TIDMVELO
RNS Number : 3550Z
Velosi Limited
21 September 2009
21 September 2009
Velosi Limited ("Velosi", "the Company" or "the Group")
Interim Results
For the six months ended 30 June 2009
Velosi, the AIM listed provider of asset integrity, quality assurance, quality
control, engineering and HSE services to major national and multinational oil
and gas companies, is pleased to announce its interim results for the six months
ended 30 June 2009.
Highlights
* Continuing a track record of significant growth:
H109H108%
TurnoverUS$89.2mUS$77.3m15.4
Profit before taxUS$7.9mUS$7.2m10.4
Earnings per share 11.2c10.4c8.2
* As at 30 June 2009, the Company had net cash reserves of US$19.7 million
* Steady flow of new contract wins coupled with 100% retention of existing
contracts underpins good visibility on future revenues
* Tightened cost base together with improved cash generation has strengthened the
Company's financial base
* Trading is in line with expectations
John Hogan, Chairman, commented:
"Velosi has again delivered a good set of results despite the more challenging
market environment. Based on historic trading patterns, revenues tend to be
stronger in the second half of the year and this, together with the excellent
visibility provided by contracted revenues, gives us confidence that we will
achieve a good result for the current year. Despite the weakening commercial
environment, the Company's strong underlying operating performance has allowed
us to strengthen our financial position. As a result the Company has a strong
balance sheet with net cash of $19.7 million, remains cash generative and
continues to increase both revenues and profitability."
For further information, please contact:
+------------------+--------------------+------------------------------+
| Velosi | Dr Nabil Abdul | 020 7930 0777 |
| | Jalil | |
| | Dan Ooi | |
+------------------+--------------------+------------------------------+
| Strand Partners | James Harris | 020 7409 3494 |
+------------------+--------------------+------------------------------+
| Charles Stanley | Mark Taylor | 020 7149 6000 |
| Securities | Freddy Crossley | |
+------------------+--------------------+------------------------------+
| Cardew Group | Tim Robertson | 020 7930 0777 |
| | Shan Shan | |
| | Willenbrock | |
| | Catherine Maitland | |
+------------------+--------------------+------------------------------+
CHAIRMAN'S STATEMENT
I am very pleased to report on what has been a strong period of growth for the
business. In the first six months of 2009 the Company has increased revenues and
profits before tax by 15.4% and 10.4% respectively. This is a particularly
satisfying performance as we have been able to simultaneously continue to win
new contracts whilst also increasing our cash generation and cash reserves thus
creating a financially secure base for the business going forward. Revenue
growth has come from our excellent track record of renewing and extending
existing contracts and continuing to add new contracts.
The partial recovery in oil prices is a positive factor but it is less a
function of demand and more a result of reduction in supply and the value of the
US dollar, and therefore has not translated into an increase in investment in
oil and gas projects. In fact there has been a slowdown in investment, versus
historic levels, however, Group revenues have continued to increase as the
slowdown has been offset primarily by new income generated as a result of new
office openings. The Company's focus is to continue to exploit its position as a
one stop shop for the major oil and gas companies.
Financial Performance
Our ability to retain and win new contracts resulted in turnover increasing by
15.4% to US$89.2 million (2008: US$77.3 million). Profit from ordinary
activities before tax for the period was up 10.4% to US$7.9 million (2008:
US$7.2 million), and profit after tax also increased, from US$6.0 million in
2008 to US$6.4 million.
The effective tax rate for the Group for the half year was 19.2% (2008: 16.2%).
The effective tax rate for the Group reflects the contributions from the
different regions and their varying tax rates.
Profits attributable to minority interests for the period were US$1.3 million
(2008: US$1.6 million).
Basic earnings per share after minority interests increased to 11.2 cents (2008:
10.4 cents) and fully diluted earnings per share after minority interests were
11.0 cents (2008: 9.4 cents).
Velosi's cash position remains strong. At 30 June 2009, cash and cash
equivalents for the Group were US$20.1 million (2008: US$10.7 million). Gearing
levels remain low with short-term bank borrowings amounting to US$2.8 million
(2008: US$5.6 million) and long-term bank borrowings amounting to US$1.5 million
(2008: US$1.5 million).
Dividend
As previously stated the Board does not propose to pay an interim dividend. The
Board does however intend, subject to the availability of distributable reserves
and a satisfactory performance in the second half of the year, to recommend a
final dividend to shareholders in respect of the financial year ending 31
December 2009.
Operational Review
During 2009 Velosi has continued to develop the business across its chosen
geographic regions, in particular we focused on key areas of continued oil and
gas investment such as Central Asia, South America and Africa. Our strategy to
overlay our core inspection work with higher margin services such as asset
integrity management services, project management consultancy, hotwork
enclosures and sub sea services has been successful as individual offices are
increasingly extending the scope of services to each client.
Asia & Australasia
Turnover: US$13.5 million (2008: US$14.1 million), Contribution to Group Sales:
15% (2008: 18%)
Revenues from Asia and Australasia remained broadly level, however, we expect
revenues to increase in the second half as the offtake for the Samsung Heavy
Industries contract was initially slow but has since come on track. Velosi India
has also made good progress with a series of new contract wins with ONGC, GAIL,
Bharat Petroleum and GSPL worth approximately US$6.0 million. In addition, the
PPL contract has been expanded to include the assembly and installation of a
further 5 derricks. As a result we expect to see an uplift in contribution from
this region in the second half of the financial year.
Europe
Turnover: US$18.5 million (2008: US$19.6 million), Contribution to Group Sales:
21 % (2008: 25%)
European revenues in 2008 grew significantly and therefore this first half
performance is against very strong comparables. The largest contributor to
Europe has been the BP Norge AS contract, providing inspection consultancy
services in fabrication sites in Norway, the United Kingdom, and Holland amongst
other European countries, which marked the Group's first contract in Norway. The
Saipem contract in Italy was deferred slightly to the fourth quarter of 2009 but
is still expected to contribute strongly over the duration of the contract.
Middle East
Turnover: US$33.8 million (2008: US$26.8 million), Contribution to Group Sales:
38% (2008: 35%)
The Middle East region produced a strong contribution, building on a good result
in 2008. A combination of the new offices opened in the previous year with a
succession of new contract wins has consolidated Velosi's leading position in
this region. The 5 year Saudi Aramco contract which began in the second half of
2008 is an important part of our overall success. In addition, Petroleum
Development Oman has extended its QA/QC contract for the third time, which
covers third party inspection services and is worth approximately US$30 million
over 4 years. Velosi Certification Services LLC also secured a 5 year worldwide
vendor inspection and site construction inspection contract in onshore and
offshore locations with ADGAS worth in excess of US$ 10 million.
Africa
Turnover: US$15.2 million (2008: US$8.7 million), Contribution to Group Sales:
17% (2008: 11%)
The first half of 2009 saw revenues increase to US$15.2 million.. The Group was
pleased to see the trading performance recover which was due to good
contributions from across the Group's areas of operation in Africa including;
Ghana, Angola, South Africa and Egypt
On April 16 2009 we were awarded a substantial new 5 year contract with the
South African state owned electricity provider Eskom. The contract has been won
in a 50:50 partnership with Khum MK Investments to provide Quality and
Inspection services for Eskom's new build power plant program. Capital spend on
this program is expected to be in excess of US$30 billion and the fees for
inspection should be in the region of 1-3%. The Quality and Inspection services
work will be spread out amongst eight competing inspection authorities.
Americas and Former Soviet Union (FSU)
Turnover: US$8.3 million (2008: US$8.1 million), Contribution to Group Sales: 9%
(2008: 10%)
Americas and FSU traded broadly in line with the previous year, has significant
strategic importance and continues to make a useful contribution to the overall
Group. We remain confident of our ability to increase revenues by focusing on
developing inspection services and securing long term contracts. With existing
clients including: UOP (Honeywell) Inco Australia, Gulf Interstate Engineering,
CB&I, GE Vetco Gray, Enersul, J. Ray McDermott, and KBR - there is a very solid
base on which to develop.
We have been working hard in 2009 to develop the Russian and Kazakhstan
certification work for companies in Canada, and a gradual increase of orders
from Canadian companies is expected towards the end of 2009.
Employees
On behalf of the Board, I would like to take this opportunity to thank all of
our employees worldwide for their dedication and continued hard work.
Outlook
Following a period of rapid expansion, the Group has, over the last 12 months,
consolidated its position creating a stable platform to continue to grow and
generate further value for shareholders. Cashflow and cash reserves have
increased significantly providing the Group with greater flexibility and
security.
While oil prices have improved from the lows of around $40 per barrel, this
increase is more a function of the curbing of supply and the value of the US$,
and is not, in our opinion, an indication of increasing demand. We therefore
view the current market as challenging and we are working to mitigate the
slowdown in investment and the natural tendency for clients in this market to
become more price sensitive. Having said that, in recent years the Group has
expanded substantially and now operates from 36 countries with 5 principal
offices, up from 27 countries with 4 principal offices in 2006. The new offices
opened are contributing strongly and this increased volume is principally the
reason behind our ability to continue to grow revenues in this environment.
Together with our now global presence, which provides a natural hedge against
being overly exposed to any one region, we are specifically targeting those
geographic regions where the oil and gas majors are continuing to invest such as
Kazakhstan, West Africa, Australia and Brazil. Underpinning this strategic
approach is our ongoing focus on ensuring the business operates on a cost
efficient basis thereby maintaining our strong financial base.
We are pleased with our trading performance for the first half of 2009 and with
the first three months of the second half nearly completed, together with our
visibility on future revenues, we are confident that we are trading in line with
expectations for the full year. Looking ahead, our order book remains strong and
we believe we are achieving our aims of delivering a truly global service
offering, providing a range of increasingly diverse and higher margin services.
John Hogan
Chairman
VELOSI LIMITED
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2009
+------------------------------------------+------+----------------+----------------+-----------------+
| |Note | Six months | Six months | Year ended |
| | | ended | ended | 31 December |
| | | 30 June | 30 June | 2008 |
| | | 2009 | 2008 | US$'000 |
| | | US$'000 | US$'000 | (audited) |
| | | (unaudited) | (unaudited) | |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| Revenue | 7 | 89,187 | 77,306 | 182,072 |
+------------------------------------------+------+----------------+----------------+-----------------+
| Cost of sales | | (67,832) | (58,232) | (136,509) |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+------------------------------------------+------+----------------+----------------+-----------------+
| Gross profit | | 21,355 | 19,074 | 45,563 |
+------------------------------------------+------+----------------+----------------+-----------------+
| Other operating income | | 735 | 28 | 883 |
+------------------------------------------+------+----------------+----------------+-----------------+
| Administrative expenses | | (14,921) | (12,083) | (32,057) |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+------------------------------------------+------+----------------+----------------+-----------------+
| Operating profit | | 7,169 | 7,019 | 14,389 |
+------------------------------------------+------+----------------+----------------+-----------------+
| Finance costs | | (117) | (269) | (533) |
+------------------------------------------+------+----------------+----------------+-----------------+
| Share of profit of associated companies | | 865 | 418 | 1,006 |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+------------------------------------------+------+----------------+----------------+-----------------+
| Profit on ordinary activities before tax | | 7,917 | 7,168 | 14,862 |
+------------------------------------------+------+----------------+----------------+-----------------+
| Income tax expense | 3 | (1,520) | (1,160) | (3,208) |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+------------------------------------------+------+----------------+----------------+-----------------+
| Profit for the period | | 6,397 | 6,008 | 11,654 |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+------------------------------------------+------+----------------+----------------+-----------------+
| Other comprehensive income: | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| Exchange differences on translating | | 785 | - | (2,828) |
| foreign operation | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+------------------------------------------+------+----------------+----------------+-----------------+
| Other comprehensive income for the | | 785 | - | (2,828) |
| period net of tax | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | ________ | ________ | ________ |
+------------------------------------------+------+----------------+----------------+-----------------+
| Total comprehensive income for the | | 7,182 | 6,008 | 8,826 |
| period | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | ________ | ________ | ________ |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| Profit attributable to: | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| Owners of the parent | | 5,057 | 4,410 | 9,306 |
+------------------------------------------+------+----------------+----------------+-----------------+
| Non - continuing interest | | 1,340 | 1,598 | 2,348 |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | ________ | ________ | ________ |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | 6,397 | 6,008 | 11,654 |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | ________ | ________ | ________ |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| Total comprehensive income attributable | | | | |
| to: | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| Owners of the parent | | 5,537 | 4,410 | 7,205 |
+------------------------------------------+------+----------------+----------------+-----------------+
| Non - continuing interest | | 1,645 | 1,598 | 1,621 |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | ________ | ________ | ________ |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | 7,182 | 6,008 | 8,826 |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | ________ | ________ | ________ |
+------------------------------------------+------+----------------+----------------+-----------------+
| | | | | |
+------------------------------------------+------+----------------+----------------+-----------------+
| Basic earnings per share | 5 | 11.2 cents | 10.4 cents | 21.7 cents |
+------------------------------------------+------+----------------+----------------+-----------------+
| Diluted earnings per share | 5 | 11.0 cents | 9.4 cents | 19.6 cents |
+------------------------------------------+------+----------------+----------------+-----------------+
VELOSI LIMITED
Consolidated Statement of Financial Position
As at 30 June 2009
+-----------------------------------+----------+----------------+----------------+-----------------+
| | Note | 30 June | 30 June | 31 December |
| | | 2009 | 2008 | 2008 |
| | | US$'000 | US$'000 | US$'000 |
| | | (unaudited) | (unaudited) | (audited) |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Assets | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Non-current assets | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Goodwill | | 8,646 | 7,341 | 8,307 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Other intangible assets | 8 | 1,598 | 1,549 | 1,744 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Property, plant and equipment | 11 | 9,314 | 7,325 | 8,261 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Investment in associated | 12 | 1,364 | 1,247 | 1,338 |
| companies | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Other investments | | - | 9 | - |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Deferred tax assets | | 450 | 42 | 400 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | 21,372 | 17,513 | 20,050 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Current assets | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Cash and cash equivalents | | 22,445 | 15,881 | 20,641 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Inventories | | 4,080 | 4,610 | 2,271 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Trade and other receivables | | 60,322 | 54,626 | 63,852 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Tax recoverable | | 85 | 450 | 126 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | 86,932 | 75,567 | 86,890 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Non-current asset held for sale | | - | 900 | - |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | ________ | ________ | _______ |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Total assets | | 108,304 | 93,980 | 106,940 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | ________ | ________ | ________ |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Equity and liabilities | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Capital and reserves | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Share capital | | 935 | 869 | 887 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Share premium | | 33,801 | 30,226 | 32,422 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Translation reserve | | (1,685) | (63) | (2,164) |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Retained earnings | | 29,135 | 19,291 | 23,917 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Total equity attributable to | | 62,186 | 50,323 | 55,062 |
| equity holders | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Minority interest | | 8,803 | 7,241 | 7,293 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Total equity | | 70,989 | 57,564 | 62,355 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
VELOSI LIMITED
Consolidated Statement of Financial Position
As at 30 June 2009
+-----------------------------------+----------+----------------+----------------+-----------------+
| | Note | 30 June | 30 June | 31 December |
| | | 2009 | 2008 | 2008 |
| | | US$'000 | US$'000 | US$'000 |
| | | (unaudited) | (unaudited) | (audited) |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Current liabilities | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Trade and other payables | | 28,166 | 22,359 | 33,605 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Bank and other borrowings | 14 | 2,824 | 5,577 | 3,581 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Current tax liabilities | | 2,493 | 2,592 | 2,421 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Deferred consideration | 9 | 1,260 | 3,984 | 2,673 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | 34,743 | 34,512 | 42,280 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Non-current liabilities | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Deferred tax liabilities | | 36 | 20 | 37 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Bank and other borrowings | 14 | 1,531 | 1,549 | 1,276 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Other non-current liabilities | | 1,005 | 335 | 992 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | 2,572 | 1,904 | 2,305 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Total liabilities | | 37,315 | 36,416 | 44,585 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | -------------- | -------------- | --------------- |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | ________ | ________ | _______ |
+-----------------------------------+----------+----------------+----------------+-----------------+
| Total equity and liabilities | | 108,304 | 93,980 | 106,940 |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | ________ | ________ | ________ |
+-----------------------------------+----------+----------------+----------------+-----------------+
| | | | | |
+-----------------------------------+----------+----------------+----------------+-----------------+
VELOSI LIMITED
Consolidated Statement of Cash Flow
For the six months ended 30 June 2009
+---------------------------------------------+-------------+-------------+------------+
| | Six months | Six months | Year ended |
| | ended | ended | 31 |
| | 30 June | 30 June | December |
| | 2009 | 2008 | 2008 |
| | US$'000 | US$'000 | US$'000 |
| | (unaudited) | (unaudited) | (audited) |
+---------------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------------+-------------+-------------+------------+
| Net cash from / (used in) operating | 4,538 | (513) | 9,928 |
| activities | | | |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------------+-------------+-------------+------------+
| Cash flows from investing activities | | | |
+---------------------------------------------+-------------+-------------+------------+
| Acquisition of property, plant and | (1,338) | (1,310) | (2,687) |
| equipment | | | |
+---------------------------------------------+-------------+-------------+------------+
| Receipts from sale of property, plant | 11 | 128 | 448 |
| and equipment | | | |
+---------------------------------------------+-------------+-------------+------------+
| Acquisition of new subsidiary | - | - | (1,168) |
| companies, net of cash | | | |
+---------------------------------------------+-------------+-------------+------------+
| (Advance to) / repayment from | (738) | 228 | (358) |
| associated companies | | | |
+---------------------------------------------+-------------+-------------+------------+
| Dividend income from associated | 777 | - | 414 |
| company | | | |
+---------------------------------------------+-------------+-------------+------------+
| Interest received | 31 | 140 | 244 |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
| Net cash used in investing activities | (1,257) | (814) | (3,107) |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------------+-------------+-------------+------------+
| Cash flows from financing activities | | | |
+---------------------------------------------+-------------+-------------+------------+
| Proceeds from issue of shares | - | 8,660 | 8,660 |
+---------------------------------------------+-------------+-------------+------------+
| Share issue expenses | - | (391) | (445) |
+---------------------------------------------+-------------+-------------+------------+
| Net borrowings | (374) | 216 | (383) |
+---------------------------------------------+-------------+-------------+------------+
| (Repayment to) / advance from related | (101) | (402) | 437 |
| party | | | |
+---------------------------------------------+-------------+-------------+------------+
| (Repayment to) / advance from | (367) | (54) | 109 |
| directors | | | |
+---------------------------------------------+-------------+-------------+------------+
| Dividend paid to shareholders | - | - | (435) |
+---------------------------------------------+-------------+-------------+------------+
| Dividend paid to minority shareholders | (135) | (86) | (208) |
| of subsidiary companies | | | |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
| Net cash (used in) / from financing | (977) | 7,943 | 7,735 |
| activities | | | |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------------+-------------+-------------+------------+
| Net increase in cash and cash | 2,304 | 6,616 | 14,556 |
| equivalents | | | |
+---------------------------------------------+-------------+-------------+------------+
| Foreign exchange translation | 50 | - | (876) |
| differences | | | |
+---------------------------------------------+-------------+-------------+------------+
| Cash and cash equivalents at the beginning | 17,791 | 4,111 | 4,111 |
| of the period | | | |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
| Cash and cash equivalents at the end | 20,145 | 10,727 | 17,791 |
| of the period | | | |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
| | | | |
+---------------------------------------------+-------------+-------------+------------+
| Cash and cash equivalents comprise: | | | |
+---------------------------------------------+-------------+-------------+------------+
| Current assets - Cash and cash | 22,445 | 15,881 | 20,641 |
| equivalents | | | |
+---------------------------------------------+-------------+-------------+------------+
| Current liabilities - Bank overdraft | (2,300) | (5,154) | (2,850) |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
| | 20,145 | 10,727 | 17,791 |
+---------------------------------------------+-------------+-------------+------------+
| | ________ | ________ | ________ |
+---------------------------------------------+-------------+-------------+------------+
VELOSI LIMITED
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2009
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Unaudited | Share | Share | Reserves | Total | Minority | Total |
| | capital | premium | US$'000 | US$'000 | interest | equity |
| | US$'000 | US$'000 | | | US$'000 | US$'000 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Balance at 1 January | 787 | 21,310 | 14,653 | 36,750 | 5,729 | 42,479 |
| 2008 | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Share allotment | 82 | 8,916 | - | 8,998 | - | 8,998 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Total comprehensive | - | - | 4,410 | 4,410 | 1,598 | 6,008 |
| income | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Issue of share options | - | - | 165 | 165 | - | 165 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Dividend paid | - | - | - | - | (86) | (86) |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | ________ | ________ | ________ | _______ | _______ | ________ |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Balance at 30 June 2008 | 869 | 30,226 | 19,228 | 50,323 | 7,241 | 57,564 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | ________ | ________ | ________ | _______ | _______ | ________ |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Balance at 1 July 2008 | 869 | 30,226 | 19,228 | 50,323 | 7,241 | 57,564 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Share allotment | 18 | 2,196 | - | 2,214 | - | 2,214 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Total comprehensive | - | - | 2,795 | 2,795 | 23 | 2,818 |
| income | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Acquisition of | - | - | - | - | 151 | 151 |
| subsidiary | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Issue of share options | - | - | 165 | 165 | - | 165 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Dividend paid | - | - | (435) | (435) | (122) | (557) |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | ________ | ________ | ________ | _______ | _______ | ________ |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Balance at 31 December | 887 | 32,422 | 21,753 | 55,062 | 7,293 | 62,355 |
| 2008 | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | ________ | ________ | ________ | _______ | _______ | ________ |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Balance at 1 January | 887 | 32,422 | 21,753 | 55,062 | 7,293 | 62,355 |
| 2009 | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Share allotment | 48 | 1,379 | - | 1,427 | - | 1,427 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Total comprehensive | - | - | 5,537 | 5,537 | 1,645 | 7,182 |
| income | | | | | | |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Issue of share options | - | - | 160 | 160 | - | 160 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Dividend paid | - | - | - | - | (135) | (135) |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | ________ | ________ | ________ | _______ | _______ | ________ |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| Balance at 30 June 2009 | 935 | 33,801 | 27,450 | 62,186 | 8,803 | 70,989 |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
| | ________ | ________ | ________ | _______ | _______ | ________ |
+-------------------------+----------+-----------+-----------+-----------+----------+-----------+
VELOSI LIMITED
1. General information
Velosi Limited was incorporated in Jersey on 28 March 2006. The principal
activity of the Company is investment holding. The principal activities of the
Group are provision of asset integrity management and health, safety, and
environment (HSE) services, which cover quality assurance and quality control
services. This includes certification, project verification, quality enhancement
and engineering support services.
2. Basis of preparation and significant accounting policies
The interim condensed consolidated statement is unaudited and does not
constitute statutory financial statements. The interim condensed consolidated
statement incorporated the results of the Velosi Group for the period from 1
January 2009 to 30 June 2009. The results for the year ended 31 December 2008
have been extracted from the statutory financial statements' for Velosi Limited
for the year ended 31 December 2008 which are prepared under International
Financial Reporting Standards ("IFRS"). The interim report should be read in
conjunction with the annual financial statement for the year ended 31 December
2008.
The accounting policies, presentation and methods of computation have been
followed in these unaudited financial statements as were applied in the
preparation of the Group's annual financial statements for the year ended 31
December 2008, except for the impact of the adoption of the Standards and
Interpretations described below:-
IFRS 8 Operating Segments (effective for annual periods beginning on or after 1
January 2009)
IFRS 8 is a disclosure Standard that has resulted in a redesignation of the
Group's reportable segments (see note 7), but has had no impact on the reported
results or financial position of the Group.
IAS 1 (revised 2007) Presentation of Financial Statements (effective for annual
periods beginning on or after 1 January 2009)
The revised Standard has introduced a number of terminology changes (including
revised titles for the condensed financial statements) and has resulted in a
number of changes in presentation and disclosure. However, the revised standard
has had no impact on the reported results or financial position of the Group.
The consolidated financial statements are presented in US Dollars ("US$") and
all values are rounded to the nearest US$ '000 except where otherwise indicated.
The Interim Report for the six months ended 30 June 2009 was approved by the
Directors on 16 September 2009.
3.Income tax expense
+----------------------------------------------+-------------------+------------------+------------------+
| | Six months | Six months | Year ended |
| | ended | ended | 31 December 2008 |
| | 30 June 2009 | 30 June 2008 | US$'000 |
| | US$'000 | US$'000 | |
+----------------------------------------------+-------------------+------------------+------------------+
| | (unaudited) | (unaudited) | (audited) |
+----------------------------------------------+-------------------+------------------+------------------+
| | | | |
+----------------------------------------------+-------------------+------------------+------------------+
| Foreign tax: | | | |
+----------------------------------------------+-------------------+------------------+------------------+
| Overseas tax payable | 1,499 | 1,163 | 3,446 |
+----------------------------------------------+-------------------+------------------+------------------+
| Total current tax | 1,499 | 1,163 | 3,446 |
+----------------------------------------------+-------------------+------------------+------------------+
| | | | |
+----------------------------------------------+-------------------+------------------+------------------+
| Deferred tax: | | | |
+----------------------------------------------+-------------------+------------------+------------------+
| Movement in deferred tax position | (51) | (42) | (352) |
+----------------------------------------------+-------------------+------------------+------------------+
| Taxation on profit from ordinary activities | 1,448 | 1,121 | 3,094 |
+----------------------------------------------+-------------------+------------------+------------------+
| Add: Share of taxation of | 72 | 39 | 114 |
| associated companies | | | |
+----------------------------------------------+-------------------+------------------+------------------+
| | 1,520 | 1,160 | 3,208 |
+----------------------------------------------+-------------------+------------------+------------------+
Interim period income tax is accrued based on the estimated average annual
effective income tax rate of 19% (Interim period 2008: 16%).
4. Share capital
(a) Share capital (unaudited)
+-------------------------------------------------------------------+--------
=-------+----------------+
|
| 2009 | 2008 |
|
| US$'000 | US$'000
|
+-------------------------------------------------------------------+------
=---------+----------------+
|
| |
|
+-------------------------------------------------------------------+------
=---------+----------------+
| Authorised:
| |
|
+-------------------------------------------------------------------+------
=---------+----------------+
| 4,400,000,000 (2008: 4,400,000,000) Ordinary
shares of US$0.02 | 88,000 | 88,000 |
| each
| |
|
+-------------------------------------------------------------------+------
=---------+----------------+
|
| |
|
+-------------------------------------------------------------------+------
=---------+----------------+
| Issued:
| |
|
+-------------------------------------------------------------------+------
=---------+----------------+
| 46,765,871 (2008: 44,341,580) Ordinary shares
of US$0.02 each | 935 | 887
|
+-------------------------------------------------------------------+------
=---------+----------------+
(b) Share issued during the period (unaudited)
+------------------------+----------+----------+------------+-----------------+--------------+-------------+
| | | Issue value per share | Shares | Share | Share |
| | | | | capital | premium |
+------------------------+----------+-----------------------+-----------------+--------------+-------------+
| | | GBP | US$ | | US$'000 | US$'000 |
+------------------------+----------+----------+------------+-----------------+--------------+-------------+
| | | | | | | |
+------------------------+----------+----------+------------+-----------------+--------------+-------------+
| At 1 January 2009 | | | | 44,341,580 | 887 | 32,422 |
+------------------------+----------+----------+------------+-----------------+--------------+-------------+
| Shares issued on 15 | | | 0.59 | | | |
| May 2009 | | 0.39 | | 2,424,291 | 48 | 1,379 |
+------------------------+----------+----------+------------+-----------------+--------------+-------------+
| | | | | 46,765,871 | 935 | 33,801 |
+------------------------+----------+----------+------------+-----------------+--------------+-------------+
On 15 May 2009, 2,424,291 new ordinary shares were issued to shareholders of K2
Specialist Services Pte Ltd ("K2"), pursuant to an agreement dated 19 October
2007 between K2 and Velosi Industries Sdn Bhd, following the satisfaction of the
entire profit guarantee of SGD4,000,000 (approximately GBP1.34 million)
aggregate profit after tax and minority interests, set for the stipulated
guarantee period.
5. Earnings per share
The basic and diluted earnings per share is calculated by reference to the
earnings attributable to ordinary shareholders divided by the number of shares
in issue as at 30 June 2009, as follows:
+----------------------------------------------+-----------------+-------------------+------------------+
| | Six months | Six months | Year ended |
| | ended | ended | 31 December 2008 |
| | 30 June 2009 | 30 June 2008 | USD'000 |
| | USD'000 | USD'000 | |
+----------------------------------------------+-----------------+-------------------+------------------+
| | (unaudited) | (unaudited) | (audited) |
+----------------------------------------------+-----------------+-------------------+------------------+
| | | | |
+----------------------------------------------+-----------------+-------------------+------------------+
| Profit after taxation and minority interest | 5,057 | 4,410 | 9,306 |
+----------------------------------------------+-----------------+-------------------+------------------+
| | | | |
+----------------------------------------------+-----------------+-------------------+------------------+
| | Number | Number | Number |
+----------------------------------------------+-----------------+-------------------+------------------+
| | | | |
+----------------------------------------------+-----------------+-------------------+------------------+
| Weighted average number of shares for the | | | |
| purpose of calculating basic earnings per | | | |
| share | 44,971,092 | 42,419,424 | 42,809,629 |
+----------------------------------------------+-----------------+-------------------+------------------+
| | | | |
+----------------------------------------------+-----------------+-------------------+------------------+
| Effect of dilutive potential ordinary | | | |
| shares: | | | |
+----------------------------------------------+-----------------+-------------------+------------------+
| Share options | - | 2,067,708 | - |
+----------------------------------------------+-----------------+-------------------+------------------+
| Warrants | - | 476,749 | - |
+----------------------------------------------+-----------------+-------------------+------------------+
| Deferred consideration | 834,575 | 1,853,193 | 4,463,847 |
+----------------------------------------------+-----------------+-------------------+------------------+
| Weighted average number of shares for the | | | |
| purpose of calculating diluted earnings per | | | |
| share | 45,805,667 | 46,817,074 | 47,273,476 |
+----------------------------------------------+-----------------+-------------------+------------------+
| | | | |
+----------------------------------------------+-----------------+-------------------+------------------+
| Earnings per ordinary share | | | |
+----------------------------------------------+-----------------+-------------------+------------------+
| Basic earnings per share | 11.2 cents | 10.4 cents | 21.7 cents |
+----------------------------------------------+-----------------+-------------------+------------------+
| Diluted earnings per share | 11.0 cents | 9.4 cents | 19.6 cents |
+----------------------------------------------+-----------------+-------------------+------------------+
6.Dividends
A final dividend of US$435,000 (representing 1 cent per share) in respect of the
financial year ended 31 December 2008 was paid on 31 July 2009.
The Directors do not propose to pay an interim dividend. The Directors do
intend, subject to the availability of distributable reserves, to recommend a
final dividend to shareholders in respect of the financial year ending 31
December 2009.
7.Segmental reporting
The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009.
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision maker as defined in IFRS 8, in order to allocate resources to
the segment and to assess its performance. In contrast, the predecessor Standard
(IAS 14 Segment Reporting) required an entity to identify two sets of segments
(business and geographical), using a risks and rewards approach, with the
entity's "system of internal financial reporting to key management personel"
serving only as the starting point for the identification of such segments. As a
result, following the adoption of IFRS 8, the identification of the Group's
reportable segments has changed.
+-------------+----------+----------+--------+--+----+--+--+-------+--+--+---+--+--+-----+--+--+------+--+--+--------+--+--+--+--+--+--+--+--+
| | Europe | Middle | Americas | Africa |Australasia |Central | Others |Adjustment |Consolidated |
| | | East | | | | Asia | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |US$'000 | US$'000 | US$'000 | US$'000 |
| | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| 2009 | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Turnover | 23,666 | 35,749 | 9,663 | 15,086 | 14,105 | 487 | - | (9,569) | 89,187 |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Gross | 3,796 | 7,197 | 1,734 | 1,430 | 4,689 | 292 | - | 2,217 | 21,355 |
| profit | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Profit / | 1,036 | 4,489 | 145 | (552) | 1,276 | 75 | (600) | 2,048 | 7,917 |
| (loss) | | | | | | | | | |
| before tax | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Adjustments listed above relate to the | | | | | | | | | |
| following: | | | | | | | | | |
+----------------------------------------------------+-------------+---------+-----------+------------+--------------+-----+-----+-----+-----+
| Share of profit of | | | | | | | 793 | 793 |
| associates, net of | | | | | | | | |
| taxation | | | | | | | | |
+------------------------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Segment | 24,062 | 42,500 | 11,914 | 20,718 | 31,861 | 552 | 36,684 | (59,987) | 108,304 |
| assets | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Segment | 21,082 | 21,426 | 10,869 | 18,240 | 21,011 | 560 | 2,338 | (58,211) | 37,315 |
| liabilities | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| 2008 | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Turnover | 21,205 | 27,766 | 10,609 | 9,307 | 13,122 | - | 2,128 | (6,831) | 77,306 |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Gross | 3,327 | 6,265 | 1,918 | 1,881 | 4,375 | - | 939 | 369 | 19,074 |
| profit | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Profit / | 1,100 | 3,748 | 274 | 421 | 1,892 | - | (766) | 499 | 7,168 |
| (loss) | | | | | | | | | |
| before tax | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Adjustments listed above relate | | | | | | | | | |
| to the following: | | | | | | | | | |
+--------------------------------------------+----------+-------------+---------+-----------+------------+--------------+-----+-----+-----+
| Share of profit of | | | | | | | 379 | 379 |
| associates, net of | | | | | | | | |
| taxation | | | | | | | | |
+------------------------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Segment | 18,540 | 31,963 | 11,914 | 16,340 | 27,242 | - | 33,946 | (45,965) | 93,980 |
| assets | | | | | | | | | |
+-------------+----------+----------+-----------+----------+-------------+---------+-----------+------------+--------------+
| Segment | 16,435 | 16,812 | 10,816 | 13,157 | 20,104 | - | 2,550 | (43,458) | 36,416 |
| liabilities | | | | | | | | | |
+-------------+----------+----------+--------+--+----+--+--+-------+--+--+---+--+--+-----+--+--+------+--+--+--------+--+--+--+--+--+--+--+--+
8. Other intangible assets
+---------------------------------------------+------------------+------------------+------------------+-------------------+
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
| | USD'000 | USD'000 | USD'000 |
+---------------------------------------------+------------------+------------------+------------------+
| | (unaudited) | (unaudited) | (audited) |
+---------------------------------------------+------------------+------------------+--------------------------------------+
| | | | |
+---------------------------------------------+------------------+------------------+--------------------------------------+
| At 1 January | 1,744 | 1,662 | 1,662 |
+---------------------------------------------+------------------+------------------+------------------+
| Foreign exchange translation difference | 23 | - | (124) |
+---------------------------------------------+------------------+------------------+------------------+
| Acquisition of subsidiary companies | - | - | 537 |
+---------------------------------------------+------------------+------------------+------------------+
| Amortisation | (169) | (113) | (331) |
+---------------------------------------------+------------------+------------------+------------------+
| | 1,598 | 1,549 | 1,744 |
+---------------------------------------------+------------------+------------------+------------------+-------------------+
Acquired intangible assets which consist of customer lists acquired are valued
at cost less accumulated amortisation. Amortisation is calculated using the
straight line method over the expected useful life ranging from 5 and 10 years.
9.Deferred consideration
+---------------------------------------------+------------------+------------------+------------------+-------------------+
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
| | USD'000 | USD'000 | USD'000 |
+---------------------------------------------+------------------+------------------+------------------+
| | (unaudited) | (unaudited) | (audited) |
+---------------------------------------------+------------------+------------------+--------------------------------------+
| | | | |
+---------------------------------------------+------------------+------------------+--------------------------------------+
| At 1 January | 2,673 | 4,477 | 4,477 |
+---------------------------------------------+------------------+------------------+------------------+
| Foreign exchange translation difference | 15 | - | (312) |
+---------------------------------------------+------------------+------------------+------------------+
| Acquisition of subsidiary companies | - | - | 1,269 |
+---------------------------------------------+------------------+------------------+------------------+
| Consideration settled | (1,428) | (493) | (2,761) |
+---------------------------------------------+------------------+------------------+------------------+
| | 1,260 | 3,984 | 2,673 |
+---------------------------------------------+------------------+------------------+------------------+-------------------+
The provisional deferred consideration consists of cash and shares.
10.Seasonality
The Group's business operations are not seasonal.
11.Property, plant and equipment
During the period, the Group acquired new plant and machinery at a cost of
US$1,761,000 (2008: US$1,350,000). The Group also disposed of plant and
machinery with net book value of US$11,000 (2008: US$128,000).
12. Investment in associated companies
Investment in associated companies has increased as a result of the share of net
profit of associated companies, foreign exchange translation difference and
dividend from associated companies.
13. Related party transactions
The following table provides the total amount of transactions, which have been
entered into with related parties for the relevant financial year:
+--------------------------------+-----------+------------------+------------------+------------------+
| | | Sales to related | Purchases from | Rental received |
| | | parties | related parties | and receivable |
| | | | | from related |
| | | | | parties |
+--------------------------------+-----------+------------------+------------------+------------------+
| | | US$'000 | US$'000 | US$'000 |
+--------------------------------+-----------+------------------+------------------+------------------+
| Related parties | | | | |
+--------------------------------+-----------+------------------+------------------+------------------+
| Velosi (M) Sdn Bhd | 2009 | 1,349 | 34 | - |
+--------------------------------+-----------+------------------+------------------+------------------+
| | 2008 | 1,447 | 101 | 31 |
+--------------------------------+-----------+------------------+------------------+------------------+
| | | | | |
+--------------------------------+-----------+------------------+------------------+------------------+
| Associated companies | | | | |
+--------------------------------+-----------+------------------+------------------+------------------+
| Velosi LLC | 2009 | 819 | 17 | - |
+--------------------------------+-----------+------------------+------------------+------------------+
| | 2008 | 407 | 17 | - |
+--------------------------------+-----------+------------------+------------------+------------------+
Term and conditions of transactions with related parties
The above transactions were entered into in the normal course of business and
were carried out on an arms-length basis.
Amount due from related party
The amount due from related party included under current assets represents
unsecured interest free advances repayable on demand. The related party is
Velosi (M) Sdn Bhd. Included in trade and other receivables is an amount of
US$1.247 million (2007: US$0.391 million) pledged as security for bank guarantee
facilities.
14. Bank and other borrowings
+--------------------------------------------+-------------------+-----------------+------------------+
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
| | US$'000 | US$'000 | US$'000 |
+--------------------------------------------+-------------------+-----------------+------------------+
| | (unaudited) | (unaudited) | (audited) |
+--------------------------------------------+-------------------+-----------------+------------------+
| Current | | | |
+--------------------------------------------+-------------------+-----------------+------------------+
| Bank overdrafts | 2,300 | 5,154 | 2,850 |
+--------------------------------------------+-------------------+-----------------+------------------+
| Bank loan | 76 | 128 | 73 |
+--------------------------------------------+-------------------+-----------------+------------------+
| Hire purchase | 448 | 295 | 658 |
+--------------------------------------------+-------------------+-----------------+------------------+
| | 2,824 | 5,577 | 3,581 |
+--------------------------------------------+-------------------+-----------------+------------------+
| | | | |
+--------------------------------------------+-------------------+-----------------+------------------+
| Non-current | | | |
+--------------------------------------------+-------------------+-----------------+------------------+
| Bank loan | 356 | 1,069 | 343 |
+--------------------------------------------+-------------------+-----------------+------------------+
| Hire purchase | 1,175 | 480 | 933 |
+--------------------------------------------+-------------------+-----------------+------------------+
| | 1,531 | 1,549 | 1,276 |
+--------------------------------------------+-------------------+-----------------+------------------+
| | | | |
+--------------------------------------------+-------------------+-----------------+------------------+
| | 4,355 | 7,126 | 4,857 |
+--------------------------------------------+-------------------+-----------------+------------------+
These interim results will be available on the Company's website www.velosi.com.
Further copies can be obtained from the registered office at Walker House, PO
Box 72, 28-34 Hill Street, St Helier, Jersey JE4 8PN Channel Islands.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR CKKKDBBKBKCB
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