TIDMAAA
RNS Number : 9551S
All Asia Asset Capital Limited
28 June 2018
28 June 2018
All Asia Asset Capital Limited
("All Asia Asset Capital", "AAA" or the "Company")
Results for the year ended 31 December 2017
All Asia Asset Capital (AIM: AAA), an investing company focused
on investing in the growing markets of Asia Pacific region, today
announces its audited results for the year ended 31 December 2017,
together with comparative figures for the year ended 31 December
2016.
Highlights:
-- During the year ended 31 December 2017, the Company disposed
of one of its investments, namely its minority stake in Andaman
Power and Utility Company Limited ("APU"), a company based in
Thailand and Myanmar which was intended to be involved in the
development of power plants and the provision of electricity,
having completed this disposal in May 2017.
-- Following completion of the disposal of the APU asset, the
Company has one remaining minority investment stake, namely its 7%
interest in Myanmar Allure Group Co., Ltd. ("MAG"), which owns and
operates the Allure Resort, a combined hotel, resort and gaming
facility located in Tachileik province, Myanmar, in the vicinity of
the Thailand-Myanmar Mae Sai border.
-- In April 2017 the Company announced that Mr. Paniti
Junhasavasdikul had resigned as an Executive Director and General
Counsel of the Company, effective 30 April 2017, in order to focus
on his existing business interests.
-- The resignation of Mr. Paniti Junhasavasdikul has led the
Company to search for a suitable replacement not only for the
Executive Director role but to fill the Chief Executive Officer
position in order to strengthen its board composition and lead the
Company forward, in particular focusing on the proven pedigree in
successfully navigating investments in the Asia Pacific region
within the context of an ever growing competitive landscape. The
search for an appropriately qualified Chief Executive Officer is
ongoing.
Robert Berkeley, Chairman of AAA said: "Looking at the past year
in retrospect, the Company created an opportunity to dispose of its
investment in APU notwithstanding events taking place in 2016 which
indicated that there would be likely be a very substantial decrease
in the value of the Company's holding in this investment. The
Company has held its investment position in MAG. The proceeds of
the disposal of the APU investment will continue to allow the
Company to refocus its energies and pave the way towards delivering
shareholder value by searching for new investment
opportunities."
The Company's full Annual Report for the year ended 31 December
2017 will be available shortly from the Company's website,
www.aaacap.com, and will be posted to shareholders tomorrow.
For further information:
All Asia Asset Capital Limited
Robert Berkeley, Executive Chairman and
Finance Director
Wai Tak Jonathan Chu, Executive Director
Tel: +44 (0) 207 621 8910
Tel: +852 3756 0124
www.aaacap.com
Allenby Capital Limited (Nominated Adviser
and Broker)
Nick Athanas / Alex Brearley
Tel: +44 (0) 203 328 5656
www.allenbycapital.com
About AAA
AAA is an investment company that has been established as a
platform for investors looking to access growing markets in the
Asia-Pacific region. The Company invests in a portfolio of
companies with at least a majority of operations (or early-stage
companies that intend to have at least a majority of their
operations) in the Asia-Pacific region in industries with high
growth potential including, but not limited to: agriculture,
forestry and plantations, mining, natural resources, property,
and/or technology. AAA is publicly quoted and its shares are traded
on the AIM Market, which is operated by the London Stock
Exchange.
CHAIRMAN'S STATEMENT
I am pleased to report the results of All Asia Asset Capital
Limited (the "Company") together with its subsidiaries (the
"Group") for the year ended 31 December 2017.
Business Review
During the year ended 31 December 2017 the Company continued its
focus on Myanmar. The Company disposed of its minority investment
in Andaman Power and Utility Company Limited ("APU"), which was
intended to operate in the development of utility plants and the
provision of electricity in Myanmar, whilst retaining to its
investment position in Myanmar Allure Group Co., Ltd., ("MAG"),
which owns and operates the Allure Resort, a combined hotel, resort
and gaming facility located in Tachileik province, Myanmar, in the
vicinity of the Thailand-Myanmar Mae Sai border.
As reported at length in the Company's previous year's Annual
Report for the year ended 31 December 2016, the disposal of the
Company's interest in APU has been fully completed with the
consideration of Thai Baht 34,889,000 being received in May 2017.
In maintaining its minority investment of 7 per cent. in MAG, the
Board is positive regarding the long-term outlook towards Myanmar
and the hotel, resort and gaming sector in particular.
Indeed, whilst MAG has continued its search for partnership
opportunities and is seeking to leverage its prime position for
foreign gaming partners to collaborate in the expansion of its
Tachileik facilities, the Board has been strongly encouraged by the
fact that MAG has paid back all loans from third party MAG
shareholders, thus having paid off its entire debt during the year
ending 31 December 2017.
Furthermore, the Board of AAA understand that MAG is currently
working on plans to expand its facilities starting in 2019. The
expected construction time is one year, with an increase in revenue
streams and capacity expected to start during 2020. The preliminary
capital outlay for the expansion of MAG's facilities will be
approximately GBP6.09 million and this funding is anticipated to be
raised via a loan from MAG's majority shareholder.
Notwithstanding these latest developments and pursuant to the
Company's announcement on 2 November 2016, the Company shall
consider its options and continues to actively seek realisation of
its investment in MAG. However, at the present time, the Company
has yet to engage in any advanced discussions with third parties in
respect of realising AAA's interest in MAG.
The proceeds of the disposal of the Company's minority interests
in APU provided the Company with necessary working capital and will
continue to allow the Company to refocus its energies and pave the
way towards delivering shareholder value by finding new investment
opportunities.
Financial Results
During the year ended 31 December 2017 the Company incurred a
net profit of GBP1.07 million (year ended 31 December 2016: loss of
GBP0.5 million), mainly attributable to gain on disposal of
available-for-sale investments.
During the year, the main assets of the Group consisted of its
two investments in APU and MAG. AAA's investments in MAG were
valued by an independent third party valuer at a fair value of
GBP1.21 million as at 31 December 2017. On 3 May 2017, the Group
disposed of all interests in APU through a disposal of the entire
issued capital of Energy Central Limited for a consideration of
Thai Baht 34,889,000 settled in cash. As at 31 December 2017 the
net assets of the Group were GBP1.56 million (31 December 2016: net
assets of GBP2.13 million) and the Group had cash and cash
equivalents of GBP0.36 million (31 December 2016: cash and cash
equivalents of GBP0.04 million).
Board Changes
On 21 April 2017, the Company announced that Mr. Paniti
Junhasavasdikul would step down as an executive director and
general counsel of the Company as of 30 April 2017. We extend our
gratitude to him for his diligence, commitment and contribution to
the Company during his tenure of office.
The Company believes that it is very important that it
identifies the right candidate to replace Paniti Junhasavasdikul,
who possesses the skills and experience that match the strategic
direction of the business. The Company also intends to consider the
composition of its Board as a whole, once it has further assessed
the strategic direction of the Group following the sale of Energy
Central/APU that took place in 2017.
It is worthy to reiterate that the Company announced on 2
November 2016 that it was considering a proposal to amend the
existing investing policy of the Company and it was noted that this
change in investing policy would be subject to approval of
shareholders. The Company intends to re-assess this proposal once
it has appointed a new Chief Executive Officer.
Economic Outlook
With the Company's sole investment at the present time being
situated in Myanmar, it is worth reviewing Myanmar's current
economic environment. In the World Bank's May 2018 Myanmar Economic
Monitor report, the overall assessment was an improved economic
growth performance during fiscal year 2017/18, with a real GDP
growth of 6.4 per cent. This signalled an about-turn from the more
modest experience of fiscal year 2016/17 which saw 5.9 per cent
real GDP growth amid a deteriorating outlook at the time.
Furthermore, inflation pressure has moderated and the current
account deficit has narrowed against the backdrop of strong export
growth, whilst exchange rates were stable during that period.
Within the tourism and hospitality sector, according to
statistical data published by Myanmar's Ministry of Hotels &
Tourism, visitor arrivals increased by approximately 500,000, to a
total 3.443 million arrivals, with the majority of these (over
400,000) arriving through border gateways. This may have helped
offset shorter stays and marginally less daily tourism spend as,
according to the World Bank report, Myanmar experienced flat
tourism-related earnings in 2017/18, attributed to international
concerns about the Rakhine humanitarian crisis. Despite some
protracted risk factors arising within certain sectors, the
economic outlook remains buoyant for Myanmar, with the World Bank's
May 2018 Myanmar Economic Monitor projecting growth at 6.8 percent
for the 2018/19 fiscal year.
Appreciation
I would like to thank all the hard work my fellow Board members
and staff, our advisers and of course our shareholders for their
continuing support for AAA. I sincerely hope that the Company will
continue to enjoy such support towards the development of the Group
in the years to come.
Robert Anthony Rowland Berkeley
Chairman
London, 28 June 2018
DIRECTORS' REPORT
The directors of the Company (the "Directors") present their
report and the audited financial statements for the year ended 31
December 2017.
Principal activity and investing policy
All Asia Asset Capital Limited ("AAA" or "Company") is an
investing company that is incorporated in the British Virgin
Islands on 14 September 2012. The Company has been established as a
platform for investors looking to access growing markets in the
Asia Pacific region. Its main country of operation is in
Thailand.
The investment objective of the Company is to invest in a
portfolio of companies with at least the majority of their
operations (or early stage companies that intend to have at least
the majority of their operations) in the Asia Pacific region with
an expected initial focus on: Malaysia, Thailand, Indonesia and
Myanmar. The Directors intend to invest in companies that operate
(or early stage companies that intend to operate) in industries
with high growth potential including, but not limited to:
agriculture, forestry and plantations, mining, natural resources,
property and/or technology.
Review of business
As at 31 December 2017, the Company held one investment in its
portfolio.
Myanmar Allure Group Company Limited
All Asia Asset Capital currently holds a 7 per cent stake in
Myanmar Allure Group Co., Ltd. ("MAG"). MAG is a privately held
company based in Thailand and Myanmar, which operates in the
hospitality and entertainment business.
MAG owns and operates the Allure Resort, a combined hotel,
resort and gaming facility located in Tachileik province, Myanmar,
in the vicinity of the Thailand-Myanmar Mae Sai border. The resort
is situated in an 11-acre plot and is easily accessible from Chiang
Rai, Thailand and located within a five minute walk from the
border. It offers a variety of entertainment including gaming,
shopping and cultural sightseeing.
The Board of AAA understand that MAG is currently working on
plans to expand its facilities in 2019. The expected construction
time is one year, with an increase in revenue streams and capacity
expected to start during 2020. The preliminary capital outlay for
the expansion of MAG's facilities will be approximately GBP6.09
million and this funding is anticipated to be raised via a loan
from MAG's majority shareholder.
Capital Resources and Financing Structure
During the year ended 31 December 2017, the Company continued to
utilise the net proceeds from the disposal of Energy Central/APU
and the funds raised through two subscriptions with certain of the
Company's existing shareholders in April 2015 and May 2015, through
which the Company raised approximately GBP490,000. No equity
finance was raised in 2017 or 2016. In December 2016, the Company
signed an agreement with Nature Cove Holdings Limited (a
shareholder of the Company), through which the Company was provided
with a convertible loan of GBP100,000, in order to provide
short-term financing for the Company. This loan was subsequently
repaid in June 2017 and no conversion of the loan's principal
amount or interest into new ordinary shares in the capital of the
Company took place during the term of the loan.
Furthermore, through the disposal of Energy Central whose sole
asset was the Company's 7 per cent stake in APU, having duly
received the cash consideration Thai Baht 34,889,000 which is
equivalent to approximately GBP0.8m at time of first reporting, the
Company has been able to put the proceeds from the disposal towards
the Company's operational expenses.
International Financial Reporting Standards
The consolidated financial statements for the year ended 31
December 2017 together with comparative figures from the year ended
31 December 2016 have been prepared by using International
Financial Reporting Standards (IFRSs).
Results and dividends
The reported profit for the year was GBP1.07 million, which was
mainly attributable to gain on disposal of available-for-sale
investments. Further details are set out in the consolidated
statement of profit or loss. No dividend has been paid or proposed
for the period.
Directors and their interests
The following Directors who served during the year ended 31
December 2017, together with their beneficial interests in the
ordinary share capital of the Company at the date of admission of
the Company to trading on AIM of London Stock Exchange are as
follows:
Shares Shares % at 31
held at held at December
2 May 2013 31 December 2017
Directors Position 2017
----------------------- -------------------------- ----------- ------------ ---------
Robert Anthony Rowland Executive Chairman
Berkeley and Finance Director 14,914,575 14,914,575 7.01%
Paniti Junhasavasdikul
(1) Executive Director - - -
Wai Tak Jonathan Chu Executive Director - - -
(Dominic) Seah Boon Independent Non-Executive
Chin Director - - -
Notes:
(1) Appointed on 9 September 2016 and resigned on 30 April
2017
Substantial interests
As at 31 December 2017, save for the Directors listed above, the
Directors were aware of the following interests amounting to 3% or
more of the ordinary share capital of the Company.
Percentage
Shareholder Number of Shares Shareholding
W B Nominees Limited 37,371,384 17.56%
Euroclear Nominees Limited 30,004,150 14.10%
Vidacos Nominees Limited 21,030,193 9.88%
Mr Robert John Sali 16,666,667 7.83%
Lynchwood Nominees Limited 16,325,000 7.01%
Mr Blake Gordon Olafson 15,000,000 7.05%
Oxbow Enterprise Limited 14,914,575 7.01%
Chakris Kajkumjohndej 11,000,000 5.17%
The Bank of New York (Nominees
Limited) 7,881,001 3.70%
Chiefland Trading Limited 7,333,334 3.45%
Directors' Responsibilities Statement
The Directors are responsible for the preparation of
consolidated financial statements for each financial year. The
consolidated financial statements must give a true and fair view of
the state of affairs of the Company and its subsidiaries (the
"Group"), and the Group's profit and loss for that period.
When preparing consolidated financial statements, the Directors
are required to:
-- Select suitable accounting policies and apply them consistently
-- Make judgments and estimates that are reasonable
-- State whether they adhered to applicable accounting standards
subject to any material departures disclosed and explained in the
consolidated financial statements
-- Prepare the consolidated financial statements on a going
concern basis, unless it is inappropriate to presume that the
Company will continue in business
The Directors must keep proper accounting records, which
disclose, with reasonable accuracy at any time, the financial
position of the Group and the Company. The Directors must ensure
that the consolidated financial statements comply with applicable
laws and follow International Financial Reporting Standards. The
Directors must also safeguard the assets of the Group and the
Company, and take reasonable steps to prevent and detect fraud or
other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and
the financial statements are made available on a website. Financial
statements are published on the Company's website in accordance
with AIM Rules. The maintenance and integrity of information
presented in the Company's website is the responsibility of the
Directors, therefore the Directors' responsibility also extends to
the ongoing integrity of the financial statements contained
therein.
Auditors
Elite Partners CPA Limited was appointed auditors at the
conclusion of the Company's annual general meeting held on 31 July
2017. A resolution to re-appoint Elite Partners CPA Limited as the
Company's auditors will be proposed at the forthcoming Annual
General Meeting.
Approved by the Board and signed on behalf of the Board.
Robert Anthony Rowland Berkeley
Chairman
London, 28 June 2018
CORPORATE GOVERNANCE STATEMENT
Board of Directors
During the year ended 31 December 2017, the following persons
served as directors of the Company:
Executive Directors:
Robert Anthony Rowland Berkeley
Paniti Junhasavasdikul (resigned on 30 April 2017)
Wai Tak Jonathan Chu
Independent Non-Executive Director:
(Dominic) Seah Boon Chin
The Directors are not related to each other.
Responsibilities of the Board
The Directors are responsible for the overall management and
control of the Company as well as identifying investment
opportunities, managing the investment/acquisition process and
monitoring the investee companies' operating performance. The
Directors will review the operations of the Company at regular
board meetings and it is currently intended that the Board will
meet at least four times a year and at other times as and when
required.
The Directors recognise the importance of sound corporate
governance commensurate with the size of the Company and the
interests of Shareholders and intend that the Company will comply
with the main provisions of the Corporate Governance Code published
by the Quoted Companies Alliance to the extent that they believe it
is appropriate in light of the size, stage of development and
resources of the Company.
Board Committee
As there is currently only one independent non-executive
director of the Company, being Dominic Seah Boon Chin, the Board
has not established remuneration, nomination and audit committees.
Until the appointment of a further independent non-executive
director, Dominic Seah Boon Chin will be responsible for the
Company's remuneration policy and the Board as a whole will monitor
the performance of the Board and plans for succession and the
functions usually carried out by a nominations committee. Until an
audit committee is appointed, the Board as a whole will be
responsible for reviewing and monitoring internal financial control
systems and risk management systems on which the Company is
reliant, considering annual and interim accounts and audit reports,
considering the appointment and remuneration of the Company's
auditor and monitoring and reviewing annually their independence,
objectivity, effectiveness and qualifications
INVESTING POLICY
(Adopted at the Annual General Meeting of the Company on 10
December 2013)
The Company intends to invest in companies with at least the
majority of their operations (or early stage companies that intend
to have at least the majority of their operations) in the Asia
Pacific region. The Company intends to invest in a portfolio of
companies with an initial focus on companies that operate (or early
stage companies that intend to operate) in industries with likely
high growth potential including, but not limited to: agriculture,
forestry and plantation, mining, natural resources, property and/or
technology.
The Directors intend to source and identify potential
investments in line with the Investing Policy through their own
research and network of contacts and possibly strategic
partnerships with other companies or persons who can assist the
Company in sourcing and identifying potential investments.
Investments are expected to be mainly in the form of equity
although investments may be by way of debt, convertible securities
or investments in specific projects. In the case of equity
investments, the Directors intend typically to take minority
positions (with suitable minority protection rights), primarily in
unquoted companies. Investments will therefore typically be of a
passive nature. However, whilst the Directors intend that typical
investments will constitute minority positions in investee
companies, should the Company make majority investments, the
Company may seek participation in the management or board of
directors of such an entity with a view to seeking to improve the
performance and growth of the business.
There is no limit on the size of an investment in a project. The
Directors expect that each investment will typically yield a
targeted internal rate of return of at least 20 to 30 per cent. per
annum. It is likely that a substantial portion of the Company's
financial resources will be invested in a small number of
companies, however the Company has not excluded the possibility of
making just one investment. Depending on the size of investments,
they may be deemed to be reverse takeovers for the purposes of the
AIM Rules, which would require Shareholder approval and
re-admission of the Company, as enlarged by the acquisition, to
trading on AIM.
In addition to paying the costs of the Company's ongoing
expenses, the Company's cash resources will primarily be used to
identify, evaluate and select suitable investment opportunities and
to make investments, either in part or in full, as applicable. The
Directors consider that as investments are made, or promising new
investment opportunities arise, further funding of the Company will
be required and they anticipate further equity fundraisings by the
Company. Subject to prevailing authorities to issue new Ordinary
Shares or, if required, with Shareholder approval, new Ordinary
Shares may be used as consideration, in whole or in part, for
investments. The Company will not be subject to any borrowing or
leverage limits. In order to mitigate investment risk, the
Directors intend to carry out a thorough due diligence process in
evaluating each potential investment including: site visits,
analysis of financial, legal and operational aspects of each
investment opportunity, meetings with management, risk analysis,
review of corporate governance and anti-corruption procedures and
the seeking of third party expert opinions and valuation reports
where the Directors see fit.
The Directors will apply investment criteria including: the
potential for capital growth and/or the potential for profit
generation with a view to receiving dividend income over time, high
attractiveness to potential buyers of the company in question in
order to facilitate exits and a strong and experienced management
team.
Given the time frame to fully maximise the value of an
investment, the Board expects that investments will be held for the
medium to long term, although short-term disposals of assets cannot
be ruled out in exceptional or opportunistic circumstances. The
Directors intend to re-invest the proceeds of disposals in
accordance with the Company's Investing Policy unless, at the
relevant time, the Directors believe that there are no suitable
investment opportunities in which case the Directors will consider
returning the proceeds to Shareholders in a tax efficient
manner.
Cash held by the Company pending investment, reinvestment or
distribution will be managed by the Company and placed in bank
deposits or in capital guaranteed schemes offered by major global
financial institutions, in order to protect the capital value of
the Company's cash assets. The Company may, where appropriate, also
enter into agreements or contracts in order to hedge against
interest rate or currency risks. Investments are expected to be
held by the Company or a subsidiary to be incorporated for the
purpose of holding an investment.
Any material change to the Company's Investing Policy will only
be made following the approval by ordinary resolution of
Shareholders in general meeting. In addition, if the Company has
not substantially implemented its Investing Policy within 18 months
of Admission, the Company will seek the approval of Shareholders at
its next annual general meeting for its Investing Policy and on
annual bases thereafter until such time that its Investing Policy
has been substantially implemented. If it appears unlikely that the
Company's Investing Policy can be implemented at any time, the
Directors will consider returning remaining funds to
Shareholders.
The Directors will review the Investing Policy on an annual
basis and will implement any non-material changes or variations as
they consider fit. Details of any such non-material changes or
variations will be announced as appropriate. Any material change or
variation of the Investing Policy will be subject to the prior
approval of Shareholders
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2017
Notes 2017 2016
--------- -----------
GBP GBP
Net realised gain on disposal
of
available-for-sale investments 1,213,028 -
Other income 5 236 377
Impairment of available-for-sale
financial assets - (3,881,471)
Change in fair value of
convertible loan designated
at fair value through profit
or loss 220,243 (220,243)
Administrative expenses (363,490) (250,096)
--------- -----------
Profit / (Loss) before
tax 6 1,070,017 (4,351,433)
Income tax 8 - -
--------- -----------
Profit / (Loss) for the
year 1,070,017 (4,351,433)
========= ===========
Earnings / Loss per ordinary
share (in pence)
- Basic 9(a) 0.50 (2.04)
========= ===========
- Diluted 9(b) 0.50 (2.04)
========= ===========
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEARED 31 DECEMBER 2017
Notes 2017 2016
----------- -----------
GBP GBP
Profit / (Loss) for the
year 1,070,017 (4,351,433)
Other comprehensive income:
Items that may reclassified
subsequently to profit
or loss
Fair value loss on available-for-sale
financial assets (243,838) (3,941,228)
Reclassification adjustment
relating to impairment
of available-for-sale financial
assets during the year - 3,881,471
Exchange difference on
translating financial statements
of foreign subsidiaries (1,387,344) 858,489
----------- -----------
Other comprehensive (expense)
/ income, net of tax (1,631,182) 798,732
----------- -----------
Total comprehensive expense
for the year (561,165) (3,552,701)
=========== ===========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
As at As at
Notes 31 Dec 2017 31 Dec 2016
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 11 6,411 10,276
Available-for-sale financial
assets 13 1,208,815 2,416,336
----------- ------------------
1,215,226 2,426,612
----------- ------------------
Current assets
Prepayments and deposits 10,547 8,932
Cash and bank balances 14 355,418 44,648
----------- ------------------
Total current assets 365,965 53,580
-----------
Total assets 1,581,191 2,480,192
=========== ==================
CAPITAL AND RESERVES
Share capital 15 6,284,194 6,284,194
Reserves 17 (4,719,341) (4,158,176)
-----------
Total equity 1,564,853 2,126,018
=========== ==================
LIABILITIES
Current liabilities
Other payables and accruals 18 16,338 33,931
----------- ------------------
Non-current liabilities
Convertible loan 20 - 320,243
----------- ------------------
Total liabilities 16,338 354,174
=========== ==================
Total equity and liabilities 1,581,191 2,480,192
=========== ==================
Net current assets 349,627 19,649
=========== ==================
Total assets less current
liabilities 1,564,853 2,446,261
=========== ==================
Net assets 1,564,853 2,126,018
=========== ==================
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2017
Fair Share
Share value option Exchange Accumulated
capital reserve reserve reserve loss Total
---------- ----------- --------- ----------- ------------ -----------
GBP GBP GBP GBP GBP GBP
As at 1 Jan
2016 6,284,194 180,779 44,125 601,104 (1,431,483) 5,678,719
Loss for the
year - - - - (4,351,433) (4,351,433)
Other comprehensive
income:
Loss on fair
value change
on available-
for-sale financial
assets - (4,169,030) - - - (4,169,030)
Reclassification
adjustment
relating
to impairments
of available-for-sale
investment
during the
year - 3,881,471 - - - 3,881,471
Exchange difference
on translating
of financial
statement of
overseas subsidiaries - - - 1,086,291 - 1,086,291
---------- ----------- --------- ----------- ------------ -----------
Total comprehensive
income for
the year - (287,559) - 1,086,291 (4,351,433) 798,732
---------- ----------- --------- ----------- ------------ -----------
As at 31 December
2016 and 1
January 2017 6,284,194 (106,780) 44,125 1,687,395 (5,782,916) 2,126,018
Profit for
the year - - - - 1,070,017 1,070,017
Other comprehensive
income:
Loss on fair
value change
on available-
for-sale financial
assets - (243,838) - - - (243,838)
Exchange difference
on translating
of financial
statement of
overseas subsidiaries - - - (1,387,344) - (1,387,344)
---------- ----------- --------- ----------- ------------ -----------
Total comprehensive
income for
the year - (243,838) - (1,387,344) - (561,165)
Lapse of share
option (44,125) 44,125 -
As at 31 December
2017 6,284,194 (350,618) - 300,051 (4,757,024) 1,564,853
========== =========== ========= =========== ============ ===========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2017
2017 2016
----------- ----------------
GBP GBP
Operating activities
Profit / (Loss) before taxation 1,070,017 (4,351,433)
Adjustments for:
Bank interest income - (3)
Depreciation of property, plant and
equipment 2,620 2,979
Impairment loss on available-for-sale
financial assets - 3,881,471
Change in fair value of convertible
loans designated at fair value through
profit or loss (220,243) 220,243
Net realised gain on disposal of available-for-sale
investments (1,213,028) -
----------- ----------------
Operating loss before working capital
changes (360,634) (276,743)
Increase in prepayments and deposits (1,615) (4,102)
(Decrease) / Increase in other payables
and accruals (17,593) 17,681
----------- ----------------
Cash used in operations (379,842) (233,164)
Interest received - 3
----------- ----------------
Net cash used in operating activities (379,842) (233,161)
----------- ----------------
Investing activities
Proceeds from disposal of available-for-sale
investments 795,069 -
----------- ----------------
Net cash generated from investing activities 795,069 -
----------- ----------------
Financing activities
Repayment of convertible loans (100,000) -
Proceeds from issue of convertible
loans - 100,000
----------- ----------------
Net cash (used in) / generated from
financing activities (100,000) 100,000
----------- ----------------
Net increase / (decrease) in cash and
cash equivalents 315,227 (133,161)
Effect of foreign exchange rate changes,
net (4,457) (8,974)
Cash and cash equivalents at the beginning
of the year 44,648 186,783
----------- ----------------
Cash and cash equivalents at the end
of the year 355,418 44,648
=========== ================
Analysis of balances of cash and cash
equivalents
Cash and bank balances 355,418 44,648
=========== ================
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2017
1. GENERAL INFORMATION
The Company was incorporated in the British Virgin Islands on 14
September 2012 with limited liability and its ordinary shares were
admitted to trading on the AIM market of the London Stock Exchange
on 2 May 2013. The registered office of the Company is located at
Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola,
British Virgin Islands and the operating office is located at Mail
Boxes Silom Complex 4 Fl., MBE No. 81, 191 Silom Complex, Silom
Road, Bangrak, Bangkok 10500 Thailand.
The principal activity of the Company and its subsidiaries
(collectively referred as to the "Group") is to invest in growing
markets of Asia Pacific.
The consolidated financial statements are presented in Great
British Pounds ("GBP"), which is the same as the functional
currency of the Company, and all value is round to the nearest GBP.
It is prepared on historical cost basis except for
available-for-sale financial assets and the share-based payment
that are stated at fair value.
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs")
2.1 Amendments to IFRSs that are mandatorily effective for the current year
In the current year, the Group has applied a number of
amendments to IFRSs issued by the International Accounting
Standards Board ("IASB") that are mandatorily effective for an
accounting period that begins on or after 1 January 2017. These
amendments have been applied by the Group for the first time in the
current year unless otherwise specified. The impact of these
amendments are described below.
Amendments to IAS 7 Disclosure Initiative
Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses
Amendments to IFRS 12 As part of the Annual Improvements to IFRSs 2014-2016 Cycle
The amendments to IAS 7 require an entity to make disclosures
that aim to enable users of financial statements to evaluate
changes in liabilities arising from financing activities.
Reconciliations of various types of the Group's financing
liabilities is disclosed in Note 24 to the consolidated financial
statements. Other than such additional disclosures, the application
of the amendments has not had any material effect on the
consolidated financial statements.
The amendments to IAS 12 clarify when unrealised losses on a
debt instrument measured at fair value would give rise to a
deductible temporary difference and how to evaluate whether
sufficient future taxable profits are available to utilise a
deductible temporary difference. The application of the amendments
has not had any material effect on the consolidated financial
statements.
Annual improvements to IFRSs (2014-2016 cycle) include an
amendment to IFRS 12 that clarifies that, when an entity's interest
in a subsidiary, a joint venture or an associate (or a portion of
its interest in a joint venture or an associate) is classified (or
included in a disposal group that is classified) as held for sale
in accordance with IFRS 5 Non-current Assets held for Sale and
Discontinued operations, it is not required to disclose summarised
financial information for that subsidiary, joint venture or
associate, as required by IFRS 12 Disclosure of Interests in Other
Entities.
2.2 New and revised IFRSs that are not mandatorily effective for the current year
The Group has not applied any of the following new and revised
IFRSs that have been issued but are not yet mandatorily
effective:
IFRS 9 Financial Instruments(1)
IFRS 15 Revenue from Contracts with Customers(1)
IFRS 16 Leases(2)
IFRS 17 Insurance Contracts(3)
IFRIC 22 Foreign Currency Transactions and Advance Consideration1
IFRIC 23 Uncertainty over Income Tax Treatments(2)
Amendments to IFRS 2 Classification and Measurement of
Share-based Payment Transactions(1)
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with
IFRS 4 Insurance Contracts(1)
Amendments to IFRS 9 Prepayment Features with Negative Compensation(2)
Amendments to IFRS 10 Sale or Contribution of Assets between an Investor and its
and IAS 28 Associate or Joint Venture(4)
Amendments to IFRS 15 Clarifications to IFRS 15 Revenue from Contracts with Customers(1)
Amendments to IAS 40 Transfers of Investment Property(1)
Amendments to IFRSs Annual Improvements to IFRSs 2014-2016 Cycle(1)
Amendments to IFRSs Annual Improvements to IFRSs 2015-2017 Cycle(2)
1 Effective for annual periods beginning on or after 1 January
2018
2 Effective for annual periods beginning on or after 1 January
2019
3 Effective for annual periods beginning on or after 1 January
2021
4 No mandatory effective date yet determined but available for
adoption
IFRS 9 Financial Instruments
IFRS 9 has introduced new requirements for a) classification and
measurement of financial assets, b) impairment of financial assets
and c) general hedge accounting.
Specifically, with regard to the classification and measurement
of financial assets, IFRS 9 requires all recognised financial
assets that are within the scope of IFRS 9 to be subsequently
measured at amortised cost or fair value. Debt investments that are
held within a business model whose objective is to collect the
contractual cash flows, and that have contractual cash flows that
are solely payments of principal and interest on the principal
outstanding are generally measured at amortised cost at the end of
each of the subsequent accounting periods. Debt investments that
are held within a business model whose objective is achieved both
by collecting contractual cash flows and selling financial assets,
and that have contractual terms that are solely payments of
principal and interest on the principal amount outstanding, are
generally measured at fair value through other comprehensive income
(FVTOCI). All other debt investments and equity investments are
measured at their fair value at the end of subsequent accounting
periods. Further, under IFRS 9, entities may make an irrevocable
election to present subsequent changes in the fair value of an
equity investment (that is not held for trading nor contingent
consideration recognised by an acquirer in a business combination
to which IFRS 3 applies) in other comprehensive income, with only
dividend income generally recognised in profit or loss and that
cumulative fair value changes will not be reclassified to profit or
loss upon derecognition of the investment.
2.2 New and revised IFRSs that are not mandatorily effective for the current year
IFRS 9 Financial Instruments (continued)
With regard to the measurement of financial liabilities
designated as at fair value through profit or loss, IFRS 9 requires
that the amount of change in the fair value of a financial
liability that is attributable to changes in the credit risk of
that liability is presented in other comprehensive income, unless
the recognition of such changes in other comprehensive income would
create or enlarge an accounting mismatch in profit or loss. Changes
in fair value attributable to a financial liability's credit risk
are not subsequently reclassified to profit or loss. Under IAS 39,
the entire amount of the change in the fair value of the financial
liability designated as fair value through profit or loss is
presented in profit or loss.
With regard to impairment of financial assets, IFRS 9 has
adopted an expected credit loss model, as opposed to an incurred
credit loss model required under IAS 39. In general, the expected
credit loss model requires an entity to assess the change in credit
risk of the financial asset since initial recognition at each
reporting date and to recognise the expected credit loss depending
on the degree of the change in credit risk.
With regard to the general hedge accounting requirements, IFRS 9
retains the three types of hedge accounting mechanisms currently
available in IAS 39. Under IFRS 9, greater flexibility has been
introduced to the types of transactions eligible for hedge
accounting, specifically broadening the types of instruments that
qualify for hedging instruments and the types of risk components of
non-financial items that are eligible for hedge accounting. In
addition, the effectiveness test has been overhauled and replaced
with the principle of an 'economic relationship'. Retrospective
assessment of hedge effectiveness is also no longer required.
Enhanced disclosure requirements about an entity's risk management
activities have also been introduced.
The Group is still in the process of assessing the impact of
IFRS 9. The directors of the Company believe that it is impractical
to disclose the impact in these consolidated financial statements
until the Group has completed the assessment.
Other than above additional disclosures, application of other
amendments has not had any material effect on the consolidated
financial statements.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared on a
going concern basis. The preparation of these financial statements
in conformity with IFRSs requires the use of certain critical
accounting estimates. It also requires the directors of the Company
to exercise judgment in the process of applying the Group's
accounting policies. The areas involving a higher degree of
judgment or complexity, or areas where assumptions and estimates
are significant to these financial statements are disclosed in Note
4.
(a) Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
and its subsidiaries. Control is achieved when the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its
involvement with the investee; and
has the ability to use its power to affect its returns.
(a) Basis of consolidation
The Group reassesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Group obtains
control over the subsidiary and ceases when the Group loses control
of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated statement of profit or loss from the date the
Group gains control until the date when the Group ceases to control
the subsidiary.
Profit or loss and each component of other comprehensive income
are attributed to the owners of the Company and to the
non-controlling interests. Total comprehensive income of
subsidiaries is attributed to the owners of the Company and to the
non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies into
line with those used by the members of the Group.
All intra-group transactions, balance, income and expenses are
eliminated in full on consolidation.
The Group does not have any non-controlling interest during the
year.
(b) Segment reporting
For the purpose of IFRS 8 "Operating Segments" the Company
currently has one segment being "Investment sector". No further
operating segment financial information is therefore disclosed.
(c) Property, plant and equipment
Items of property, plant and equipment are measured at cost less
accumulated depreciation and any accumulated impairment losses.
Depreciation is charged so as to allocate the cost of assets
less their residual values over their estimated useful lives, using
the straight-line method. The following annual rates are used for
the depreciation of property, plant and equipment:
Furniture and fixture 20%
Office equipment 30%
If there is an indication that there has been a significant
change in the depreciation rate, useful life or residual value of
an asset, the depreciation of that asset is revised prospectively
to reflect the new expectations.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
(d) Cash and cash equivalents
Cash and cash equivalents include cash on hand and other
short-term highly liquid investments with original maturities of
three months or less. Bank overdraft is shown within borrowings in
current liabilities on the consolidated statement of financial
position.
(e) Financial instruments
Financial assets and financial liabilities are recognised when a
group entity becomes a party to the contractual provisions of the
instrument.
Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are added to or
deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets
or financial liabilities at fair value through profit or loss are
recognised immediately in profit or loss.
Financial assets
Financial assets are classified into the following specified
categories: "available-for-sale" (AFS) financial assets and "loans
and receivables". The classification depends on the nature and
purpose of the financial assets and is determined at the time of
initial recognition. Purchases or sales of financial assets are
recognised and derecognised on a trade date basis. Purchases or
sales are purchases or sales of financial assets that require
delivery of assets within the time frame established by regulation
or convention in the marketplace.
Effective interest method
The effective interest method is a method of calculating the
amortised cost of a debt instrument and of allocating interest
income over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash receipts
(including all fees on points paid or received that form an
integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the debt
instrument, or, where appropriate, a shorter period to the net
carrying amount of initial recognition.
Income is recognised on an effective interest basis for
debt.
Available-for-sale financial assets ("AFS financial assets")
AFS financial assets are non-derivatives that are either
designated as available-for-sale or are not classified as (a) loans
and receivables, (b) held-to-maturity investments or (c) financial
assets at FVTPL (as defined below).
AFS financial assets are measured at fair value at the end of
each reporting period. Changes in fair value are recognised in
other comprehensive income and accumulated under the heading of
available-for-sale investments revaluation reserve. Where the
financial asset is disposed of or is determined to be impaired, the
cumulative gain or loss previously accumulated in the
available-for-sale investments revaluation reserve is reclassified
to profit or loss (see the accounting policy in respect of
impairment loss on financial assets below).
(e) Financial instruments (Continued)
Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. Loans and receivables (including deposits and other
receivables, cash and cash equivalents) are measured at amortised
cost using the effective interest method, less any impairment.
Interest income is recognised by applying the effective interest
rate, except for short-term receivables when the recognition of
interest would be immaterial.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at
the end of each reporting period. Financial assets are considered
to be impaired when there is objective evidence that, as a result
of one or more events that occurred after the initial recognition
of the financial asset, the estimated future cash flows of the
investment have been affected.
For AFS equity investments, a significant or prolonged decline
in the fair value of the security below its costs is considered to
be objective evidence of impairment.
For all other financial assets, objective evidence of impairment
could include:
-- significant financial difficulty of the issuer or counterparty; or
-- breach of contract, such as a default or delinquency in interest or principal payments; or
-- it becoming probable that the borrower will enter bankruptcy
or financial re-organisation; or
-- the disappearance of an active market for that financial
asset because of financial difficulties.
For financial assets carried at amortised cost, the amount of
the impairment loss recognised is the difference between the
asset's carrying amount and the present value of estimated future
cash flows, discounted at the financial asset's original effective
interest rate.
The carrying amount of the financial asset is reduced by the
impairment loss directly for all financial assets, where the
carrying amount is reduced through the use of an allowance account.
Changes in the carrying amount of the allowance account are
recognised in profit or loss.
For financial assets measured at amortised cost, if, in a
subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after
the impairment was recognised, the previously recognised impairment
loss is reversed through profit or loss to the extent that the
carrying amount of the investment at the date the impairment is
revered does not exceed what the amortised cost would have been had
the impairment not been recognised.
(e) Financial instruments (Continued)
When an AFS financial asset is considered to be impaired,
cumulative gains or losses previously recognised in other
comprehensive income are reclassified to profit or loss in the
period.
In respect of AFS equity investments, impairment losses
previously recognised in profit or loss are not reversed through
profit or loss. Any increase in fair value subsequent to an
impairment loss is recognised in other comprehensive income and
accumulated under the heading of available-for-sale investments
revaluation reserve. In respect of AFS debt investments, impairment
losses are subsequently reversed through profit or loss if an
increase in the fair value of the investment can be objectively
related to an event occurring after the recognition of the
impairment loss.
Financial liabilities and equity instruments
Debt and equity instruments issued by the Group are classified
as either financial liabilities or as equity in accordance with the
substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Group are recognised
at the proceeds received, net of direct issue costs.
Repurchase of the Company's own equity instruments is recognised
and deducted directly in equity. No gain or loss is recognised in
profit or loss on the purchase, sale, issue or cancellation of the
Company's own equity instruments.
Financial liabilities at fair value through profit or loss
("FVTPL")
Financial liabilities are classified as at FVTPL when the
financial liability is either held for trading or it is designated
as at FVTPL on initial recognition.
A financial liability is classified as held for trading if:
-- it has been acquired principally for the purpose of repurchasing in the near term; or
-- on initial recognition it is part of a portfolio of
identified financial instruments that the Group manages together
and has a recent actual pattern of short-term profit-taking; or
-- it is a derivative that is not designated and effective as a hedging instrument.
(e) Financial instruments (Continued)
Financial liabilities at fair value through profit or loss
("FVTPL") (continued)
A financial liability other than a financial liability held for
trading may be designated as at FVTPL upon initial recognition
if:
-- such designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise
arise; or
-- the financial liability forms part of a group of financial
assets or financial liabilities or both, which is managed and its
performance is evaluated on a fair value basis, in accordance with
the Group's documented risk management or investment strategy, and
information about the grouping is provided internally on that
basis; or
-- it forms part of a contract containing one or more embedded
derivatives, and IAS 39 Financial Instruments: Recognition and
Measurement permits the entire combined contract (asset or
liability) to be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with
any gains or losses arising on re-measurement recognised in profit
or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability and is
included in the "other gain and losses" line item in the
consolidated income statement.
Other financial liabilities
Other financial liabilities (including other payables and
others) are subsequently measured at amortised cost using the
effective interest method.
Convertible loan designated at fair value through profit or
loss
The convertible loan issued in December 2016 (as described in
note 20 below) includes a liability component and a conversion
option. The conversion option that will not be settled by the
exchange of a fixed amount of cash for a fixed number of the
Company's own equity instruments is treated as a derivative.
Derivatives embedded in a financial instrument are treated as
separate derivatives when their economic risks and characteristics
are not closely related to those of the host contract (the
liability component) and the host contract is not carried at fair
value through profit or loss.
The convertible loan (including the liability component and the
conversion option) as a whole is designated as a financial
liability at fair value through profit or loss on initial
recognition. In subsequent periods, the entire convertible loan is
measured at fair value, with changes in fair value recognised
directly in profit or loss in the period in which they arise.
Transaction costs that are directly attributable to the issue of
the convertible bond designated as financial liabilities at fair
value through profit or loss are recognised immediately in profit
or loss.
(e) Financial instruments (Continued)
Effective interest method
The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments
(including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the
financial liability, or, where appropriate, a shorter period to the
net carrying amount on initial recognition.
Interest expense is recognised on an effective interest basis
except for those financial liabilities designated at FVTPL.
Derecognition
The Group de-recognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another entity. If the
Group neither transfers nor retains substantially all the risks and
rewards of ownership and continues to control the transferred
asset, the Group continues to recognise the asset to the extent of
its continuing involvement and recognises an associated liability.
If the Group retains substantially all the risks and rewards of
ownership of a transferred financial asset, the Group continues to
recognise the financial asset and also recognises a collateralised
borrowing for the proceeds received.
On de-recognition of a financial asset in its entirety, the
difference between the asset's carrying amount and the sum of the
consideration received and receivable and the cumulative gain or
loss that had been recognised in other comprehensive income and
accumulated in equity is recognised in profit or loss.
On de-recognition of a financial asset other than in its
entirety, the Group allocates the previous carrying amount of the
financial asset between the part it continues to recognise, and the
part it no longer recognises on the basis of the relative fair
values of those parts on the date of the transfer. The difference
between the carrying amount allocated to the part that is no longer
recognised and the sum of the consideration received for the part
no longer recognised and any cumulative gain or loss allocated to
it that had been recognised in other comprehensive income is
recognised in profit or loss. A cumulative gain or loss that had
been recognised in other comprehensive income is allocated between
the part that continues to be recognised and the part that is no
longer recognised on the basis of the relative fair values of those
parts.
The Group de-recognises financial liabilities when, and only
when, the Group's obligations are discharged, cancelled or they
expire. The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable is
recognised in profit or loss.
(f) Current assets and current liabilities
Current assets are expected to be realised within twelve months
of the date of the reporting period or in the normal course of the
Group's operating cycle. Current liabilities are expected to be
settled within twelve months of the date of the reporting period or
in the normal course of the Group's operating cycle.
(g) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group
entities are measured using the currency in accordance to the
location where shares of the Company are traded (the functional
currency). These consolidated financial statements are presented in
Great British Pound ("GBP"), which is the Company's functional and
the Group's presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or
loss.
(h) Revenue recognition
Revenue is recognised when it is probable that the economic
benefits will flow to the Group and the revenue and costs, if
applicable, can be measured reliably. Gain on disposal of
available-for-sale financial assets is measured at fair value of
the consideration received or receivable, whereas interest income
is recognised on a time-proportion basis using the effective
interest method.
(i) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, and
it is probable that the Group will be required to settle that
obligation, and reliable estimate can be made of the amount of the
obligation. Provisions are measured at the Group's best estimate of
the expenditure required to settle the present obligation at the
end of the reporting period, and are discounted to present value
where the effect of the time value of money is material.
(j) Leasing
Leases are classified as finance leases whenever the terms of
the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as
operating leases.
Rental payable under operating leases are recognised as an
expense on a straight-line basis over the lease term, except where
another systematic basis is more representative of the time pattern
in which economic benefits from the leased asset are consumed.
(k) Share-based payment transactions
The fair value of services received determined by reference to
the fair value of share warrants and options granted under the
share warrants and share award scheme of the Company on the grant
date is expensed on the year of grant.
At the end of each reporting period, the Group revises its
estimates of the number of options that are expected to ultimately
vest. The impact of the revision of the estimates during the
vesting period, if any, is recognised in profit or loss such that
cumulative expenses reflects the revised estimate, with a
corresponding adjustment to equity. At the time when the share
options are exercised, forfeited after the vesting date or are
still not exercised at the expiry date, the amount previously
recognised will continue to be held in equity.
(l) Retirement benefit cost
Payments to retirement benefits plans and government-managed
retirement benefits schemes are recognised as an expense when
employees have rendered service entitling them to the
contributions.
(m) Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from profit as reported in the
statement of income and retained earnings because of items of
income or expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Group's liability
for current tax is calculated using tax rates that have been
enacted or substantively enacted by the end of the reporting
period.
Deferred tax is recognised on temporary differences between the
carrying amounts of assets and liabilities in the consolidated
financial statements and the corresponding tax bases using in the
computation of taxable profit. Deferred tax liabilities are
generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised only to the extent
that it is probable that future taxable profits will be available
against which the temporary difference can be utilised. Such
deferred tax assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial
recognition (other than in business combination) of other assets
and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
(m) Taxation (continued)
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the
reporting date. The measurement of deferred tax liabilities and
assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and
liabilities. However, the measurement of deferred tax liabilities
associated with an investment property measured at fair value does
not exceed the amount of tax that would be payable on its sale to
an unrelated market participant at fair value at the reporting
date. Deferred tax is recognised in profit or loss, except when it
relates to items that are recognised in other comprehensive income
or directly in equity, in which case the deferred tax is also
recognised in other comprehensive income or directly in equity
respectively.
(n) Impairment of assets
Assets that have an indefinite useful life are not subject to
amortisation, which are at least tested annually for impairment and
are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be
recoverable. Assets that are subject to amortisation are reviewed
for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss
is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset's fair value less costs to sell and value in
use. For the purposes of assessing impairment assets are grouped at
the lower levels for which there are separately identifiable cash
flow (cash-generating units).
(o) Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from
past events and whose existence will only be confirmed by the
occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Group. It can also be a
present obligation arising from past events that is not recognised
because it is not probable that outflow of economic resources will
be required or the amount of obligation cannot be measured
reliably. A contingent liability is not recognised but is disclosed
in the notes to the financial statements. When a change in the
probability of an outflow occurs so that outflow is probable, they
will then be recognised as a provision.
A contingent asset is a possible asset that arises from past
events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly
within control of the Group. A contingent asset is not recognised
but is disclosed in the notes to the financial statements when an
inflow of economic benefits is probable. When inflow is virtually
certain, an asset is recognised.
(p) Related parties
For the purpose of these financial statements, a related party
includes a person and entity as defined below:
(a) A person or a close member of that person's family is
related to the Group if that person:
(i) has control or joint control over the Group;
(ii) has significant influence over the Group; or
(iii) is a member of the key management personnel of the Group or the Group's parent.
(b) An entity is related to the Group if any of the following
conditions applies:
(i) the entity and the Group are members of the same group
(which means that each parent, subsidiary and fellow subsidiary is
related to the others).
(ii) either entity is an associate or joint venture of the other
entity (or of a member of a group of which the other entity is a
member).
(iii) both entities are joint ventures of a third entity.
(iv) either entity is a joint venture of a third entity and the
other entity is an associate of the third entity.
(v) the entity is a post-employment benefit plan for the benefit
of employees of either the Group or an entity related to the Group.
If the reporting entity is itself such a plan, the sponsoring
employers are also related to the plan.
(vi) the entity is controlled or jointly controlled by a person identified in (a).
(vii) a person identified in (a)(i) has significant influence
over the entity or is a member of the key management personnel of
the entity (or of a parent of the entity).
(viii) Close members of the family of a person are those family
members who may be expected to influence or be influenced
management personnel of the entity (or of a parent of the
entity).
(c) A related party as defined in the AIM Rules for
Companies.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are discussed below.
Valuation of financial instruments
The Group uses valuation techniques that include inputs that are
not based on observable market data to estimate the fair value of
certain types of financial instruments. Note 13 provides
information the estimation of the fair value of financial
instruments.
The directors of the Company believe that the chosen valuation
techniques used are appropriate in determining the fair value of
financial instruments.
5. OTHER INCOME
Other income represents the bank interest income and foreign
exchange gain incurred during the year, as presented below:
2017 2016
GBP GBP
Bank interest income - 3
Foreign exchange gain - 374
Sundry income 236
---- ----
236 377
==== ====
6. PROFIT / (LOSS) BEFORE TAX
Profit / (loss) before tax arrived at after charging/
(crediting):
2017 2016
GBP GBP
Auditors' remuneration 21,893 20,491
Depreciation of property, plant
and equipment 2,620 2,979
Foreign exchange loss 40,793 1,196
Operating lease payment in respect
of office premises - 7,984
Staff costs (including directors'
remuneration)
- Fees 21,750 20,625
- Salaries and other benefits 53,694 73,410
- Retirement scheme contribution - 2,901
------ ------
Total staff costs 75,444 96,936
====== ======
7. DIRECTORS' REMUNERATION
During the year, no emoluments were paid by the Group to the
Directors as an inducement to join or upon joining the Group or as
compensation for loss of office.
For the year ended 31 December 2017:
Salaries Retirement
and other scheme
Fees benefits contribution Total
GBP GBP GBP GBP
Executive directors
Mr. Robert Anthony Rowland
Berkeley - 23,600 - 23,600
Mr. Wai Tak Jonathan
Chu - - - -
Mr. Paniti Junhasavasdikul
(i) - 25,200 - 25,200
------ --------- ------------ ------
- 48,800 - 48,800
------ --------- ------------ ------
Independent non-executive
director
Mr. Seah Boon Chin 21,750 - - 21,750
------ --------- ------------ ------
21,750 48,800 - 70,550
====== ========= ============ ======
For the year ended 31 December 2016:
Salaries Retirement
and other scheme
Fee benefits contribution Total
GBP GBP GBP GBP
Executive directors
Mr. Robert Anthony
Rowland Berkeley - 11,430 - 11,430
Mr. Wai Tak Jonathan
Chu - 6,843 342 7,185
Mr. Paniti Junhasavasdikul
(i) - 26,133 - 26,133
------ ---------- ------------ ------
- 44,406 342 44,748
------ ---------- ------------ ------
Independent non-executive
director
Mr. Seah Boon Chin 20,625 - - 20,625
------ --------- ------------ ------
20,625 44,406 342 65,373
====== ========= ============ ======
During the years ended 31 December 2017 and 31 December 2016, no
non-cash benefits were received by the directors and no director
received any grants of share options or awards under any other
long-term incentive plans.
Details of share appreciation awards and warrants granted to
directors are set out in note 16 below.
Notes:
(i) Mr.Paniti Junhasavasdiku was appointed on 9 September 2016 and resigned on 30 April 2017.
8. INCOME TAX
2017 2016
---- ----
GBP GBP
Current income tax - -
==== ====
i) Pursuant to the rules and regulations of the BVI, the Company
is not subject to any income tax in the BVI.
ii) No provision for Hong Kong profits tax has been made for
subsidiary incorporated in Hong Kong as the subsidiary did not have
any assessable profits subject to Hong Kong profits tax during the
years ended 31 December 2017 and 2016.
Tax charge for the year is reconciled to loss before taxation as
follows:
2017 2016
--------- -----------
GBP GBP
Profit/(Loss) before taxation 1,070,017 (4,351,433)
--------- -----------
Tax at the application income tax rate (176,553) (717,986)
Tax effect of expenses not deductible 176,553 717,986
--------- -----------
Tax charge and effective tax rate for the year - -
========= ===========
9. EARNINGS / (LOSS) PER SHARE
The calculation of basic earnings / (loss) per share is based on
the profit / (loss) attributable to owners of the Company and the
weighted average number of ordinary shares in issue during the
year.
(a) Basic earnings / (loss) per share
During the year ended 31 December 2017, the calculation of basic
earnings / (loss) per share amount is based on the net profit for
the year of GBP1,070,017 (2016: loss of GBP4,351,433) attributable
to the equity holders of the Company, and weighted average of
212,826,072 (2016: 212,826,072) ordinary shares in issued during
the year.
(b) Diluted earnings / (loss) per share
No adjustment has been made to the basic earnings/ (loss) per
share presented for the year ended 31 December 2017 and 2016 in
respect of a dilution as the impact of the share options
outstanding (2016: share options outstanding) had an anti-dilutive
effect on the basic earnings / (loss) per share presented, because
the exercise price of those share options was higher than the
average market price of the shares and were considered to have
anti-dilutive effects.
10. DIVID
No dividend has been paid or declared by the Company during the
year ended 31 December 2017 (2016: nil).
11. PROPERTY, PLANT AND EQUIPMENT
Furniture Office
and fixture equipment Total
GBP GBP GBP
At cost:
At 1 January 2016 696 17,596 18,292
Exchange realignment 139 551 690
----------- --------- -------
At 31 December 2016
and 1 January 2017 835 18,147 18,982
Written off (835) (3,311) (4,146)
At 31 December 2017 - 14,836 14,836
----------- --------- -------
Accumulated depreciation:
At 1 January 2016 206 5,167 5,373
Charge for the year 152 2,827 2,979
Exchange realignment 57 297 354
----------- --------- -------
At 31 December 2016
and 1 January 2017 415 8,291 8,706
Charge for the year - 2,225 2,225
Written back (415) (2,091) (2,506)
At 31 December 2017 - 8,425 8,425
Net carrying value:
At 31 December 2017 - 6,411 6,411
=========== ========= =======
At 31 December 2016 420 9,856 10,276
=========== ========= =======
12. SUBSIDIARIES
Particulars of the subsidiaries of the Company are as
follows:
Name of subsidiaries Place of incorporation Issued/Paid-up Effective interest Principal
share/registered held by the Company activities
capital
Direct Indirect
All Asia Asset Energy British Virgin Ordinary Investment
Limited Islands Share US$1 100% - holding
Administrative
All Asia Assets Ordinary supporting
(Hong Kong) Limited Hong Kong Shares 100% - services
HK$100
Fortune House Group British Virgin Ordinary - 100% Investment
Limited Share holding
Islands US$1
13. AVAILABLE-FOR-SALE FINANCIAL ASSETS
Available-for-sale financial assets comprise of:
2017 2016
GBP GBP
Unlisted equity securities,
at cost 1,239,926 4,702,021
Fair value adjustment (361,938) (3,988,251)
Exchange realignment (330,827) 1,702,566
--------- -----------
1,208,815 2,416,336
========= ===========
The unlisted equity securities are measured at fair value and
are classified as Level 3 fair value measurement. Fair value is
estimated using Discounted Cash Flow ("DCF") method. Details of the
parameters adopted in the DCF model are shown in the corresponding
note to each category of available-for-sale financial assets.
The details of movement in available-for-sale financial assets
have been set out as follow:
As at 31 December 2017
Place of Fair value Exchange At fair
Incorporation At cost adjustment difference value
GBP GBP GBP GBP
Myanmar Allure
Group Company
Limited (b) Myanmar 1,239,926 (361,938) 330,827 1,208,815
As at 31 December 2016
Place of Fair value Exchange At fair
Incorporation At cost adjustment difference value
GBP GBP GBP GBP
Andaman Power
and Utility Co.,
Limited (a) Thailand 3,462,095 (3,881,471) 1,249,230 828,134
Myanmar Allure
Group Company
Limited (b) Myanmar 1,239,926 (105,060) 453,336 1,588,202
4,702,021 (3,988,251) 1,702,566 2,416,336
Notes:
(a) On 3 May 2017, the Group disposed of all interests in APU
through a disposal of the entire issued capital of Energy Central
Limited for a consideration of Thai Baht 34,889,000 settled in
cash.
As at 31 December 2016, the Group owned a 7% interest of Andaman
Power and Utility Co., Limited ("APU"). APU has obtained the rights
to develop and operate a 500MW combined-cycle power plant
construction project in Shan Province of Myanmar. In the opinion of
the directors, the Group has not been in a position to exercise any
significant influence over the financial and operating policies of
APU. Accordingly, APU has been accounted for as an
available-for-sale financial asset. As at 31 December 2016, the
fair value of approximately US$1,022,000 (equivalent to GBP828,134)
was derived by an independent professional valuer using a DCF
method. In determining the fair value, a risk-adjusted discount
rate of 31.74% was being used.
(b) As at 31 December 2017, the Group owns 7% equity interest of
Myanmar Allure Group Company Limited ("MAG"). MAG, a private
company with limited liability, owns and operates a resort hotel in
Tachileik, Shan Province of Myanmar. In the opinion of the
directors, the Group has not been in a position to exercise any
significant influence over the financial and operating policies of
MAG. Accordingly, MAG has been accounted for as an
available-for-sale financial asset.
As at 31 December 2017, a fair value of approximately
US$1,631,000 (equivalent to GBP1,208,815) (2016: US$1,960,000
(equivalent to GBP1,588,202) was derived by an independent
professional valuer using a DCF method. In determining the fair
value, a risk-adjusted discount rate of 13.90% was being used.
14. CASH AND BANK BALANCE
2017 2016
------- ------
GBP GBP
Cash and bank
balance 355,418 44,648
======= ======
At 31 December 2017, bank balances carry interest at market rate
of 0.05% (2016: 0.05%) per annum. The bank balances are deposited
with creditworthy banks of high credit rating.
15. SHARE CAPITAL
Number of
ordinary shares
of GBP0.10each GBP
Authorised
At 31 December 2016 and 2017 1,000,000,000 N/A
=============== =========
Issued
As at 1 January 2016, 31 December
2016 and 31 December 2017 212,826,072 6,284,194
=============== =========
All issued ordinary shares rank pari passu in all respects with
the existing ordinary shares of the Company.
16. WARRANTS AND SHARE APPRECIATION AWARDS
The Group has issued or generated one-off warrants and share
appreciation awards (the "Awards") to the executive directors of
the Company during the Reporting Period.
Warrants
On 25 April 2013, the Company has issued one-off warrants to the
executive directors of the Company which given the right to
subscribe for new Ordinary Shares of the Company at 3 pence per
ordinary share and are exercisable two years after the date of
grant and will lapse if not exercised within five years from the
date of grant. There are no performance conditions that are
required to be satisfied in order for the Warrants to become
exercisable.
2017 2016
Weighted Weighted
average average
exercise exercise
price price
No. of per share No. of per share
share (pence) share (pence)
Outstanding at 1 January 4,176,082 3 4,176,082 3
Lapsed during the year - - - -
--------------------------- --------- --------- --------- ---------
Outstanding at 31 December 4,176,082 3 4,176,082 3
--------------------------- --------- --------- --------- ---------
Exercisable at 31 December 4,176,082 - 4,176,082 -
=========================== ========= ========= ========= =========
The exercisable period of warrants of the Company are as
follows:
2017 2016
Weighted Weighted
average average
exercise exercise
price price
per share per share
No. of (pence) No. of (pence)
24 April 2015 - 24 April
2018 4,176,082 3 4,176,082 3
========= ========= ========= =========
The fair value of the warrants as initially recognised on the
grant date was GBP133,839. The fair value was estimated by the
directors with reference to a valuation report issued by an
independent valuer the Black-Scholes option pricing model by
Bloomberg and taking into account the terms and conditions upon
which the warrants granted.
The number, exercise price and earliest and latest dates of
exercise of the warrants to subscribe for new Ordinary Shares of
the Company held by directors as at 31 December 2017 were as
follows:
Name Number of Exercise price Earliest exercise Latest exercise
warrants (pence) date date
Mr. Robert Anthony
Rowland Berkeley 4,176,082 3 p 24 April 2015 24 April 2018
---------- --------------- ------------------ ----------------
Mr. Wai Tak - 3 p 24 April 2015 24 April 2018
Jonathan Chu
---------- --------------- ------------------ ----------------
Mr. Seah Boon - 3 p 24 April 2015 24 April 2018
Chin
---------- --------------- ------------------ ----------------
Share Appreciation Awards
On 25 April 2013, the Company issued one-off share appreciation
awards ("the Awards") to the executive directors which are spilt
into five tranches with different exercise timeframe. The
beneficiaries of the Awards are given the rights to receive the new
Ordinary Shares of the Company based on the performance of the
Company which are measured by the share price of the Company of
each tranche. The Awards will become exercisable in respect of that
number of Ordinary Shares subject to the relevant tranche and the
Awards are exercisable for two years from the date upon which the
relevant performance condition is satisfied and are not exercisable
during the close period. Where a Performance Condition is not
satisfied within the relevant measurement period, the relevant
tranche shall lapse and not carry over. The Company does not intend
to grant further share appreciation awards.
2017 2016
Outstanding at 1 January 1,789,749 1,789,749
Lapsed during the year (1,789,749) -
----------- ----------
Outstanding as at 31 December - 1,789,749
=========== ==========
Exercisable as at 31 December - -
=========== ==========
The performance condition and exercise period of share awards
are as follow:
Share price Measurement period
------------ ------------------------------
22.8 pence Any 12-month period before 31
December 2017
The fair value of the Awards is initially recognised on the
grant date was GBP66,218. The fair value was estimated by the
directors with reference to a valuation report issued by an
independent valuer using Black-Scholes option pricing model and
taking into account the terms and conditions upon which the
warrants granted.
The number, exercise price (note that there is no exercise price
per se, i.e. it is nil) and earliest and latest dates of exercise
of Awards held by directors as at 31 December 2017 were as
follows:
Name Number of Exercise price Earliest exercise Latest exercise
Awards (pence) date date
Mr. Robert 1,789,749 (nil) (lapsed) (lapsed)
Anthony Rowland
Berkeley
---------- --------------- ------------------ ----------------
Mr. Wai Tak - (nil) - -
Jonathan Chu
---------- --------------- ------------------ ----------------
Mr. Seah Boon - (nil) - -
Chin
---------- --------------- ------------------ ----------------
17. RESERVES
Fair Share
value option Exchange Accumulated
reserve reserve reserve loss Total
GBP GBP GBP GBP GBP
As at 1 January 2016 180,779 44,125 601,104 (1,431,483) (605,475)
Loss for the year - - - (4,351,433) (4,351,433)
Other comprehensive
income:
Fair value change on
available-for-sale financial
assets (4,169,030) - - - (4,169,030)
Exchange difference
on translating financial
statements of overseas
subsidiaries - - 1,086,291 - 1,086,291
Reclassification adjustment
relating to impairment
of available-for-sale
financial assets during
the year 3,881,471 - - - 3,881,471
----------- -------- ----------- ------------------- ---------------------
Total comprehensive
income for the year (287,559) - 1,086,291 (4,351,433) (3,552,701)
Lapse of share options - - - - -
----------- -------- ----------- ------------------- ---------------------
As at 31 December 2016
and 1 January 2017 (106,780) 44,125 1, 687,395 (5,782,916) (4,158,176)
Loss for the period - - - 1,070,017 1,070,017
Other comprehensive
income:
Fair value change on
available for-sale financial
assets (243,838) - - - (243,838)
Exchange difference
on
translating financial
statements of overseas
subsidiaries - - (1,387,344) - (1,387,344)
----------- -------- ----------- ------------------- ---------------------
Total comprehensive
income for the year (243,838) - (1,387,344) - (1,631,182)
Lapse of share option (44,125) 44,125 -
As at 31 December 2017 (350,618) - 300,051 (4,757,024) (4,719,341)
=========== ======== =========== =================== =====================
Nature and purpose of the reserves
(i) Fair Value reserve
The fair value reserve comprises the change in fair value of
available-for-sale financial assets as at the end of each reporting
period. These amounts will be reclassified to profit or loss as
gains realised on the disposal of available-for-sale financial
assets when the available-for-sale financial assets have been
disposed of.
(ii) Share options reserve
Share options reserve comprises the fair value of warrants and
any the Awards granted which are yet to be exercised, the amount of
which will be transferred to the share capital account when the
related warrants and Awards are exercised or to retained profits
should the related warrants and Awards expire or be forfeited.
(iii) Exchange reserve
The exchange fluctuation reserve comprises all foreign exchange
differences arising from the translation of the financial
statements of the Company's overseas subsidiaries.
18. ACCRUALS AND OTHER PAYABLES
2017 2016
GBP GBP
Accruals expenses 16,338 33,931
====== ======
19. OPERATING LEASES ARRANGEMENT
The Group leases certain of its office property under operating
lease arrangements. Leases for properties are negotiated for terms
ranging from one to two years.
As at the year ended of 31 December 2017, the Group had the
following total future minimum lease payments payable under
non-cancellable operating leases:
2017 2016
GBP GBP
Not later than one year - 9,548
Later than one year - -
---- -----
- 9,548
==== =====
20. CONVERTIBLE LOAN
The Company issued a two-year convertible loan with a principal
amount of GBP100,000, bearing interest rate at 15% per annum, to
Nature Cove Holdings Limited ("Nature Cove") on 1 December 2016.
The convertible loan entitled Nature Cove to convert the loan into
ordinary shares of the Company at any time between the date of
issue of the convertible loan and the date of maturity on 1
December 2018 at the lower of conversion price of GBP 0.03 per
ordinary share or the market price. If the convertible loan has not
been converted, they will be redeemed on 1 December 2018 at the
principal amount outstanding plus accrued interest. On 24 May 2017,
the Group had repaid the convertible loan of GBP100,000 and the
loan facility had been cancelled. No shares had been converted
during the term of the loan.
The convertible loan contains a liability component and a
conversion option derivative. The convertible loan was designated
at fair value through profit or loss entirely and measured at fair
value with changes in fair value recognised in profit or loss. The
convertible loan has been fully repaid during the period.
The movements of the convertible loan note is set out below:
2017 2016
GBP GBP
At the beginning year 320,243 -
Issue during the year - 100,000
Repayment during the year (100,000) -
Change in fair value (220,243) 220,243
At the end of the year - 320,243
--------- -------
The following assumptions were used to calculate the fair values
of the embedded derivatives:
As at
31 Dec 2016
Spot price GBP0.095
Conversion price GBP0.030
Time to maturity 1.9 year
Risk-free rate 0.0844%
Volatility 81%
The monte carlo simulation model has been used to estimate the
fair value of the embedded derivatives. The variables and
assumptions used in computing the fair value of the embedded
derivatives are based on the directors' best estimate. Changes in
variables and assumptions may result in changes in the fair value
of the embedded derivatives.
21. RELATED PARTY TRANSACTIONS
Compensation of key management personnel of the Group
2017 2016
GBP GBP
Short term employee benefits 70,550 65,031
Post-employment benefit - 342
------ ------
70,550 65,373
====== ======
22. CAPITAL RISK MANGEMENT
The Group manages its capital so that entities in the Group will
be able to continue a going concern while maximising the return to
shareholders through the optimisation of the debt and equity
balance.
The capital structure of the Group consists of cash and cash
equivalents and equity attributable to shareholders of the Company,
comprising issued share capital and reserves.
The directors of the Company review the capital structure by
considering the cost of capital and the risks associated with
capital. In view of this, the Group will balance its overall
capital structure through new shares issues as well as issue of new
debt (as appropriate).
23. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES
The Group's major financial instruments include equity
investments, other payables and bank and cash balances. Details of
such financial instruments are disclosed in the respective notes.
The risks associated with these financial instruments and the
policies applied by the Group to mitigate these risks are set out
below. Management monitors these exposures to ensure appropriate
measures are implemented in a timely and effective manner.
Foreign currency risk
At the end of the reporting period, the carrying amounts of the
Group's foreign currency denominated monetary assets which consists
of bank balances and cash and prepayments that are denominated in
United States dollars ("USD") amounted to GBP 357,185 (2016: nil)
(see note 14) respectively. If exchange rates of the GBP against
the USD had been 5% weaker and all other variables were held
constant, the effect on loss after taxation is as follows:
2017 2016
GBP GBP
Increase in loss after taxation 17,855 -
====== ====
There would be an equal and opposite impact on the loss after
taxation where the GBP strengthens against the USD.
In the directors' opinion, the sensitivity analysis is
unrepresentative of the inherent foreign exchange risk as the year
end exposure does not reflect the exposure during the year.
Interest rate risk
The Group's cash flow interest rate risk is mainly concentrated
on the bank balances carried at floating interest rates. The Group
currently does not have a hedging policy against interest rate
exposure. However, the management monitors interest rate exposure
and will consider the hedging of significant interest rate exposure
as needed.
The directors consider that the Group's exposure to interest
rate risk of bank balances, which are short term in nature, is
insignificant, and accordingly no sensitivity analysis is
presented.
Credit risk
The Group's maximum exposure to credit risk is represented by
total financial assets held by the Group. The Group did not hold
any collateral during the reporting period.
Cash and bank deposits are placed with financial institutions
with sound credit ratings and the directors of the Company do not
expect that any counterparty will fail to meet its obligation.
The Group does not provide any financial guarantees which would
expose the Group to credit risk.
Liquidity risk
Liquidity risk is the risk that the Group is unable to meet its
payment obligations associated with its financial liabilities when
they fall due. The Group manages liquidity risk by maintaining
adequate reserves, as well as continuously monitoring cash flow
forecast and actual cash flows.
In managing the liquidity risk, the Group monitors and maintains
a level of cash and cash equivalents that is adequate in discretion
of the directors of the Company. In formulating their strategy, the
directors of the Company would consider the financing of the
Group's operations and the effects of fluctuation in operating and
investing cash flows. As at 31 December 2017, the liquidity of the
Group is primarily dependent on its ability to maintain adequate
cash flows from operations and to raise funds through issue of
convertible loans to meet its obligations and investment project
opportunities as they fall due or arise.
The maturity profile of the Group's financial liabilities as at
the end of the year is as follows:
Weighted
average
effective - Total
interest Less than More than undiscounted carrying
rate 1 year 1 year cash flows amount
--------- --------- --------- ------------ --------
% GBP GBP GBP GBP
At 31 December 2017
Accruals and other
payables N/A 16,338 - 16,338 20,039
========= ========= ============ ========
At 31 December 2016
Accruals and other
payables N/A 33,931 - 33,931 33,931
Convertible loan 15% 15,000 100,000 115,000 320,243
--------- --------- ------------ --------
48,931 100,000 148,931 354,174
========= ========= ============ ========
Fair values on financial instruments
(i) Financial instruments carried at fair value on a recurring basis
The following table presents the carrying amount of financial
instruments measured at fair value at 31 December 2017 across the
three levels of the fair value hierarchy defined in IFRS 13 Fair
Value Measurements, with the fair value of each financial
instrument categorised in its entirely based on the lowest level of
input that is significant to the fair value measurement. The levels
are defined as follows:
- Level 1 (highest level): fair value measurements are those
derived from quoted price (unadjusted) in active markets for
identical asset or liabilities;
- Level 2: fair value measurements are those derived from inputs
other than quoted prices included within Level 1 that are
observable for asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
- Level 3 (lowest level): fair value measures are those derived
from valuation techniques that include inputs for assets or
liability that are not based on observable market data
(unobservable inputs).
As at 31 December 2017, the Group had following financial
instrument carried at fair value all of which are based on the
Level 3 fair value measurement basis.
2017 2016
--------- ---------
GBP GBP
Financial assets:
Available-for-sale financial assets 1,208,815 2,416,336
========= =========
Financial liabilities
Convertible loan - 320,243
========= =========
Fair values on financial instruments (Continued)
(i) Financial instruments carried at fair value on a recurring basis (continued)
Level 3 movement tables
For the year ended 31 December 2017
Available-
for-sale
financial Convertible
asset loan Total
---------- ----------- ------------
GBP GBP GBP
At the beginning of the
year 2,416,336 (320,243) 2,0966,093
Total gains or losses
in profit or loss - 220,243 220,243
in other comprehensive
income (243,838) - (243,838)
Disposal (828,134) - (828,134)
Repayment - 100,000 100,000
Exchange realignment (135,549) - (135,549)
---------- ----------- ----------
At the end of the year 1,208,815 - 1,208,815
========== =========== ==========
For the year ended 31 December 2016
Available-
for-sale
financial Convertible
asset loan Total
----------- ----------- -----------
GBP GBP GBP
At the beginning of the year 5,490,437 - 5,490,437
Total gains or losses
in profit or loss - (220,243) (220,243)
in other comprehensive income (4,169,030) - (4,169,030)
Issue - (100,000) (100,000)
Exchange realignment 1,094,929 - 1,094,929
----------- ----------- -----------
At the end of the year 2,416,336 (320,243) 2,096,093
=========== =========== ===========
Fair values on financial instruments (Continued)
(i) Financial instruments carried at fair value on a recurring basis (continued)
The following table gives information about how the fair values
of the Group's available-for-sale financial assets are determined
(in particular, the valuation technique(s) and inputs used).
2017 2016 Valuation Significant Range Relationship
technique(s) unobservable of unobservable
inputs inputs to
fair value
GBP GBP
Financial
assets
The higher
the free cash
Available-for-sale flow, the
financial Discounted Free cash higher the
assets 1,208,815 2,416,336 cash flow flow N/A fair value
Discount The higher
rate the discount
rate, the
lower the
13.9% fair value
Discount 15.03% The higher
for lack the discount
of marketability for lack of
marketability,
the lower
fair value
Financial
liabilities
Monte
Carlo The higher
simulation the volatility,
Convertible pricing the higher
loan - 320,243 model Volatility 81% the fair value
Fair values on financial instruments (Continued)
(ii) Fair Value of Financial instruments carried at other than fair value
The carrying amounts of the Group's financial instruments
carried at cost or amortised cost are not materially different from
their fair value as at 31 December 2017 and 2016 due to their
short-term maturities.
2017
Carrying
amount Fair value
----------------------- ----------------------
GBP GBP
Bank and cash balances 355,418 355,418
Deposits 10,547 10,547
Accruals and other payable (16,338) (16,338)
======================= ======================
2016
Carrying
amount Fair value
---------------------- ------------------------
GBP GBP
Bank and cash balances 44,648 44,648
Deposits 8,932 8,932
Accruals and other payable (33,931) (33,931)
====================== ========================
Estimation of fair value
Fair value for unquoted equity investments are estimated using
the discount cash flow valuation techniques.
Classification and fair value of financial assets and
liabilities
The carrying amounts of each of the categories of financial
instruments are as at the end of the reporting period are as
follows:
2017 2016
GBP GBP
Financial assets
Available-for-sales financial assets 1,208,815 2,416,336
Loan and receivables - 2,683
--------- ---------
1,208,815 2,419,019
========= =========
Financial liabilities
Amortised cost 16,338 33,931
Designated at FVTPL - 223,708
16,338 257,639
========= =========
24. AUTHORISATION FOR ISSUE OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements were approved and
authorised for issue by the board of directors on 28 June 2018.
------ Ends ------
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END
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