TIDMAMED
RNS Number : 9231O
Amedeo Resources PLC
02 June 2015
2 June 2015
Amedeo Resources plc
("Amedeo" or the "Company")
Audited Results for Eleven Months Ended 31 December 2014
Highlights
-- Explorer 1 being built to quality and schedule, and due to be
completed end 2(nd) half 2015. Keel laid in April 2014 and vessel
launched from the skid-way on land to the water in April 2015
-- New Yard operational, and as well as building Explorer 1, New
Yard absorbing overspill from Yangzijiang Holdings' principal yards
by building blocks for container ships
-- Notwithstanding significant weakness in the iron ore price,
MGR marginally profitable, and paid over US$400,000 of interest to
Amedeo
-- Excluding non-cash items and one-off items, loss on ordinary
activities before taxation reduced by 53% to US$128,000 (year ended
31 January 2014: loss of US$272,000)
-- Successful equity fundraising of US$8,554,000
-- AGM to be held on 30 June 2015
Glen Lau, CEO of Amedeo, commented:
"YZJ Offshore's New Yard is fully operational. The build of
Explorer 1 is to quality and schedule, building the New Yard's
reputation and laying firm foundations for the New Yard's future.
Although the rig market has slowed, we expect it to pick up in the
medium term. In any case, the New Yard is able to build a range
vessels and blocks and is well placed to take advantage of any
upturn.
"MGR remains profitable against an extremely difficult
back-drop, and has been able to pay to Amedeo over US$400,000 of
interest. MGR is currently exploring opportunities in a range of
commodities.
"Current market conditions have slowed the progress of Amedeo's
strategy. Nonetheless, we expect recovery in the medium term which
Amedeo is well placed to take advantage of."
**ENDS**
For further information please visit www.amedeoresources.com or
contact:
Enquiries:
Glen Lau Zafar Karim
Chief Executive Officer Executive Director
Amedeo Resources Plc Amedeo Resources Plc
Tel office: +44 20 7583 8304 Tel office: +44 20 7583 8304
Paul Shackleton /Nick Prowting Saif Janjua
Nominated Adviser & Broker Joint Broker
WH Ireland Beaufort Securities Limited
Tel office: +44 20 7220 1667 Tel office: +44 20 7382 8300
Notes
Amedeo Resources plc is an investment company whose policy is to
invest principally, but not exclusively, in the resources and
energy and related infrastructure and asset sectors. Amedeo has a
deep and broad global network and wide contact base in these
sectors, including in East and South East Asia and the Middle East
which it leverages to source and make investments. These sectors
exhibit high growth and are strategically important. Amedeo is a
proactive investor which assists its investee companies to grow by
providing investment, expertise and contacts.
CHAIRMAN'S STATEMENT
Introduction
Amedeo Resources plc ("Amedeo" or the "Company") continues to
build on its progress last year. Jiangsu Yangzijiang Offshore
Engineering Co. Ltd's ("YZJ Offshore") new marine vessel yard ("New
Yard") located in Taicang, approximately 60km north west of
Shanghai, is now operational and its first order, a Le Tourneau
Super 116E Class design self-elevating mobile offshore jack up
drilling rig ("Explorer 1"), has been launched. Progress on new
orders has been slower than expected due to the fall in the oil
price and consequent postponement of capital expenditure in the oil
& gas industry. We do not expect this situation to persist in
the medium term.
The New Yard has the capability to construct a multitude of
vessels and construct blocks for container and gas carrier vessels.
It has used this capability to absorb overspill from Amedeo's
partner in this venture, Yangzijiang Shipbuilding (Holdings) Pte
Ltd's ("Yangzijiang Holdings") main shipyards.
MGR Resources PTE Ltd ("MGR") has had to operate against a
background of steeply declining iron ore prices which have
depressed margins. Nonetheless, MGR has remained profitable and
paid US$444,000 of interest to Amedeo after the year end. MGR is
exploring opportunities in other commodities.
Despite the slowdown, Amedeo continues to make progress in
achieving its vision of building a range of holdings in the
resource and energy and related infrastructure and asset sectors
and proactively assisting its holdings.
YZJ Offshore
YZJ Offshore's New Yard is fully operational and the build of
its first order, Explorer 1, is nearing completion. The keel was
laid in April 2014. Post the period end, in April 2015, Explorer 1
was launched from the skid-way on land to the water. The build is
progressing to quality and to schedule, and the customer continues
to be impressed with the build quality and progress. Explorer 1 is
on schedule to be completed in the second half of 2015.
As mentioned in the interim statement, as a new fabricator, YZJ
Offshore needs to develop its reputation and brand. With Explorer 1
now having been launched, third parties have been inspecting it,
its build quality and the New Yard. Indications are that they are
satisfied with the New Yard and build quality of Explorer 1, with
both comparing favourably to other Chinese yards.
With the oil price having declined from circa US$115 per barrel
in July 2014 to a low of circa US$47 per barrel in January 2015,
there has been a general postponement of capital expenditure in the
oil & gas sector. This has led to underutilisation and
oversupply of existing rigs. Whilst we believe that this situation
will not persist in the medium term (as we write, the oil price has
already recovered to over US$60 per barrel), and over half the
world's rig fleet is over 25 years old and will require replacing
in the medium term, it has made it more difficult to obtain orders
over the course of 2014 and currently. Nonetheless, Amedeo is in
continuous discussions with respect to obtaining further orders,
and some of these discussions are at an advanced stage.
The trend appears to be away from deep water vessels to mid and
shallow water vessels and more advanced and specialised (by
locality) vessels. The New Yard is well placed to build such
vessels. Moreover, in addition to building oil rigs, the New Yard
has the capability to build various other vessels including
offshore vessels (jackups, semi submersibles and accommodation
units) and fabricate blocks for container ships and gas carrier
vessels. Discussions regarding building such vessels are also
underway.
In the meantime, the New Yard is absorbing overspill from
Yangzijiang Holdings' principal yards by building blocks for
container ships. Along with completing the order for Explorer 1,
these activities keep the New Yard busy while new orders are
obtained.
Amedeo has an indirect 19.0% stake in YZJ Offshore which it
holds through its 47.5% stake in the joint venture company, YZJ
Offshore Engineering Pte Ltd ("YZJ JV").
MGR
In the period under review, trading conditions have been
difficult for MGR, whose principal activity is the amalgamation of
iron ore from the Middle East and Africa and onward supply to
China. In January 2014, the iron ore price was in the region of
US$120 per tonne. By December 2014, it had fallen to below US$70
per tonne, and as we write it is in the region of US$50 per tonne.
Brokering margins have decreased substantially as a result.
Despite these falls, MGR has remained marginally profitable,
even after substantial interest charges of US$444,000 to Amedeo.
Due to its low profitability, MGR made no dividend payments in the
period under review. The interest charges were settled after the
period end. In late January 2015, also after the period end, MGR
repaid a loan of US$1,950,000 to Amedeo. There is a further loan to
MGR of US$2,044,000 still outstanding which has an interest rate of
15%.
With the immediate outlook for iron ore being poor, MGR is
utilising its network to explore other opportunities for broking
other commodities, including into China and elsewhere.
Fund raise
In March 2014, Amedeo raised approximately US$8,783,000 via an
equity fundraising, which resulted in the issue of 521,764,569
ordinary shares at 1.0 pence per share. Following the fundraising,
the Company's enlarged issued ordinary share capital comprises
3,265,384,202 ordinary shares of 0.1p each ("Existing Ordinary
Share").
Of the funds raised, US$5,059,000 was utilised to pay up fully
Amedeo's stake in YZJ JV and to increase Amedeo's stake in YZJ JV
from 46.5% to 47.5%, thereby raising Amedeo's stake in YZJ Offshore
from 18.6% to 19.0%.
In June 2014, US$2,044,000 of the funds raised were utilised to
make a working capital loan to MGR to enable it to expand its
operations. The loan has a five year maturity and carries a 15%
coupon.
Legacy Investments
At the reporting date, Amedeo had two legacy investments, its
holding of 400,000 unquoted preference shares in privately owned
Pinnacle Plus Limited ("Pinnacle") and its holding of shares in
Ashcourt Rowan Plc. Significant provisions have been made against
the former, and the latter has been disposed of post year end for a
value in excess of the book value (US$12,000 sale value versus
US$7,000 book value).
Financial Review
Trading revenue for the eleven months ended 31 December 2014 was
US$91,000 (year ended 31 January 2014: US$128,000). Amedeo provides
various business development and marketing services to MGR which,
during the period resulted in revenue of US$91,000. This lesser
figure was due to the shorter period and decreased activity at
MGR.
Administrative expenses were US$827,000 (year ended 31 January
2014: US$699,000). The increase included a number of one-off items
(fees related to the investment in YZJ JV and items related to a
now settled VAT dispute) amounting in total to US$149,000.
Amedeo's share of loss in associates was US$922,000 (year ended
31 January 2014: US$1,024,000). This was made up of a loss of
US$942,000 (year ended 31 January 2014: US$929,000) at YZJ JV and a
profit of US$20,000 (year ended 31 January 2014: US$96,000 loss) at
MGR. The losses/profits of the associates are non-cash items.
Foreign exchange losses amount to US$197,000 (year ended 31
January 2014: US$704,000). These were predominately due to
translating GBP denominated loans into US$. This is a non-cash
item.
Finance income rose to US$444,000 (year ended 31 January 2014:
US$154,000) due to the interest on loans to MGR.
Overall loss on ordinary activities before taxation fell by 7.2%
to US$1,411,000 (year ended 31 January 2014: loss of US$1,520,000).
Basic and fully diluted loss per share for the period was US0.04c
(year ended 31 January 2014: US0.06c).
Excluding non-cash items, loss on ordinary activities before
taxation of US$277,000 was broadly in line with the prior period
(year ended 31 January 2014: loss of US$272,000). However, after
removing one-off items, the loss on ordinary activities before
taxation was reduced by 53% to US$128,000 (year ended 31 January
2014: loss of US$272,000).
Foreign exchange translation differences of US$64,000 arose
(year ended 31 January 2014: US$1,854,000). The current period
difference relates to Amedeo's indirect investment in YZJ Offshore.
The prior period difference related to a combination of Amedeo's
indirect investment in YZJ Offshore (US$597,000) and the
translation of historic balance sheet items from GBP into US$
(US$1,257,000). The translation of historic balance sheet items is
a non-cash, one-off item. The translation of Amedeo's indirect
investment in YZJ Offshore is also a non-cash item but not a
one-off item.
Taking the balance sheet foreign exchange translation
differences into account, overall, total comprehensive loss for the
period was US$1,475,000 (year ended 31 Jan 2014 gain of:
US$334,000).
As at the period end, the carrying value on the balance sheet of
investments in associates rose to US$19,205,000 (31 January 2014:
US$15,132,000), primarily as a result of the US$5,059,000
investment to pay up fully Amedeo's stake in YZJ JV. Current assets
rose to US$5,576,000 (31 January 2014: US$2,624,000) primarily as a
result of the US$2,044,000 loan made to MGR. Cash as at 31 December
2014 was US$1,179,000 (31 January 2014: US$582,000).
At the date of signature of these financial statements, the
Group had US$2,972,000 of cash and cash equivalent balances.
Trade payables increased to US$344,000 (31 January 2014:
US$200,000) due to timing differences on when invoices were paid
around period end.
Overall, at the period end, net and total assets were
US$24,437,000 (year ended 31 January 2014: US$17,556,000) and
US$24,781,000 (year ended 31 January 2014: US$17,756,000),
respectively.
Post the period end and in line with Amedeo's policy of aligning
Directors' incentives with those of shareholders, Amedeo awarded to
Glen Lau, the Chief Executive Officer of Amedeo, 260,721,118
warrants to subscribe for new ordinary shares of 0.01p in the
Company. The warrants have share price performance and time vesting
conditions. They have an exercise price of 1.0 pence compared with
the share price of 0.35 pence at the time of the award.
Outlook
Progress continues on the build of Explorer 1 which is nearing
completion and is scheduled to be completed in the second half of
2015. The quality of the build is impressive and the build is to
schedule. This is key in building the New Yard's reputation as a
quality and reliable yard. The oil price has fallen substantially
from January 2014 to now, as we write, and this has led to a
postponement of capital expenditure in the oil and gas sector. Many
rigs are underemployed and there is a current oversupply. We do not
expect this to continue in the medium term. The price of oil has
recovered from its lows of under US$50 per barrel to the current
over US$60 per barrel. More than half the world's rig fleet is over
25 years old and will require replacing in the medium term.
Further, demand for rigs is expected to be for more advanced and
localised rigs.
The New Yard is able to meet this demand. In addition, the New
Yard is able to construct a variety of other vessels. While
completing Explorer 1 and waiting for further orders, the New Yard
is also building blocks for container ships. As mentioned above,
the New Yard is in continuous discussions with respect to obtaining
further vessel orders.
The price of iron ore has fallen substantially from January 2014
to now, as we write. This has eroded margins in the iron ore
brokering business. MGR has nonetheless remained marginally
profitable and has met its interest payments. With no immediate
recovery in the price of iron ore expected, MGR is exploring
opportunities in broking other commodities.
While, due to a low oil price and falling commodity prices,
progress in building Amedeo has been slower than expected, as well
as seeking new orders for the New Yard and MGR exploring
opportunities in broking a range of commodities, Amedeo also
continues exploring additional investments in the resource and
resource infrastructure sectors.
The Board looks forward confidently to the future.
Annual general meeting
You will find set out at the end of this document a notice
convening an annual general meeting of the Company ("AGM") to be
held at 201 Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT at
2.30pm on 30 June 2015. Also enclosed is a proxy form for use by
shareholders in respect of the AGM.
The Board considers that a consolidation of the existing
ordinary shares will be for the benefit of the Company and its
members because it should assist in improving such share's
attractiveness and liquidity, through the increase in value of each
share which may potentially lead to a relative reduction in the bid
offer spread price of a share. Accordingly it is proposed that
every 100 Existing Ordinary Shares be consolidated into 1 ordinary
share of 10p (the "Consolidation") in accordance with Resolution 5
proposed at the AGM.
To effect the Consolidation it will be necessary to issue 98
further Existing Ordinary Shares so that the Company's issued share
capital is exactly divisible by 100 at the time that the
Consolidation takes effect. The additional 98 Existing Ordinary
Shares would be issued to the Company Secretary for cash,
conditional on the approval of Resolution 5 at the AGM.
Holders of fewer than 100 Existing Ordinary Shares would not be
entitled to receive a new ordinary share of 10p each (a "New
Ordinary Share") under the Consolidation. Shareholders with a
holding of Existing Ordinary Shares of greater than 100 but not
exactly divisible by 100 would have their entitlement rounded down
to the nearest whole number. Fractional entitlements would be
aggregated and sold in the market for the benefit of the Company
except that any net proceeds after the deduction of expenses of the
sale in excess of GBP3.00 per shareholder would be distributed to
the relevant shareholders entitled thereto.
Assuming that the Consolidation is approved, it is expected to
become effective, and trading in the New Ordinary Shares is
expected to commence on AIM on 1 July 2015.
GROUP STATEMENT OF COMPREHENSIVE INCOME
for the 11 months ended 31 December 2014
11 months Year ended
ended 31 31Jan 2014
Dec 2014
Note $'000 $'000
Revenue 91 128
Cost of sales - (2)
______ _______
Gross profit 91 126
Administrative expenses 4 (827) (699)
Share of loss of associates 5 (922) (1,024)
Foreign currency loss (197) (704)
______ ______
Loss from operations (1,855) (2,301)
Gain on purchase of associate - 519
Dividend income 11 - 108
Finance income 7 444 154
______ ______
Loss on ordinary activities
before taxation (1,411) (1,520)
Taxation 8 - -
______ ______
Loss for the year (1,411) (1,520)
Basic and diluted loss
per share 9 (0.04)c (0.06)c
Other Comprehensive Income
Foreign exchange translation
difference (64) 1,854
______ _____
Total Comprehensive (Loss)/Profit
for the year (1,475) 334
All of the Group's activities are classed as continuing.
The accompanying notes are an integral part of these financial
statements.
The Company has elected to take exemption under section 408 of
the Companies Act 2006 from presenting the Company statement of
comprehensive income. The loss for the Company for the 11 months to
31 December 2014 was US$408,000 (year to 31 Jan 2014: loss of
US$1,007,000).
STATEMENTS OF CHANGES IN EQUITY
Group
Total equity
Foreign attributable
Share Share-based currency to equity
Share premium payment translation Retained holders
capital account reserve reserves earnings of parent
$'000 $'000 $'000 $'000 $'000 $'000
At 1 February
2013 4,923 21,643 250 (331) (9,302) 17,183
5
Loss for
the year - - - - (1,520) (1,520)
Share-based
payments - - 39 - - 39
Foreign exchange - - - 1,854 - 1,854
______ ________ ________ ________ _________ ________
At 31 January
2014 4,923 21,643 289 1,523 (10,822) 17,556
Loss for
the period - - - - (1,411) (1,411)
Share-based
payments - - 15 - - 15
Foreign exchange - - - (64) - (64)
Issue of
share capital 881 7,902 - - - 8,783
Issue costs - (442) - - - (442)
______ ________ ________ ________ _________ ________
At 31 December
2014 5,804 29,103 304 1,459 (12,233) 24,437
______ ________ ________ ________ _________ ________
Company
Total equity
Foreign attributable
Share-based currency to equity
Share premium payment translation Retained holders of
Share capital account reserve reserves earnings parent
$'000 $'000 $'000 $'000 $'000 $'000
At 1 February
2013 4,923 21,643 250 - (8,590) 18,226
Loss for the
year - - - - (1,007) (1,007)
Share-based
payments - - 39 - - 39
Foreign
exchange - - - 922 - 922
______ ______ ______ ______ _______ ______
At 31 January
2014 4,923 21,643 289 922 (9,597) 18,180
Loss for the
period - - - - (408) (408)
Share-based
payments - - 15 - - 15
Issue of share
capital 881 7,902 - - - 8,783
Issue costs - (442) - - - (442)
______ _______ ______ ______ _______ ______
At 31 December
2014 5,804 29,103 304 922 (10,005) 26,128
______ ________ ________ ________ _________ ________
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF FINANCIAL POSITION
as at 31 December 2014
Group Company
Assets Note Dec 2014 Jan 2014 Dec 2014 Jan 2014
Non-current assets $'000 $'000 $'000 $'000
Investment in subsidiaries 10 - - 8 8
Investment in associates 11 19,205 15,132 - -
_____ _____ _ _
19,205 15,132 8 8
Current assets
Loans receivable 12 3,813 1,950 24,867 18,090
Investments in quoted
shares 13 7 7 7 7
Investment in unquoted
preference shares 14 33 33 33 33
Other receivables 15 544 52 250 52
Cash and cash equivalents 1,179 582 1,017 271
____ ____ ______ _____
5,576 2,624 26,174 18,453
Total assets 24,781 17,756 26,182 18,461
Liabilities
Current liabilities
Trade and other payables 16 (344) (200) (54) (281)
____ ___ ____ ____
Total liabilities (344) (200) (54) (281)
______ ______ ______ ______
Net assets 24,437 17,556 26,128 18,180
Equity
Called up share capital 17 5,804 4,923 5,804 4,923
Share premium account 29,103 21,643 29,103 21,643
Share warrant reserve 18 304 289 304 289
Foreign currency
translation reserve 1,459 1,523 922 922
Accumulated deficit (12,233) (10,822) (10,005) (9,597)
_____ _____ _____ _____
Total equity 24,437 17,556 26,128 18,180
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF CASH FLOWS
Group Company
11 months Year ended 11 months Year
ended 31 31 Jan ended ended
Dec 2014 2014 31 Dec 31 Jan
2014 2014
$'000 $'000 $'000 $'000
Loss for the year
before tax (1,411) (1,520) (408) (1,007)
Adjustments for:
Share-based payments 15 39 - 39
Share of loss of
associates 922 1,024 - -
Gain in bargain purchase - (519) - -
Loss on US$ retranslation - - - 689
Foreign exchange - 568 - -
difference on associates
Change in receivables (492) (42) (198) (43)
Change in payables 144 58 (78) 135
Dividend income - (108) - -
_____ _____ _____ _____
Cash flows from operating
activities (822) (500) (684) (187)
Investing activities
Investment in associates (5,059) (47) - -
Loans made to associates (1,863) - (1,863) -
Loans made to subsidiaries - - (5,059) (2,228)
Loans receivable - (1,852) - -
given
Dividends received - 208 - -
from associate
______ ______ ______ ______
Net cash used in
investing activities (6,922) (1,691) (6,922) (2,228)
Financing activities
Proceeds from share
issue 8,783 - 8,783 -
Share issue costs (442) - (442) -
_______ _______ _______ _______
Net cash from financing
activities 8,341 - 8,341 -
_______ _______ _______ _______
Net increase/(decrease)
in cash and cash
equivalents 597 (2,191) 735 (2,415)
Cash and equivalents
at beginning of year 582 2,875 271 2,798
Effects of currency
translation on cash
and cash equivalents - (102) 11 (112)
Cash and equivalents
at end of year 1,179 582 1,017 271
The accompanying notes are an integral part of these financial
statements.
NOTES TO THE GROUP FINANCIAL STATEMENTS
1. Accounting policies
The principal accounting policies are summarised below. They
have all been applied consistently throughout the period and the
preceding year unless stated otherwise.
Basis of accounting
The financial statements of the Group and the Company have been
prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and Interpretations
issued by the International Accounting Standards Board as adopted
by European Union.
The financial statements have been prepared under the historical
cost convention, with the exception of financial instruments.
The accounting policies applied are the same as those applied in
the financial statements for the year ended 31 January 2014. New
standards introduced during the period had no material impact on
the results or net assets of the company.
The Directors anticipate that the adoption of those standards
and interpretations which, at the date of authorisation of these
financial statements, were in issue but not yet effective will have
little or no impact on the financial statements when they come into
effect.
Going concern
The Directors have reviewed the current budgets and cash flow
projections for a period of more than 12 months from the date of
this report, which take into account the current cash balances. As
at the year end, the Group had US$1,179,000 of cash. The Group's
administrative expenses were US$827,000 (year ended 31 January
2014: US$699,000). These included a number of one-off items (fees
related to the increase in capital for YZJ Offshore Engineering Pte
Ltd ("YZJ JV") and items related to a now settled VAT dispute)
amounting in total to US$149,000. Excluding the one-off items,
administrative expenses were US$678,000 (year ended 31 January
2014: US$699,000) and, allowing for non-cash items (i.e. the Share
Based Payment Charge), administration expenses for the year were
US$663,000 (year ended 31 January 2014: US$660,000). The Directors
do not expect these cash costs to rise substantially in the
foreseeable future. As at the date of signature of these financial
statements the Group had US$2,972,000 of cash and equivalent
balances, following the repayment of a loan by MGR Resources PTE
Ltd ("MGR") in January 2015.
On the basis of the above, the Directors believe that sufficient
funds will be available to support the going concern status of the
Group over the next 12 months following the approval of these
financial statements. Consequently, the Directors believe that it
is appropriate to prepare the Group's financial statements on a
going concern basis.
Basis of consolidation
Where the Company has the power, either directly or indirectly,
to govern the financial and operating policies of another entity or
business so as to obtain benefits from its activities, it is
classified as a subsidiary. The consolidated financial statements
present the results of the Company and its two subsidiary
undertakings, Amedeo Resources (Asia) PTE Ltd ("Amedeo Asia") and
Creon Corporation Limited ("Corporation"), the latter of which is
dormant, as if they formed a single entity. Inter-company
transactions and balances between Group companies are therefore
eliminated in full.
Revenue
Revenue of US$91,000 was recorded in the 11 months ended 31
December 2014 (year ended 31 Jan 2014: US$128,000). All the revenue
was receivable from the associate company, MGR, for the provision
of marketing and consultancy services.
Investments in subsidiaries
Investment in subsidiary companies is stated at cost less
provision for any impairment in value. Subsequent measurement of
all investments in subsidiaries is at fair value.
Investments in unquoted and quoted shares
Investments in unquoted and quoted shares are initially measured
at cost, including transaction costs. Subsequent measurement of all
investments is at fair value. The fair values of listed investments
are based on bid prices at the financial year end date.
Assets held by the Group at the period end include unlisted
ordinary equity shares, unlisted redeemable preference shares and
listed investments.
When managing its investments, the Group aims to profit from
changes in the fair value of equity investments. Accordingly, all
quoted equity investments are designated as "at fair value through
the profit and loss" and are subsequently recorded in the statement
of financial position as current assets at fair value.
Investment in associates
Where the Company, or its wholly owned subsidiaries, has
significant influence over an entity, normally being more than 20%
and less than 50%, such as Amedeo Asia's holdings in YZJ JV and
MGR, then that investment is classified as an associate and is
equity accounted for, see notes 5 and 11.
Where the Company, or its wholly owned subsidiaries, hold less
that 20% of the voting control of an entity, the investment is
valued at cost or impaired value, and subsequently revalued upwards
only if there is a third party reference which can be used to
justify any value uplift. It is not the policy of the Company to
apply a "directors' valuation".
Loans receivable
Loans receivable are valued at nominal amount less provisions
against recoverability. The maximum exposure in respect of the loan
portfolio at the period end is the amount receivable shown in note
12. No hedging transactions have been entered into with respect to
the loan portfolio.
Impairment
At each financial period end date, the Group reviews the
carrying amounts of its non-current assets with finite lives to
determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss. Where it is not possible to
estimate the recoverable amount of the individual asset, the Group
estimates that recoverable amount of the cash-generating unit to
which the asset belongs.
Cash
Cash and cash equivalents comprise cash at bank and in hand.
Financial liabilities and equity
Financial liabilities and equity are classified according to the
substance of the financial instrument's contractual obligations
rather than the financial instrument's legal form. An equity
instrument is any contract that evidences a residual interest in
the assets of the Group after deducting all of its liabilities.
Financial assets
Apart from its unquoted and quoted investments and its
investments in associates, the Group has only financial assets
classified as loans and receivables. The Group's loans and
receivables comprise loans and other receivables and cash and cash
equivalents in the statement of financial position.
Trade payables
Trade payables are not interest bearing and are stated at their
nominal value.
Equity instruments
Equity instruments issued by the Company are recorded as the
proceeds received, net of direct issue costs.
Current and deferred tax
The charge for current tax is based on the results for the
period as adjusted for items which are non-assessable or
disallowed. It is calculated using rates that have been enacted or
substantively enacted by the financial period end date. Deferred
tax assets are recognised to the extent that it is probable that
future taxable profits will arise against which the temporary
difference will be utilised.
Foreign currencies
The financial information is presented in United States Dollars
which is the functional currency of the Company. The presentational
and functional currency changed from United Kingdom Pounds Sterling
in the 11 months ended 31 December 2014. Comparative balances have
been restated with any effect of restatement taken to the foreign
currency translation reserve.
Monetary assets and liabilities denominated in foreign
currencies in each company are translated at the rates of exchange
prevailing at the accounting date. Transactions in foreign
currencies are translated at the rate prevailing at the date of
transaction.
On consolidation, revenues, costs and cash flows of undertakings
abroad are included in the Group income statement at average rates
of exchange for the year. The assets and liabilities denominated in
foreign currencies are translated into United States Dollars using
rates of exchange at the reporting date.
Exchange differences on the re-translation of opening net assets
and results for the year of foreign subsidiary undertakings and
associates are dealt with through reserves net of differences on
loans denominated in foreign currency. Other gains and losses
arising from foreign currency transactions, including trading, are
included in the consolidated income statement.
Share-based payments
All share-based payments are accounted for in accordance with
IFRS 2 - "Share-based payments". The Company issues equity-settled
share-based payments in the form of share warrants to certain
directors and key advisers. Equity settled share-based payments are
measured at fair value at the date of grant. The fair value
determined at the grant date of equity-settled share-based payments
is expensed on a straight line basis over the vesting period, based
on the Company's estimate of shares that will eventually vest.
Fair value is estimated using a Black Scholes probability
valuation model. The expected life used in the model has been
adjusted, on the basis of management's best estimate for the
effects of volatility of share price and exercise restrictions.
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. 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.
(a) Impairment of investment in associated company:
The investment in the associated company is stated on an equity
accounting basis supported by the audited financial statements of
the associate. The Group is also required to determine whether any
impairment loss should be recognised in accordance with IAS 39. The
recoverable amount is determined based on value in use
calculations. In determining the value in use, the Company
estimates:
(i) its share of the present value of the estimated future cash
flows expected to be generated by the associate or joint venture,
including the cash flows from the operations of the associate or
joint venture and the proceeds from the ultimate disposal of the
investment; or
(ii) the present value of the estimated future cash flows
expected to arise from dividends to be received from the investment
and from its ultimate disposal.
It then compares the product of these estimates with the total
carrying value of the associate.
(b) Recoverability of loans receivable:
Separately, the Company determines the recoverability of its
loans to its associate, MGR. As the loans were used to make working
capital available to MGR, consideration of the recoverability of
the loans is related to consideration of the carrying value of the
associate.
2. Segmental reporting
No segmental analysis is considered necessary as the Directors
believe that the Group has only one segment in the period under
review, being that of an investment company with a focus on
investments in, but not exclusively, the resources and/or resources
infrastructure sectors, with no specific national or regional
focus.
3. Reference Date and Presentational Currency
During the period under review, the Directors decided to change
the accounting reference date from 31 January to 31 December. This
is more typical in the resource and offshore sector and generally.
As a result of this change not all amounts disclosed in the
financial statements for the corresponding period may be directly
comparable.
Also during the period under review, the directors decided to
change the reporting currency to United States Dollars, in light of
the fact that all of the current investments of the Company account
in US Dollars and indeed, this is the norm in the resource and
infrastructure sectors and that the only head office expenses are
incurred in Pounds Sterling. The GBP exchange rate at 31 December
2014 was 1.5532.
4. Administrative expenses
Expenses included in administrative expenses are analysed
below
11 months Year ended
ended 31 31 Jan
Dec 2014 2014
$'000 $'000
Administration, legal,
professional and financial
costs 679 496
Directors' fees 140 151
Unrecovered VAT 8 52
_____ _____
827 699
_____ _____
The auditor's fees in the 11 months ended 31 December 2014 for
the audit of the parent company and the consolidated accounts were
in respect of taxation services amounted to US$50,000 (year ended
31 January 2014: US$63,000) and auditor's fees payable to the
associates of the company's auditors in respect of audit of the
subsidiary's financial statements were US$30,000 (year ended 31
January 2014: US$: Nil). In addition, fees for non-audit services
in respect of taxation services in the period ended 31 December
2014 were US$47,500 (year ended 31 January 2014: US$14,000).
5. Share of loss of associates
11 months Year ended
ended 31 31 Jan
Dec 2014 2014
$'000 $'000
YZJ Offshore Engineering
Pte Ltd (942) (929)
MGR Resources Pte Ltd 20 (95)
_____ ______
(922) (1,024)
_____ ______
The Company's wholly-owned Singapore-registered subsidiary,
Amedeo Asia, holds a 47.51% investment in YZJ JV, a Singapore
registered company. The loss of US$922,000 represents Amedeo Asia's
share of YZJ JV's loss for the 11 months ended 31 December 2014 of
US$942,000 (year ended 31 January 2014: US$929,000) and Amedeo
Asia's share of MGR's income for the 11 months ended 31 December
2014 of US$20,000 (year ended 31 January 2014: loss of US$95,000).
See note 11.
6. Foreign exchange losses
11 months Year ended
ended 31 31 Jan
Dec 2014 2014
$'000 $'000
Loss on conversion of loans
made to associates 181 449
____ ____
In June 2014, the Company made a foreign currency denominated,
interest free, unsecured loan to its wholly-owned subsidiary,
Amedeo Asia, totalling GBP1.2 million (translated to US$2.044
million in June 2014), to enable Amedeo Asia to make a convertible
loan to MGR ("Convertible Loan"). At 31 December 2014, the loan of
GBP1.2 million was retranslated to US$1.863 million at the balance
sheet date, resulting in an unrealised loss on foreign exchange of
US$0.181 million. See table below, which details this:
Loan from Amedeo Asia to
MGR in 2014
At 30 June 2014 $2.044m
Less: At 31 December 2014 ($1.863)m
Unrealised loss on foreign US $0.181m
exchange
The Company does not hedge against movements in foreign exchange
rates.
7. Loan Interest
11 months Year ended
ended 31 31 Jan
Dec 2014 2014
$'000 $'000
Interest on loans made to
associates 444 154
____ ____
Interest on loans made to associates is made up of interest
receivable from MGR, both in the period under review and in the
year ended 31 January 2014.
8. Taxation 11 months Year ended
ended 31 31 Jan
Dec 2014 2014
$'000 $'000
UK Corporation tax
Factors affecting tax charge
in the year
Loss on ordinary activities
before tax (1,411) (1,520)
Loss on ordinary activities
at the effective rate
of corporation tax 20% (year
ended 31 Jan 2014: 20%) (282) (304)
Unrelieved losses 282 304
- -
___ ___
Deferred income tax assets are recognised for tax losses
carried-forward to the extent that the realisation of the related
tax benefit through future taxable profits is probable. The Group
did not recognise deferred income tax assets relating to estimated
carried forward tax losses of US$12,454,000 (31 January 2014:
US$11,150,000) as there is insufficient evidence that the asset
will be recovered. The deferred income tax asset relating to these
losses is US$2,491,000 (31 January 2014: US$ 2,341,500).
9. Loss per share
The basic and diluted loss per share for the 11 months to 31
December 2014 was US0.04c(year to 31 January 2014: US0.06c). The
calculation of loss per share is based on the loss of US$1,411,000
for the 11 months ended 31 December 2014 (year to 31 January 2014:
US$1,520,000 loss) and the weighted average number of shares in
issue during the 11 months to 31 December 2014 of 3,222,348,757
(year ended 31 January 2014: 2,738,619,633).
5,000,000 warrants were exercised in the period under review
(2014: Nil) and no warrants were issued during the 11 months ended
31 December 2014 (year ended 31 January 2014:109.5 million), which
equates to total warrants on hand of 191.5 million (year ended 31
January 2014: 196.5 million). The outstanding warrants represent
approximately 6% of the Company's current issued share capital and
are considered by the Directors to be anti-dilutive, given that the
various exercise prices of warrants are all in excess of the
average share price for the year. See post balance sheet events
note 25, for details of post year end warrant issues.
10. Investment in subsidiaries
Company
31 Dec 31 Jan
2014 2014
Cost or valuation $'000 $'000
At 1 February 2014 8 8
___ ___
At 31 December 2014 8 8
___ ___
The investment in subsidiaries shown in above is the investment
in Amedeo Asia.
The Company's subsidiaries were as follows:
Name Country of Proportion of ownership
incorporation interest
Dec 2014 Jan 2014
Creon Corporation
Limited England 100% 100%
Amedeo Resources
(Asia) Pte Limited
("Amedeo Asia") Singapore 100% 100%
Creon Corporation Limited was incorporated on 24 November 2011
and acquired by the Company on 16 December 2011. It remains
dormant. Amedeo Asia was incorporated on 10 July 2012 to hold the
Company's Asian-based investments.
11. Investments in associates
During the year, Amedeo's wholly owned subsidiary, Amedeo Asia
made an additional investment into YZJ JV, which is incorporated in
Singapore and increased its holding from 46.45% to 47.51%. YZJ JV
has a 40% stake in Jiangsu Yangzijiang Offshore Engineering Co. Ltd
("YZJ Offshore"), which is incorporated in Singapore. YZJ JV equity
accounts for its 40% interest in YZJ Offshore, and Amedeo Asia
equity accounts for its 47.51% stake in YZJ JV. Amedeo provided an
interest free unsecured loan to Amedeo Asia to make the 47.51%
stake in YZJ JV.
Amedeo Asia also has a 49% stake in MGR, which is incorporated
in Singapore. Amedeo Asia equity accounts for its 49% stake in MGR.
In the period to 31 December 2014 the Group received a dividend
from MGR amounting to US$: Nil (year to 31 January 2014:
US$108,000).
YZJ JV MGR Total
31 31 Jan14 31 Dec 31 Jan 31 Dec 31 Jan
Dec 14 14 14 14
14
Amounts relating $'000 $'000 $'000 $'000 $'000 $'000
to associates
Current assets 1,086 1,513 14,496 7,534 15,582 9,047
Non-current
assets 38,524 30,288 - - 38,524 30,288
Current liabilities (16) (23) (11,656) (6,777) (11,672) (6,800)
Non-current
liabilities - - (2,035) - (2,035) -
______ _______ _______ _______ _______ _______
Net assets 39,594 31,778 805 757 40,399 32,535
_______ _______ _______ _______ _______ _______
Group's share
of net assets
of associates 18,811 14,762 394 370 19,205 15,132
_______ _______ _______ _______ _______ _______
Total revenue 2 3 43,777 49,615 43,779 49,618
Loss (2,165) (2,000) 46 (195) (2,119) (2,195)
_______ _______ _______ _______ _______ _______
Group's share
of loss of
associates
(see note
5) (942) (929) 20 (95) (922) (1,024)
_______ _______ _______ _______ _______ _______
Group's share of net assets $'000
of associates
Opening at 1 February 2014 15,132
Additional investment in associates 5,059
Group's share of loss of associates (922)
Foreign exchange translation
difference (64)
-------
Closing at 31 December 2014 19,205
-------
12. Loans receivable
Group Company
31 Dec 31 Jan 31 Dec 2014 31 Jan
2014 2014 2014
$'000 $'000 $'000 $'000
Balance brought
forward 1,950 - 18,090 16,464
Loans advanced 2,044 1,950 6,958 2,314
Foreign exchange
loss (181) - (181) (688)
______ ______ ______ ______
Balance carried
forward 3,813 1,950 24,867 18,090
______ ______ ______ ______
During the year, the Company made a number of interest free,
unsecured and repayment on demand loans to its wholly-owned
subsidiary, Amedeo Asia, totalling US$6.958 million, which, when
aggregated with loans made to Amedeo Asia in the prior year,
totalled US$24.867 million at the period end (year to 31 January
2014: US$18.090m). During the period, the Group also made loans to
an associate, MGR, of US$2.044m (year ended 31 January 2014:
US$1.950m). The prior year loan was repaid in full subsequent to
the year end as referred to in note 25.The loan made in the period
under review, US$2.044m, is not due to be repaid until 2019.
The Directors consider that the carrying amount of loans
receivable approximates to their fair value.
13. Investments in quoted shares
Group and Company
31 Dec 31 Jan
2014 2014
Cost or valuation $'000 $'000
At 1 February 7 7
Impairment provision - -
_____ _____
7 7
_____ _____
The investment represents 2,775 ordinary shares in the capital
of Ashcourt Rowan PLC. This investment has been disposed of post
period end, for a sale value of US$12,000.
14. Investment in unquoted preference shares
Group and Company
31 Dec 31 Jan
2014 2014
Cost or valuation $'000 $'000
Cost 660 660
Provision brought forward (627) (627)
_______ _______
33 33
_______ _______
The investment in unquoted preference shares represents 400,000
GBP1 non-voting redeemable preference shares held in Pinnacle Plus
Limited ("the Preference Share") and is held at impaired value. The
Preference Shares were acquired in 2008, and accrue interest at a
rate of 7.0 per cent. per annum. The Preference Shares were due for
redemption from 30 September 2013. The Company has not recognised
any interest income accrued on the Preference Shares to date.
The carrying value of the Preference Shares will continue to be
monitored closely by the Directors.
15. Other receivables
Group Company
31 Dec 31 Jan 31 Dec 31 Jan
2014 2014 2014 2014
$'000 $'000 $'000 $'000
Prepayments and
sundry debtors 544 52 250 52
The Directors consider that the carrying amount of other
receivables approximates to their fair value.
16. Trade and other payables
Current liabilities Group Company
31 Dec 31 Jan 31 Dec 31 Jan
2014 2014 2014 2014
$'000 $'000 $'000 $'000
Trade payables
and accruals 344 159 54 240
VAT provision - 41 - 41
______ ______ ______ ______
344 200 54 281
______ ______ ______ ______
The VAT provision of US$41,000 represented the amount of VAT
previously recovered by the Company. This amount was settled with
HMRC, post year end. See note 4. The Directors consider that the
carrying amount of trade and other payables approximates to their
fair value.
17. Called up Share capital
31 Dec 31 Jan
2014 2014
Allotted, called up and fully '000 '000
paid
Ordinary shares
In issue at beginning of the
period 2,738,619 2,738,619
Issued for cash 526,765 -
Total Ordinary shares 3,265,384 2,738,619
$'000 $'000
Ordinary Shares of 0.1p each 5,179 4,298
44,190,545 Deferred Shares
of 0.9p each 625 625
_____ ____
Total Share Capital 5,804 4,923
The 44,190,545 deferred shares of 0.9p each ("Deferred Shares")
do not entitle the holder thereof to receive notice of or attend
and vote at any general meeting of the Company or to receive a
dividend or other distribution or to participate in any return on
capital on a winding up unless the assets of the Company are in
excess of GBP1,000,000,000,000. The Company retains the right to
purchase the Deferred Shares from any Shareholder for a
consideration of one penny in aggregate for all that shareholder's
Deferred Shares. As such, the Deferred Shares effectively have no
value. Share certificates have not and will not be issued in
respect of the Deferred Shares.
In March 2014, Amedeo raised approximately US$8,783,000 via an
equity fundraising, which resulted in the issue of 521,764,569
ordinary shares at 1.0 pence per share. Following the fundraising,
the Company's enlarged issued ordinary share capital comprises
3,265,384,202 ordinary shares of 0.1p each ("Existing Ordinary
Share").
As detailed in the Chairman's Statement on page 7, the Board
considers that a consolidation of the Existing Ordinary Shares will
be for the benefit of the Company and its members because it should
assist in improving such shares attractiveness and liquidity,
through the increase in value of each share which may potentially
lead to a relative reduction in the bid offer spread price of a
share. Accordingly it is proposed that every 100 Existing Ordinary
Shares be consolidated into 1 ordinary share of 10p (the
"Consolidation") in accordance with Resolution 5 proposed at the
AGM.
To effect the Consolidation it will be necessary to issue
further Existing Ordinary Shares so that the Company's issued share
capital is exactly divisible by 100 at the time that the
Consolidation takes effect. The additional 98 Existing Ordinary
Shares would be issued to the Company Secretary for cash,
conditional on the approval of Resolution 5 at the AGM.
18. Warrants
The Company had 196,544,785 outstanding warrants at 31 January
2014. In the 11 month period ended 31 December 2014, 5,000,000
warrants were exercised per the table below. This leaves
191,544,785 warrants outstanding at 31 December 2014.
Number Number
of Warrants of Warrants
Date of Exercise granted Exercise Number at 31 Dec
grant period /(surrendered) price exercised 2014
------------ ----------- ---------------- ----------- ----------- -------------
4 April 4 April
2012 2022 16,000,000 0.75 pence - 16,000,000
31 August 31 August
2012 2017 71,000,000 0.5 pence 5,000,000 66,000,000
23 June 23 June
2013 2023 109,544,785 0.5 pence - 109,544,785
________ _______ ________
196,544,785 5,000,000 191,544,785
________ _______ ________
All of the warrants granted during 2012 vested in 2012 and there
are no outstanding conditions to exercise. Therefore there is no
charge in the current year related to the 87,000,000 warrants
issued in 2012. The charge in the current year of US$15,000 relates
to the 109,544,785 warrants issued in the prior period.
Post the period end, on 1 February 2015, 50,000,000 warrants
with an exercise price of 1.0p and an expiration date of 31 January
2025 were issued to a third party.
In addition, post period end, Mr Lau was issued 260,721,118
warrants with an exercise price of 1.0p and an expiration date of
11 March 2025.
The following table sets out the warrants held by Directors and
former Directors, or entities connected with the Directors, who
served during the year and up to the date of this report:
Number Date of Exercise Exercise Number
Warrant holder of Warrants grant period price exercised
--------------- ------------- ----------- ----------- ---------- -----------
A Quraishi 31 August 31 August
(1) 7,000,000 2012 2017 0.5 pence -
Fulton Capital
Management 31 August 31 August
Ltd(2) 25,000,000 2012 2017 0.5 pence -
Lau Lian
Seng Glen 11 March 11 March
(3) 260,721,118 2015 2025 1.0 pence -
Zafarullah 31 January 31 January
Karim (4) 33,315,774 2015 2025 1.0 pence -
Zafarullah 23 June 23 June
Karim 109,544,785 2013 2023 0.5 pence -
Notes
(1) Mr Quraishi resigned as a director on 12 September 2013.
(2) Fulton Capital Management Limited is a company owned and
controlled by Mr Lau, the Company's chief executive officer
(3) Post the period end, Mr Lau was issued 260,721,118 warrants
with an exercise price of 1.0p and an expiration date of 11 March
2025.
(4)Post the period end, Mr Karim acquired from a third party
33,315,774 warrants with an exercise price of 1.0p and an
expiration date of 31 January 2025.
No warrants were issued in the period under review. The share
based payment charge in the period under review of US$15,000
relates to the 109,544,785 warrants issued in 2013 (year ended 31
January 2014: US$39,000). The Black Scholes pricing model was used
to calculate the share based payment charge.
19. Asset value per share
The net asset value per share at 31 December 2014 was US$0.0075
(31 January 2014; US$0.0066). Net asset value is based on the net
assets as at 31 December 2014 of US$24.44 million (31 January 2014:
US$17.56 million) and on the number of ordinary shares in issue at
31 December 2014 being 3,265,384,202 ordinary shares (31 January
2014: 2,738,619,633).
20. Staff numbers and costs
The average monthly number of employees of the Group, including
directors, during the period was 4 (2014: 4). The Directors are
considered the key management of the Group. The aggregate
remuneration of the Directors is set out in the remuneration
report. All employees are Directors of the Company, therefore no
remuneration was paid to staff of the Company (year ended 31
January 2014: US$: Nil).
21. Capital commitments
There were no capital commitments at the period end (31 January
2014: $nil).
22. Related party transactions
Fulton Capital Management Limited ("Fulton") is a company owned
and controlled by Mr Lau, the Company's chief executive officer.
During the period under review, Amedeo incurred commission of
US$102,000 from Fulton in respect of a contract for services
executed in July 2012 relating to the investment in YZJ JV (year to
31 January 2014: US$: Nil), prior to Mr Lau being appointed as a
director of Amedeo. This sum was outstanding at the year end and is
included in trade and other payables. This is still outstanding at
the date of this report.
In April 2014, Amedeo signed a management services agreement
with MGR to provide marketing assistance and services to MGR.
During the period, MGR paid US$91,000 to Amedeo in respect of these
services (year ended 31 January 2014: US$128,000).
In June 2014, Amedeo made a Sterling loan equivalent to US$2.04m
to MGR. The Group earned US$444,000 in interest on their loans to
MGR for the period to December 2014 (year to January 2014: US$
154,000). At the period end US$444,000 was outstanding and is
included in other receivables (31 January 2014: US$Nil). This has
been paid in full subsequent to period end.
23. Analysis of cash and 31 Dec 2014 31 Jan
cash equivalents 2014
$'000 $'000
Cash at bank and in hand 1,179 582
24. Financial instruments and risk management
Investments
All of the Group's actual and intended investments present a
risk of loss of capital. Such investments are subject to investment
specific, industry specific, sector specific, market specific and
macro-economic risks including, but not limited to, international
economic conditions, international financial policies and
performance, governmental events and changes in laws. Moreover, the
Company may only have a limited ability to vary its investments in
response to changing conditions.
The success of the Group is dependent upon the identification,
making, management and realisation of suitable investments. There
can be no guarantee that such investments can or will be made or
that such investments will be successful. Poor performance by an
investment could severely affect the net asset value per share of
the Company.
The Group may have minority interests in companies, partnerships
and ventures. As such it may be unable to exercise control over the
operations of such investments or exercise control over any exit,
or timing of any exit, by other investors in such investments. In
addition, the managements of the investee companies targeted by the
Directors may not always welcome proactive shareholder
involvement.
The Group may dispose of investments in certain circumstances
and may be required to give representations and warranties about
those investments. In certain cases such representations and
warranties may be challenged. This may lead to the Group having to
pay damages to the extent that such representations and warranties
turn out to be inaccurate or other terms of sale are breached.
There can be no certainty that the value of investments as
reported from time to time will in fact be realised.
Investments in unquoted companies
It is intended that the Group's investment portfolio will
comprise interests predominantly in unquoted, growth companies,
which may be difficult to value and/or realise. Investments in
unquoted growth companies may involve greater risks than is
customarily associated with investments in larger, more established
quoted companies. In particular, such companies may have limited
product offerings, markets or resources and may be dependent on a
small number of key individuals. As at 31 December 2014, the
Group's holding of unquoted investments was valued at approximately
US$19.2 million (January 2014: US$15.13 million).
Market risk
It is possible that certain investments will represent a
significant proportion of the Company's total assets, such as
Amedeo Asia's investment in YZJ JV. As a result, the impact on the
Company's performance and the potential returns to investors will
be adversely affected to a greater degree if any one of those
investments were to perform badly than would be the case if the
Company's portfolio of investments was more diversified. At 31
December 2014, the overall investment allocation was a portfolio of
4 investments, of which one was in a quoted company and three
investments were in unquoted companies. As at 31 December 2014, the
Company's investment in YZJ JV represented 98% of the value of the
Company's investment portfolio and almost 76% of the Group's gross
assets.
Interest rate risk
The majority of the Group's financial assets and liabilities are
not interest bearing. As a result, the Group is not subject to
significant amounts of risk due to fluctuations in the prevailing
levels of market interest rates. Any cash and cash equivalents are
held in short notice accounts. The table below summarises the
Group's exposure to interest rate risks.
As at 31 December
2014 Non-interest Variable Fixed
bearing interest interest Total
Assets $'000 $'000 $'000 $'000
Investments at fair
value 19,212 - 33 19,245
Loans to MGR - - 3,813 3,813
Other receivables 544 - - 544
Cash and cash equivalents 1,179 - - 1,179
______ _______ ______ ______
Total financial
assets 20,935 - 3,846 24,781
______ _______ ______ ______
Liabilities
Trade and other payables 344 - - 344
______ _______ ______ ______
Total financial liabilities 344 - - 344
______ _______ ______ ______
As at 31 January
2014 Non-interest Variable Fixed
bearing interest interest Total
Assets $'000 $'000 $'000 $'000
Investments at fair
value 15,139 - 33 15,172
Loan to MGR - - 1,950 1,950
Other receivables 52 - - 52
Cash and cash equivalents 582 - - 582
______ _______ ______ ______
Total financial
assets 15,773 - 1,983 17,756
______ _______ ______ ______
Liabilities
Trade and other payables 200 - - 200
______ _______ ______ ______
Total financial liabilities 200 - - 200
______ _______ ______ ______
Hedging and currency risk
As the current focus of the Company's investment has been
outside of the UK, the majority of the Company's investments are
denominated in US$. As such, the Company is exposed to fluctuations
in exchange rate variations between the US$ and GBP. During the
year under review, Amedeo changed its functional and presentational
currency to US$, which reduces currency risk.
Liquidity risk
The Company's financial instruments include minority equity
investments in unquoted Singapore-registered companies and an
investment in an AIM-traded company As a result, the Company may
not be able to quickly liquidate some of its investments in these
instruments at an amount close to their fair value in order to meet
its liquidity requirements.
The Company has a procedure to manage liquidity risk whereby the
board meet regularly to review investment holdings and current and
anticipated levels of financial liabilities. Where liquidity of the
investments within the portfolio is believed to be at a level which
may adversely affect the Company's ability to service its financial
obligations, the board will consider taking action to improve cash
flow, which may include utilising bank overdrafts or other credit
arrangements.
The table below details the contractual, undiscounted cash flows
of the Group's financial liabilities.
Less
than 1-3 3 months No stated
to 1
1 month months year maturity
31 December
2014 $'000 $'000 $'000 $'000
Trade and other
payables 344 - - -
______ ______ ______ ______
Total 344 - - -
______ ______ ______ ______
31 January
2014
Trade and
other payables 200 - - -
_______ ______ ______ ______
Total 200 - - -
_______ ______ ______ ______
Credit risk
Credit risk is the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Group. The carrying amounts of
financial assets best represent the maximum credit risk exposure at
the balance sheet date.
Capital risk management
The Company is currently financed solely through equity and
manages its capital to ensure that it has sufficient financial
resources to implement its planned operations while maximising the
return to stakeholders. Please see the Strategic Report on page 8
for details. Details of additional equity raised in the year are
set out in note 17.
25. Post balance sheet events
Other than as set out below, the Directors consider that there
are no events not disclosed in the Directors' Report or elsewhere
in this report that require disclosure as post balance sheet
events.
Post the period end, on 1 February 2015, 50,000,000 warrants
with and exercise price of 1.0p and an expiration date of 31
January 2025 were issued to a third party for consultancy
services.
On the 13 March 2015, the Company announced that it had granted
260,721,118 warrants to Mr Lau (director) to subscribe for new
ordinary shares of 0.01p in the company. These warrants have an
exercise price of 1.0p and an expiration date of 11 March 2025.
In January 2015, MGR paid back to Amedeo a loan of US$1,950,000,
reducing the loans receivable due from MGR from US$3,813,000 to
US$1,863,000 and increasing Amedeo's cash balance by
US$1,950,000.
26. Ultimate controlling party
The ultimate controlling party is Qatar Investment Corporation,
which holds 61.1% of the issued Ordinary Share capital of the
Group. Qatar Investment Corporation is a wholly owned investment
vehicle of Mr Ghanim Al Saad, Non-Executive Chairman of the
Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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