TIDMSNS
RNS Number : 4880L
Silanis International Limited
05 September 2012
RNS Release 5 September 2012
Silanis International Limited (the "Company") and its sole
investment,
Silanis Technology Inc. ("Silanis")
Interim Results
The Company (AIM: SNS) today announced its and Silanis' interim
results for the six-month period ended 30 June 2012.
Silanis is the most widely used e-signature solution in the
world, responsible for processing over 600 million documents
annually. Silanis solutions have strengthened the business
processes of thousands of organizations, including four of the top
10 North American banks, eight of the top 15 insurance companies
and the entire US Army. Companies and government organizations
around the globe depend on Silanis to accelerate business
transactions, improve customer experience and reduce costs while
improving compliance with legal and regulatory requirements.
Silanis' on-premise, cloud and SaaS e-signature solutions eliminate
manual, paper-based processing and enable e-commerce and
e-government transactions to be electronically executed from start
to finish.
The Company's sole investment is a 25% interest in the shares of
Silanis. The following review and analysis reflect the underlying
operations of Silanis, from which the value of the Company is
derived. All figures are expressed in United States dollars unless
noted otherwise. The financial statements for both companies are
attached, and form an integral part of this release.
"Leveraging the growth and momentum of our strong 2011 results,
Silanis is well positioned to realize its any-premise strategy. As
the e-signature market continues to grow, our ability to deliver
enterprise class solutions either as multitenant SaaS, on a private
cloud, or on premise, is a unique differentiator that addresses the
broadest possible market opportunities. According to a leading
market analyst firm, by 2014, 50% of e-signature implementations
will be delivered through SaaS, while the remainder will be
delivered on-premise.
Revenues for the first half of 2012 are lower than the
comparative period because of last year's extraordinary
single-largest perpetual financial services license in our history.
What is not reflected in these results are the very strong bookings
that we have secured year to date whose revenues will be recognized
in subsequent periods. We are very fortunate to be able to invest
in transactional recurring revenue streams that, we believe, will
significantly enhance Silanis' value." said Tommy Petrogiannis,
founder and Chief Executive Officer of the Company and Silanis.
Silanis H1 2012 Financial Highlights
-- Revenue of $3.3 million (H1 2011 - $7.3 million)
-- Net loss of $3.6 million (H1 2011 - net earnings of $1.6 million)
-- Cash and long-term investments of $9.3 million (Dec. 31, 2011 - $12.9 million)
Silanis H1 2012 Operating Highlights
-- Successful launch of Silanis comprehensive "any-premise" product suite and market offering
-- Silanis' e-SignLive(TM) added new named paying customers at a
month over month growth rate greater than 25%
-- Insurance carriers using Silanis private cloud offerings more
than doubled their prospective commitments
-- Service providers delivering Silanis solutions experienced
material growth in their end-user transactions
Major Contracts Subsequent to H1 2012
-- A major US federal government agency licensed Silanis' e-Sign
Enterprise(TM) to bring added transparency and auditability to its
organization
-- In a competitive win, a leading financial services provider
selected Silanis' e-Sign Enterprise for processing consumer loans
and improving customer service
-- Significant transactional software and professional services
bookings added to backlog for H2 and beyond
For further details, please contact:
Silanis International Limited
Tommy Petrogiannis, Chief Executive Officer
www.sil-intl.co.uk
Tel: + 1 514 337 5255
Canaccord Genuity Limited
Simon Bridges
Tel: +44 (0)20 7523 8000
C.E.O.'s REVIEW AND OUTLOOK
Today, Silanis is the only provider of electronic signatures to
the enterprise marketplace that delivers its solutions as SaaS,
both multi-tenant and as a dedicated private instance on the Cloud,
or on-premise.
Our vision is simple: to be the most widely used e-signature
solution in high-value, regulated and compliance-driven
applications worldwide. There are numerous providers of basic
e-signature products in the market today that provide simple
signing capabilities to be applied to low-value, horizontal
applications where the e-signature ostensibly replaces a fax
machine. Our strategy is to focus on market segments where
signatures matter greatly, requiring us to deliver superior
solutions that encompass process orchestration, robust electronic
evidence, device independent mobile support, sophisticated
transaction management, invaluable customer insight and analytics.
The technology investment required to deliver these capabilities is
material, but such investment is yielding the capacity to generate
per transaction revenues that are multiples greater than the basic
e-signature products on the market today.
Our investments in mobile and customer insight analytics
solutions are not only being adopted by leading insurance and
financial institutions in order to provide a transformational
customer experience. They are fuelling a whole new value
proposition - having real-time insight into how consumers are
interacting with our clients.
We are fully aware that the purposeful transition to increased
recurring transactional revenue, at the expense of one-time
perpetual license revenue, is very visible in the short-term. But
we heartily believe this is a sound strategy because it will
successfully align the buying behaviour of our enterprise customers
with our long-term strategic growth objectives.
First half total revenue notwithstanding, we have signed more
new customers year-to-date than in any other time in our history.
We have closed significant services and transactional contracts to
be delivered in upcoming periods. The revenue mix will continue to
shift - by design. I look forward to updating you on our
progress.
Tommy Petrogiannis, Chief Executive Officer
Silanis Technology Inc. and Silanis International Limited
Financial Review
The unaudited interim financial statements of the Company and
Silanis for the six months ended June 30, 2012 are included at the
end of this release.
The following table outlines Silanis' results of operations for
the period indicated:
Unaudited Six months Six months %
ended ended
in U.S. dollars June 30, 2012 June 30, 2011 Change
Revenues
Software licenses 550,872 4,435,690 (88%)
Maintenance 2,199,356 1,882,303 17%
Professional services 550,534 974,478 (44%)
Reimbursable expenses
and other 34,664 40,321 (14%)
------------------------- -------------------------- -------
3,335,426 7,332,792 (55%)
Cost of revenues 1,545,248 1,998,273 (23%)
------------------------- -------------------------- -------
1,790,178 5,334,519 (66%)
Operating expenses
Sales and marketing 2,542,152 2,105,358 21%
Research and development 2,802,466 1,915,529 46%
Tax credits (964,366) (1,251,260) (23%)
General and administrative 1,040,773 1,085,459 (4%)
Financial 2,942 (72,260) (104%)
Amortization of capital
assets 62,121 49,181 26%
------------------------- -------------------------- -------
5,486,088 3,832,007 43%
------------------------- -------------------------- -------
Earnings (loss) before
undernoted item (3,695,910) 1,502,512 (346%)
Interest income 52,732 66,508 (21%)
------------------------- -------------------------- -------
Net earnings (loss) (3,643,178) 1,569,020 (332%)
========================= ========================== =======
Revenues, Cost of revenues and Net earnings (loss)
Total revenues decreased by $4 million in the first six months
of 2012, from $7.3 million in the same period last year. Almost all
of the variance was attributable to a decrease in sales of
perpetual software licenses. Whilst Silanis is successfully
executing its transition to greater recurring revenues, the H1
results primarily reflect the fact that Silanis realized its
largest-ever financial services on-premise license in H1 2011, for
which there was no counterpart in H1 2012. Meanwhile year-to-date,
through its channel partners, Silanis has closed three times the
number of new major named customers than in the same period last
year. Silanis' e-SignLive(TM) is adding new customers at a month
over month growth rate greater than 25%. The revenue streams
associated with these customers typically take over 12 months to
achieve anticipated monthly transaction volumes.
Maintenance revenues, Silanis' measure of customer satisfaction
and retention, continued to steadily increase by $0.3 million over
the comparative period, reflecting the impact of major new
maintenance contracts added in the 12 months ended June 30, 2012,
plus the full-period recognition of maintenance contracts added in
H1 2011.
Professional services revenues decreased from $1.0 million to
$0.6 million for the first six months of 2012 compared to the same
period last year. Lower H1 2012 professional services revenues
reflected a limited backlog of undelivered contracts from the end
of 2011, and a limited amount of new business booked in time to
deliver in 2012. Subsequent to the close of H1 2012, Silanis has
closed the largest dollar volume of services contracts to start a
calendar half in its history. This will permit the delivery of
significantly greater services revenues in H2 2012 and furthermore
set up a strong backlog into 2013.
Cost of revenues for the first six months of 2012 decreased by
$0.5 million compared to the same period last year. These costs are
comprised of variable sales compensation and professional services
implementation costs. The decrease is primarily attributable to
variable sales compensation, itself directly related to the
decrease in revenues.
Net loss for the first six months of 2012 was $3.6 million.
Expenses
Sales and Marketing
Sales and marketing (S&M) expenses consist of all costs
directly related to the sales, marketing and promotion of Silanis'
software solutions. These activities include strategic
partnerships, direct outside sales, direct inbound sales, technical
sales support, lead generation and marketing, but do not include
sales commissions which are classified in cost of revenues. S&M
expenses increased by $0.4 million over the same period last year.
The increase is due to increased headcount to support the Silanis'
direct, partner and existing customer groups. Silanis also executed
more significant targeted marketing activities in H1, a highlight
of which was the widely attended Insurance Summit hosted in
conjunction with IBM.
Research and Development
Research and development (R&D) expenses consist primarily of
human resource expenses associated with research and testing of new
products, and the management and development of existing products.
Gross R&D expenditures increased by $0.9 million for the six
months ended June 30, 2012, which represents a 46% increase from
the $1.9 million incurred for the same period last year. This
increase is attributable to significant efforts expended in
development of Silanis' new products: e-Sign Enterprise 4.6,
released in June with tested enterprise capability of processing
over 3 billion documents annually, and the new Transaction Manager,
released in July. Further major product announcements are
forthcoming.
Fully refundable Canadian scientific research and experimental
development (SR&ED) tax credits provided an expense recovery of
$1 million for the six months ended June 30, 2012. The accrual of
tax credits for H1 2011 decreased however by $0.3 million as the
Company has now exceeded the expenditure limit at which the rate of
refundable tax credits is reduced, and adjusted its provision for
2011 tax credits pursuant to government review in process.
General and Administrative, Financial, Amortization and Interest
Income
General and administrative (G&A) expenses include all
overhead incurred to support Silanis' operations, including rental
of premises and utilities, insurance, professional fees, accounting
and administration, and senior executive management compensation.
Financial expenses are comprised of bank charges and any exchange
gains or losses with respect to foreign currencies. Interest income
reflects the rate of interest coupon on invested funds.
These categories of expense and income were, in aggregate, in
line with those of the comparative period in 2011, and a reflection
of the various cost/income drivers associated with each.
FORWARD-LOOKING STATEMENTS
This document includes statements that are, or may be deemed to
be, 'forward-looking statements'. These forward-looking statements
can be identified by the use of forward-looking terminology,
including the terms 'believes', 'estimates', 'plans', 'projects',
'anticipates', 'expects', 'intends', 'may', 'will', or 'should' or,
in each case, their negative or other variations or comparable
terminology. These forward-looking statements include matters that
are not historical facts. They appear in a number of places
throughout this document and include statements regarding the
Directors' current intentions, beliefs or expectations concerning,
among other things, the Company's and Silanis' results of
operations, financial condition, liquidity, prospects, growth,
strategies and industry.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Actual results and developments could differ materially from those
expressed or implied by the forward-looking statements.
Forward-looking statements may and often do differ materially
from actual results. Any forward-looking statements in this
document are based on certain factors and assumptions, including
the Directors' current view with respect to future events and are
subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Company's and
Silanis' operations, results of operations, growth strategy and
liquidity. While the Directors consider these assumptions to be
reasonable based on information currently available, they may prove
to be incorrect. Prospective investors should specifically consider
the factors identified in this document that could cause actual
results to differ before making an investment decision. The Company
undertakes no obligation publicly to release the results of any
revisions to any forward-looking statements in this document that
may occur due to any change in the Directors' expectations or to
reflect events or circumstances after the date of this
document.
SILANIS TECHNOLOGY INC.
Interim consolidated balance sheets
As at June 30, 2012 and December 31, 2011
(unaudited)
(U.S. dollars)
Assets
Current assets
Cash 3,387,392 6,910,965
Accounts receivable 671,129 3,965,543
Work in process 149,801 288,138
Tax credits receivable 3,232,753 2,272,651
Prepaid expenses 296,087 202,293
Shareholder and employee loans (Note 6) 238,128 396,074
7,975,290 14,035,664
Capital assets 420,492 393,527
Long-term investments (Note 4) 5,925,210 5,939,702
Other long-term assets 27,820 27,820
14,348,812 20,396,713
Liabilities
Current liabilities
Accounts payable and accrued liabilities 1,651,552 2,600,128
Deferred revenue 1,562,774 2,810,069
3,214,326 5,410,197
Deferred lease inducement 72,773 74,399
3,287,099 5,484,596
Shareholders' equity
Capital stock (Note 3) 28,078,647 28,400,974
Contributed surplus 676,915 561,814
Deficit (17,693,849) (14,050,671)
11,061,713 14,912,117
14,348,812 20,396,713
The accompanying notes are an integral part of these interim
consolidated financial statements.
Approved by the Board
Signed, Tommy Petrogiannis
C.E.O.
SILANIS TECHNOLOGY INC.
Interim consolidated statements of operations and deficit
For the six-month periods ended June 30
(unaudited)
(U.S. dollars)
2012 2011
$ $
Revenues
Software licenses 550,872 4,435,690
Maintenance 2,199,356 1,882,303
Professional services 550,534 974,478
Reimbursable expenses and other 34,664 40,321
3,335,426 7,332,792
Cost of revenues 1,545,248 1,998,273
1,790,178 5,334,519
Operating expenses
Sales and marketing 2,542,152 2,105,358 Research and development
2,802,466 1,915,529
Tax credits (964,366) (1,251,260)
General and administrative 1,040,773 1,085,459
Financial (Note 5) 2,942 (72,260)
Amortization of capital assets 62,121 49,181
5,486,088 3,832,007
(Loss) earnings before undernoted item (3,695,910) 1,502,512
Interest income 52,732 66,508
Net (loss) earnings (3,643,178) 1,569,020
Deficit, beginning of period (14,050,671) (15,750,310)
Deficit, end of period (17,693,849) (14,181,290)
The accompanying notes are an integral part of these interim
consolidated financial statements.
SILANIS TECHNOLOGY INC.
Interim consolidated statements of cash flows
For the six-month periods ended June 30
(unaudited)
(U.S. dollars)
2012 2011
$ $
Operating activities
Net (loss) earnings (3,643,178) 1,569,020 Adjustments for:
Amortization of capital assets 62,121 49,181
Amortization of premiums on long term investments 14,492
14,492
Stock-based compensation 115,101 57,388
Deferred lease inducement (1,626) (1,626)
(3,453,090) 1,688,455
Net changes in non-cash working capital items
Accounts receivable 3,294,414 (1,566,786)
Work in process 138,337 129,870
Tax credits receivable (960,102) 200,023
Prepaid expenses (93,794) (4,541)
Accounts payable and accrued liabilities (948,576) 737,070
Deferred revenue (1,247,295) (665,784)
(3,270,106) 518,307
Investing activities
Net increase in shareholder and employee loans (164,381)
(119,869)
Acquisition of capital assets (89,086) (70,297)
(253,467) (190,166)
Financing activities
- -
Increase (decrease) in cash (3,523,573) 328,141
Cash, beginning of period 6,910,965 6,291,722
Cash, end of period 3,387,392 6,619,863
Non-cash financing transaction
Capital distribution (Note 3) 322,327 296,930
The accompanying notes are an integral part of these interim
consolidated financial statements.
SILANIS TECHNOLOGY INC.
Notes to the interim consolidated financial statements
For the six-month periods ended June 30, 2012 and 2011
(unaudited)
(U.S. dollars)
1. Nature of business
Silanis Technology Inc. (the "Company") is engaged in the
development, distribution and service of computer software, mainly
in the U.S. market.
2. Significant accounting policies
Basis of Presentation
The interim consolidated financial statement have been prepared
in accordance with Accounting standards for private enterprises
("ASPE") using the same accounting policies as in Note 2 of the
notes to the 2011 annual consolidated financial statements.
During the six months ended June 30, 2012, the Company has
continued discussions with the Autorité des marchés financiers du
Québec ("AMF"), with whom it files its financial statements, to
confirm its financial statements are to be prepared in accordance
with ASPE. Having received 100% shareholder approval, these interim
consolidated financial statements, and those for the year ended
December 31, 2011, have both been prepared under ASPE on the basis
that approval from the AMF shall be received.
3. Capital stock
a) Shares
Authorized
The following authorized classes of shares are unlimited in
number and without par value:
Class A common shares
Voting and participating
Class B Exchangeable shares and Class C Exchangeable shares
Voting, participating, exchangeable into ordinary shares of
Silanis International Limited ("LTD"), the Company's significant
shareholder, at the option of the holder at any time
Class D common shares
Voting, entitled to an amount of $0.0001 per share in preference
to the other classes of shares, upon the liquidation, dissolution
or winding-up of the Company. The holders of Class D common shares
will be entitled to any remaining property after the preference
payment on a pari-passu basis with the holders of the other classes
of shares
Issued and fully paid
June 30, 2012 December 31, 2011
------------------------ ------------------------
Number Number
of of
shares shares
----------- ----------- ----------- -----------
$ $
Class A common shares 21,750,000 14,695,727 21,750,000 15,018,054
Class B Exchangeable
shares 26,666,460 10,581,622 26,666,460 10,581,622
Class C Exchangeable
shares 38,640,566 2,801,298 38,640,566 2,801,298
----------------------- ----------- ----------- ----------- -----------
87,057,026 28,078,647 87,057,026 28,400,974
----------------------- ----------- ----------- ----------- -----------
In 2012, a capital distribution was declared by the Company on
the outstanding Class A common shares in the amount of $322,327
(2011 - $296,930) relating to the ongoing expenses of LTD, paid for
by the Company. This transaction settled a portion of the amounts
due from LTD and was recorded as a reduction of the Class A common
shares carrying amounts.
b) Stock options
In June 2007, the Company's stock option plan was amended and
restated (the "New Plan"). Pursuant to the New Plan, options
exercisable for Class C Exchangeable shares of the Company can be
issued from time to time to employees, consultants, directors and
officers of LTD and/or the Company, provided that the aggregate
number of Class C Exchangeable shares that can be issued further to
the exercise of options under the New Plan may not exceed more than
10% of the share capital of LTD on a fully diluted basis (assuming
the exchange of all Class B Exchangeable shares and Class C
Exchangeable shares of the Company). Unless otherwise determined by
the board of directors of the Company at the time of the granting
of a particular option, options granted under the New Plan vest 25%
per year over four years and expire 10 years after their date of
grant. Certain options additionally have vesting that is
conditional upon the Company reaching certain financial targets
and/or individual performance measures.
For these performance-based options, a stock-based compensation
expense is recorded based on the likelihood that the financial
targets and/or performance measures would be reached. For the
six-months ended June 30, 2012, $NIL compensation expense (2011
-
$7,108) was recorded for these performance-based options.
The following table presents options that were issued and
outstanding under the New Plan:
2012 2011
Weighted Weighted
average average
Number of exercise Number of exercise
options price options price
GBP GBP
Outstanding, December 31 4,264,166 0.17 3,747,000 0.16
Granted 2,825,000 0.30 -
Outstanding, June 30 7,089,166 0.23 3,747,500 0.16
Exercisable, June 30 2,181,875 0.19 1,695,000 0.21
Options outstanding as at June
30, 2011
Weighted
average
Number of Exercisable remaining
Exercise price options options life (years)
GBP0.46 475,000 475,000 4.97
GBP0.12 825,000 805,000 5.80
GBP0.09 627,500 451,875 6.32
GBP0.119 80,000 40,000 7.18
GBP0.1885 275,000 137,500 7.33
GBP0.111 965,000 272,500 8.30
GBP0.199 1,016,666 - 9.32
GBP0.305 2,825,000 - 9.57
---------------- ----------- ------------ --------------
7,089,166 2,181,875 8.21
The fair value of the stock options granted is determined using
the Black-Scholes option pricing model, with the following
weighted-average assumptions:
2012 2011
Expected dividend yield 0.0% 0.0%
Expected volatility 75% 55%
Risk-free interest rate 1.6% 2.0%
Expected term in years 6.23 6.56
2,825,000 options were granted during the six-months ended June
30, 2012 (2011 - nil), with a fair value of $875,000.
The stock-based compensation expense for the six-month period
ended June 30, 2012 amounted to $115,101 (2011 - $57,388), and is
included in cost of revenues, sales and marketing, research and
development, and general and administrative expenses according to
the functional role of the respective optionees.
The Black-Scholes option pricing model requires the use of
subjective assumptions including the expected volatility. Changes
in the assumptions can materially affect the fair value estimate
and, therefore, the Black-Scholes model does not necessarily
provide a reliable single measure of the fair value of the
Company's stock options.
c) Warrants outstanding
As at June 30, 2012 the Company has outstanding warrants to
acquire 1,290,025 Class B Exchangeable shares of the Company at an
exercise price of $0.42634 per share expiring upon the earlier of
(i) July 31, 2012 and (ii) three years from the date that any
shares of the Company are listed for trading on any recognized
stock exchange in Canada or in the United States or are quoted for
trading on NASDAQ.
Subsequent to June 30, 2012, these warrants expired unexercised,
in accordance with their terms.
4. Long-term investments
The long-term investments consist of a guaranteed investment
certificate in the amount of $2,000,000 with an annual interest
rate of 1.35%, maturing in 2014, and two corporate bonds with
principal values of $1,912,000 and $1,935,000, bearing interest
rates of 3.00% and 2.375%, respectively, with effective interest
rates of 2.04% and 1.70%, respectively, and maturing in 2014 and
2015, respectively. These investments are measured at amortized
cost.
5. Financial expenses (income)
2012 2011
$ $
Bank charges 18,574 16,630
Foreign exchange
gain (15,632) (88,890)
--------- ---------
2,942 (72,260)
========= =========
6. Related party transactions and balances
The following transactions are measured at the exchange amount,
which is the consideration established and agreed upon by the
related parties:
-- Pursuant to its articles of incorporation, the Company may
pay ongoing expenses of LTD by way of a capital distribution on the
outstanding Class A common shares. For the period ended June 30,
2012, expenses of $165,577 were incurred on behalf of LTD and are
included in shareholder and employee loans, without interest.
-- In 2012, a capital distribution was declared by the Company
on the outstanding Class A common shares in the amount of $322,327
relating to the expenses of LTD for the year ended December 31,
2011, paid for by the Company. This transaction settled all amounts
due from LTD as at December 31, 2011 and was recorded as a
reduction of capital stock (see Note 3).
-- Shareholder and employee loans includes a loan to an
executive officer by virtue of his employment. This loan, in the
amount of $72,552 (CDN$73,935), bears interest payable annually at
the commercial prime rate plus 0.25%. The loan is repayable on
demand and is secured by a number of Class C Exchangeable shares
with aggregate market value equal to the outstanding loan including
accrued interest.
___________________________________________________________
FINANCIAL STATEMENTS - SILANIS INTERNATIONAL LIMITED
INDEPENDENT REVIEW REPORT TO THE MEMBERS OF SILANIS
INTERNATIONAL LIMITED
We have been engaged by Silanis International Limited (the
"Company") to review the condensed set of financial statements in
the half-yearly financial report for the six months ended June 30,
2012, which comprises the balance sheet, the statement of
comprehensive income (loss), the statement of changes in equity,
the statement of cash flows and related notes 1 to 7. We have read
the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatement or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company, in accordance with
International Standard on Review Engagements 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board. Our work has
been undertaken so that we might state to the Company those matters
we are required to state to them in an independent review 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, for our review work, for this report, or for the
conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial statements in accordance
with the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual set of financial statements
of the Company are prepared in accordance with IFRSs as issued by
IASB. The condensed set of financial statements included in this
half-yearly financial report have been prepared in accordance with
International Accounting Standard 34, "Interim Financial
Reporting," as issued by IASB.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended June
30, 2012 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as issued by the IASB and
the AIM rules of the London Stock Exchange.
Emphasis of matter - Investment in associate
Without modifying our conclusion, we have considered the
disclosures made in note 2 of the financial statements, which
describe the method adopted by the directors for recording an
impairment charge in the investment in associate. The calculation
of the amount of the impairment arising is inherently uncertain for
the reasons set out in note 2. It is not possible to quantify the
effects of this uncertainty.
Deloitte LLP
Chartered Accountants
St Helier, Jersey
Signed, August 30, 2012
SILANIS INTERNATIONAL LIMITED
Balance sheet
As at
(unaudited)
(in GBP)
June 30, December 31,
2012 2011
GBP GBP
Assets
Non-current asset
Investment in associate (Note 2) 1,762,061 2,398,189
Investment in subsidiary (Note 1) 1 1
Current asset
Prepaid expenses 29,085 13,856
Total assets 1,791,147 2,412,046
Equity and liabilities
Equity
Share capital (Note 3) 217,500 217,500
Share premium (Note 4) 9,787,500 9,787,500
Accumulated losses (9,638,619) (8,969,373)
Translation reserve (Note 2) 1,325,890 1,168,934
Total equity 1,692,271 2,204,561
Current liabilities
Accounts payable to an associate 98,876 207,485
Total equity and liabilities 1,791,147 2,412,046
Net asset value per ordinary share (Note 6) 0.08 0.10
The accompanying notes are an integral part of these condensed
interim financial statements.
Approved by the Board
Signed, Tommy Petrogiannis
C.E.O.
SILANIS INTERNATIONAL LIMITED
Statement of comprehensive income (loss)
For the six months ended June 30, 2012
(unaudited)
(in GBP)
2012 2011
GBP GBP
Continuing operations
Operating expenses
General and administrative 83,647 70,992
Share of (loss) profit of associate (Note 2) (585,599)
242,408
Net (loss) profit for the period (669,246) 171,416
Net (loss) profit per ordinary share (Note 6)
(Basic and diluted) (0.03) 0.01
Other comprehensive income for the period, after tax
Foreign currency translation adjustment related to the
investment in associate (Note 2) 156,956 91,810
Other comprehensive income for the period, net of tax 156,956
91,810
Total comprehensive (loss) income for the period (512,290)
263,226
The accompanying notes are an integral part of these condensed
interim financial statements.
SILANIS INTERNATIONAL LIMITED
Statement of changes in equity
For the six months ended June 30, 2012
(unaudited)
Six months ended June 30, 2011
-----------------------------------------------------------------------------------------------
Profit and Translation
Share capital Share premium loss account reserve Total
------------------- -------------------- ------------------- ---------------- -------------
GBP GBP GBP GBP GBP
Balance, beginning
of
period 217,500 9,787,500 (9,032,680) 994,889 1,967,209
Foreign currency
translation
adjustment - - - 91,810 91,810
Net profit for
the period - - 171,416 - 171,416
--------------------- ------------------- -------------------- ------------------- ---------------- -------------
Balance, end of
period 217,500 9,787,500 (8,861,264) 1,086,699 2,230,435
--------------------- ------------------- -------------------- ------------------- ---------------- -------------
Six months ended June 30, 2012
-----------------------------------------------------------------------------------------------
Profit and Translation
Share capital Share premium loss account reserve Total
-------------------- ------------------- ------------------- ---------------- -------------
GBP GBP GBP GBP GBP
Balance, beginning
of period 217,500 9,787,500 (8,969,373) 1,168,934 2,204,561
Foreign currency
translation
adjustment - - - 156,956 156,956
Net loss for the
period - - (669,246) - (669,246)
--------------------- -------------------- ------------------- ------------------- ---------------- -------------
Balance, end of
period 217,500 9,787,500 (9,638,619) 1,325,890 1,692,271
--------------------- -------------------- ------------------- ------------------- ---------------- -------------
The accompanying notes are an integral part of these condensed
interim financial statements.
SILANIS INTERNATIONAL LIMITED
Statement of cash flows
For the six months ended June 30, 2012
(unaudited)
(in GBP)
2012 2011
GBP GBP
Operating activities
Net (loss) profit for the period (669,246) 171,416
Adjustments for:
Share of loss (profit) of associate (Note 2) 585,599
(242,408)
Decrease in accounts payable to an associate (108,609)
(117,245)
Increase in prepaid expenses (15,229) (2,139)
Net cash flow used in operating activities (207,485)
(190,376)
Investing activities
Capital distribution received from an associate 207,485
190,376
Movement in cash - -
Cash, beginning of period - -
Cash, end of period - -
The accompanying notes are an integral part of these condensed
interim financial statements.
SILANIS INTERNATIONAL LIMITED
Notes to the condensed interim financial statements
For the six month period ended June 30, 2012
(unaudited)
(in GBP)
1. Basis of preparation
The condensed interim financial statements have been prepared in
accordance with International Accounting Standards ("IAS") 34
Interim Financial Reporting, as issued by the International
Accounting Standards Board ("IASB") using the historical cost basis
except for the investment in an associate which is recorded under
the equity method, as described below.
The principal accounting policies, which have been applied
consistently throughout the period, are set out below. The same
accounting policies were applied for the financial statements for
the year ended December 31, 2011.
Going concern
As highlighted in note 7 and in accordance with its Articles of
Incorporation, Silanis Technology Inc. ("Silanis") provides
financial support to Silanis International Limited (the "Company")
on an ongoing basis. The going concern of the Company is dependent
on this continued support from Silanis. The Company's directors
have reviewed the cash flow of Silanis and made inquiries of the
board of directors of Silanis and consider that the Silanis has
adequate financial resources to enable it to meet its obligations
with regard to the Company. The directors have a reasonable
expectation that the Company will continue to receive funding from
Silanis and therefore have adequate resources to continue in
operational existence for the foreseeable future. For these
reasons, they continue to adopt the going concern basis in
preparing the half-yearly report and accounts.
Investment in an associate
The Company owns an equity investment in an associate over which
it has a significant influence. Significant influence is the power
to participate in, but not control, in the financial and operating
decisions of the investee. Investments in associates are accounted
for using the equity method, under which the investment is
initially recorded at cost and subsequently adjusted by the
Company's share of the associate's post-acquisition change in net
assets, less any impairment in value and after any changes in
foreign currency translation adjustment.
Investment in a subsidiary
Silanis Canada Inc., a wholly owned subsidiary which is a
dormant company, was not consolidated because the resulting impact
on the Company's financial statements would not influence the
economic decisions of the users due to immateriality. The
investment is reflected at cost less impairment.
Expenses
Ongoing expenses incurred by the Company are paid for by Silanis
Technology Inc. on its behalf as the Company has no bank account.
Silanis Technology Inc. has confirmed that they will continue to
provide financial support to the Company to continue as a going
concern until at least March 31, 2014.
Foreign currencies
The financial statements of the Company are presented in the
currency of the primary economic environment in which it operates
(its functional currency). For the purpose of the condensed
financial statements, the results and financial position of the
Company are expressed in pounds sterling, which is the functional
currency of the Company, and the presentation currency for the
financial statements.
In preparing the financial statements, transactions in
currencies other than the entity's functional currency (foreign
currencies) are recognised at the rates of exchange prevailing on
the dates of the transactions. At each balance sheet date, monetary
assets and liabilities that are denominated in foreign currencies
are retranslated at the rates prevailing at that date. Non-monetary
items carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing at the date when
the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not
retranslated.
For the purpose of presenting the financial statements, the
assets and liabilities of Silanis are translated at exchange rates
prevailing on the balance sheet date. Income and expense items are
translated at the average exchange rates for the period, unless
exchange rates fluctuate significantly during that period, in which
case the exchange rates at the date of transactions are used.
Judgments by Management and estimation uncertainty
The preparation of financial statements in conformity with IFRSs
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates. The significant estimate requiring the use of
management's judgment relates to the carrying amount of the
investment in its associate company, Silanis and this is discussed
in note 2.
Operating segments
Management has determined that the Company operates in one
industry and geographic segment. Specifically, the Company operates
in the distribution and service of computer software industry and
primarily in the geographic region of the United States of America,
through its associate, Silanis Technology Inc.
Accounting standards
Standards, amendments and interpretations effective from January
1, 2012
The following new and revised Standards and Interpretations have
been adopted in the current year. Their adoption has not had any
significant impact on the amounts reported in these financial
statements but may impact accounting for future transactions and
arrangements.
-- Amendments to IAS 12, Deferred Tax: Recovery of Underlying
Assets, effective January 1, 2012
Standards, amendments and interpretations not yet applicable and
not early adopted by the Company
At the date of authorisation of these financial statements, the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
-- Amendments to IAS 1, Presentation of items of other
comprehensive income, effective July 1, 2012
-- Amendments to IAS 19, Employee benefits, effective January 1, 2013
-- IFRS 9, Financial Instruments, effective January 1, 2015
-- IFRS 10, Consolidated financial statements, efective January 1, 2013
-- IFRS 11, Joint arrangements, effective January 1, 2013
-- IFRS 12, Disclosure of interests in other entities, effective January 1, 2013
-- IAS 27 (2011), Separate financial statements, effective January 1, 2013
-- IAS 28 (2011), Investments in associates and joint ventures, effective January 1, 2013
-- IFRS 13, Fair value measurement, effective January 1, 2013
-- Improvements to IFRSs 2011, effective January 1, 2013
-- IFRIC 20, Stripping costs in the production phase of a
surface mine, effective January 1, 2013
The directors do not expect that the adoption of the standards
listed above will have a material impact on the financial
statements of the Company's in future periods except for IFRS 12
which will impact the disclosure of interests the Company has in
other entities. Beyond the information
above, it is not practicable to provide a reasonable estimate of
the effect of these standards until a detailed review has been
completed.
2. Investment in an associate
Silanis is engaged in the development, distribution and service
of computer software, mainly in the U.S. market and was
incorporated in Canada.
As at June 30, 2012, the details of the investment are as
follows:
GBP
Carrying value as at January 1, 2012 2,398,189
Capital distribution received from the associate (Note 7)
(207,485)
Share of loss for the six-month period ended
June 30, 2012 (585,599)
Foreign currency translation adjustment related to the
investment in associate _156,956
Carrying value as at June 30, 2012 1,762,061
The summarized unaudited financial information of Silanis as at
and for the six-month period ended June 30, 2012, is as
follows:
GBP
Assets 9,148,694
Liabilities 2,095,830
Revenue 2,115,313
Net loss (2,310,488)
As at December 31, 2011, the details of the investment are as
follows:
GBP
Carrying value as at January 1, 2011 2,149,821
Capital distribution received from the associate (Note 7)
(190,376)
Share of gain for the year ended
December 31, 2011 264,700
Foreign currency translation adjustment _174,045
Carrying value as at December 31, 2011 2,398,189
The summarized financial information of Silanis as at and for
the year ended December 31, 2011, is as follows:
GBP
Assets 13,129,522
Liabilities 3,530,477
Revenue 8,548,882
Net profit 1,059,493
IAS 36: Impairment of Assets requires that once there is
evidence of an impairment, the asset should be recorded at the
lower of the carrying amount and its recoverable amount. The
recoverable amount is the higher of the fair value (less costs to
sell) and the value in use.
There is no active market in which the shares of Silanis are
traded. The directors of the Company are uncertain about the
trading prospects of Silanis and, on the basis of this uncertainty,
have determined the value in use as being equal to its share of the
Net Asset Value of Silanis as at June 30, 2012 and this also
equates the approximate fair value. As such, no impairment has been
provided for, although the directors recognize the uncertainty
surrounding recovery of value from this investment.
A translation reserve is recorded at period-end to account for
the foreign currency adjustment.
The reporting date of the financial statements of Silanis is
June 30, 2012.
The directors of the Company are represented on the Board of
Directors of Silanis. The Company is therefore able to exercise
significant influence over its investment. The Company currently
owns 24.98% of the issued and fully paid shares of Silanis as of
June 30, 2012.
The Company holds 21,750,000 Class A common shares in Silanis,
an associated company. Share capital of Silanis also includes
26,666,460 Class B Exchangeable shares and 38,640,566 Class C
Exchangeable shares, which rank pari passu with Class A common
shares.
In the event of exercise of option to exchange by the Class B
and Class C shareholders, Silanis will cancel the Class B
Exchangeable shares and Class C Exchangeable shares and the Company
will issue an equivalent number of Ordinary shares to the holders
of the exchangeable shares. In return for issuance of shares, the
Company's wholly owned subsidiary, Silanis Canada Inc., will
receive Class D common shares in Silanis which rank pari passu with
Class A common shares.
The Class A shares of Silanis, held by the Company rank pari
passu with the other classes of shares in Silanis in respect of
voting, dividend and liquidation rights.
3. Share capital
Ordinary shares with a par value of GBP0.01 per share
As at June 30, 2012 and December
31, 2011
Number GBP
Authorized 10,000,000,000 100,000,000
Issued and fully paid 21,750,000 217,500
As per the Articles of Association of the Company, the
authorized share capital of the Company is 10,000,000,000 ordinary
shares of GBP0.01 each.
As at June 30, 2012 and December 31, 2011, there was no ultimate
controlling party.
4. Share premium
The share premium arose on issuance of 21,750,000 equity shares
on June 26, 2007 for consideration of GBP10,005,000.
5. Income taxes
The Company is incorporated in Jersey and currently conducts its
affairs in such a way that it is regarded as resident for tax
purposes in the United Kingdom.
UK Corporation tax is provided at amounts expected to be paid /
recovered using the tax rates and laws that have been enacted or
substantively enacted by the balance sheet date.
Full provision is made for deferred tax assets and liabilities
arising from timing differences subject to consideration of
prudence. Deferred tax is measured at the average rates that are
expected to apply in the periods in which the timing differences
are expected to reverse, based on tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax assets are recognized to the extent that it is
regarded as more likely than not that they will be recovered.
Deferred tax assets and liabilities are not discounted.
As the Company is tax resident in the United Kingdom, the
Company is non-resident for tax purposes in Jersey under the
provisions of Article 123 of the Income Tax (Jersey) law and the
Company is not subject to Jersey tax other than in respect of
Jersey source income or on the profits of a permanent establishment
located in Jersey.
The current tax charge is nil (2011 - nil). As at 30 June 2012,
the Company has unrecognised deferred tax asset arising from
chargeable losses and unutilised management expenses amounting to
GBP788k (December 31, 2011: GBP78,000). The directors believe that
the recoverability of the deferred tax asset is uncertain hence has
not been recognised in these financial statements.
6. Net (loss) profit per ordinary share and net asset value per
ordinary share
The calculation of net (loss) profit per ordinary share for the
six-month period ended June 30, 2012 was based on the loss
attributable to shareholders of GBP669,246 per the statement of
comprehensive income (loss) (2011 - profit of GBP171,416) and a
weighted average number of ordinary shares in issue of
21,750,000.
The calculation of net asset value per ordinary share as at June
30, 2012 was based on the net assets attributable to shareholders
of GBP1,692,271 (2011 - GBP2,230,435) and the 21,750,000 ordinary
shares in issue.
Dilutive net profit (loss) per ordinary shares is not presented
because to do so would be anti-dilutive.
7. Related party transactions
Pursuant to the articles of incorporation of Silanis Technology
Inc. ("Silanis"), Silanis will provide funds for ongoing expenses
of the Company by way of a capital distribution on Silanis'
outstanding Class A common shares. As at June 30, 2012 expenses of
GBP98,876 (2011 - GBP73,131) incurred by the Company, are included
in accounts payable to an associate. As at June 30, 2012, a capital
distribution amounting to GBP207,485 (2011 - GBP190,376) was
declared by Silanis and satisfied through the reduction of a
portion of the amount payable to the associate.
As at June 30, 2012, the key management personnel (Directors) as
well as their compensation for the six-month period ended June 30,
2012 from the Company are as follows (2011 - $US 43,750 in
aggregate):
GBP
David Brereton 5,022 ($US 7,861)
Michael Hunt 5,260 ($US 8,234)
Justin LaFayette 5,973 ($US 9,361)
Vernon Lobo 5,883 ($US 9,220)
Jonathan Wener 4,705 ($US 7,361)
8. Capital risk management
The Company manages its capital to ensure it will continue as a
going concern while maximizing the return to stakeholders through
the optimization of its capital structure. The capital structure of
the Company consists of equity, comprising issued share capital and
the retained deficit. The Company had no borrowings as at June 30,
2012.
9. Ultimate controlling party
The directors believe that the Company has no immediate or
ultimate controlling party.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR USSSRUWAKRAR
Silanis (LSE:SNS)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Silanis (LSE:SNS)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
