Final Results
CRESCENT HYDROPOLIS RESORTS PLC
ANNOUNCEMENT
Final Results
For the year ended 31 December 2007
Chairman's Report
29 August 2008
Crescent Hydropolis Resorts PLC (CHR), the world's leading developer of ultra-luxury underwater resort hotels under the Hydropolis design concept, announces its final results for the period ended 31 December 2007. The Company had €16,983 in cash as at 31 December 2007. The main items of expenditure relate to development costs associated with furthering CHR's proposed Hydropolis project at Qingdao China, including legal, engineering, technical feasibility and travel costs. New inquiries for a development of an underwater resort hotel in conjunction with a Chinese Enterprise were followed up as a result of an introduction to a significant real estate developer out of Shanghai. This has led not only to a highly suitable Chinese location in the Shanghai area, on which CHR is following up on well into 2008, but also to the challenge of exploring a construction site off the coast of Dubai, where this same Shanghai firm owns real estate.
The previous management (Mr. Joachim Hauser and Mr. Mansoor Ijaz) of CHR had formed a local project management company in Qingdao, Crescent Hydropolis Qingdao Limited (CHQ), and CHQ received its operating license from the governmental authorities of the Laoshan District in Qingdao City, China on 23 August 2006. This license to do business in China has enabled our Company's local project development subsidiary, CHQ, to apply for full permits and licensing authorities for the project's HydroTower® land station and HydroPalace® construction phases. Due to changes of personnel/decision-makers in the administrative offices of the Laoshan District in Qingdao City, the further development of Crescent Hydropolis Qingdao is at a halt. Detailed marine studies, surveys of steel manufacturing and shipbuilding yards and site surveys of the land had been concluded by our Company's engineering advisers in the meantime and a suitable proposal to construct the hull of the HydroPalace® are under discussions, results of which will be detailed further in forthcoming announcement(s) when contracts have been agreed. The gained information can be used in the future for all deep water projects in this part of the world.
For the current management (Mr. Bernd Artinger and Mr. Uwe Hohmann) a potential Dubai project continues to remain a priority for the Company. Meetings with representatives of an influential local group have commenced and are ongoing.
Additionally, CHR has undertaken several management changes - effective March 17, 2008 - in its fourth year of operations to prepare for the commencement of the construction phase for the first Hydropolis underwater hotel project. Joachim Hauser, the founder and visionary of 'Hydropolis' decided that it was in the best interests of CHR and its shareholders, resign from the office of Executive Chairman of CHR, so that he can further the commencement of the first underwater hotel without the burden and responsibility of such office. Mr. Hauser is very pleased that he can now commit 100% of his time to the technical challenges of the company's underwater structures. Mr. Hauser's decision to focus on in this area is designed to allow the company and shareholders to benefit from his technical expertise and engagement. Mr. Bernd Artinger, long since related to 'Hydropolis' was elected by the board to replace Mr. Hauser and has assumed the position of the Non-Executive Chairman of the Board. He has many years of experience and expertise in companies and as an entrepreneur on his own.
At the same time (March 17, 2008) Mr. Mansoor Ijaz also resigned from his positions as Chief Operating Officer and Deputy Executive Chairman of the company, so that he could fully focus on his political career in the United States. Mr. Uwe Hohmann was elected by the board to replace Mr. Ijaz and has assumed the position of the new Chief Executive Officer. He has many years of experience and expertise in companies and as an entrepreneur on his own. Mr. Hohmann is long since a resident of Dubai and as such Mr. Hohmann's main focus will be the further development of 'Hydropolis' in Dubai.
The Company maintains its strong relationships with project manager, SIBC Industrial Building Consultants, and Siemens AG, for engineering and technology support.
Bernd Artinger, Non-Executive Chairman 29 August 2008
Directors' Report for the year ended 31 December 2007
The Directors are pleased to present their report on the principal activities of the Company, a review of business and future developments together with the audited financial statements for the year.
The Directors continued to put a majority of their efforts for the fiscal year 2007 into bringing the Hydropolis Qingdao project in China to the start of construction as well as commencing with intense negotiations for a project in the area of Shanghai as well as off the coast of Dubai. To that extent the Chairman and Chief Executive Officer of the company met with a well established real estate developer from the city of Shanghai.
The Company also finished all final planning and architectural design work on the HydroTower for Qingdao during the year, including updated construction planning timetables, materials acquisition schedules and reservations for work crews in China to start construction. However, the Qingdao project has now been halted.
The Company's results are presented in the pages following and reflect the venture capital nature of your Company. The Company lost 2.7 cents per share, fully diluted, during the period ended 31 December 2007.
Directors who served during the year and their interests in the share capital of the Company were:
The Directors do not recommend the payment of a dividend (2006: nil). Directors who served during the year and their interests in the share capital of the Company were:
Note 31 December 2007 31 December 2006
Ordinary Shares Ordinary Shares
Mr. Bernd Artinger, Non-Executive Chairman 1,000,000 1,000,000
Mr. David Harris, Non-Executive - -
Mr. Uwe Hohmann, Chief Executive 550,000 550,000
Substantial Shareholdings
The Company has been notified, as of 1 August 2008, of the following interests of 3% or more in its issued share capital:
Number of Percentage of total
Ordinary Shares Issued Share Capital
Klaus Foerster as Trustee for Poseidon investors 16,617,849 20.17
Manfred Buettner 9,367,708 11.37
Apollo Investors 7,575,000 9.19
Alfred Wuttke 5,216,667 6.33
Guenther Schuett 3,901,000 4.74
Suhail Al Dhaheri 3,525,000 4.28
Going Concern
After making enquiries, the Directors consider that the Company has adequate resources to continue in operational existence for the foreseeable future and are satisfied that the Company is a going concern. For this reason they continue to adopt the going concern basis in preparing the financial statements.
Directors' Responsibilities
Isle of Man company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the profit or loss of the Company for that year. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently;
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make judgments and estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed; and
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the requirements of the Companies Acts 1931 to 2004. 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.
Each Director who was a Director of the company at the date that this report was approved has taken all steps that they ought to have taken as Directors in order to:
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make themselves aware of any relevant audit information (as defined by the Companies Act 1931 to 2004); and
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ensure that the auditor is aware of all relevant audit information (as defined).
As far as each Director is aware, there is no relevant audit information of which the company's auditor is unaware.
The maintenance and integrity of the Company website is the responsibility of the Company. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislations in other jurisdictions.
Auditor
A resolution for the re-appointment of Chantrey Vellacott DFK LLP as auditor to the company is to be proposed at the forthcoming Annual General Meeting in accordance with Section 12(2) of the Companies Act 1982.
Approved by the Board of Directors on 28 August 2008 and signed on its behalf by
Uwe Hohmann, Chief Executive
Independent Auditor's Report to the shareholders
of Crescent Hydropolis Resorts PLC
We have audited the financial statements of Crescent Hydropolis Resorts Plc for the year ended 31 December 2007 which comprise the income statement, the balance sheet, the cash flow statement, the statement of changes in equity and the related notes. These financial statements have been prepared under the accounting policies set out therein.
This report is made solely to the Company's members, as a body, in accordance with Section 15 of the Isle of Man Companies Act 1982. Our audit work has been undertaken so that we might state to the Company's members 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 members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
The directors' responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and International Financial Reporting Standards as adopted by the European Union are set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements have been properly prepared in accordance with the Isle of Man Companies Act 1931 to 2004.
We also report to you whether in our opinion the information given in the Directors' Report is consistent with the financial statements.
In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. This other information comprises only the Directors' Report and the Chairman's Report. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.
Opinion
In our opinion
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the financial statements give a true and fair view, in accordance with International Financial Reporting Standards as adopted by the European Union, of the state of the company's affairs as at 31 December 2007 and of its loss for the year then ended;
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the financial statements have been properly prepared in accordance with the Isle of Man Companies Act 1931 to 2004; and
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the information given in the Directors' Report is consistent with the financial statements.
CHANTREY VELLACOTT DFK LLP
Chartered Accountants & Registered Auditor
LONDON
29 August 2008
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Income statement for the year ended 31 December 2007 |
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Note |
2007 |
2006 |
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€ |
€ |
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Management and project development costs |
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1,899,970 |
1,263,985 |
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Administrative expenses |
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341,545 |
470,518 |
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Loss on ordinary activities before interest |
2 |
2,241,515 |
1,734,503 |
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Finance income |
5 |
12,324 |
59,118 |
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Loss on ordinary activities before taxation |
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2,229,191 |
1,675,385 |
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Taxation |
6 |
- |
- |
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RETAINED LOSS |
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2,229,191 |
1,675,385 |
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Basic and diluted |
7 |
2.7c |
2.1c |
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All of the above amounts relate to continuing activities. |
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There were no recognised gains and losses other than the results shown above. |
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The notes on pages 14 to 18 form part of these financial statements. |
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Balance sheet as at 31 December 2007 |
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Note |
2007 |
2006 |
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€ |
€ |
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ASSETS |
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Non-current assets |
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Intangible assets |
8 |
40,750,000 |
40,750,000 |
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Current assets |
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Trade and other receivables |
9 |
4,033 |
4,912 |
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Cash and cash equivalents |
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16,983 |
1,609,617 |
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TOTAL ASSETS |
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40,771,016 |
42,364,529 |
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EQUITY AND LIABILITIES |
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Shareholders equity |
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Share capital |
11 |
823,836 |
823,836 |
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Share premium |
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35,058,130 |
35,058,130 |
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Accumulated losses |
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(6,596,426) |
(4,367,235) |
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TOTAL EQUITY |
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29,285,540 |
31,514,731 |
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Non-current liabilities |
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Long term liabilities |
12 |
10,750,000 |
10,750,000 |
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Current liabilities |
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Trade and other payables |
10 |
735,476 |
99,798 |
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TOTAL LIABILITIES |
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11,485,476 |
10,849,798 |
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TOTAL EQUITY AND LIABILITIES |
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40,771,016 |
42,364,529 |
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These financial statements were approved by the Board and authorised |
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for issue on 28 August 2008 and signed on its behalf by: |
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Uwe Hohmann, Chief Executive Bernd Artinger, Chairman |
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The notes on pages 14 to 18 form part of these financial statements |
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Statement of changes in equity for the year ended 31 December 2007 |
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Share |
Share |
Accumulated |
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capital |
premium |
losses |
Total |
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€ |
€ |
€ |
€ |
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Balance at 31 December 2005 |
810,286 |
34,368,282 |
(2,691,850) |
32,486,718 |
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Loss for the year |
- |
- |
(1,675,385) |
(1,675,385) |
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Issue of share capital |
13,550 |
689,848 |
- |
703,398 |
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Balance at 31 December 2006 |
823,836 |
35,058,130 |
(4,367,235) |
31,514,731 |
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Loss for the year |
- |
- |
(2,229,191) |
(2,229,191) |
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Balance at 31 December 2007 |
823,836 |
35,058,130 |
(6,596,426) |
29,285,540 |
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Cash flow statement for the year ended 31 December 2007 |
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2007 |
2006 |
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€ |
€ |
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Cash flow from operating activities |
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Loss from operations |
(2,241,515) |
(1,734,503) |
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Operating cash flows before movement in working capital |
(2,241,515) |
(1,734,503) |
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Change in receivables |
879 |
(3,201) |
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Change in payables |
635,678 |
(54,751) |
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Net cash used in operating activities |
(1,604,958) |
(1,792,455) |
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Cash flows from returns on investments and servicing of finance |
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Interest received |
12,324 |
59,118 |
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Net cash from returns in investments and servicing of finance |
12,324 |
59,118 |
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Cash flows from financing activities |
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Share capital issued (net of costs) |
- |
703,398 |
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Net cash from financing activities |
- |
703,398 |
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Net decrease in cash and cash equivalents |
(1,592,634) |
(1,029,939) |
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Cash and cash equivalents at beginning of period |
1,609,617 |
2,639,556 |
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Cash and cash equivalents at end of period |
16,983 |
1,609,617 |
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Notes for the financial statements for the year ended 31 December 2007
1. ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Company's financial statements:
2. LOSS ON ORDINARY ACTIVITIES
Loss on operations is stated after the following
2007 2006
€ €
Auditor's remuneration - audit services 15,000 15,000
Exchange losses 1,898 28,144
===== =====
3. EMPLOYEES
The weekly average number of employees during the period, including executive directors, was 6
(2006 - 6)
2007 2006
€ €
Wages and Salaries 8,000 93,931
______ ______
8,000 93,931
===== =====
4. DIRECTOR'S EMOLUMENTS
2007 2006
€ €
Directors fees - 65,931
===== ====
The key management personnel are the directors' and hence no further disclosure is considered necessary.
5. FINANCE INCOME
2007 2006
€ €
Bank interest 12,324 58,118
===== =====
6. TAXATION
No provision has been made for taxation as no taxable profits or revenues have been generated in the period.
7. LOSS PER SHARE
Calculations of basic and diluted loss per share are based on the following data:
2007 2006
€ €
Loss for the purpose of basic loss per share 2,229,191 1,675,385
======= ========
There were no dilutive instruments over the period.
Number of Shares
Weighted average number of ordinary shares
in issue during the year 82,383,631 80,252,112
========= ========
8. INTANGIBLE FIXED ASSETS
2007 2006
€ €
Cost
At 1 January 2007 and at 31 December 2007 40,750,000 40,750,000
========= ========
On 15 June 2005, CHR acquired the Hydropolis Project concept and all the associated know how from Crescent Hydropolis Holdings LLC for a consideration of 60,000,000 ordinary shares issued as fully paid at €0.50 per share (such shares being issued on 17 June 2005) and payment of €10,750,000 in cash in installments with the final payment due at the end of the fourth fiscal year end after the first payment has been made subsequent to the financing of the first Hydropolis project (see Note 12).
The directors believe that this intellectual property has an indefinite useful economic life.
9. TRADE AND OTHER RECEIVABLES
2007 2006
€ €
Other receivables 4,033 4,912
==== ====
10. TRADE AND OTHER PAYABLE
2007 2006
€ €
Accruals 735,476 99,798
===== =====
11. SHARE CAPITAL
2007 2006
€ €
Authorised:
2,000,000,298 Ordinary shares of €0.01 each 10,000,000 10,000,000
======== ========
Called up, allotted and fully paid
82,383,631 ordinary shares of £0.01 each (2006: 82,203,631) 823,836 823,836
====== ======
12. NON CURRENT LIABILITIES
2007 2006
€ €
Deferred consideration 10,750,000 10,750,000
========= ========
On 15 June 2005, CHR acquired the Hydropolis Project concept and all the associated know how from Crescent Hydropolis Holdings LLC for a consideration of 60,000,000 ordinary shares issued as fully paid at €0.50 per share (such shares being issued on 17 June 2005) and payment of €10,750,000 in cash in installments with the final payment due as set forth in the payment schedule below.
The payments fall due as follows:
€2,750,000 to be paid upon completion of financing for the first Hydropolis Project (the 'First Payment')
€2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December during the first full fiscal year following the First Payment (the 'Second Payment')
€2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December during the next full fiscal year following the Second Payment (the 'Third Payment')
€2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December during the next full fiscal year following the Third Payment (the 'Fourth Payment')
€2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December during the next full fiscal year following the Fourth Payment (the 'Final Payment')
In the event that on any installment payment date, CHR has insufficient working capital then the installment is accrued until the following year without interest. Any unpaid consideration following the publication of the annual accounts for the period to 31 December during the Final Payment year will become due 60 days following publication of the annual accounts for each successive year until CHR is able to make payment and does so in full.
13 WARRANTS
On 7 December 2006 the Company issued a warrant for Ordinary shares for investors of the Company to purchase up to an additional 671,250 Ordinary shares at €0.79. The Warrant could have been exercised at a time not earlier than 6 February 2007 and not later than 6 December 2007. However, these were not taken up and have now lapsed.
14. FINANCIAL INSTRUMENTS
(a) Interest rate risk
The Company holds no fixed rate financial assets or liabilities. Cash balances attract a floating rate of interest.
(b) Liquidity risk
The Company's policy has been to finance its operations through the issue of equity share capital.
15. SUBSEQUENT EVENTS
On 26 March 2008 the Company issued 7,000,000 ordinary shares at €0.03 per share to raise €196,500 net of costs. On the same date the Company issued 7,000,000 options for ordinary shares at €0.05 raising an additional €7,000 net of costs. These options may be exercised at a time not earlier than 1st June 2008 and not later than 31 December 2010. Also on the same date the Company issued and allotted 4,945,000 Ordinary shares to four individuals and one company at €0.10 per share to reduce current outstanding liabilities owed by the Company by €494,500.
The Company further completed payment of commission obligations totalling €112,500 for capital raised on previous rounds of private placements by issuing and allotting 937,500 Ordinary shares to six individuals at €0.12 per share.
The Company advises that its report and accounts for the year ended 31 December 2007 will be posted to shareholders today and is available from the Company's website at www.crescent-hydropolis.com.
For further information contact:-
Uwe Hohmann
Chief Executive
+971 50 55 11 018
u.hohmann@crescent-hydropolis.com
Richard Swindells/Natasha Reed
Nabarro Wells & Co. Limited, Nominated Adviser
020 7634 4705
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