23 August 2013
Japanese Turnaround Capital PLC
("JTC" or the "Company")
Audited Annual Results for the year to 31 March 2013
and Notice of Annual General Meeting
JTC today reports its audited results for the year to 31 March 2013 and
announces that the Annual General Meeting (″AGM″) will be held at the offices
of K&L Gates LLP at One New Change, London EC4M 9AF at 10 a.m. on 16 September
2013.
CEO'S STATEMENT
I am pleased to report the final audited results of the Company for the twelve
months ended 31 March 2013.
Review of Business
The Company was established to take advantage of opportunities in connection
with distressed financial assets in Japan, primarily in relation to portfolios
of distressed Japanese consumer loans. The Company intended to acquire consumer
debt portfolios from controlled foreign companies at a discount to market
value.
The Company has considered a number of consumer debt portfolios but has not
identified any suitable for acquisition. Due to the decreasing amount of
consumer loan balances in Japan, the directors of the Company (the "Directors")
came to the conclusion that distressed acquisition opportunities are likely to
decline further and that the Company should consider changing its current
business plan and strategy. As a consequence, the Company started to consider
alternative strategies for the Company during the year under review.
New Strategy and Post-Balance Sheet Events
On 29 July 2013, the Company sought and gained shareholder approval to change
its business strategy [DEL::DEL]to become a casino product software developer
and an online casino operator.
The online gambling sector continues to show very strong growth rises and
specifically the proposed target markets offer promising future potential for
new market entrants.
Research by the Company suggests that there is a significant opportunity to
develop the Japanese-speaking and Asian sectors of the online and mobile casino
and slots gambling market. The Company intends to offer a wide range of online
casino games including blackjack, roulette, baccarat, poker and slots on a
variety of internet enabled devices including computers, tablets and mobile
phones. It intends to distinguish itself in the market through a proprietary
Japanese animation front-end system and other elements that are designed
specifically to appeal to Japanese-speaking consumers. The Company intends
subsequently to target consumers in the broader Asia-Pacific region.
In order to fund the new business strategy, on 30 July 2013, the Company
announced that it had raised £1,000,000 (before expenses) at a price of £1 per
share. The Placing Price represents a premium of 500 per cent. on the closing
price on 29 July 2013.
The proceeds of the Placing will be used to support the development of the new
business strategy, as detailed in the circular announced and sent to
shareholders on 11 July 2013.
Following the Placing, the issued share capital of the Company increased to
11,250,000 ordinary shares of £0.05 each. The following shareholders have an
interest in more than 3 per cent. of the shares of the Company:
Number of shares Percentage holding
Ippan Shadan Hojin R&R 9,970,000 88.62%
Eightex Investment Inc. 1,000,000 8.89%
The Company also issued Alexander David Securities Limited ("Alexander David")
168,750 warrants on 11 July 2013. Each warrant entitles Alexander David to
subscribe for one new ordinary share in the Company at an exercise price of £1
per new ordinary share at any time until 11 July 2018.
The Company's securities were admitted to trading on the GXG Main Quote Market
on 11 July 2013 and its securities were withdrawn from the ISDX Growth Market
on 2 August 2013. The Placing Shares were admitted to trading on the GXG Main
Quote Market on 30 July 2013.
The Company is currently in the process of applying for an Isle of Man gaming
licence. The Isle of Man is the jurisdiction of choice because of the high
reputation that its licences hold due to its robust regulatory environment and
the high class infrastructure present on island to support the venture. Once
the gaming licence has been granted, the new casino `Redsharks' is expected to
be launched this winter.
Annual General Meeting ("AGM") on 16 September 2013
A notice of AGM will be sent to shareholders. Apart from the standard AGM
resolutions, the Company is also proposing the following.
Change of Name
In accordance with the change of business strategy, the Company will be seeking
shareholder approval to change the Company's name to WinLogic Plc at the Annual
General Meeting.
Omnibus Incentive Plan, Issuance of Options to the Company's Employees.
At the Annual General Meeting, the Company will be seeking shareholder approval
to grant share options (the "Options") to the following employees of the
Company: Masahiko Kageyama, Kosuke Takishima and Satoshi Kokubo (hereafter the
"Employees") at an exercise price of £0.20 per new ordinary share. The exercise
price of the Options is below the Placing Price of the recent Placing and it is
also below the current share price of £1. After consideration of the Options,
the Directors have decided to recommend that the shareholders of the Company
vote in favour of granting the Options at £0.20 to the Employees for the
following reasons:
* The Employees have invested significant time and effort in assisting the
Company develop its new business strategy.
* The Employees identified the online gaming project which the Directors
believe will significantly enhance shareholder value and create long term
growth potential.
* The Employees have successfully negotiated various casino supplier
contracts and, as detailed above, have raised £1 million from an external
party pursuant to the Placing to support the development of the new
business strategy of the Company.
* Much of this work occurred prior to the Placing whilst the Company's share
price was trading at £0.20.
The existing omnibus incentive plan of the Company adopted in March 2010 (the "
Existing Omnibus Incentive Plan") allows options to be granted to employed
directors and employees at the current share price. Given that the Options are
proposed to be granted at a price which is below the current share price, the
Directors are also seeking shareholder approval to terminate the Existing
Omnibus Incentive Plan and replace it with a new omnibus incentive plan (the "
New Omnibus Incentive Plan") pursuant to which the terms and conditions of the
grant of the options are determined by the Directors. The New Omnibus Incentive
Plan is available on the Company's website.
It is proposed to grant the following Options to the Employees pursuant to the
New Omnibus Incentive Plan:
Employee Options to be Granted Total Options Post
Grant
(subject to
shareholder approval)
Masahiko Kageyama 337,500 337,500
Kosuke Takishima 337,500 637,500
Satoshi Kokubo 150,000 150,000
Subject to shareholder approval in relation to the Options, the Options will
vest as follows:
* one third will vest immediately on the date of the grant of the Options;
* one third will vest on the 12 month anniversary of the date of the grant of
the Options; and
* one third will vest on the 24 month anniversary of the date of the grant of
the Options.
The unexercised Options will expire ten years after the date of the grant of
the Options.
Finally, I would like to thank all our shareholders for their continued support
over the last 12 months. We believe that we are now in an exciting period of
the Company's development.
Keiichiro Takishima
Chief Executive Officer
23 August 2013
DIRECTORS' REPORT
The Directors present their report together with the audited financial
statements of the Company for the year ended 31 March 2013.
Results and dividends
The accompanying financial statements for the year ended 31 March 2013 which
were approved by the Board of Directors are set out on pages 6 to 20.
The Directors do not recommend the payment of a final dividend for the
financial year ended 31 March 2013 (2012: nil).
Principal Activities
Japanese Turnaround Capital PLC is a company incorporated in England in
February 2010. The Company was established to take advantage of opportunities
in connection with distressed financial assets in Japan.
The shares of the Company were admitted for trading on the PLUS-quoted market
on 9 April 2010.
Review of business and future developments
The company remains non-trading at present, although it continues to actively
seek investment opportunities to enhance value for shareholders.
Over the past twelve months, the Company has assessed several projects. The
majority of expenditure has been used for due diligence in respect of the
targeted assets. Unfortunately, due to the market conditions the Company has
faced increasing economic uncertainty in Japan, which means that certain
distressed asset transactions identified by the Board have not completed.
The Board is maintaining a tight control of the Company's resources, which they
consider adequate to support the current level of expenditure.
A General Meeting was scheduled for 29th July 2013 where shareholders voted in
favour of a New Business Strategy and to withdraw from the ISDX Growth Market
(formerly PLUS Markets). The company intends to become an online casino
operator targeting Japanese and Asian markets. The Company was admitted to
trading on the GXG Main Quote on 11th July 2013 and has subsequently raised GBP
1 million (approximately JPY 152.8 million) from new share issues.
Serious Loss of Capital
The Directors note that as at 31 March 2013, the net current liabilities of the
Company were Yen 52,156,455. Section 656 of the Companies Act 2006 states that
where the net assets of a public company are half or less than its called-up
share capital, the directors must convene a general meeting within 28 days, for
a date not later than 56 days, after any of the directors become aware of the
situation. The meeting must consider whether any, and if so what, steps should
be taken to deal with the situation
The Directors intend to discuss the serious loss of capital of Japanese
Turnaround Capital Plc pursuant to s656 of the 2006 Companies Act at the AGM.
The reasons that net assets are less than half the called-up share capital are
outlined above. The Directors propose resolving the situation during the
course of the year either by increasing the net asset value of the Company
through the issue of new capital and/or acquiring businesses in line with its
investment strategy.
Going Concern
The Directors assessment of going concern is set out in the accounting policies
to the financial statements.
Directors
The Directors who served during the year were as follows:
Yoshio Nakajima
Shuichiro Tamaki
Keiichiro
Takishima
William David (Non Executive)
Directors' interests
The Directors' and their beneficial interests (including family interest) in
the Company during the year were as follows:
As at 31 March
2013
Ordinary
Shares of
5pence each
Yoshio Nakajima 10,000
Shuichiro Tamaki 10,000
Keiichiro Takishima 10,000
No director holds any share options.
Share capital
The authorised and issued share capital of the Company is shown in note 14 of
the Financial Statements.
Principal Risks and Uncertainties
The management of the business and the execution of the Company's strategy are
subject to a number of risks. These risks are formally reviewed by the Board
and appropriate processes and controls are implemented to monitor and mitigate
them.
Foreign Currency Exchange Risks
The Company has minimal exposure to foreign currency risk as most of its
business transactions, assets and liabilities are principally denominated in
Japanese Yen ("JPY").
Credit Risks
The Company has no significant credit risk as the Company has not traded since
incorporation. The credit risk on bank and cash balances is limited because the
counter party is a bank with high credit- rating assigned by international
credit rating agencies.
Liquidity Risks
The Company policy is to regularly monitor current and expected liquidity
requirements to ensure that it maintains sufficient reserves of cash to meet
its liquidity requirements in the short and longer term.
Interest Rate Risks
The Company has limited exposure to interest-rate risk arising from its bank
deposits.
Supplier Payment Policy
It is the Company's policy to pay suppliers in accordance with the terms of
business agreed with them.
Statement of Director's responsibilities in respect of the Annual Report and
the financial statements
The directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. The directors have elected to prepare the financial statements
in accordance with International Financial Reporting Standards (`IFRS') as
adopted in the European Union. Under company law the directors must not approve
the financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Company and of the profit or loss of
the Company for that period.
In preparing those financial statements, the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state whether the financial statements have been prepared in accordance
with IFRS as adopted by the European Union; and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business, in
which case there should be supporting assumptions or qualifications as
necessary.
The directors confirm that they have complied with the above requirements in
preparing the financial statements.
The directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Directors' Statement as to Disclosure of Information to the Auditors
So far as each director is aware, there is no relevant audit information of
which the Company's auditors are unaware. Each director has taken all the steps
he ought to have taken as a director in order to make himself aware of any
relevant audit information and to establish that the Company's auditors are
aware of that information.
By order of the Board
Keiichiro TAKISHIMA
Director
Registered office:
One New Change
London
EC4M 9AF
Date: ______________________________
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that Japanese Turnaround Capital plc (the "Company")
will hold its Annual General Meeting at the offices of K&L Gates LLP at One New
Change, London, EC4M 9AF on 16 September 2013 at 10 a.m. for the purpose of
considering and, if thought fit, passing the following resolutions which will
be proposed in the case of resolutions 1 to 9 (inclusive) as ordinary
resolutions and in the case of resolution 10 as a special resolution:
ORDINARY RESOLUTIONS
1. To receive and adopt the Company's annual accounts for the year ended 31
March 2013, together with the directors' and auditors' reports thereon.
1. To approve the directors' remuneration report for the year ended 31 March
2013.
2. To re-appoint Yoshio Nakajima as a director of the Company, who is retiring
by rotation in accordance with the Company's articles of association.
3. To re-appoint RSM Tenon Audit Limited as auditors of the Company to hold
office from the conclusion of the meeting until the conclusion of the next
general meeting of the Company at which accounts are laid and to authorise
the directors of the Company to agree the auditors' remuneration.
4. To terminate the rules of the Existing Omnibus Incentive Plan
2. To adopt the rules of the New Omnibus Incentive Plan
5. To grant 337,500 options to Masahiko Kageyama at an exercise price of £0.20
pursuant to the New Omnibus Incentive Plan.
6. To grant 337,500 options to Kosuke Takishima at an exercise price of £0.20
pursuant to the New Omnibus Incentive Plan.
7. To grant 150,000 options to Satoshi Kokubo at an exercise price of £0.20
pursuant to the New Omnibus Incentive Plan.
SPECIAL RESOLUTION
8. To change the name of the Company to WinLogic Plc.
The circular notice convening this AGM has been sent to shareholders on 23
August 2013. Copies of the circular are available for inspection at the
Company's registered office One New Change, London, EC4M 9AF and on the
Company's website www.jtcapital.co.uk.
The directors of Japanese Turnaround Capital PLC accept responsibility for this
announcement.
CORPORATE ADVISER AND CONTACT DETAILS:
Alexander David Securities Limited is acting as GXG Corporate Adviser to the
Company and can be contacted at:
David Scott
Telephone: +44 (0) 20 7448 9800
45 Moorfields, London, EC2Y 9AE
ANNUAL RESULTS FOR THE YEAR TO 31 MARCH 2013
Statement of Comprehensive Income for the period ended 31 March 2013
Year ended Year ended
31 31
March March
2013 2012
¥ ¥
Administrative expenses (46,631,299) (9,100,319)
Operating loss (46,631,299) (9,100,319)
Other Operating Income 4,440,282 -
Finance income 119 636
Loss before tax (42,190,898) (9,099,683)
Income tax expense (70,000) (70,000)
Loss for the year and total comprehensive (42,260,898) (9,169,683)
loss for the year
All activities relate to continuing
operations
Loss per share
From continuing operations
Basic and diluted (Yen per share) (4.12) (0.89)
Statement of Financial Position for the period ended 31 March 2013
31 Mar 31 Mar
2013 2012
¥ ¥
Current assets
Trade and other receivables 9,090,130 7,000,000
Bank and cash balances 1,955,875 98,162
11,046,005 7,098,162
Current liabilities
Trade and other payables (63,132,460) (16,923,719)
Current income tax liabilities (70,000) (70,000)
(63,202,460) (16,993,719)
Net current liabilities (52,156,455) (9,895,557)
NET LIABILITIES (52,156,455) (9,895,557)
Capital and reserves
Share capital 71,286,389 71,286,389
Share premium account 71,286,111 71,286,111
Retained loss (194,728,955) (152,468,057)
DEFICIT (52,156,455) (9,895,557)
Statement of Cash Flows for the period ended 31 March 2013
Year ended 3 Year ended
1 31 March
March 2012
2013
¥ ¥
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year (42,260,898) (9,169,683)
Adjusted for:
Income tax expenses 70,000 70,000
Finance Income (119) (636)
Share based payment expense - -
Movements in working capital
Increase in trade and other receivables (2,090,130) -
Increase in trade and other payables 46,208,741 8,676,881
Income Tax Paid (70,000) (70,000)
Net Cash Inflow/(Outflow) from Operating 1,857,594 (493,438)
Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 119 636
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share capital - -
NET INCREASE IN (DECREASE) CASH AND CASH 1,857,713 (492,802)
EQUIVALENTS
Cash and cash equivalents at 1 April 2012 98,162 590,964
CASH AND CASH EQUIVALENTS AT 31 MARCH 2013 1,955,875 98,162
