INFOSERVE TECH<08077> - Results Announcement (Q2, 2004, Summary)
Infoserve Technology Corp. announced on 10/08/2004:
(stock code: 08077 )
Year end date :31/12/2004
Currency :USD
Auditors' report :N/A
2nd Quarterly Report Reviewed by :Audit Committee
Important Note :
This result announcement form only contains extracted information from
and should be read in conjunction with the detailed results announcement
of the issuer, which can be viewed on the GEM website at
http://www.hkgem.com
( Unaudited) ( Unaudited)
Current Last Corresponding
Period Period
from 01/01/2004 from 01/01/2003
to 30/06/2004 to 30/06/2003
$'000 $'000
Turnover : 1,471 11,736
Profit/(Loss) from Operations : (408) (2,857)
Finance cost : (134) (410)
Share of Profit/(Loss) of Associates : N/A N/A
Share of Profit/(Loss) of Jointly
Controlled Entites : N/A N/A
Profit/(Loss) after Taxation & MI : (542) (3,267)
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : (USD 0.0009) (USD 0.0057)
Diluted (in dollar) : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : (542) (3,267)
2nd Quarter Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for 2nd Quarter Dividends : N/A
Payable Date : N/A
B/C Dates for (-) General Meeting : N/A
Other Distribution for Current Period : NIL
B/C Dates for Other Distribution : N/A
(bdi: both days inclusive)
For and on behalf of
Infoserve Technology Corp.
Signature :
Name : Yu Shu Kuen
Title : Chairman
Responsibility statement
The directors of the Company (the "Directors") as at the date hereof
hereby collectively and individually accept full responsibility for the
accuracy of the information contained in this results announcement form
(the "Information") and confirm, having made all reasonable inquiries,
that to the best of their knowledge and belief the Information are
accurate and complete in all material respects and not misleading and
that there are no other matters the omission of which would make the
Information herein inaccurate or misleading.The Directors acknowledge
that the Stock Exchange has no responsibility whatsoever with regard to
the Information and undertake to indemnify the Exchange against all
liability incurred and all losses suffered by the Exchange in connection
with or relating to the Information.
Remarks:
1. BASIS OF PRESENTATION
The Company was incorporated in the Cayman Islands as an exempted
company with limited liability. The shares of the Company are listed on
GEM of the Stock Exchange.
The condensed financial statements have been prepared in accordance
with International Accounting Standard No. 34 "Interim financial
reporting" and with the applicable disclosure requirements of Chapter
18 of the GEM Listing Rules.
(A) In preparing the interim financial information, the Directors have
given careful consideration to the future liquidity of the Group.
Against this background, the Group has taken steps to implement a
corporate restructuring as follows:
(1) Disposal of Infoserve Technology Corporation ("Infoserve Taiwan"),
Infoserve Technology Beijing Limited ("Infoserve PRC") and
Infoserve Telecom Corp. ("Infoserve US")
On 18 March 2004, the Company and an independent purchaser
entered into three sets of separate agreements (the "Disposal
Agreements") pursuant to which the Company agreed to sell and the
independent purchaser agreed to acquire from the Company its entire
equity interest in each of Infoserve Taiwan, Infoserve PRC and
Infoserve US ("Disposed Subsidiaries") at a consideration of
HK$1.00, HK$1.00 and US$1.00 respectively. Pursuant to the terms of
the Disposal Agreements, the inter-company balances between (i) the
Disposed Subsidiaries, and (ii) the Remaining Group namely the
Company, Infoserve Technology Pte Ltd. ("Infoserve Singapore") and
Infoserve Technology K.K. ("Infoserve Japan")) and Infoserve
Technology Hong Kong Ltd. ("Infoserve HK") would be waived, save
that any payables due to Infoserve HK will not be waived as
Infoserve HK is in liquidation and the Company is no longer able to
procure such a waiver. The disposal of the Group's operations in
Taiwan, the PRC and US would enable the Group to extinguish the
PRC significant outstanding liabilities of Infoserve Taiwan,
Infoserve PRC and Infoserve US.
(2) The First Subscription
On 18 March 2004, the Company and an independent investor (the
"First Subscriber") entered into an agreement pursuant to which the
Company agreed to allot and issue and the First subscriber agreed
to subscribe in cash for a total of 2,000 million new shares in the
Company at a subscription price of HK$0.01 per share (the "First
Subscription"). The total net proceeds from the First Subscription
is estimated to be approximately US$2.4 million and the Directors
general intend to apply the net proceeds to repay indebtedness and
as general working capital of the Remaining Group.
(3) The Second Subscription
On 12 May 2004, the Company and another independent investor
(the "Second Subscriber") entered into an agreement pursuant to
which the Company agreed to allot and issue and the Second
Subscriber agreed to subscribe in cash for a total of 140,000,000
new shares in the company at a subscription price of HK$0.01 per
share (the "Second Subscription"). The Company will apply the
entire proceeds of HK$1.4 million to repay the indebtedness of the
Remaining Group.
(4) Debt Restructuring with the creditor
On 15 April 2004, the Company and a creditor, namely China Unicom
International Ltd ("China Unicom"), reached a settlement agreement
(the "Settlement Agreement") in respect of litigation relating to
amounts allegedly owed by Infoserve HK to China Unicom for
international roaming and Internet and/or other computer networking
services. It was agreed under the Settlement Agreement that the
Company shall repay HK$2.7 million (the "Settlement Amount") as
full and final settlement for the judgment debt of approximately
HK$3.23 million owed to China Unicom. Upon application by the
Company and China Unicom, a consent order was issued by the
Court on 16 April 2004 pursuant to which the Company shall repay
the Settlement Amount by two instalments, of which the first
instalment of HK$300,000 has been paid by the Company to China
Unicom on 16 April 2004. The second instalment of the Settlement
Amount was paid on or before 18 June 2004. However, the payment
was in default due to the delay of completion of the First
Subscription. The Company is liaising with China Unicom for a
reschedule of payment.
(5) The Loan Capitalisation
In February 2004, another creditor, namely Success Harmony
Limited ("Success Harmony"), advanced to the Company a HK$4
million three-month short term loan (the "Loan"). On 12 May 2004,
Success Harmony and the Company entered into an agreement,
(the Loan Capitalisation Agreement") whereby the Company agreed
to allot and issue shares in the Company to Success Harmony,
credited as fully paid by way of capitalisation of HK$2.6 million
of the principal amount of the Loan and the interests accrued and
to be accrued on the entire principal amount of the Loan of HK$4
million up to and including the date of completion of the Loan
Capitalisation Agreement, and Success Harmony agreed to subscribe
the shares in the Company subject to the terms and conditions
of the Loan Capitalisation Agreement.
(6) Subordinate Loan
During April to July 2004, Mr Yu Shu Kuen, chairman of the Company,
provided subordinated interest bearing loan facilities of not
exceeding HK$1,900,000 and repayable in 2 years to finance the
daily operation of the Company. The loan is only repayable when
and if the Company is still solvent immediately after the payment.
(7) Loan from SHK Finance Limited
On 13 October 2003, the Company entered into a loan agreement
(as amended by a first supplemental loan agreement dated 14 January
2004 and a second supplemental loan agreement dated 14 April 2004)
(collectively the "Loan Agreement") with SHK Finance Limited ("SHK
Finance") whereby the Company borrowed a principal amount of
HK$5,000,000.00 (the "Outstanding Principal") from SHK finance.
The Outstanding Principal with interest payment in the sum of
HK$100,000.00 was payable to SHK Finance on 13 July 2004. The
Company has received a letter dated 9 August 2004 from the
solicitors of SHK Finance demanding the payment of an aggregate
amount of HK$5,254,800 being the total amount of the Company's
indebtedness under the Loan agreement together with all default
interest accrued up to 12 August 2004, failing which SHK Finance
would institute legal proceedings against the Company. The Company
is liaising with SHK Finance for a possible reschedule of
payment.
(B) In November 2003, having lost contact with the management and
officers of Infoserve Taiwan, Infoserve Hong Kong which was put under
liquidation, Infoserve PRC and Infoserve US, the Directors concluded
that the Group had lost effective control over these former
subsidiaries. These subsidiaries ceased operations by November 2003.
The directors considered that the financial interests of the Group were
best served not by expending significant time and resources to regain
control of these subsidiaries, but instead by actively seeking means to
divest these investments. Since the Directors do not have any available
information about the results of these subsidiaries for the period from
1 October 2003 to the date when, in the opinion of the Directors, the
Group lost effective control. On this basis, the results of these
subsidiaries have been excluded from the unaudited consolidated
results of the Group for the six months ended 30 June 2004.
2. TAXATION
No provision for taxation has been made in the condensed financial
statements as the Group had no assessable profit for the Period.
3. LOSS PER SHARE
The calculation of the basic loss per share is based on the net loss
attributable to shareholders of US$542,000 (2003: US$3,267,000) and
the number of 575,382,456 (2003: 575,382,456) shares in issue
during the period.
The computation of diluted loss per share does not assume the exercise
of outstanding warrants and share options as the effect of the
potential shares outstanding during the period were anti-dilutive.
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