WTS.L Regulatory News (WTS)

29 Jun 2006 17:10

World Trade Systems PLC29 June 2006 WORLD TRADE SYSTEMS PLC -------------------------------------- INTERIM REPORT Six months ended 31 March 2006 -------------------------------------- CHAIRMAN'S STATEMENT INTRODUCTION The Company had no trading activities in the six month period from 1 October2005 to 31 March 2006. RESULTS The loss for the period of £59,000 (2005: £30,000) arises from administrativeexpenses and charges. TRADING PROSPECTS The Company continues to seek opportunities in the Far East and discussions havebeen opened concerning several possibilities in Japan and China. Recently, therehave been more detailed discussions with a view to generating trading activitiesin Asia with parties in both Japan and China. As detailed in the interim financial information, we have obtained further loans totalling £120,000 fromparties who have indicated an interest in developing business opportunites forthe Company.Shareholders will be kept advised of any further developments. ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS") The interim financial information for the six months ended 31 March 2006 hasbeen prepared under IFRS. The impact of the new standards on the group isminimal. Robert Lee Non Executive Chairman 29 June 2006 CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2006 Note 6 months to 6 months to 12 months to 31 March 31 March 30 September 2006 2005 2006 £'000 £'000 £'000Continuing operations Operating income 2 - 15Administrative expenses (61) (30) (76) ______ ______ ______ Operating loss (59) (30) (61)Investment revenues - - 2 ______ ______ ______Operating loss before tax (59) (30) (59) Income Tax 5 - - - ______ ______ ______ Loss for the financialperiod (59) (30) (59)from continuing operations ______ ______ ______ Attributable to equityholders of the parent (59) (30) (59) ______ ______ ______ Basic and diluted loss perordinary share 3 (0.006)p (0.34)p (0.006)p ______ ______ ______ CONDENSED CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2006 Note As at As at As at 31 March 31 March 30 September 2006 2005 2005 £'000 £'000 £'000Assets Non-current assetsInvestment property 6 40 40 40 ________ _______ _______ 40 40 40 ________ _______ _______Current assetsTrade and other receivables 8 5 4Cash and cash equivalents 31 42 81 _______ ______ _______ 39 47 85 _______ ______ _______Current liabilitiesTrade and other payables (55) (30) (42) _______ ______ ______Net Current (Liabilities)/Assets (16) 17 43 ______ ______ ______ Total assets less current liabilities 24 57 83 Non-current liabilitiesFinancial liabilities - Borrowings 7 (160) (105) (160) ______ ______ _______ Net Liabilities (136) (48) (77) ______ ______ _______ Equity Capital and reservesShare capital 4 4,378 4,378 4,378Retained earnings (4,514) (4,426) (4,455) _______ ______ _______ Total equity (136) (48) (77) _______ ______ _______ CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR SIX MONTHS ENDED 31 MARCH 2006 Share Retained Total capital Earnings £'000 £'000 £'000 Balance at 1 October 2004 4,378 (4,396) (18) ______ ______ _____ Loss for the period - (30) (30) ______ ______ _____ Balance at 31 March 2005 4,378 (4,426) (48) Loss for the period - (29) (29) ______ ______ _____ Balance at 1 October 2005 4,378 4,455) (77) Loss for the period - (59) (59) ______ ______ ______ Balance at 31 March 2006 4,378 (4,514) (136) ______ ______ ______ CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2006 6 months to 6 months to 12 months to 30 31 March 31 March September 2006 2005 2005 £'000 £'000 £'000 Net cash used inoperating activities (50) (50) (68) Net cash received from investingactivitiesInvestment revenues - - 2 Net cash received from financingactivitiesNew loan raised - - 55 _______ ______ _____ Net decrease in cashand cash equivalents (50) (50) (11) Cash and cashequivalents atbeginning of period 81 92 92 _______ _______ ______ Cash and cashequivalents at end ofperiod 31 42 81 _______ _______ ______ NOTES TO THE INTERIM REPORT 1. ACCOUNTING POLICIES a) Statement of compliance UK law requires that the next annual consolidated financial statements of theCompany, for the year ending 30 September 2006, be prepared in accordance withInternational Financial Reporting Standards (IFRSs) adopted for use in theEuropean Union ("adopted IFRSs") and therefore comply with Article 4 of the EUIAS legislation. The interim financial information has been prepared on the basis of therecognition and measurement requirements of adopted IFRSs as at 31 March 2006that are effective (or available for early adoption) at 30 September 2006, theGroup's first annual reporting date at which it is required to use adoptedIFRSs. Based on these adopted IFRSs, the directors have applied the accountingpolicies, as set out below, which they expect to apply when the first IFRSfinancial statements are prepared for the year ending 30 September 2006. a) Basis of preparation - Going Concern The financial statements have been prepared on the going concern basis. KudrowFinance Limited has made available unsecured interest free loans totalling£160,000 for which the earliest repayment date has been extended to 31 December2007 and have also confirmed to the directors that it has made arrangements witha non-executive director, Mr Antares Cheng to provide such further financialsupport as the Company and the Group may require to meet its financialobligations as they fall due and to seek and develop new business opportunities. Subsequent to 31 March 2006 the company has obtained two further unsecuredinterest free loans of £60,000 from each of Emporium Investment Holdings Limitedand World Capital Services Limited. The earliest date for repayment of theseloans is 15 May 2007. These loans were obtained to enable the Company to meetits on going financial obligations and to seek business opportunities. The Non-Executive Chairman Robert Lee has also given a personal undertaking tothe Board that he will support the Company's financial requirements up to£100,000. Taking account of these factors the directors are satisfied that the Company andthe Group has adequate working capital for the foreseeable future. b) Accounting convention The financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards. The accounting policiesset out below have been applied consistently in all periods presented in theseconsolidated financial statements and in preparing an opening IFRS balance sheetat 1 October 2004 c) Basis of Consolidation The Group financial statements consolidate the financial statements of theCompany and its subsidiary undertakings. The results of subsidiary undertakingsacquired during the year are included from the date of acquisition. Onacquisition of a subsidiary, all of the subsidiary's assets and liabilities,which exist at the date of acquisition, are recorded at their fair valuesreflecting their condition at that date. The results of subsidiary undertakingsdisposed of in the year are included to the date of disposal. d) Foreign currencies In preparing the financial statements of the individual companies, transactionsin currencies other than the entity's functional currency (foreign currencies)are recorded at the rates of exchange prevailing at the dates of thetransactions. At each balance sheet date, monetary assets and liabilities thatare denominated in foreign currencies are retranslated at the rates prevailingon the balance sheet date. Non-monetary items carried at fair value that aredenominated in foreign currencies are translated at the rates prevailing at thedate when the fair value was determined. Non-monetary items that are measured interms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on theretranslation of monetary items, are included in profit or loss for the period.Exchange differences arising on the retranslation of non-monetary items carriedat fair value are included in profit or loss for the period except fordifferences arising on the retranslation of non-monetary items in respect ofwhich gains and losses are recognised directly in equity. For such non-monetaryitems, any exchange component of that gain or loss is also recognised directlyin equity. e) Investment property Investment property, which is property held to earn rentals and/or for capitalappreciation is stated at its cost less impairment losses. Investment propertyis not depreciated. f) Income tax Income tax on the profit or loss for the year comprises current and deferredtax. Income tax is recognised in the income statement except to the extent thatit relates to items recognised directly to equity, in which case it isrecognised in equity. Current tax is the expected tax payable on the taxable income for the year,using tax rates enacted or substantially enacted at the balance sheet date, andany tax payable in respect of previous years. Full provision for deferred taxation is made using the balance sheet liabilitymethod, providing for temporary differences between the carrying amounts ofassets and liabilities for financial reporting purposes and the amounts fortaxation purposes. The amount of deferred tax provided is based on the expectedmanner of realisation or settlement of the carrying amounts of assets andliabilities, using tax enacted or substantially enacted at the balance sheetdate. A deferred tax asset is recognised only to the extent that it is probable thatfuture taxable profits will be available against which the asset can beutilised. h) Financial instruments Financial assets and liabilities are recognised on the Group's balance sheetwhen the Group becomes a party to the contractual provisions of the instrument. (i) Trade and other receivables Trade and other receivables are measured at initial recognition at fair value,and are subsequently measured at amortised cost using the effective interestmethod. Appropriate allowances for estimated irrecoverable amounts arerecognised in profit or loss when there is objective evidence that the asset isimpaired. The allowance recognised is measured as the difference between theasset's carrying amount and the present value of estimated future cash flowsdiscounted at the effective interest rate computed at initial recognition. (ii) Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits and othershort term highly liquid investments that are readily convertible to a knownamount of cash and are subject to an insignificant risk of changes in value. (iii) Trade and other payables Trade and other payables are initially measured at fair value, and aresubsequently measured at amortised cost using the effective interest ratemethod. 2. Transition to IFRS In the current year, the Group has adopted International Financial ReportingStandards "IFRS" for the first time. The Group has adopted IFRS 1 First Time Adoption of IFRS to provide a startingpoint for reporting under IFRS. The date of transition to IFRS was selected at 1October 2004 and all comparative information in these financial statements hasbeen restated to reflect the Group's adoption of IFRS. The transition to IFRS has not affected the reported financial position and noadjustments were required to be made between equity or income at 1 October 2004or 30 September 2005 as reported under UK GAAP and presented now under IFRS. 3. Loss per Ordinary Share has been calculated as follows: 6 months to 6 months to 12 months to 31 March 31 March 30 September 2006 2005 2005 £'000 £'000 £'000 This has been calculated on a lossattributable to ordinaryshareholders of (59) (30) (59) ------- ----- ----The weighted average number of shareslisted was:Basic and diluted 8,747,377 8,747,377 8,747,377 ========= ========= ========= The options and warrants areanti-dilutive. 4. Called up share capital 6 months to 6 months to 12 months to 31 March 31 March 30 September 2006 2005 2005 £'000 £'000 £'000AuthorisedOrdinary Shares of 50p each 5,521 5,521 5,521 ----- ------ ----- Allotted, called up and fully paidOrdinary Shares of 50p each 4,378 4,378 4,378 ===== ===== ===== On 12 April 2006 by ordinary resolution passed at a general meeting the ordinaryshares of 50p each in the capital of the Company were sub-divided andreclassified as 1 Ordinary Share of 1p and 1 Deferred Share of 49p. A specialresolution passed on the same date approved the reduction of share capital bycancelling and extinguishing all of the issued deferred shares of 49p each inthe company, subject to approval of the Court. No application has yet been madeto the Court for the reduction of capital. 5. Taxation There is no taxation charge for the six months ended 31 March 2006. (2005:£Nil). Unutilised tax losses carried forward are £873,000 (2005: £784,000). 6. Investment property The company's investment property comprises approximately 67 acres ofagricultural land in the UK. The directors consider that the fair value of thecompany's interest in freehold land is £70,000. 7. Financial liabilities - borrowings These represent unsecured interest free loans totalling £160,000 (2005:£105,000). See details in Note 8 8. Related party Transactions Murzban Mehta an executive director of the Company is a partner in the firm ofCitroen Wells, Chartered Accountants. During the period the Company paid feestotalling £8,750 (2005: £3,750) for accountancy services provided by CitroenWells. The total balance outstanding as 31 March 2006 was £7,000 (2005: £2,500). Robert Lee a non-executive director is the principal of Robert Lee Law Officesand a Director of Inter-Asia Consulting Group Inc. Under the terms of anagreement Inter-Asia Consulting Group Inc is entitled to receive a fee of£50,000 on the Company successfully concluding new business arrangements. At 31March 2006 the company owed Robert Lee £5,700 in respect of unpaid director'sfees (2005: £4,700). Richard Lascelles a non-executive director is owed £3,000 in respect of unpaiddirector's fees. (2005: £2,000). Kudrow Finance Limited, the ultimate parent company, has provided unsecured,interest free loans totalling £160,000 (2005: £105,000), which have been sourcedfrom a company under the control of a non-executive director, Mr Antares Cheng.The loans fall due for repayment on 31 December 2007 If the loans are not repaidby their respective dates, then interest will start accruing at 4% and 6% perannum. 9. Post balance sheet events Subsequent to 31 March 2006 the company has obtained two further unsecuredinterest free loans of £60,000 from each of Emporium Investment Holdings Limitedand World Capital Systems Limited. The earliest date for repayment of these loanis 15 May 2007. The loans were obtained to enable the Company to meet its ongoing financial obligations and to seek business opportunities. 10. The interim financial information is neither audited nor reviewed by theauditors and was approved by the Board on 29 June 2006. This announcement isbeing circulated to all Shareholders of the Company, and copies will beavailable to the public at the Company's registered office at Devonshire House,1 Devonshire Street, London W1W 5DR. This information is provided by RNS The company news service from the London Stock Exchange