TIDMCHC
RNS Number : 4506T
Charles Street Capital PLC
28 September 2010
Charles Street Capital plc / EPIC: CHC / Market: AIM
28 September 2010
Charles Street Capital plc ('CSC' or 'the Company')
Final Results and Notice of AGM
Charles Street Capital plc, the AIM listed natural resources investment company,
announces its final results for the period ended 30 April 2010.
Overview
· New investment strategy implemented to focus on the natural resources
sector
· Looking to acquire and invest strategically in natural resources, minerals,
metals and oil and gas companies within Africa, South America, Australasia and
Central and Eastern Europe
· Currently evaluating a number of projects, both at the exploration and
production stages
· Raised GBP805,488 post-period end via a placing in order to improve cash
position
· Strengthened Board in light of the new investment strategy with appointment
of Robert Hyndes and Greg Kuenzel
Chairman's Statement
This has been an important developmental year for the Company during which we
have commenced our new investment strategy to focus on the natural resources
sector following the disposal of Sweet China Plc's assets in the first quarter
of 2010. Since the period-end, we have changed our company name, strengthened
our Board in view of our new investment strategy and completed a placing to
reinforce our position in the natural resources sector.
The Company has a strategy centred on acquiring and strategically investing in
natural resources, minerals, metals and oil and gas companies within Africa,
South America, Australasia and Central and Eastern Europe. Although broad at
the moment, the Board is confident that this will be of benefit to shareholders
and we are active in assessing opportunities in this arena. We are currently
evaluating a number of projects, both at the exploration and production stages,
which we believe have the potential to fulfil our investment criteria and build
shareholder value. We look forward to updating shareholders on these
developments at the appropriate time.
At the current time, the Board is focused on developing a solid foundation for
future growth. Subsequent to the period-end, following shareholder approval for
our change in investment strategy in early May 2010, the Company raised
GBP805,488 via a placing in order to improve its cash position.
In light of our new investment strategy, we have strengthened our management
team and as part of this, Robert Hyndes' was appointed as a Non-Executive
Director in May 2010. Additionally, Damian Conboy has joined our management
team to assist the Company during its development phase and Greg Kuenzel has
joined the Board as a Non-Executive Director. Importantly, both Damian and Greg
have experience in operating and executing transactions in the resource sector
and the Board is optimistic about the opportunities that are now becoming open
to the Company as we look to build our exposure in the natural resources sector.
Financials
Much of the period under review was concerned with the liquidation of Sweet
China Plc's assets, which left no residual value to shareholders, and the
establishment of the Company as a natural resource focused investment company.
We are now moving ahead with this new investment strategy and so these financial
results are not reflective of the current operations of the Company.
Accordingly, we are reporting a Group profit for the year after taxation of
GBP80,343 (2009: loss GBP6,151,880) on a turnover of GBP419,874 (2009:
GBP6,425,454).
Outlook
The Board believes that the Company is well placed to progress as we look to
apply our new investment strategy focused on the natural resource sector. Our
Board and management team have identified a number of projects and investment
opportunities which are currently under assessment with a view to maximising our
position as an investment company and executing a transaction to the benefit of
shareholders.
I would like to take this opportunity to thank the team and our shareholders for
their support throughout this transitional time for the Company.
Nicholas Lee
Chairman
4 October 2010
+----------------+----------------------+---------------------+
| For further information on the Company visit |
| www.charlesstreetplc.com or contact: |
+-------------------------------------------------------------+
| |
+-------------------------------------------------------------+
| Nicholas Lee | Charles Street | Tel: 0203 006 0260 |
| | Capital plc | |
+----------------+----------------------+---------------------+
| Damian Conboy | Charles Street | Tel: 0203 006 0260 |
| | Capital plc | |
+----------------+----------------------+---------------------+
| Nick Naylor | Allenby Capital | Tel: 0203 328 5656 |
| | Limited | |
+----------------+----------------------+---------------------+
| Alex Price | Allenby Capital | Tel: 0203 328 5656 |
| | Limited | |
+----------------+----------------------+---------------------+
| Hugo de Salis | St Brides Media & | Tel: 020 7236 1177 |
| | Finance Ltd | |
+----------------+----------------------+---------------------+
| Elisabeth | St Brides Media & | Tel: 020 7236 1177 |
| Cowell | Finance Ltd | |
+----------------+----------------------+---------------------+
**ENDS**
Group Statement of Comprehensive Income
For The Year Ended 30 April 2010
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | Year | | Year |
| | | | | ended | | ended |
| | | | | 30 | | 30 |
| | | | | April | | April |
| | | | | 2010 | | 2009 |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | GBP | | GBP |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Revenue - sale of goods | | | | 419,874 | | 6,425,454 |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Cost of sales | | | | (219,913) | | (5,044,092) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Gross profit | | | | 199,961 | | 1,381,362 |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Administrative expenses | | | | (329,758) | | (2,389,365) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Other operating expenses | | | | (1,112) | | (17,805) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Other income | | | | 231,180 | | 203,736 |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Operating profit/(loss) | | | | 100,271 | | (822,072) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Other gains and losses | | | | - | | (5,303,050) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Finance income | | | | - | | 1,632 |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Finance costs | | | | (19,928) | | (28,234) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Profit/(loss) before taxation | | | | 80,343 | | (6,151,724) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Taxation | | | | - | | (156) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Profit/(loss) for the year | | | | 80,343 | | (6,151,880) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Other comprehensive income: | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Exchange differences on translation of | | | | - | | (26,694) |
| overseas subsidiaries | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Profit/(loss) for the year and total | | | | 80,343 | | (6,178,574) |
| comprehensive income attributable to | | | | | | |
| owners of the parent | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Profit/(loss) from continuing activities | | | | 86,203 | | (856,720) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Profit/(loss) from discontinued | | | | (5,860) | | (5,295,160) |
| activities | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Basic and diluted profit/(loss) per | | | | | | |
| share (pence): | | | | | | |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Continuing activities | | | | 0.09p | | (0.94p) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| Discontinued activities | | | | (0.01p) | | (5.82p) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
| | | | | 0.08p | | (6.76p) |
+------------------------------------------+-----+--+----------+-----------+----------+-------------+
Group Balance Sheet
As At 30 April 2010
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | 2010 | | 2009 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | GBP | | GBP |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| ASSETS | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Non-current assets | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Property, plant and equipment | | | | - | | 14,660 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | - | | 14,660 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Current assets | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Inventories | | | | - | | 44,872 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Trade and other receivables | | | | 30,188 | | 137,618 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Cash and cash equivalents | | | | 41,864 | | 164,706 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | 72,052 | | 347,196 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| TOTAL ASSETS | | | | 72,052 | | 361,856 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| EQUITY AND LIABILITIES | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Share capital and reserves | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Issued capital | | | | 984,746 | | 976,412 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Share premium | | | | 6,002,170 | | 6,010,504 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Reserve on acquisition | | | | 216,000 | | 216,000 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Loan note holders reserve | | | | 28,682 | | - |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Option reserve | | | | 388,738 | | 388,738 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Translation reserve | | | | - | | (27,133) |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Retained earnings | | | | (8,226,706) | | (8,279,916) |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| TOTAL EQUITY | | | | (606,370) | | (715,395) |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Non-current liabilities | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Borrowings | | | | 86,318 | | - |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Finance lease obligations | | | | - | | 11,386 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Deferred tax liabilities | | | | - | | 1,951 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | 86,318 | | 13,337 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Current liabilities | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Trade and other payables | | | | 592,104 | | 672,252 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Borrowings | | | | - | | 197,648 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Finance lease obligations | | | | - | | 3,105 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Current income tax payable | | | | - | | 190,909 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| Total current liabilities | | | | 592,104 | | 1,063,914 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| TOTAL LIABILITIES | | | | 678,422 | | 1,077,251 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| TOTAL EQUITY AND LIABILITIES | | | | 72,052 | | 361,856 |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
| | | | | | | |
+------------------------------------------+----+--+----------+-------------+----------+-------------+
Group Statement of Cash Flows
For the Year Ended 30 April 2010
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | Year | | Year |
| | | | | ended | | ended |
| | | | | 30 | | 30 |
| | | | | April | | April |
| | | | | 2010 | | 2009 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | GBP | | GBP |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Cash flows from operating activities | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Profit/(loss) before income tax | | | | 86,203 | | (6,151,724) |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Adjustments for: | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Depreciation | | | | 387 | | 35,273 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Loss on disposal of property, plant | | | | 1,112 | | 17,805 |
| and equipment | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Impairment loss in respect of | | | | - | | 5,303,050 |
| subsidiary undertakings | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Interest receivable | | | | - | | (1,632) |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Interest expense | | | | 19,928 | | 28,234 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Share-based payments | | | | - | | 175,702 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Operating cash flows before working | | | | 107,630 | | (593,292) |
| capital changes | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Decrease/(increase) in inventories | | | | - | | 10,052 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Decrease in trade and other | | | | 20,116 | | 267,385 |
| receivables | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Increase/(decrease) in trade and other | | | | (222,842) | | 150,658 |
| payables | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Cash outflow from operations | | | | (95,096) | | (165,197) |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Income tax paid | | | | - | | (37,768) |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Net cash outflow from operating | | | | (95,096) | | (202,965) |
| activities | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Cash flows from investing activities | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Cash balances of discontinued | | | | (126,896) | | - |
| activities | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Purchase of property, plant and | | | | (461) | | (28,912) |
| equipment | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Proceeds on disposal of property, | | | | - | | 42,992 |
| plant and equipment | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Interest received | | | | - | | 1,632 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Net cash (outflow)/inflow from | | | | (127,357) | | 15,712 |
| investing activities | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Cash flows from financing activities | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Proceeds from issue of shares | | | | - | | 168,653 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Convertible loan notes issued | | | | 115,000 | | - |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Proceeds from finance leases | | | | - | | 10,570 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Interest paid | | | | (17,419) | | (28,234) |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Net cash inflow from financing | | | | 97,581 | | 150,989 |
| activities | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Net decrease in cash and cash | | | | (124,872) | | (36,264) |
| equivalents | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Exchange rate translation adjustment | | | | 2,030 | | 21,569 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Cash and cash equivalents brought | | | | 164,706 | | 179,401 |
| forward | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Cash and cash equivalents carried | | | | 41,864 | | 164,706 |
| forward | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Represented by: | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| Positive cash balances | | | | 41,864 | | 164,706 |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
| | | | | | | |
+----------------------------------------+-----+----+----------+-----------+----------+-------------+
Group Statement of Changes In Equity
For The Year Ended 30 April 2010
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| | Share | Share | | | Loan | | Option | | Translation | | | | Total |
| | capital | premium | Reserve | | note | | reserve | | reserve | | Retained | | |
| | | | on | | holders | | | | | | earnings | | |
| | | |acquisition | | reserve | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| | GBP | GBP | GBP | | | | GBP | | GBP | | GBP | | GBP |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| At 30 | 887,648 | 5,930,615 | 216,000 | | - | | 213,036 | | (439) | | (2,128,036) | | 5,118,824 |
| April 2008 | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Loss for | - | - | - | | - | | - | | - | | (6,151,880) | | (6,151,880) |
| the year | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Exchange | - | - | - | | - | | - | | (26,694) | | - | | (26,694) |
| differences | | | | | | | | | | | | | |
| on | | | | | | | | | | | | | |
| translation | | | | | | | | | | | | | |
| of overseas | | | | | | | | | | | | | |
| subsidiaries | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Total | - | - | - | | - | | - | | (26,694) | | (6,151,880) | | (6,178,574) |
| recognised | | | | | | | | | | | | | |
| income and | | | | | | | | | | | | | |
| expense | | | | | | | | | | | | | |
| for the | | | | | | | | | | | | | |
| year | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Shares | 88,764 | 88,765 | - | | - | | - | | - | | - | | 177,529 |
| issued in | | | | | | | | | | | | | |
| year for | | | | | | | | | | | | | |
| cash | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Costs of | - | (8,876) | - | | - | | - | | - | | - | | (8,876) |
| share | | | | | | | | | | | | | |
| issue | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Credit to | - | - | - | | - | | 175,702 | | - | | - | | 175,702 |
| equity for | | | | | | | | | | | | | |
| share | | | | | | | | | | | | | |
| based | | | | | | | | | | | | | |
| payments | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| At 30 | 976,412 | 6,010,504 | 216,000 | | - | | 388,738 | | (27,133) | | (8,279,916) | | (715,395) |
| April 2009 | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Profit for | - | - | - | | - | | - | | - | | 86,203 | | 86,203 |
| the year | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Adjustments | - | - | - | | - | | - | | 27,133 | | (32,993) | | (5,860) |
| in respect | | | | | | | | | | | | | |
| of | | | | | | | | | | | | | |
| discontinued | | | | | | | | | | | | | |
| activities | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Total | - | - | - | | - | | - | | 27,133 | | 53,210 | | 80,343 |
| recognised | | | | | | | | | | | | | |
| income and | | | | | | | | | | | | | |
| expense | | | | | | | | | | | | | |
| for the | | | | | | | | | | | | | |
| year | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Equity | - | - | - | | 28,682 | | - | | - | | - | | 28,682 |
| recognised | | | | | | | | | | | | | |
| on issue | | | | | | | | | | | | | |
| of loan | | | | | | | | | | | | | |
| notes | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Adjustment | - | (50,000) | - | | - | | - | | - | | - | | (50,000) |
| to premium | | | | | | | | | | | | | |
| on shares | | | | | | | | | | | | | |
| issued in | | | | | | | | | | | | | |
| a previous | | | | | | | | | | | | | |
| year | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| Shares | 8,334 | 41,666 | - | | - | | - | | - | | - | | 50,000 |
| issued in | | | | | | | | | | | | | |
| year | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
| At 30 | 984,746 | 6,002,170 | 216,000 | | 28,682 | | 388,738 | | - | | (8,226,706) | | (606,370) |
| April 2010 | | | | | | | | | | | | | |
+--------------+---------+-----------+-------------+-+---------+-+---------+-+-------------+----------+-------------+-+-------------+
Notes to financial statements
1. General information
Charles Street Capital plc is a public limited company incorporated and
domiciled in England and Wales. Its registered office and business address is 47
Charles Street, London, W1J 5EL.
2. Accounting policies
2.1. Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union and IFRIC
interpretations and with those parts of the Companies Act, 2006 applicable to
companies reporting under IFRS. The financial statements have been prepared
under the historical cost convention and presented in British Pounds, which is
the Company's functional and presentation currency. A summary of the more
important accounting policies is set out below.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on management's best knowledge of the amount,
event or actions, actual results ultimately may differ from those estimates.
2.2. Going concern
As referred to in note 13 to the financial statements the Company's main
operating subsidiary went into provisional liquidation on 9 December 2009 and
the Group has net current liabilities of GBP520,052 as at 30 April 2010. On 26
March 2010 an agreement was completed with all the Company's creditors that
debts totalling approximately GBP475,000 be discounted by 75% and shares be
issued in settlement of the balance, subject only to the approval of the
shareholders. Subsequently this agreement was ratified by shareholders on 7 May
2010. Also on 7 May the shareholders approved the conversion of GBP115,000 loan
notes into new ordinary shares, and on 30 June 2010 the Company completed a
placing of 805,488,000 new ordinary shares raising GBP805,488 before expenses.
These events have resulted in an increase in net equity of approximately
GBP1,350,000.
For these reasons, the directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence for the foreseeable
future and they have therefore adopted a going concern basis in preparing the
accounts.
2.3. Statement of compliance
The financial statements comply with International Financial Reporting
Standards. At the date of authorisation of these financial statements, the
following Standards and Interpretations affecting the Group, which have not been
applied in these financial statements, were in issue, but not yet effective (and
in some cases had not been adopted by the EU):
+--------------+---------------------------------------+---------------+
| | | Effective for |
| | | accounting |
| | | periods |
| | | beginning on |
| | | or after: |
+--------------+---------------------------------------+---------------+
| IAS 7 | Classification of expenditures on | 1 January |
| | unrecognised assets | 2010 |
+--------------+---------------------------------------+---------------+
| IAS 17 | Classification of leases of land and | 1 January |
| | buildings | 2010 |
+--------------+---------------------------------------+---------------+
| IAS 24 | Related Party Disclosures | 1 January |
| | | 2011 |
+--------------+---------------------------------------+---------------+
| IAS 32 | Financial instruments: Presentation | 1 February |
| | - Classification of Rights Issues | 2010 |
+--------------+---------------------------------------+---------------+
| IAS 36 | Unit of accounting for goodwill | 1 January |
| | impairment test | 2010 |
+--------------+---------------------------------------+---------------+
| IAS 38 | Intangible assets | 1 July 2009 |
| (amendment) | | |
+--------------+---------------------------------------+---------------+
| IFRS 2 | Scope of IFRS 2 and IFRS 3 (revised) | 1 July 2009 |
+--------------+---------------------------------------+---------------+
| IFRS 8 | Disclosure of information about | 1 January |
| (amendment) | segment assets | 2010 |
+--------------+---------------------------------------+---------------+
| IFRS 9 | Financial Instruments | 1 January |
| | | 2013 |
+--------------+---------------------------------------+---------------+
| IFRIC 19 | Extinguishing Financial Liabilities | 1 July 2010 |
| | with Equity Instruments | |
+--------------+---------------------------------------+---------------+
The Directors anticipate that the adoption of the above Standards and
Interpretations in future periods will have little or no impact on the financial
statements of the Group when the relevant Standards come into effect for periods
commencing on or after 1 May 2010.
2.4. Basis of consolidation
The Group financial statements consolidate the financial statements of Charles
Street Capital plc ("the Company") and its subsidiaries (the "Group") for the
year ended 30 April 2010.
Subsidiaries are all entities over which the Group has the power to govern the
financial and operating policies, generally accompanying a shareholding of more
than one half of the voting rights. The existence and effect of potential voting
rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. On acquisition the assets
and liabilities and contingent liabilities of subsidiaries are measured at their
fair values at the date of acquisition.
The financial statements of subsidiaries are prepared for the same reporting
year as the parent company, using consistent accounting policies. All
inter-company balances and transactions, including unrealised profits arising
from them, are eliminated. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group and cease to be consolidated from the
date on which control is transferred out of the Group, except as noted in the
following paragraph.
A provisional liquidator was appointed to the Group's Hong Kong subsidiary,
Sweet Essentials Limited ("SEL") on 9 December 2009, and the Group has taken
advantage of Section 405(3)(a) of the Companies Act 2006 which provides for the
exclusion from consolidation of a subsidiary undertaking where severe long-term
restrictions substantially hinder the exercise of the rights of the parent
company over the assets or management of that undertaking. All transactions
with SEL during the period, and all amounts due to and from SEL, have been
accounted for on a third party basis.
Definitions used in these financial statements are as follows:
+------------------------------+------------------------------+
| The Company | Charles Street Capital Plc |
+------------------------------+------------------------------+
| The Group | Charles Street Capital Plc, |
| | Sweet China Trading Limited |
| | and Sweet Essentials |
| | International Limited. |
+------------------------------+------------------------------+
| The Sweet Essentials Group | Sweet Essentials |
| | International Limited, Sweet |
| | Essentials Limited, Lings |
| | Limited, Candycraft (Quality |
| | Superb) Limited |
+------------------------------+------------------------------+
2.5. Revenue
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured.
Revenues from sale of goods are recognised once all the significant risks and
rewards arising from the ownership over the goods have been assigned to the
buyer, the seller no longer maintains continuing decision-making involvement
that characterises ownership and no longer maintains effective control over the
sold goods, the amount of revenues can be measured reliably, the economic
benefits relating to the transaction are expected to flow to the Group and the
costs incurred or to be incurred in respect of the transaction can be measured
reliably.
Sales are recognised net of sales tax and discounts.
Interest income is recognised on a time-proportion basis using the effective
interest method.
Commission or royalty income is recognised when the goods on which the
commission or royalty is calculated are delivered.
2.6. Segment reporting
From 1 May 2009 the Group determines and presents operating segments based on
the information that internally is provided to the Chief Executive Officer, who
is the Group's chief operating decision maker ("CODM").
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including
revenues and expenses that relate to transactions with any of the Group's other
components. An operating segment's operating results are reviewed regularly by
the CODM to make decisions about resources to be allocated to the segment and
assess its performance, and for which discrete financial information is
available. Information provided to the CODM is focused on regions and as a
result, reportable segments are on a regional basis.
These financial statements do not include a note on segmental analysis as all
the Group's trading operations ceased during the year and the directors consider
that the disclosure of segmental analysis relating to the discontinued
operations would be of no benefit to shareholders.
2.7. Cash flow
The Group has elected to disclose its cash flows from operating activities using
the indirect method that requires the profit or loss to be adjusted for the
effects of non-cash movements, changes in working capital and items relating to
investing and finance activities.
2.8. Share-based payments
The Group accounts for employee and non-employee share-based compensation awards
based on their fair value in accordance with IFRS 2 'Share-based Payments'.
The Group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value (excluding the
effect of non market-based vesting conditions) at the date of grant. The fair
value determined at the date of grant of the equity-settled share-based payments
is expensed on a straight-line basis over the vesting period, based on the
Group's estimate of shares that will eventually vest and adjusted for the effect
of non market-based vesting conditions.
Fair value is measured using the Black-Scholes model. The expected life used in
the model has been adjusted, based on management's best estimate, for the
effects of non-transferability, exercise restrictions, and behavioural
considerations.
The potential employers' national insurance contributions in the UK arising on
employee compensation awards are calculated using the market value of the
company's shares at the reporting date, and pro-rated over the vesting period of
the options.
2.9. Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are:
(i) Fair value of equity-settled share-based payments - see note 2.8
(ii) The equity element of the convertible loan - see note 2.24
2.10. Taxation
Current tax, including UK corporation tax and foreign tax, is provided at
amounts expected to be paid (or recovered) using the tax rates and laws that
have been enacted or substantially enacted by the balance sheet date.
Deferred tax is recognised, using the liability method, in respect of temporary
differences between the carrying amount of the group's assets and liabilities
and their tax base. Deferred tax liabilities are offset against deferred tax
assets within the same taxable entity or qualifying local tax group.
In the UK, the Company is entitled to a tax deduction for amounts treated as
compensation on the exercise of certain options. As explained in note 2.8 a
share-based payment charge is recorded in the income statement from the grant
date and over the vesting period. As there is a temporary difference between the
accounting and tax bases, a deferred tax asset is calculated by comparing the
estimated amount of tax deduction to be obtained in the future, based on the
Group's share price at the balance sheet date, with the cumulative amount of the
share-based payment charge recorded in the income statement. A deferred tax
asset is not recorded if the tax deduction is not expected to crystallise.
Any remaining deferred tax asset is recognised only when, on the basis of all
available evidence, it can be regarded as probable that there will be suitable
taxable profits, within the same jurisdiction, in the foreseeable future against
which the deductible temporary difference can be utilised.
Deferred tax is determined using tax rates that are expected to apply in the
periods in which the asset is realised or liability settled, based on tax rates
and laws that have been enacted or substantially enacted by the balance sheet
date.
Current and deferred tax are recognised in the income statement, except when the
tax relates to items charged or credited directly in equity, in which case the
tax is also recognised in equity.
2.11. Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
cost and net realisable value. Cost comprises all costs of purchases, cost
conversion and other costs incurred in bringing the inventories to their present
location and condition. Cost is calculated using the weighted average method.
Net realisable value represents the estimated selling price in the ordinary
course of business less the estimated costs of completion and the estimated
costs necessary to make the sale.
2.12. Financial instruments
Financial assets and financial liabilities are recognised in the group's balance
sheet when the group becomes a party to the contractual provisions of the
instrument.
2.13. Financial assets
All financial assets are recognised and derecognised on a trade date where the
purchase or sale of a financial asset is under a contract whose terms require
delivery of the investment within the timeframe established by the market
concerned, and are initially measured at fair value, plus transaction costs.
All the Group's financial assets are classified as 'loans and receivables'. The
classification depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition.
2.14. Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable
payments that are not quoted in an active market are classified as loans and
receivables. loans and receivables are measured at amortised cost using the
effective interest method, less any impairment. Interest income is recognised by
applying the effective interest rate, except for short-term receivables when the
recognition of interest would be immaterial.
Trade receivables, which generally have 30-60 day terms, are recognised and
carried at original invoice amount less an allowance for any uncollectible
amounts. An estimate for doubtful debts is made when collection of the full
amount is no longer probable. Bad debts are written off when identified.
2.15. Effective interest method
The effective interest method is a method of calculating the amortised cost of a
financial asset and of allocating interest income over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash
receipts (including all fees on points paid or received that form an integral
part of the effective interest rate, transaction costs and other premiums or
discounts) through the expected life of the financial asset, or, where
appropriate, a shorter period.
2.16. Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in
hand and short-term deposits with an original maturity of three months or less.
For the purpose of the consolidated cash flow statement, cash and cash
equivalents consist of cash and cash equivalents net of outstanding bank
overdrafts.
2.17. Financial liabilities
Financial liabilities include trade and other payables, and debt instruments
issued by the Group.
2.18. Trade and other payables
Trade payables, which generally have 30-60 day terms, are recognised initially
and carried at original invoice value. The Group considers there are no
significant differences between the nominal value and fair value of trade and
other payables.
2.19. Intangible assets
Intangible assets comprise certain separable brand names (Jessica Walker, Lings
Turkish Delight and Candy Craft), obtained on the acquisition of Essential Box
Confectionery Limited. In accordance with IFRS 3 ' Business Combinations', where
the fair value of an intangible asset acquired in a business combination can be
measured reliably, the intangible asset is recognised separately from goodwill.
The acquired brand names are considered to have an indefinite economic life
because of their ability to continue maintaining profitable operations over long
periods of time, and of the Group's commitment to support the brands through
marketing and product development.
Intangible assets are not subject to amortisation, but are tested for impairment
in accordance with IAS 36.
The brands referred to above, obtained on the acquisition of Essential Box
Confectionery Limited, were fully impaired in 2009. As described in note 30, on
23 March 2010 provisional agreement was reached for the sale of the brands for a
consideration of GBP50,000. This agreement was ratified by the shareholders and
completed on 7 May 2010.
2.20. Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated
depreciation and impairment losses. Cost includes expenditure that is directly
attributable to the acquisition of the items. Subsequent costs are included in
the asset's carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognised. All other repairs and
maintenance are charged to the income statement during the financial period in
which they are incurred.
Property, plant and equipment are depreciated on a straight-line basis over the
estimated useful life of the item, as follows:
Leasehold improvements Over the lease period
Office equipment 3 - 4 years
Fixtures and fittings 4 years
Machinery 5 - 10 years
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 assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date. An asset's carrying amount is written
down immediately to its recoverable amount if the asset's carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the
carrying amount and are recognised in the income statement.
2.21. Impairment
The Group assesses at each reporting date whether there is an indication that an
asset may be impaired. Assets that are not available for use are not subject to
amortisation and are tested annually for impairment. Assets that are subject to
amortisation or depreciation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable.
An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of
an asset's fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash-generating units). Non-financial
assets that suffered impairment are reviewed for possible reversal of the
impairment at each reporting date.
2.22. Leasing
Finance leases which substantially transfer to the Group all the risks and
benefits incidental to ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased item or, if lower, at the
present value of the minimum lease payments. Lease payments are apportioned
between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated
useful life of the asset and the lease term if there is no reasonable certainty
that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in the income statement on
a straight-line basis over the lease term.
2.23. Foreign currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates ("the functional currency"). The consolidated financial
statements are presented in British Pounds, which is the Company's functional
and presentation currency.
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the income statement, except
when deferred in equity as qualifying cash flow hedges and qualifying net
investment hedges.
The results and financial position of all the group entities that have a
functional currency different from the presentation currency are translated into
the presentation currency as follows:
· Assets and liabilities for each balance sheet presented are translated at
the closing rate at the date of that balance sheet;
· Income and expenses for each income statement are translated at average
exchange rates because they are considered to be an approximation to translating
each transaction at the ruling rate; and
· All resulting exchange differences are recognised as a separate component
of equity.
2.24. Financial liabilities and equity instruments issued by the Group
Debt and equity instruments are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangement.
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deducting all of its liabilities. Equity instruments
are recorded at the proceeds received, net of direct issue costs.
2.25. Convertible loan notes
The deed constituting the convertible loan notes is regarded as a compound
instrument, consisting of a liability component and an equity component. At the
date of issue, the fair value of the liability component is estimated using the
prevailing market interest rate for similar non-convertible debt. The difference
between the loan initially recorded at fair value and the fair value assigned to
the liability component, representing the embedded equity option, is included in
capital reserves (equity).
2.26. Employee benefits
Contributions payable to defined contribution retirement benefit plans are
charged to the income statement as they fall due.
Termination benefits are recognised when, and only when, the Company commits
itself to terminate employment or to provide benefits as a result of voluntary
redundancy by having a detailed formal plan which is without realistic
possibility of withdrawal.
Employee entitlements to annual leave and long service payment due on retirement
or termination are recognised when they accrue to the employees. A provision is
made for the estimated liability for annual leave and long-service payment as a
result of services rendered by employees up to the balance sheet date. The
estimated liability is calculated net of expected reduction from benefits
available from social security funds.
Employee entitlements to sick leave and other non-accumulating compensated
absences are not recognised until the time of leave.
3. Income and expenses
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Profit for the year is stated | | | | | | | |
| after charging: | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Depreciation of property, plant | | | | | | | |
| and equipment | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| - owned | | | | | 387 | | 34,123 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| - leased | | | | | - | | 1,150 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Operating lease rentals | | | | | 18,900 | | 54,307 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| As permitted by section 408 of the Companies Act 2006 the Company has |
| elected not to present its own income statement and related notes. The |
| profit and total comprehensive income for the year, dealt with in the |
| financial statements of the parent Company, was GBP376,672 (2009: loss |
| GBP6,249,731). |
+---------------------------------------------------------------------------+
| Auditors' remuneration | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Fees payable to the Company's auditors for the | | 15,000 | | 23,000 |
| audit of the Company's annual accounts | | | | |
+-----------------------------------------------------+-+--------+-+--------+
| Fees payable to the Company's auditors for other | | - | | - |
| services: | | | | |
+-----------------------------------------------------+-+--------+-+--------+
| - The audit of the Company's subsidiaries | | 2,500 | | 5,000 |
| pursuant to legislation | | | | |
+-----------------------------------------------------+-+--------+-+--------+
| | | | | | 17,500 | | 28,000 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| Employment costs | | | | | | | |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| Wages and salaries | | | | | | | |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| - general | | | | | 129,240 | | 907,268 |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| - reversal of prior year bonus | | | | | (150,000) | | - |
| accrual | | | | | | | |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| - share-based payment charge | | | | | - | | 175,702 |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| | | | | | (20,760) | | 1,082,970 |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| Social security costs | | | | | 14,010 | | 39,756 |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| Short-term non-monetary benefits | | | | | - | | 67,211 |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| Pension costs | | | | | - | | 12,500 |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| | | | | | (6,750) | | 1,202,437 |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+-----------+-+-----------+
The average monthly number of employees (including Directors) was:
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | No | | No |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Sales and administration | | | | | 4 | | 14 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
+------------------------------+--------+-+------------+-+-----------+-+---------+
| | | | | | 2009 | | 2008 |
+------------------------------+--------+-+------------+-+-----------+-+---------+
| | | | | | GBP | | GBP |
+------------------------------+--------+-+------------+-+-----------+-+---------+
| Directors' remuneration | | | | | | | |
+------------------------------+--------+-+------------+-+-----------+-+---------+
| Wages and salaries | | | | | 78,110 | | 245,854 |
+------------------------------+--------+-+------------+-+-----------+-+---------+
| Reversal of prior year bonus | | | | | (150,000) | | - |
| accrual | | | | | | | |
+------------------------------+--------+-+------------+-+-----------+-+---------+
| Compensation for loss of | | | | | - | | 8,667 |
| office | | | | | | | |
+------------------------------+--------+-+------------+-+-----------+-+---------+
| Share-based payment charge | | | | | - | | 175,702 |
+------------------------------+--------+-+------------+-+-----------+-+---------+
| | | | | | (71,890) | | 430,223 |
+------------------------------+--------+-+------------+-+-----------+-+---------+
5. Other income
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Exchange translation gains | | | | | - | | 163,734 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Rent receivable | | | | | 1,575 | | 17,780 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| *Management fees received from | | | | | 229,605 | | - |
| Sweet Essentials Limited | | | | | | | |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Miscellaneous income | | | | | - | | 22,222 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | 231,180 | | 203,736 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| *As explained in note 2.4 transactions with Sweet Essentials Limited have |
| been accounted for on a third party basis |
+----------------------------------+-------+-+--------+-+---------+-+---------+
6. Other gains and losses
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| Impairment loss on subsidiary | | | | | - | | (5,303,050) |
| undertakings | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| | | | | | - | | (5,303,050) |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
8. Finance costs
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Interest payable on convertible | | | | | 2,509 | | - |
| loan notes | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Interest payable on finance | | | | | - | | 349 |
| leases | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Factoring charges | | | | | 10,109 | | - |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Interest payable on other loans | | | | | 7,310 | | 27,885 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | 19,928 | | 28,234 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
9. Tax on ordinary activities
+----------------------------------+------+----+-------+-+----------+--+-------------+
| | | | | | 2010 | | 2009 |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| | | | | | GBP | | GBP |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Income statement | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Current tax on income for the | | | | | - | | 5,098 |
| period | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Deferred tax movement | | | | | - | | (4,942) |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| | | | | | - | | 156 |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Factors affecting the tax charge | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Profit/(loss) on ordinary | | | | | 87,315 | | (6,151,724) |
| activities before taxation | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Aggregate of profit/(loss) on ordinary | | | 17,463 | | (1,723,408) |
| activities before taxation multiplied by | | | | | |
| domestic tax rate-UK: 20% (2009: 20%), (Hong | | | | | |
| Kong: 2009: 16.5%). | | | | | |
+----------------------------------------------+-------+-+----------+--+-------------+
| Effects of: | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Expenditure not allowable for | | | | | 6,000 | | 6,397 |
| tax purposes | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Unrelieved tax losses and other | | | | | - | | 1,674,084 |
| deductions arising | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Utilisation of tax losses | | | | | (23,463) | | - |
| brought forward | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Share-based payments | | | | | - | | 49,197 |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Adjustment in relation to prior | | | | | - | | 4,601 |
| years tax provision | | | | | | | |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Other | | | | | - | | (5,773) |
+----------------------------------+------+----+-------+-+----------+--+-------------+
| Current tax charge | | | | | - | | 5,098 |
+----------------------------------+------+----+-------+-+----------+--+-------------+
10. Discontinued activities
The amounts set out below relate to the trading activities of SEL in 2009 and to
Sweet China Trading Limited in 2010 and represent the total losses incurred by
the Group as a result of these discontinued activities.
+----------------------------------+-----+--+----+---+--+-+-----------+--+-------------+
| | | | | | 2010 | | 2009 |
+----------------------------------+--------+----+---+--+-------------+--+-------------+
| | | | | | GBP | | GBP |
+----------------------------------+--------+----+---+--+-------------+--+-------------+
| | | | | | | |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Revenue - sale of goods | | | | 419,874 | | 6,425,454 |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Cost of sales | | | | (219,913) | | (5,044,092) |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Gross profit | | | | 199,961 | | 1,381,362 |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Operating expenses | | | | (195,712) | | (1,539,052) |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Other income | | | | - | | 185,956 |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Operating profit | | | | 4,249 | | 28,266 |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Other gains and losses | | | | - | | (5,303,050) |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Finance income | | | | - | | 8,014 |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Finance costs | | | | (10,109) | | (28,234) |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| loss before taxation | | | | (5,860) | | (5,295,004) |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Taxation | | | | - | | (156) |
+----------------------------------------+-------+---+----+-----------+--+-------------+
| Profit/(loss) for the year included in the statement of | (5,860) | | (5,295,160) |
| comprehensive income | | | |
+---------------------------------------------------------+-----------+--+-------------+
| | | | | | | | | | |
+----------------------------------+-----+--+----+---+--+-+-----------+--+-------------+
11. Profit/(loss) per share
The basic profit/(loss) per share is calculated by dividing the profit/(loss)
attributable to equity shareholders by the weighted average number of shares in
issue. In calculating the diluted profit/(loss) per share, share options
outstanding have been taken into account where the impact of these is dilutive.
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| | | | | | Number | | Number |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| Weighted average number of | | | | | 97,849,577 | | 90,983,886 |
| shares | | | | | | | |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| Profit/(loss) from continuing | | | | | 86,203 | | (856,720) |
| activities | | | | | | | |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| Profit/(loss) from discontinued | | | | | (5,860) | | (5,292,160) |
| activities | | | | | | | |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| Profit/(loss) attributable to | | | | | 80,343 | | (6,151,880) |
| equity shareholders | | | | | | | |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| Basic and diluted earnings per | | | | | | | |
| share: | | | | | | | |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| Continuing activities | | | | | 0.09p | | (0.94p) |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| Discontinued activities | | | | | (0.01p) | | (5.82p) |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| | | | | | 0.09p | | (6.76p) |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+------------+-+-------------+
12. Intangible assets
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| | | | | | | | Brands |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| | | | | | | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| Cost | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| At 30 April 2008 | | | | | | | 5,258,491 |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| Adjustment to cost of | | | | | | | (62,623) |
| acquisition | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| Exchange translation adjustment | | | | | | | (75,551) |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| Impairment loss | | | | | | | (5,120,317) |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| At 30 April 2009 and at 30 April | | | | | | | - |
| 2010 | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+-------------+
Brands comprise certain separable brand names (Jessica Walker, Lings Turkish
Delight and Candy Craft), obtained on the acquisition of The Sweet Essentials
Group. The value of these brands is held within the Sweet Essentials Group and
the main operating company within that group, Sweet Essentials Limited, went
into provisional liquidation in December 2009. The Directors consider that
there will be no residual value to shareholders and so full provision for
impairment of the value of the brands was made in 2009. As referred to in note
30 the sale of the intellectual property rights associated with these brands was
completed on 7 May 2010.
13. Subsidiaries
Holdings of more than 20%
Charles Street Capital plc holds more than 20 per cent of the share capital of
the following companies:
+----------------------------+----------------+------------+--------------+
| Subsidiary Undertaking | Country of | Class | % Shares |
| | incorporation | | held |
+----------------------------+----------------+------------+--------------+
| *Sweet Essentials Limited | Hong Kong | Ordinary | 100 |
| (see note 1 below) | | | |
+----------------------------+----------------+------------+--------------+
| Sweet China Trading | England and | Ordinary | 100 |
| Limited (see note 2 below) | Wales | | |
+----------------------------+----------------+------------+--------------+
| Sweet Essentials | England and | Ordinary | 100 |
| International Limited | Wales | | |
+----------------------------+----------------+------------+--------------+
*Denotes that the subsidiary was indirectly held. All other subsidiaries were
directly held.
Note 1: The main activity of Sweet Essentials Limited ("SEL") was the selling
and distribution of confectionery. In December 2009 a provisional liquidator
was appointed to SEL. As mentioned in note 12 the Directors consider that there
will be no residual value to shareholders and the results for the period up to
the appointment of the liquidator have not been consolidated in these financial
statements.
Note 2: The main activity of Sweet China Trading Limited ("SWCT") was the
selling and distribution of confectionery in the United Kingdom. On 25 May 2010
a liquidator was appointed to SWCT. The Directors consider that there will be
no residual value to the shareholders.
Sweet Essentials International Limited was dormant throughout the period.
The Company also indirectly held 100% of the share capital of Lings Limited and
Candycraft (Quality Superb) Limited, which were both dormant and were dissolved
on 27 April 2010.
14. Property, plant and equipment
+---------------------------+-------+------+-+-+----------+----------+-+-----------+-+-----------+-+-----------+
| | Leasehold | | Office equipment | | Machinery | | Furniture | | Total |
| | improvements | | | | | | and | | |
| | | | | | | | fixtures | | |
+---------------------------+--------------+-+-----------------------+-+-----------+-+-----------+-+-----------+
| | | GBP | | GBP | | GBP | | GBP | | GBP |
+---------------------------+-------+------+-+-----------------------+-+-----------+-+-----------+-+-----------+
| Cost | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| At 30 April 2008 | | 9,870 | | 33,514 | | 127,691 | | 6,296 | | 177,371 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Additions | | 651 | | 26,525 | | - | | 1,736 | | 28,912 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Disposals | | - | | (14,859) | | (97,487) | | (69) | | (112,415) |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Exchange translation | | 3,390 | | 11,509 | | 35,919 | | 2,162 | | 52,980 |
| adjustment | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| At 30 April 2009 | | 13,911 | | 56,689 | | 66,123 | | 10,125 | | 146,848 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Additions | | - | | 461 | | - | | - | | 461 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| **Disposals | | (13,911) | | (57,150) | | (66,123) | | (10,125) | | (147,309) |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| At 30 April 2010 | | - | | - | | - | | - | | - |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Depreciation | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| At 30 April 2008 | | 3,193 | | 25,380 | | 45,841 | | 5,874 | | 80,288 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| On disposals | | - | | (11,149) | | (40,455) | | (14) | | (51,618) |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Charge for the year | | 6,299 | | 7,528 | | 21,035 | | 411 | | 35,273 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Impairment losses* | | 1,918 | | 18,494 | | 20,911 | | 1,230 | | 42,553 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Exchange translation | | 1,887 | | 9,642 | | 12,097 | | 2,066 | | 25,692 |
| adjustment | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| At 30 April 2009 | | 13,297 | | 49,895 | | 59,429 | | 9,567 | | 132,188 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| **On disposals | | (13,297) | | (50,234) | | (59,429) | | (9,615) | | (132,575) |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Charge for the year | | - | | 339 | | - | | 48 | | 387 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| At 30 April 2010 | | - | | - | | - | | - | | - |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| Net book value | | | | | | | | | | |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| At 30 April 2010 | | - | | - | | - | | - | | - |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| At 30 April 2009 | | 614 | | 6,794 | | 6,694 | | 558 | | 14,660 |
+---------------------------+-------+----------+----------+----------+-+-----------+-+-----------+-+-----------+
| | | | | | | | | | | | | |
+---------------------------+-------+------+-+-+----------+----------+-+-----------+-+-----------+-+-----------+
*The impairment losses in 2009 are in respect of assets held by SEL which went
into provisional liquidation in December 2009 as explained in note 13.
**Included in the disposals in 2010 are assets held by SEL which, as explained
in note 2.4, have not been included in the consolidated figures of the Group.
Finance leases
The net book value of office equipment includes an amount of nil (2009:
GBP3,451) in respect of assets held under finance leases.
16. Trade and other receivables
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| Trade receivables | | | | | - | | 21,111 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| VAT recoverable | | | | | 9,682 | | 26,814 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| Other receivables | | | | | 6,250 | | 3,100 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| Other prepayments and accrued | | | | | 14,256 | | 86,184 |
| income | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| Amount owed by related companies | | | | | - | | 409 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | 30,188 | | 137,618 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
The ageing analysis of trade receivables is given as follows:
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Current | | | | | - | | 21,111 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Less than one month past due | | | | | - | | - |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| One to three months past due | | | | | - | | - |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| More than three months but less than 12 | | | | - | | - |
| months past due | | | | | | |
+------------------------------------------+-+--------+-+--------+-+--------+
| Amount past due at balance sheet date | | | | - | | - |
| but not impaired | | | | | | |
+------------------------------------------+-+--------+-+--------+-+--------+
| | | | | | - | | 21,111 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
At the year end the carrying amounts of the group's trade and other receivables
were denominated in the following currencies:
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| British pounds | | | | | 30,188 | | 50,747 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| HK dollar | | | | | - | | 86,871 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | 30,188 | | 137,618 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
18. Issued share capital
+----------------------------------+-------+-+--------+-+----------+--------+-+-----------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+------------+--------+-+-----------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+------------+--------+-+-----------+
| Authorised: | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| 500,000,000 Ordinary Shares of | | | | | 5,000,000 | | 5,000,000 |
| 1p each | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| | | | | | 5,000,000 | | 5,000,000 |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| Issued and fully paid: | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| 98,474,577 (2009: 97,641,243) | | | | | 984,746 | | 976,412 |
| Ordinary Shares of 1p each | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| On 19 March 2010, 833,334 ordinary shares were issued at 6p each in settlement of an |
| obligation arising from a loan to the Company (see also note 19). |
+-----------------------------------------------------------------------------------------+
| | | | | | | | | |
+----------------------------------+-------+-+--------+-+----------+--------+-+-----------+
19. Share premium account
+----------------------------------+-------+-+--------+-+----------+--------+-+-----------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+------------+--------+-+-----------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+------------+--------+-+-----------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| At beginning of period | | | | | 6,010,504 | | 5,930,615 |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| *Adjustment in respect of shares | | | | | (50,000) | | - |
| issued in prior year | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| On issue of shares | | | | | 41,666 | | 88,765 |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| Share issue expenses | | | | | - | | (8,876) |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| At end of period | | | | | 6,002,170 | | 6,010,504 |
+----------------------------------+-------+-+--------+-+-------------------+-+-----------+
| *In February 2008, 1,666,667 shares were issued at 9p each in settlement of a loan |
| obligation. It was subsequently determined that the shares should have been issued at |
| 6p each, resulting in a reduction to the share premium account of GBP50,000. In March |
| 2010, 833,334 additional shares were issued at 6p each to settle the difference. |
+-----------------------------------------------------------------------------------------+
| | | | | | | | | |
+----------------------------------+-------+-+--------+-+----------+--------+-+-----------+
20. Loan note holders reserve
+------------------------------------+--------+-+--------+-+----------+--------+-+--------+
| | | | | | 2010 | | 2009 |
+------------------------------------+--------+-+--------+------------+--------+-+--------+
| | | | | | GBP | | GBP |
+------------------------------------+--------+-+--------+------------+--------+-+--------+
| | | | | | | | |
+------------------------------------+--------+-+--------+-+-------------------+-+--------+
| At beginning of period | | | | | - | | - |
+------------------------------------+--------+-+--------+-+-------------------+-+--------+
| On issue of 12% convertible loan | | | | | 28,682 | | - |
| notes (see note 24) | | | | | | | |
+------------------------------------+--------+-+--------+-+-------------------+-+--------+
| | | | | | | | |
+------------------------------------+--------+-+--------+-+-------------------+-+--------+
| At end of period | | | | | 28,682 | | - |
+------------------------------------+--------+-+--------+-+-------------------+-+--------+
| | | | | | | | | |
+------------------------------------+--------+-+--------+-+----------+--------+-+--------+
21. Share options
The reconciliation of options and warrants during the year ended 30 April 2010
is shown below:
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| | 2010 | | 2010 | | 2009 | | 2009 |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| | Number | | Weighted | | Number | | Weighted |
| | | | average | | | | average |
| | | | exercise | | | | exercise |
| | | | price | | | | price |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| | | | | | | | |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| Outstanding at 1 May 2009 | 12,530,461 | | 9.16p | | 12,530,461 | | 9.16p |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| Granted during the year | - | | - | | - | | - |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| | | | | | | | |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| Outstanding at 30 April 2010 | 12,530,461 | | 9.16p | | 12,530,461 | | 9.16p |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| | | | | | | | |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
| Exercisable at 30 April 2010 | 12,530,461 | | 9.16p | | 12,530,461 | | 9.16p |
+--------------------------------+------------+----------+----------+-+------------+-+----------+
The following options and warrants were in existence at 30 April 2010:
+-----------------------+------------+-+----------+-+-----------+-+------------+-+----------+-+-----------+
| | 2010 | | 2010 | | 2010 | | 2009 | | 2009 | | 2009 |
+-----------------------+------------+-+----------+-+-----------+-+------------+-+----------+-+-----------+
| | Number | | Weighted | | Weighted | | Number | | Weighted | | Weighted |
| | | | average | | average | | | | average | | average |
| | | | exercise | | remaining | | | | exercise | | remaining |
| | | | price | | life | | | | price | | life |
| | | | (pence) | | (years) | | | | (pence) | | (years) |
+-----------------------+------------+-+----------+-+-----------+-+------------+-+----------+-+-----------+
| | | | | | | | | | | | |
+-----------------------+------------+-+----------+-+-----------+-+------------+-+----------+-+-----------+
| Warrants | 6,419,349 | | 9.31 | | 2.92 | | 6,419,349 | | 9.31 | | 3.92 |
+-----------------------+------------+-+----------+-+-----------+-+------------+-+----------+-+-----------+
| Options | 6,111,112 | | 9.00 | | 2.92 | | 6,111,112 | | 9.00 | | 3.92 |
+-----------------------+------------+-+----------+-+-----------+-+------------+-+----------+-+-----------+
| | | | | | | | | | | | |
+-----------------------+------------+-+----------+-+-----------+-+------------+-+----------+-+-----------+
| | 12,530,461 | | 9.16 | | 2.92 | | 12,530,461 | | 9.16 | | 3.92 |
+-----------------------+------------+-+----------+-+-----------+-+------------+-+----------+-+-----------+
23. Trade and other payables
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Trade payables | | | | | 525,218 | | 307,940 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Other taxes and social security | | | | | - | | 33,551 |
| costs | | | | | | | |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Other payables | | | | | 210 | | 210 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Accruals and deferred income | | | | | 66,676 | | 318,020 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Amounts due to related parties | | | | | - | | 12,531 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | 592,104 | | 672,252 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| Current tax payable | | | | | - | | 190,909 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+---------+-+---------+
| | | | | | 592,104 | | 863,161 |
+----------------------------------+-------+-+--------+-+---------+-+---------+
24. Borrowings
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| Current | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| Secured borrowings at amortised | | | | | | | |
| cost | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| Loans from related parties | | | | | - | | 197,648 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+---------+
| | | | | | - | | 197,648 |
+----------------------------------+-------+-+--------+-+--------+-+---------+
The related party loan was obtained from Mr Ian Walker, a substantial
shareholder in the Company. It was denominated in Sterling and secured by a
floating charge on all properties, assets and rights of Sweet Essentials
Limited. Interest was charged on the loan at 5% above the UK clearing bank base
rate and the loan was repayable on demand.
The loan liability was the obligation of SEL and the Group's liability ceased on
the appointment of a provisional liquidator to SEL.
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | 2010 | | 2009 |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | GBP | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Non-current | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| Unsecured borrowings at | | | | | | | |
| amortised cost | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| 12% convertible loan notes | | | | | 86,318 | | - |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+--------+
| | | | | | 86,318 | | - |
+----------------------------------+-------+-+--------+-+--------+-+--------+
The 12% convertible loan notes were issued on 8 March 2010 and are redeemable on
30 September 2011, if not converted at an earlier date. Interest is payable
quarterly on 30 June, 30 September, 31 December and 31 March.
The loan notes are convertible at any time prior to the redemption date, 30
September 2011. Following the restructuring of the Company's ordinary shares on
7 May 2010 (see note 30) the loan notes are convertible at 0.1p per share.
The net proceeds received from the issue of the loan notes have been split
between the liability element and an equity component, representing the fair
value of the embedded option to convert the liability into equity of the Company
as follows:
+----------------------------------+-------+-+--------+-+--------+-+----------+
| | | | | | | | GBP |
+----------------------------------+-------+-+--------+-+--------+-+----------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+----------+
| Nominal value of convertible | | | | | | | 115,000 |
| loan notes issued | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+----------+
| Equity component | | | | | | | (28,682) |
+----------------------------------+-------+-+--------+-+--------+-+----------+
| Liability component at date of | | | | | | | 86,318 |
| issue | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+----------+
| Interest charged | | | | | | | 2,509 |
+----------------------------------+-------+-+--------+-+--------+-+----------+
| Interest paid | | | | | | | - |
+----------------------------------+-------+-+--------+-+--------+-+----------+
| | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+----------+
| Liability component at 30 April | | | | | | | 88,827 |
| 2010 | | | | | | | |
+----------------------------------+-------+-+--------+-+--------+-+----------+
The interest charged for the year is calculated by applying an effective average
interest rate of 20% to the liability component for the period since the loan
notes were issued.
The directors estimate the fair value of the liability component of the
convertible bonds at 31 December 2010 to be approximately GBP88,827. This fair
value has been calculated by discounting the future cash flows at the market
rate of 20%.
The table below analyses the group's financial liabilities into relevant
maturity groupings based on the remaining period at the balance sheet to the
contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows, so they include the relevant interest
payable, and therefore do not reconcile to the amounts disclosed on the balance
sheet for borrowings.
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | | | | | | 2010 | | 2009 |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | | | | | | GBP | | GBP |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | | | | | | | | |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| In the first | Borrowings | | | | | 13,800 | | 213,460 |
| year: | | | | | | | | |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | Finance leases | | | | | - | | 3,105 |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | Trade and other | | | | | 592,104 | | 863,161 |
| | payables | | | | | | | |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | | | | | | | | |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| In the second | Borrowings | | | | | 120,750 | | - |
| year: | | | | | | | | |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | Finance leases | | | | | - | | 3,795 |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | | | | | | | | |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| In the third | Finance leases | | | | | - | | 7,591 |
| to fifth years | | | | | | | | |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | | | | | | | | |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
| | | | | | | 726,654 | | 1,091,112 |
+----------------+--------------------+-------+-+--------+-+---------+-+-----------+
The directors consider that the carrying amount of the bank loans approximates
to their fair value as interest is charged at a market rate.
29. Related party transactions
On 23 March 2010 the Company entered into an agreement to sell the intellectual
property rights of certain brands owned by the group to the shareholder Ian
Walker for a consideration of GBP50,000, and on the same date entered into a
second agreement with Ian Walker to acquire his shareholding of 36,463,000
shares in the Company for a consideration of GBP50,000. Both these agreements
were approved by the shareholders and completed on 7 May 2010.
Details of remuneration relating to key management personnel are provided in the
directors' report.
On 7 May 2010, Martin Frost, David Zulman and Christopher Cleverly resigned as
directors and the Company entered into compromise agreements with them,
resulting in compensation payments totalling GBP25,840 and the issue of
21,000,000 new ordinary shares of 0.1p each.
As explained in note 2.4 SEL has been excluded from the consolidated financial
statements and all transactions with SEL have been accounted for on a third
party basis. During the year the Group charged management fees of GBP229,605
(2009: GBP323,794) to SEL. SEL charged the Group GBP109,815 (2009: GBPnil) for
goods supplied, and charged interest of GBP7,309 (2009: GBP8,014) on the inter
company balance. Included in trade creditors at 30 April 2010 was an amount of
GBP153,952 (2009: GBP306,394) owed by the Company to SEL. The balance due at 30
April 2010 was settled by the issue of 3,848,800 new ordinary shares subsequent
to the year end.
30. Post balance sheet events
At the Annual General Meeting of the Company held on 7 May 2010 a number of
actions were approved by the shareholders:
(i) As disclosed in note 29, on 23 March 2010 the Company entered into
an agreement to sell the intellectual property rights of certain brands owned by
the group to the shareholder Ian Walker for a consideration of GBP50,000, and on
the same date entered into a second agreement with Ian Walker to acquire his
shareholding of 36,463,000 shares in the Company for a consideration of
GBP50,000. Both these agreements were approved by the shareholders and
completed on 7 May 2010.
(ii) The shareholders approved the restructuring of the Company's equity
whereby each existing ordinary share of 1p was converted into 1 new ordinary
share of 0.1p and 9 deferred shares of 0.1p each. The deferred shares have no
rights to receive dividends, or to attend or vote at general meetings of the
Company and are only entitled to a return of capital after payment to the
holders of new ordinary shares of GBP100,000 per each share held.
(iii) The shareholders approved a settlement agreement with the Company's
creditors, which had been completed subject to the approval of the shareholders
on 23 March 2010, whereby the creditors agreed to accept a reduction of 75% in
respect of the amounts owed to them at 31 January 2010, and further agreed to
accept in full settlement 1 new share for each 1p of the balance due to them.
Completion of the agreement has resulted in the issue of 11,871,075 new shares
in settlement of amounts owed to creditors totalling GBP474,843
(iv) The shareholders approved the granting of warrants to acquire
5,971,300 shares, at an exercise price of 0.1p per share, to the outgoing
directors in settlement of remuneration entitlement for the period prior to 31
January 2010.
(v) The shareholders approved the issue of 128,800,000 new shares on the
conversion of the 12% convertible loan notes totalling GBP115,000.
(vi) The shareholders approved the change of name to Charles Street
Capital plc
(vii) The Shareholders approved the transition of the Company to an
investment company focusing on the Natural Resources sector.
Also on 7 May 2010, the Company entered into compromise agreements with the
outgoing directors, resulting in compensation payments totalling GBP25,840 and
the issue of 21,000,000 new ordinary shares of 0.1p each.
On 25 May 2010 a liquidator was appointed to Sweet China Trading Limited
("SWCT") and as explained in note 13 the Directors consider that there will be
no residual value to shareholders resulting from the liquidation. Results of
SWCT for the period have been included in the Group's results for the year, but
no value has been attributed to the net assets of SWCT as at 30 April 2010.
On 30 June 2010 the Company completed the placing of 805,488,000 new shares
raising GBP805,488 before expenses. . In addition the subscribers to the
placing received warrants to acquire shares at 0.25p per share on the basis of
one warrant for every two shares subscribed for.
STATEMENT
This statement was approved by the directors on 28 September 2010. This
statement does not constitute the Group's statutory accounts for the year ended
30 April 2010. Statutory accounts for the year ended 30 April 2009 have been
delivered to the Registrar of companies. The auditor's report on those accounts
was qualified due to a limitation of scope due to the underlying financial
records supporting the financial results of the subsidiary undertaking, Sweet
Essentials Limited (formerly Essential Box Hong Kong Limited), included within
the group financial statements being unavailable for group audit purposes. The
auditor's report for the accounts to 30 April 2010 is qualified in relation to a
non-compliance with IAS 27. This has arisen as a result of a provisional
liquidator was appointed to the Company's then Hong Kong subsidiary, Sweet
Essentials Limited on 9 December 2009, and the Company has taken advantage of
section 405(3)(a) of the Companies Act 2006 which provides for the exclusion
from consolidation of a subsidiary undertaking where severe long-term
restrictions substantially hinder the exercise of the rights of the parent
company over the assets or management of that undertaking. Under IAS 27 a
company which prepares its accounts in accordance with IFRSs should include in
its group accounts all subsidiary undertakings for the period until such time
that it ceases to have control of the undertaking, and therefore it may not take
advantage of the exemption contained in Section 405(3)(a) to exclude a
subsidiary undertaking from its group accounts. As a consequence of the Company
excluding the results of Sweet Essentials Limited for the period prior to the
appointment of the provisional liquidator, its group financial statements do not
comply with IAS 27.
The Company's AGM will be held on 22 October 2010 at 9 am at The Washington
Hotel, 5 Curzon Street, London W1J 5EH and the the Annual Report for 2010 and
Notice of AGM will be posted to shareholders today and will shortly be available
to shareholders and the public on the Company's website
(www.charlesstreetplc.com).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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