30th Jun 2006 16:22
Crescent Hydropolis Resorts PLC30 June 2006 For immediate release Stock Exchange Announcement 30th June 2006 CRESCENT HYDROPOLIS RESORTS PLCFINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2005 COMPANY AND INVESTOR INFORMATION Directors Mr Joachim Hauser Executive Chairman Mr Mansoor Ijaz Chief Executive Mr Joachim Kundt Non-Executive Director Mr David Harris Non-Executive Director Mr Richard Armstrong Non-Executive Director Company Number 113151C Registered Office 15-19 Athol Street Douglas IM1 1LB Isle of Man Nominated Adviser and Broker Nabarro Wells & Co. Limited Saddlers House Gutter Lane London EC2V 6HS Auditors Chantrey Vellacott DFK LLP Russell Square House 10-12 Russell Square London WC1B 5LF Bankers HSBC Bank PLC 70 Pall Mall London SW1Y 5EZ Solicitors McClure Naismith Pountney Hill House 6 Laurence Pountney Hill London EC4R 0BL Registrars Neville Registrars 18 Laurel Lane Halesowen West Midlands BD6 3DA ANNUAL REPORT Chairman's Statement Crescent Hydropolis Resorts PLC (CHR), the world's leading developer ofultra-luxury underwater resort hotels and casinos under the Hydropolis designconcept first conceived and developed by the German architect and CHR'sexecutive chairman, Joachim Hauser, announces its annual results for the periodended 31 December 2005. The Company had €2.639.556 in cash as at 31 December. The main items of expenditure in the annual accounts relate to development costsassociated with the architectural, design, engineering and feasibility studiesof CHR's proposed Hydropolis projects at Qingdao, China and Dubai, United ArabEmirates, as well as early stage development costs for a proposed Hydropoliscasino/resort project in Monaco. Other items of expenditure included the costsof admission and the reimbursement of certain expenses incurred prior toadmission. Since admission, additional funds have been raised through privateplacings and deployed to fund the aforementioned working capital costs. I am pleased to report that your Company succeeded in obtaining the firstgovernment approvals for a deepwater Hydropolis project in Qingdao, China, onChina's Yellow Sea coastline, in April 2006. Planning for this importantproject began in September 2005, shortly after admission. The world's firstHydropolis deepwater project is expected to have two phases - the constructionof the HydroTower(R) landstation, planned for completion prior to the start ofthe 2008 Beijing Olympic Games, and the underwater Hydropalace(R), planned forcompletion in 2009. Detailed marine studies, surveys of steel manufacturing and shipbuilding yardsand site surveys of the land on the Yellow Sea Coast have been conducted. Alocal project development company that will undertake the construction effort ispresently being formed and your Company's executive management team is innegotiations with financing partners to complete the equity fundraisingnecessary for the Hydropolis Qingdao project to proceed. I am also pleased to report that CHR remains in active negotiations with thegovernment of Dubai for the world's first shallow water Hydropolis hotel, aswell as with official entities in two other potential locations to bringadditional Hydropolis franchises on the world map. CHR maintains strong relations with its industrial partners, including SiemensAG, Hydropolis' engineering and technical adviser, SIBC Industrial BuildingConsultants GmbH, the proposed project manager for each of the proposedHydropolis properties, Duik Combinatie Nederland BV (DCN), underwater tunnel andconcrete experts for Hydropolis' shallow water designs and Ostsee-Kontor, marineand naval consultants on structural design for Hydropolis' deep waterHydro-Palaces. .............................................................................. Joachim Hauser, Executive ChairmanMUNICH, 30 June 2006 DIRECTORS' REPORT FOR THE PERIOD ENDED 31 DECEMBER 2005 The Directors are pleased to present their report on the principal activities ofthe Company, a review of business and future developments together with theaudited financial statements for the period. The Company was incorporated on 31 March 2005. The Directors focused much of their attention the half year that comprised thefirst full fiscal year of operations on two principal activities: first, thecomplete development of the Company's premier Hydropolis deepwater project forQingdao, China, including the necessary architectural, design, engineering andfinancing plans; and second, to continue sourcing appropriate construction, debtand equity financing for the Company's projects as determined appropriate by theBoard. In September, the Directors made certain strategic changes in the projectproposal for Dubai to insure that proposal remains central to the Company'sdevelopment of shallow water Hydropolis projects. Project proposals were alsodeveloped for Monaco and Las Vegas, as twin casino resort Hydropolis properties,and presented for review to government officials in Monaco as well as investorgroups in Las Vegas. The Company's results are presented in the pages following and reflect theventure capital nature of your Company. CHR lost 6.2c per share, fully diluted,during the period ended 31 December 2005. Directors who served during the year, Messrs Hauser, Ijaz, Keenan and Armstrongof whom were appointed on 23 June 2005, Mr Kundt on 6 July 2005 and Mr Harris on24 September 2005 on which date Mr Keenan resigned as Director, and theirinterests in the share capital of the Company were: Note 31 December 2005 Ordinary Shares Mr Joachim Hauser, Executive Chairman (1) 34,300,149Mr Mansoor Ijaz, Chief Executive 2,625,149Mr Joachim Kundt -Mr David HarrisMr Richard Armstrong 437,500Mr Laurence Keenan - Note (1) Mr Klaus Foerster holds shares in trust for the benefit of Poseidon,Neptune and Apollo investors, of which the shares listed above accrue for thebenefit of Mr Hauser, his children and certain of his close associates. Substantial Shareholdings The Company has been notified, as at 27 June 2006, of the following interests of3% or more in its issued share capital: Number of Percentage of total Ordinary Shares Issued Share Capital Klaus Foerster as 56,300,149 69.94 Trustee for "Poseidon, Neptune, Apollo Investors"Suhail Al Dhaheri 3,525,000 4.35Mansoor Ijaz 2,625,149 3.24 Going Concern After making enquiries, the Directors consider that the Company has adequateresources to continue in operational existence for the foreseeable future andare satisfied that the Company is a going concern. For this reason theycontinue to adopt the going concern basis in preparing the financial statements. Directors' Responsibilities Company law requires the directors to prepare financial statements for eachfinancial year which give a true and fair view of the state of affairs of theCompany as at the end of the financial year and of the profit or loss of theCompany for that year. In preparing these financial statements, the directorsare required to: • select suitable accounting policies and apply them consistently; • make judgements and estimates that are reasonable and prudent; • state whether applicable accounting standards have been followed; and The directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of theCompany and to enable them to ensure that the financial statements comply withthe Companies Act 1985. They are also responsible for safeguarding the assetsof the Company and hence for taking reasonable steps for the prevention anddetection of fraud and other irregularities. Auditors A resolution for the re-appointment of Chantrey Vellacott DFK LLP as auditors tothe company is to be proposed at the forthcoming Annual General Meeting. Approved by the Board of Directors on 30 June 2006and signed on its behalf by ........................................................................ Musawer Mansoor Ijaz, Chief Executive INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OFCRESCENT HYDROPOLIS RESORTS PLC We have audited the financial statements of Crescent Hydropolis Resorts Plc forthe period ended 31 December 2005, comprising the income statement, the balancesheet, the cash flow statement and related notes. These financial statementshave been prepared under the accounting policies set out therein. This report is made solely to the Company's members, as a body, in accordancewith section 235 of the Companies Act 1985. Our audit work has been undertakenso that we might state to the Company's members those matters we are required tostate to them in an auditors' report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother 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 Auditors The directors' responsibilities for preparing the annual report and thefinancial statements in accordance with applicable law and United KingdomAccounting Standards (United Kingdom Generally Accepted Accounting Practice) areset out in the statement of directors' responsibilities. Our responsibility is to audit the financial statements in accordance withrelevant legal and regulatory requirements and International Standards onAuditing (UK and Ireland). We report to you our opinion as to whether thefinancial statements give a true and fair view and whether the financialstatements have been properly prepared in accordance with the Companies Act1985. We report to you whether in our opinion the information given in the directors'report is consistent with the financial statements. We also report to you if,in our opinion, the Company has not kept proper accounting records, if we havenot received all the information and explanations we require for our audit, orif information specified by law regarding directors' remuneration and othertransactions is not disclosed. We read other information contained in the annual report, and consider whetherit is consistent with the audited financial statements. This other informationcomprises only the directors' report and the chairman's report. We consider theimplications for our report if we become aware of any apparent misstatements ormaterial inconsistencies with the financial statements. Our responsibilities donot extend to any other information. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing(UK and Ireland) issued by the Auditing Practices Board. An audit includesexamination, on a test basis, of evidence relevant to the amounts anddisclosures in the financial statements. It also includes an assessment of thesignificant estimates and judgements made by the directors in the preparation ofthe financial statements, and of whether the accounting policies are appropriateto the Company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the financial statementsare free from material misstatement, whether caused by fraud or otherirregularity or error. In forming our opinion we also evaluated the overalladequacy of the presentation of information in the financial statements. OpinionIn our opinion: • the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the Company's affairs as at 31 December, and of its results for the period then ended; and • the financial statements have been properly prepared in accordance with the Companies Act 1985. CHANTREY VELLACOTT DFK LLPChartered AccountantsLondon 30 June 2006 INCOME STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2005 Note Period Ended 31 December 2005 • Management and Project Development Costs 2,294,282Administrative Expenses 410,907 Loss on ordinary activities before interest 2 2,705,189 Interest receivable 5 13,339 Loss on ordinary activities before taxation 2,691,850 Tax 6 - RETAINED LOSS 2,691,850 Loss per share Basic and diluted 7 6.2c All of the above amounts relate to continuing activities. There were no recognised gains and losses other than the results shown above. The notes on pages 12 to 14 form part of these financial statements. BALANCE SHEET AS AT 31 DECEMBER 2005 ASSETS Note 31 December 2005 •Non-current assetsIntangible assets 8 40,750,000 Current assets Trade and other receivables 9 1,711Cash and cash equivalents 2,639,566 TOTAL ASSETS 43,391,267 EQUITY AND LIABILITIES Shareholders' equityShare capital 11 810,286Capital reserves 34,368,282Accumulated losses (2,691,850) Non-current liabilities 32,486,718 Long-term liabilities 12 10,750,000 Total non-current liabilities 10,750,000 Current liabilitiesTrade and other payables 10 154,549 Total current liabilities 154,549 Total liabilities 10,904,549 TOTAL EQUITY & LIABILITIES 43,391,267 Approved by the Board of Directors on 30 June 2006 Signed on behalf of the Board of Directors: .............................................................................. Mansoor IjazChief Executive and Director The notes on pages 12 to 14 form part of these financial statements STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 DECEMBER 2005 Share Capital Accumulated Total capital reserves losses • • • • Balance at incorporation - - - -Loss for the period - - (2,691,850) (261,850) Total recognised expense for the period - - (2,691,850) (2,691,850)Issue of share capital 810,826 34,737,714 - 35,548,000Cost of issue of share capital - (369,432) - (369,432) Balance at 31 December 2005 810,826 34,368,282 (2,691,850) 32,486,718 CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 DECEMBER 2005 Period ended 31 December 2005 • Cash flow from operating activitiesLoss from operations (2,705,189) Operating cash flows before movement in working capital (2,705,189) Change in receivables (1,711)Change in payables 154,549 Net cash used in operating activities (2,552,351) Cash flows from returns on investments and servicing of financeInterest received 13,339 Net cash from returns on investments and servicing of finance 13,339 Cash flows from financing activitiesShare capital issued (net of costs) 5,178,568 Net cash from financing activities 5,178,568 Net increase in cash and cash equivalents 2,639,556 The notes on pages 12 to 14 form part of these financial statements NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2005 1. Accounting Policies The following accounting policies have been applied consistently in dealing withitems which are considered material in relation to the Company's financialstatements. (a) Basis of preparation The financial statements have been prepared in accordance with InternationalFinancial Reporting and Accounting Standards adopted by the EU and thereforecomply with Article 4 of the EU IAS Regulation. (b) Foreign currencies Assets and liabilities in foreign currencies are translated intoeuros at rates of exchange ruling at the balance sheet date. Transactionsduring the period are translated at the rate of exchange ruling at the date ofthe transaction. Differences arising on exchange are dealt with through theincome statement. (c) Intangible assets Intangible assets are stated at cost less accumulated amortisation and anyimpairment losses. Amortisation is charged so as to write off the cost of theasset over its estimated useful economic life. The useful lives of assets are reviewed annually. (d) Financial Instruments The company does not hold or issue derivative financialinstruments for trading purposes. Short-term receivables and payables are not treated as financialinstruments. 2. Loss on ordinary activities 2005 •Loss on operations is stated after the followingAuditors' remuneration - audit services 8,759 - non-audit services 23,435Exchange gains/losses 9,706 3. Employees The weekly average number of employees during the period, including executivedirectors, was two. 4. Directors' emoluments No directors' were paid remuneration during the period. 5. Interest receivable 2005 • Bank interest 13,339 6. Taxation No provision has been made for taxation as no taxable profits have beengenerated in the period. 7. Earnings per share The calculation of basic and diluted earnings per share arebased on the following data: 2005 • Loss for the purpose of basic earnings per share 2,906,733 There were no dilutive instruments over the period. Number of sharesWeighted average number of ordinary shares in issue during theyear 43,585,444 8. Intangible fixed assets 2005 •CostAdditions 40,750,000 At 31 December 2005 40,750,000 As discussed in note 11, on 15 June 2005, CHR acquired the Hydropolis Projectconcept and all the associated know how from Crescent Hydropolis Holdings LLCfor a consideration of 60,000,000 ordinary shares issued as fully paid at €0.50per share (such shares being issued on 17 June 2005) and payment of €10,750,000in cash in instalments with the final payment due in December 2009. The directors believe that the know how has an indefinite useful economic life. 9. Trade and other receivables 2005 • Other receivables 1,711 10. Trade and other payables 2005 • Accruals 154,549 11. Share Capital 31 December 2005 •Authorised:2,000,000,298 ordinary shares of €0.01 each 10,000,000 Called up, allotted and fully paid:81,028,631 ordinary shares of €0.01 each 810,286 The Company was incorporated on 31 March with an authorised share capital of£2,000 comprising 2,000 ordinary shares of £1 each. On incorporation, the Company issued two ordinary shares of £1 each. On 9 June 2005, 1,998 existing authorised but unissued ordinary shares of £1each were cancelled. On the same day the authorised share capital was increased to £2 and €10,000,000by the creation of 1,000,000,000 Ordinary Shares of €0.01 each. On the same day, each of the existing issued ordinary shares of £1 each wereconverted into stock and reconverted into ordinary shares. On 15 June 2005, 12,500,000 ordinary shares were issued fully paid for cash at€0.01 per share. On 15 June 2005, CHR acquired the Hydropolis Project concept and all theassociated know how from Crescent Hydropolis Holdings LLC for a consideration of60,000,000 ordinary shares issued as fully paid at €0.50 per share (such sharesbeing issued on 17 June 2005) and payment of €10,750,000 in cash in instalmentswith the final payment due in December 2009. On 23 June 2005, CHR raised €4,125,000 by way of placing, conditional onAdmission, 6,875,000 ordinary shares at €0.60 per share. Issue costs of €253,000have been set against the share premium account. On 1 July 2005, 1,333,333 ordinary shares were issued fully paidfor cash at €0.75 per share. On 28 July 2005, 155,000 ordinary shares were issued fully paidfor cash at €0.97 per share. On 2 September 2005, 165,000 ordinary shares were issued fullypaid for cash at €0.91 per share. 12. Non-current liabilities 2005 • Deferred consideration 10,750,000 On 15 June 2005, CHR acquired the Hydropolis Project concept and all theassociated know how from Crescent Hydropolis Holdings LLC for a consideration of60,000,000 ordinary shares issued as fully paid at €0.50 per share (such sharesbeing issued on 17 June 2005) and payment of €10,750,000 in cash in instalmentswith the final payment due in December 2009. The payments fall due as follows: €2,750,000 to be paid upon completion of financing for the first HydropolisProject. €2,000,000 to be paid 60 days following publication of the annual accounts forthe period to 31 December 2006. €2,000,000 to be paid 60 days following publication of the annual accounts forthe period to 31 December 2007. €2,000,000 to be paid 60 days following publication of the annual accounts forthe period to 31 December 2008. €2,000,000 to be paid 60 days following publication of the annual accounts forthe period to 31 December 2009. In the event that on any instalment payment date CHR has insufficient workingcapital then the instalment is accrued until the following year withoutinterest. Any unpaid consideration following the publication of the annualaccounts for the period to 31 December 2009 will become due 60 days followingpublication of the annual accounts for each successive year until CHR is able tomake payment and does so in full. 13. Related party transactions During the year Crescent Investment Management LLC (CIM), a Delaware corporationwith its registered office at 100 United Nations Plaza, 44th Floor, New York, NYand a company in which Mr Ijaz and Mr Hauser are interested, made payments onbehalf of the Company in relation to the creation of the Company and variouslisting costs. These have now been repaid in full at the year-end date. 14. Financial Instruments (a) Interest rate risk The Company holds no fixed rate financial assets or liabilities. Cash balances attract a floating rate of interest. (b) Liquidity risk The Company's policy has been to finance its operations through the issue ofequity share capital. (c) Currency risk All material monetary assets and liabilities are denominated in the functionalcurrency of the Company. 15. Publication of the accounts A copy of the report and accounts have been posted to shareholders and can be obtained free of charge from the offices of Nabarro Wells & Co Limited, Saddlers House, Gutter Lane London EC2V 6HS. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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