2011 2,600 242 (3,625) (783)
Share issues 29 - - 29
---------------------------------------------------
Loss for the year - - (440) (440)
------------------------------------------------------------------------------------------------------------
At 31 March 2012 2,629 242 (4,065) (1,194)
------------------------------------------------------------------------------------------------------------
Company
At 1 April 2011 2,600 102 (424) 2,278
Share issues 29 - - 29
Loss for the year - - (100) (100)
------------------------------------------------------------------------------------------------------------
At 31 March 2012 2,629 102 (524) 2,207
------------------------------------------------------------------------------------------------------------
18 Reconciliation of movements in shareholder funds
2012 2011
£,000 £,000
------------------------------------------------------------------------------------------------------------
Loss for the financial year (440) (495)
Movement on other reserves - 4
Issue of shares 37 -
------------------------------------------------------------------------------------------------------------
Net increase (decrease) in shareholder funds (403) (491)
Opening shareholder funds (478) 13
------------------------------------------------------------------------------------------------------------
Closing shareholder funds (881) (478)
------------------------------------------------------------------------------------------------------------
19 Contingent liabilities
There are no contingent liabilities at the year end.
20 Related party transactions
During the year the Company paid £45,002 to London and City Corporation for fees and expenses with
regard to services supplied by Mr. M Edelson. At the year-end, £7,200 was due to Mr. M Edelson,
this amount being included in trade creditors.
21 Transactions with Directors
The Directors use personal credit cards to pay trade creditors where necessary.
During the year costs incurred of £481,154 were reimbursed to Mr A Hardoon, £97,700 to Mrs J Joyce
and £3,787 to Mrs A Curry-Taylor. At the year end, £85,206 was due to Mr Hardoon and £23,998 was
due to Mrs J Joyce, both amounts are included in other creditors.
During the year, the Company paid rent and service charges for its premises amounting to £31,600
to Mr Hardoon.
Included in creditors falling due after one year is £45,000 provided by Mr Hardoon as part of a
loan facility. The loan is due to be repaid on 31 August 2013 and interest payable is 10%.
Mr A Hardoon has given personal guarantees to Barclays Bank of up to £70,000 dated 14
February 2008 and up to £80,000 dated 17 November 2008.
22 Analysis of changes in net funds
Other
31-Mar Cash non-cash 31-Mar
2011 flow changes 2012
£,000 £,000 £,000 £,000
------------------------------------------------------------------------------------------------------------
Net cash:
Cash at bank and in hand 99 9 - 108
------------------------------------------------------------------------------------------------------------
Net funds 99 9 - 108
------------------------------------------------------------------------------------------------------------
23 Reconciliation of net cash flow to movement in net funds
2012 2011
£,000 £,000
------------------------------------------------------------------------------------------------------------
(Decrease) Increase in cash in the year 9 18
Opening net funds 99 81
Closing net funds 108 99
------------------------------------------------------------------------------------------------------------
24 Loss per share
2012 2011
------------------------------------------------------------------------------------------------------------
Loss for the financial year attributable to shareholders £440,000 £747,000
Weighted number of equity shares in issue 61,403,002 61,123,550
Basic/diluted loss per share £0.01 £0.01
------------------------------------------------------------------------------------------------------------
Since the conversion of potential ordinary shares to ordinary shares would decrease the net loss
per share, they are not dilutive. Accordingly diluted loss per share is the same as basic loss per
share.
25 Profit/(Loss) for the financial year
As permitted by section 408 Companies Act 2006, the holding Company's profit and loss has not been
included in the financial statements. The loss for the financial year is made up as follows:-
2012 2011
£,000 £,000
------------------------------------------------------------------------------------------------------------
Holding company's loss for the year 100 95
------------------------------------------------------------------------------------------------------------
100 95
------------------------------------------------------------------------------------------------------------
Corporate Information
------------------------------------------------------------------------------------------------------------
Company Secretary and Registered Office
Clive Maudsley FCA
Number 14 Riverview Vale Road
Heaton Mersey
Stockport
Cheshire
SK4 3GN
Tel: +44 (0) 207 458 5757
Email: clive.maudsley@daily.co.uk
Company Number
06172239
PLUS Market Corporate Advisor
Loeb Aron & Company Ltd.
Georgian House
63 Coleman Street
London
EC2R 5BB
Registrar
Computershare Investor Services plc.
The Pavilions Bridgwater Road
Bristol
BS13 8AE
Lawyers
Kuit Steinart Levy LLP
3 St Mary's Parsonage
Manchester
M3 2RD
Auditors
Hazlems Fenton LLP
Chartered Accountants
Palladium House
1-4 Argyll Street
London
W1F 7LD
Bankers
Barclays Bank plc.
One Churchill Place
London
E14 5HP
Notice of meeting
------------------------------------------------------------------------------------------------------------
Notice is hereby given that the Annual General Meeting of Daily Internet plc will be held on 27 September
2012 at 10.00 am at the Company's registered office at Number 14 Riverview, Vale Road, Heaton Mersey,
Stockport, Cheshire, SK4 3GN for the purpose of considering and, if thought fit, passing the resolutions
set out below, of which Resolutions 1 to 4 will be proposed as ordinary resolutions and Resolution 5 will
be proposed as a special resolution.
Ordinary Business
To consider and, if thought fit, pass the following resolutions:
1. TO receive, consider and adopt the Annual Report and Financial Statements for the year ended 31
March 2012, together with the Directors' and Auditors' Reports contained therein.
2. TO reappoint John Michael Edelson as a director who retires by rotation.
3. TO reappoint Hazlems Fenton LLP Chartered Accountants as auditors of the Company and authorise the
Directors to fix their remuneration.
4. THAT the Directors be generally and unconditionally authorised to allot equity securities (as
defined in section 560(1) of the Companies Act 2006 ("the Act")):
a. up to an aggregate nominal amount of £31,312 (such amount to be reduced by the nominal amount of
any Relevant Securities allotted under resolution 6(b) below) in connection with an offer by way of a
rights issue:
i. to holders of ordinary shares in proportion (as nearly as may be practicable)
to their respective holdings; and
ii. to holders of other equity securities as required by the rights of those securities
or as the Directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the Directors may deem necessary
or expedient in relation to treasury shares, fractional entitlements, record dates, legal
or practical problems in or under the laws of any territory or the requirements of any
regulatory body or stock exchange; and
b. in any other case, up to an aggregate nominal amount of £379,080 (such amount to be reduced by the
nominal amount of any equity securities allotted under resolution 6(a) above in excess of
£31,312), provided that this authority shall, unless renewed, varied or revoked by the Company,
expire 15 months from the date this resolution is passed or, if earlier, the date of the next
annual general meeting of the Company save that the Company may, before such expiry, make offers or
agreements which would or might require Relevant Securities to be allotted and the Directors may
allot Relevant Securities in pursuance of such offer or agreement notwithstanding that the authority
conferred by this resolution has expired.
This resolution revokes and replaces all unexercised authorities previously granted to the
Directors to allot Relevant Securities but without prejudice to any allotment of shares or grant
of rights already made, offered or agreed to be made pursuant to such authorities.
For the purposes of the resolution: 'Relevant Securities' means:
(a) shares in the Company other than shares allotted pursuant to: an employee share scheme (as
defined by section 1166 of the CA 2006); a right to subscribe for shares in the Company where the
grant of the right itself constituted a Relevant Security; or a right to convert securities into
shares in the Company where the grant of the right itself constituted a Relevant Security; and
(b) any right to subscribe for or to convert any security into shares in the Company other than right
to subscribe for or convert any security into shares allotted pursuant to an employee share scheme
(as defined by section 1166 of the CA 2006). References to the allotment of Relevant Securities
in the resolution include the grant of such rights.
Special business
As special business, to consider and, if thought fit, pass the following resolution:
5. THAT, subject to the passing of resolution 4, the Directors be given the general power to allot
equity securities (as defined by section 560 of the Act) for cash, either pursuant to the
authority conferred by resolution 5 or by way of a sale of treasury shares, as if section 561(1)
of the Act did not apply to any such allotment, provided that this power shall be limited to:
a. the allotment of ordinary shares of £0.005 (0.5 pence) each ("Ordinary Shares") pursuant to
options granted to directors, employees and consultants to the Company up to an aggregate nominal
value of £20,504;
b. the allotment of Ordinary Shares pursuant to the convertible loan note instrument dated 4 January
2012 up to an aggregate nominal value of £50,867 (including interest);
c. the allotment of Ordinary Shares pursuant to warrants granted pursuant to a warrant instrument
dated 9 January 2008, 21 January 2008 and 4 January 2012 up to an aggregate nominal value of £59,348;
d. the allotment of Ordinary Shares to certain lenders, including Abby Hardoon Adulayavichit, by way
of capitalisation of loan facility, as renewed on 10th August 2012 up to an aggregate nominal value of
£67,500;
e. the allotment of Ordinary Shares pursuant to the private placing at £0.02 (2 pence) a share up to
an aggregate nominal value of £150,000;
f. the allotment of equity securities in connection with an offer by way of a rights issue:
i. to the holders of ordinary shares in proportion (as nearly as may be practicable) to
their respective holdings; and
ii. to holders of other equity securities as required by the rights of those securities or
as the Directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the Directors may deem necessary
or expedient in relation to treasury shares, fractional entitlements, record dates, legal
or practical problems in or under the laws of any territory or the requirements of any
regulatory body or stock exchange; and
g. the allotment (otherwise than pursuant to resolutions 5(a) to (f) above) of equity securities up
to an aggregate nominal amount of £31,312.
The power granted by this resolution will expire 15 months from the date this resolution is passed
or, if earlier, the conclusion of the Company's next annual general meeting (unless renewed,
varied or revoked by the Company prior to or on such date) save that the Company may, before such
expiry make offers or agreements which would or might require equity securities to be allotted
after such expiry and the Directors may allot equity securities in pursuance of any such offer or
agreement notwithstanding that the power conferred by this resolution has expired.
This resolution revokes and replaces all unexercised powers previously granted to the Directors to
allot equity securities as if section 561(1) of the 2006 Act did not apply but without prejudice
to any allotment of equity securities already made or agreed to be made pursuant to such
authorities.
By order of the board Registered Office
Number 14 Riverview
Vale Road
Heaton Mersey
Clive Maudsley Stockport
Company Secretary Cheshire
23 August 2012 SK4 3GN
Notes
1. Any member entitled to attend and vote at the Annual General Meeting is entitled to appoint one or
more proxies who need not be a member of the Company to attend and to vote instead of the member.
Completion and return of a form of proxy will not preclude a member from attending and voting at the
meeting in person, should he subsequently decide to do so.
2. In order to be valid, any form of proxy and power of attorney or other authority under which it is
signed, or a notarially certified or office copy of such power of attorney, must reach the registered
office at Number 14 Riverview, Vale Road, Heaton Mersey, Stockport, Cheshire, SK4 3GN, not less than 48
hours before the time of the meeting or of any adjournment of the meeting.
3. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 the Company specifies
that to be entitled to attend and vote at the meeting (and for the purposes of the determination by the
Company of the number of votes they may cast), holders of ordinary shares must be entered on the relevant
register of securities by 10.00 am on 25 September 2012. Changes to entries on the relevant register of
securities after 10.00 am on 25 September 2012 shall be disregarded in determining the rights of any person
to attend and vote at the meeting.
4. Copies of the service contracts and letters of appointment of each of the Directors of the Company
together with the Register of Directors' Interests will be available for inspection at the registered
office of the company during usual business hours on any weekday (Saturday and public holidays excluded)
and at the place of the Annual General Meeting from at least 15 minutes prior to and until the conclusion
of the Annual General Meeting.
5. The Directors have no present intention of exercising either the allotment authority under
resolution 4 or the disapplication of pre-emption rights authority under resolution 5 other than as
required pursuant to the authorities set out in paragraphs (a) to (f) of resolution 5.
6. The annual report can be downloaded from the investor section of the Daily.co.uk website using the
following link http://www.daily.co.uk/investors/financial-reports.html.