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enterpriseAsia Plc -
2000 Interim Report & Accounts
Chairman's statement
October 31, 2000
Dear Shareholder,
I am pleased to present to you your company's first business and financial report from the
Board of Directors, covering the period from January 11, 2000 (date of incorporation) to
June 30, 2000 (the "Period").
Results
For the Period, your company and its subsidiaries recorded an unaudited consolidated loss
of GBP27,528. The unaudited net asset value per share was 4.8p as at June 30, 2000.
Flotation on AIM
Your company was successfully floated on the Alternative Investment Market of the London
Stock Exchange on February 22, 2000. Approximately 239,600,000 new shares were issued at
5p each, bringing total net cash proceeds, after flotation expenses, of approximately
GBP11,600,000 for investment and working capital.
Business Strategy
Your company was formed to invest in start-up and early stage internet and information
technology ("IT") companies with a focus upon Asia, in particular the Far East.
We seek to provide the capital and strategic support to projects with the potential to
offer reasonable returns. The company's aim is to realize these investments at the
appropriate time, most probably through a trade sale or flotation. As a general rule, the
company does not take up a controlling interest in any investee project, but board
representation is mandatory.
Implementation of Strategy
During this initial period your company's resources were focussed mainly on investment
opportunities arising from the Greater China markets (i.e. Mainland China, Hong Kong and
Taiwan), as this is the region in which your Board of Directors is best connected and most
experienced.
Your investment management team operates from their base in Hong Kong, which provides
proximity to our key markets and is within a stable legal and financial environment.
Notwithstanding the team's in-depth knowledge of this market, investment evaluation always
follows a rigorous set of procedures which consider the commercial, technological,
financial and legal aspects of a prospective project, taking into consideration the
culture and business dynamics specific to the relevant markets. On average, the evaluation
process on any project, from initial approach to completion, takes between 4 to 5 months.
The Investment Portfolio
Since our flotation in February, we have invested in a total of 8 projects as follows:
|
|
Month
Investment Was Made |
Original
Investment(Approximate amount in GBP) |
% of Equity
Held |
| Invested on or before June 30, 2000 - |
|
|
|
| P&S International Limited |
June 2000 |
856,000 |
2.2% |
| iBASE Holdings Limited |
June 2000 |
257,000 |
49% |
| |
|
|
|
| Invested after June 30, 2000 - |
|
|
|
| Cybermax Network Technology Limited |
Sept 2000 |
1,379,000 |
49% |
| Best Wisdom Limited |
Sept 2000 |
1,280,000 |
50% |
| Net Fun Limited |
Sept 2000 |
1,223,000 |
8% |
| CFN (UK) Limited |
July 2000 |
1,200,000 |
39.99% |
| ecAgent.com Limited |
Aug 2000 |
1,170,000 |
33% |
| Winshare Technology Limited |
July 2000 |
252,000 |
50% |
|
|
A summary of these projects can be found in the list
after this Statement. All of them are now progressing according to their respective
business plans at the time of our investment. Your management representatives in each of
the projects are involved actively in their business developments.
Market
Since your company's flotation, the worldwide capital market has changed significantly
with regard to investors' views about internet and IT related businesses. The sentiment
has entered a rationalization stage in which business valuations and prospects are now
measured in a more realistic, practical manner. Since we have always adopted a prudent
evaluation approach based on fundamental factors, your company has avoided investing in
any project that belongs to the over-valued, over-spent category.
While our network of investments will steadily expand beyond the Greater China region, the
largest potential in the Far East will undoubtedly come from Mainland China. Positive
domestic macro-economic factors, a favourable world trade climate and a population
increasingly ready to adopt new consumer technology will all be the catalysts for a fast
growing IT sector. Recently introduced regulations on internet businesses have added
elements of certainty to the sector and clearly reflect the Chinese government's
recognition of the business potential which exists. While consolidation in the sector will
be as inevitable as it is in western countries, the critical success factor for a foreign
investor lies in understanding the intricate relationships between government policies,
business logistics and social fabric of the region.
Our medium to long term view on the IT market in the Far East remains optimistic. We
believe that under our existing strategy your company is well positioned to benefit from
the region's rapid growth.
The Future
Your management team will continue to monitor and support the progress of those projects
in our existing portfolio. The team's connections and experience in the region are
expected to provide a useful contribution to the projects. Meanwhile, new projects will
also be evaluated based on the existing investment strategy and criteria. A steady inflow
of quality deals is foreseen.
Furthermore, we shall keep our eyes and minds open to any other concrete opportunities
that may complement our existing strategy and further enhance shareholder value.
Dividend
Your Directors are not recommending the payment of a dividend for the period being
reported.
Peter So
Chairman
Your investment portfolio
P&S International Limited ("P&S International")
P&S International designs, produces and markets semi-conductor chips that connect
appliances and equipment to the internet. Such connectivity will enable remote control of
home appliances and business equipment. Based on a cost-effective technology platform that
does not directly rely on TCP/IP, the methodology is now pending US patents. P&S
International plans to market its products worldwide at highly competitive prices and an
office in the USA is currently being established.
iBASE Holdings Limited ("iBASE")
iBASE provides information technology and e-commerce solutions to a wide spectrum of
companies, including multi-nationals, but has a particular focus on the Greater China
market. Its strength lies in areas such as online payment logistics, Linux server
solutions and internet-enabled automated systems customised for specific industries.
Cybermax Network Technology Limited ("Cybermax")
Cybermax operates websites displaying recruitment advertising for part-time jobs. It has
already launched a website of this nature in Hong Kong, and there has been a positive
response from both job seekers and recruiters. Similar operations are now being
established in China and Japan; other Asian countries will also be covered progressively.
Best Wisdom Limited ("Best Wisdom")
Best Wisdom is engaged in the business, to be branded "Unified Financial
Omnibus", of developing and providing software systems to assist stock brokers, fund
houses and custodian banks in the trading, fund management and custodianship of Hong Kong
and overseas securities. The core of its system is a comprehensive back office online
trading system covering the needs of stock brokers in clearing, settlement, accounting and
reporting. The relevant components can be further adapted and enhanced to evolve into
systems catering for the needs of fund managers and custodian banks.
Net Fun Limited ("Net Fun")
Net Fun has been one of the market leaders among Greater
China's game providers. Its strength lies in the ability to provide interactive
edutainment services via the internet, with contents fine-tuned to the local language and
culture. Its vision is to build a virtual community for the Chinese population. Net Fun's
other shareholders include a subsidiary of Cheung Kong (Holdings) Limited and parties
associated with Excel Technology International Holdings Limited, a company listed on the
Growth Enterprise Market of Hong Kong Stock Exchange. By leveraging on the support from
these shareholders, Net Fun is expected to benefit from a strong marketing and
distribution network, as well as advanced internet technology expertise and
infrastructure.
CFN (UK) Limited ("CFN UK")
CFN UK is part of Cyber Financial Network ("CFN Network"), and plans to become a
technology enabler for small to medium sized brokers and financial institutions in the UK.
Such institutions can expand into internet and overseas investment vehicles, thus
maintaining their competitive position. A management team has already been recruited for
CFN UK, which will launch its products towards the end of 2000. The CFN Network is being
established by CFNasia Holdings Limited and its coverage will include Europe, the USA and
the Far East.
ecAgent.com Limited ("ecAgent")
ecAgent will provide a virtual office environment to insurance sales agents in Greater
China. It will offer a comprehensive range of sales management, administrative, marketing
and financial functions that can facilitate the agents' daily sales and administrative
needs, thus freeing them to become more effective in their income producing sales work. It
is expected to generate a loyal and captive target user group which also offers prospects
in other related activities.
Winshare Technology Limited ("Winshare")
Winshare is developing major components for online stock trading systems used by brokers
in Hong Kong. These components will be compatible with new industry standards, the
implementation of which, coupled with the fast growing trend in internet trading, is
expected to result in significant demand. Winshare's product development will be ahead of
the main competition and is expected to benefit from a first mover advantage.
|
Consolidated statement of total return
(incorporating the revenue account)
|
|
|
Revenue GBP |
Capital GBP |
Total GBP |
|
|
|
|
| Interest receivable and other income |
216,918 |
- |
216,918 |
|
|
|
|
| Gross revenue gains/capital (losses) |
216,918 |
|
216,918 |
|
|
|
|
| Other administrative expenses |
(244,446) |
- |
(244,446) |
|
|
|
|
|
(27,528) |
|
(27,528) |
|
|
|
|
| Taxation on ordinary activities |
- |
- |
- |
|
|
|
|
|
(27,528) |
- |
(27,528) |
|
======== |
======== |
======== |
| Return per ordinary share -
Basic |
(0.015)p |
- |
(0.015)p |
|
======== |
======== |
======== |
|
|
The revenue column of this
statement is the profit and loss account for the group.
|
| Consolidated
balance sheet |
|
Unaudited
as at
30 June 2000 |
|
GBP |
| Fixed assets investments -
Investment portfolio |
1,112,758 |
| Tangible fixed assets |
2,635 |
|
________ |
|
1,115,393 |
| Current assets |
|
| Debtors |
52,199 |
| Prepayments |
389 |
| Cash at bank and in hand |
10,477,826 |
|
_________ |
|
10,530,414 |
|
|
| Creditors: amounts falling due within
one year |
101,580 |
|
________ |
| Net current assets |
10,428,834 |
|
________ |
| Total assets less current liabilities |
11,544,227 |
|
======== |
| Capital and reserves |
|
| Called-up share capital |
2,395,985 |
| Share premium account |
9,175,770 |
| Capital reserve |
- |
| Revenue reserve |
(27,528) |
|
_________ |
| Equity shareholder's funds |
11,544,227 |
|
======== |
| Net asset value per Ordinary Share: |
|
| Basic |
4.8p |
| |
==== |
|
| Consolidated cash
flow statement |
|
|
Unaudited
period ended
30 June 2000 |
|
GBP |
| Net cash inflow from operating
activities |
|
| Return on ordinary activities |
(27,528) |
| Depreciation of tangible fixed assets |
236 |
| Increase in debtors |
(52,588) |
| Increase in creditors |
101,580 |
|
______ |
| Net cash inflow from operating activities |
21,700 |
| |
|
| Investing activities |
|
| Payment to acquire fixed assets: |
|
| - Investment portfolio |
(1,112,758) |
| - Tangible assets |
(2,871) |
|
________ |
| Net cash outflow before financing |
(1,093,929) |
| |
|
| Financing |
|
| Proceeds from issue of share capital and share
options |
11,979,924 |
| Cost of shares issue in period |
(408,169) |
|
________ |
|
11,571,755 |
| |
|
| Increase/(decrease) in cash balances |
10,477,826 |
|
========= |
| Reconciliation of net cash flow to
movement in funds |
|
| Increase in cash in period |
10,477,826 |
| |
__________ |
| Closing net funds |
10,477,826 |
| |
========= |
|
Consolidated interim announcement - Notes
|
| 1. |
The information
relating to the period ended 30 June 2000 is unaudited and covers the period from
incorporation on 11 January 2000. |
| 2. |
The above financial
information does not constitute statutory accounts within the meaning of Section 240
Companies Act 1985. |
| 3. |
Loss per share is
based on the weighted average number of shares in issue during the period ended 30 June
2000 of 181,091,887. |
| 4. |
Unquoted investments
have been valued at cost. |
| 5. |
The Directors' direct
and beneficial interests in the Company's share capital at 30 June 2000 is as follows: -
Peter So
Benjamin Ng
Siu Fai Ng
Phillip Brown |
20,000,000
400,001
11,000,000
10,000,000
|
| (i) |
StartIT.com
Plc ("StartIT") holds 10,000,000 enterpriseAsia .com Plc
("enterpriseAsia") ordinary shares. Peter So, Siu Fai Ng and Phillip Brown are
directors of StartIT. Vintage Investments Limited (of which Peter So and Phillip Brown are
both directors and shareholders) holds 5,000,000 StartIT ordinary shares. |
| (ii) |
Clarest
Holdings Limited (of which Peter So is a director and shareholder) holds 10,000,000
enterpriseAsia ordinary shares and is also a shareholder of Vintage Investments Limited. |
| (iii) |
Rich
Project International Limited holds 1,000,000 enterpriseAsia ordinary shares. Siu Fai Ng
is a director and shareholder of Rich Project International Limited which in addition
holds 5,000,000 StartIT ordinary shares.
|
|
| 6. |
The Directors hold the
following options over ordinary shares of 1p each in the Company at 30 June 2000.
| Director |
Option Scheme |
Number of options |
Exercise Price |
Exercise period |
| Peter So |
Unapproved |
200,000 |
5p |
To 7 February 2010 |
| Benjamin Ng |
Unapproved |
400,000 |
5p |
To 7 February 2010 |
| Siu Fai Ng |
Unapproved |
200,000 |
5p |
To 7 February 2010 |
| Phillip Brown |
Unapproved |
200,000 |
5p |
To 7 February 2010 |
|
|
|
Independent review report
Introduction
We have been instructed by the company to review the financial information set out on
pages 7 to 11 and we have read the other information contained in the interim report for
any apparent misstatements or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is the
responsibility of, and has been approved by the directors. The Listing Rules of the
Financial Services Authority require that the accounting policies and presentation applied
to the interim figures should be consistent with those applied in preparing the annual
accounts except where changes, and the reason for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by
the Auditing Practices Board. A review consists principally of making enquiries of
management and applying analytical procedures to the financial information and underlying
financial data, and based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in accordance with
Auditing Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that should be
made to the financial information as presented for the period ended 30th June 2000.
PRIDIE BREWSTER
Carolyn House
29-31 Greville Street
London
EC1N 8RB
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