Final Results

30th Sep 2008 17:43



30 September 2008

Mortice Ltd

Financial results for the period 9 January 2008 to 31 March 2008

Mortice Ltd (AIM:MORT, "Mortice"), the AIM listed security and facilities management company based in India, today announces results for the period from its incorporation on 9 January 2008 to 31 March 2008. 

These results relate to the period prior to Mortice listing on AIM which occurred on 15 May 2008 and includes the consolidated results of its subsidiaries Tenon Property Services Private Limited ("Tenon") and Peregrine Guarding Private Limited ("Peregrine") from 1 February 2008, since Mortice acquired Tenon and Tenon acquired Peregrine on 30 January 2008. 

Commenting today, Manjit Rajain, Executive Chairman of Mortice Ltd said:

"I am pleased to report, that since this reporting period ended, the company has successfully listed on AIM and continued to trade very strongly. We have made significant progress in developing organically throughout India and remain very well positioned to expand overseas. Accordingly I hope to give shareholders a fuller update on the Group's progress when we report our Interim results in the next few months"

Extracts from the audited financial statements are attached below. The full version of the Annual Report and Accounts has been posted to shareholders and it will be available on the company website www.morticegroup.com 

 

Notes to Editors

Mortice Limited, a company incorporated in Singapore, is the holding company of Tenon Property Services Private Limited, and the ultimate parent company of Peregrine Guarding Private Limited ("Peregrine"), the two operational companies of the Group which are based in India (together the "Group").

Peregrine has provided security services in India for 13 years, establishing a client base of over 450 customers and developing a strong pan-India presence providing manned guarding operations in the process. By 30 September 2007 the Peregrine Group operated in 51 locations in 19 out of the 28 Indian states and had clients in a range of sectors including information technology enabled services ("ITES"), telecoms, manufacturing, pharmaceutical, banking and healthcare. 

Mortice intends to utilise the platform provided by the Peregrine Group to grow the Tenon business, to manage and provide project, property and facilities management services in the Indian market.

The Group has a strong management team with experience in setting-up, managing and delivering integrated facilities services to the Indian corporate real estate sector. The key objective of the reorganised Group is to provide integrated property services in India and the Directors believe that such services will enable the Company to provide total end-to-end management solutions to India's growing corporate real estate sector.

For further information please contact:

Mortice Ltd
Manjit Rajain, Executive Chairman		Tel: +91 981 800 0011
Andrew Barker, Executive Director		Tel: +91 974 130 9401
Grant Thornton UK LLP
Fiona Owen		Tel: +44 207 383 5100
Jermyn Capital Partners PLC
Dharmesh Doshi		Tel: +44 207 399 2020
Pelham PR
Alex Walters / Charles Goodwin		Tel : +44 203 159 4399

Statement by the Executive Chairman, Mr Manjit Rajain

"It has been a privilege to build one of India's most successful security services corporations. Over the last 13 years, we have set very high benchmarks for delivery of security services in India. Our rapid growth, both financially and in terms of resource strength, is a testimonial to this growth.

The unmatched learning from this experience has inspired us to establish Mortice - to capitalize on the significant opportunity which exists in India, in particular, and Asia in general for high quality facilities-related services customized to local market conditions. Our promise of international standard solutions at locally relevant costs has been greeted with enthusiasm in the market. The results are already showing with customers moving their property and facilities management business from traditional multi-national service providers to Tenon. As our facilities services have grown, we have been delighted by the increasing speed at which new opportunities are arising. Most corporations in India are confident not just of the sound theory behind our model but also our credibility of having delivered similar high-quality, cost-efficient guarding solutions for over 13 years now through Peregrine. With the parallel continued growth of our guarding business, we are confident of generating significant value for our shareholders."

Statement by the Executive Director, and Group CEO Mr Andrew Barker

"As a Facilities Management ("FM") professional with over 30 years in the industry, 10 of them in Asia Pacific and 5 in India, I have seen diverse assignments in senior positions with service providers and with corporations. However, no opportunity has excited me as much as this current one: leading a team of strong FM professionals delivering services through a model that is completely customized to the requirements of the Indian market in particular and Asia in general. Added to this is the excitement of taking a successful, innovative security services business to the next level. We have been able to draw the top talent in the industry, both on FM and on security, because these individuals recognize that our service delivery model addresses inefficiencies inherent in the fragmented way in which services have traditionally been delivered. This early phase of Mortice has been spent in building a robust platform for the delivery of self-performance FM services across India and marketing our new product. The focus on developing our infrastructure has inspired confidence in our capability across potential customers, both indigenous and multinational corporations. Market feedback and a growing number of orders indicate that our business model has hit the right note and will meet with considerable success." 

  MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

FINANCIAL STATEMENTS

FOR THE PERIOD FROM 9 JANUARY 2008

(DATE OF INCOPORATION) TO 31 MARCH 2008

BALANCE SHEETS AS AT 31 MARCH 2008

			Note		Group		Company
					US$		US$
NON-CURRENT ASSETS
Plant and equipment			4		609,147		-
Investment in subsidiary			5		-		394,675
Deferred tax asset			6		165,870		-
					775,017		394,675
CURRENT ASSETS
Cash and cash equivalents			7		405,009		5,028
Trade receivables			8		3,690,329		-
Other receivables			9		1,656,410		551,215
Inventories, at cost			10		20,481		-
					5,772,229		556,243
CURRENT LIABILITIES
Trade payables			11		1,390,460		-
Other payables			12		2,672,873		568,542
Finance lease			13		43,029		-
Borrowings			14		369,052		-
Provision for taxation					423,517		-
					4,898,931		568,542
NET CURRENT ASSETS/(LIABILITIES)					873,298		(12,299)
NON-CURRENT LIABILITIES
Finance lease			13		(97,271)		-
Bank overdraft			7		(200,389)		-
Retirement benefit obligations			15		(92,916)		-
Borrowings			14		(237,883)		-
NET ASSETS					1,019,856		382,376
SHAREHOLDERS' EQUITY
Share capital			16		400,001		400,001
Reserves			17		617,361		(17,625)
					1,017,362		382,376
Minority interest			18		2,494		-
TOTAL EQUITY					1,019,856		382,376

The annexed notes form an integral part of and should be read in conjunction with these financial statements

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

INCOME STATEMENTS

FOR THE PERIOD FROM 9 JANUARY 2008 

(DATE OF INCORPORATION) TO 31 MARCH 2008

		Note		Group		Company
				US$		US$
REVENUE
Services income				3,390,490		-
Negative goodwill written back		19		651,478		-
Other income				1,569		-
Total revenue				4,043,537		-
COSTS AND EXPENSES
Services consumed		20		2,713,594		-
Depreciation of plant and equipment		4		20,401		-
Staff and related costs				471,020		-
Operating expenses		21		259,460		17,625
Finance costs		22		60,333		-
Total costs and expenses				3,524,808		17,625
PROFIT/(LOSS) BEFORE TAXATION		23		518,729		(17,625)
TAXATION		24		113,905		-
PROFIT/(LOSS) FOR THE PERIOD				632,634		(17,625)
Attributable to:
Equity holders of the company				632,642		-
Minority interest		18		(8)		-
				632,634		(17,625)

The annexed notes form an integral part of and should be read in conjunction with these financial statements

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

STATEMENTS OF CHANGES IN EQUITY

FOR THE PERIOD FROM 9 JANUARY 2008 

(DATE OF INCORPORATION) TO 31 MARCH 2008

	Attributable to equity holders of the group
	Share  capital		Retained profits/ (Accumulated loss)		Currency translation reserve		Total		Minority interest		Total
	US$		US$		US$		US$		US$		US$
Group
Issuance of subscribers' shares	400,001		-		-		400,001		-		400,001
Acquisition of subsidiaries	-		-		-		-		2,502		2,502
Profit for the period	-		632,642		-		632,642		(8)		632,634
Translation difference on consolidation	-		-		(15,281)		(15,281)		-		(15,281)
Balance as at 31 March 2008	400,001		632,642		(15,281)		1,017,362		2,494		1,019,856
Company
Issuance of subscribers' shares	400,001		-		-		400,001		-		400,001
Loss for the period	-		(17,625)		-		(17,625)		-		(17,625)
Balance as at 31 March 2008	400,001		(17,625)		-		382,376		-		382,376

The annexed notes form an integral part of and should be read in conjunction with these financial statements

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD FROM 9 JANUARY 2008 

(DATE OF INCORPORATION) TO 31 MARCH 2008

	Note			US$
Cash Flows From Operating Activities
Profit before taxation				518,729
Adjustments for:
Depreciation of plant and equipment	4			20,401
Negative goodwill written back				(651,478)
Interest expense				60,333
Cash flows from operations before changes in working capital				(52,015)
Working capital changes, excluding changes relating to cash:
Trade receivables				(212,659)
Other receivables				(414,263)
Inventories, at cost				(20,481)
Trade payables				80,885
Other payables				(67,573)
Retirement benefit obligations				14,346
Cash absorbed by operations				(671,760)
Interest paid				(60,333)
Net cash absorbed by operating activities				(732,093)
Cash Flows From Investing Activities
Acquisition of plant and equipment				(98,022)
Net cash outflow on acquisition of subsidiaries				(394,675)
Cash and cash equivalents in subsidiaries upon acquisition (see note on page 13)				557,562
Net cash generated from investing activities				64,865
Cash Flows From Financing Activities
Issuance of share capital				400,001
Proceeds from finance lease				140,300
Proceeds from borrowings				344,108
Placement of pledged fixed deposit				(14,589)
Net cash generated from financing activities				869,820
Net increase in cash and cash equivalents				202,592
Unrealised exchange difference				(12,561)
Cash and cash equivalents at the beginning of the period				-
Cash and cash equivalents at the end of the period	7			190,031

The annexed notes form an integral part of and should be read in conjunction with these financial statements

MORTICE LIMITED 

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

CONSOLIDATED CASH FLOW STATEMENT (…CONT'D)

FOR THE PERIOD FROM 9 JANUARY 2008 

(DATE OF INCORPORATION) TO 31 MARCH 2008

Note

On 31 January 2008, the company acquired subsidiary companies.

The effect of above acquisition on the cash flows of the group is as follows:

	US$
Summary of the effect of acquisition of subsidiaries
Cash and cash equivalents	557,562
Trade receivables	3,477,670
Other receivables	881,167
Deferred tax asset	2,499
Plant and equipment	539,352
Trade payables	(1,309,575)
Retirement benefit obligations	(78,570)
Other payables	(2,758,686)
Long term borrowings	(262,827)
Minority shareholders interest	(2,539)
Currency translation adjustment	100
Net assets acquired	1,046,153
Negative goodwill on consolidation	(651,478)
Amount paid in consideration of acquisition	394,675
Cash and cash equivalents of acquired entity	557,562

The annexed notes form an integral part of and should be read in conjunction with these financial statements

 

 

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL PERIOD FROM 9 JANAUARY 2008 

(DATE OF INCORPORATION) TO 31 MARCH 2008

1. CORPORATE INFORMATION

Mortice Limited (Company Registration No.: 200800770W) is a public limited company, domiciled in Singapore.  Subsequent to the financial year the company was listed on Alternate Investment Market (AIM) of London Stock Exchange, issuing 7,700,000 ordinary shares with proceeds amounting to US$9,730,120.  The company's registered office is at 36 Robinson Road, #17-01 City House, Singapore 068877.

The principal activities of the group are to provide guarding services, facilities management, property management, fleet management and sale of safety equipment and their installation. There have been no significant changes in the nature of these activities during the financial period. 

The financial statements of the group and of the company for the financial period from 9 January 2008 (date of incorporation) to 31 March 2008 were authorised and approved by the Board of Directors for issuance on 23 September 2008. 

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation

The consolidated financial statements are prepared in accordance with Singapore Financial Reporting Standards ("FRS") as required by the Singapore Companies Act. 

The consolidated financial statements, which are expressed in United States dollars are prepared in accordance with the historical cost convention, except as disclosed in the accounting policies.

In the current financial period, the group has adopted all the new and revised FRSs and Interpretations of FRS ("INT FRS") that are mandatory for application from that date. The adoption of these new and revised FRS and INT FRS have no material effect on the financial statements.

At the date of authorisation of these financial statements, the group has not applied those FRS and INT FRSs that have been issued but are effective only in next financial year. The group expect the adoption of the standards will have no financial effect on their financial statements in the period of initial application.

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

2. SIGNIFICANT ACCOUNTING POLICIES (…CONT'D)

 b) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and its subsidiaries. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Acquisition of subsidiary is accounted for using the purchase method of accounting. The results of the subsidiaries' operations have been included in the consolidated financial statements from the effective date of acquisition or up to the effective date of disposal, as appropriate. All inter-company transactions and balances are eliminated on consolidation and the consolidated financial statements reflect external transactions only. The accounting periods of the subsidiaries are coterminous with that of the company. Negative goodwill represents the excess of the fair value of the subsidiaries net identifiable assets over the cost of acquisition at the date of acquisition. Negative goodwill is recognised immediately in the income statement.

In the company's financial statements, investment in subsidiaries are carried at cost less any impairment in net recoverable value that has been recognised in the income statement.

c) Foreign currency translation

The individual financial statements of each entity in the group are presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the group and financial statements of the company are presented in United States dollars, which is the functional currency of the company, and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entity, monetary assets and liabilities in foreign currencies are translated into United States dollars at rates of exchange closely approximate to those ruling at the balance sheet date and transactions in foreign currencies during the financial period are translated at rates ruling on transaction dates. Non-monetary items carried at fair values that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair values were determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

2. SIGNIFICANT ACCOUNTING POLICIES (…CONT'D)

c) Foreign currency translation (…cont'd)

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in the income statement. Exchange differences arising on the retranslation of non-monetary items carried at fair values are included in the income statement for the year except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity. 

For consolidation purposes, the assets and liabilities of the foreign subsidiary company are translated at the rate of exchange ruling at the balance sheet date and income statement items are translated at the average rate. The effects of translation are taken directly to foreign currency translation reserves within equity. Such translation differences are recognised in income statement in the period in which its subsidiary is disposed of.

d) Plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment loss. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the income statement. When property, plant and equipment are sold or retired, their cost and accumulated depreciation and accumulated impairment losses (if any), are removed from the consolidated financial statements and any gain or loss resulting from their disposal is included in the income statement. 

e) Depreciation of plant and equipment

Depreciation is calculated to write off the cost of plant and equipment by the straight-line method over their estimated useful lives. The estimated useful lives are as follows:

Computers	3 years
Office equipment	5 years
Machinery	5 years
Furniture and fittings	5 years
Motor vehicles	5 years

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

2. SIGNIFICANT ACCOUNTING POLICIES (…CONT'D)

e) Depreciation of plant and equipment (…cont'd)

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease. 

The residual values and useful lives of plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use. 

f) Investment in subsidiaries

Unquoted equity investments in subsidiaries are stated at cost less accumulated impairment losses. On disposal of investment in subsidiary, the difference between the net disposal proceeds and the carrying amount of the investment is taken to the income statement. 

g) Cash and cash equivalents

Cash and cash equivalents consist of unsecured cash and bank balances, fixed deposit and bank overdraft. 

h) Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method less allowance for impairment. An allowance for impairment of receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of receivables. The amount of the allowance is the difference between the asset's carrying amount and estimated future cash flows. The amount of the allowance is recognised in the income statement. 

i) Inventories

Inventories are stated at the lower of cost and net realisable value. In general, cost is determined on a first in first out basis. Cost includes all cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the price at which the inventories can be realised in the normal course of business after allowing for the costs of realisation. Work in progress represents material and equipment under installation which are stated at cost. Cost includes all direct expenditure and all appropriate overheads.

j) Trade and other payables

Trade and other payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest rate method.

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

2. SIGNIFICANT ACCOUNTING POLICIES (…CONT'D)

k) Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of direct issue costs.

l) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts and sales related taxes. The following specific recognition criteria must also be met before revenue is recognised:

(i) Income from services is recognised upon rendering of services.

(ii) Interest income is recognised on a time apportioned basis.

m) Income tax

Income tax expense is calculated on the basis of tax effect accounting, using the liability method and is applied to all significant temporary differences.

Income tax on the profit or loss for the period comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly to equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the period using tax rates enacted or substantially enacted at the balance sheet date.

Deferred income tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. 

Deferred tax liabilities are recognised for all taxable temporary differences. 

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unabsorbed capital allowances and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax credits and unused tax losses can be utilised.

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

2. SIGNIFICANT ACCOUNTING POLICIES (…CONT'D)

m)  Income tax (…cont'd)

At each balance sheet date, the group re-assesses unrecognised deferred tax assets and the carrying amount of deferred tax assets. The group recognises a previously unrecognised deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. The group conversely reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax asset to be utilised. 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the balance sheet date.

n) Impairment of assets

i. Non-financial assets

The carrying amounts of the group's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amounts are estimated in order to determine the extent of the impairment loss (if any). An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The impairment loss is charged to the income statement unless it reverses a previous revaluation, credited to equity, in which case it is charged to equity. 

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in the income statement, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

2. SIGNIFICANT ACCOUNTING POLICIES (…CONT'D)

n) Impairment of assets (…cont'd)

ii. Financial assets

The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in the income statement.

The allowance for impairment loss account is reduced through the income statement in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured.

o) Provisions

Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

p) Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. 

Assets held under finance leases are recognised as assets of the company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Lease of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Rentals payable under operating leases are charged to income statement on a straight line basis over the term of the relevant lease. 

  MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

2. SIGNIFICANT ACCOUNTING POLICIES (…CONT'D)

q) Employee benefits

Defined contribution plan

As required by law, the subsidiaries make pension contributions to a Provident Fund. Contributions are recognised as an expense in the income statements in the same period as the employment that gives rise to the contributions.

Employee leave entitlement

The company provides for encashment of leave entitlement as at year end for all the employees. Hence, all employee entitlements to annual leave are recognised when due.

Employee Gratuity

Employees are entitled to gratuity based on the years of service provided they serve on a continuous basis for a period of 5 years. The liability for the same is recognised on the basis of actuarial valuation by an independent actuary using the projected unit credit method. Under this method, the projected accrued benefit is calculated at the beginning of the year and again at the end of the year for each benefit that will accrue for all active members of the plan.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

The presentation of financial statements in conforming with FRS requires the use of certain critical accounting estimates and judgements in applying the accounting policies. These estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The following are the significant accounting estimates and judgements for preparation of financial statements:

(a) Plant and equipment

Management determines the estimated useful lives and residual values for the group's plant and equipment. Management will revise the depreciation charge where useful lives and residual values are different to previously estimated, or it will write off or write down technically obsolete or non-strategy assets that have been abandoned or sold.

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (…CONT'D)

(b) Income taxes

The Group and the Company have exposure to income taxes in countries where it operates. Significant judgement is involved in determining the Group's and the Company's provision for income taxes. The Group and the Company recognise liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provision in the financial year in which such determination is made. At 31 March 2008, the carrying amounts of the Group's and the Company's current income tax payable and deferred tax liabilities are disclosed in the balance sheets.

(c) Retirement benefit obligations

Management determines the assumptions used by an independent actuary to calculate the retirement benefit obligations (note 15).

 

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

4. PLANT AND EQUIPMENT

	Computers		Office equipment		Machinery		Furniture & Fittings		Motor Vehicles		Construction in Progress		Total
	US$		US$		US$		US$		US$		US$		US$
Group
Cost
Additions on acquisition of subsidiaries	41,660		18,454		42,481		330,885		117,712		16,232		567,424
Additions	15,505		663		2,894		1,104		77,856		-		98,022
Currency translation difference	(605)		(268)		(616)		(4,801)		(1,708)		(236)		(8,234)
At 31 March 2008	56,560		18,849		44,759		327,188		193,860		15,996		657,212
Accumulated depreciation
Additions on acquisition of subsidiaries	8,383		2,798		5,437		9,973		1,482		-		28,073
Charge for the period	2,355		766		1,530		10,630		5,120		-		20,401
Currency translation difference	(122)		(41)		(79)		(145)		(22)		-		(409)
At 31 March 2008	10,616		3,523		6,888		20,458		6,580		-		48,065
Net book value
At 31 March 2008	45,944		15,326		37,871		306,730		187,280		15,996		609,147

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

4.  PLANT AND EQUIPMENT (…CONT'D)

The group's plant and equipment as at 31 March 2008 include motor vehicles under finance lease with net book value of US$187,280.

 5. INVESTMENT IN SUBSIDIARY

	Company
	US$
Unquoted equity investment - at cost	394,675

The details of the subsidiaries are as follows:

Name of Company	Country of incorporation	Principal activities	Financial Year End	Percentage of equity held by the company	Cost of Investment
					US$
Direct subsidiary company
Held by the company
Tenon Property Services Pvt Ltd	India	Facilities & Property Management and Fleet Management Services	31 March	99.36%	394,675
(Tenon Property Services Pvt Ltd is subsidiary of Mortice Ltd)
Sub-subsidiary company
Held by subsidiary company
Peregrine Guarding Pvt Ltd.	India	Guarding, Safety and Security Services	31 March	100%	377,783
(Peregrine Guarding Pvt Ltd is a Subsidiary of Tenon Property Services Pvt Ltd)

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

6. DEFERRED TAX ASSET

	Group
	US$
At the beginning of the period	-
Transfer from income statement	165,870
At the end of the period	165,870

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon: 

	At 9 January 2008		Credit to profit or loss  (Note 24)		At 31 March 2008
	US$		US$		US$
Accelerated tax depreciation	-		3,684		3,684
Gratuity	-		(31,582)		(31,582)
Others	-		(8,892)		(8,892)
Tax losses carried forward	-		(79,281)		(129,042)
Unabsorbed capital allowances	-		(49,799)		(49,799)
	-		(165,870)		(165,870)

One of the subsidiary companies has unabsorbed tax losses and capital allowances amounting to approximately US$233,180 and US$146,468, respectively available for offsetting against future taxable income of the subsidiaries for the next 8 assessment years subject to conditions imposed by Indian Tax Act.

7. CASH AND CASH EQUIVALENTS

	Group		Company
	US$		US$
Cash at bank	191,193		5,028
Cash on hand	186,233		-
Fixed deposits	27,583		-
	405,009		5,028

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

7. CASH AND CASH EQUIVALENTS (…CONT'D)

The carrying amounts of cash and cash equivalents approximate their fair values and are denominated in the following currencies:

	Group		Company
	US$		US$
Indian rupees	399,981		-
United States dollars	5,028		5,028
	405,009		5,028

The bank overdraft bears an interest ranging from 11% to 13% per annum. The bank overdraft is secured by pledge of trade receivables, inventories and plant and equipment.

For the purpose of the cash flow statement, the year end cash and cash equivalents comprised the following:

			Group
			US$
Cash at bank			191,193
Cash on hand			186,233
Fixed deposits			27,583
			405,009
Less:
Bank overdraft			(200,389)
Pledged fixed deposits			(14,589)
			190,031

The company has pledged US$14,589 fixed deposit out of the above deposits as security for a bank guarantee obtained as disclosed in Note 26 to the financial statements.

8. TRADE RECEIVABLES 

			Group
			US$
Third parties			3,704,615
Less : Allowance for doubtful debts			(14,286)
			3,690,329

  MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

8. TRADE RECEIVABLES (…CONT'D)

The group's trade receivables are denominated in Indian rupees.

Trade receivables are recognised at their original invoiced amounts which represent their fair values on initial recognition. The trade receivables are considered to be of short duration and are not discounted and the carrying values are assumed to approximate their fair values. 

Trade receivables of one of the subsidiaries amounting to US$3,671,483 have been pledged as security for bank overdraft.

9. OTHER RECEIVABLES 

	Group		Company
	US$		US$
Deposits	537,942		-
Prepayments	551,215		551,215
Advances - third parties	510,662		-
Advances - related parties	53,921		-
Other debtors	2,670		-
	1,656,410		551,215

Prepayments include fund raising cost incurred by the group for Initial Public Offering and listing on Alternate  Investment Market (AIM) of London Stock Exchange (LSE), which took place subsequently on 15 May 2008.

The carrying amounts of other receivables approximate their fair values. The group's and company's other receivables are denominated in the following currencies:

	Group		Company
	US$		US$
Indian rupees	1,105,195		-
United States dollars	551,215		551,215
	1,656,410		551,215

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

 10. INVENTORIES, AT COST 

	Group
	US$
Finished Goods	2,290
Work in Progress	18,191
	20,481

Work in progress represents material and equipment under installation at client site.

11. TRADE PAYABLES

The group's trade payables are denominated in Indian rupees.

Trade payables are recognised at their original invoiced amounts which represent their fair values on initial recognition. Trade payables are considered to be of short duration and are not discounted and the carrying values are assumed to approximate their fair values.

12. OTHER PAYABLES

	Group		Company
	US$		US$
Accruals for operating expenses	807,861		17,327
Duties payable	1,505,860		-
Other payables – related parties	359,152		551,215
	2,672,873		568,542

The carrying amounts of other payables approximate their fair values and are denominated in the following currencies:

	Group		Company
	US$		US$
Indian rupees	2,299,222		-
United States dollars	373,651		568,542
	2,672,873		568,542

  MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

 13. FINANCE LEASE

	Group
	US$
Due within one year	59,106
Due within one to five years	110,346
	169,452
Finance charge allocated to future periods	(29,152)
	140,300
Representing finance lease liabilities:
Current	43,029
Non-current	97,271
	140,300

The carrying amounts of the non-current portion of finance lease obligations approximate their fair values. The finance lease obligations are denominated in Indian rupees. The average floating rate is at 13.28% per annum.

The group's obligations under finance leases are secured by the lessors' title to the leased assets (Note 4).

14. BORROWINGS

		Group
		US$
Within one year		369,052
Within two to five years		237,883
		606,935

The group's borrowings are denominated in Indian rupees.

The carrying amounts of borrowings approximate their fair values. The borrowings are unsecured, subject to interest at rates ranging from 12 % to 21% per annum 

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

15. RETIREMENT BENEFIT OBLIGATIONS

In accordance with applicable Indian laws, the group provides for gratuity, a defined benefit retirement plan ("the Gratuity Plan") covering eligible employees calculated by an independent actuary. The Gratuity Plan provides for a lump sum payment to vested employees on retirement, death, incapacitation or termination of employment of amounts that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation by the company. The group has not funded its obligation under the gratuity benefit plan. 

For determination of the Gratuity the following actuarial assumptions were used: 

Economic assumptions:-The principal Assumptions are the discount rate and salary growth rate. The discount rate is generally based upon the market yield available on government bonds at the accounting date with a term that matches that of the liabilities and the salary growth rate takes account of inflation seniority promotion and other relevant factors on long term basis 

Demographic assumptions

		Group
Retirement age		58 years
Mortality table		LIC (94-96) duly modified
Attrition rate		55%
Discount rate		8%
Rate of increase in compensation levels		5%

16. SHARE CAPITAL

		Company
		US$
Issued and fully paid
40,000,001 ordinary shares		400,001

At the date of incorporation, the company issued 40,000,001 ordinary share for cash as initial share capital.

The holder of ordinary shares is entitled to receive dividends as declared from time to time and is entitled to one vote per share at meeting of the company. All shares rank equally with regard to the company's residual assets.

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

17. RESERVES

	Group		Company
	US$		US$
Currency translation reserve
Balance at the beginning of the period	-		-
Exchange differences on consolidation	(15,281)		-
Balance at the end of the period	(15,281)		-
Retained profits
Balance at the beginning of the period	-		-
Profit/(loss) for the period	632,642		(17,625)
Balance at the end of the period	632,642		(17,625)
Total reserves	617,361		(17,625)

18. MINORITY INTEREST

			Group
			US$
Cost of investment			2,502
Loss for the period			(8)
Balance at the end of the period			2,494

19. NEGATIVE GOODWILL WRITTEN BACK

Negative goodwill represents the excess of the fair value of the subsidiaries net identifiable assets over the cost of acquisition at the date of acquisition as result of a bargain purchase.

 

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

20. SERVICES CONSUMED

			Group
			US$
Purchases consumed			15,759
Bonuses			93,351
Contribution to provident fund			241,744
Wages			2,289,047
Others			73,693
			2,713,594

 21. OPERATING EXPENSES

	Group		Company
	US$		US$
Advertisement	5,172		-
Legal and professional fees	9,443		2,827
Fringe benefit expense	18,240		-
Printing and stationary	7,846		-
Rental	60,211		-
Repair and maintenance	27,846		-
Telephone and fax	14,372		-
Travelling expenses	55,605		-
Others	60,725		14,500
	259,460		17,327

 22. FINANCE COSTS

			Group
			US$
Interest on bank overdraft			50,970
Interest on term loan			3,737
Interest on finance lease			3,423
Others			2,203
			60,333

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

23. PROFIT/(LOSS) BEFORE TAXATION

Profit/(loss) before taxation is arrived at after charging:

			Group
			US$
Staff pension contributions			176,579
Directors' remuneration			156,254
Accommodation and office rental			60,210
Rental of office equipment			3,760

24. TAXATION

	Group		Company
	US$		US$
Current year taxation:
- Singapore taxation	-		-
- Foreign taxation	51,965		-
Deferred tax benefit (Note 6)	(165,870)		-
	(113,905)		-

The reconciliation between tax expense/(benefit) and the accounting profit/(loss) multiplied by the applicable tax rates is as follows:

	Group		Company
	US$		US$
Accounting profit/(loss)	518,729		(17,625)
Income tax expense/(benefit) at applicable rate	93,371		(3,173)
Non taxable income	(135,516)		-
Non allowable expenses	11,165		3,173
Difference in tax rate	4,889		-
Accelerated tax depreciation	1,950		-
Gratuity	(16,720)		-
Tax losses carried forward	(41,972)		-
Unabsorbed capital allowances	(26,364)		-
Others	(4,708)		-
	(113,905)		-

One of the subsidiary companies has unabsorbed tax losses and capital allowances amounting to approximately US$233,180 and US$146,468, respectively available for offsetting against future taxable income of the subsidiaries for the next 8 assessment years subject to conditions imposed by Indian Tax Act.

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

25. OPERATING LEASE COMMITMENTS

At the balance sheet date, the group and the company had commitments in respect of operating leases as follows:

			Group
			US$
Within one year			186,532
Within two to five years			43,989
			230,521

Operating lease commitments represent rental payable by the group for offices and guest houses. The leases have varying terms and renewal rights.

 26. OTHER COMMITMENTS

At the balance sheet date, the company had obtained a bank guarantee totalling US$67,382 in favour of third parties with respect to the company's activities. The bank guarantee is secured by fixed deposits amounting to US$14,589, pledge of trade receivables, inventories and plant and equipment.

27. RELATED PARTY TRANSACTIONS

An entity or individual is considered a related party of the group for the purpose of the financial statements if: 

(i) it possesses the ability (directly or indirectly) to control or exercise significant influence over the financial and operating decisions of the group or vice versa; or 

(ii) it is subject to common control or common significant influence.

The following transactions are the significant related party transactions entered into by the company and the group on terms agreed between the parties:

	Group
	US$
Assets purchased from a shareholder	5,629

MORTICE LIMITED

 (Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

27. RELATED PARTY TRANSACTIONS (…CONT'D)

Compensation of directors and key management personnel

The remuneration of directors and other members of key management of the group during the financial period is as follows:

	Group
	US$
Short-term benefits	156,254

28. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

a) Liquidity risk

The group maintains sufficient reserves of cash and available bank credit facilities to meet its liquidity requirement at all times.

b) Foreign currency risk

The group is exposed to a certain degree of foreign exchange risk arising from their transactions denominated in Indian rupees. However, the company does not use any hedging instruments to protect against the volatility associated with foreign currency transactions, other assets and liabilities created in the normal course of business.

c) Credit risk

Credit risk is managed through trading with majority customers with good credit history, performing credit checks and monitoring procedures. The carrying amount of each financial asset in the balance sheet represents the group's maximum exposure to credit risk. 

d) Interest rate risk

The group's exposure to market risk for changes in interest rates is disclosed further in note 7, 13 and 14 to the financial statements.

 

MORTICE LIMITED

(Incorporated in Singapore)

AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL PERIOD FROM 9 JANUARY 2008 (DATE OF INCORPORATION) TO 31 MARCH 2008 (…CONT'D)

28. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (…CONT'D)

e) Fair values

The carrying amounts of cash and cash equivalents, trade and other receivables, related party balances, trade and other payables, current portion of finance lease and borrowings approximate their fair values due to their short-term nature.

29. SUBSEQUENT EVENTS

Subsequent to the financial period the company was listed on Alternate Investment Market (AIM) of London Stock Exchange (LSE), issuing 7,700,000 ordinary shares with total proceeds amounting to US$9,730,120.

Upon admission to AIM of LSE, the Company has adopted a share option scheme for 2,800,000 ordinary shares of the company, of which 1,600,000 options (3.4 per cent of the Ordinary Shares at Admission) are alloted and granted to Andrew Barker and 1,200,000 options (2.5 per cent of the Ordinary Shares at Admission) are allotted and granted to Vijayendra Babji, both of which are performance related and exercisable three years after Admission at the Placing Price. 

30. COMPARATIVE FIGURES

No comparative figures are available as this is the group's and the company's first set of` financial statements.

ENDFR WUUWCBUPRGAU

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Related Shares:

MORT.L