QFI.L Regulatory News (QFI)

23 Mar 2006 07:01

Zareba PLC23 March 2006 Zareba Plc ("Zareba" or "the Company" Interim results for the six months ended 31 December 2005 CHAIRMAN'S STATEMENT The Company announces its results for the six months ended 31 December 2005, which show a loss for the period of £123,000 and total assets of £1.28 million. Zareba has also announced today that it has conditionally agreed to acquireQuadrise International Limited. Full details of the transaction and the futureprospects of the Company are contained in the Admission Document being posted toshareholders today. An electronic copy of the Admission Document is also available on the Company's website, www.zarebaplc.com Brian MoritzChairman22 March 2006 INCOME STATEMENT 6 months Period ended ended 31 Dec 30 June Note 2005 2005 £'000 £'000 (unaudited) (unaudited) General and Administrative expenses (61) (56)Impairment loss on investments (85) - ----- -----Operating loss (146) (56) ----- -----Other interest receivable and similar income 23 17 - ----- -----Loss from continuing activities beforeincome tax (123) (39) ----- ----- Income tax credit/(expense) 2 - - ----- -----Loss from continuing activities (123) (39) ===== =====Net loss per share: Basic and diluted (pence) 3 (0.06)p (0.02)p ===== =====Shares used in net loss per sharecalculation Basic and diluted 3 203,300,000 203,300,000 =========== =========== BALANCE SHEETAt 31 December 2005 As at As at 31 Dec 30 June Note 2005 2005 £'000 £'000 (unaudited) (unaudited) Current assetsCash and cash equivalents 1,279 1,350Receivables 3 5 ---------- ---------- Total current assets 1,282 1,355 Non-current assetsInvestments 4 - 41 ---------- ----------Total non-current assets - 41 Total assets 1,282 1,396 ========== ==========Current liabilitiesOther payables 16 7 ---------- ----------Total current liabilities 16 7 ---------- ----------Total liabilities 16 7 Shareholders' equity Share capital 5 203 203Share premium account 1,205 1,205Profit and loss account (162) (39)Other equity reserves 20 20 ---------- ----------Total shareholders' equity 1,266 1,389 ---------- ----------Total liabilities and shareholders' equity 1,282 1,396 ========== ========== CASH FLOW STATEMENT 6 months Period Ended ended 31 Dec 30 June 2005 2005 £'000 £'000 (unaudited) (unaudited)Cash flows from operating activitiesOperating loss before working capital changes (146) (56)Impairment loss 85 -(Increase) Decrease in receivables 2 (5)(Decrease) Increase in accounts payable 9 7 ---------- ---------- Net cash outflow from operating activities (50) (54) ---------- ----------Capital expenditure and financial investments Payments to acquire fixed asset investments (69) (41)Receipts from disposal of fixed asset investments 25 - ---------- -----------Net cash used in investing activities (44) (41) ---------- -----------Cash flows from financing activitiesIssue of share capital - 1,583Costs of issue of share capital - (155)Interest on cash deposits 23 17 ---------- ---------- Net cash inflow from financing 23 1,445 ---------- ----------Net increase (decrease) in cash in the period (71) 1,350 ========== ==========Reconciliation of net cash flow to movement infundsIncrease (Decrease) in cash in the period (71) 1,350 ---------- ----------Movement in net funds in the period (71) 1,350Opening net funds 1,350 - ---------- ----------Closing net funds 1,279 1,350 ========== ========== STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITYPeriod ended 31 December 2005 Shares in Share Share Retained Other Total issue capital Premium earnings reserves £'000 £'000 £'000 £'000 £'000Balance onincorporation 2 - - - - - Issue of newshares 203,299,998 203 1,380 - - 1,583 Costs ofissue - - (155) - - (155)of shares Fair value ofoptions - - (20) - 20 - Loss for theperiod - (39) (39) At 30 June 203,300,000 203 1,205 (39) 20 1,3892005 Loss for theperiod - - - (123) - (123) At 31December 203,300,000 203 1,205 (162) 20 1,2662005 NOTES TO THE INTERIM REPORT 1. Basis of preparation This interim financial statement is the second such statement prepared by theCompany, which has not yet published statutory financial statements. TheCompany's first statutory financial statements will cover the period fromincorporation on 22 October 2004 to 31 March 2006 The financial information relating to the period from incorporation on 22October 2004 to 30 June 2005 and the six month period ended 31 December 2005 isunaudited. The information for the period ended 31 December 2005 has been prepared on thebasis of the accounting policies set out below, which are in accordance withapplicable International Financial Reporting Standards ('IFRS'). The financialinformation for the period from incorporation to 30 June 2005 has been restatedon the basis of the accounting policies set out below and in accordance withIFRS. The effects of the Company's conversion to IFRS are explained in Note 7below. The statutory financial statements for the Company for the period ending31 March 2006 with be prepared in accordance with the accounting policies setout below and with IFRS. The above financial information does not constitutestatutory accounts within the meaning of Section 240 Companies Act 1985. Use of estimatesThe preparation of the financial information in conformity with generallyaccepted accounting principles requires management to make estimates andassumptions that affect reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Actual results could differ from those estimates. Net loss per ordinary shareBasic net loss per ordinary share is computed by dividing net loss by theweighted average number of ordinary shares outstanding in the period. For the purpose of calculating diluted earnings per share, the net lossattributable to ordinary shareholders and the weighted average number of sharesoutstanding is adjusted for the effects of all dilutive potential ordinaryshares. The effects of anti-dilutive potential ordinary shares are ignored incalculating diluted earnings per share. Potential ordinary shares areanti-dilutive when their conversion to ordinary shares would decrease loss pershare from continuing operations. Fair value of financial instrumentsCarrying amounts of certain financial instruments including cash and cashequivalents, accounts receivable, accounts payable, and accrued expensesapproximate fair value due to their short maturities, based on borrowing ratescurrently available to the Company. Share based paymentsShare-based payments are recognised at fair value at the date of grant and therecognition of liabilities for cash-settled share-based payments at the currentfair value at each balance sheet date. The fair value of share options issued in the period is measured according tothe estimated market value of the services received in consideration of theissue of those share options. Where it is not possible to reliably measure the estimated market value of theservices received in consideration of the issue of those share options, shareoptions issued in the period are according to the market price of the options orin accordance with a generally accepted valuation methodology. Deferred taxationDeferred tax assets and liabilities are determined based on differences betweenfinancial reporting and tax bases of assets and liabilities, and are measuredusing the enacted tax rates and laws that will be in effect when the differencesare expected to reverse. Valuation allowances are recorded for deferred taxassets that are not more likely that not to be realised. Deferred tax assets are recognised only to the extent that future taxable profitwill be available such that realisation of the related tax benefit is morelikely than not. Impairment of tangible and intangible assetsAt each balance sheet date a review of carrying amounts is undertaken todetermine whether there is any indication that those assets have sufferedimpairment loss. If any such indication exists, the recoverable amount of theasset is estimated in order to determine the amount of the impairment loss (ifany). Where it is not possible to estimate the recoverable amount of anindividual asset an estimate is made of the recoverable amount of the cashgenerating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value inuse. Estimated future cash flows are discounted to their present value using apre-tax discount rate that reflects current market assessments of the time valueof money and the risks specific to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated tobe less than its carrying amount, the carrying amount of the asset(cash-generating unit) is reduced to its recoverable amount. An impairment lossis recognised immediately in profit or loss, unless the relevant asset iscarried at a re-valued amount, in which case the impairment loss is treated as arevaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset(cash-generating unit) is increased to the revised estimate of its recoverableamount, but so that the increased carrying amount does not exceed the carryingamount that would have been determined had no impairment loss been recognisedfor the asset (cash-generating unit) in prior years. A reversal of an impairmentloss is recognised immediately in profit or loss, unless the relevant asset iscarried at a revalued amount, in which case the reversal of the impairment lossis treated as a revaluation increase. Cash and cash equivalentsThe Company considers all highly liquid investments purchased with an originalmaturity of three months or less to be cash equivalents. 2. Income tax credit/expense The Company has not submitted any computations in respect of income tax. Noprovision has been made for income tax in this financial information due to thelikely availability of trading losses at the end of its first statutory periodof account, being the period from incorporation to 31 March 2006. No deferred tax asset has been recognised in relation to the possibleavailability of losses as the Company has yet to reach the conclusion of theaccounting reference period in respect of any claim for such losses and therealisation of any related tax benefit cannot therefore be said to be morelikely than not. 3. Loss per share Loss per share is based on the weighted average number of shares in issue duringthe period ended 31 December 2005 of 203,300,000 (30 June 2005: 203,300,000).The weighted average number of shares in issue used in the basic loss per sharecalculation for the period ended 30 June 2005 has been restated to reflect theeffect of the conversion to IFRS referred to above. 4. Investments Fixed asset investments represent investments as follows: £'000CostOn incorporation -Additions at cost 41 ------30 June 2005 41Additions at cost 69Disposal to directors (25)Impairment loss (85) ------31 December 2005 - ====== The disposal to directors related to an investment in the early stages of aSouth African diamond mining project which, due to the imminent acquisition ofQuadrise International Limited, was considered to be no longer viable as anongoing proposition for the Company. The investment was therefore sold to JBurgess and B Moritz at cost. Amounts provided for impairment loss relates to a provision made against thecost of a holding of 10 per cent in a Namibian mineral exploration and miningproject following receipt of a competent person's report which deemed theproject to have a significantly lower value than previously expected. The Boardagreed to relinquish the Company's rights in relation to the investment inreturn for the cancellation of the Company's commitments to future funding ofthe project under the investment agreement. 5. Share capital 2005 £'000Authorised:1,000,000,000 ordinary shares of £0.001 each 1,000 ======= 2005 £'000Allotted, issued and fully paid:203,300,000 ordinary shares of £0.001 each 203 ===== On Admission to AIM on 14 February 2005 the Company granted options to itsprofessional advisers to subscribe for 9,000,000 ordinary shares at 1p per shareat any time up to the fifth anniversary of Admission. No adjustment has beenmade to basic earnings per share for the purpose of calculating diluted earningsper share because the effect of including the 9,000,000 outstanding shareoptions referred to above would be to further dilute the net loss. There were9,000,000 share options outstanding at 31 December 2005, with a weighted averageexercise price of 1p per share. 6. Post Balance Sheet Events Subsequent to the balance sheet date, the Company announced that it had enteredinto an agreement to acquire the entire issued share capital of QuadriseInternational Limited for aggregate consideration of £45 million, to besatisfied by the issue of new ordinary shares in the Company. The Company alsoannounced a placing of new ordinary shares at 1.75 to 2.0 pence per share toraise a minimum of £12.1 million before costs of the issue to be used to fund£4.5 million of acquisition costs and to provide working capital to support thegrowth and development of the enlarged group. 7. Effects of transition to IFRS a) The financial information for the period ended 30 June 2005 has been restatedto comply with IFRS. Asummary of the adjustments required is set out below. UK GAAP Effect of IFRS (unaudited) transition (unaudited) £'000 £'000 £'000 Current assetsCash and cash equivalents 1,350 - 1,350Receivables 5 - 5 --------- --------Total current assets 1,355 - 1,355 Non-current assetsInvestments 41 - 41 --------- -------- Total non-current assets 41 - 41Total assets 1,396 - 1,396 ========= ========Current liabilitiesOther payables 7 - 7 --------- --------Total current liabilities 7 - 7 --------- --------Total liabilities 7 - 7 Shareholders' equity Share capital 203 - 203Share premium account 1,225 (20) 1,205Profit and loss account (39) - (39)Other equity reserves - 20 20 --------- --------Total shareholders' equity 1,389 - 1,389 --------- -------- Total liabilities and shareholders'equity 1,396 - 1,396 ========= ======== b) The financial information for the period ended 31 December 2005 has beenpresented on the basis of compliance with IFRS. A reconciliation of equity at 31December 2005 is set out below. UK GAAP Effect of IFRS (unaudited) transition (unaudited) £'000 £'000 £'000 Current assetsCash and cash equivalents 1,279 - 1,279Receivables 3 - 3 --------- --------Total current assets 1,282 - 1,282 Non-current assetsInvestments - - - --------- -------- Total non-current assets - - -Total assets 1,282 - 1,282 ========= ======== Current liabilitiesOther payables 16 - 16 --------- --------Total current liabilities 16 - 16 --------- --------Total liabilities 16 - 16 Shareholders' equity Share capital 203 - 203Share premium account 1,225 (20) 1,205Profit and loss account (162) - (162)Other equity reserves - 20 20 --------- -------- Total shareholders' equity 1,266 - 1,266 --------- -------- Total liabilities and shareholders'equity 1,282 1,282 ========= ======== Adjustment in respect of share based payments On Admission to AIM on 14 February 2005 the Company granted options to itsprofessional advisers to subscribe for 9,000,000 ordinary shares at 1p per shareat any time up to the fifth anniversary of Admission. The adjustment representsthe estimated fair value of the services received in consideration for the issueof the options, measured at the date of grant. The recognition of additionalvalue in relation to the services received has been set against the Company'sshare premium account on Admission. 8. Copies of the interim statement Copies of the interim statement will be available from Smith & Williamson Corporate Finance Limited, 25 Moorgate London EC2R 6AY. This information is provided by RNS The company news service from the London Stock Exchange