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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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London Asia | LSE:LDC | London | Ordinary Share | GB0008251513 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 2.85 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:1388X London Asia Capital PLC 31 March 2004 LONDON ASIA CAPITAL PLC FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2003 London Asia Capital ("LAC"), the AIM-listed investment banking group focused on Greater China, announces its audited results for the seven months to December 31 2003, following the change of its year end. Highlights: * Net Assert Value ("NAV") up six-fold to #4.14m (2002: #668,000) * Cash at bankup from #98,000 to #2.2m * Bank debt repaid * Non core investments sold for cash * Dividend policy implemented by Chinese investment * IPO of first Chinese investment underway * Strong new partners in China * IBM andChina Mobile as business partners in latest investments * Three investments made post period end * Market Cap now #14m (2003: #460,000) * Institutional shareholdings now nearly 50 per cent LAC Chairman, Jack Wigglesworth, said:"These results reflect the substantial expansion in activities which has taken place in the period, with a considerable strengthening of the company's financial position: "As an investment company, we show our investments at original cost rather than actual value. No account is taken of the profits (in aggregate #1.3 million) these investments generated, of which the company is entitled to 51 per cent. "We believe that the base we have established in China will begin to show substantial returns in 2004. There are no shortage of opportunities for the company. The key to our success will be to ensure that we focus on the opportunities which produce the best return for shareholders" Chief Executive, Simon Littlewood, said: "2004 will be the year in which we turn our hard work and investments to date into profits. We aim to make London Asia the leading channel for Europeans looking to invest in the Greater China market". -ends- For further information: Simon Littlewood, Chief Executive London Asia Capital 020 7332 2219 Paul Quade CityRoad Communications 020 7334 0243 LONDON ASIA CAPITAL PLC CHAIRMAN'S STATEMENT Results I am pleased to announce the Group's results for the seven months to 31st December 2003, following our change of year end. These results reflect the substantial expansion in activities which has taken place in the period, with a considerable strengthening of the company's financial position: * net assets risen six fold, from #668,000 to #4,184,000; * cash at bank risen from #98,000 to over #2.2 million; * long term investments risen from #0.8 million to #3.0 million; * bank debt repaid. As at 31st December 2003, we had invested #2.5 million in our five Chinese investments, of which #0.7 million was in cash and the remainder via the issue of shares. As an investment company, we show our investments at original cost rather than actual value, and no account is taken of the profits (in aggregate #1.3 million) these investments generated, of which the company is entitled to 51%. Tight control continues to be kept on UK overheads. Despite the increase in investment activity, operating costs have been reduced to a level where they could be covered by dividends received from the profits of our investee companies. Cash Position During the period, the company raised #2.4 million via a placing with institutional investors which took place in October 2003. Since the period end, the Company has raised a further #2.4 million via the exercise of 10.1 million warrants attached to the shares placed in October 2003 and an institutional placing in February 2004. We invested #0.7 million in the exercise of our option to increase our stake in Beijing Success. Since the period end, we have invested #65,000 in MyEG, a Malaysian based e-government services business, and #268,000 in Tianfeng, a Chinese SMS technology business. Our strategy is to invest in businesses via a mixture of cash and shares, with the mix depending on the working capital needs of the investee company to achieve its growth strategy. Investment Activity The Chief Executive's statement contains a detailed analysis of our current investment portfolio. During the period, the Company acquired a 51% stake in Biaoqi Oriental Advert to supplement its existing media businesses, and increasedits stake in Beijing Success from 25% to 51%. The Chinese currency is linked to the US Dollar, and has therefore dropped considerably in value relative to the pound. The current exchange rate of 15 RMB to the # represents a 25% fall compared to the exchange rate of 12 RMB to the # in May 2002, and a 15% fall in the last six months from the level of 13RMB to the # in September 2003. This presents a good opportunity to UK based investors such as ourselves to acquire Chinese assets now while the exchange rate is favourable, which would increase in value in Sterling terms were the Chinese currency to appreciate. To take advantage of the current currency position, we have recently increased our investment activity, using the funds we raised via the two institutional placings. Since the period end we have made three further investments, totalling #0.9 million: * Biaoqi Century Data - Chinese GPRS business in partnership with China Mobile; * Tianfeng - Chinese SMS service provider, in partnership with IBM; * MyEG - Malaysian e-government services business, part of the Governments Multi Media Super Corridor project. Beijing Success, the financial software business in which we have a 51% stake, is the first of our Chinese investments which we are seeking to list. Following a review of the relative valuations we would be likely to achieve for our stake on stock markets in Europe and Asia, we have taken the decision to list Beijing Success in Singapore. To that end, advisers have already been appointed and the listing process begun, with a view to trading commencing later this year. Based on the current valuations of comparable companies on the Singapore Stock Exchange, we should be able to achieve a healthy profit on our investment, which will be reflected in the 2004 accounts. The year saw the realisation for cash of several investments made by the old management, which no longer fit with the Company's new investment strategy. In September we announced the disposal of the whole of our stake in Kelkoo for cash of #165,000. We have post period end disposed of our holdings for cash in Mean Fiddler, Intelliplus and Pure Communications. China Strategy Our focus is on investingin profitable businesses in the Greater China region, with strong management teams, which are capable of being developed to a point where they can be sold on or listed on a stock market within two years of investment. Our aim is to have a portfolioof up to thirty investments in the next two years, which not only reduces the risk of individual investments not performing, but puts us in a strong position to make substantial gains in 2006 when we believe there will be the opportunity to list some of our investments on the Chinese Stock Market. The strength of our strategy lies in the team in China that we have built up over the last few years, and the partnerships we have developed with leading companies and organizations in China. Through them, we have access to deal flow which would not be available to most Western investors, and the ability to perform due diligence and monitor the performance of investee companies post investment. Our presence in cities such as Jinan, Yantai and Wuhan, gives us access to deal flow beyond the reach of most Western investors, who tend to focus on opportunities in the more developed cities of Shanghai, Beijing and Guangzhou where we have already seen prices paid by investors rise considerably relative to opportunities outside those cities. One of the benefits of our strategy of focusing on profitable businesses is that we are not dependent on selling investments to pay the Company's overheads, as we can take some of the profits via dividends and management charges. This enables us to sell investments when the timing is right and the best return can be achieved. As noted above, we have successfully exited from the majority of the historical investments, and are in the process of listing Beijing Success. We continue to explore a range of options for realizing our investments, including reversal into already listed comparable businesses in Asia and Europe, and sale to investors and businesses seeking to gain access to the Chinese markets. Our ultimate aim is to list our investments on stock markets within China, where we believe we will be able to achieve higher valuations than listing outside China. The Chinese Stock Market is undergoing a period of considerable reform to make it more accessible to non state owned businesses and more market driven, and the Shenzhen Stock Market, one of two Stock Exchanges in China, has recently begun to accept new listings after a sustained period without any new listings. The financial services market in China is relatively undeveloped, and still subject to legal constraints and restrictions on non Chinese businesses taking majority holdings. As part of China's commitments to the World Trade Organisation, many of these restrictions on non Chinese businesses becoming involved in China's financial services industry are being relaxed. London Asia is currently looking at a number of opportunities in the financial services sector in China, in particular the possibility of investing in a fund management business to tap into the high savings rates within China. China's Economy China continues to see substantial growth and progress in its economy. Statistics on the recent performance of China are impressive * It is now the sixth largest economy in the world; * Bank lending in 2003 rose by nearly 20%; * China Mobile, our partner in Century Data, is the largest wireless provider in the world by subscriber numbers. China has 287 million mobile users; * At the end of 2003, China had 421 million fixed and mobile telephone lines, representing 35% of the population. Every village and town in China now has access to telephone services, with China having the second largest telephone network in the world; * There are 1,143 international and domestic airways operating in China; * In 2003 total investment in transportation projects in China was #26 billion, with a further 70,000 km of road buildingplanned for 2004; * In 2003 alone 41 power plant projects were approved with a capacity of 31 million kW, and 30,000 km of power grid approved in the past three years with a carrying capacity of 120 million kva. * Beijing alone isbuilding 4 new underground railways in preparation for the Olympics in 2008. China continues to welcome overseas investors, who are providing capital and expertise to develop China's economy and thereby increasing the living standards of thepeople in China: * In 2003, there were 41,081 newly registered foreign investment enterprises in China, an increase of 20% over the previous year, with registered capital of US$115 billion, an increase of 39% over 2002; * Over 400 R&D centres have been set up by multinational companies in China to date; * Foreign investment enterprises in 2003 accounted for 54% of China's total exports by value; * Foreign investment enterprises account for over 20% of China's total tax collected; * There are over 23 million Chinese citizens working directly in foreign investment enterprises, representing nearly 10% of the labour force in urban areas. London Asia is not alone in spotting the huge opportunities in China, though Europeans have been slower than other countries. In 2003 EU businesses established 2,074 new foreign owned enterprises in China, with registered capital of US$5.85 billion, representing just 5% of foreign investment in China in 2003. The UK is the main EU investor in China, in 2003 establishing 438 new companies in China, a 38% increase on the previous year, with registered capital of US$1.2 billion. The total number of UK enterprises in China as at December 2003 was3,856, with paid up capital of US$11.4 billion There has been much debate recently in the press as to whether there is an overheating of the Chinese economy and over-investment in some sectors, for example car manufacturing, and concern expressed as to the effect on the Chinese economy of an upwards revaluation of the Chinese currency which would make China's exports more expensive. We believe that our focus on investing in businesses which are aimed at the Chinese consumer market, rather than manufacturers dependent on the export market, reduces the impact on us of a currency revaluation, and as noted earlier would have the effect of increasing the value of our investments in sterling terms. We are also increasingly focusing on areas outside the main cities of Shanghai, Beijing, and Guangzhou, in line with the Chinese government's policy of spreading investment away from the more developed coastal cities to inland cities. Partners and regional offices It is difficult tooperate in Greater China without strong local partners and a presence on the ground. We have recently announced several significant alliances to add to our existing network in China. In March 2004 we announced an alliance with Wuhan Eastlake Technology Zone (" WENDZ"). WENDZ is a technology park in Hubei Province, which currently hosts over 6,000 businesses, with a particular emphasis on optoelectronics and telecommunications. Wuhan is the capital of Hubei province and has a current population of over 7 million, making it one of the six largest cities in China. Under the alliance, WENDZ will be responsible for providing London Asia with details of companies within the business park seeking strategic investors or looking to list on a Stock Market outside China. Wuhan is one of the main central cities and poised to benefit from the Chinese Government's policy of encouraging investment into the Western regions of China in order to balance the investment already made in the coastalcities. We are currently looking at two potential investments in Wuhan. In January 2004 we announced the signing of a strategic alliance with Chinese business park Yantai Wolong Economic Zone ("Wolong"). Wolong hosts approximately 120 companies, over 66% of which are privately owned Chinese enterprises. Covering over 5 square kilometres, ultimately the park is seeking to house over a thousand enterprises. Yantai is a port city, with a population of 6.35 million. The alliance is along similar lines to that signed with WENDZ. In December 2003 we signed a strategic alliance with Heda Group ("Heda"), a leading Chinese venture capital group which has expertise in the utilities sector. Heda has made a number of investments in the power, water and environmental sectors across China, including a power plant and a company with a software solution for the power industry. Heda has fifteen staff, who are working alongside London Asia staff to identify investment opportunities in which the companies will co-invest. We are currently performing due diligence on the first potential investment introduced by Heda. London Asia has associate offices in Singapore and Hong Kong to identify potential investments and assist as required with processing transactions and listings in their territory. In early March we announced the expansion of LAC Singapore's operations, with additional capital injected and new team members appointed. LAC Singapore is currently assisting with the listing of Beijing Success in Singapore and has made its first investment in a placing by a Singapore listed software company. In April 2003, London Asia took a 25% stake in TCIB, an investment banking group based in China with offices in Beijing, Xi'an and Jinan. TCIB's other principal shareholder is Prutention, a Shanxi Province based venture capital and investment group which is the representative of the Chinese Venture Capital Association for Shanxi Province. TCIB has carried out due diligence on a number of potential investments on behalf of London Asia, and is currently advising a Chinese company on the possibility of listing on the London Stock Exchange. Outlook Despite the fact that China is already the sixth largest economy, many investors and businessmen in the UK remain to be convinced of the benefits of doing business in China. UK exports to China in 2003 were only #1.9 billion, representing just 0.7% of total UK exports, and the UK's recorded investment in Chinain 2003 represented just 1% of the total foreign investment in China in 2003. We are delighted with the interest shown in the Company by our new and existing shareholders. A year ago we had a share price of 2.3p, 20 million shares in issue, no institutional shareholders, and a market cap of less than #1/2 million. Today we have a market cap of nearly #14 million, with nearly half the Company's shares held by institutional investors, with a further 23% held by the management of the companies in which we have invested in China. We believe that the base we have established in China to date will begin to show substantial returns this year and look forward to that being reflected in our share price going forward, as investors wake up to the potential in China and gain a better understanding of the risks and rewards. There are no shortages of opportunities for the Company. The key to our success will be to ensure that we focus on the opportunities which produce the best returns for shareholders, and that we have the appropriate personnel and financial resources in place to make the most of the opportunities. Jack Wigglesworth Chairman 31st March 2004 LONDON ASIA CAPITAL PLC CHIEF EXECUTIVE'S STATEMENT I am delighted to report on the substantial progress that has been made by the Company: * we completed two institutional fund raisings, at increasing prices; * we continued to build and strengthen the brand of our Chinese media group, Biaoqi; * the London Asia brand is becoming increasing established and recognized within China, particularly following our high profile investments in Biaoqi Century Data and Tianfeng, where partners include China Mobile and IBM; * we extended our existing relationships and coverage in China through alliances with Chinese Government economic zones and business parks, and Chinese venture capitalists; * we brought in additional staff who can help take the Company forward. Investment Strategy We continue our focus of investing in profitable businesses in the Greater China market, and disposing of non core investments. Investments are made via a mixture of shares and cash, so that the management of the companies we invest in end up as London Asia shareholders. The Company's investment strategy to date in Greater China has been to develop brands within industry sectors, using trusted managementto run the acquisitions, with the ultimate aim of listing those brands as separate businesses. In the first quarter of 2004, we have added three new investments, each within our industry focus of: * Media, IT and telecom * Financial services * Environment, energy, water and waste Media, IT and Telecom In this sector, we have made a series of investments under the Biaoqi brand, with acquisitions funded by a mixture of cash and shares, covering the following: * Filmproduction and publishing - Biaoqi Culture & Publication Co Ltd ("Biaoqi Culture"). Despite the loss of several large projects as a result of the impact of SARS in China in the early part of 2003, which the company estimates cost it over #100,000 of profits and had a severe impact on the whole sector, Culture achieved pre tax profits of RMB1.56 million (#112,000). Biaoqi Culture is well known in China, in September 2003 winning the award for the Best Documentary inthe Ninth Ornamental Pillar Awards issued by the Chinese Government. Victor Ng is on the Board to represent London Asia. * Radio advertising - Biaoqi Oriental Advertising Ltd ("Biaoqi Oriental"). London Asia acquired a 51% stake in December 2003 via an issue of 330,000 ordinary shares, equal to #69,000. Biaoqi Oriental sells advertising space on Beijing's traffic radio station, one of the most listened to radio stations in Beijing due to Beijing's estimated 11 hour rush hour caused by over 2 million cars in Beijing. Victor Ng is on the Board representing London Asia. In the period to 31st December 2003, the business made sales of #740,000 and a post tax profit of #105,000. * Television advertising - Beijing Biaoqi Advert Company Ltd ("Biaoqi Advert"). Biaoqi Advert produces adverts for Chinese TV stations. It is believed to be one of the top privately-run advertising production companies in China, holding a coveted TV advertising and movie production licence. Victor Ng is on the Board to represent London Asia's interest. We have added three investments in this sector since the period end, two of which have been branded Biaoqi. * SMS service provider - Biaoqi Tianfeng, a Chinese SMS service business which provides secure SMS for the Chinese corporate market. The business operates in partnership with IBM, who provide the hardware. London Asia invested #265,000 in cash for a 40% stake. Simon Littlewood and Victor Ng have been appointed to the Board to represent London Asia's interest. * GPRS based environmental monitoring service - Biaoqi Century Data, a Chinese GPRS business which operates in partnership with China Mobile to provide an environmental monitoring service tracking the level of pollution generated by factories and industry in China. Our investment was via the issue of 3 million shares at 19p a share, equal to #570,000 Both of these businesses operate across China and have the potential to ultimately list within China. It also brings us working alongside top quality partners China Mobile, the largest wireless provider in the world by number of subscribers, IBM, and the National Environmental Protection Agency. The third investment made in March 2004 is MyEG, a Malaysian e-government business which is part of Malaysia's Multi-Media Super Corridor project. MyEG intends to float on the Malaysian Stock Market later this year, and use the proceeds to expand its range of services both within Malaysia and into China. London Asia took a 2.5% stake for #65,000. We are currently working with a number of businesses within China which could be suitable acquisition targets for MyEG post it's IPO. We have a historical investment in Idiom, trading under the brand Puca. Based in Dublin, Puca has developed a range of software and managed infrastructure solutions designed to help organisations to capitalize on wireless data technologies, such as SMS and MMS messaging. It partners with carriers, media organisations, enterprises and public sector organizations in developing and managing SMS applications and marketing programmes which operate on wireless devices including cell phones, pagers and PDAs. Puca has also developed proprietary software applications including solutions for mobile coupons, loyalty and incentive campaigns, competitions, ringtones, picture messages and a variety of interactive mobile SMS and MMS applications. Founded in 2000, Puca's customers have included Vodafone, Coca Cola, McDonalds and Cadbury. Puca's strong business growth was recognised by the 2003 Deloitte Technology Fast 50 programme, which ranked Puca as the 6th fastest growing Irish technology company. Following a successful placing in late 2003, supported by Enterprise Ireland, London Asia's stake has been reduced to 15.5%. The company is trading profitably, and our investment is held at the valuation priceused in the latest fund raising. Financial Services We currently have five investments in the financial services sector: * Beijing Success Technology Company Ltd ("Beijing Success") - financial analysis software & services * Temima China Investment Bank ("TCIB") - corporate finance and investment services within China * London Asia Capital (S) Pte ("LAC Singapore") - corporate finance and investment services in S.E Asia * London Asia Capital Hong Kong ("LAC HK") - consulting and corporate finance in Hong Kong and Taiwan. * Dynamis plc - business exchange platform The financial services market in China is relatively undeveloped, and we believe there are substantial opportunities within thesector as a result of China's entry into the World Trade Organisation, which has put in place a timetable for China to open up it's financial services market to overseas competitors. As well as extending our investments in the sector, we are looking at ways of gaining our own authorization to provide a range of services to the Chinese market, such as fund management, using the resources and contacts of our existing investments, supplemented by the various partners we work with in China, suchas Heda Group. Beijing Success London Asia's largest investment by cost, we are currently working with the Beijing Success management team to gain a listing for the business on the Singapore Stock Exchange, with initial documentation being prepared with a view to a listing later in the year. During the period we exercised our option to take our stake from 25% to 51%, with a total cost to date of #2.3 million, of which #0.7 million was in cash and the remainder in shares, valuing the whole business at only #4.46 million. Simon Littlewood and Victor Ng sit on the Beijing Success Board to represent London Asia's interest. Founded in January 1999, Beijing Success provides securities analysis tools and related data services in China. Since January 2002, Beijing Success has developed a series of analysis products and services, from basic to highly sophisticated tailored products. Customers include private investors, securities companies, institutional investors, listed companies, advisory companies, data service companies, training institutes and media companies. Its products are sold in twenty of the major cities in China. Beijing Success announced in September 2003 that it has reached agreement with China-Morning Information News Group ("MIN"), a popular securities media group, to provide training courses for people interested in investing in the securities and futures markets in China. MIN is one of the largest Chinese financial publishers, with its newspaper,Information Morning, having an estimated subscription of over 20 million people each month. Beijing Success achieved turnover of RMB18.1 million (#1.3 million) in 2003, up 48% on the previous year, and post tax profit of RMB16.0 million (#1.1 million), up 53% on the previous year in RMB, though the sterling figures show only a 41% gain as a result of the fall in the Chinese currency during the year. TCIB TCIB is a China based corporate finance and investment group, in which London Asia acquired a 25% stake in April 2003 via shares. TCIB is a joint venture with Xian Prutention Investment Development Company Ltd ("Prutention"), a well known Chinese investment group. Prutention is the representative in Xi'an for the China Venture Investment Committee, a Chinese Government venture capital organisation. Xi'an is the home of the Terracotta Warriors. TCIB has taken on a number of key staff. Following the alliance with WENDZ, Kent Wang is now covering operations at our new Wuhan office. Jasmine Tseng has taken over running the Jinan office, and Xiang Jun Qu is responsible for operations in Xi'an. The Beijing office is run by Sherry Xie, who joins us from Guinness Mahon's China operations. Yen Po Wang, who I have known for several years, is in overall charge of TCIB operations. Following London Asia's investment, Victor Ng was appointed Deputy Chairman and Simon Littlewood a director. TCIB carries out corporate finance and investment banking activities within China, and identifies investment opportunities and carries out due diligence for London Asia. TCIB has identified its first potential UK IPO candidate, and due diligence has begun on it with a view to listing it in London in the summer. LAC Singapore With the strong appetite shown by Singaporean investors for China related investments, LAC Singapore has taken on a number of new staff, with Mr S.T Yeo and Mr Peter Kwok joining the management team. In early March London Asia increased its investment in the business by a further #19,000. LAC Singapore is assisting in the Success listing and identifying a number of potential investments in S.E Asia such as our recent investment in MyEG. LAC HK Hong Kong operations are headed by Mr C.K Cho. LAC HK is currently assisting a UK listed company on devising investment products to attract funds from Hong Kong, Taiwanese and Chinese investors. Dynamis plc A UK company that operates the business exchange platforms businessesforsale.com and franchisesforsale.com for buyers and sellers of businesses and franchises. The company is trading profitably, has cash reserves, and is in a good position to capitalise on its position. A historical investment, it is valued at #28,000 for 3.6% of the Company. Environment, energy, water and waste Following our alliance with Heda in December 2003, we are currently reviewing a number of Chinese utility and environmental companies for potential investment. China's energy requirements have grown rapidly to support its booming economy, which has resulted in an increase in carbon emissions and in the need for China to have an environmentally friendly energy solution. These trends support London Asia's interest in the sectorgoing forward. Personnel We welcomed a number of new staff during the period at TCIB, LAC Singapore and LAC HK. London Asia's future success depends on the quality of it's staff, who are responsible for identifying the investments, performing due diligence on them and monitoring the progress of and assisting our investee companies post investment. To date our staff have been paid salaries below market rates, and we aim to continue this policy to ensure that as much of our cash resources as possible are focused on investing. However, in order to attract and retain the quality of staff that the Company needs, we need to be able to offer a package which enables staff to share some of the upside from their work, especially as they are in most cases taking pay cuts to join us. It is therefore proposed to set up a share option scheme for employees and consultants working for the company. Dividend Policy A resolution is being proposed at the AGM to enable the Company to reduce its share capital through the transfer of part of the surplus from the Company's Share Premium account to the Profit and Loss Reserve. This would assist the Company in paying dividends out of future profits sooner than would otherwise be the case. Subject to the passing of the resolution, the Company may make an application to the High Court to effect the share capital reduction. Outlook For 2004 Whilst 2003 was the year in which we implemented the China focused business plan and built up the foundations and networks for our expansion, 2004 will be the year in which we turn our hard work and investments to date into profits. We have already increased the pace of investment to take advantage of the current low Chinese exchange rate, and to invest the money raised in October 2003 and February 2004. We aim to make London Asia the leading channel for Europeans looking to invest in the Greater China market. Simon Littlewood Chief Executive 31st March 2004 PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 31 DECEMBER 2003 Period ended Year ended 31 December 31 May 2003 2003 #'000 #'000 Loss on sale of investments (8) (11) Other operating income 47 38 Administrative expenses (170) (214) ------ ------ Operating loss (131) (187) Interest receivable 2 1 Interest paid (31) (24) Amounts written off investments - (5) ------ ------ Loss on ordinary activities before taxation (160) (215) Taxation - - ------ ------ Retained loss for the financial period (160) (215) ====== ====== Loss per share Pence Pence Basic and diluted (0.50) (1.45) ====== ====== Continuing operations All amounts are derived from continuing operations. Total recognised gains and losses There were no recognised gains or losses not dealt with through the profit and loss account. LONDON ASIA CAPITAL PLC BALANCE SHEET AS AT 31 DECEMBER 2003 31 December 2003 31 May 2003 #'000 #'000 #'000 #'000 Fixed assets Tangible assets 3 - Investments 2,974 781 ------ ------ 2,977 781 Current assets Debtors 77 72 Investments 138 302 Cash at bank and in hand 2,234 98 ------ ----- 2,449 472 Creditors: amounts falling due within one year (783) (172) ------ ----- Net current assets 1,666 300 ----- ------ Total assets less current liabilities 4,643 1,081 Creditors: amounts falling due after more than one year (459) (413) ----- ------ 4,184 668 ===== ====== Capital and reserves Called up share capital 2,736 1,117 Share premium account 7,815 5,758 Profit and loss account (6,367) (6,207) ----- ------ Equity shareholders' funds 4,184 668 ===== ====== Jack Wigglesworth Simon Littlewood Chairman Chief executive LONDON ASIA CAPITAL PLC CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2003 31 December 2003 31 May 2003 #'000 #'000 #'000 #'000 Net cash inflow/ (outflow) from operating activities 538 (128) Returns on investments and servicing of finance Interest received 2 1 Interest paid (31) (24) ------ ----- Net cash outflow from returns on investments and servicing of finance (29) (23) Taxation paid - - Financial investment and capital expenditure Payment to acquire tangible assets (4) - Payments to acquire investments (10) (109) Receipts from sales of investments - 19 ------ ----- Net cash outflow from financial investment and capital (14) (90) expenditure Acquisitions and disposals Purchase of subsidiary undertaking (789) (34) ----- ----- Net cash outflow for acquisitions and disposal (789) (34) ----- ----- Net cash outflow before management of liquid resources and financing (294) (275) Management of liquid resources Current asset investments 156 131 ---- ----- Cash inflow from management of liquid resources 156 131 Financing Issue of ordinary share capital 2,282 11 Convertible loan stock received net of costs 222 225 Repayment of bank loan (230) (60) ----- ----- Net cash inflow from financing 2,274 176 ----- ------ Increase in cash in the year 2,136 32 ===== ====== LONDON ASIA CAPITAL PLC NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2003 1. Accounting policies The principal accounting policies adopted by the company are as follows:- a) Convention The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. b) Investments Fixed asset investments Fixed asset investments are stated at cost less provision for diminution in value. Current asset investments Current asset investments comprise marketable and quoted investments held for resale and are stated at the lower of cost and net realisable value. c) Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax assets are recognised only tothe extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. The company has not adopted a policy of discounting deferred tax assets and liabilities. d) Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows: Office equipment - 25% straight line Fixtures, fittings and equipment - 25% straight line e) Group accounts The financial statements present information about the company as an individual undertaking and not about its group. The company has taken advantage of the exemptions provided by Section 229 of the Companies Act 1985 not to prepare group accounts on the basis that severe long term restrictions are in place which hinder the exercise of the company's rights over the assets and management of its subsidiary undertakings that, in the case of certain of the subsidiary undertakings, these companies are not material to the company's financial statements. f) Associated undertakings The company has taken advantage of the exemption in Financial Reporting Standard No.9 : Associates and Joint Ventures from the requirement to equity account for its investments in associated undertakings. The directors consider that the company's principal activity is that of an investment holding company and therefore to account for its share of the net assets and liabilities of these associates would not be meaningful. 2. Taxation There is no charge to UK corporation tax due to tax losses brought forward from previous years subject to agreement with the Inland Revenue. Accumulated tax losses have not been recognised as a deferred tax asset. 3. Loss per share The calculation of basic loss per share is based on the loss after tax of #160,000 (2003: #215,000) and on 31,810,916 (2003: 14,838,345) ordinary shares being the weighted average number of ordinary shares in issue during the period. The convertible loan stock, options and warrants were anti-dilutive in respect of the period. 4. Reconciliation of operating loss to net cash outflow from operating activities 31 December 2003 31 May 2003 #'000 #'000 Operating loss (131) (187) Amortisation of finance cost 6 6 Depreciation 1 - Loss on disposal of investments 8 11 Increase in debtors (5) (24) Increase in creditors 659 66 ------ ------ Net cash inflow/(outflow) from operating activities 538 (128) ====== ====== 5. Analysis of net debts 1 June 2003 Cash flow Other non-cash changes 31 Dec 2003 #'000 #'000 #'000 #'000 Net cash: Cash at bank and in hand 98 2,136 - 2,234 ----- ----- ----- ----- 98 2,136 - 2,234 ----- ----- ----- ----- Liquid resources: Current asset investment 302 (156) (8) 138 ----- ----- ----- ----- 302 (156) (8) 138 ----- ----- ----- ----- Debt: Bank loan (230) 230 - - Convertible loan stock (231) (222) (6) (459) ----- ----- ----- ----- (461) 8 (6) (459) ----- ----- ----- ----- Net cash/(debt) (61) 1,988 (14) 1,913 ===== ===== ===== ===== 6. Reconciliation of net cash flow to movement in net fund/(debt) 31 December 2003 31 May 2003 #'000 #'000 Increase in cash in the year 2,136 32 Cash inflow from movement in liquid resources(156) (131) Cash outflow/(inflow) from movement in debt 8 (165) ----- ----- Change in net funds/debt resulting from cash flows 1,988 (264) Non cash movements in liquid resources (8) 433 Non cash movements in debt (6) (6) ----- ----- Movement in net debt in the period 1,974 163 Opening net debt (6) (224) ----- ----- Closing net fund/(debt) 1,913 (61) ===== ===== 7. Financial information The financial information herein does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information has been extracted from the group's 2003 statutory financial statements upon which the auditors reported on 31 March 2004. Their opinion is unqualified and does not include any statement under section 237 of the Companies Act 1985 8. Copies of the report and accounts Copies of the report and accounts will be posted to shareholders and are available from the Company's registered office, 11 Central House, High Street, Ongar, Essex CM5 9AA. This information is provided by RNS The company news service from the London Stock Exchange END FR QKKKKCBKDANN
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