TIDMAAA
RNS Number : 7107D
All Asia Asset Capital Limited
27 June 2019
27 June 2019
All Asia Asset Capital Limited
("All Asia Asset Capital", "AAA" or the "Company")
Results for the year ended 31 December 2018
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 2018,
together with comparative figures for the year ended 31 December
2017.
Highlights:
-- The Company has one minority investment, being a 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.
-- The Board of AAA understands that MAG continues to work on
plans to expand its facilities starting in 2019. Once MAG has made
a commitment to progress its expansion plans, the expected
construction time would be two years which, once completed, should
lead to an increase in MAG's revenue streams and capacity and would
therefore be expected to start during 2022. As far as the Company
are aware this expansion is to be funded by debt from the MAG
holding company. The Company will seek to utilise the potential
upside of these development plans to progress its strategy for
seeking a realisation of its investment in MAG, although the
Company has yet to engage in any material discussions with third
parties in respect of realising AAA's interest in MAG.
-- On 14 May 2019 the Company announced that Mr. Wai Tak
Jonathan Chu would step down as Executive Director of the Company
with immediate effect. The Board intends to appoint a replacement
director in due course, and the search for an appropriate candidate
will need to occur in conjunction with the Company's ongoing search
for an appropriately qualified Chief Executive Officer. At present,
the Directors wish to build depth and breadth in the Board to help
lead the Company forward. At present, a particular emphasis is on
candidates with a proven track record in successfully navigating
investments not only in the Asia Pacific region but also
internationally.
A copy of the Company's annual report and accounts for the year
to 31 December 2018 (the "Annual Report and Accounts") will shortly
be posted to shareholders and the Annual Report and Accounts will
be available from the Company's website, http://www.aaacap.com/,
shortly.
For further information:
All Asia Asset Capital Limited
Robert Berkeley, Executive Chairman and
Finance Director
Tel: +44 (0) 207 621 8910
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 2018.
Business Review
During the year ended 31 December 2018 the Company remained
focused on Myanmar. The Company holds a 7% 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.
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.
The Board understands that MAG has continued its planning in
relation to expanding its facilities and has maintained its focus
on beginning such expansion later in 2019. Further, MAG's search
for partnership opportunities has been redirected in order to
explore and investigate new opportunities in the nascent sector of
online gaming, with a particular emphasis on collaborating with
regional foreign gaming partners including those from the
Chinese-speaking region, Malaysia and further afield. The Board is
encouraged by the fact that MAG plans to review market trends
carefully prior to proceeding with any upgrading and expansion of
its facilities. Once MAG has made a commitment to progress its
expansion plans, the expected construction time would be two years,
which once completed should lead to an increase in MAG's revenue
streams and capacity, which would therefore be expected to start
during 2022. As far as the Company are aware this expansion is to
be funded by debt from the MAG holding company.
Notwithstanding these latest developments, as noted in the
interim results for the six months ended 30 June 2018 announced on
28 September 2018, the Company continues to actively seek
realisation of its investment in MAG. The Company will seek to
utilise the potential upside of these development plans to progress
its strategy for seeking a realisation of its investment in MAG,
although the Company has yet to engage in any material discussions
with third parties in respect of realising AAA's interest in
MAG.
Financial Results
During the year ended 31 December 2018 the Company incurred a
loss of GBP0.53 million (year ended 31 December 2017: net profit of
GBP1.07 million), which was mainly attributable to administrative
expenses and a loss in the fair value of equity investments at fair
value. The difference between 2017 and 2018 was attributable to the
sale of the Company's investment in Energy Central Limited in
2017.
During the year, the sole asset of the Group consisted of its
investment in MAG. AAA's investments in MAG were valued by an
independent third party valuer at a fair value of GBP0.98 million
as at 31 December 2018 (31 December 2017: GBP1.2 million). Thus, as
at 31 December 2018 the net assets of the Group were GBP0.31
million (31 December 2017: net assets of GBP1.56 million) and the
Group had cash and cash equivalents of GBP0.20 million (31 December
2017: cash and cash equivalents of GBP0.36 million). The Company
acknowledges its limited cash position and is exploring options
going forward.
The Board and Board Changes Subsequent to the reporting
period
On 14 May 2019, the Company announced that Mr. Wai Tak Jonathan
Chu would step down as an executive director of the Company, with
immediate effective. 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 Mr. Wai Tak Jonathan Chu,
who possesses skills and experience that matched the Company's
investing policy and strategy. The Board intends to appoint a
replacement director in due course, and the search for an
appropriate candidate will need to occur in conjunction with the
Company's ongoing search for an appropriately qualified Chief
Executive Officer. At present, the Directors wish to build depth
and breadth in the Board to help lead the Company forward. At
present, a particular emphasis is on candidates with a proven track
record in successfully navigating investments not only in the Asia
Pacific region but also internationally.
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 June 2019 Myanmar
Economic Monitor report, the overall assessment was that Myanmar
was regaining stability after a volatile 2018, with economic growth
momentum during the fiscal year 2018/19 picking up speed, and a
real GDP growth of 6.5 per cent being projected. Both the
industrial and service sectors have supported a continuation of
broad-based growth, with industrial activities reviving in
particular. The garments sector and construction sector have
supported the general trend as well. Furthermore, services remain
the key driver of growth, with reform-supported wholesale and
retail sectors standing out. Inflation was reported to have
declined to 6.1 per cent in January 2019 due to improved exchange
rate stability and lower fuel prices. Volatility, however, remains
a concern with reported inflation levels being pushed up again to
7.9 per cent in March, again, driven by fuel and food prices.
The forecasted outlook remains positive, with economic growth
projected to further accelerate to 7.6 per cent by 2020/21,
underscored by reforms, large infrastructure projects being planned
and investments into sectors undergoing liberalisation.
Within the tourism and hospitality sector, according to
statistical data from the Ministry of Hotels and Tourism, as well
as World Bank staff estimates cited in the World Bank June 2019
Myanmar Economic Monitor report, tourist arrivals appear to have
increased, based on available figures up to March 2019. A
particular emphasis was arrivals from the region (Asia), with a
year-on-year increase of 2.6 per cent being recorded throughout
2018 and a 43.1 per cent increase up to March 2019, year-on-year.
Tourist arrivals reached 1.39 million in 2018, compared to 1.36
million in 2017. Significant developments included increased
promotion towards the Southeast Asian market, with more Asian
countries being granted visa exemptions driven by slowing tourist
arrivals from the West. Arrivals from China rose to 21 per cent of
total arrivals in 2018, eclipsing Thailand's share of arrivals.
However, the trend towards shorter stays and marginally less daily
tourism spend is expected to continue with slowing Western demand.
On the other hand, the Central Bank of Myanmar has eased trade
settlement facilities by officialising the use of the Chinese Yuan
and Japanese yen for cross-border trade payments, a restriction
that had previously caused an acute problem for Myanmar's bilateral
trade with some of its major partners, especially China. This is
slated to be especially beneficial to border areas and may lead to
increased border arrivals, given that land-border trade accounts
for more than half of Myanmar's trade with China. Overall, the
hospitality service sector is expected to remain subdued and
relatively flat due to conflicting push-pull factors.
Appreciation
I would like to thank 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, 27 June 2019
DIRECTORS' REPORT
The directors of the Company (the "Directors") present their
report and the audited financial statements for the year ended 31
December 2018.
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 2018, 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 understands that MAG has continued its planning in
relation to expanding its facilities and has maintained its focus
on beginning such expansion later in 2019. Further, MAG's search
for partnership opportunities has been redirected in order to
explore and investigate new opportunities in the nascent sector of
online gaming, with a particular emphasis on collaborating with
regional foreign gaming partners including those from the
Chinese-speaking region, Malaysia and further afield. The Board is
encouraged by the fact that MAG plans to review market trends
carefully prior to proceeding with any upgrading and expansion of
its facilities. Once MAG has made a commitment to progress its
expansion plans, the expected construction time would be two years,
which once completed should lead to an increase in MAG's revenue
streams and capacity, which would therefore be expected to start
during 2022.
The Company continues to actively seek realisation of its
investment in MAG. The Company will seek to utilise the potential
upside of these development plans to progress its strategy for
seeking a realisation of its investment in MAG, although the
Company has yet to engage in any material discussions with third
parties in respect of realising AAA's interest in MAG.
Capital Resources and Financing Structure
During the year ended 31 December 2018, the Company continued to
utilise the net proceeds from the disposal of Energy Central/APU,
completed in May 2017, whose sole asset was the Company's 7 per
cent stake in APU. The cash consideration of Thai Baht 34,889,000
which is equivalent to approximately GBP0.8m at time of first
reporting, has been put towards the Company's operational expenses.
The Company acknowledges its limited cash position and is exploring
options going forward.
International Financial Reporting Standards
The consolidated financial statements for the year ended 31
December 2018 together with comparative figures from the year ended
31 December 2017 have been prepared by using International
Financial Reporting Standards (IFRSs).
Results and dividends
The reported loss for the year was GBP0.53 million, which was
mainly attributable to administrative expenses and to the
revaluation 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 2018, 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 2018
Directors Position 2018
----------------------- -------------------------- ----------- ------------ ---------
Robert Anthony Rowland Executive Chairman
Berkeley and Finance Director 14,914,575 14,914,575 7.01%
Wai Tak Jonathan Chu
(1) Executive Director - - -
(Dominic) Seah Boon Independent Non-Executive
Chin Director - - -
Note: (1) Resigned on 14 May 2019
Substantial interests
As at 31 December 2018, 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 37,546,384 17.64%
Euroclear Nominees Limited 29,829,150 14.02%
Lynchwood Nominees Limited 23,731,001 11.15%
Vidacos Nominees Limited 20,940,193 9.84%
Mr Robert John Sali 16,666,667 7.83%
Mr Blake Gordon Olafson 15,000,000 7.05%
Oxbow Enterprise Limited 14,914,575 7.01%
Chakris Kajkumjohndej 11,000,000 5.17%
Chiefland Trading Limited 7,333,334 3.45%
Related Party Transactions
Save for disclosure in note 21 to the consolidated financial
statements, during the year ended 31 December 2018 the Company does
not have any related party transactions as defined by AIM Rules for
Companies.
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 30 July
2018. 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, 27 June 2019
CORPORATE GOVERNANCE STATEMENT
Board of Directors
During the year ended 31 December 2018, the following persons
served as directors of the Company:
Executive Directors:
Robert Anthony Rowland Berkeley
Wai Tak Jonathan Chu (resigned on 14 May 2019)
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.
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.
The Directors recognise the need for sound corporate governance.
As a company whose shares are traded on AIM, the Board has
determined that it will apply the Quoted Companies Alliance's
Corporate Governance Code ("the QCA Code"). An updated corporate
governance statement including any disclosures required pursuant to
the QCA Code has been published on the Company's website:
http://www.aaacap.com/
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
BOARD OF DIRECTORS
Robert Berkeley (Executive Chairman and Finance Director)
Robert qualified as a chartered accountant with Arthur Andersen
and Co in 1990 and has had a successful career in senior management
within the retail, construction, headhunting and financial services
sectors. In 1999, he was appointed to Harvey Nash Plc's European
Management Board, significantly developing the business across
Europe, as well as placing senior executives within major
international organisations. Since 2009, Robert has successfully
established Vantage FX UK Trading Limited, an FSA regulated online
forex broker based in London, a significant player in the FX market
across Europe with strong growth year on year. Robert is currently
the Managing Director of Vantage FX UK Trading Limited. Robert's
position as Executive Chairman and Finance Director is on a part
time basis.
Wai Tak Jonathan Chu
Jonathan has over twenty years of experience in property
investment and asset management, investor relations and corporate
finance mostly in Hong Kong. He was a Senior Property Manager at
Hon Kwok Land Investments Co. Ltd., a property developer company
listed on the main board of the Hong Kong Stock Exchange, from
September 1988 to April 2004. He was a consultant with Ketchum
Newscan Public Relations Limited in Hong Kong from December 2009 to
February 2011. He was an Investor Relations Manager at Zhengye
International Holdings Co. Ltd. from June 2012 to October 2013 and
an Investor Relations Manager at Modern (HR) Limited from August
2011 to April 2012, both companies listed on the main board of the
Hong Kong Stock Exchange. Jonathan received his BA (Hons) in
Economics and Social Studies from the University of Manchester and
a Master of Science in Financial Engineering from the City
University of Hong Kong.
Mr. Wai Tak Jonathan Chu was appointed to the board of AAA on 2
April 2015 and subsequently resigned on 14 May 2019.
Dominic Seah Boon Chin (Independent Non-Executive Director)
Dominic began his career in 1995 as a senior officer at Chung
Khiaw Bank (Malaysia) Bhd. (now known as United Overseas Bank
(Malaysia) Berhad). From 1997 to January 2007, he worked in several
established financial institutions in Malaysia and Singapore,
including CIMB Investment Bank Berhad, Affin Investment Bank Berhad
and Public Investment Bank Berhad, mainly focused in corporate
finance. Subsequently he joined MobilityOne Limited (which is
quoted on AIM) as its corporate finance director and has been a
non-executive director there since November 2011. He is currently
the head of corporate finance at TA Securities Holdings Berhad, a
stockbroking firm in Malaysia. He obtained his Bachelor of Commerce
(Honours) degree with distinction from McMaster University,
Canada.
INDEPENT AUDITOR'S REPORT
TO THE MEMBERS OF ALL ASIA ASSET CAPITAL LIMITED
(Incorporated in the British Virgin Islands with limited
liability)
Opinion
We have audited the consolidated financial statements of All
Asia Asset Capital Limited (the "Company") and its subsidiaries
(collectively referred to as the "Group") set out on pages 22 to
60, which comprise the consolidated statement of financial position
as at 31 December 2018, and the consolidated statement of profit or
loss, consolidated statement of profit or loss and other
comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year
then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies.
In our opinion, the consolidated financial statements present
fairly, in all materials respects the consolidated financial
position of the Group as at 31 December 2018, and of its
consolidated financial performance and its consolidated cash flows
for the year then ended in accordance with International Financial
Reporting Standards ("IFRSs") issued by the International
Accounting Standards Board ("IASB").
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing ("ISAs") issued by the International
Federation of Accountants ("IFAC"). Our responsibilities under
those standards are further described in the Auditor's
Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the Group
in accordance with the International Ethics Standards Board for
Accountants' "Code of Ethics for Professional Accountants" (the
"Code") and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code. We believe that
the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
Key audit matters are the matters that, in our professional
judgment, were of most significance in our audit of the
consolidated financial statements for the year ended 31 December
2018. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on
these matters.
INDEPENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALL ASIA ASSET CAPITAL LIMITED
(Incorporated in British Virgin Islands with limited
liability)
Key audit matter How the matter was addressed
in our audit
-------------------------------------------------------------
Valuation of the Group's investments
in unlisted equity securities
measured at fair value categorised
as level 3 of fair value hierarchy
----------------------------------------- -------------------------------------------------------------
As at 31 December 2018, the Group's Our major audit procedures
financial assets at fair value in relation to this matter
through profit or loss of approximately included the following:
GBP971,000 was investment in * We evaluated the competence, capabilities and
unlisted equity securities whose independence of the Group's external valuer;
fair value measurements were
categorised as level 3 in the
fair value hierarchy defined * We assessed the appropriateness for the selection of
in IFRS 13. the discounted cash flow model as the valuation
technique used by management based on the market
The valuation of the investments practice and our knowledge of the nature of the
in unlisted equity securities financial assets;
involved high degree of estimation
uncertainty, subjectivity and
management judgement. * We evaluated the judgement made by management in
determining the key assumptions, including credit
We have identified the fair value spread rate and volatility, by comparing the
measurement of the Group's investments supporting documentation to external market analysis.
in unlisted equity securities
as a key audit matter because
the fair value of which were * We also performed an independent sensitivity analysis
derived from valuation techniques to evaluate those assumptions applied to the
that include inputs for assets valuation model for calculating the fair value of the
that are not based on observable financial assets; and
market date and high degree of
management judgement was required
in determining the assumptions * We checked the mathematical accuracy of the
to use in arriving at the unobservable discounted cash flow model prepared by management via
inputs. reperformance.
-------------------------------------------------------------
Information other than the Consolidated Financial Statements and
Auditor's Report Thereon
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, but does not include the consolidated financial statements
and our auditor's report thereon.
Our opinion on the consolidated financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the consolidated financial statements
or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing
to report in this regard.
INDEPENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALL ASIA ASSET CAPITAL LIMITED
(Incorporated in British Virgin Islands with limited
liability)
Responsibilities of Directors and Those Charged with Governance
for the Consolidated Financial Statements
The directors are responsible for the preparation and fair
presentation of the consolidated financial statements that in
accordance with IFRSs issued by the IFAC, and for such internal
control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the
directors are responsible for assessing the Group's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but
to do so.
The those charged with governance are responsible for overseeing
the Group's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements
Our objectives are to obtain reasonable assurance about whether
the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue
an auditor's report that includes our opinion solely to you, as a
body, in accordance with our agreed terms of engagement, and for no
other purpose. We do not assume responsibility towards or accept
liability to any other person for the contents of this report.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of
these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Group's internal control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the directors.
-- Conclude on the appropriateness of the directors' use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group's
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor's report. However, future
events or conditions may cause the Group to cease to continue as a
going concern.
INDEPENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ALL ASIA ASSET CAPITAL LIMITED
(Incorporated in British Virgin Islands with limited
liability)
Auditor's Responsibilities for the Audit of the Consolidated
Financial Statements (continued)
-- Evaluate the overall presentation, structure and content of
the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair
presentation.
-- Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for
our audit opinion.
We communicate with the audit committee regarding, among other
matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the audit committee with a statement that we
have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the audit committee, we
determine those matters that were of most significance in the audit
of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in
our auditor's report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
The engagement partner on the audit resulting in the independent
auditor's report is Leung Man Kin with Practising Certificate
number P07174.
Elite Partners CPA Limited
Certified Public Accountants
10/F., 8 Observatory Road,
Tsim Sha Tsui, Kowloon,
Hong Kong
27 June 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE YEARED 31 DECEMBER 2018
Notes 2018 2017
--------- ---------
GBP GBP
Net realised gain on disposal
of
available-for-sale investments - 1,213,028
Other income 5 10,943 236
Changes in fair value of
equity
investments at fair value
through profit or loss (294,000) -
Change in fair value of
convertible loan designated
at fair value through profit
or loss - 220,243
Administrative expenses (246,822) (363,490)
--------- ---------
(Loss) / Profit before
tax 6 (529,879) 1,070,017
Income tax 8 - -
--------- ---------
(Loss) / Profit for the
year (529,879) 1,070,017
========= =========
(Loss) / Earnings per ordinary
share (in pence)
- Basic 9(a) (0.25) 0.50
========= =========
- Diluted 9(b) (0.25) 0.50
========= =========
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEARED 31 DECEMBER 2018
Notes 2018 2017
--------- -----------
GBP GBP
(Loss) / Profit for the
year (529,879) 1,070,017
Other comprehensive income:
Items that may reclassified
subsequently to profit
or loss
Fair value loss on available-for-sale
financial assets - (243,838)
Exchange difference on
translating financial statements
of foreign subsidiaries 74,514 (1,387,344)
--------- -----------
Other comprehensive income
/ (expense), net of tax 74,514 (1,631,182)
--------- -----------
Total comprehensive expense
for the year (455,365) (561,165)
========= ===========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2018
As at As at
Notes 31 Dec 2018 31 Dec 2017
GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 11 4,186 6,411
Equity investments at fair
value
through profit or loss 13 971,252
Available-for-sale financial
assets 13 - 1,208,815
----------- -----------
975,438 1,215,226
----------- -----------
Current assets
Prepayments and deposits 4,128 10,547
Cash and bank balances 14 196,262 355,418
----------- -----------
Total current assets 200,390 365,965
-----------
Total assets 1,175,828 1,581,191
=========== ===========
CAPITAL AND RESERVES
Share capital 15 6,284,194 6,284,194
Reserves 17 (5,174,706) (4,719,341)
-----------
Total equity 1,109,488 1,564,853
=========== ===========
LIABILITIES
Current liabilities
Other payables and accruals 18 66,340 16,338
----------- -----------
Total liabilities 66,340 16,338
=========== ===========
Total equity and liabilities 1,175,828 1,581,191
=========== ===========
Net current assets 134,050 349,627
=========== ===========
Total assets less current
liabilities 1,109,488 1,564,853
=========== ===========
Net assets 1,109,488 1,564,853
=========== ===========
Approved by the board of directors on 27 June 2019
Robert Anthony Rowland Berkeley
Director
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2018
Fair Share
Share value option Exchange Accumulated
capital reserve reserve reserve loss Total
--------- --------- -------- ----------- ----------- -----------
GBP GBP GBP GBP GBP GBP
As at 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 (4,668,774) 1,564,853
--------- --------- -------- ----------- ----------- -----------
Reclassification
of investment
revaluation
reserve under
IFRS 9 - 350,618 - - (350,618) -
--------- --------- -------- ----------- ----------- -----------
At 1 January
2018 (Restated) 6,284,194 - - 300,051 (5,019,392) 1,564,853
--------- --------- -------- ----------- ----------- -----------
Loss for the
year - - - - (529,879) (529,879)
Other comprehensive
income:
Exchange difference
on translating
of financial
statement of
overseas subsidiaries - - - 74,514 - 74,514
--------- --------- -------- ----------- ----------- -----------
Total comprehensive
income for
the year - - - 74,514 (529,879) (455,365
--------- --------- -------- ----------- ----------- -----------
As at 31 December
2018 6,284,194 - - 374,565 (5,549,271) 1,109,488
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 31 DECEMBER 2018
2018 2017
--------- -----------
GBP GBP
Operating activities
(Loss) / Profit before taxation (529,879) 1,070,017
Adjustments for:
Depreciation of property, plant and
equipment 2,225 2,620
Change in fair value of equity investment
at fair value
through profit or loss 237,563 -
Change in fair value of convertible
loans designated at fair value through
profit or loss - (220,243)
Net realised gain on disposal of available-for-sale
investments - (1,213,028)
--------- -----------
Operating loss before working capital
changes (290,091) (360,634)
Increase in prepayments and deposits 6,419 (1,615)
Increase / (Decrease) in other payables
and accruals 50,002 (17,593)
--------- -----------
Cash used in operations (233,670) (379,842)
Interest received - -
--------- -----------
Net cash used in operating activities (233,670) (379,842)
--------- -----------
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)
--------- -----------
Net cash used in financing activities - (100,000)
--------- -----------
Net (decrease) / increase in cash and
cash equivalents (233,670) 315,227
Effect of foreign exchange rate changes,
net 74,514 (4,457)
Cash and cash equivalents at the beginning
of the year 355,418 44,648
--------- -----------
Cash and cash equivalents at the end
of the year 196,262 355,418
========= ===========
Analysis of balances of cash and cash
equivalents
Cash and bank balances 196,262 355,418
========= ===========
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2018
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.
The consolidated financial statements are 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.
IFRS 9 Financial Instruments
IFRS 15 Revenue from Contracts with Customers
In the current year, the Group has adopted IFRS 9 "Financial
Instruments", which becomes effective for accounting periods
beginning on or after 1 January 2018. The Group applied the
transition provisions set out in IFRS 9 to adjust the retained
profits or other reserves as at 1 January 2018, without restating
comparative information retrospectively, for any adjustments to the
carrying amounts of financial assets and financial liabilities
resulting from the adoption of IFRS 9. The principal effects
resulting from the application of IFRS 9 on the Group's assets or
liabilities are summarised below.
Classification and measurement of financial assets and financial
liabilities
IFRS 9 "Financial Instruments" introduces a new classification
and measurement approach for financial assets that reflects the
business model in which assets are managed and their cash flow
characteristics, and the new requirements on accounting for
financial liabilities that are designated at fair value through
profit or loss.
Impairment of financial assets
IFRS 9 replaces the "incurred loss" impairment model in IAS 39
with a forward-looking "expected credit loss" model. The Group
applies simplified approach to recognise lifetime expected losses
for all debtors and other receivables, and expected losses for
investments in securities. The credit losses calculated pursuant to
the new requirements are not significantly different from the
amount recognised under the current practices. Therefore, the Group
considered no adjustment is necessary.
The change in the classification of financial assets under IFRS
9 at the date of initial application on 1 January 2018 is that
available-for-sale investments of approximately GBP1,240,053 as at
31 December 2017 were classified as investment in equity
instruments of GBP1,240,053 as comparative figures in the
consolidated statement of financial position. Based on the Group's
financial instruments policies, the equity securities classified as
available-for-sale investments qualified for designation as
measured at financial assets at fair value through other
comprehensive income under IFRS 9, however, the Group elects to use
the option for designating these securities to be measured at
financial assets at fair value through other comprehensive income
and measures these securities at fair value with subsequent fair
value gains or losses to be recognised in profit or loss. Upon
initial application of IFRS 9, investments revaluation reserve
related to these available-for-sale investments currently
accumulated in equity of GBP350,618 were transferred to accumulated
loss at 1 January 2018.
The following table summarizes the original measurement
categories under IAS 39 and the new measurement categories under
IFRS 9 for each class of the Group's financial assets as at 1
January 2018:
Measurement category and carrying
amount under IFRS 9
------------- -----------------------------------------------
Non-current Current
assets assets
------------- -----------------------------------------------
Equity investment Equity investment
Carrying at fair value at fair value
amount under Amortised through profit through profit
IAS 39 cost or loss or loss
-------------------------------
Measurement category under
IAS 39 GBP GBP GBP GBP
------------------------------- ------------- --------- ----------------- -----------------
Available-for-sale financial
assets
Unlisted equity securities
(note i) 1,208,815 - 1,208,815 -
Loans and receivables
Deposits 10,547 10,547 - -
Bank balances and cash 355,418 355,418 - -
1,574,780 365,965 1,208,815 -
============= ========= ================= =================
(i) The unlisted equity securities that were previously
classified as available-for-sale financial assets amounted to
GBP1,208,815 are now classified as equity investment at fair value
through profit or loss since, at the date of initial application,
these investments are designated to be measured at fair value
through profit or loss.
Related fair value gain of GBP250,618 as at 1 January 2018 were
transferred from fair value reserves to accumulated loss on 1
January 2018.
The Company adopted IFRS 15 on its effective date of 1 January
2018. IFRS 15 replaces IAS 18 Revenue and establishes a five-step
model to account for revenue arising from contracts with customers.
In addition, guidance on interest and dividend income have been
moved from IAS 18 to IFRS 9 without significant changes to the
requirements. Therefore, there was no impact of adopting IFRS 15
for the Company.
2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (CONTINUED)
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 16 Leases(1)
IFRS 17 Insurance Contracts(2)
I(IFRIC)-Int 23 Uncertainty over Income Tax Treatments(1)
Amendments to IFRS 10 Sale or Contribution of Assets between an Investor and its
and IAS 28 Associate or Joint Venture(3)
Amendments to IAS 19 Plan Amendment, Curtailment or Settlement(1)
Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures(1)
Amendments to IFRSs Annual Improvements to IFRSs 2015-2017 Cycle(1)
(1) Effective for annual periods beginning on or after 1 January
2019.
(2) Effective for annual periods beginning on or after 1 January
2021.
(3) Effective for annual periods beginning on or after a date to
be determined.
IFRS 16 was issued in January 2016 and requires lessees to
account for all leases under a single on balance sheet model in a
similar way to finance leases under IAS 17. Lessor accounting is
substantially unchanged from today's accounting under IAS 17.
Lessors will continue to classify all leases using the same
classification principle as in IAS 17 and distinguish between two
types of leases: operating and finance leases. The standard
requires lessees and lessors to make more extensive disclosures
than under IAS 17. IFRS 16 is effective for annual periods
beginning on or after 1 January 2019, however early adoption is
permitted. The Company has no activity as a lessee and expects the
impact of adopting this standard to be minimal.
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.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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
Recognition and derecognition
Financial assets are recognised when and only when the Group
becomes a party to the contractual provisions of the instruments
and on a trade date basis.
A financial asset is derecognised when and only when (i) the
Group's contractual rights to future cash flows from the financial
asset expire or (ii) the Group transfers the financial asset and
either (a) it transfers substantially all the risks and rewards of
ownership of the financial asset, or (b) it neither transfers nor
retains substantially all the risks and rewards of ownership of the
financial asset but it does not retain control of the financial
asset.
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.
If the Group neither transfers nor retains substantially all the
risks and rewards of ownership and continues to control the
transferred asset, the Group recognises the financial asset to the
extent of its continuing involvement and an associated liability
for amounts it may have to pay.
Classification and measurement
Financial assets - applicable from 1 January 2018
Financial assets (except for trade receivables without a
significant financing component) are initially recognised at their
fair value plus, in the case of financial assets not carried at
FVPL, transaction costs that are directly attributable to the
acquisition of the financial assets. Such trade receivables are
initially measured at their transaction price.
On initial recognition, a financial asset is classified as (i)
measured at amortised cost; (ii) debt investment measured at fair
value through other comprehensive income ("Mandatory FVOCI"); (iii)
equity investment measured at fair value through other
comprehensive income ("Designated FVOCI"); or (iv) measured at fair
value through profit or loss ("FVPL").
The classification of financial assets at initial recognition
depends on the Group's business model for managing the financial
assets and the financial asset's contractual cash flow
characteristics. Financial assets are not reclassified subsequent
to their initial recognition unless the Group changes its business
model for managing them, in which case all affected financial
assets are reclassified on the first day of the first annual
reporting period following the change in the business model (the
"reclassification date").
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Financial instruments (continued)
Financial assets measured at amortised cost
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVPL:
(i) it is held within a business model whose objective is to
hold financial assets in order to collect contractual cash flows;
and
(ii) its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured
using the effective interest rate method and are subject to
impairment. Gains and losses arising from impairment, derecognition
or through the amortisation process are recognised in profit or
loss.
Mandatory FVOCI
A financial asset is measured at Mandatory FVOCI if both of the
following conditions are met and is not designated as at FVPL:
(i) it is held within a business model whose objective is to
hold financial assets in order to collect contractual cash flows
and for sale; and
(ii) its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
The financial asset is subsequently measured at fair value.
Interest calculated using the effective interest method, impairment
gains or losses and foreign exchange gains and losses are
recognised in profit or loss. Other gains or losses are recognised
in other comprehensive income until the financial asset is
derecognised. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in other
comprehensive income is reclassified to profit or loss as a
reclassification adjustment.
Designated FVOCI
Upon initial recognition, the Group may make an irrevocable
election to present subsequent changes in the fair value of an
investment in an equity instrument that is neither held for trading
nor contingent consideration recognised by an acquirer in a
business combination to which IFRS 3 applies in other comprehensive
income. The classification is determined on an
instrument-by-instrument basis.
These equity investments are subsequently measured at fair value
and are not subject to impairment. Dividends are recognised in
profit or loss unless the dividend clearly represents a recovery of
part of the cost of the investment. Other gains or losses are
recognised in other comprehensive income and shall not be
subsequently reclassified to profit or loss.
Financial assets at FVPL
These investments include financial assets held for trading,
financial assets designated upon initial recognition as at FVPL,
and financial assets resulting from a contingent consideration
arrangement in a business combination to which IFRS 3 applies. They
are carried at fair value, with any resultant gain and loss
recognised in profit or loss, which does not include any dividend
or interest earned on the financial assets. Dividend or interest
income is presented separately from fair value gain or loss.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Financial instruments (continued)
A financial asset is classified as held for trading if it
is:
(i) acquired principally for the purpose of selling it in the near term;
(ii) part of a portfolio of identified financial instruments
that are managed together and for which there is evidence of a
recent actual pattern of short-term profit-taking on initial
recognition; or
(iii) a derivative that is not a financial guarantee contract or
not a designated and effective hedging instrument.
Derivatives embedded in a hybrid contract in which a host is an
asset within the scope of IFRS 9 are not separated from the host.
Instead, the entire hybrid contract is assessed for
classification.
Financial assets are designated at initial recognition as at
FVPL only if doing so eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise arise
from measuring assets or liabilities or recognising the gains or
losses on them on different bases.
Classification and measurement
Financial assets - applicable before 1 January 2018
Financial assets are initially recognised at their fair value
plus, in the case of financial assets not carried at FVPL,
transaction costs that are directly attributable to the acquisition
of the financial assets.
The Group classified its financial assets into one of the
following categories before 1 January 2018:
Financial assets at FVPL
Financial assets at FVPL include financial assets held for
trading, financial assets designated upon initial recognition as at
FVPL, and financial assets resulting from a contingent
consideration arrangement in a business combination to which IFRS 3
applies. They are carried at fair value, with any resultant gain
and loss recognised in profit or loss, which does not include any
dividend or interest earned on the financial assets. Dividend or
interest income is presented separately from fair value gain or
loss.
Financial assets are classified as held for trading if they are
(i) acquired principally for the purpose of selling in the near
future; (ii) 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 (iii) derivatives that are
not financial guarantee contracts or not designated and effective
hedging instruments.
Financial assets are designated at initial recognition as at
FVPL only if (i) the designation eliminates or significantly
reduces the inconsistent treatment that would otherwise arise from
measuring the assets or liabilities or recognising gains or losses
on a different basis; or (ii) they are part of a group of financial
assets and / or financial liabilities that are managed and their
performance evaluated on a fair value basis, in accordance with a
documented risk management strategy; or (iii) they contain embedded
derivatives that would need to be separately recorded.
Where a contract contains one or more embedded derivatives, the
entire hybrid contract may be designated as a financial asset at
FVPL, except where the embedded derivative does not significantly
modify the cash flows or it is clear that separation of the
embedded derivative is prohibited.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Financial instruments (continued)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets
with fixed or determinable payments and fixed maturities that the
Group's management has the positive intention and ability to hold
to maturity. They are measured at amortised cost using the
effective interest method. Amortised cost is calculated by taking
into account any discount or premium on acquisition over the year
to maturity. Gains and losses arising from derecognition,
impairment or through the amortisation process are recognised in
profit or loss.
Loans and receivables
Loans and receivables including cash and bank balances and trade
and other receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market and are not held for trading. They are measured at amortised
cost using the effective interest method, except where receivables
are interest-free loans and without any fixed repayment term or the
effect of discounting would be insignificant. In such case, the
receivables are stated at cost less impairment loss. Amortised cost
is calculated by taking into account any discount or premium on
acquisition over the period to maturity. Gains and losses arising
from derecognition, impairment or through the amortisation process
are recognised in profit or loss.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial
assets that are either designated at this category or not
classified in any of the other categories of financial assets. They
are measured at fair value with changes in value recognised as a
separate component of equity until the assets are sold, collected
or otherwise disposed of, or until the assets are determined to be
impaired, at which time the cumulative gain or loss previously
reported in other comprehensive income shall be reclassified to
profit or loss as a reclassification adjustment.
Financial liabilities
Recognition and derecognition
Financial liabilities are recognised when and only when the
Group becomes a party to the contractual provisions of the
instruments and on a trade date basis.
A financial liability is derecognised when and only when the
liability is extinguished, that is, when the obligation specified
in the relevant contract is discharged, cancelled or expires.
Classification and measurement
Financial liabilities are initially recognised at their fair
value plus, in the case of financial liabilities not carried at
FVPL, transaction costs that are direct attributable to the issue
of the financial liabilities.
The Group's financial liabilities except for financial
liabilities at FVPL, are recognised initially at their fair value
and subsequently measured at amortised cost, using the effective
interest method, unless the effect of discounting would be
insignificant, in which case they are stated at cost.
Financial liabilities at FVPL are carried at fair value, with
any resultant gain and loss (excluding interest expenses)
recognised in profit or loss, except for the portion of fair value
changes of financial liabilities designated at FVPL that are
attributable to the credit risk of the liabilities which is
presented in other comprehensive income unless such treatment would
create or enlarge an accounting mismatch in profit or loss. The
amounts presented in other comprehensive income shall not be
subsequently transferred to profit or loss. Before the adoption of
IFRS 9, all the fair value gain or loss of financial liabilities at
FVPL is recognised in profit or loss.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Financial instruments (continued)
A financial liability is classified as held for trading if it
is:
(i) incurred principally for the purpose of repurchasing it in the near term;
(ii) part of a portfolio of identified financial instruments
that are managed together and for which there is evidence of a
recent actual pattern of short-term profit-taking on initial
recognition; or
(iii) a derivative that is not a financial guarantee contract or
not a designated and effective hedging instrument.
Financial liabilities are designated at initial recognition as
at FVPL only if:
(i) the designation eliminates or significantly reduces a
measurement or recognition inconsistency that would otherwise arise
from measuring assets or liabilities or recognising the gains or
losses on them on different bases;
(ii) they are part of a group of financial liabilities or
financial assets and financial liabilities that are managed and
their performance evaluated on a fair value basis, in accordance
with a documented risk management strategy; or
(iii) they contain one or more embedded derivatives, in which
case the entire hybrid contract may be designated as a financial
liability at FVPL, except where the embedded derivatives do not
significantly modify the cash flows or it is clear that separation
of the embedded derivatives is prohibited.
Impairment of financial assets and other items under IFRS 9
Applicable from 1 January 2018
The Group recognises loss allowances for expected credit losses
("ECL") on financial assets that are measured at amortised cost, to
which the impairment requirements apply in accordance with IFRS 9.
The Group measures a loss allowance for a financial asset at an
amount equal to the lifetime ECL if the credit risk on that
financial asset has increased significantly since initial
recognition. If the credit risk on a financial asset has not
increased significantly since initial recognition, the Group
measures the loss allowance for that financial asset at an amount
equal to 12-month ECL.
Measurement of ECL
ECL is a probability-weighted estimate of credit losses (i.e.
the present value of all cash shortfalls) over the expected life of
the financial instrument. A cash shortfall is the difference
between the cash flows that are due to an entity in accordance with
the contract and the cash flows that the entity expects to
receive.
For financial assets, a credit loss is the present value of the
difference between the contractual cash flows that are due to an
entity under the contract and the cash flows that the entity
expects to receive.
Lifetime ECL represents the ECL that will result from all
possible default events over the expected life of a financial
instrument while 12-month ECL represents the portion of lifetime
ECL that is expected to result from default events on a financial
instrument that are possible within 12 months after the reporting
date.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Financial instruments (continued)
Definition of default
The Group considers the following as constituting an event of
default for internal credit risk management purposes as historical
experience indicates that the Group may not receive the outstanding
contractual amounts in full if the financial instrument that meets
any of the following criteria.
information developed internally or obtained from external
sources indicates that the debtor is unlikely to pay its creditors,
including the Group, in full (without taking into account any
collaterals held by the Group); or there is a breach of financial
covenants by the counterparty.
Assessment of significant increase in credit risk
In assessing whether the credit risk on a financial instrument
has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial
instrument as at the reporting date with the risk of a default
occurring on the financial instrument as at the date of initial
recognition. In making this assessment, the Group considers both
quantitative and qualitative information that is reasonable and
supportable, including historical experience and forward-looking
information that is available without undue cost or effort.
Irrespective of the outcome of the above assessment, the Group
presumes that the credit risk on a financial instrument has
increased significantly since initial recognition when contractual
payments are more than 30 days past due
Notwithstanding the foregoing, the Group assumes that the credit
risk on a financial instrument has not increased significantly
since initial recognition if the financial instrument is determined
to have low credit risk at the reporting date.
Low credit risk
A financial instrument is determined to have low credit risk
if:
(i) it has a low risk of default;
(ii) the borrower has a strong capacity to meet its contractual
cash flow obligations in the near term; and
(iii) adverse changes in economic and business conditions in the
longer term may, but will not necessarily, reduce the ability of
the borrower to fulfil its contractual cash flow obligations.
A financial asset is credit-impaired when one or more events
that have a detrimental impact on the estimated future cash flows
of that financial asset have occurred. Evidence that a financial
asset is credit-impaired include observable data about the
following events:
(i) significant financial difficulty of the issuer or the borrower.
(ii) a breach of contract, such as a default or past due event.
(iii) the lender(s) of the borrower, for economic or contractual
reasons relating to the borrower's financial difficulty, having
granted to the borrower a concession(s) that the lender(s) would
not otherwise consider.
(iv) it is becoming probable that the borrower will enter
bankruptcy or other financial reorganisation.
(v) the disappearance of an active market for that financial
asset because of financial difficulties.
(vi) the purchase or origination of a financial asset at a deep
discount that reflects the incurred credit losses.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Financial instruments (continued)
Write-off
The Group writes off a financial asset when the Group has no
reasonable expectations of recovering the contractual cash flows on
a financial asset in its entirety or a portion thereof. The Group
has a policy of writing off the gross carrying amount based on
historical experience of recoveries of similar assets. The Group
expects no significant recovery from the amount written off.
However, financial assets that are written off could still be
subject to enforcement activities under the Group's procedures for
recovery of amounts due, taking into account legal advice if
appropriate. Any subsequent recovery is recognised in profit or
loss.
Applicable before 1 January 2018
At the end of each reporting period, the Group assesses whether
there is objective evidence that financial assets, other than those
at FVPL, are impaired. The impairment loss of financial assets
carried at amortised cost is measured as the difference between the
assets' carrying amount and the present value of estimated future
cash flow discounted at the financial asset's original effective
interest rate. Such impairment loss is reversed in subsequent
periods through profit or loss when an increase in the asset's
recoverable amount can be related objectively to an event occurring
after the impairment was recognised, subject to a restriction that
the carrying amount of the asset at the date the impairment is
reversed does not exceed what the amortised cost would have been
had the impairment not been recognised.
When an available-for-sale financial asset is impaired, a
cumulative loss comprising the difference between its acquisition
cost (net of any principal repayment and amortisation) and current
fair value, less any previously recognised impairment loss in
profit or loss, is reclassified from equity to profit or loss as a
reclassification adjustment. Impairment losses recognised in profit
or loss in respect of available-for-sale equity instrument are not
reversed through profit or loss. Any subsequent increase in fair
value of available-for-sale equity instrument after recognition of
impairment loss is recognised in equity. Reversal of impairment
loss of available-for-sale debt instruments are reversed through
profit or loss, if the increase in fair value of the instrument can
be objectively related to an event occurring after the impairment
loss was recognised in profit or loss.
For an available-for-sale financial asset that is carried at
cost, the amount of impairment loss is measured as the difference
between the carrying amount of the financial asset and the present
value of estimated future cash flows discounted at the current
market rate of return for a similar financial asset. Such
impairment loss shall not be reversed.
(e) 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.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(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:
2018 2017
GBP GBP
Foreign exchange gain 10,943 -
Sundry income - 236
------ ----
10,943 236
====== ====
6. (LOSS) / PROFIT BEFORE TAX
(Loss) / Profit before tax arrived at after charging:
2018 2017
GBP GBP
Auditors' remuneration 21,061 21,893
Depreciation of property, plant
and equipment 2,225 2,620
Foreign exchange loss - 40,793
Staff costs (including directors'
remuneration)
- Fees 52,500 21,750
- Salaries and other benefits 24,000 53,694
Total staff costs 76,500 75,444
====== ======
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 2018:
Salaries Retirement
and other scheme
Fees benefits contribution Total
GBP GBP GBP GBP
Executive directors
Mr. Robert Anthony Rowland
Berkeley 30,000 - - 30,000
Mr. Wai Tak Jonathan
Chu (i) - - - -
30,000 - - 30,000
------ --------- ------------ ------
Independent non-executive
director
Mr. Seah Boon Chin 22,500 - - 22,500
------ --------- ------------ ------
52,500 - - 52,500
====== ========= ============ ======
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 (i) - - - -
Mr. Paniti Junhasavasdikul
(ii) - 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
====== ========= ============ ======
During the years ended 31 December 2018 and 31 December 2017, 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 previously
granted to directors are set out in note 16 below.
Notes:
(i) Mr. Wai Tak Jonathan Chu was appointed on 2 April 2015 and resigned on 14 May 2019.
(ii) Mr.Paniti Junhasavasdikul was appointed on 9 September 2016 and resigned on 30 April 2017.
8. INCOME TAX
2018 2017
---- ----
GBP GBP
Current income tax - -
==== ====
Pursuant to the rules and regulations of the BVI, the Company is
not subject to any income tax in the BVI.
Tax charge for the year is reconciled to loss before taxation as
follows:
2018 2017
--------- ---------
GBP GBP
(Loss) / Profit before taxation (529,879) 1,070,017
--------- ---------
Tax at the application income tax rate 148,895 (176,553)
Tax effect of expenses not deductible (148,895) 176,553
--------- ---------
Tax charge and effective tax rate for the - -
year
========= =========
9. (LOSS) / EARNINGS 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 (loss) / earnings per share
During the year ended 31 December 2018, the calculation of basic
(loss) / earnings per share amount is based on the net loss for the
year of GBP529,879 (2017: profit of GBP1,070,017) attributable to
the equity holders of the Company, and weighted average of
212,826,072 (2017: 212,826,072) ordinary shares in issued during
the year.
(b) Diluted (loss) / earnings per share
No adjustment has been made to the basic (loss) / earnings per
share presented for the year ended 31 December 2018 and 2017 in
respect of a dilution as the impact of the share options
outstanding (2017: share options outstanding) had an anti-dilutive
effect on the basic (loss) / earnings 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 2018 (2017: nil).
11. PROPERTY, PLANT AND EQUIPMENT
Furniture Office
and fixture equipment Total
GBP GBP GBP
At cost:
At 1 January 2017, 31
December 2017, 1 January
2018 and 31 December 2018 - 14,836 14,836
----------- --------- -------
Accumulated depreciation:
At 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
and 1 January 2018 - 8,425 8,425
Charge for the year - 2,225 2,225
----------- --------- -------
At 31 December 2018 - 10,650 10,650
----------- --------- -------
Net carrying value:
At 31 December 2018 - 4,186 4,186
=========== ========= =======
At 31 December 2017 - 6,411 6,411
=========== ========= =======
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
Fortune House Group British Virgin Ordinary - 100% Investment
Limited Share holding
Islands US$1
13. EQUITY INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS /
AVAILABLE-FOR-SALE FINANCIAL ASSETS
Equity investment at fair value through profit or loss /
Available-for-sale financial assets comprise of:
2018 2017
GBP GBP
Unlisted equity securities,
at cost 1,239,926 1,239,926
Fair value adjustment (655,938) (361,938)
Exchange realignment 387,265 330,827
--------- ---------
971,252 1,208,815
========= =========
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.
13. EQUITY INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS /
AVAILABLE-FOR-SALE FINANCIAL ASSETS (CONTINUED)
The details of movement in equity investment at fair value
through profit or loss have been set out as follow:
As at 31 December 2018
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 (655,938) 387,265 971,252
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
13. AVAILABLE-FOR-SALE FINANCIAL ASSETS (CONTINUED)
Notes:
(a) On 3 May 2017, the Group disposed of all interests in
Andaman Power and Utility Co., Limited ("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 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 2018, 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 2018, a fair value of approximately
US$1,239,000 (equivalent to GBP971,252) (2017: US$1,631,000
(equivalent to GBP1,208,815) 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
2018 2017
------- -------
GBP GBP
Cash and bank
balance 196,262 355,418
======= =======
At 31 December 2018, bank balances carry interest at market rate
of 0.05% (2017: 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 2017 and 2018 1,000,000,000 N/A
=============== =========
Issued
As at 1 January 2017, 31 December
2017 and 31 December 2018 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.
2018 2017
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 -
=========================== ========= ========= ========= =========
16. WARRANTS AND SHARE APPRECIATION AWARDS (CONTINUED)
The exercisable period of warrants of the Company are as
follows:
2018 2017
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 2018 were as
follows:
Name Number of Exercise price Earliest exercise Latest exercise
warrants (pence) date date
Mr. Robert Anthony 4,176,082 3 pence 24 April 2015 24 April 2018
Rowland Berkeley
---------- --------------- ------------------ ----------------
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.
2018 2017
Outstanding at 1 January - 1,789,749
Lapsed during the year - (1,789,749)
---- -----------
Outstanding as at 31 December - -
==== ===========
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.
As of 31December 2018 all Awards were lapsed and the Company
does not have any share appreciation award outstanding.
17. RESERVES
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
2018 2017
GBP GBP
Accruals expenses 66,341 16,338
====== ======
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 was fully repaid during the year ended 31 December
2017.
The movements of the convertible loan note is set out below:
2018 2017
GBP GBP
At the beginning year - 320,243
Issue during the year - -
Repayment during the year - (100,000)
Change in fair value - (220,243)
At the end of the year - -
---- ---------
21. RELATED PARTY TRANSACTIONS
Compensation of key management personnel of the Group
2018 2017
GBP GBP
Short term employee benefits 52,500 70,550
Post-employment benefit - -
------ ------
52,500 70,550
====== ======
22. CAPITAL RISK MANAGEMENT
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 GBP357,185 in 2017 (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:
2018 2017
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.
23. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
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.
Although the cash and cash equivalents are concentrated with
certain counterparties, the credit risk on liquid funds is limited
because the counterparties are banks with good credit ratings
assigned by international credit rating agencies. In this regard,
the management considers that the Group's credit risk on such
authorised institutions is low. Accordingly, cash and cash
equivalents are subject to 12m ECL assessment. In the opinion of
the management, the 12m ECL's balance is not significant.
For the purposes of internal credit risk management, the Group
uses past and forward-looking information to assess whether credit
risk has increased significantly since initial recognition. The
internal credit risk grading of the Group comprises 4 categories:
performing, doubtful, in default and write-off. The financial
assets of the Group which are subject to ECL assessment comprises
other receivables and bank balances and cash. The management of the
Group reviewed and assessed the impairment for each financial asset
individually under the 12m ECL model. These financial assets are
categorised as performing as there is no significant increase in
credit risk since initial recognition and the risk of default is
low and the counterparties have the capacity to meet their
contractual cash flow obligations in the near term. No loss
allowance was recognised as the amount was immaterial.
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 2018, 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 2018
Accruals and other
payables N/A 66,341 - 66,341 66,341
========= ========= ============ ========
At 31 December 2017
Accruals and other
payables N/A 16,338 - 16,338 16,338
========= ========= ============ ========
23. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
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 2018 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 2018, the Group had following financial
instrument carried at fair value all of which are based on the
Level 3 fair value measurement basis.
2018 2017
------- ---------
GBP GBP
Financial assets:
Available-for-sale financial assets - 1,208,815
Equity investment at fair value through
profit or loss 971,252 -
======= =========
23. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
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 2018
Available-
for-sale
financial
asset
----------
GBP
At the beginning of the year 1,208,815
Total gains or losses
in profit or loss (655,938)
in other comprehensive income -
Exchange realignment 387,265
----------
At the end of the year 971,252
==========
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
========== =========== ==========
23. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
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).
2018 2017 Valuation Significant Range Relationship
technique(s) unobservable of unobservable
inputs inputs to
fair value
GBP GBP
Financial
assets
Equity
investment
at fair
value through
profit The higher
or loss the free cash
/ Available-for-sale flow, the
financial Discounted Free cash higher the
assets 971,252 1,208,815 cash flow flow N/A fair value
Discount The higher
rate the discount
rate, the
lower the
14% fair value
23. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
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 2018 and 2017 due to their
short-term maturities.
2018
Carrying
amount Fair value
----------------------- ----------------------
GBP GBP
Bank and cash balances 196,262 196,262
Deposits 4,128 4,128 4,128
Accruals and other payable (66,341) (66,341)
======================= ======================
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)
======================= ======================
Estimation of fair value
Fair value for unquoted equity investments are estimated using
the discount cash flow valuation techniques.
23. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES (CONTINUED)
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
Financial assets at fair value through profit
or loss 971,252 -
971,252 1,208,815
======= =========
Financial liabilities
Amortised cost 66,341 16,338
24. AUTHORISATION FOR ISSUE OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements were approved and
authorised for issue by the board of directors on 27 June 2019.
------ Ends ------
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Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR CKODQQBKDPAB
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