Afentra Plc. Regulatory News (AET)

28 Apr 2006 15:56

The following replaces the "Final Results" announcement made today at 14.42under Number PRNUK-2804. The final paragraph of the Chairman's Statement in theearlier version should be disregarded. All other details remain the same.For immediate release 28 April 2006 ADESTE INVESTMENTS PLC (the "Company") FINAL RESULTS FOR THE YEAR ENDED 31 OCTOBER 2005 CHAIRMAN'S STATEMENTINTRODUCTIONThe Company presents its results for the year ended 31 October 2005.RESULTS AND DIVIDENDTurnover for the year ended 31 October 2005 decreased to ‚£101,550 (2004: ‚£567,455), giving a pre-tax loss of ‚£7,971,423 (2004: ‚£5,217,389) afterexceptional operating expenses which include provision against loan, interestand fees of ‚£7,901,368 (2004: ‚£5,068,950). The board cannot recommend thepayment of a dividend to shareholders.BUSINESS ACTIVITYThe Company's shares were suspended from trading on AIM on 8 March 2005 at theCompany's request following the appointment of administrative receivers toChesterton International Limited and thus the outstanding borrowings amountingto approximately ‚£7.2 million could no longer be repaid and which wereguaranteed by the company. National Westminster Bank subsequently demandedpayment under a guarantee given by the company for ‚£1.6 million on the 14thMarch 2005 and issued Statutory Demand on 17th March 2005. As the Company wasunable to meet this claim by the Bank, on 30 March 2005, after being made awareof the financial position of the company, the secured creditor of the company,Kaloshar Limited, appointed Antony Batty of Antony Batty & Co as administratorto the company.National Westminster Bank cancelled their demand against the company on thelikelihood of receiving a substantial payment on the sale of Chesterton assetswhich could lead to them being repaid in due course by Chesterton InternationalLimited and Chesterton Limited.The Directors over a number of months, worked toward a set of solutions forwhich shareholder approval was given at a creditors meeting of the 6thSeptember 2005 and the Court were notified that the Company was no longer inAdministration.At the Company's Extraordinary General meeting on the 7th October 2005 theCompany changed its name from Resurge Plc to Adeste Investments PLC and alsorestructured its Share Capital as detailed in note 13 to the accounts.CONTINUING OPERATIONSThe company continues to generate income through its current operations andwill be seeking further transactions to produce income and expand the business.Adeste Investments PLCPROFIT AND LOSS ACCOUNTfor the year ended 31 October 2005 Notes 2005 2004 ‚£ ‚£ TURNOVER 1 101,550 567,455 Direct costs (139,586) (37,874) Other operating expenses - exceptional 2 (7,901,368) (5,068,950) - other (29,163) (571,805) OPERATING LOSS (7,968,567) (5,111,174) Loss on disposal of fixed asset - (104,085)investments Interest receivable 1,973 8,309 Amounts written off fixed asset - (9,000)investments Interest payable 3 (4,829) (1,439) LOSS ON ORDINARY ACTIVITIES BEFORE 4 (7,971,423) (5,217,389)TAXATION Taxation 6 - 164,464 LOSS ON ORDINARY ACTIVITIES AFTER 14 (7,971,423) (5,052,925)TAXATION LOSS PER SHARE 7 Basic (11.07p) (7.02p) Diluted (11.07p) (7.02p) The operating loss for the year arises from the company's continuingoperations.No separate Statement of Total Recognised Gains and Loss has been prepared asall such gains and losses have been dealt with in the profit and loss account.Adeste Investments PLCBALANCE SHEET31 October 2005 Notes 2005 2004 ‚£ ‚£ FIXED ASSETS Investments 8 33,789 33,790 CURRENT ASSETS Debtors 9 209,578 22,171 Loans: due within one year 10 58,998 765,741 Cash at bank and in hand 36,439 33,689 305,015 821,601 CREDITORS: Amounts falling due within one 11 (805,951) (605,665) year NET CURRENT (LIABILITIES)/ASSETS (500,936) 215,936 TOTAL ASSETS LEE CURRENT LIABILITIES (467,147) 249,726 CREDITORS: Amounts falling due after more 12 (7,254,550) - than one year NET CURRENT (LIABILITIES)/ASSETS (7,721,697) 249,726 CAPITAL AND RESERVES Called up share capital 13 1,440,519 1,440,519 Share premium account 2,890,013 2,890,013 Profit and loss account 14 (12,052,229) (4,080,806) SHAREHOLDERS' FUNDS (including non-equity 15 (7,721,697) 249,726 interests) Adeste Investments PLCCASH FLOW STATEMENTfor the year ended 31 October 2005 Notes 2005 2004 ‚£ ‚£ Cash outflow from operating activities 16a (109,223) (1,085,209) Returns on investments and servicing 16b 1,973 6,870 of finance Taxation - (49,385) Capital expenditure and financial 16b - 1,279,636 investment Equity dividends paid - (79,229) CASH (OUTFLOW)/INFLOW BEFORE FINANCING (107,250) 72,683 Financing 16b 110,000 - INCREASE IN CASH IN THE YEAR 2,750 72,683 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (debt)/FUNDS 2005 2004 ‚£ ‚£ Increase in cash in the year 2,750 72,683 Cash inflow from change in debt (110,000) - CHANGE IN NET DEBT RESULTING FROM CASH (107,250) 72,683 FLOWS Accrued loan interest and debt from 16c (7,204,829) - subsidiary MOVEMENT IN NET (DEBT)/FUNDS IN THE (7,312,079) 72,683 YEAR NET FUNDS/(DEBT) AT 1 NOVEMBER 2004 33,689 (38,994) NET (DEBT)/FUNDS AT 31 OCTOBER 2005 16c (7,278,390) 33,689 Adeste Investments PLCNOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 October 2005 1 TURNOVER The company's turnover is derived from its principal activity in the UnitedKingdom and was split as follows: 2005 2004 ‚£ ‚£ Fixed returns on loan investments 44,108 433,955 Management fees 904 73,500 Other income 56,538 60,000 _________ _________ 101,550 567,455 _________ _________ 2 OTHER OPERATING EXPENSES - EXCEPTIONAL 2005 2004 ‚£ ‚£ Provision against loan to subsidiary 7,166,665 3,923,691 Provision against other loans 188,109 1,011,528 Legal fees 546,594 133,731 _________ _________ 7,901,368 5,068,950 _________ _________ The exceptional legal fees arose in connection with an action brought againstthe group as explained in note 18a. 3 INTEREST PAYABLE 2005 2004 ‚£ ‚£ On bank overdraft - 1,168 Other interest 4,829 271 _________ _________ 4,829 1,439 _________ _________ 4 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION 2005 2004 ‚£ ‚£ Loss on ordinary activities before taxation is stated after charging: Auditors' remuneration for audit services 15,000 17,500 _________ _________ Amounts payable to Baker Tilly in respect of non-audit services were ‚£ 15,125 (2004: ‚£33,723). This comprises taxation compliance and advisory services of ‚£15,125 (2004: ‚£31,773) and other services of ‚£Nil (2004: ‚£ 1,950). 5 EMPLOYEES 2005 2004 No. No. The average monthly number of persons (including Directors) employed by the company during the year was: Office and management 3 2 ________ _______ 2005 2004 ‚£ ‚£ Staff costs for above persons: Wages and salaries - 27,083 Social security costs - 2,434 - 29,517 ________ ________ 2005 2004 ‚£ ‚£ DIRECTORS' REMUNERATION Emoluments (including fees) - 41,833 6 TAXATION 2005 2004 ‚£ ‚£ Current tax: - (190,853) UK corporation tax on loss for the period Total current tax - (190,853) Deferred tax: - 26,389 Origination and reversal of timing differences Tax on loss on ordinary activities - (164,464) Factors affecting tax charge for the year 2005 2004 ‚£ ‚£ Loss on ordinary activities before tax (7,971,423) (5,217,389) Loss on ordinary activities at the standard(2,391,427) (1,565,217) rate of 30% (2004: 30%) Expenses not deductible for tax purposes 80,476 111,837 Tax on realised revaluation profits - 85,420 Provision against subsidiary loan 2,150,000 1,177,107 Unutilised tax losses 160,951 - Current tax recoverable for the year - (190,853) Factors that may affect future tax charges:As a result of being in administration from March to October 2005, the companyis currently in arrears in respect of resolving enquiries from HM Revenue andCustoms into prior year corporation tax returns and the submission of the 2004tax return. The directors do not believe that a material tax liability willarise in respect of these matters and are unable to quantify any potentialliability that could arise or the quantum of tax losses available to carryforward to future accounting periods. 7 LOSS PER ORDINARY SHARE The calculation of loss per share is based upon the loss after taxation of ‚£7,971,423 (2004: ‚£5,052,925) and on 72,025,963 (2004: 72,025,963) being theweighted average number of ordinary shares in issue during the year. 8 FIXED ASSET Shares in Unlisted shares Total INVESTMENTS subsidiary undertaking ‚£ ‚£ ‚£ Valuation: 1 November 2004 1 33,789 33,790 Disposals (1) - (1) 31 October 2005 - 33,789 33,789 On an historical cost basis, the fixed asset investments would have beenincluded at ‚£33,789 (2004: ‚£33,790).The company holds more than 20% of the ordinary share capital of the followingundertakings: Proportion Nature of business directly held Skillglass Limited (in 100% Finance to Phoenix administration) Acquisitions Limited UV Modular Limited 22.01% Manufacturer of specialist vehicles Phoenix Acquisitions 24.75% Acquisition Vehicle for Limited (in Chesterton International administration) Limited On 30 March 2005 Skillglass Limited and then on 5 April 2005 PhoenixAcquisitions Limited were both placed into administration. Phoenix AcquisitionsLimited holds 86.9% of the ordinary share capital of Chesterton InternationalLimited, who went into administration on 7 March 2005.In the opinion of the directors, the appointment of an administrator toSkillglass Limited resulted in Adeste Investments PLC losing control of itssubsidiary and hence it has been treated as a disposal on that date.The most recent financial statements for UV Modular Limited disclose a lossafter taxation for the year ended 3 July 2005 of ‚£184,000 and aggregate capitaland reserves at that date of ‚£364,000. 9 DEBTORS 2005 2004 ‚£ ‚£ Due within one year: Trade debtors - 20,023 Other debtors 201,657 - Prepayments and 7,921 2,148 accrued income 209,578 22,171 10 LOANS 2005 2004 ‚£ ‚£ Repayable within one 58,998 765,741 year 11 CREDITORS: Amounts falling due within one year 2005 2004 ‚£ ‚£ Loan 60,279 - Trade creditors 166,527 160,233 Other creditors - 1 Accruals and deferred 579,145 445,431 income 805,951 605,665 The loan is repayable on demand and accrues interest at 5% per annum. 12 CREDITORS: Amounts falling due after more than one year 2005 2004 ‚£ ‚£ Convertible loan notes 7,254,550 - On 7 October 2005, the company issued ‚£7,250,000 of loan notes at par to settleexisting debts. These loan notes are convertible at 0.1p for each ordinaryshare in the company at the loan note holders option. ‚£1,300,000 of these loannotes bear interest at 5% per annum and the remaining loan notes of ‚£5,900,000are non-interest bearing.‚£800,000 of the 5% Loan notes are payable on 7 October 2007 and the remaininginterest bearing and all the non-interest hearing loan notes are repayable on 7October 2012. Interest accruing on the loan notes is added to the debt which ispayable as follows: 2005 2004 ‚£ ‚£ Repayable in one to 802,837 - two years Repayable in two to 6,451,712 - five years 7,254,549 - ‚£6,702,568 of these loan notes are secured by a charge on the company's assetsand the remainder are unsecured. 13 SHARE CAPITAL 2005 2004 ‚£ ‚£ Authorised: 18,631,506,703 (2004: 500,000,000) ordinary 18,631,507 10,000,000 shares of 0.1p each (2004: 2p) 72,025,963 deferred shares of 1.9p each 1,368,493 - 20,000,000 10,000,000 Allotted, issued and fully paid: 72,025,963 (2004: 72,025,963) ordinary shares 72,026 1,440,519 of 0.1p each (2004: 2p) - equity 72,025,963 deferred shares of 1.9p each - 1,368,493 - non-equity 1,440,519 1,440,519 On 7 October 2005, each of the issued ordinary shares of 72,025,963 of 2p eachwere subdivided into one ordinary share of 0.1p and one deferred share of 1.9pcredited as fully paid up. Each of the 427,974,037 un-issued ordinary shares of2p each in the company were subdivided into 20 ordinary shares on 0.1p each.On the same day, the company increased its authorised share capital to ‚£20,000,000 by the creation of 10,000,000,000 ordinary shares of 0.1p each.The deferred shares have no rights to dividends or voting rights and are onlyentitled to a return of capital on winding up once each ordinary share holderhas received the sum of ‚£100,000 for each ordinary share held.As disclosed in note 20, on 7 October 2005 the company issued a total of7,250,000 ‚£1 convertible loan notes at par. Each loan note can be convertedinto 1,000 0.1p ordinary shares. ‚£800,000 of the loan notes are convertible atany time until 7 October 2007 and the remainder are convertible at any timeuntil 7 October 2012. 14 PROFIT AND LOSS ACCOUNT 2005 2004 ‚£ ‚£ 1 November (4,080,806) 687,385 2004 Transfer - 284,734 from revaluation reserve Loss for (7,971,423) (5,052,925) the year 31 October (12,052,229) (4,080,806) 2005 15 RECONCILIATION OF MOVEMENT IN 2005 2004 SHAREHOLDERS' FUNDS ‚£ ‚£ Loss for the financial year (7,971,423) (5,052,925) Opening shareholders' funds 249,726 5,302,651 Closing shareholders' funds (7,721,697) 249,726 Shareholders' funds includes non-equity interests of ‚£nil (2004: ‚£Nil) due tothe commercial effect of the rights of the deferred shares, as disclosed innote 14. 16 CASH FLOWS 2005 2004 ‚£ ‚£ a Reconciliation of operating loss to net cash flow from operating activities Operating loss (7,968,567) (5,111,174) Non-cash change to long-term debt 7,200,000 - (Increase)/decrease in debtors (187,407) 212,969 Decrease in loans 706,743 4,169,595 Increase/(decrease) in creditors 140,008 (356,599) Net cash outflow from operating (109,223) (1,085,209) activities 2005 2004 ‚£ ‚£ b Analysis of cash flows for headings netted in the cash flow Returns on investments and servicing of finance Interest received 1,973 8,309 Interest paid - (1,439) Net cash inflow from returns on investments 1,973 6,870 and servicing of finance Capital expenditure and financial investment Purchase of equity shares - (190,994) Sale of equity shares - 1,470,630 Net cash inflow from capital expenditure and - 1,279,636 financial investment Financing Increase in loans 110,000 - Net cash inflow from financing 110,000 - 16 CASH FLOWS (continued) c Analysis of net At Cash flow Other non-cash At funds/(debt) changes 1 November ‚£ 31 October ‚£ 2004 2005 ‚£ ‚£ Cash at bank and 33,689 2,750 - 36,439 in hand Loan due within - (60,000) (279) (60,279) one year Loans due after - (50,000) (7,204,550) (7,254,550) one year 33,689 (107,250) (7,204,829) (7,278,390) Other non-cash changes comprise accrued loan interest of ‚£129,853 and a debtarising from a guarantee issued to the company's subsidiary, Skillglass Limited(see note 19), of ‚£7,074,976. 17 FINANCIAL INSTRUMENTS The company's financial instruments comprise cash, loans receivable andpayable, equity shares, and various items such as trade creditors that arisedirectly from its operations. Trade creditors and other short-term itemsarising directly from operations, have been excluded from the followingdisclosures.Credit riskThe company supports the recovery of businesses in financial difficulties. Thenature of the company's trade means that there is a potential credit risk ifthe business does not recover. The risk is minimised by securing all debts andthe risk is monitored on a daily basis by the Directors of the company.Interest rate riskThe interest rate profile of the company's cash at bank and loans receivable at31 October 2005 was: 2005 2004 ‚£ ‚£ Fixed rate financial assets 58,998 765,741 Floating rate financial assets 36,439 33,689 95,437 799,430 The weighted average interest rate and period of the fixed rate financialassets at 31 October 2005 was 10% p.a. (2004: 10% p.a.) and repayable on demand(2004: on demand) respectively.The company's financial liabilities at 31 October 2005 are all at fixed rates,with ‚£60,279 repayable within one year (2004: ‚£Nil) and ‚£7,254,550 repayableafter more than one year (2004: ‚£Nil). Further details on these financialliabilities are disclosed in notes 11 and 12.Market price riskDuring the year, the company has not traded in financial instruments.Fair value of financial instrumentsThere is no material difference between the fair value and book value of thecompany's cash at bank and loans receivable and payable. The company's unlistedequity shares are incorporated into the accounts in accordance with thecompany's accounting policies. It is not practical to estimate the fair valueof these financial instruments with sufficient reliability as the shares areunlisted and the nature of the company's trade means there is a potentialcredit risk if the businesses do not recover. 18 CONTINGENT LIABILITIESa During the year ended 31 October 2004, an action was brought by Mr Jafari-Fini ("MJF") against Skillglass Limited and Phoenix Acquisitions Limited for a personal claim and a derivative action relating to the funding of Phoenix Acquisitions Limited. There have been two full Court hearings on the derivative action in both the High Court and the Court of Appeal both of which the company won with substantial cost orders against MJF. Subsequently, MJF petitioned the House of Lords who have refused consent for an appeal. The MJF personal action against Skillglass Limited and Adeste Investments PLC who were added as an additional defendant came on for trial on preliminary issues and lasted from 12 to 21 December 2005 judgement was given on 20 January 2006. The court dismissed all of MJF's claims and ordered MJF to pay interim costs to Skillglass Limited of ‚£400,000. Adeste Investments PLC has also obtained judgement against MJF for a sum in excess of ‚£1,000,000 for the non payment of some of his shares in Phoenix Acquisitions Limited. Payment of these costs and judgement has been stayed pending MJF's application to the Court of Appeal for permission to appeal, permission to appeal having been refused by the High Court. MJF has filed his application for permission to appeal The application is expected to be determined at the end of May or the beginning of June 2006. Adeste Investments PLC will consider what further action to take against MJF after his application to the Court of Appeal has been heard. The directors are of the opinion that the case against the group is without merit. No contingent asset has been recognised in the accounts in respect of the award on the judgement due to the uncertainty as to the timing of receipt. The directors have been unable to quantify the potential liability that would arise against the company if MJF's claim was successful as Skillglass Limited and Phoenix Acquisitions Limited are both in administration and the Board consider that there is no claim against Adeste in any circumstances.b On 23 December 2003, the company received a fee of ‚£60,000 for guaranteeing the obligations of MJS Lens (Automation) Limited under the lease of premises. The company received a counter indemnity from Sauflon Pharmaceuticals Limited in the event that any claim was made under the lease guarantee. The directors believe that it is remote that there will be any liability for the company under this guarantee but are unable to qualify the potential liability if one did arise. 19 RELATED PARTY TRANSACTIONS Included in creditors as at 31 October 2005 are amounts owed to Kaloshar Limited of ‚£6,702,568. In view of the size of this debt, the directors believe that transactions with Kaloshar Limited and its related parties should be disclosed as related party transactions. Kaloshar Limited is controlled by The Rowland Purpose Trust 2001. These transactions are explained below.a During the year, the company was charged ‚£12,600 (2004: ‚£36,000) for professional services supplied by Rowland Capital (CI) Limited. There was no outstanding balance as at 31 October 2005 (2004: ‚£Nil). Rowland Capital (CI) Limited is controlled by the trustee of The Rowland Purpose Trust 2001.b On 7 October 2005, the company issued convertible loans of ‚£7,200,000 at par to replace the loan facility with Kaloshar Limited. This is explained in note 20(c) below. This loan facility was provided by Kaloshar Limited to Skillglass Limited and was guaranteed by Adeste Investments PLC. On the appointment of an administrator to Skillglass Limited, this guarantee crystallised as an actual liability in the company. Interest accruing from 30 March 2005 was recognised in the company's profit and loss account. During the year, the company was charged interest totalling ‚£125,024 in connection with this facility.19 RELATED PARTY TRANSACTIONS (continued)c On 7 October 2005, the company issued convertible loan notes at par totalling ‚£7,200,000 to replace the existing loan due to Kaloshar Limited. These loan notes are convertible at 0.1p per share at the option of the note holder and are redeemable as follows. i. ‚£750,000 - redemption date 7 October 2007 and bear interest at 5% per annum; ii. ‚£500,000 - redemption date 7 October 2012 and bear interest at 5% per annum; and iii. ‚£5,950,000 - redemption date 7 October 2012 and non-interest bearing. The 5% convertible loan note for ‚£500,000 was assigned to Mr Leo Knifton and Mr Jonathan Rowland, who are both directors of Adeste Investments PLC on 7 October 2005. Also on 7 October 2005, the company issued 5% convertible loan notes at par to replace cash advances made by Caldicot Management Limited (‚£30,000), Mr Leo Knifton (‚£10,000) and Mr Jonathan Rowland (‚£10,000). Caldicot Management Limited is a trustee of The Rowland Purpose Trust 2001. During the period, interest accrued on these loan notes of ‚£2,568 to Kaloshar Limited, ‚£911 to Mr Leo Knifton, ‚£910 to Mr Jonathan Rowland and ‚£ 160 to Caldicot Management Limited. Consequently, at 31 October 2005 the company owed Kaloshar Limited ‚£ 6,702,568 (2004: ‚£Nil), Mr Leo Knifton ‚£260,911 (2004: ‚£Nil), Mr Jonathan Rowland ‚£260,910 (2004: ‚£Nil) and Caldicot Management Limited ‚£30,160 (2004: ‚£Nil). d On the 28 September 2005, the company received a ‚£60,000 loan from Lawgra (365) Limited under a loan facility of ‚£300,000. This facility has been extended to ‚£750,000 since the year end to enable the company to meet its liabilities as they fall due. The loan facility is repayable on demand and interest accrues on the outstanding balance at 5% per annum. During the year, the accrued interest on the loan was ‚£279. Lawgra (365) Limited is controlled by the trustee of The Rowland Purpose Trust 2001 and Graham Robeson is a Director of Lawgra (365) Limited. e During the period from 1 November 2004 until 30 March 2005, Skillglass Limited was a wholly owned subsidiary of the company. During this period, the company advanced monies of ‚£91,658 to Skillglass Limited. On 30 March 2005, Skillglass Limited was put into administration and is therefore no longer a related party. Note to the announcement: The report and accounts have been posted to shareholders and are available, free of charge, for a period of one month from 43 North Audley Street, London W1K 6WH. Adeste Investments PLC COMPANY BALANCE SHEET 31 October 2005 ENDENDADESTE INVESTMENTS PLC