25 Jun 2010 10:48
WORLD TRADE SYSTEMS PLC
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CONDENSED INTERIM FINANCIAL STATEMENTS
For the Six months ended 31 March 2010
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Contents Page
Operating and Financial Review 2
Condensed Income Statement 4
Condensed Statement of Financial Position 5
Condensed Statement of Changes In Equity 6
Condensed Cash Flow Statement 6
Notes to the Condensed Financial Statements 8
NON-EXECUTIVE CHAIRMAN'S REVIEW
INTRODUCTION
The Company had no trading activities in the six month period from 1 October 2009 to 31 March 2010.
TRADING PROSPECTS
The Board has for some time now been engaged in seeking out new business opportunities for the Company. Whilst, the market to date and the general global economic climate continues to be extremely difficult, we have nevertheless held discussions with several entities based in the Far East which are ongoing.
In our annual financial statements for the year ended 30 September 2010 we advised shareholders that we had identified an opportunity with a Pharmaceuticals company operating in China and the Far East which is seeking to promote its brands on a worldwide scale through an overseas listing and that discussions as to the nature of involvement and investment were at an informal but positive stage. Regrettably, these discussions have been terminated but other opportunities are being considered and the Board is redoubling its efforts to identify suitable opportunities.
Shareholders will be kept informed of all material developments as and when they occur.
FINANCIAL REVIEW FOR THE PERIOD
Results
The loss for the period of £35,000 (2009: £42,000) arises from administrative expenses and charges.
Net liabilities as at 31 March 2010 were £510,000 (2009: £442,000).
Treasury and Financial Instruments
The Company has no financing facility with its bankers. It focuses on cash flows and monitors cash balances and requirements on a monthly basis.
On 15 May 2006 the Company obtained interest free unsecured loans totalling £120,000. These loans were repayable on demand and were due to be repaid on 31 March 2008. Since that date these loans have accrued interest at a rate of 6% per annum. No demand for repayment has been received.
On 12 February 2010 the Company obtained a further unsecured loan of £200,000 from Kudrow Finance Limited ("the new loan"). Under the terms of a loan agreement dated 12 February 2010 the new loan carries interest at the rate of 5% per annum and the existing loans totalling £260,000 were interest free until 12 February 2010 from when they carry interest at the rate of 5% per annum. Under the terms of this loan agreement the new loan together with earlier loans fall due for repayment upon the earlier of 31 July 2011 or the date on which shareholder approval is obtained for the acquisition by the Company of a new business. In the event of a default in payment of capital and/or interest the loans will be capitalised from the date of default and shall carry interest at the rate of 10% per annum.
At 31 March 2010 the Company had cash on deposit with its bankers of £16,000 (2009: £7,000), and £122,060 held in a designated trust account with Robert Lee Law Offices, Hong Kong (2009: £37,097).
Dividend Policy
The Directors take a prudent approach to dividend payments and will make payments only when commercially viable to do so, subject to the availability of distributable reserves.
Going concern
Having regard to cashflow forecasts prepared in February 2010, the Directors consider that the Company has sufficient liquid resources to meet its financial requirements for the period up to 31 July 2011 when existing loans fall due for repayment. Thereafter the Company is reliant upon further financial support from the loan providers and the Directors will review alternative options at that time.
Taking account of these factors the Directors are satisfied that the Company has adequate working capital for the foreseeable future.
Statement of Directors' responsibilities
The Directors of World Trade Systems plc confirm that to the best of their knowledge this condensed set of interim financial statements has been prepared in accordance with IAS 34 as adopted by the European Union, and the Chairman's Review includes a true and fair view of the assets, liabilities, financial position and results of World Trade Systems plc as required by the Disclosure and Transparency Rules (DTR) 4.2.4 and a fair view of the information required by DTR 4.2.7 and DTR 4.2.8.
……………………………………
Robert Lee
Non Executive Chairman
24 June 2010
CONDENSED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 2010
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| Note | 6 months to 31 March 2010 (Unaudited) | 6 months to 31 March 2009 (Unaudited) | Year ended 30 September 2009 (Audited)
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| £'000 |
| £'000 | £'000 |
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| Continuing operations |
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| Operating income |
| 1 |
| 1 | 3 |
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| Administrative expenses |
| (30) |
| (35) | (71) |
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| ______ |
| ______ | ______ |
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| Loss from operations |
| (29) |
| (34) | (68) |
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Finance costs |
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(6) |
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(8) |
(7) |
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| ______ |
| ______ | ______ |
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| Loss before tax |
| (35) |
| (42) | (75) |
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Income tax expense |
6 |
- |
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- |
- |
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| ______ |
| ______ | ______ |
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| Loss for the financial period attributable to equity holders |
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(35)
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(42)
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(75) ______ |
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| Basic and diluted loss per ordinary share | 4 | ( 0.40 p) |
| (0.48 p) | (0.874 p) |
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| ______ |
| ______ | ______ |
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CONDENSED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2010
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Note
| As at 31 March2010 (Unaudited) | As at 31 March 2009 ( Unaudited)
| As at 30 September 2009 (Audited) |
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| £'000 | £'000 | £'000 |
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| Assets |
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| Non-current assets |
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| Investment property | 7 | 40 | 40 | 40 |
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| ________ | _______ | _______ |
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| 40 | 40 | 40 |
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| ________ | _______ | _______ |
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| Current assets |
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| Trade and other receivables |
| 14 | - | 2 |
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| Cash and cash equivalents |
| 138 | 44 | 30 |
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| _______ | ______ | _______ |
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| 152 | 44 | 32 |
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| _______ | ______ | _______ |
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| Total assets |
| 192 | 84 | 72 |
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| _______ | ______ | _______ |
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| Current liabilities |
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| Trade and other payables |
| (91) | (125) | (142) |
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| Financial Liabilities - borrowings | 8 | (611) | (401) | (405) |
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| ______ | _____ | _______ |
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| Total liabilities |
| (702) | (526) | (547) |
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| ______ | _____ | _______ |
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| Net Liabilities |
| (510) | (442) | (475) |
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| ______ | _____
| ______ |
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| Equity |
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| Capital and reserves |
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| Share capital | 5 | 4,378 | 4,378 | 4,378 |
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| Retained earnings |
| (4,888) | (4,820) | (4,853) |
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| _______ | ______ | _______ |
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| Total deficit of equity attributable to equity holders of the parent |
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( 510 ) |
(442) |
(475) |
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| _______ |
______ |
_______ |
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CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR SIX MONTHS ENDED 31 MARCH 2010
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Share capital |
Retained Earnings |
Total |
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| £'000 | £'000 | £'000 |
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| Balance at 1 October 2009 |
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| 4,,378 | (4,853) | (475) |
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| Loss for the period |
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| - | ( 35) | ( 35) |
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| ______ | ______ | ______ |
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| Balance at 31 March 2010 |
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| 4,378 | (4,888) | (510) |
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| _____ | ______ | ______ |
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| Balance at 1 October 2008 |
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| 4,378 | (4,778) | (400) |
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| Loss for the period |
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| - | (42) | (42) |
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| ______ | ____________ | ______ |
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| Balance at 31 March 2009 |
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| 4,378 | (4,820) | (442) |
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| ______ | ______ | ______ |
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CONDENSED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 MARCH 2010
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6 months to 31 March 2010 (Unaudited) | 6 months to 31 March 2009 (Unaudited)
| Year ended 30 September 2009 (Audited) |
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| £'000 | £'000 | £'000 |
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| Net cash used in operating activities |
| (92) | (6) | (20) |
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| Net cash received from/ (used in) financing activities |
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| New loan raised |
| 200 | - | - |
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| _____ |
| ____ |
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| Net increase/(decrease) in cash and cash equivalents |
| 108 | (6)
| (20) |
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| Cash and cash equivalents at beginning of period |
| 30 | 50 | 50 |
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| _____ | _____ | ____ |
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| Cash and cash equivalents at end of period |
| 138 | 44 | 30 |
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| _____ | _____ | ____ |
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Notes to the condensed financial statements
for the period ended 31 March 2010
1. Nature of operations and general information
The Company was seeking investment opportunities throughout the period under review. The Company received rental income on freehold agricultural land.
These condensed interim financial report is neither audited nor reviewed by the auditors and was approved by the Board on 24 June 2010 This announcement is being circulated to all Shareholders of the Company, and copies will be available to the public at the Company's registered office at Devonshire House, 1 Devonshire Street, London W1W 5DR.
The financial information for the year ended 30 September 2009 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Company's statutory financial statements for the year ended 30 September 2009 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498(2) or Section 498(3) of the Companies Act 2006.
2. Basis of preparation
These interim condensed financial statements are for the six month period ended 31 March 2010. They have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". They do not include all of the information required for full annual financial statements, and should be read in conjunction with the full financial statements as at and for the year ended 30 September 2009.
These interim condensed financial statements have been prepared under the historical cost convention and in accordance with the accounting policies adopted in the Company's last annual financial statements for the year ended 30 September 2009.
The accounting policies have been applied consistently throughout for the purposes of preparation of these condensed financial statements.
3. Going Concern
Whilst the board is active in considering business opportunities for the Company, should such an opportunity not materialise, having regard to the cashflow forecasts prepared in February 2010 the Directors consider that the Company has sufficient liquid resources to meet its financial requirements for the period up to 31 July 2011 when existing loans are due for repayment. Thereafter the Company would be reliant upon further financial support from the loan providers and will review the alternative options at that point in time.
On 12 February 2010 the Company obtained a further unsecured loan of £200,000 from Kudrow Finance Limited ("the new loan"). Under the terms of a loan agreement dated 12 February 2010 the new loan carries interest at the rate of 5% per annum and the existing loans totalling £260,000 are interest free until 12 February 2010 from when they carry interest at the rate of 5% per annum. Under the terms of this loan agreement the new loan together with earlier loans fall due for repayment upon the earlier of 31 July 2011 or the date on which shareholder approval is obtained for the acquisition by the Company of a new business. In the event of a default in payment of capital and/or interest the loans will be capitalised from the date of default and shall carry interest at the rate of 10% per annum.
Taking account of these factors the directors are satisfied that the Company and the Group has adequate working capital for the foreseeable future.
4. Loss per Ordinary Share has been calculated as follows:
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6 months to 30 March 2010 |
6 months to 31 March 2009 |
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|
| £'000 | £'000 |
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| This has been calculated on a loss attributable to ordinary shareholders of |
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(35)
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(42)
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| The weighted average number of shares listed was: |
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| Basic and diluted |
| 8,747,377 | 8,747,377 |
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5. Called up share capital
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| At 31 March 2010 | At 31 March 2009 | At 30 September 2009 |
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| Number | £'000 | Number | £'000 | Number | £'000 |
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| Authorised |
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Ordinary shares of 1p each Deferred shares of 49p each
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11,041,237 11,041,237 |
110 5,411 _____ |
11,041,237 11,041,237 |
110 5,411 _______ |
11,041,237 11,041,237 |
110 5,411 _____ |
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5,521 _____ |
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5,521 ______ |
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5,521 _____
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| Allotted, called up and fully paid |
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Ordinary shares of 1p each Deferred shares of 49p each |
8,753,867 8,753,867 |
88 4,290 _____ |
8,753,867 8,753,867 |
88 4,290 _____ |
8,753,867 8,753,867 |
88 4,290 _____ |
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4,378 _____ |
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4.378 _____ |
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4,378 _____ |
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The deferred shares do not entitle the holder to payment of any dividend or other distribution or to receive Notice of or attend or vote at any General Meeting of the company or on a return of capital to the repayment of the amount paid on such deferred shares until after repayment of the capital paid up on the Ordinary Shares together with payment of £1,000,000 on each Ordinary Share and the Deferred Shares shall not be capable of transfer at any time other than with the consent of the Directors.
6. Taxation
There is no taxation charge for the six months ended 31 March 2010 (2009: Nil). Unutilised tax losses carried forward are £1,228,000 (2009: £ 1,168,000). A deferred tax asset has not been recognised in respect of these losses, as the conditions for recognition are not evident. The estimated value of the unrecognised deferred tax asset at a standard rate of 28% is £343,000 (2009:£327,000)
7. Investment property
The company's investment property comprises approximately 67 acres of agricultural land in the UK. Based on a valuation report dated 4 July 2006 conducted by Savills (L & P) Limited Chartered Surveyors of Winchester, Hampshire the fair value of the Company's investment in freehold land was £110,000. However, in view of the current market conditions the Directors are of the opinion that the fair value of the investment property is £80,000. The rental income earned by the Company from its investment property which is leased out on an agricultural tenancy which continues year to year amounted to £1,500 (2009: £1,500).
8. Financial liabilities - borrowings
Other borrowings comprise unsecured loans totalling £120,000. These loans were repayable on demand and by agreement the repayment date had been extended to 31 March 2008. No demand has been received for repayment. Under the terms of the agreement the lenders are entitled to charge interest on the Loans at the rate of 6% per annum from the date of the advance on 15 May 2006. Interest accrued in the 6 month period to 31 March 2010 is £3,600 (2009: £3,600)
Unsecured borrowings from the ultimate parent company total £460,000 and include a new loan of £200,000 obtained on 12 February 2010. The earlier loan of £260,000 was interest free until 11 February 2010 and was due for repayment on 31 March 2008 but by agreement the repayment date has been extended to 31 July 2011. As from 12 February 2010 all loans carry interest at the rate of 5% per annum. Under the terms of this loan agreement the new loan together with earlier loans fall due for repayment upon the earlier of 31 July 2011 or the date on which shareholder approval is obtained for the acquisition by the Company of a new business. In the event of a default in payment of capital and/or interest the loans will be capitalised from the date of default and shall carry interest at the rate of 10% per annum. Interest accrued in the 6 month period to 31 March 2010 is £ 2,875 (2009: Nil).
9. Related party Transactions
Kudrow Finance Limited, the ultimate parent company, has provided unsecured, interest free loans totalling £460,000 (2009: £260,000), which have been sourced from Glory Time Holdings Inc, a company under the control of a non-executive Director Antares Cheng. The loans were due for repayment on 31 March 2008 but by agreement the repayment date has been extended to 31 July 2011. As from 12 February 2010 these loans carry interest at the rate of 5% per annum.
Directors' transactions
Robert Lee a non-executive Director is the principal of Robert Lee Law Offices which at 31 March 2010 operated a designated trust account for the benefit of the Company and held funds amounting to £122,060 (2009: £37,097). At 31 March 2010 the Company owed Robert Lee £ 9,700 in respect of unpaid director's fees (2009: £8,700). Proclass Limited, a company incorporated in the British Virgin Islands is a Corporate Director of Kudrow Finance Limited, the ultimate parent company. Robert Lee is a director of Proclass Limited and by virtue of this office is able to influence the decision making process of Kudrow Finance Limited.
Antares Cheng a non-executive Director is the controlling shareholder in Glory Time Holdings Inc.