29th Jun 2007 07:00
Crescent Hydropolis Resorts PLC28 June 2007 28th June 2007 Crescent Hydropolis Resorts PLC ("the Company") Preliminary Results for the year ended 31 December 2006 Crescent Hydropolis Resorts PLC, the world's leading developer of ultra-luxuryunderwater resort hotels under the Hydropolis design concept, announces itsannual results for the year ended 31 December 2006. The Company had €1,609,617 in cash as at 31 December 2006. The main items ofexpenditure relate to development costs associated with furthering the Company'sproposed Hydropolis project at Qingdao, China, including legal, engineering,technical feasibility and travel costs. These project development costs forQingdao are largely complete as of 27 June 2007. The Group maintains its operating license from the governmental authorities ofthe Laoshan District in Qingdao City, China, which license was issued on 23August 2006. Construction of the HydroTower phase of the project was expected tostart during the fourth quarter of 2006, but closing on financing for theproject proved to be more difficult than originally anticipated by theDirectors. Considered efforts continue to secure project finance and theDirectors remain confident that a reasonable and comprehensive financingsolution will be determined, and that a closing will be effected in the comingmonths, although further funding for financing transaction costs may be requiredprior to closure. Banks, private equity firms, insurance companies and private institutions andindividuals have all been approached by executive management in regard of areasonably priced financing solution. Project risks have been assessed duringthe past six months since the Interim Results were announced and the Directorscan report that no material findings have adversely affected the ability of theCompany to raise the required funds to commence construction. These efforts tosecure finance will remain an ongoing priority for the Company, as will raisingnew equity for working capital purposes prior to year-end. The Dubai project remains of material importance to the Company's intermediateand long-term goals. The Company retained the services of HE Shaikh FawazAbdullah al Khalifa during the second half to secure land and suitable sourcesof project finance for a project in Dubai, Saudi Arabia and Oman. The Company expects to undertake additional management changes in the comingmonths subsequent to closing the Qingdao project's financing which will serve tostrengthen the Company's capability to manage the Qingdao project whileexpanding new business opportunities. These changes will be announced in duecourse as each particular managerial change materializes. 2006 was achallenging year, with significant positive developments for shareholder value.The challenges still faced can be overcome and the Directors remain committed inthis regard. The Directors put a majority of their efforts for the fiscal year 2006 intobringing the Hydropolis Qingdao project in China to a point of commencement forconstruction activities. In April 2006, the Company's directors concludeddefinitive binding agreements with the government of Laoshan District, QingdaoCity, to license construction of the HydroTower and HydroPalace components forthe proposed Hydropolis project. The license authority offered by the Qingdaogovernment permits the erection of a multi-use residential tower withapproximately 90,000 square meters of sellable residential space and commercialspace to operate the entrance facilities for the offshore Hydropalace Hotel. This was followed by an intense capital raising effort for the project whichremains ongoing. Licensing for the project remains intact and 33,000 squaremeters of prime ocean front real estate have been allotted by the LaoshanDistrict for the erection of the HydroTower. The Company completed all planningand architectural design work on the HydroTower for Qingdao during the year,including complete construction planning timetables, materials acquisitionschedules and reservations for work crews in China to start construction. Separately, the Company engaged the services of a prominent member of Bahrain'sroyal family to source land sites and project licensing for proposed Hydropolisprojects in Saudi Arabia, Dubai and Oman. The Company's design and blueprintsfor these projects are complete and remain under active consideration. The Company brought new managerial experience to the team with the addition ofLarry J. Woolf Sr., former president of the MGM Grand Hotel in Las Vegas, as anon-executive director and is preparing to evaluate other opportunities forunderwater and aquatic hotel environments for development. During the coming year, the Directors will focus attention on concluding thefinancing for the Qingdao project, proceeding to purchase the land allotted inQingdao City's Laoshan District and commence final planning and construction forthe HydroTower phase of the overall project. Other projects contemplated by theBoard shall be reviewed as and when needed where developments warrant theattention of the Company's Directors. The Company's results are presented below and reflect the venture capital natureof the Company. The Company lost 2.1c per share, fully diluted, during theperiod ended 31 December 2006. The Directors do not recommend the payment of a dividend (2005: nil). Posting of Accounts Copies of this report and accounts were mailed to shareholders on 28th June2007, and are available on the Company's website. Enquiries: Crescent Hydropolis Resorts PLCMansoor Ijaz 07717 333 137 Nominated Adviser - Nabarro Wells & Co. LimitedJohn Wilkes INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 Note 2006 2005 • • Management and project development costs 1,263,985 2,294,282Administrative expenses 470,518 410,907 Loss on ordinary activities before interest 2 1,734,503 2,705,189 Finance income 5 59,118 13,339 Loss on ordinary activities before taxation 1,675,385 2,691,850 Taxation 6 - - RETAINED LOSS 1,675,385 2,691,850 Loss per share Basic and diluted 7 2.1c 6.2c All of the above amounts relate to continuing activities. There were no recognised gains and losses other than the results shown above. BALANCE SHEET AS AT 31 DECEMBER 2006 2006 2005 Note • •ASSETS Non-current assetsIntangible assets 8 40,750,000 40,750,000 Current assetsTrade and other receivables 9 4,912 1,711Cash and cash equivalents 1,609,617 2,639,556 _________ _________TOTAL ASSETS 42,364,529 43,391,267 ======== ========EQUITY AND LIABILITIES Shareholders equityShare capital 11 823,836 810,286Share premium 35,058,130 34,368,282Accumulated losses (4,367,235) (2,691,850) _________ _________TOTAL EQUITY 31,514,731 32,486,718 _________ _________Non-current liabilitiesLong term liabilities 12 10,750,000 10,750,000 _________ _________Current liabilitiesTrade and other payables 10 99,798 154,549 _________ _________TOTAL CURRENT LIABILITIES 99,798 154,549 TOTAL LIABILITIES 10,849,798 10,904,549 _________ _________TOTAL EQUITY AND LIABILITIES 42,364,529 43,391,267 ======== ======== These financial statements were approved by the Board and authorised for issueon 28 June 2007. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2006 Share Share Accumulated capital premium losses Total • • • • Balance at incorporation - - - - Loss for the year - - (2,691,850) (2,691,850) Issue of share capital 810,286 34,737,714 - 35,548,000 Cost of issue of share capital - (369,432) - (369,432) _________ _________ _________ _________ Balance at 31 December 2005 810,286 34,368,282 (2,691,850) 32,486,718 Loss for the year - - (1,675,385) (1,675,385) Issue of share capital 13,550 689,848 - 703,398 _________ _________ _________ _________Balance at 31 December 2006 823,836 35,058,130 (4,367,235) 31,514,731 ======== ======== ======== ======== CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 • • Cash flow from operating activitiesLoss from operations (1,734,503) (2,705,189) _________ _________Operating cash flows before movement inworking capital (1,734,503) (2,705,189) Change in receivables (3,201) (1,711)Change in payables (54,751) 154,549 _________ _________ Net cash used in operating activities (1,792,455) (2,552,351) Cash flows from returns on investments and servicingof financeInterest received 59,118 13,339 _________ _________Net cash from returns in investments and servicingof finance 59,118 13,339 _________ _________Cash flows from financing activitiesShare capital issued (net of costs) 703,398 5,178,568 _________ _________Net cash from financing activities 703,398 5,178,568 _________ _________Net (decrease)/increase in cash and cash equivalents (1,029,939) 2,639,556 Cash and cash equivalents at beginning of period 2,639,556 - _________ _________ Cash and cash equivalents at end of period 1,609,617 2,639,556 ======== ======== 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 under the historical cost conventionand in accordance with International Financial Reporting Standards adopted foruse in the EU and therefore comply with Article 4 of the EU IAS Regulation. (b) Foreign currencies Assets and liabilities in foreign currencies are translated into euros at ratesof exchange ruling at the balance sheet date. Transactions during the period aretranslated at the rate of exchange ruling at the date of the transaction.Differences arising on exchange are dealt with through the income 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 financial instruments for tradingpurposes. 2. LOSS ON ORDINARY ACTIVITIES Loss on operations is stated after the following 2006 2005 • • Auditor's remuneration - audit services 15,000 8,759 - non-audit services 8,473 23,435 Exchange losses 28,144 9,706 ======= ======= 3. EMPLOYEES The weekly average number of employees during the period, including executivedirectors, was 6 (2005 - 2) 2006 2005 • • Wages and Salaries 136,531 - ________ ________ 136,531 - ======= ======= 4. DIRECTOR'S EMOLUMENTS 2006 2005 • • Directors fees 65,931 - ======= ======= The key management personnel are the directors' and hence no further disclosureis considered necessary. 5. FINANCE INCOME 2006 2005 • • Bank interest 59,118 13,339 ====== ====== 6. TAXATION No provision has been made for taxation as no taxable profits or revenues havebeen generated in the period. 7. LOSS PER SHARE Calculations of basic and diluted loss per share are based on the followingdata: 2006 2005 Loss for the purpose of basic loss per share • • 1,675,385 2,906,733 ======== ======= There were no dilutive instruments over the period. Number of Shares Weighted average number of ordinary shares in issue during the year 80,252,112 43,585,444 ======== ======== 8. INTANGIBLE FIXED ASSETS 2006 2005 • • Cost At 1 January 2006 and at 31 December 2006 40,750,000 40,750,000 ======== ======== 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 installmentswith the final payment due at the end of the fourth fiscal year end after thefirst payment has been made subsequent to the financing of the first Hydropolisproject (see Note 12). The directors believe that this intellectual property has an indefinite usefuleconomic life. 9. TRADE AND OTHER RECEIVABLES 2006 2005 • • Other receivables 4,912 1,711 ===== ===== 10. TRADE AND OTHER PAYABLES 2006 2005 • • Accruals 99,798 154,549 ====== ====== 11. SHARE CAPITAL 2006 2005 • • Authorised: 2,000,000,298 Ordinary shares of €0.01 each 10,000,000 10,000,000 ======== ======== Called up, allotted and fully paid 82,203,631 ordinary shares of £0.01 each (2005: 81,028,631) 823,836 810,286 ======== ======== On 24 October 2006, 280,000 ordinary shares of €0.01 each were issued fully paid for cash at €0.375. On 7 December 2006, 895,000 ordinary shares of €0.01 each were issued fully paid for cash at €0.56. On 22 December 2006, 90,000 shares were issued to employees of the Company insettlement of remuneration costs due of €49,500. On the same date a further90,000 shares were issued to three advisers to the company in payment forservices rendered in the amount of €49,500. 12. WARRANTS On 7 December 2006 the Company issued a warrant for Ordinary Shares forinvestors of the Company to purchase up to an additional 671,250 Ordinary Sharesat €0.79. The Warrant may be exercised at a time not earlier than 6 February2007 and not later than 6 December 2007. 13. NON CURRENT LIABILITIES 2006 2005 • • Deferred consideration 10,750,000 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 as set forth in the payment schedule below. 13. NON CURRENT LIABILITIES (continued) The payments fall due as follows: €2,750,000 to be paid upon completion of financing for the first HydropolisProject (the "First Payment") €2,000,000 to be paid 60 days following publication of the annual accounts forthe period to 31 December during the first full fiscal year following the FirstPayment (the "Second Payment") €2,000,000 to be paid 60 days following publication of the annual accounts forthe period to 31 December during the next full fiscal year following the SecondPayment (the "Third Payment") €2,000,000 to be paid 60 days following publication of the annual accounts forthe period to 31 December during the next full fiscal year following the ThirdPayment (the "Fourth Payment") €2,000,000 to be paid 60 days following publication of the annual accounts forthe period to 31 December during the next full fiscal year following the FourthPayment (the "Final Payment") In the event that on any installment payment date, CHR has insufficient workingcapital then the installment is accrued until the following year withoutinterest. Any unpaid consideration following the publication of the annualaccounts for the period to 31 December during the Final Payment year will becomedue 60 days following publication of the annual accounts for each successiveyear until CHR is able to make payment and does so in full. 14. FINANCIAL INSTRUMENTS (a) Interest rate risk The Company holds no fixed rate financial assets or liabilities. Cash balancesattract 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. Important information relating to the Auditor's opinion Within the audit report, which is included with the report and accounts, theauditors have drawn attention to the statement by the directors by commentingthat: "The Company needs to procure additional finance facilities in order to developits Hydropolis Quingdoo project and fund its working capital requirements(including fund raising costs) prior to completing that funding. Thisrequirement indicates the existence of a material uncertainty. The financialstatements do not include the adjustments that would result if the Company wasunable to continue as a going concern. In view of the significance of thisuncertainty, we consider that this should be drawn to your attention, but ouropinion is not a qualified report." The report and accounts were posted to shareholders on 28th June 2007 and areavailable on the Company's website. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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