Phoenician Corporation V Limited Annual Financial Report
PHOENICIAN CORPORATION V LIMITED ("the Company")
REPORT OF THE DIRECTORS AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2010
CHAIRMAN'S STATEMENT
FOR THE YEAR 31 AUGUST 2010
Since admission to PLUS in January 2009, the Company has sought investment opportunities, if deemed commercially appropriate, not only in the Eastern and Central Asia regions but also Western Asia, which includes the Middle East.
As announced on 24 December 2010, the Company has entered into a share purchase agreement with the shareholders of Prime Investments Group ("Prime") for the purchase of Prime's entire issued share capital. The consideration for the purchase of these shares, to be met by the allotment of consideration shares in the Company, is an aggregate of GBP312,458,091.
The shareholders of the Company have approved the transaction at a shareholders' meeting held on 31 January 2011. The Company must now wait for final approval for admission from PLUS Markets ("PLUS"), which is expected imminently. The reason for the delay of the timetable set out in the Admission Document sent to shareholders of the Company on 24 December is due to finalizing queries from PLUS which is to be expected in a matter of this size and importance. Admission cannot occur without PLUS approval.
Jason R. Futko
Chairman
31 January 2011
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2010
The Company was incorporated on 29 May 2007. The Directors present their report and Financial Statements for the year to 31 August 2010.
PRINCIPAL ACTIVITIES AND REVIEW OF THE BUSINESS
The Company was formed with the intention of becoming a vehicle for Investment in Asian Active businesses.
A review of the business of the Company during the year and progress made to date is included in the Chairman's Statement.
RESULTS AND DIVIDENDS
The loss for this year ended 31 August 2010 was GBP322,369 (2009 - GBP204,715).
The Directors do not recommend the payment of a dividend.
DIRECTORS
Jason R Futko, Lisa Lee, Spencer J Wilson and Edwin S Lee were appointed on 29 May 2007.
DIRECTORS' INTERESTS
The Directors who served during the year ended 31 August 2010 had the following beneficial interests in the shares of the Company:
31 August 2010
Ordinary Shares
Jason R. Futko: 5,000
Lisa Lee: 5,000
Spencer J Wilson: 1,589,144
Edwin S Lee: 5,000
31 August 2011
Ordinary Shares
Jason R. Futko: 5,000
Lisa Lee: 5,000
Spencer J Wilson: 1,589,144
Edwin S Lee: 5,000
KEY PERFORMANCE INDICATORS
The Board monitors the activities and performance of the Company on a regular basis. The primary performance indicator applicable to the Company is Return on Investment. As noted in the Chairman's Statement, the Company has entered into a share purchase agreement with the shareholders of Prime Investments Group ("Prime") for the purchase of Prime's entire issued share capital. Return on Investment will therefore be a more significant indicator at the 2011 year end and will be reported on in the 2011 Directors' Report.
RISK MANAGEMENT
The Company's activities expose it to a variety risks.
Risks are formally reviewed by the Board, and appropriate processes are put in place to monitor and mitigate them. If more than one event occurs, it is possible that the overall effect of such events would compound the possible adverse effects on the Company.
Foreign exchange risk
The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to US dollar and CAN dollar. Foreign exchange risk arises from recognised monetary assets and liabilities. The exposure to this risk is not considered material to the Company's operations and thus the Directors consider that, for the time being, no hedging or other arrangement are necessary to mitigate this risk.
Credit risk
The Company considers that it is not exposed to major concentrations of credit risk
Liquidity risk
To date the Company has relied upon equity funding to finance operations. The Directors are confident that adequate funding will be forthcoming with which to finance operations. Controls over expenditure are carefully managed.
The liquidity and funding management process includes projecting cash flows and considering the level of liquid assets in relation thereto, monitoring the liquidity position of the Statement of Financial Position and obtaining additional funding from investors to cover working capital needs when required.
Financial Risk Management
The Company's operations expose it to some financial risks. The Company has a risk management programme in place that seeks to limit the adverse effects on the financial performance of the Company by monitoring levels of finance. The Company does not use derivative financial instruments to manage these risks and, as such, no hedge accounting is applied.
Details of the Company's financial risk management policies are set out in Note 3 to the Financial Statements.
Internal Controls
The Board recognises the importance of both financial and non-financial controls and has reviewed the Company's control environment and any related shortfalls during the year. Since the Company was established, the Directors are satisfied that, given the current size and activities of the Company, adequate internal controls have been implemented. Whilst they are aware that no system can provide absolute assurance against material misstatement or loss, in light of the current activity and proposed future development of the Company, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.
GOING CONCERN
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and, therefore, continue to adopt the going concern basis in preparing the Annual Report and Financial Statements. Further details on their assumptions and their conclusion thereon are included in the statement on going concern at Note 2.
SUBSEQUENT EVENTS
As announced on 24 December 2010, the Company has entered into a share purchase agreement with the shareholders of Prime Investments Group ("Prime") for the purchase of Prime's entire issued share capital. The consideration for the purchase of these shares, to be met by the allotment of consideration shares in the Company, is an aggregate of GBP312,458,091.
The shareholders of the Company have approved the transaction at a shareholders' meeting held on 31 January 2011. The Company must now wait for final approval for admission from PLUS Markets ("PLUS"), which is expected imminently. The reason for the delay of the timetable set out in the Admission Document sent to shareholders of the Company on 24 December is due to finalizing queries from PLUS which is to be expected in a matter of this size and importance. Admission cannot occur without PLUS approval.
Further details of subsequent events are detailed in Note 15 and the chairman's statement.
DISCLOSURE OF INFORMATION TO AUDITORS
So far as each of the Directors is aware at this time the report is approved:
* there is no relevant audit information of which the Company's auditors are unaware; and
* the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
AUDITORS
Littlejohn LLP were appointed auditors to the Company and, in accordance with applicable laws and regulations, a resolution proposing that they be re-appointed will be put to the Annual General Meeting.
This report was approved by the Board on 31 January 2011 and signed on its behalf by:
Spencer Wilson
Director
STATEMENT OF DIRECTORS' RESPONSIBILITIES FOR THE YEAR ENDED 31 AUGUST 2010
Directors' responsibilities
The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.
The PLUS Market Rules, as published by PLUS Markets plc ("the PLUS Rules"), require the Directors to prepare Financial Statements for each financial year. Under the PLUS Rules the Directors have prepared the Financial Statements in accordance with EU-Endorsed International Financial Reporting Standards (IFRS). The Financial Statements are required by the PLUS Rules to give a true and fair view of the state of affairs of the Company at 31 August 2010 and of the profit or loss for the year then ended. In preparing these Financial Statements the Directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgments and estimates that are reasonable and prudent;
* state that the Financial Statements comply with IFRS, subject to any material departures disclosed and explained in the Financial Statements; and
* prepare the Financial Statements on the going concern basis, unless it is inappropriate to presume that the Company will continue in business, in which case there should be supporting assumptions or qualifications as necessary.
The Directors confirm that they have complied with the above requirements in preparing the Financial Statements.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company, and enable them to ensure that the Financial Statements comply with applicable laws and regulations. They are also responsible for safeguarding the assets of the Company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF PHOENICIAN CORPORATION V LIMITED
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We have audited the Financial Statements of Phoenician Corporation V Limited for the year ended 31 August 2010 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Cash Flow Statement, the accounting policies and the related notes. The financial reporting framework that has been applied in their preparation is local applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company's shareholders, as a body in compliance with the PLUS Market Rules as published by PLUS Markets plc (the "PLUS Rules"). Our audit work has been undertaken so that we might state to the Company's shareholders those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's shareholders as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
As explained more fully in the Statement of Directors' Responsibilities, the Directors are responsible for the preparation of the Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the Financial Statements in accordance with local applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the UK Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the Financial Statements
An audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of whether the accounting policies are appropriate to the Company's circumstances, and have been consistently applied and adequately disclosed, the reasonableness of significant accounting estimates made by the Directors, and the overall presentation of the Financial Statements.
Opinion on Financial Statements
In our opinion the Financial Statements:
* give a true and fair view of the state of the Company's affairs as at 31 August 2010 and of its loss for the year then ended; and
* have been properly prepared in accordance with IFRSs as adopted by the European Union.
Emphasis of matter - Going concern
In forming our opinion on the Financial Statements, which is not qualified, we have considered the adequacy of disclosures in note 2 of the Financial Statements concerning the Company's ability to continue as a going concern. The matters detailed in the disclosures indicate the existence of a material uncertainty which may cast significant doubt on the Company's ability to continue as a going concern. The Financial Statements do not include the adjustments that would result if the Company was unable to continue as a going concern.
Littlejohn LLP
1 Westferry Circus
Chartered Accountants Canary Wharf and Registered Auditors London E14 4HD
31 January 2011
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