TIDMPHM
RNS Number : 2800Y
Phimedix PLC
08 September 2020
RNS ANNOUNCEMENT: The information communicated in this
announcement contains inside information for the purposes of
Article 7 of Regulation 596/2014.
Embargoed: 7.00 a.m.
8 September 2020
Phimedix Plc
("Phimedix" or "the Company")
Final Results for the year ended 31 March 2020 and AIM Rule 15
Update
Phimedix (AIM: PHM) presents its Final Results for the year
ended 31 March 2020 and an update on the Company's status as an AIM
Rule 15 company.
Summary
This has been a transformational year for the Company. Following
the well documented issues with the regulatory environment in China
and the resulting significant adverse impact on the trading results
of the main subsidiary, the Company agreed with its principal
shareholders to dispose of Masterpiece Enterprises Limited
"Masterpiece") to them, together with a share buyback, and raise
GBP353K of new funds by way of a placing of new shares in March
2020.
AIM Rule 15 update
As a result of the disposal of Masterpiece on 11 March 2020, the
Company became an AIM Rule 15 Cash Shell.
Since that time the Board has been looking to source an
acquisition or acquisitions which would constitute a reverse
takeover under the Aim Rules and the directors have identified and
had early stage discussions with a number of potential candidates.
As part of an update to the market on 7 May 2020, the Board was of
the view that, even in the current environment, there were
potential acquisition opportunities in the technology and life
sciences sectors in particular and had decided to focus efforts
initially in these two areas. Since then the Board has also been
introduced to companies in other sectors which were believed had
some merit. As a result, the Board has now decided not to limit our
search to these two specific sectors.
At this time, early stage discussions continue to progress, but
there can be no guarantee that these discussions will conclude
successfully and the Directors do not expect there will be any
further developments before trading in the Company's shares is
suspended under AIM Rule 15.
The London Stock Exchange is expected to suspend trading in the
Company's ordinary shares on AIM, pursuant to Rule 15 of the AIM
Rules, at 7.30 am on 14 September 2020. In the event that no
reverse takeover is completed in the six months after that date,
the London Stock Exchange will cancel the admission of the
Company's ordinary shares to trading on AIM.
Final Results (Note: all figures are rounded)
The Company has reported a total comprehensive loss of GBP204K
for the year (2019: loss GBP6,966K). This included the costs of
disposal of Masterpiece, the restructuring of the Company and the
placing of new shares.
The Company also reported a gain on disposal of Masterpiece
Enterprises Limited of GBP8K.
The cash position at the year-end was GBP348K (2019: GBPnil),
following the placing of new shares. The Board believes the Company
has sufficient funds to undertake its search for an acquisition
target in the timelines available.
Outlook
The Covid-19 outbreak has, unfortunately, disrupted the Board's
activities to source an acquisition, or acquisitions that would
constitute a reverse takeover under the AIM Rules, as required by
AIM Rule 15. As is stated above, that search continues and the
Board will keep shareholders informed on progress as
appropriate.
The Annual Report and Accounts, together with the Notice of
Annual General Meeting, will be made available on the Company's
website www.phimedix.com and posted to shareholders shortly; at
which time a further announcement will be made.
Phimedix Plc Please email any enquiries
Nicholas Nelson, Director to nelson@nexfin.org.uk
Ajay Rajpal, Director
SPARK Advisory Partners Limited (Nominated
Adviser)
Mark Brady or Neil Baldwin
www.sparkadvisorypartners.com +44 (0) 203 368 3550
SI Capital Ltd (Broker)
Nick Emerson
www.sicapital.co.uk +44 (0)1483 413500
Statement of Comprehensive Income
For the year ended 31 March 2020
Notes 2020 2019
GBP'000 GBP'000
Continuing operations
Administrative expenses 6 (204) (196)
Impairment losses 6 - (6,770)
-------------- --------------
Loss before tax (204) (6,966)
Income tax expense 7 - -
-------------- --------------
Loss for the year (204) (6,966)
Other comprehensive income
Foreign exchange differences - 847
-------------- --------------
Loss and total comprehensive income for the year (204) (6,119)
Loss and total comprehensive income for the year attributable to the owners
of the Company (204) (6,119)
Loss per share 2020 2019
GBP GBP
Basic and diluted 8 (0.002) (0.057)
The notes are an integral part of these financial
statements.
Statement of Financial Position
As at 31 March 2020
Notes 2020 2019
GBP'000 GBP'000
Assets
Non-Current Assets
Investment in subsidiaries 9 - 95
-------- --------
Current Assets
Prepayments and other receivables 10 8 4
Cash and cash equivalents 348 -
-------- --------
Total Assets 356 99
Equity and liabilities
Equity attributable to owners of the Company
Share capital 12 226 1,220
Share premium 4,186 3,871
Capital redemption reserve 925 -
Share based payment reserve - 54
Foreign exchange reserve - 628
Accumulated loss (5,219) (5,697)
------ --------
Total Equity 118 76
Current Liabilities
Accrued liabilities and other payables 11 238 23
-------- --------
Total Liabilities 238 23
------ --------------
Total Equity and Liabilities 356 99
The financial statements were approved by the Board of directors
on 7 September 2020. They were signed on its behalf by:
Nicholas Nelson
Director
The notes are an integral part of these financial
statements.
Statement of Cash Flows
Notes 2020 2019
GBP'000 GBP'000
Cash flows from operating activities
Loss for the year before tax (204) (6,966)
Adjustments for:
Impairment losses - 6,770
Gain on sale of subsidiary (8) -
Foreign exchange differences - (12)
-------- ------
(212) (208)
Changes in working capital:
(Increase)/decrease in other receivables (3) 206
Increase in accrued liabilities and other payables 215 2
-------- ------
Net cash flow from operating activities - -
-------- ------
Cash flows from investing activities
Sale of shares in Masterpiece 103 -
-------- ------
Net cash flow from investing activities 103 -
-------- ------
Cash flows from financing activities
Buy back of shares (103) -
Net proceeds from the issue of ordinary shares 348 -
-------- ------
Net cash flow from financing activities 245 -
-------- ------
-------- ------
Net increase in cash and cash equivalents 348 -
Cash and cash equivalents at beginning of the year - -
-------- ----------
Cash and cash equivalents at the end of the year 348 -
Statement of Changes in Equity
Share Share Capital Accumulated Share Foreign Total
Capital Premium Redemption Loss Based Exchange
Reserve Payment Reserve
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 31 March
2018 1,220 3,871 - 1,269 54 (219) 6,195
Loss for the
year - - - (6,966) - - (6,966)
Foreign
exchange
gain - - - - - 847 847
------ -------- ------ ---------- -------- -------- --------
As at 31 March
2019 1,220 3,871 - (5,697) 54 628 7 6
Total
comprehensive
income for
the
year - - - (204) - - (204)
Share based
payment
movement - - - 54 (54) - -
Foreign
exchange
reserve
movements - - - 628 - (628) -
Share placing
and buyback (994) 315 925 - - - 246
------ -------- ------ ---------- -------- -------- --------
As at 31 March
2020 226 4,186 925 (5,219) - - 118
Share capital is the amount subscribed for shares at nominal
value.
Share premium represents the excess of the amount subscribed for
share capital over the nominal value of those shares net of
expenses.
Accumulated loss represents the cumulative losses of the Company
attributable to owners of the Company.
Capital redemption reserve represents the share capital subject
to the buyback of shares, net of consideration paid.
Share based payment reserve is the amount transferred in
accordance with IFRS 2.
Foreign exchange reserve represents historic foreign exchange
differences on consolidation. In the year ended 31 March 2020 this
amount was transferred to accumulated loss following the disposal
of the overseas subsidiary.
Notes to the Financial Statements
1. General information
Phimedix Plc is a public limited company incorporated in England
and Wales on 9 October 2013 under the Companies Act 2006. It was
listed on the AIM market on 20 June 2014. The address of the
registered office is given at the start of the annual report. The
Company's principal activity is that of an AIM Rule 15 Cash Shell.
Further details are set out in the Director's Statement in the
Report and Accounts.
2. Basis of preparation and significant accounting policies
The financial statements of Phimedix Plc have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union (IFRSs as adopted by the EU), IFRS
Interpretations Committee and the Companies Act 2006 applicable to
companies reporting under IFRS.
The financial statements have been prepared under the historical
cost convention.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Company's accounting policies. The areas involving a
higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the financial statements are
disclosed in Note 3.
Although these estimates are based on management's experience
and knowledge of current events and actions, actual results may
ultimately differ from these estimates.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised if the revision
affects only that period or in the period of the revision and
future periods if the revision affects both current and future
periods.
Going concern
These financial statements have been prepared on the assumption
that the Company is a going concern.
When assessing the foreseeable future, the directors have looked
at a period of at least twelve months from the date of approval of
this report. The Company raised GBP348K net of placing costs
following the disposal of Masterpiece Enterprises Limited and the
placing of new ordinary shares. These funds are deemed to be
sufficient to make the above assessment.
After making enquiries, the directors firmly believe that the
Company has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt the
going concern basis in preparing the financial statements.
New and amended standards adopted by the Company
There are no IFRSs or IFRIC interpretations that are effective
for the first time for the financial year beginning on or after 1
April 2019 that would be expected to have a material impact on the
Company.
The new IFRSs adopted during the year areas as follows:
- IFRS 16 - Leases
- Amendments to IFRIC 23 - Uncertainty over income tax treatments
Standards, interpretations and amendments to published standards
that are not yet effective.
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
financial year beginning 1 April 2019 and have not been early
adopted:
Reference Title Summary Application date Application
of standard date of
Company
---------- ----------- ----------------------------- ------------------- -----------
IFRS 17 Insurance Applies a model that Periods commencing 1 April
Contracts combines a current balance on or after 1 2021
sheet measurement of January 2021
insurance contracts
with recognition of
profit over the period
that services are provided.
---------- ----------- ----------------------------- ------------------- -----------
IAS 23 Borrowing Annual Improvements Periods commencing 1 April
Costs 2015-2017 Cycle on or after 1 2020
January 2020
---------- ----------- ----------------------------- ------------------- -----------
The directors anticipate that the adoption of these standards
and the interpretations in future periods will have no material
impact on the financial statements of the Company.
(a)Investments in subsidiaries
Investments in subsidiaries are stated at cost less, where
appropriate, provisions for impairment.
(b)Impairment of non-financial assets
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when an annual impairment assessment for an asset is
required, the Company makes an estimate of the asset's recoverable
amount. An asset's recoverable amount is the higher of an asset's
or cash-generating unit's fair value less costs to sell and its
value in use and is determined for an individual asset, unless the
asset does not generate cash inflows that are largely dependent on
those from other assets. Where the carrying amount of an asset or
cash generating unit exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows expected
to be generated by the asset are discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset. In determining fair value less costs to sell, recent
market transactions are taken into account, if available. If no
such transactions can be identified, an appropriate valuation model
is used. These calculations are corroborated by valuation multiples
or other available fair value indicators.
Impairment losses are recognised in profit or loss in those
expense categories consistent with the function of the impaired
asset, except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case,
the impairment is also recognised in other comprehensive income up
to the amount of any previous revaluation.
An assessment is made at each reporting date as to whether there
is any indication that previously recognised impairment losses may
no longer exist or may have decreased. If such indication exists,
the Company estimates the asset's or cash-generating unit's
recoverable amount. A previously recognised impairment loss is
reversed only if there has been a change in the estimates used to
determine the recoverable amount of an asset since the last
impairment loss was recognised. If that is the case, the carrying
amount of the asset is increased to its recoverable amount. This
increase cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been
recognised previously. Such a reversal is recognised in the profit
and loss unless the asset is measured at revalued amount, in which
case the reversal is treated as a revaluation increase.
(c)Financial instruments
Financial assets and financial liabilities are initially
classified as measured at amortised cost, fair value through other
comprehensive income, or fair value through profit and loss when
the Company becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised when the contractual
rights to the cash flows expire, or the Company no longer retains
the significant risks or rewards of ownership of the financial
asset. Financial liabilities are derecognised when the obligation
is discharged, cancelled or expires.
Financial assets are classified dependent on the Company's
business model for managing the financial and the cash flow
characteristics of the asset. Financial liabilities are classified
and measured at amortised cost except for trading liabilities, or
where designated at original recognition to achieve more relevant
presentation. The Company classifies its financial assets and
liabilities into the following categories:
Financial assets at amortised cost
The Company's financial assets at amortised cost comprise trade
and other receivables. These represent debt instruments with fixed
or determinable payments that represent principal or interest and
where the intention is to hold to collect these contractual cash
flows. They are initially recognised at fair value, included in
current and non-current assets, depending on the nature of the
transaction, and are subsequently measured at amortised cost using
the effective interest method less any provision for
impairment.
Impairment of trade and other receivables
In accordance with IFRS 9 an expected loss provisioning model is
used to calculate an impairment provision. We have implemented the
IFRS 9 simplified approach to measuring expected credit losses
arising from trade and other receivables, being a lifetime expected
credit loss. This is calculated based on an evaluation of our
historic experience plus an adjustment based on our judgement of
whether this historic experience is likely reflective of our view
of the future at the balance sheet date. In the previous year the
incurred loss model is used to calculate the impairment
provision.
Financial liabilities at amortised cost
Financial liabilities at amortised cost comprise loan
liabilities, including convertible loan note liability elements,
and trade and other payables. They are classified as current and
non-current liabilities depending on the nature of the transaction,
are subsequently measured at amortised cost using the effective
interest method. All convertible loan notes are held at amortised
cost and no election has been made to hold them as fair value
through profit and loss.
Financial assets at fair value through profit and loss
Financial assets at fair value are recognised and measured at
fair value using the most recent available market price with gains
and losses recognised immediately in the profit and loss.
The fair value measurement of the Company's financial and non-
financial assets and liabilities utilises market observable inputs
and data as far as possible. Inputs used in determining fair value
measurements are categorised into different levels based on how
observable the inputs used in the valuation technique utilised are
(the 'fair value hierarchy').
Level 1 - Quoted prices in active markets
Level 2 - Observable direct or indirect inputs other than Level
1 inputs
Level 3 - Inputs that are not based on observable market
Borrowings
Borrowings are presented as current liabilities unless the
Company has an unconditional right to defer settlement for at least
12 months after the statement of financial position date, in which
case they are presented as non-current liabilities.
Borrowings are initially recorded at fair value, net of
transaction costs and subsequently carried for at amortised costs
using the effective interest method. Any difference between the
proceeds (net of transaction costs) and the redemption value is
recognised in profit or loss over the period of the borrowings
using the effective interest method. Borrowings which are due to be
settled within twelve months after the statement of financial
position date are included in current borrowings in the statement
of financial position even though the original term was for a
period longer than twelve months and an agreement to refinance, or
to reschedule payments, on a long-term basis is completed after the
statement of financial position date and before the financial
statements are authorised for issue.
(d) Borrowing costs
Borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of funds.
(e) 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 net profit as reported in the
statement of comprehensive income because it excludes items of
income and expense that are taxable or deductible in other years,
and it further excludes items that are never taxable or deductible.
The Company'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 amount of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation
of taxable profit . Deferred tax liabilities are generally
recognised for all taxable temporary differences .
D eferred tax assets are generally recognised for all deductible
temporary differences to the extent that it is probable that t
axable profits will be available against which those deductible
temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary differences arise
from goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a
transaction that affects neither the tax able profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences associated with investments in subsidiaries, except
where the company is able to control the reversal of the temporary
difference and it is probable that the temporary difference will
not reverse in the foreseeable future. Deferred tax assets arising
from deductible temporary differences associated with such
investments are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to
utilise the benefits of the temporary differences and they are
expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the
end of each reporting period 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.
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. The measurement of d
eferred tax assets and liabilities reflects the tax consequences
that would follow from the manner in which the Company expects, at
the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
Current or deferred tax for the year 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
current and deferred tax is also recognised in other comprehensive
income or directly in equity respectively. Where current tax or
deferred tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting for the
business combination.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand,
demand deposits with banks and other financial institutions, and
short-term, highly liquid investments that are readily convertible
into known amounts of cash and which are subject to an
insignificant risk of changes in value, having been within three
months of maturity at acquisition. Bank overdrafts that are
repayable on demand and form an integral part of the company's cash
management, as well as client funds held with the
Funds held with the Company's solicitors are also included as a
component of cash and cash equivalents for the purpose of the
statement of cash flows.
(g) Provisions and contingencies
Provisions are recognised when the Company has a present
obligation as a result of a past event, and it is probable that the
Company will be required to settle that obligation. Provisions are
measured at the directors' best estimate of the expenditure
required to settle the obligation at the statement of financial
position date and are discounted to present value where the effect
is material. Provisions are not recognised for future operating
losses.
Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be
small.
When the effect of discounting is material, the amount
recognised for a provision is the present value at the reporting
date of the future expenditures expected to be required to settle
the obligation. The increase in the discounted present value amount
arising from the passage of time is included in finance costs in
the statement of comprehensive income.
Contingent liabilities are not recognised in the financial
statements. They are disclosed unless the possibility of an outflow
of resources embodying economic benefits is remote. A contingent
asset is not recognised in the financial statements but disclosed
when an inflow of economic benefits is probable.
(h) Share Capital
Ordinary shares are classified as equity. Proceeds from issuance
of ordinary shares are classified as equity. Incremental costs
directly attributable to the issuance of new ordinary shares are
deducted against share capital.
(i) Foreign currencies
In preparing the financial statements of each individual Company
entity, transactions in currencies other than the functional
currency of that entity (foreign currencies) are recorded in the
respective functional currency (i.e. the currency of the primary
economic environment in which the entity operates) at the rates of
exchanges prevailing on the dates of the transactions. At the end
of the reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing on the
date when the fair value was determined. Non-monetary items that
are measured in terms of historical costs in a foreign currency are
not retranslated.
Exchange differences arising on the settlement of monetary
items, and on translation of monetary items, are recognised in
profit or loss in the period in which they arise. Exchange
differences arising on the retranslation of non-monetary items
carried at fair value are included in profit or loss for the period
except for differences arising on the retranslation of non-monetary
items in respect of which gains and losses are recognised directly
in other comprehensive income, in which cases, the exchange
differences are also recognised directly in other comprehensive
income.
Exchange differences arising, if any, are recognised in other
comprehensive income and accumulated in equity.
The Company has changed its accounting policy in March 2020,
such that the presentational currency was aligned with the
functional currency (GBP). In the prior years, the Company
presented its financial statements in Hong Kong dollars ("HKD"), as
the main trading operations were based in Hong Kong/China and HKD
was the reporting currency. Following the disposal of the
subsidiary in March 2020, the Company has used GBP in the financial
statements in the year ended 31 March 2020. As a result of this
change, the Company has restated the comparative periods as at 31
March 2018 and 31 March 2019 as follows:
2019 2018
GBP'000 GBP'000
Assets
Non-Current Assets
Investment in subsidiaries 95 2,316
-------- --------
Current Assets
Prepayments and other receivables 4 3,901
-------- --------
Total Assets 99 6,217
Equity and liabilities
Equity attributable to owners of the Company
Share capital 1,220 1,220
Share premium 3,871 3,871
Share based payment reserve 54 54
Foreign exchange reserve 628 (219)
Accumulated loss (5,697) 1,269
-------- --------
Total Equity 76 6,195
Current Liabilities
Accrued liabilities and other payables 23 22
-------- --------
Total Liabilities 23 22
-------- --------
Total Equity and Liabilities 99 6,217
(j) Employee benefits
(i) Salaries, annual bonuses, paid annual leave, leave passage
and the cost to the Company of non-monetary benefits are accrued in
the period in which employees of the Company render the associated
services. Where payment or settlement is deferred and the effect
would be material, these amounts are stated at their present
values.
Provision has not been recognised in respect of such possible
payments, as it is not considered probable that the situation will
result in a material outflow of resources from the Company.
(k) Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the executive directors who make
strategic decisions. There is currently one segment for the
Company, as a Rule 15 investing company.
(l) Warrants
Warrants issued by the Company are initially assessed to
determine whether they meet the criteria to be classified as
share-based payments in accordance with IFRS 2. Where this is
applicable, the fair value of the warrants is calculated, and this
amount is recognised as an expense in the Statement of
Comprehensive Income over the vesting period. Where warrants do not
meet the classification criteria in IFRS 2, the warrants are
accounted for as financing transactions with any equity or debt
elements separately identified and recognised.
3. Critical accounting estimates and judgements
Estimates and judgements 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.
In the application of the Company's accounting policies, which
are described above, management is required to make estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
assumptions that had a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities are
discussed below.
(a) Impairment of receivables
The Company's management reviews receivables on a regular basis
to determine if any provision for impairment is necessary. The
policy for the impairment of receivables of the Company is based
on, where appropriate, the evaluation of collectability and ageing
analysis of the receivables and on management's judgement. A
considerable amount of judgement is required in assessing the
ultimate realisation of these outstanding amounts, including the
current creditworthiness and the past collection history of each
debtor. If the financial conditions of debtors of the Company were
to deteriorate, resulting in an impairment of their ability to make
payments, provision for impairment may be required.
(b) Income Taxes
The Company was previously subject to income taxes in Hong Kong
and Macau. Significant judgement is required in determining the
provision for income taxes and the timing of payment of the related
tax. There are certain transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course
of business. The Company recognises liabilities for anticipated tax
based on estimates of whether additional taxes will be due. Where
the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact
the income tax provision in the period in which such determination
is made. The Company intends to register for UK tax following the
restructuring in March 2020.
4. Personnel expenses and staff numbers (excluding directors)
There were no employees in the Company, excluding directors, for
the year ended 31 March 2020 (2019: nil).
5. Directors' remuneration
2020 2020 2020 2019
Salaries Share based Total
and fees payment charge Total
GBP'000 GBP'000 GBP'000 GBP'000
Wenjie Zhou - - - -
Jianfeng Li - - - -
Chor Wei Ong 3 - 3 13
Chin Phang Kwok 3 - 3 13
Peter George Greenhalgh 9 - 9 13
Ajay Kumar Rajpal* 12 - 12 13
Nicholas Nelson 1 - 1 -
------------ -------------- ------------ ------------
Total 28 - 28 52
_________ _________ _________ _________
* Mr Rajpal is paid through NAS Corporate Services Ltd, a
company controlled by him.
NAS Corporate Services Ltd, a company controlled by Ajay Rajpal,
charged fees and expenses of GBP19K to Masterpiece Enterprises
Limited in relation to the restructuring of Masterpiece Enterprises
Limited and its subsidiaries.
6. Expenses - analysis by nature
2020 2019
GBP'000 GBP'000
Auditor's remuneration for audit services 11 21
Directors fees 28 52
Legal & professional fees 191 123
Other expenses 4
Intercompany loan write-back (22) -
Gain on disposal (8) -
Impairment losses - 6,770
------------ ------------
Total administrative expenses 204 6,966
_________ _________
7. Taxation
The charge for the year can be reconciled to the loss
before taxation per the statement of comprehensive income
as follows:
2020 2019
GBP'000 GBP'000
Loss before taxation (204) (6,966)
_________ _________
Loss at standard rate of
Hong Kong corporation tax
of 16.5% (2019: 16.5%) (34) (1,149)
Unutilised tax losses and
other adjustments 34 1,149
---------- ----------
Total tax charge in the - -
year
_________ _________
The tax losses can be carried forward to offset against the
taxable profits of subsequent years for up to five years from the
year in which they were incurred or there is no restriction on
their expiry, depending on the tax jurisdiction concerned.
8. Loss per share
Loss per share data is based on the Company profit or loss for
the year and the weighted average number of shares in issue.
2020 2019
GBP'000 GBP'000
Loss for the year from:
Continuing operations used in the calculation of basic and diluted earnings per share from
continuing operations (204) (6,966)
---------- --------
Loss for the year attributable to owners of Company (204) (6,966)
Weighted average number of ordinary shares for the purposes of :
basic and diluted earnings per share (000's) 116,838 122,010
2020 2019
GBP GBP
Basic and diluted earnings per share (0.002) (0.057)
9. Investment in Subsidiaries
2020 2019
GBP'000 GBP'000
Cost
At 1 April 2,316 2,316
Disposal (2,316) -
---------- ----------
At 31 March - 2,316
Impairment
At 1 April 2,221 -
Addition - 2,221
Eliminated on disposal (2,221) -
---------- ----------
At 31 March - 2,221
Carrying amount
At 31 March - 95
10. Other receivables
2020 2019
GBP'000 GBP'000
Prepayments 8 4
---------- ----------
8 4
_________ _________
11. Accrued liabilities and other payables
2020 2019
GBP'000 GBP'000
* Accrued expenses 11 23
227 -
* Other payables
-
- ---------- ----------
238 23
_________ _________
12. Share capital
Ordinary Shares 2020 2019
GBP GBP
Class Nominal
Value
Allotted, issued and
fully paid
GBP0.001
34,400,481 (2019: 122,020,000) Ordinary 2019: GBP0.01) 34,400 1,220,100
_________ _________
Deferred Shares 2020 2019
GBP GBP
Class Nominal
Value
Allotted, issued and
fully paid
19,250,000 (2019: nil) Deferred GBP0.009975 192,019 -
_________ _________
TOTAL SHARE CAPITAL 226,419 1,220,100
_________ _________
Capital Redemption Reserve 2020 2019
GBP GBP
Class Nominal
Value
Share buyback
102,760,000 Ordinary GBP0.000025 2,569 -
102,760,000 Deferred GBP0.009975 1,025,031 -
Funded by new issue (102,760) -
_________ _________
TOTAL 924,840 -
_________ _________
The ordinary shares have attached to them full voting, dividend
and capital distribution (including on winding up) rights; they do
not confer any rights of redemption.
On 9 March 2020, the following changes to the ordinary shares
took place:
1. 122,010,000 ordinary shares of GBP0.01 were sub-divided into
122,010,000 new ordinary shares of GBP0.000025 and 122,010,000 new
deferred shares of GBP0.009975
2. 1,356,769,231 new ordinary shares were issued at a price of GBP0.00026
3. The Company completed a buyback and cancellation of
102,760,000 new ordinary shares and 102,760,000 new deferred
shares
4. The remaining 1,376,019,231 new ordinary shares of
GBP0.000025 were consolidated on the basis of a 40/1 consolidation,
resulting in 34,400,481 new ordinary shares of GBP0.001
13. Related-party transactions
During the year, the Company entered into the following
transactions with related parties:
Subscription of shares by Nicholas Nelson 678,365 shares
Issue of warrants to Nicholas Nelson 339,182 warrants
14. Lease commitments
T he Company has no commitments for leases with independent
third parties in respect of rented premises and staff quarters.
15. Financial instruments
Financial risk management objectives and policies
The Company's major financial instruments include trade and
other receivables, amounts due to/from related companies, bank
balances and cash, trade and other payables, and amounts due to a
director. Details of these financial instruments are disclosed in
respective notes. The risks associated with these financial
instruments include market risk (foreign exchange risk), credit
risk, interest rate risk, liquidity risk and capital management
risk. The Company's overall risk management programme focuses on
the unpredictability of financial markets and seeks to minimise
potential adverse effects on the Company's financial performance.
The policies for managing these risks are summarised below.
It is the Company's policy not to trade in derivative
contracts.
(a) Market risk
Foreign currency risk
Currency risk is the risk that the holding of foreign currencies
will affect the Company's position as a result of a change in
foreign currency exchange rates. The Company has no significant
foreign currency risk as the Company's financial assets and
liabilities are denominated in the currency of the Company.
Accordingly, no quantitative market risk disclosures or sensitivity
analysis for currency risk have been prepared.
(b) Cash flow and fair value interest rate risk
The Company currently does not have any interest-bearing
borrowings or financial instruments or any interest rate hedging
policy. The directors monitor the Company's exposure on an ongoing
basis and will consider hedging interest rate risk should the need
arise. Accordingly, no quantitative market risk disclosures or
sensitivity analysis for interest rate risk have been prepared
(c) Liquidity risks
The Company manages its liquidity risk by maintaining sufficient
cash, by monitoring the liquidity requirements in the short and
longer term.
The Company monitors its liquidity risk and maintains a level of
cash and cash equivalents deemed adequate by management to finance
the Company's operations and to mitigate the effects of
fluctuations in cash flows. Typically, the Company ensures that it
has sufficient cash on demand to meet expected operational expenses
including the servicing of financial obligations. Management
monitors the Company's liquidity reserve, comprising cash and cash
equivalents on the basis of expected cash flows.
(c) Liquidity risks (continued)
The following tables detail the remaining contractual maturity
for non-derivative financial liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Company can be
required to pay.
2020 On demand Later than
or not later 1 year and
than 1 year not later
than 5 years
GBP'000 GBP'000
Trade and other payables 227 -
------------ ------------
227 -
_________ _________
2019 On demand Later than
or not later 1 year and
than 1 year not later
than 5 years
GBP'000 GBP'000
Trade and other payables 23 -
------------ ------------
23 -
_________ _________
(d) Credit risk
Credit risk refers to the risk that counterparty will default on
its contractual obligations resulting in financial loss to the
Company. The carrying amount of financial assets recorded in the
financial statements, which is net of impairment losses, represents
the Company's maximum exposure to credit risk. The Company has
adopted a policy of only dealing with creditworthy counterparties
as a means of mitigating the risk of financial loss from defaults.
The Company's exposure and the credit ratings of its counterparties
are continuously monitored. Credit exposure is controlled by
counterparty limits that are reviewed and approved by the
management regularly.
The Company has put in place policies to ensure that sales of
products are made to customers with an appropriate credit history
and the Company performs periodic credit evaluations of its
customers. In this regard, the director of the Company considers
that the Company's credit risk is significantly reduced.
(e) Financial instruments by category
The following table sets out the financial instruments as at the
statement of balance sheet date:
2020 2019
GBP'000 GBP'000
Financial assets:
Loans and receivables:
Trade receivables - -
Deposits and other receivables - -
Bank balances and cash
348 -
* Client account funds
---------- ----------
348 -
Financial liabilities:
Financial liabilities measured
at amortised cost:
Accrued liabilities and other
payables 238 23
---------- ----------
238 23
(f) Capital management risk
The Company's objectives when managing capital are to safeguard
the Company's ability to continue as a going concern, so that it
can continue to provide returns for shareholders and benefits for
other stakeholders, and to provide an adequate return to
shareholders.
The Company manages its capital structure and makes adjustments
to it in the light of changes in economic conditions and the risk
characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Company may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares, or sell assets to reduce debt.
No changes were made in the objectives, policies, and processes
during the years of 2019 and 2020.
16. Fair value of financial instruments
Fair value estimates are made at a specific point in time and
based on relevant market information and information about the
financial instruments. These estimates are subjective in nature and
involve uncertainties and matters of significant judgment and
therefore cannot be determined with precision. Changes in
assumptions could significantly affect these estimates. The Company
does not currently have any derivative or other financial
instruments measured at fair value through profit and loss and the
carrying amounts of financial instruments in the balance sheet
approximated their fair values.
17. Controlling Party
There is no ultimate controlling party.
18. Share options
On 16 June 2014 the Company granted options on 525,000 ordinary
shares to certain directors. The options are exercisable at GBP0.08
per share after the first anniversary of Admission, provided that
the director remains in office until then.
Weighted
average
remaining
Number Exercise contractual
of options price life
At 31 March 2018 525,000 GBP0.08 5 years
Options issued in the period - - -
---------- ---------- ----------
At 31 March 2019 525,000 GBP0.08 5 years
Options issued in the period - - -
Options expired in the period (525,000) - -
---------- ---------- ----------
At 31 March 2020 - - -
A charge of GBP nil (2019: GBP nil) has been recognised for the
share-based payments during the year.
19. Warrants
On 16 June 2014, the Company granted to ZAI warrants to
subscribe for 2,917,500 Ordinary shares at an issue price of
GBP0.08 at any time in the period to 16 June 2019. These warrants
have now expired.
On 11 March 2020, the Company granted warrants to participants
in the new placing to subscribe for 16,959,615 Ordinary shares at
an issue price of GBP0.001 at any time in the period to 11 March
2021.
Weighted
average
remaining
Number Exercise contractual
of warrants price life
At 31 March 2018 2,917,500 GBP0.08 5 years
Warrants issued in the period - - -
---------- ---------- ----------
At 31 March 2019 2,917,500 GBP0.08 5 years
Warrants issued in the period 16,959,615 GBP0.001 1 year
Warrants expired in the period (2,917,500) - -
---------- ---------- ----------
At 31 March 2020 16,959,615 GBP0.001 1 year
The fair value of the new warrants issued in the current period
is GBP 0.05 and was derived using
the Black Scholes model. The following assumptions were used in
the calculations:
Bid price discount 20%
Risk-free rate 1.04%
Volatility 50%
Expected life 1 years
Expected volatility is based on a conservative estimate for a
newly listed entity. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability, exercise restrictions and behavioural
considerations.
A charge of GBP nil (2019: GBP nil) has been recognised for the
share-based payments in the period as the warrants do not meet the
criteria as set out in IFRS2.
20. Events subsequent to 31 March 2020
There were no subsequent events.
ENDS
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