21 May 2015 15:34
Company No. 01698076
WORLD TRADE SYSTEMS PLC |
REPORT AND FINANCIAL STATEMENTS |
¨ Year ended 30 September 2014¨ |
DIRECTORS AND ADVISERS
ROBERT LEE Non-executive Chairman, aged 65, is a solicitor admitted in England and Wales, Hong Kong, California, Ontario and Victoria (Australia). Since 1984 his professional career has been spent practising in the Far East, where he has been a partner in two international law firms. In 1988 he established his own firm, which has offices in Hong Kong and Tokyo, where he now lives. His practice is a general corporate and commercial one, centred on providing assistance for Japanese companies investing and operating overseas.
CLIO LEE Non-executive Director, aged 39 qualified as a solicitor in 2002 at London based niche corporate boutique Memery Crystal where she focused on company commercial work. Clio has practised commercial law and also acted in a business advisory capacity in the UK for over 10 years. Clio also has a broad range of experience in international property development both in a legal capacity and as a development consultant.
| ANTARES CHENG Non-executive Director, aged 57 is the Chief Executive Officer and major shareholder of the King Power group of companies based in Hong Kong. King Power is a large duty free goods and travel wholesaler and retailer operating in Hong Kong, Peoples Republic of China (PRC), Macau and Japan and has interests in other related activities.
MURZBAN MEHTA Non-executive Directors, aged 66 is a Certified Accountant in Public Practice in the UK. He was appointed to the Board in an alternate director capacity and plays no active role in the management of the company. |
SECRETARY Murzban Mehta
REGISTERED OFFICE Devonshire House 1 Devonshire Street London W1W 5DR
REGISTERED NUMBER 01698076
AUDITOR Grant Thornton UK LLP 1020 Eskdale Road IQ Winnersh Wokingham Berkshire RG41 5TS
REGISTRARS Capita Registrars Limited The Registry 34 Beckenham Road Kent BR3 4TU |
strategic report FOR THE YEAR ENDED 30 SEPTEMBER 2014
The Company Directors present their Strategic Report for the year ended 30 September 2014.
BUSINESS REVIEW
The Company continued to have no business activity and was seeking investment opportunities throughout the year under review. The Company received rental income on freehold agricultural land.
RESULTS
The loss for the period of £100,000 (2013: £79,000) arises from administrative expenses and charges less rent receivable.
At 30 September 2014 the Company had net liabilities of £951,000 (2013: £851,000).
TREASURY AND FINANCIAL INSTRUMENTS
The Company has no financing facility with its bankers and is financed by financial support from its parent company Kudrow Finance Limited. The Board focuses on cash flows and monitors cash balances and requirements on a monthly basis.
On 15 May 2006 the Company had obtained 2 interest free unsecured loans totalling £120,000 from independent third partiesand whichwere repayable on demand with a repayment date of 31 March 2008. Interest was to be accrued subsequent to this repayment date. One loan in the sum of £60,000 was repaid in the year to 30 September 2012 and at 30 September 2014 a balance of £60,000 remained outstanding on the second loan. Interest has continued to accrue on this loan as from 31 March 2008 at a rate of 6% per annum. At 30 September 2014 accrued interest on this loan amounted to £30,000 (2013: £27,000).
The parent company Kudrow Finance Limited ("Kudrow") has undertaken to procure the necessary funding to discharge any demand for the remaining loan and interest as and when received.
The Company has an unsecured loan of £723,800 from Kudrow, including £63,000 advanced on 31 December 2013 ("the new loan") for on-going working capital requirements.
Under the terms of the revised loan agreement dated 20January 2015 the loans carry interest at the rate of 5% per annum from the earlier of 12 February 2010 or date of advance if later and are due for repayment on the earlier of 31 July 2016 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 rolled up into the principal loan from the date of default and shall carry interest at the rate of 10% per annum. As at 30 September 2014, £132,000 (2013: £97,000) of interest was outstanding.
Kudrow has unconditionally undertaken to provide such further financial support as may be required.
At 30 September 2014 the Company had cash on deposit with its bankers of £13,000 (2013: £11,000), and £12,000 held in a client account with Robert Lee Law Offices, Hong Kong (2013: £11,000).
KEY PERFORMANCE INDICATORS
The Company's only source of income was rent received on freehold agricultural land which is let under an agricultural tenancy at a fixed annual rental.
The Company measures its performance by comparing budgeted cash flows to actual cash flows and monitors cash balances carefully. There are no other relevant key performance indicators being reviewed at this time.
PRINCIPAL RISKS AND UNCERTAINTIES FACING THE COMPANY
The principal risk and uncertainty facing the Company relates to it finding suitable new business opportunities, within the timeframe of the current financing arrangements. Should such an opportunity not materialise and if new financing arrangements are not forthcoming the Board will consider taking steps to wind up the Company.
strategic report FOR THE YEAR ENDED 30 SEPTEMBER 2013 - (continued)
OTHER MATTERS
As the Company has no current business activity or employees, this report therefore does not contain information as to the following as it is not deemed relevant to the Company:
· its business strategy and business model;
· policy on environmental matters;
· employees; and
· social community and human rights issues
As the Company has no business activity there are therefore no greenhouse gas emissions generated which require separate report.
THE BOARD AND THE COMMITTEES OF THE BOARD
The Board comprised of a non-executive Chairman, and three non-executive Directors one of whom is female. One of the non-executive directors is independent. The Board formally met 3 times during the year. When and where appropriate, the Directors meet to monitor and guide the Company's performance. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that Board procedures are observed and that applicable rules and regulations are complied with. Any Director, in furtherance of his duties, may take independent professional legal advice at the Company's expense.
All Directors are subject to re-election at least every three years. Clio Lee will retire by rotation and being eligible offers herself for re-election.
The Strategic Report was approved by the Board on 26 January 2015 and signed on its behalf by:
Robert Lee
Non-executive Chairman
26 January 2015
report of the directors
The Company Directors present their Report together with the audited financial statements for the year ended 30 September 2014.
PRINCIPAL ACTIVITIES, BUSINESS REVIEW AND FUTURE DEVELOPMENT
A review of the business is given in the Strategic Report on pages 2 and 3.
The future development of the Company is under constant review by the Board.
Results and dividends
The loss for the period before and after tax, attributable to ordinary shareholders amounted to £100,000 (2013: £79,000). The Directors do not recommend the payment of a final equity dividend (2013: Nil). No interim dividend was paid (2013: Nil).
FINANCIAL INSTRUMENTS
The Company's principal financial instruments comprise sterling cash and bank deposits, loans together with trade receivables and payables that arise directly from its operations.
The main risks arising from the Company's financial instruments can be analysed as follows:
Liquidity risk
Until such time as the Company acquires new business it is reliant upon continued financial support in the form of medium term loans from its ultimate parent company and others to enable it to meet its ongoing financial obligations.
Credit risk
The Company's principal financial assets are cash and cash equivalents and trade and other receivables which represent its maximum exposure to credit risk in relation to financial assets.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
The credit risk on liquid funds held by Robert Lee Law Offices on behalf of the Company, in a designated client account, is mitigated as far as possible as these funds are also held with a high credit-ratings bank and Robert Lee Law Offices are monitored and reviewed in a regulated environment.
Cash flow interest rate risk
Interest bearing assets comprise cash and bank deposits all of which earn interest at a variable rate. The Company has no bank borrowings. The Company's existing borrowings from its parent company were interest free until 12 February 2010 after which they begun to accrue interest at a fixed rate of 5% per annum. Borrowings from third parties accrue interest at a fixed rate of 6% per annum. The Directors monitor overall borrowings and interest costs to limit any adverse effects on the financial performance of the Company.
Directors and their interestsThe membership of the Board at the end of the year is set out on page 1.
The Board was comprised of a non-executive Chairman, and three non-executive Directors, one of whom was independent. Brief biographies of the Board at the end of the period appear on page 1.
No Director had any interests in the shares of the Company.
report of the directors - (Continued)
Substantial interests
At 23 January 2015 the following had notified the Company of an interest in 3% or more of the nominal value of the Company's shares.
Ordinary shares of 1p | % | |
Kudrow Finance Limited | 5,308,640 | 60.64 |
Mushashino Industries Co. Limited | 500,000 | 5.71 |
CORPORATE GOVERNANCE
As the Company has no material operations and in order to maintain a restraint on administration costs the Company has not complied with the provisions of the UK Corporate Governance Code. The functions of the Audit Committee and Remuneration Committee have been carried out by the Board.
INTERNAL CONTROLS
The Board has overall responsibility for the Company's systems of internal control and for reviewing their effectiveness, which are appropriate to the activities of the Company and are designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material financial misstatement or loss.
As the Company had no material operations in the year under review there were no formal internal control systems or risk management systems in relation to the financial reporting process. The Board monitors and approves all payments made by the Company and ensures that at all times there are adequate financial resources to enable the Company to meet its obligations. The Board reviews the financial reports provided to it by the Company's external accountants to mitigate the risk of misstatement.
Throughout the period from 1 October 2013 up to the date of approval of the annual report and accounts the Directors have maintained close control over the Company's finances to ensure that at all times it has sufficient cash resources to meet its financial obligations.
Given the scale of the Company's operations the Board is of the view that formal internal audit procedures are not required.
AUDIT COMMITTEE
There is currently no Audit Committee and the Directors have carried out the functions normally reserved to such a Committee.
The Directors, therefore, ensure that the external auditor is independent via the segregation of audit related work from other accounting functions and measures applicable fees with similar auditors.
Relations with Shareholders
The Company encourages two-way communications with all its shareholders and responds quickly to all requests or queries received. All shareholders have at least twenty-one days' notice of the Annual General Meeting at which all of the Directors and the Chairman are normally available for questions. Comments and questions are encouraged from the shareholders at the meeting.
OTHER MATTERS
As the Company has no business activity there are therefore no greenhouse gas emissions generated which require separate report.
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 November 2014; the Directors consider that the Company has sufficient liquid resources to meet its financial requirements for the period up to 31 January 2016. 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.
Kudrow Finance Limited ("Kudrow"), the parent company, has provided unsecured loans totalling £723,800 ("the existing loans") to support the Company's financing requirements, including £63,000 on 31 December 2013 for working capital purposes. Since 12 February 2010, or the date of advancement if later, the total loan balance carries interest at a rate of 5% per annum. On 19 January 2015 Kudrow provided a further unsecured loan of £65,000 to enable the company to meet its forecast cash requirements.
Under the terms of this loan agreement the repayment date is the earlier of 31 July 2016 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 rolled up into the principle loan from the date of default and shall carry interest at the rate of 10% per annum. Kudrow has unconditionally undertaken to provide such further financial support as may be required.
The above loans were obtained to enable the Company to meet its on going financial obligations and to seek new business opportunities.
On 15 May 2006 the Company had obtained 2 interest free unsecured loans totalling £120,000 from independent third partiesand whichwere repayable on demand with a repayment date of 31 March 2008. Interest was to be accrued subsequent to this repayment date. One loan in the sum of £60,000 was repaid in the year to 30 September 2012 and at 30 September 2014 a balance of £60,000 remained outstanding on the second loan. Interest has continue to accrued on this loan as from 31 March 2008 at a rate of 6% per annum. At 30 September 2014 accrued interest on this loan amounted to £30,000 (2013: £27,000).
The parent company Kudrow Finance Limited ("Kudrow") has undertaken to procure the necessary funding to discharge any demand for the remaining loan and interest as and when received.
Taking account of these factors and the post balance sheet events the Directors believe that the Company has adequate resources to continue as a going concern for the foreseeable future.
POST BALANCE SHEET EVENTS
After the year end Kudrow provided a further unsecured loan of £65,000 to the Company for working capital purposes.Such loan was sourced from Glory Time Holdings Inc., which is controlled by Antares Cheng. The loan bears interest at 5% per annum and is repayable on the later of 31 July 2016 or the date on which shareholder approval is obtained for the acquisition by the Company of a new business.
AUDITOR
Grant Thornton UK LLP, offer themselves for re-appointment as auditor. A resolution to re-appoint Grant Thornton UK LLP will be proposed at the forthcoming annual general meeting.
APPROVAL OF REPORT
The Report of the Directors was approved by the Board on 26 January 2015 and signed by order of the Board by:
_______________________
Murzban Mehta - Secretary
STATEMENT OF DIRECTORS' RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS
The directors are responsible for preparing the Strategic Report, Directors' Report, the Remuneration Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have to prepare the financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements;
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and the Remuneration Report comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors confirm that:
· so far as each director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
· the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
The directors are responsible for preparing the annual report in accordance with applicable law and regulations. The directors consider the annual report and the financial statements, taken as a whole, provides the information necessary to assess the company's performance, business model and strategy and is fair, balanced and understandable.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
To the best of our knowledge:
· the financial statements, prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and loss of the Company
· the annual report, including the Strategic Report, includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
Antares Cheng
Non-executive Director
26 January 2015
DIRECTORS' REMUNERATION REPORT
The Directors present the Directors' Remuneration Report for the financial year ended 30 September 2014.
This report has been prepared in accordance with Schedule 8 of the Large & Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 as amended by SI2013/1981. The report also meets the relevant requirements of the Listing Rules of the Financial Services Authority.
As required a resolution to approve this Directors' Remuneration Report will be proposed at the Company's Annual General Meeting.
The auditor is required to report to the shareholders on the "auditable part" of the Directors' Remuneration Report and to state whether in its opinion the "auditable part" of the Directors' Remuneration Report has been properly prepared in accordance with the Companies Act 2006. This report, therefore, has separate sections containing unaudited and audited information.
UNAUDITED INFORMATION
Remuneration Committee
There is currently no Remuneration Committee and the Directors have carried out the functions normally reserved to such a Committee.
REMUNERATION POLICY
Executive Directors
There are no executive Directors on the Board.
Non-executive Directors
The Board determines the remuneration of the non-executive Directors and fees are related to current market levels for a comparable business.
Under a revised letter of engagement dated 9 September 2001 Robert Lee was entitled to receive fees at the rate of £7,500 per annum for his services as a non-executive Chairman but as from 1 April 2003, by mutual agreement the fee payable was reduced to £1,000 per annum. Robert Lee is not entitled to receive any benefits. The appointment is terminable on three months written notice by either party. There are no contractual termination payments.
Antares Cheng was appointed to the Board as a non-executive Director on 1 July 2004. There is currently no contract of employment with the Company and he has not received any remuneration or benefits. The Board will consider and determine the level of his future remuneration at a time when the Company has acquired new business.
Clio Lee was appointed to the Board as a non-executive Director on 1 June 2010. There is currently no contract of employment with the Company and she has not received any remuneration or benefits. The Board will consider and determine the level of her future remuneration at a time when the Company has acquired new business.
Murzban Mehta was appointed as an Alternate Director on 7 April 2014 and there is no contract of Employment with the Conpany and he has not received any remuneration or benefits.
Assuming this policy is approved by the members at the forthcoming Annual General Meeting, it is intended that this policy will continue for the year ending 30 September 2015 and subsequent years. In accordance with the regulations an ordinary resolution to approve the Directors' Remuneration Report policy will be put to shareholders at least once every three years.
None of the non-executive directors are contractually entitled to any employment related benefits, incentive awards or contributions to pension schemes.
Total shareholder return
The following graph shows the Company's performance for the period from 1 October 2009 to 30 September 2014 as measured by the Total Shareholder Return (TSR) (with dividends reinvested), for equity shareholders of World Trade Systems plc, compared with the TSR for the FTSE All Share index. The Directors consider that as the Company currently has no trading activity there are no comparable companies or market sector and accordingly they have chosen the TSR for the FTSE All Share index as a suitable comparator.
http://www.rns-pdf.londonstockexchange.com/rns/9661N_1-2015-5-21.pdf
Pension Arrangements
There are no UK pension schemes (either defined benefit or defined contribution) for the Directors.
INFORMATION SUBJECT TO AUDIT
Director's Emoluments
2014 | 2013 | |||||||||||
Non-Executive |
Fees (A) |
Taxable Benefits (B) |
Annual Incentives (C) |
LTIP (D) |
Pension (E) |
TOTAL |
Fees (A) |
Taxable Benefits (B) |
Annual Incentives (C) |
LTIP (D) |
Pensions (E) |
TOTAL |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Robert Lee | 1 | - | - | - | - | 1 | 1 | - | - | - | - | 1 |
Antares Cheng | - | - | - | - | - | - | - | - | - | - | - | - |
Clio Lee | - | - | - | - | - | - | - | - | - | - | - | - |
Murzban Mehta | - | - | - | - | - | - | - | - | - | - | - | - |
The Company has no employees and considers the Directors to be the key management personnel.
Interests in shares
None of the non-executive directors have any interest in the issued capital of the company.
APPROVAL OF REPORT
The Directors' Remuneration Report was approved by the Board on 26 January 2015 and signed on its behalf by:
…………………………
Antares Cheng - Non-executive Director
WORLD TRADE SYSTEMS PLC
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WORLD TRADE SYSTEMS PLC
We have audited the financial statements of World Trade Systems PLC for the year ended 30 September 2014 which comprise the Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Financial Position, the Statement of Cash Flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's 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 and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Statement of Directors' Responsibilities on page 7, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.
Auditor commentary
An overview of the scope of our audit
Our audit approach was based on a thorough understanding of the Company's business and is risk-based. Accordingly, our audit work is focussed on obtaining an understanding of, and evaluating, internal controls at the Company relevant to our risk assessment, the accounts production process and critical accounting matters. We undertook substantive testing on significant transactions, balances and disclosures, the extent of which was based on various factors such as our overall assessment of the control environment, the design effectiveness of controls over individual systems and the management of specific risks.
Our application of materiality
We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified misstatements and in forming our opinion. For the purpose of determining whether the financial statements are free from material misstatement we define materiality as the magnitude of a misstatement or an omission from the financial statements or related disclosures that would make it probable that the judgement of a reasonable person, relying on the information would have been changed or influenced by the misstatement or omission. For the Company's audit, we established materiality for the financial statements as a whole to be £5,000 which is 1% of the loss before taxation.
Our assessment of risk
Without modifying our opinion, we highlight the following matters that are, in our judgement, likely to be most important to users' understanding of our audit. Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on individual transactions, balances or disclosures.
Going concern
The accounts are prepared on a going concern basis in accordance with IAS 1 'Presentation of Financial Statements'. However, as no substantive operations exist, the Company continues to generate minimal cash inflows, has made losses for consecutive years and has an on-going net liability position, these conditions may cast doubt on the Company's ability to continue as a going concern. We therefore identified going concern as a risk requiring special audit consideration.
Our audit work included, but was not restricted to, an evaluation of management's assessment of the Company's ability to continue as a going concern including an analysis of cash flow forecasts and an evaluation of the reliability of the underlying data. We also confirmed the financial support arrangements to maintain financial support from related and third parties, as well as assessing their ability to fulfil the commitment if necessary. The Company's disclosure about going concern is included in the significant accounting policies in note 2.
Opinion on financial statements
In our opinion the financial statements:
· give a true and fair view of the state of the Company's affairs as at 30 September 2014 and of its loss for the year then ended;
· have been properly prepared in accordance with IFRSs as adopted by the European Union; and
· have been prepared in accordance with the requirements of the Companies Act 2006.
Other reporting responsibilities
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
· the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and
· the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements.
As described in the Report of the Directors, the Company has not complied with the UK Corporate Governance Code and has not prepared a Corporate Governance Statement. Accordingly we were unable to form an opinion as to whether the information given in the Corporate Governance Statement with respect to internal control and risk management systems in relation to financial reporting processes and about share capital structures is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is:
· materially inconsistent with the information in the audited financial statements; or
· apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Company acquired in the course of performing our audit; or
· otherwise misleading.
In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the directors' statement that they consider the annual report is fair, balanced and understandable and whether the annual report appropriately discloses those matters that were communicated to the board (which has assumed the duties of the audit committee) which we consider should have been disclosed.
Under the Companies Act 2006 we are required to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
· the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.
As described in the Report of the Directors, the Company has not complied with the UK Corporate Governance Code and has not prepared a Corporate Governance Statement.
Under the Listing Rules we are required to review:
· the directors' statement on page 6 in relation to going concern.
As described in the Report of the Directors, the Company has not complied with the UK Corporate Governance Code and has not prepared a Corporate Governance Statement. Accordingly we were unable to review the part of the Corporate Governance Statement relating to the Company's compliance with the nine provisions of the UK Corporate Governance Code specified for our review by the Listing Rules.
Tracey James
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Reading
28January 2015
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 September 2014
Note |
2014 |
2013 | ||
£'000 | £'000 | |||
Continuing operations | ||||
Operating income | 7 | 3 | 3 | |
Administrative expenses | (64) | (62) | ||
____ | ____ | |||
Loss from operations | 3 | (61) | (59) | |
Finance costs | (39) | (20) | ||
____ | ____ | |||
Loss before tax | (100) | (79) | ||
Income tax expense | 5 | - | - | |
____ | ____ | |||
Loss for the year and total comprehensive income attributable to equity holders |
(100) |
(79) | ||
====
| ====
| |||
Basic and diluted loss per ordinary share | 6 | (1.143p) | (0.903p) | |
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 September 2014
| Share capital £'000 | Retained earnings £'000 | Total £'000 | |
At 1 October 2012 | 4,378 | (5,150) | (772) | |
Loss for the year Other comprehensive income for the year | -
- | (79)
- | (79)
- | |
Total comprehensive income for the year attributable to equity holders
| _____ - _____
| ______ (79) ______ | _____ (79) _____
| |
At 30 September 2013 | 4,378 | (5,229) | (851) | |
Loss for the year Other comprehensive income for the year | -
- | (100)
- | (100)
- | |
_____ | ______ | _____ | ||
Total comprehensive income for the year attributable to equity holders
| - _____ | (100) ______ | (100) _____
| |
At 30 September 2014 | 4,378 | (5,329) | (951) |
COMPANY NO: 01698076
STATEMENT OF FINANCIAL POSITION
As at 30 September 2014
|
Note |
2014 2013 | |||
£'000 | £'000 | ||||
Non-current assets | |||||
Investment property | 7 | 40 | 40 | ||
______ | ______ | ||||
40 | 40 | ||||
______ | ______ | ||||
Current assets | |||||
Cash and cash equivalents | 8 | 25 | 22 | ||
_____ | ______ | ||||
25 | 22 | ||||
_____ | ______ | ||||
Total assets | 65 | 62 | |||
===== | ====== | ||||
Current liabilities | |||||
Trade and other payables | 9 | (71) | (68) | ||
Financial liabilities - borrowings | 9 | (945) | (845) | ||
_____ | _______ | ||||
Total liabilities | (1,016) | (913) | |||
_____ | _______ | ||||
Net liabilities | (951) | (851) | |||
===== | ======= | ||||
EQUITY | |||||
Share capital | 10 | 4,378 | 4,378 | ||
Retained earnings | 11 | (5,329) | (5,229) | ||
______ | _______ | ||||
Total deficit of equity attributable to equity holders |
|
(951) ===== |
(851) ====== |
The financial statements were approved by the Board of Directors and authorised for issue on 26 January 2015, and signed on its behalf by:
Robert Lee - Non-executive Chairman
STATEMENT OF CASH FLOWS
For the year ended 30 September 2014
| Note | 2014 | 2013 | |||||||
| £'000 | £'000 | ||||||||
| ||||||||||
Operating activities Net cash used in operating activities |
12 |
(60) |
(55) | |||||||
_____ | ______ | |||||||||
Cash flows from operating activities
Financing activities Proceeds from ultimate parent company loans Repayment of unsecured loan
Net Cash flows from financing activities
Net change in cash and cash equivalents from continuing operations |
| (60) ______
63 - _____ 63 _____
3 | (55) ______
55 (7) ______ 48 ______
(7) | |||||||
Cash and cash equivalents at beginning of period |
22 |
29 | ||||||||
_____ | ______ | |||||||||
Cash and cash equivalents at end of period | 8 | 25 | 22 | |||||||
===== | ===== | |||||||||
1. GENERAL INFORMATION AND NATURE OF OPERATIONS
World Trade Systems plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is given on page 1. The Company is currently seeking new investment opportunities and its only source of revenue is rental income.
These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which it operates. The Company has no foreign operations.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Preparation - 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 November 2014; the Directors consider that the Company has sufficient liquid resources to meet its financial requirements for the period up to 31 January 2016. 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.
Kudrow Finance Limited ("Kudrow"), the parent company, has provided unsecured loans totalling £723,800 ("the existing loans") to support the Company's financing requirements, including £63,000 on 31 December 2013 for working capital purposes. Since 12 February 2010, or the date of advancement if later, the total loan balance carries interest at a rate of 5% per annum. On 19 January 2015 Kudrow provided a further unsecured loan of £65,000 to enable the company to meet its forecast cash requirements.
Under the terms of this loan agreement the repayment date is the earlier of 31 July 2016 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 rolled up into the principle loan from the date of default and shall carry interest at the rate of 10% per annum. Kudrow has unconditionally undertaken to provide such further financial support as may be required.
The above loans were obtained to enable the Company to meet its on going financial obligations and to seek new business opportunities.
On 15 May 2006 the Company had obtained 2 interest free unsecured loans totalling £120,000 from independent third parties and which were repayable on demand with a repayment date of 31 March 2008. Interest was to be accrued subsequent to this repayment date. One loan in the sum of £60,000 was repaid in the year to 30 September 2012 and at 30 September 2014 a balance of £60,000 remained outstanding on the second loan. Interest has continue to accrued on this loan as from 31 March 2008 at a rate of 6% per annum. At 30 September 2014 accrued interest on this loan amounted to £30,000 (2013: £27,000).
The parent company Kudrow Finance Limited ("Kudrow") has undertaken to procure the necessary funding to discharge any demand for the remaining loan and interest as and when received.
Taking account of these factors and the post balance sheet events the Directors believe that the Company has adequate resources to continue as a going concern for the foreseeable future.
b) IFRSs in issue but not effective
At the date of authorisation of this report there were no Standards and Interpretations which have not been applied in these financial statements which were in issue but not yet effective and which would impact on the reported results.
c) Basis of Preparation - Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), The Companies Act 2006 that applies to companies reporting under IFRS and IFRIC interpretations.
The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. The accounting policies set out below have been applied consistently in all periods presented in these financial statements.
The financial statements are for the Company only. The Tamaris Employees Share Option Scheme Trust ("the trust") has no material effect on the Statement of Comprehensive Income or Statement of Financial Position. Details of the trust have been disclosed in Note 10 to the financial statements.
The financial statements do not include any amounts which are based on significant estimates or judgements.
d) Revenue recognition
Rental Income from operating leases is recognised in the profit or loss on a straight line basis over the term of the relevant lease.
e) Foreign currencies
Transactions in currencies other than pounds sterling are recorded 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 on the balance sheet date. Gains and losses arising on retranslation are included in profit or loss.
f) Taxation
Income tax on the profit or loss for the year comprises current and deferred tax. Taxation is recognised in the profit or loss except to the extent that it relates to items recognised in other comprehensive income or in equity in which case it is recognised in either other comprehensive income or equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the year end date, and any tax payable in respect of previous years.
Full provision for deferred taxation is made using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for taxation purposes.
Deferred tax assets and liabilities are not recognised if the temporary differences arise from goodwill or the initial recognition (other than a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amounts of assets and liabilities, using tax rates enacted or substantively enacted at the year end date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
g) Investment property
Investment property comprising agricultural land, held to earn rentals and for capital appreciation is stated at its cost less impairment losses. Investment property is not depreciated as it related to freehold land. The value of the investment property is reviewed annually and where there is permanent impairment of the value this is written off to profit or loss.
h) Financial instruments and equity instruments
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.
(i) Trade and other receivables
Trade and other receivables are measured at fair value on initial recognition, and are subsequently measured at amortised cost using the effective interest method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted 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 other short term highly liquid investments that are readily convertible to a known amount 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 are subsequently measured at amortised cost using the effective interest rate method.
(iv) Borrowings
Borrowings are recognised initially at fair value, net of direct issue costs. Finance costs are accounted for on an accruals basis and are charged to profit or loss using the effective interest method.
(v) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting its liabilities. Equity instruments issued by the Company are recorded as the proceeds received net of direct issue costs.
i) Segmental analysis
As the Company has only one segment a segmental analysis is not presented. The entire rental income relates to one customer which is based in the UK.
3. LOSS FROM OPERATIONS
Loss from operations is stated after charging: | 2014 £'000 | 2013 £'000 | |
Auditor's remuneration | |||
Fees payable to the Company's auditor for the audit of the financial statements | |||
- statutory audit | |||
Current year | 15 | 15 | |
|
4. DIRECTORS' EMOLUMENTS
2014 £'000 | 2013 £'000 | |
Non-Executive directors - fees | ||
R Lee | 1 | 1 |
A Cheng | - | - |
C Lee | - | - |
M Mehta | -- ___- | - ___ |
1 | 1 | |
___ | ___ |
There were no pension contributions for directors in the year to 30 September 2014 (2013: Nil).
The Company has no employees. The Company considers the Directors to be the key management personnel.
5. TAXATION
| 2014 £'000 | 2013 £'000 |
| ||
Loss for the year | (100) | (79) |
Expected income tax benefit at 22% (2013: 23.5%) | (22) | (19) |
Adjustment for; Tax losses not brought to account |
22
___ |
19
___
|
Actual tax expense | - ___ | - ___ |
Reconciliation of carried forward tax losses | ||
Loss on ordinary activities before tax | (100) | (79) |
Losses brought forward | (1,466) | (1,387) |
______ | ______ | |
Unutilised tax losses | (1,566) | (1,466) |
====== | ====== |
A deferred tax asset has not been recognised in respect of these losses, as it is not evident that these losses will be utilised in the foreseeable future. Should the losses be utilised in the future the estimated value of the deferred tax asset not recognised, at a standard rate of 22% (2013: 23.5%), is £345,000 (2013: £345,000).
6. LOSS PER ORDINARY SHARE
The calculation of the basic loss per share is based on the loss after taxation attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Shares held in employee trusts are treated as cancelled for the purpose of this calculation.
There are no potentially dilutive capital instruments in issue, therefore the basic and diluted loss per share are identical.
Reconciliations of the loss and weighted average number of shares used in the calculations are set out below:
Year ended 30 September 2014 |
Loss £'000 | Weighted average number of shares |
Per share loss pence (p) |
Basic and diluted loss per share | (100) | 8,747,366 | (1.143p) |
| __________ |
| |
Year ended 30 September 2013 | |||
Basic and diluted loss per share | (79) | 8,747,366 | (0.903p) |
| __________ |
| |
|
7. INVESTMENT PROPERTY
2014 | 2013 | |
£'000 | £'000 | |
Land at cost | 40 | 40 |
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. The Directors have reviewed comparable land values and given the mix and usage of the subject land believe that the value lies in the range between £350,000 at the low end and £500,000 at the high end to reflect the potential variability of land values in the region. The directors consider that the fair value of the Company's investment in freehold land as at 30 September 2014 was at the high end of £500,000 (2013: £500,000) as this reflects the valuation of similar parcels of land in the same area. 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 £3,000 (2013: £3,000).
The fair value of the land has been estimated by the Directors by reviewing the sales prices for local parcels of land which were on the market at the year end in the locality. This resulted in an average land value per acre for arable and rough grazing land of £11,000 and £14,000 respectively. The 66.94 acres of land held by the Company is split between arable, rough grazing and woodland in the following proportions: 59%, 35% and 6% respectively. The Directors consider that the land should be included at a valuation to reflect the similar parcels of land in the same region. A further 36% discount has been applied by the Directors due to the land currently being occupied.
The fair value hierarchy categorises the inputs used in the valuation of the land held to be level 3 inputs. Level 3 inputs are unobservable inputs, and have been used to measure the fair value as observable inputs have not been available. As the investment property is held at cost, the fair value measurement does not affect the statement of comprehensive income. There have been no changes in the method of valuation from the prior year.
The land is currently subject to a tenancy, which is not considered to be the highest and best use of the asset. However, a tenancy agreement is in place and so this is the only possible use in the period.
8. CASH AND CASH EQUIVALENTS
2014 £'000 | 2013 £'000 | |||
Cash at bank
| 13 | 11 | ||
Cash held in Solicitors' Client Account (Note 14) | 12 ___ | 11 ___ | ||
25 |
22 | |||
=== | === |
Bank balances and cash comprise cash held by the Company and short term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.
9. OTHER FINANCIAL LIABILITIES
Trade and other payables comprise amounts outstanding for services provided and accrued expenses. The average credit period taken is 60 days (2013: 60 days). Financial liabilities comprise:
2014 | 2013 | |||
£'000 | £'000 | |||
Trade payables | - | 1 | ||
Accrued expenses | 71 __ | 67 ___ | ||
Financial liabilities - borrowings | 71 __
90 | 68 ___
87 | ||
Financial liabilities - amounts owed to ultimate parent company | 855 | 758 | ||
___ | ____ | |||
945 | 845 | |||
=== | ==== |
The Directors consider that the carrying amount of trade payables approximates to their fair value. The fair value of the Financial Liabilities is estimated using a valuation technique where all significant inputs are based on observable market prices, e.g. market interest rates of similar loans with a similar risk.
Financial liabilities - borrowings comprise an unsecured loan totalling £60,000 (2013: £60,000). This loan was repayable on demand and by agreement the repayment date had been extended to 31 March 2008 since when no demand for repayment has been made by the lender.
Under the terms of the agreement the lender is entitled to charge interest on the Loan at the rate of 6% per annum from the date of the advance on 15 May 2006. Within the amount disclosed above is a provision for interest payable for the period from 15 May 2006 to 30 September 2014 of £30,000 (2013: £27,000).
Kudrow has undertaken to procure the necessary funding to discharge the remaining loan together with any interest due thereon.
Amounts owed to Kudrow, the parent company, are unsecured and are due for repayment on 31 July 2016. As from 12 February 2010 these loans carry interest at the rate of 5% per annum. Within the amount disclosed above is a provision for interest payable for the period from 12 February 2010 to 30 September 2013 of £131,000 (2013: £97,000).
Kudrow has unconditionally undertaken to provide such further financial support as may be required.
10. CALLED UP SHARE CAPITAL
2014 | 2013 | |||
Number | £'000 | Number | £'000 | |
Authorised |
| |||
Ordinary shares of 1p each Deferred shares of 49p each
| 11,041,237 11,041,237 | 110 5,411_______ | 11,041,237 11,041,237 | 110 5,411_______ |
5,521 _______ | 5,521 _______ | |||
Allotted, called up and fully paid | ||||
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 ______ |
4,378 ______ | 4,378 ______ |
On 12 April 2006 by ordinary resolution, passed at a general meeting, the ordinary shares of 50p each in the capital of the Company were sub-divided and reclassified as 1 Ordinary Share of 1p and 1 Deferred Share of 49p. A special resolution passed on the same date approved the reduction of share capital by cancelling and extinguishing all of the issued deferred shares of 49p each in the Company, subject to approval of the Court. No application has yet been made to the Court for the reduction of capital.
The deferred shares do not entitle the holder to payment of any dividend, other distribution, 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.
Tamerise Limited was the trustee of The Tamaris Employees Share Option Scheme Trust ("the Trust") and was dissolved on 23 January 2001. World Trade Systems plc ("the Employer") will appoint alternative independent trustees when considered appropriate. Under the terms of the Trust, the trustees may acquire ordinary shares in World Trade Systems plc from time to time, either in the market or by subscription. Benefits may be conferred on selected employees of World Trade Systems plc and/or its subsidiaries (both current and future subsidiaries) at the discretion of the trustees by methods including a direct bonus payment in cash or in shares with no payment required from the employee, a direct transfer of shares with payment of all or part required by the employee or the
transfer of shares to an employee who exercises an option under World Trade Systems' existing share option schemes.
All acquisitions of shares by the Trust have been funded by non-interest bearing loans from World Trade Systems plc. The total trust holding of 6,501 ordinary shares of 1p each at 30 September 2014 (2013: 6,501 shares of 1p each) represented 0.07% (2013: 0.07%) of World Trade Systems plc's issued ordinary share capital. Following the reorganistion of share capital on 12 April 2006 the trust also holds 6,501 deferred shares of 49p (2013: 49p).
Any costs involved in the administration of the trust are charged to the general overheads of World Trade Systems plc.
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to be able to provide returns for shareholders and benefits for stakeholders. The Company believes that an optimum capital structure is achieved through equity and debt. Total deficit of equity at 30 September 2014 was £951,000 (2013: £851,000) and debt was £945,000 (2013: £845,000).
11. RETAINED EARNINGS
2014 | 2013 | ||
£'000 | £'000
| ||
At 1 October | (5,229) | (5,150) | |
Loss for the year | (100) | (79) | |
______ | ______ | ||
At 30 September | (5,329) ====== | (5,229) ======= |
12. NOTES TO THE CASH FLOW STATEMENT
2014 £'000 | 2013 £'000 | |||||
Net loss | (100) | (79) | ||||
Finance costs Decrease in receivables | 39 - | 20 2 |
| |||
Increase in payables
Net cash outflow from operating activities | 1 _____ (60) ===== | 2 _____ (55) ===== | ||||
13. FINANCIAL INSTRUMENTS
The Company's principal financial instruments comprise sterling cash and bank deposits, loans together with trade receivables and payables that arise directly from its operations. The main risks arising from the Company's financial instruments can be analysed as follows:
Liquidity risk
Until such time as the Company acquires new business it is reliant upon continued financial support in the form of medium term loans from Kudrow, its parent company, and others to enable it to meet its ongoing financial obligations.
As at the balance sheet date the Company's liabilities have contractual maturities as summarised below:
2014 2013
|
| Within 6 months | 6 to 12 months | Within 6 months | 6 to 12 months |
|
| £'000 | £'000 | £'000 | £'000 |
Trade and other payables (note 9) |
| 70 | - | 68 | - |
Financial liabilities - borrowings (note 9) |
| 90 | - | 87 | - |
Financial liabilities - parent (note 9) |
| - | 855 | - | 758 |
|
| _____ | ____ | _____ | _____ |
|
| 160 ===== | 855 ==== | 155 =====
| 758 =====
|
Kudrow has unconditionally undertaken to provide financial support to meet the repayment of the Company's borrowings.
Credit risk
The Company's principal financial assets are bank balances and cash and trade and other receivables.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The credit risk on liquid funds held in a client account by Robert Lee Law Offices, on behalf of the Company, is mitigated as far as possible as these funds are also held with a high credit-ratings bank and Robert Lee Law Offices are monitored and reviewed in a regulated environment.
13. FINANCIAL INSTRUMENTS -(Continued)
Interest rate risk
Interest bearing assets comprise cash and bank deposits all of which earn interest at a variable rate. The Company has no bank borrowings. The Company's existing borrowings were interest free up until their extended due date for repayment, from which time they incur interest at rates of 5% and 6% per annum. During the year under review, existing borrowings carry an interest charge.
The Directors monitor overall borrowings and interest costs to limit any adverse effects on the financial performance of the Company.
Categories of financial assets and liabilities
The carrying amounts presented in the Statement of Financial Position relate to the following categories of assets and liabilities:
Financial assets | 2014 | 2013 | |
£'000 | £'000 | ||
Loans and receivables Cash and cash equivalents |
24
|
22 | |
Financial liabilities
2014 | 2013 | ||
£'000 | £'000 | ||
Current financial liabilities Trade and other payables Borrowings |
70 945 |
68 845 | |
1,015 | 913 |
14. RELATED PARTY TRANSACTIONS
Kudrow Finance Limited, the parent company,has provided unsecured loans totalling £723,800 (2013: £660,800), which have been sourced from Glory Time Holdings Inc, a company under the control of a non-executive Director, Antares Cheng. The loans are due for repayment on 31 July 2016. As from 12 February 2010 these loans carry interest at the rate of 5% per annum. Interest accrued in the period from 12 February 2010 to 30 September 2014 was £131,517 (2013: £97,339) Antares Cheng is ultimately interested in the interest payment.
Directors' transactions
Robert Lee the non-executive Chairman is the principal of Robert Lee Law Offices which at 30 September 2014 held funds on behalf of the Company in a Clients Account amounted to £11,408 (2013: £10,496). At 30 September 2014 the Company owed Robert Lee £14,200 in respect of unpaid director's fees (2013: £13,200). Proclass Limited, a company incorporated in the British Virgin Islands is a Corporate Director of Kudrow Finance Limited, the 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 also a director and controlling shareholder in Glory Time Holdings Inc.
15. PARENT UNDERTAKING AND ULTIMATE CONTROLLING PARTIES
The Directors consider Kudrow Finance Limited ("Kudrow") a company incorporated in the British Virgin Islands as its parent company. Kudrow has entered into an informal arrangement with Glory Time Holdings Inc ("Glory Time") - a company controlled by Antares Cheng - whereby Glory Time, at its discretion, makes available such funding as is required by Kudrow to enable it to support World Trade Systems plc. By virtue of this arrangement and the discretion and influence exercised by Glory Time, the Directors consider Antares Cheng through his control of Glory Time, to be the Ultimate Controlling Party.
16. POST BALANCE SHEET EVENTS
Subsequent to the year-end the parent company Kudrow Finance Limited, provided a further unsecured loan of £65,000 to the Company for working capital purposes. Such loan which was sourced from Glory Time Holdings Inc., a company controlled by Antares Cheng, carries interest at 5% per annum and is repayable on the later of 31 July 2016 or the date on which shareholder approval is obtained for the acquisition by the Company of a new business.