Geo Genesis Group Limited / Ticker: GEOP / Market: PLUS
30 June 2010
Geo Genesis Group Ltd (`Geo Genesis' or `the Company' or `the Group')
Interim Results
Geo Genesis Group Limited, an advisory and investment company focussed on China
and other emerging markets, announces its interim results for the six months
ended 31 March 2010.
Chairman's Statement
The Board of Geo Genesis continues to focus on building its position as a
strategic management consultancy and private equity firm specialising in
investments and advice within emerging markets, with a particular focus on the
People's Republic of China.
The Company has continued to pursue new business opportunities and
collateralise on its position to identify and secure deal flow. The
establishment of our Beijing presence, which is considered the centre of
decisions for business generation and implementation in China and the
broadening of our service offering, is beginning to pay dividends as we look to
take advantage of our experience and knowledge of emerging markets.
We have reported a loss for the first six months but anticipate a recovery in
the second half, as our investments both realise and recover. During this
reporting period, we were impacted by a drop in value of existing investments,
particularly the Group's position in Changda International Ltd (`Changda').
However, we anticipate an improvement in performance in the second half once
Changda is admitted to the American Stock Exchange, to which it has publicly
indicated it applied to and that its current S-1 filing with the SEC is
effective.
Additionally, and again more positively, we anticipate strong returns from our
seed investment and advisory commission on Santaro Interactive Entertainment
Company, a Nevada corporation which we expect to be merged with a China based
on-line gaming company whom we introduced. The uplift from this and the return
in the fortunes of Changda should allow us to book significant earnings in the
second part of the year that we believe will compensate for the shortfall from
the first six months.
As reported in the year end results we have continued to work to reduce
overheads and executive compensation has continued to be modified to reflect
performance, therefore allowing for a longer cash flow use for the development
of the business. Cash as of 31 March 2010 was US$86,091, however, the Group
subsequently generated sufficient cash to meet its obligations, both through
incurring borrowings on its holdings and when appropriate by disposing of some
of these holdings, additionally the Group receives consulting fees that were
used to meet on-going expenses.
We continue to pursue new opportunities and remain confident that we can build
a substantive business and benefit from the ever increasing opportunities in
emerging markets and particularly China. Although trading has not been easy we
anticipate a recovery in the second half and further activity which we believe
will add to the business going forward. I would like to thank shareholders for
their continued support and look forward to updating the market on developments
following the full year.
Marc Koplik
Chairman
For further information visit www.geogenesisgroup.com or contact:
Roger Bendelac, CEO Geo Genesis Group Ltd Tel: +1 (917) 969 5475
John Bridges Keith,Bayley,Rogers and Co. Tel: +44 (0) 20 3100
Limited 8300
Paul Youens St Brides Media & Finance Ltd Tel: +44 (0)20 7236
1177
Isabel Crossley St Brides Media & Finance Ltd Tel: +44 (0)20 7236
1177
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 MARCH 2010
Notes Six months Six months Year
to 31 March to 31 March ended 30
2010 2009 September
(unaudited) (unaudited) 2009
(audited)
US $ US $ US $
Revenue 60,000 1,564,200 1,905,120
Less sales tax - - -
Gross margin 60,000 1,564,200 1,905,120
Operating expenses:
Operating expenses 10,000 - 10,422
General and 194,703 424,788 680,220
administrative expenses
Share option charge 5 - - 266,555
Salaries and wages 3,167 - 5,893
Rent expense 5 5,849 2,546 9,086
Exchange loss - - 32
Total expenses 213,719 427,334 972,208
Operating income (loss) (153,719) 1,136,866 932,912
Other income & expenses
Write off of receivable - - (235,400)
Impairment - - (50,000)
Unrealised gain on - - 457,015
investment
Loss on sale of - - (155)
investment
Finance income 2 - -
Finance costs (7,561) (4,434) (16,861)
Other gain and losses 7 (1,263,887) 3,680,800 -
(1,271,446) 3,676,366 154,599
Income (loss) before taxation (1,425,165) 4,813,232 1,087,511
Taxation - - -
Net income (loss) after (1,425,165) 4,813,232 1,087,511
taxation
Discontinued operations 4 - (104,486) 152,627
(Loss)/Profit attributable to (1,425,165) 4,708,746 1,240,138
equity holders
Other comprehensive income
Other comprehensive income
net of tax
Total comprehensive income
for the year
Earnings per share 10
Basic (loss)/earnings per (.02)c 7.10c 1.60c
share (continuing)
Basic (loss)/earnings per share - (0.15)c 0.20c
(discontinuing)
Diluted earnings per (.02)c 4.50c 1.02c
share (continuing)
Diluted continuing per - (0.10)c 0.14c
share (discontinuing)
The notes to the financial statements form an integral part of these financial
statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2010
Notes As at 31 As at 31 Year ended
March 2010 March 2009 30
(unaudited) (unaudited) September
2009
(audited)
US $ US $ US $
ASSETS
Non-current assets
Property, plant and - 41,963 -
equipment
Deferred tax asset - - -
Total non-current assets - 41,963 -
Current assets
Trade and other 84,428 322,887 148,224
receivables
Prepaid expenses 11,976 13,570 -
Investments 7 895,367 5,200,000 2,228,660
Cash and cash 86,091 22,282 5,311
equivalents
Total current assets 1,077,862 5,558,739 2,382,195
Total assets 1,077,862 5,600,702 2,382,195
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 179,288 137,121 309,809
Loan payables 8 322,574 - 71,138
Accrued expenses - 62,991 83
Total current 501,862 200,112 381,030
liabilities
Equity
Issued capital 9 6,806 6,773 6,806
Additional paid in 9 2,744,896 2,719,929 2,744,896
capital
Share option reserve 712,297 445,742 712,297
Retained earnings (2,887,999) 2,217,479 (1,462,834)
Foreign exchange reserve - 10,667 -
Total equity 576,000 5,400,590 2,001,165
Total liabilities and 1,077,862 5,600,702 2,382,195
equity
The notes to the financial statements form an integral part of these financial
statements
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED 31 MARCH 2010
Issued Share Share Retained Foreign Total
Capital Premium Option Earnings Exchange Shareholder's
Reserve Reserve Equity
US $ US $ US $ US $ US $ US $
Balance as 6,773 2,719,929 445,742 (2,491,267) 2,035 683,212
at 1
October
2008
(unaudited)
Profit for 4,708,746 4,708,746
the period
Currency 8,632 8,632
translation
differences
Balance as 6,773 2,719,929 445,742 2,217,479 10,667 5,400,590
at 31 March
2009
Issue of 33 24,967 25,000
shares
Share 266,555 - 266,555
option
reserve
Prior year (211,705) (211,705)
adjustment
pertaining
to
restatement
Profit (3,468,608) (3,468,608)
(loss) for
the period
Currency (10,667) (10,667)
translation
differences
Balance as 6,806 2,744,896 712,297 (1,462,834) - 2,001,165
at 30
September
2009
(audited)
Profit (1,425,165) (1,425,165)
(loss) for
the period
Currency
translation
differences
Balance as 6,806 2,744,896 712,297 (2,887,999) - 576,000
at 31 March
2010
The notes to the financial statements form an integral part of these financial
statements
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 31 MARCH 2010
6 months to 6 months to Year to 30
31 March 31 March September
2010 2009 2009
(unaudited) (unaudited) (audited)
US $ US $ US $
Operating activities:
Net income (loss) (1,425,165) 4,708,746 1,240,138
Adjustments to reconcile net income
to net cash provided (used) for
operating activities:
Depreciation and amortization - 5,624 5,624
Share option charge - - 266,555
Equity share received for - - (1,780,300)
services performed
Impairments - - 50,000
Unrealised loss (gains) on 1,248,973 (3,685,196) (457,015)
investments
Non cash consideration - (1,519,200)
Working capital adjustments:
(Increase) decrease in trade and 63,796 (14,709) (51,751)
other receivables
Increase (decrease) in trade and (130,521) 107,325 244,086
other payables
Increase in prepaid expenses (11,976) (13,570) -
Increase (decrease) in accrued (83) 38,764 -
expenses
Net cash flows used for operating (254,976) 372,216 (482,663)
activities
Cash flows from investing activities:
Interest earned - 4,396 -
Disposal of subsidiary net of cash - (1,251)
New investments (110,770) - -
Proceeds from investments sold 195,090 - -
Proceeds from sale of shares 8,500
Purchase of property and equipment - (897) -
Net cash flows used in 84,320 3,499 7,249
investing activities
Cash flows from financing activities:
New loans received 320,000 - -
Payment of other loans (72,500) - -
Interest from loans 3,936 - -
Proceeds from issuance of shares - - 25,000
Proceeds from borrowing - 70,000
Foreign exchange difference - - -
Net cash flows provided by 251,436 - 95,000
financing activities
Net increase (decrease) in cash 80,780 (368,717) (380,414)
Cash at the beginning of the year 5,311 385,725 385,725
Foreign exchange translation - 5,274 -
Cash and equivalents at the end of 86,091 22,282 5,311
the period
The notes to the financial statements form an integral part of these financial
statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 MARCH 2010
1. GENERAL INFORMATION
Geo Genesis Group Ltd (`the Company'), was incorporated on 2 April 2007 under
the Business Corporation Act of the Republic of Marshall Islands. The Company's
registered office address is noted in the Directors, Secretary and Advisers
sections of the financial statements.
The Company and its subsidiaries (`the Group') was formed to provide
professional services as strategic advisors to corporate and government
entities throughout Africa, Asia, Europe, Central and South America and the
United States. The Group's principal place of business is in the People's
Republic of China, the address of which is noted in the Directors, Secretary
and Advisers sections of the financial statements. The Group is a Limited
Company and is quoted on the PLUS-Quoted Stock exchange market in the United
Kingdom.
The consolidated financial information is presented in United States Dollars
(USD), unless otherwise stated.
2. BASIS OF PREPARATION
This Interim condensed consolidated statement is unaudited and does not
constitute statutory financial statements. The Interim condensed consolidated
statement incorporates the results of the Group for the period from 1 October
2009 to 31 March 2010. The results for the year ended 30 September 2009 have
been extracted from the financial statements for Geo Genesis Group Limited for
the year ended 30 September 2009 which are prepared under International
Financial Reporting Standards (`IFRS') as issued by International Accounting
Standards Board (`IASB'). The interim financial information should be read in
conjunction with the annual financial statements for the year ended 30
September 2009.
The interim consolidated financial statements for the six months ended 31 March
2010 have been prepared in accordance with IAS 34, Interim Financial Reporting.
The accounting policies, presentation and methods of computation have been
followed in these unaudited interim financial statements as were applied in the
preparation of the Group's annual financial statements for the year ended 30
September 2009, 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 re-designation of the
Group's reportable segments (see note 3), 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 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 Interim financial information for the six months ended 31 March 2010 was
approved by the directors on 30 June 2010.
IFRS 3 (revised) `Business combinations' and the consequential amendments to
IAS 27 `Consolidated and separate financial statements' amend certain aspects
of accounting for business combinations set out in IFRS 3. Amendments include
the requirement to expense all transaction costs as incurred and the
requirement for all payments to acquire a business to be recorded at fair value
at the acquisition date, with some contingent payments subsequently re-measured
at fair value through the income statement. IFRS 3 (revised) is applicable
prospectively to business combinations effected on or after the 1 July 2009.
Adoption of this revised standard will impact how the Group accounts for
business combinations entered into in future accounting periods.
Whilst the revised IAS1, "Presentation of financial statements", will have no
impact on the measurement of the Groups results or net assets it is likely to
result in certain changes in the presentation of the group's financial
statements from 2009/10 onwards.
The directors consider that the adoption of the amendments arising from the May
2008 and April 2009 Improvements Projects are not considered to have a material
impact on the Group's and Company's forthcoming financial statements.
The Interim financial information for the six months ended 31 March 2010 was
approved by the directors on 30 June 2010.
3. BUSINESS SEGMENTS
For the purposes of IFRS 8, the chief decision maker takes the form of the
directors.
The directors are of the opinion that the business of the Group comprises a
single business activity, being strategic management consultancy specialising
in investments and advice within China. Operating results and net assets are
attributable to the activities in this sector. At meetings between the
directors the expenditure, cash flows, assets and liabilities are reviewed.
The investment criteria of the Group is to invest in management consultancy
opportunities in China. Sub-divisions of exploration by type, function or town
or city is therefore of little significance in reviewing operations.
4. DISCONTINUED OPERATIONS
During the fiscal year ended 30 September 2009, the Group lost control of
Qingdao China Partners Investment Advisory Co. Ltd whose principal activities
were to act as a strategic management consultancy and private equity firm in
the People's Republic of China. Consequently the Directors have considered to
terminate the operations of this subsidiary undertaking.
The Group considered that control of the entity was lost on 31 March 2009 and
as such was classified as discontinued operations as at this date.
The results of the discontinued operations have been included in the
consolidated financial statements until the date of the loss of control. These
are as follows.
Six months Six months Year ended
ended 31 ended 31 30
March March September
2010 2009 2009
(unaudited) (unaudited) (audited)
US$ US$ US$
Other income - 8,971 8,971
Administrative expenses - (113,314) (113,316)
Finance costs - (143) (143)
Gain on disposal - 257,115
(loss) / Gain from discontinued - (104,486) 152,627
operations
During the six months ended 31 March 2009 and the fiscal year ended 30
September 2009 Qingdao China Partners Investment Advisory Co. Ltd contributed
(loss) / gain of $10,641 to the Group's net operating cashflows, contributed
$37,708 in respect of investing activities and paid $Nil in respect of
financing activities. As the operations were discontinued at 31 March 2009 no
income or costs arose from this operation in 2010.
A gain of $236,481 arose on disposal of Qingdao China Partners Investment
Advisory Co. Ltd, being the carrying amount of the subsidiary's net assets
considered lost. No cash consideration was received as a result. In addition to
the gain on disposal a write off of $235,400 has been included in the Group and
company accounts as a result of receivable balances owed to GGG Ltd.
5. GAIN / LOSS FROM OPERATIONS
Group
Gain / loss from operations has been arrived at after charging:
Six months Six months Year ended
ended 31 ended 31 30
March 2010 March 2009 September
2009
(unaudited) (unaudited)
(audited)
US$ US$ US$
Rent 5,849 28,080 34,620
Depreciation - 5,624 5,624
Realised foreign exchange (gain)/ loss - 8,939 8,939
Auditors remuneration - audit fees - - 35,633
- non audit fee - - -
Share option charges - - 266,555
6. TAXATION
Six months Six months Year ended 30
ended 31 September 2009
ended 31 March 2009
March 2010 (audited)
(unaudited)
(unaudited)
US$ US$ US$
Total tax charge - - -
Factors affecting tax charge:
Profit / (loss) before tax (1,425,165) 4,813,232 1,087,511
Tax at applicable tax rate - - -
Adjustment for different tax - (77,658) (74,577)
jurisdictions
Creation of tax losses - 77,658 74,577
Total tax charge - - -
7. INVESTMENTS
The Group have received equity instruments as consideration in return for the
provision of services. These investments are classified as held for trading and
measured at fair value through profit or loss as the directors consider that
these investments have been incurred principally for the purpose of selling in
the near term.
All the investments are in listed equity securities and therefore present the
Group with the opportunity for return through dividend income and trading
gains. The fair value of these equity securities are based upon quoted market
prices.
6 months to 6 months to Year ended
31 March 31 March 30 September
2010 2009 2009
(unaudited) (unaudited) (audited)
US$ US$ US$
Trading investments carried at
fair value through profit or loss
As at 1 October 2,228,660 - 348,985
Incurred in the period 10,770 1,519,200 (29,276)
Sold in the period (195,090) -
Fair value movement during the (1,248,974) 3,680,800
period
Impairment (319,709)
795,366 5,200,000 -
Other investments in new ventures
c
carried at cost 100,000 - -
As at 31 March 895,366 5,200,000 -
As at 30 September -
6 months to 6 months to Year ended
31 March 31 March 2009 30 September
2010 2009
(unaudited)
(unaudited) (audited)
US$ US$ US$
Listed equity securities
Changda International Holdings, 590,266 3,700,000 1,758,660
Inc.
Trilliant exploration corporation 35,100 1,500,000 190,000
Four Rivers BioEnergy, Inc 170,000 - 280,000
795,366 5,200,000 2,228,660
Other investments
Project Santaro Corporation 75,000 - -
Project W Corporation 25,000 - -
895,366 5,200,000 2,228,660
Of the above investments held in Changda International Inc 266,667 of the
equities (800,000 pre-split) include conditions that restrict the Group to sell
the securities for a period of 12 months from acquisition, and therefore
realise any trading gains during this period. As a result a discounted factor
of 20% has been applied to the quoted market price to reflect the illiquidity
of the investments.
During the year no dividend income has been received in relation to any of
these investments.
8. INTEREST BEARING LOANS AND BORROWINGS
6 months to 6 months to Year ended
31 March 31 March 30
2010 2009 September
2009
(unaudited) (unaudited)
(audited)
Current liabilities US$ US$ US$
Bank loans and borrowings 322,574 - 71,138
322,574 - 71,138
One of the borrowings of the group is secured by 66,667 (200,000 pre-split)
ordinary shares in Changda International Ltd with a carrying value of $136,667.
Interest payable on the loan is on a fixed basis.
9. SHARE CAPITAL
2010 2009
US$ US$
Authorised
350,000,000 common shares of US$0.0001 35,000 35,000
each
31 March 2009
Share Share
Capital Premium
US$ US$
Allotted, called up and fully paid
67,725,692 common shares of US$0.0001 each 6,773 2,719,929
31 March 2010
Share Share
Capital Premium
US$ US$
Allotted, called up and fully paid
68,055,692 common shares of US$0.0001 each 6,806 2,744,896
The Company has one class of shares. Each share entitles the holder to one (1)
vote at general meetings of the Company. The authorised number of shares is
350,000,000 with a par value of US$0.0001 per share. For shares that are
ultimately owned by directors, executive directors, or their immediate family
members, these are subject to lock up agreements that expire on April 10, 2010.
All directors and insiders are required to inform the public of any changes in
their holdings.
On 31 March 2010, the share capital of the Company was US$6,806 and the total
number of shares was 68,055,692.
There were no share issues during the 6 month period to 31 March 2010.
10. EARNINGS / (LOSS) PER SHARE
6 months to 6 months to Year ended 30
31 March 31 March September
2010 2009 2009
(unaudited) (unaudited) (audited)
US$ US$ US$
(Loss)/Profit after taxation and (1,425,165) 4,813,232 1,087,511
non-controlling interest (continuing)
(Loss)/Profit after taxation and - (104,486) 152,627
non-controlling interest
(discontinuing)
Weighted average number of shares for Number Number Number
the purpose of calculating basic
earnings per share 68,055,692 67,725,692 68,055,692
Share options 39,150,535 39,150,535 39,150,535
Basic (loss)/earnings per share (0.02c) 7.10c 1.60c
(continuing)
Basic earnings per share - (0.15)c 0.20c
(discontinuing)
Diluted earnings per share (continuing) (0.02c) 4.50c 1.02c
Diluted earnings per share - (0.10)c 0.14c
(discontinuing)
In accordance with IAS 33 and as the Group has made a loss in the current
period the shares are not dilutive in 2010.
11. RELATED PARTIES TRANSACTIONS
Loans to Directors
The Group has provided its directors with short term loans at rates comparable
to the average commercial rate of interest.
At the period end amounts outstanding are:
6 months to 31 31 March 2009 30 September
March 2010 2009
(unaudited)
(unaudited) (audited)
US$ US$ US$
Loans to directors 1,053 1,053 1,053
Loans from Directors
The Directors have provided the Group with short term non-interest bearing
loan.
At the period end amounts payable are:
6 months 6 months Year end
31 March 2010 31 March 2009 30 September
2009
(unaudited) (unaudited)
(audited)
US$ US$ US$
Loans to directors 107,523 55,209 104,778
12. SEASONALITY
The Group's business operations are not seasonal.
13. DIVIDENDS
The Directors do not propose to pay an interim dividend.
END
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