TIDMOPP TIDMOPPP
RNS Number : 2219D
Origo Partners PLC
28 June 2021
Origo Partners PLC
("Origo" or the "Group" or the "Company")
Annual Audited Financial Statements and Posting of Annual
Report
Origo Partners PLC today announces its audited results for the
year ended 31 December 2020.
The Company also announces that copies of its 2020 Annual Report
and Accounts are today being posted to shareholders and will be
available on the Company's corporate website.
Ends
For further information about Origo please visit
www.origopartners.com or contact:
Origo Partners plc
John Chapman 55 Athol Street
Chairman Douglas
Isle of Man IM1 2LA
Nominated Adviser and Broker
Arden Partners plc
Richard Johnson +44 (0)20 7614 5900
Chairman's Letter
Dear Shareholders,
The Company's net asset value as at year end 2020 was US$2.3
million as compared to US$3.6 million a year earlier. The primary
reasons for the decline in net asset value are a write down of the
Company's investment in Celadon Mining Limited (Celadon) and the
Company's running costs.
Celadon is a privately held company domiciled in the British
Virgin Islands. It owns rights to mine coal in northern China. As
we announced about a year ago, Celadon had entered into an
agreement with a third party for the sale of the Company's assets.
If that transaction had completed, the Company would have expected
to receive net proceeds of approximately GBP3.3 million. That
agreement was subsequently replaced with one that entailed a series
of payments commencing in March 2021 and completing in March 2022
with gross proceeds to Celadon of RMB 282 million and net proceeds
to the Company of about GBP2.5 million. Celadon's controlling
shareholder has reported that although Celadon has already received
a small portion of the RMB 282 million, the bulk has not been
received on schedule because of what he identifies as short-term
obstacles to transferring money out of China. He is nonetheless
confident that the promised consideration will be received in its
entirety and has stated that net proceeds will be distributed to
Celadon's shareholders. Given the series of disappointments over
the buyer's failure to complete as promised and concomitant
concerns, the Company has decided to write down this asset by
half.
On 7 June 2021 the Company announced the sale of its entire
investment in Gobi Coal & Energy Ltd. (Gobi Coal) for
US$275,438. This represents Gobi's carrying value. In 2009, nearly
a decade prior to this board's tenure, the Company paid nearly
US$15 million for the Gobi Coal investment. Gobi Coal is a
privately held BVI company that purports to own various mining
rights in Mongolia. That company has been mired in legal battles
for many years with various allegations of wrongdoing and
corruption, including a connection to the disgraced Malaysia state
investment fund 1MDB. In the beginning, the Company had a Gobi Coal
board seat and a role in Gobi Coal. The board seat was lost under
unclear circumstances and for many years the ultimate control of
that company has been opaque as well. The BVI company does not
appear to have produced audited financial statements in many years.
The Company has for many years been entirely dependent on Gobi
Coal's controlling shareholder for information. About a year ago,
Gobi Coal said that it had retained KPMG (Beijing) to sell the
company's assets. Earlier this year Gobi Coal said that KPMG had
received no bids. Gobi Coal has had two capital raises over the
last several years, none of which has the Company participated in.
The last capital raise reportedly closed at about US$75,000. These
capital raises were apparently to meet Gobi Coal's running costs.
Given these facts and circumstances and a review of recent
transactions in Gobi Coal shares, the Board determined that a sale
at the asset's carrying value was appropriate.
Our objectives continue to be selling the Company's remaining
assets, returning capital to shareholders and putting the Company
into liquidation. We also periodically review the cost of
maintaining a listed company in light of the prospects of attaining
our objectives.
We welcome bids for the Company's remaining assets.
Very truly yours,
John D. Chapman
Chairman
Origo Partners Plc
Date: 25 June 2021
Directors' Report
The Directors present their report together with the audited
financial statements for the year ended 31 December 2020.
Results and dividends
The result of the Group for the year is set out below and shows
a loss for the year of US$1,257,000 (2019: US$567,000). During
2019, the Directors approved a capital distribution of US$0.02947
to the holders of the Company's redeemable preference and
US$0.00117 to the holders of the Company's ordinary shares at
US$0.00117 per ordinary share. No distributions were made during
the current reporting period. The retained loss of the year of
US$1,257,000 (2019: US$567,000) has been transferred to
reserves.
Principal activities, review of business and future
developments
On 20 November 2014, the Company's Investing Policy changed from
that of a closed-ended, permanent capital vehicle to that of a
realisation company with the mandate to return the net proceeds of
realisations to shareholders over a four year period. However,
investments will only be realised when the Independent Directors
believe the terms are appropriate. A review of the business of the
Company is covered in the Chairman's Letter.
Directors
At 31 December 2020:
Mr John Chapman
Mr Philip Peter Scales
Mr Hiroshi Funaki
Directors' responsibilities in respect of the financial
statements
The Directors are responsible for the preparation of the
financial statements. The Directors have elected to prepare the
financial statements in accordance with applicable law and
International Financial Reporting Standards as adopted by the
European Union. In preparing these financial statements, the
Directors are required to:
-- select suitable accounting policies and then apply them on a consistent basis;
-- make judgments and estimates that are reasonable and prudent;
-- state whether International Financial Reporting Standards
have been followed, subject to any material departures disclosed
and explained in the financial statements; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping reliable accounting
records which correctly explain the transactions of the Company,
and which enable the financial position of the Company to be
determined with reasonable accuracy. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Corporate Governance Statement
The Board of Origo Partners Plc has adopted the Quoted Companies
Alliance 2018 Corporate Governance Code (the "QCA Code"). The
Company is committed to the highest standards of corporate
governance, ethical practices and regulatory compliance. In
particular, the Board is committed to ensuring that the Company is
governed in a manner to allow efficient and effective decision
making, with robust risk management procedures.
The Company is reliant upon its service providers for many of
its operations and as such will maintain an ongoing and rigorous
review of these providers. The Company's compliance with the QCA
Code is reported on the Company's website ( www.origopartners.com
), and at the back of this report. The Company will provide annual
updates on changes to compliance with the QCA Code.
Going concern
The Board has concluded that the Company and the Group is not
considered to be a going concern and as a result of this the
consolidated financial statements for the year ended 31 December
2020 have been prepared on an orderly realisation basis. The share
capital of the Company has been reorganised so that the redemption
of the Redeemable Preference Shares (previously Convertible
Preference Shares) will be settled with the proceeds of
realisations as and when they occur.
Auditor and disclosure of information to auditor
As far as each Director is aware, there is no relevant audit
information of which the Company's auditor is unaware.
Financial statements are published on the Group's website in
accordance with legislation in the Isle of Man governing the
preparation and dissemination of financial statements, which may
vary from legislation in other jurisdictions. The maintenance and
integrity of the Group's website is the responsibility of the
Directors. The Directors' responsibility also extends to the
ongoing integrity of the financial statements contained
therein.
Each of the Directors has taken all the steps they ought to have
taken individually as a Director in order to make themselves aware
of any relevant audit information and to establish that the
Company's auditors are aware of that information.
Lubbock Fine LLP, who, being eligible, have expressed their
willingness to continue in office in accordance with the Isle of
Man Companies Act 2006.
By Order of the Board
Philip Peter Scales
Date: 25 June 2021
INDEPENT AUDITOR'S REPORT
TO THE MEMBERS OF ORIGO PARTNERS PLC
(incorporated in the Isle of Man with limited liability)
QUALIFIED OPINION
We have audited the consolidated financial statements of Origo
Partners Plc (the 'Company') and its subsidiaries (the 'Group') for
the year ended 31 December 2020, which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of
Financial Position, the Consolidated Statement of Changes in
Equity, the Consolidated Statement of Cash Flows, and the related
notes, including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards as adopted by the European Union.
In our opinion, except for the possible effects of the matter
described in the Basis for Qualified Opinion section of our report,
the accompanying consolidated financial statements present fairly,
in all material respects, the financial position of the Group as at
31 December 2020 and of its consolidated financial performance and
its consolidated cash flows for the year then ended in accordance
with International Financial Reporting Standards as adopted by the
European Union
BASIS FOR QUALIFIED OPINION
In the year ended 31 December 2020, the Group's Consolidated
Statement of Financial Position included an investment in Celadon
Mining Limited which at the year-end was valued at US$564,000, and
in the Consolidated Statement of Comprehensive Income for the year
there was an unrealised loss on this investment of US$565,000 due
to the reduction in the fair value of this investment at the
year-end. Note 10 in these consolidated financial statements sets
out the directors' approach to valuing this investment, including
highlighting the uncertainties around a potential sale. Given these
uncertainties we have been unable to obtain sufficient appropriate
audit evidence about the fair value of the Group's investment in
Celadon Mining Limited as at 31 December 2020 and consequently the
movement in unrealised losses on investments in the Consolidated
Statement of Comprehensive Income for the year then ended.
Consequently, we were unable to determine whether any adjustments
to these amounts were necessary.
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
EMPHASIS OF MATTER - BASIS OF PREPARATION
As explained in Note 1.2, the directors do not consider either
the Group or Company to be a Going Concern, and so consider that
the consolidated financial statements should be prepared on a basis
other than that of going concern. As explained in note 1.2, no
adjustments are required to the financial statements as a result of
preparing the financial statements on this basis.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
consolidated financial statements of the current period and include
the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which
had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts of
the engagement team.
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.
Key audit matter How our audit addressed the
key audit matter
Valuation of investments (Note
10)
We have obtained an understanding
The Group holds unquoted investments of the processes and controls
with a fair value at 31 December around investment valuation,
2020 of US$839,000 (2019 - US$1,404,000). and reviewed the directors'
approach to the valuation of
These are held at fair value the investments.
and are revalued annually by
the Directors. Unquoted investments We have evaluated the appropriateness
have no readily available market of the valuation approach and
price and so are valued in accordance methodology applied by the directors,
with International Private Equity with reference to the nature
and Venture Capital Valuation of the underlying entities in
Guidelines by using measurement the investments held
of value such as multiples,
discounted cash flow and industry We have challenged key assumptions
valuation benchmarks. and inputs into the valuation
models used and verified the
Due to the significance of these arithmetical accuracy of the
balances to the financial statements models and adjustments made.
this represents a key audit
matter. Due to continued uncertainties
around the valuation of the
investment in Celadon Mining
Ltd, we have issued a qualified
audit opinion in respect of
this investment.
----------------------------------------
OUR APPLICATION OF MATERIALITY
The scope and focus of our audit was influenced by our
assessment and application of materiality. We apply the concept of
materiality both in planning and performing our audit, and in
evaluating the effect of misstatements on our audit and on the
consolidated financial statements.
We define financial statements materiality as the magnitude by
which misstatements, including omissions, could influence the
economic decisions taken on the basis of the consolidated financial
statements by reasonable users.
We also determine a level of performance materiality, which we
use to determine the extent of testing needed to reduce to an
appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality for
the consolidated financial statements as a whole.
-- Overall materiality - We determine materiality for the
consolidated financial statements as a whole to be $50,000. This
was based on the key performance indicator, being 2% of gross
assets. We believe gross asset values are the most appropriate
bench mark due to the minimal income statement activity during the
year and existence of key balance sheet items.
-- Performance materiality - On the basis of our risk
assessment, together with our assessment of the Group's control
environment, our judgement is that performance materiality for the
consolidated financial statements should be 55% of materiality,
amounting to $28,000.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the consolidated
financial statements. In particular, we looked at where the
directors made subjective judgements, for example in respect of
significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain.
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to give an opinion on the financial
statements as a whole, taking into account an understanding of the
structure of the Group, its activities, the accounting processes
and controls, and the industry in which they operate. Our planned
audit testing was directed accordingly and was focused on areas
where we assessed there to be the highest risk of material
misstatement. During the audit, we reassessed and re-valuated audit
risks and tailored our approach accordingly.
The audit testing included substantive testing on significant
transactions, balances and disclosures, the extent of which was
based on various factors such as our overall assessment of the
control environment, the effectiveness of controls and management
of specific risk.
We communicated with the directors regarding, among other
matters, the planned scope and timing of the audit and significant
findings, including any significant deficiencies in internal
control that we identify during the audit.
Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The directors are responsible for the
other information.
Our opinion on the 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 financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. 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.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation and
fair presentation of the consolidated financial statements in
accordance with International Financial Reporting Standards as
adopted by the European Union, 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 directors are also responsible for overseeing the Group's
financial reporting process. The audit committee of the Company
(the "Audit Committee") assists the directors in discharging their
responsibility in this regard.
AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED
FINANCIAL STATEMENTS
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below:
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and noncompliance with
laws and regulations, we considered the following:
-- Enquires of management, including obtaining and reviewing
supporting documentation, concerning the Group's policies and
procedures relating to:
o Identifying, evaluating and complying with laws and
regulations and whether they were aware of any instances of
non-compliance;
o detecting and responding to the risks of fraud and whether
they have knowledge of any actual, suspected or alleged fraud;
and
o the internal controls established to mitigate risks related to
fraud or non-compliance of laws and regulations; and
-- Discussions among the engagement team regarding how and where
fraud might occur in the consolidated financial statements and any
potential indicators of fraud.
We also obtained an understanding of the legal and regulatory
framework that the Group operates in, focusing on provisions of
those laws and regulations that had direct effect on the
determination of material amounts and disclosures in the
consolidated financial statements. The key laws and regulations we
considered in this context included the Isle of Man Companies Act
2006, International Financial Reporting Standards and AIM Listing
Rules.
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental to the
Group's ability to operate or to avoid a material penalty. These
included employment law and health and safety regulations. As a
result of these procedures, we considered the opportunities and
incentives that may exist within the Group for fraud. In common
with all audits under ISAs (UK), we are also required to perform
specific procedures to respond to the risk of management
override.
Our procedures to respond to risks identified included the
following:
-- reviewing the financial statement disclosures and testing to
supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect
on the consolidated financial statements;
-- enquiring of management concerning actual and potential litigation and claims;
-- performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
-- reading minutes of meetings of the directors' meetings;
-- reviewing the investment valuation approach taken by the directors;
-- in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries and
other adjustments; assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and
evaluating the rationale of any significant transactions that are
unusual or outside the normal course of the Group's operations.
A further description of our responsibilities for the audit of
the consolidated financial statements is located on the Financial
Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our Auditors' Report.
USE OF OUR REPORT
This report is made solely to the Company's members, as a body,
in accordance with our engagement letter dated 10 May 2021. Our
audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an Auditors' Report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members, as a body,
for our audit work, for this report, or for the opinions we have
formed.
Lubbock Fine LLP
Chartered Accountants & Statutory Auditors
3rd Floor Paternoster House
65 St Paul's Churchyard
London
EC4M 8AB
Date: 25 June 2021
Consolidated s tatement of c omprehensive i ncome
F or the year ended 31 December 2020
2020 2019
Notes US$'000 US$'000
----------------------------------------- ------ ------------- -------------
Investment gain/loss: 2
Realised gains/losses on disposal
of investments 22 (75)
Unrealised gains/losse s on investments (565) -
(543) (75)
----------------------------------------- ------ ------------- -------------
Other income 20 -
Other administrative expenses 3 (725) (1,270)
Share based payment 21 - 103
Financial guarantee derecognition 15 - 435
Foreign exchange loss (7) (3)
----------------------------------------- ------ ------------- -------------
Net l oss before f inance c osts
and t axation (1,255) (810)
Finance costs 5 (2) (4)
----------------------------------------- ------ ------------- -------------
L os s before tax (1,257) (814)
Income tax credit 6 - 247
----------------------------------------- ------ ------------- -------------
L oss after tax (1,257) (567)
----------------------------------------- ------ ------------- -------------
Other comprehensive income
----------------------------------------- ------ ------------- -------------
Other comprehensive income to be
reclassified to profit or loss
in subsequent periods:
Exchange differences on translating
foreign operations - (41)
----------------------------------------- ------ ------------- -------------
Net other comprehensive income
to be reclassified to profit or
loss in subsequent periods - (41)
Tax on other comprehensive income - -
Other comprehensive income net
of tax - (41)
Total comprehensive loss after
tax (1,257) (608)
L oss after tax
----------------------------------------- ------ ------------- -------------
Attributable to:
- Owners of the parent (1,257) (567)
- Non-controlling interests - -
----------------------------------------- ------ ------------- -------------
(1,257) (567)
----------------------------------------- ------ ------------- -------------
Total comprehensive loss
----------------------------------------- ------ ------------- -------------
Attributable to :
- Owners of the parent (1,257) (608)
- Non-controlling interests - -
----------------------------------------- ------ ------------- -------------
(1,257) (608)
----------------------------------------- ------ ------------- -------------
Basic loss per ordinary share 7 (0.07) cents (0.03) cents
----------------------------------------- ------ ------------- -------------
Diluted loss per ordinary share 7 (0.07) cents (0.03) cents
----------------------------------------- ------ ------------- -------------
Basic loss per redeemable zero
dividend preference share 7 (6.71) cents (3.24) cents
----------------------------------------- ------ ------------- -------------
Diluted loss per redeemable zero
dividend preference share 7 (6.71) cents (3.24) cents
----------------------------------------- ------ ------------- -------------
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated s tatement of f inancial p osition
A t 31 December 2020
2020 2019
Assets Notes US$'000 US$'000
-------------------------------------------------- ------ ---------- ----------
Non-current assets
Property, plant and equipment 8 - -
Loans 11 - -
- -
-------------------------------------------------- ------ ---------- ----------
Current assets
Investments at fair value through profit or loss 10 842 1,407
Trade and other receivables 12 20 34
Cash and cash equivalents 13 1,651 2,455
-------------------------------------------------- ------ ---------- ----------
2,513 3,896
-------------------------------------------------- ------ ---------- ----------
Total assets 2,513 3,896
-------------------------------------------------- ------ ---------- ----------
Current liabilities
Trade and other payables 14 170 296
Current tax liabilities - -
-------------------------------------------------- ------ ---------- ----------
170 296
-------------------------------------------------- ------ ---------- ----------
Non-current liabilities
Deferred income tax liability 6 - -
- -
-------------------------------------------------- ------ ---------- ----------
Total liabilities 170 296
-------------------------------------------------- ------ ---------- ----------
Net assets 2,343 3,600
-------------------------------------------------- ------ ---------- ----------
Equity attributable to owners of the parent
Issued capital 17 56 56
Share premium 149,994 150,027
Share - based payment reserve 5,048 5,048
Accumulated losses (198,200) (200,216)
Translation reserve (1,457) (1,379)
Other reserve 18 46,902 50,064
-------------------------------------------------- ------ ---------- ----------
2,343 3,600
Non-controlling interests - -
-------------------------------------------------- ------ ---------- ----------
Total equity 2,343 3,600
-------------------------------------------------- ------ ---------- ----------
The consolidated financial statements were approved by the Board
of Directors and authorised for issue. They were signed on its
behalf by:
Philip Peter Scales
Director
25 June 2021
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated s tatement of c hanges in e quity
F or the year ended 31 December 2020
Attributable to equity holders of the parent
Share-
based
Issued Share payment Accumulated Translation Other Non-controlling Total
capital premium reserve losses reserve reserve Total interests equity
Notes US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------ ------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
At 31 December
2018 56 150,414 5,048 (199,649) (1,338) 51,744 6,275 - 6,275
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
Loss for the
year - - - (567) - - (567) - (567)
Other comprehensive
income - - - - (41) - (41) - (41)
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
Total comprehensive
income/(loss) - - - (567) (41) - (608) - (608)
Capital distribution - (387) - - - (1,680) (2,067) - (2,067)
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
At 31 December
2019 56 150,027 5,048 (200,216) (1,379) 50,064 3,600 - 3,600
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
Adjustment - (33) - 48 (15) - - - -
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
Loss for the
year - - - (1,257) - - - - (1,257)
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
Total comprehensive
income/(loss) - - - (1,257) - - (1,257) - (1,257)
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
Reclassification
on disposal
of subsidiaries - - - 3,225 (63) (3,162) - - -
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
At 31 December
2020 56 149,994 5,048 (198,200) (1,457) 46,902 2,343 - 2,343
--------------------------- -------- -------- -------- ------------ ------------ -------- -------- ----------------- --------
The following describes the nature and purpose of each reserve
within parent's equity:
Reserve Description and purpose
-------------------- ------------------------------------------------------
Share premium Amounts subscribe d for shar e capital in
excess of nominal value.
-------------------- ------------------------------------------------------
Share-based payment Equity created to recognise share-based payment
reserve expense.
-------------------- ------------------------------------------------------
Accumulated losses Cumulative net gains and losses recognised
in profit or loss.
-------------------- ------------------------------------------------------
Translation reserve Equity created to recognise foreign currency
translation differences.
-------------------- ------------------------------------------------------
Other reserve Own shares acquired, EBT (as defined in Note
21) shares and capital redemption and capitalisation
of redeemable zero dividend preference shares
("RZDP").
-------------------- ------------------------------------------------------
The accompanying notes form an integral part of these
consolidated financial statements.
Consolidated s tatement of c ash f lows
F or the year ended 31 December 2020
2020 2019
Notes US$ '000 US$ '000
--------------------------------------------- ------ --------- ---------
Loss before tax (1,257) (814)
--------------------------------------------- ------ --------- ---------
Adjustments for:
Depreciation and amortisation 3 - 5
Share - based payments 21 - (103)
Realised gains/losses on disposal of
investments 2 (22) 75
Unrealised gains/losses on investments
at FVTPL* 2 565 -
Foreign exchange gains 7 15
Other adjustment - (23)
Operating loss before changes in working
capital and provisions (707) (845)
--------------------------------------------- ------ --------- ---------
Proceeds from disposals of investments
at FVTPL* 10 24 2,045
Movement in loans 11 - -
Increase in trade and other receivables 14 (7)
Decrease in trade and other payables (126) (86)
Derecognition of financial guarantee 15 - (435)
Net cash (outflow)/inflow from operations (795) 672
--------------------------------------------- ------ --------- ---------
Investing activities
Cash removed on disposal of subsidiary (2) -
Net cash out flow from investing activities (2) -
--------------------------------------------- ------ --------- ---------
Financing activities
Capital distribution - (2,100)
Net cash out flow from financing activities - (2,100)
--------------------------------------------- ------ --------- ---------
Net (de crease)/ increase in cash and
cash equivalents (797) (1,428)
--------------------------------------------- ------ --------- ---------
Effect of exchange rate changes on cash
and cash equivalents (7) -
Cash and cash equivalents at beginning
of year 2,455 3,883
--------------------------------------------- ------ --------- ---------
Cash and cash equivalents at end of
year 13 1,651 2,455
--------------------------------------------- ------ --------- ---------
* FVTPL refers to fair value through profit or loss
The accompanying notes form an integral part of these
consolidated financial statements.
Notes to the financial statements
1 Accounting policies
1.1 Corporate information
The Company is a limited liability c ompany incorporated and
domiciled in the Isle of Man whose shares are publicly traded on
the Alternative Investment Market ("AIM") of the London Stock
Exchange. The registered office is located at 55 Athol Street,
Douglas, Isle of Man IM1 1LA . The principal activity of the Group
is that of an Investment vehicle. The Group currently holds
investments in companies including unquoted interests, and illiquid
publicly traded equity interests, based or principally active in
China and Mongolia. On 20 November 2014, the Company's shareholders
voted to amend the Company's investing policy to that of a
realisation vehicle.
1.2 Basis of preparation
The Financial Statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union ("IFRS"). These comprise standards and
interpretations approved by the International Accounting Standards
Board ("IASB"), together with interpretations of the International
Accounting Standards and Standing Interpretations Committee
approved by the International Accounting Standards Committee that
remain in effect, to the extent that IFRS have been adopted by the
EU.
Going concern
The Board has concluded that the Company and the Group is not
considered to be a going concern and as a result of this the
consolidated financial statements for the year ended 31 December
2020 have been prepared on an orderly realisation basis. There was
no impact to the financial information as result of changing to
this basis.
The comparative information is for the year from 1 January 2019
to 31 December 2019.
1.3 Functional and presentation currency
The consolidated financial statements are presented in United
States dollars, which is also the parent company's functional
currency. For each group entity the Group determines functional
currency and items included in the financial statements of each
entity are measured using that functional currency.
1.4 Use of judgments and estimates
In preparing these consolidated financial statements, management
has made judgments and estimates that affect the application of the
Group's accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognised prospectively.
The following is a list of accounting policies which cover areas
that the Directors consider require estimates and judgements which
have a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities within the next financial
year:
(a) Fair value of unquoted equity instruments
The Directors have estimated the value of each of its unquoted
equity instruments by using their judgement to select the most
appropriate valuation methodology for each investment based on the
recommendations of the International Private Equity and Venture
Capital Valuation Guidelines (the "Guidelines"). For more
information on estimation, refer to Note 10. Valuation
methodologies mainly include multiples, discounted cash flow,
industry valuation benchmarks, available market prices and so on,
which may apply individually or in combination. Key assumptions and
judgements of each methodology concerning the future and other key
sources of estimation uncertainty will have a significant risk of
causing a material adjustment to the fair value of the instruments
within the next financial year.
(b) Assessment of the Company as investment entity
Entities that meet the definition of an investment entity within
IFRS 10 are required to account for most investments in controlled
entities as held at fair value through profit or loss. Subsidiaries
that provide investment related services or engage in permitted
investment related activities with investees continue to be
consolidated unless they are also investment entities. The
directors have concluded that the Company meets the definition of
an investment entity.
(c) Assessment of the subsidiaries as investment entities
The Company controls the voting rights and ownership interests
in its subsidiaries as stated in Note 10 for which the countries of
incorporation for those subsidiaries are included in the same
note.
Per IFRS 10, there is a requirement for the Board to assess
whether each subsidiary is itself an investment entity. The Board
has performed the assessments and has concluded that the
subsidiaries stated in Note 9 are not operating subsidiaries of the
Group for the reasons below:
(I) The subsidiaries do not provide services to the Group
(including administrative services to the Board of the Group,
buying / selling securities as well as managing the portfolios on a
fair value basis); and
(II) The subsidiaries are not remunerated for these services.
(III) Each subsidiary is itself not deemed to be an investment
entity investing solely for capital appreciation and investment
income and therefore the subsidiaries are consolidated.
(d) Share-based payments
The Group has applied the requirements of IFRS 2 "Share-based
payments" in these consolidated financial statements.
The Group has issued share options, which are equity-settled
share-based payments, to an ex director, certain ex-employees and
to its advisors for services provided in respect of the admission
of the Company to trading on the AIM of the London Stock Exchange.
Equity-settled share-based payments to directors and employees are
measured at the fair value of equity instruments awarded at the
date of grant. Equity-settled share-based payments to non-employees
are measured at the fair value of goods or services rendered at the
date when the goods or services are received. Where equity
investments are granted subject to vesting conditions,
equity-settled share-based payments are expensed to the profit or
loss on a straight-line basis over the vesting period, based on the
Group's estimate of the number of shares that will eventually vest.
Fair value is measured by use of the Binominal option pricing
model.
The Group has also granted upper share rights/contingent share
awards, which are cash-settled share-based payments, to an ex
director and certain ex-employees under the Company's JSOS (as
defined in Note 21). The cost of cash-settled share-based payments
is measured initially at fair value at the grant date using the
Binominal Tree model. This fair value is expensed over the period
until the vesting date with recognition of a corresponding
liability. The liability is remeasured to fair value at each
reporting date up to and including the settlement date, with
changes in fair value recognised in expense.
When estimating the value of the share options, the upper share
rights and contingent share awards, significant assumptions such as
the expected life of the share options and the upper share rights,
and expected volatility of the shares have been applied based on
management's best estimates.
1.5 Summary of significant accounting policies
The accounting policies which follow set out those policies
which apply in preparing the Financial Statements for the period 1
January 2020 to 31 December 2020.
Standards and amendments effective for the period beginning 1
January 2020 or later
A number of other new standards are effective from 1 January
2021 but they do not have a material effect on the Company's
financial statements.
Amendments to IFRS 3: Definition of a business
Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark
Reform
Amendments to IAS 1 and IAS 8 Definition of Material
Conceptual Framework for Financial Reporting issued on 29 March
2018
Amendments to IFRS 16 COVID - 19 Related Rent Concessions
A number of new standards are effective for annual periods
beginning after 1 January 2020 and earlier application is
permitted; however, the Group has not early adopted the new or
amended standards in preparing these consolidated financial
statements.
The following amended standards and interpretations are not
expected to have a significant impact on the Group's consolidated
financial statements:
-- IFRS 17 Insurance Contracts (effective on or after 1 January 2023)
-- Amendments to IAS 1: Classification of Liabilities as Current
or Non-current (effective on or after 1 January 2023) Reference to
the Conceptual Framework - Amendments to IFRS 3 (effective on or
after 1 January 2022)
-- Property, Plant and Equipment: Proceeds before Intended Use -
Amendments to IAS 16 (effective on or after 1 January 2022)
-- Onerous Contracts - Costs of Fulfilling a Contract -
Amendments to IAS 37 (effective on or after 1 January 2022)
-- IFRS 1 First-time Adoption of International Financial
Reporting Standards - Subsidiary as a first-time adopted (effective
on or after 1 January 2022)
-- IFRS 9 Financial Instruments - Fees in the '10 per cent' test
for derecognition of financial liabilities (effective on or after 1
January 2022)
-- IAS 41 Agriculture - Taxation in fair value measurements
(effective on or after 1 January 2022
Financial instruments
i) Recognition and initial measurement
The Company initially recognises financial assets and financial
liabilities at fair value through profit or loss ("FVTPL") on the
trade date, which is the date on which the Company becomes a party
to the contractual provisions of the instrument. Other financial
assets and financial liabilities are recognised on the date on
which they are originated.
A financial asset or financial liability is measured initially
at fair value plus, for an item not at FVTPL, transaction costs
that are directly attributable to its acquisition or issue.
ii) Classification and subsequent measurement
Classification of financial assets
On initial recognition, the Company classifies financial assets
as measured at amortised cost or FVTPL.
A financial asset is measured at amortised cost if it meets both
the following conditions and is not designated as at FVTPL.
- it is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash
flows that are solely payment of principal and interest
("SPPI").
All other financial assets of the Fund are measured at
FVTPL.
Business model assessment
In making an assessment of the objective of the business model
in which a financial asset is held, the Company considers all of
the relevant information about how the business is managed,
including:
- the documented investment strategy and the execution of this
strategy in practice. This includes expected cash outflows or
realising cash flows through the sale of assets;
- how the performance of the portfolio is evaluated and reported
to the Company's management;
- the risks that affect the performance of the business model
(and the financial assets held within that business model) and how
those risks are managed; and
- the frequency, volume and timing of sales of financial assets
and expectations about the future sales activity.
Transfers of financial assets to third parties in transactions
that do not qualify for derecognition are not considered sales for
this purpose, consistent with the Company's continuing recognition
of the assets.
The Company has determined that it has two business models.
- Held-to-collect business model: this includes cash and cash
equivalents and receivables. These financial assets are held to
collect contractual cash flow.
- Other business model: this includes equity investments. These
financial assets are managed and their performance is evaluated, on
a fair value basis, with frequent sales taking place.
Assessment whether contractual cash flows are SPPI
For the purposes of this assessment, 'principal' is defined as
the fair value of the financial asset on initial recognition.
'Interest' is defined as consideration for the time value of money
and for the credit risk associated with the principal amount
outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative
costs), as well as a profit margin.
In assessing whether the contractual cash flows are SPPI, the
Company considers the contractual terms of the instrument. This
includes assessing whether the financial asset contains a
contractual term that could change the timing or amount of
contractual cash flows such that it would not meet this condition.
In making this assessment, the Company considers:
- contingent events that would change the amount or timing of
cash flows;
- prepayment and extension features;
- terms that limit the Company's claim to cash flows from
specified assets (e.g. non-recourse features); and
- features that modify consideration of the time value of money
(e.g. periodical reset of interest rates).
Reclassifications
Financial assets are not reclassified subsequent to their
initial recognition unless the Company were to change its business
model for managing financial assets, in which case all affected
financial assets would be reclassified on the first day of the
first reporting period following the change in the business
model.
Subsequent measurement of financial assets
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains
and losses, including foreign exchange gains and losses, are
recognised in the statement of comprehensive income.
Equity investments and derivative financial instruments are
included in this category.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using
the effective interest method. Interest income is recognised in
'interest income calculated using the effective interest method',
foreign exchange gains and losses are recognised in 'net foreign
exchange loss' and impairment is recognised in 'impairment losses
on financial instruments' in the statement of comprehensive income.
Any gain or loss on derecognition is also recognised in profit or
loss.
Cash and cash equivalents, receivables and balances due from
brokers are included in this category.
Financial liabilities - Classification, subsequent measurement
and gains and losses
Financial liabilities are classified as measured at amortised
cost or FVTPL.
A financial liability is classified as at FVTPL if it is
classified as held-for-trading, it is a derivative or it is
designated as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit or
loss.
Other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognised in
profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss.
Financial liabilities at amortised cost:
- This includes trade and other payables.
Financial guarantee contracts:
Financial guarantee contracts issued by the Group are those
contracts that require a payment to be made to reimburse the holder
for a loss it incurs because the specified debtor fails to make a
payment when due in accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised initially as a
liability at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of the best
estimate of the expenditure required to settle the present
obligation at the reporting date and the amount recognised less
cumulative amortisation.
Redeemable zero dividend preference shares:
On initial recognition, redeemable zero dividend preference
shares are recognised at the fair value, which are determined using
the prevailing market interest of similar non-convertible debts,
net of issue costs incurred. In subsequent periods, redeemable zero
dividend preference shares are carried at amortised cost using the
effective interest method.
iii) Amortised cost measurement
The 'amortised cost' of a financial asset or financial liability
is the amount at which the financial asset or financial liability
is measured on initial recognition minus the principal repayments,
plus or minus the cumulative amortisation using the effective
interest method of any difference between that initial amount and
the maturity amount and, for financial assets, adjusted for any
loss allowance.
Equity instrument
Financial instruments shall reclassify a financial liability as
equity from the date when there is no existence of a contractual
obligation to deliver cash or another financial asset by the
issuer. The equity instruments are recorded at the fair value of
the equity instruments issued. The difference between the carrying
amount of the financial liability extinguished and the fair value
of the equity instruments issued shall be recognised in profit or
loss. The equity instruments issued shall be recognised initially
and measured at the date the financial liability is
extinguished.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of the Company and its subsidiaries as at 31 December
2020. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
- Power over the investee (i.e. existing rights that give the
current ability to direct relevant activities of the investee);
- Exposure, or rights, to variable returns from its involvement with the investee; and
- The ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting
rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
- The contractual arrangement(s) with the other vote holders of the investee;
- Rights arising from other contractual arrangements; and
- The Group's voting rights and potential voting rights.
The Group does not consolidate its subsidiaries other than those
that solely provide it with services that relate to its investment
activities. Subsidiaries that provide services to the Group are
fully consolidated from the date of acquisition, being the date on
which the Group obtains control, and continue to be consolidated
until the date when such control ceases. The financial statements
of the subsidiaries are prepared for the same reporting period as
the parent company, using consistent accounting policies. All
intra-group balances, transactions, unrealised gains and losses
resulting from intra-group transactions and dividends are
eliminated in full.
Profit or loss and each component of other comprehensive income
are attributed to the equity holders of the parent of the Group and
to the non-controlling interests, even if this results in the
non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
Subsequent to acquisition, the carrying amount of
non-controlling interests that represent present ownership
interests in the subsidiary is the amount of those interests at
initial recognition plus such non-controlling interest's share of
subsequent changes in equity. Total comprehensive income is
attributed to such non-controlling interests even if this results
in those non-controlling interests having a deficit balance.
Non-controlling interests represent the portion of profit or
loss and net assets that is not held by the Group and are presented
separately in the consolidated statement of comprehensive income
and within equity in the consolidated statement of financial
position, separately from parent shareholders' equity.
Associates
Associates are all entities over which the Group has significant
influence but not control, generally accompanying a shareholding of
between 20% and 50% of the voting rights. The Group elects to
measure investments in associates at fair value through profit or
loss as, in the opinion of the directors, the Company meets the
definition of venture capital organisation. This treatment is
permitted under IAS 28 "Investments in Associates and Joint
Ventures".
Foreign currencies
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 the statement
of comprehensive income.
Non-monetary financial assets and liabilities that are carried
at historic cost are translated using the exchange rate as at the
date of initial transactions and are not re-measured. Translation
differences on non-monetary financial assets and liabilities, such
as equities held at fair value through profit or loss, are
recognised in profit or loss as part of the fair value gain or
loss.
Group companies
The results and financial position of all group entities, none
of which has the currency of a hyperinflationary economy, that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
(I) assets and liabilities for each statement of financial
position are translated at the closing rate at the date of that
statement of financial position;
(II) income and expenses for each statement of comprehensive
income are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative effect
of the rates prevailing on the transaction dates, in which case
income and expenses are translated at the date of the transaction);
and
(III) all resulting exchange differences are recognised in the
statement of comprehensive income as other comprehensive
income.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
Cash and bank and borrowings
Cash and bank is defined as cash in hand, demand deposits, time
deposit and short-term, highly liquid investments that are readily
convertible into known amounts of cash. They are subject to an
insignificant risk of changes in value, and have a short maturity,
generally less than three months, less bank overdrafts which are
repayable on demand and form an integral part of the Group's cash
management. For the purpose of the consolidated statement of
financial position, cash and bank balances comprise cash on hand
and at banks, including term deposits, which are not restricted as
to use.
Borrowings are financial liabilities at amortised cost and are
initially measured at fair value, net of directly attributable
costs incurred. It is subsequently measured at amortised cost,
using the effective interest method. The related interest expense
is recognised in profit or loss.
Share-based payments
Ex employees (including former senior executives) of the Group
received remuneration in the form of share-based payment
transactions (i.e. share options), whereby employees render
services as consideration for equity instruments ("equity-settled
transactions"). Certain ex director, executives and key employees
of the Group were granted share appreciation rights (including
upper share rights and contingent share awards), which can only be
settled in cash ("cash-settled transactions"). Advisors received
equity-settled options in relation to the Company's admission to
trading on the AIM of the London Stock Exchange.
The cost of these options with ex employees are measured by
reference to the fair value of the equity instruments awarded at
the date of grant, whereas those with non-employees are measured at
the fair value of goods or services received at the date when the
goods or services have been received. The fair value is determined
by using binominal tree model, further details of which are given
in Note 21.
Equity-settled transactions
The cost of equity-settled transactions (share options) is
recognised, together with a corresponding increase in equity, over
the period in which the performance and/or service conditions are
fulfilled, ending on the date on which the relevant ex employees
become fully entitled to the award (the "vesting date"). The
cumulative expense recognised for equity-settled transactions at
each reporting date until the vesting date reflects the extent to
which the vesting period has expired and the Group's best estimate
of the number of equity instruments that will ultimately vest.
Movements in the liability (other than cash payments) are
recognised in profit or loss.
No expense is recognised for awards that do not ultimately vest,
except for awards where vesting is conditional upon a market or
non-vesting condition, which are treated as vesting irrespective of
whether or not the market condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of earnings per
share.
Cash-settled transactions
The cost of cash-settled transactions (upper share rights and
contingent share awards) is measured initially at fair value at the
grant date using binominal tree model, further details of which are
given in Note 21. This fair value is expensed over the period until
the vesting date with recognition of a corresponding liability. The
liability is remeasured to fair value at each reporting date up to
and including the settlement date, with changes in fair value
recognised in expense.
Taxes
Current Income Tax
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or substantively
enacted at the reporting date.
Current income tax relating to items recognised directly in
equity is recognised in equity and not in the statement of
comprehensive income. Management periodically evaluates positions
taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the liability method on temporary
differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting
purposes.
Deferred tax liabilities are recognised for all taxable
temporary differences, except:
(I) where the deferred tax liability arises from goodwill or the
initial recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss;
and
(II) in respect of taxable temporary differences associated with
investments in subsidiaries and associates where the timing of the
reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible temporary
differences, carry forward of unused tax credits and unused tax
losses, to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences,
and the carry forward of unused tax credits and unused tax losses
can be utilised, except:
(I) where the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; and
(II) in respect of deductible temporary differences associated
with investments in subsidiaries and associates, deferred tax
assets are recognised only to the extent that it is probable that
the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are reassessed at each reporting date and are
recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to
the same taxable entity and the same taxation authority.
Income taxes are recognised in the profit or loss or directly in
equity except when a tax exemption has been granted.
Investment income/loss
Investment income/loss derived from the investment activities is
equivalent to "revenue" for the purposes of IAS 1. Investment
income/loss is analysed into the following components:
- Realised gains/losses on the disposal of investments are the
difference between the fair value of the consideration received
less any directly attributable costs, on the sale of equity and the
repayment of loans and receivables, and its carrying value at the
start of the accounting period.
- Unrealised gains/losses on the revaluation of investments are
the movement in the carrying value of investments measured at fair
value between the start and end of the accounting period and the
impairment of amortised cost loans.
- Income/loss from loans is recognised on a time proportion
basis as it accrues by reference to the principal outstanding and
the effective interest rate applicable.
Provisions and contingent liabilities
Provisions are recognised for liabilities of uncertain timing or
amount when the Group has a legal or constructive obligation
arising as a result of a past event, which will probably result in
an outflow of economic benefits that can be reasonably
estimated.
Where it is not probable that an outflow of economic benefits
will be required, or the amount cannot be estimated reliably, the
obligation is disclosed as a contingent liability, unless the
probability of an outflow of economic benefits is remote. Possible
obligations, the existence of which will only be confirmed by the
occurrence or non-occurrence of one or more future events, are also
disclosed as contingent liabilities unless the probability of an
outflow of economic benefits is remote.
2 Investment loss
2020 2019
US$ '000 US$ '000
---------------------------------------- ---------- ----------
Realised gains/losses on disposal
of investments 22 (75)
---------------------------------------- ---------- ----------
- Investments at FVTP L 24 (75)
- Subsidiary (2) -
---------------------------------------- ---------- ----------
Unrealised gains/losses on investments - -
---------------------------------------- ---------- ----------
- Investments at FVTPL (565) -
Income from loans - -
Total (543) (75)
---------------------------------------- ---------- ----------
3 Other administrative expenses
2020 2019
US$ '000 US$ '000
-------------------------- ---------- ----------
Recurring expenses: (777) (928)
- Directors fees (210) (210)
- Audit fees (35) (58)
- Depreciation expenses - (5)
- Amortisation expenses - (1)
- Other (532) (654)
Non-recurring expenses* 52 (342)
-------------------------- ---------- ----------
Total (725) (1,270)
-------------------------- ---------- ----------
* Non-recurring expenses include professional fees of an ad-hoc
nature and previous advisor fees. In 2020 expenses totalling US$96k
previously recognised have been written back.
4 Directors' remuneration
2020 2019
US$ '000 US$ '000
--------------------------------- ---------- ----------
Directors' emoluments (210) (210)
Share - based payment expense s - -
--------------------------------- ---------- ----------
(210) (210)
--------------------------------- ---------- ----------
Directors' remuneration for the year 2020 and the number of
options held were as follows:
Share
Salaries - based
* Director payment 2020
US$ fee ** Total Number
Name '000 US$ '000 US$ '000 US$ '000 of options
-------------------- ---------- ---------- ---------- ---------- ------------
Mr. Hiroshi Funaki - 75 - 75 -
Mr. Philip Peter
Scales - 55 - 55 -
Mr. John Chapman - 80 - 80 -
- 210 - 210 -
------------------------------- ---------- ---------- ---------- ------------
Directors' remuneration for the year 2019 and the number of
options held were as follows:
Share
- based
Salaries Director payment 2019
* fee ** Total Number
Name US$ '000 US$ '000 US$ '000 US$ '000 of options
-------------------- ----------- ---------- ---------- ---------- ------------
Mr. Hiroshi Funaki - 75 - 75 -
Mr. Philip Peter
Scales - 55 - 55 -
Mr. John Chapman - 80 - 80 -
- 210 - 210 -
-------------------------------- ---------- ---------- ---------- ------------
* Short term employee benefits.
** Share - based payment refers to expenses arising from the
Company's share option scheme (Note 22 ).
5 Finance costs
2020 2019
US$ '000 US$ '000
-------------- ---------- ----------
Bank charges (2) (4)
--------------- ---------- ----------
(2) (4)
-------------- ---------- ----------
6 Income tax
As the Company is not in receipt of income from Manx land,
certain related business or property and does not hold a Manx
banking licence, it is taxed at the standard rate of 0% on the Isle
of Man. The Company is resident for tax purposes in the Isle of Man
and subject to corporate income tax at the standard rate of 0% and
as such no provision for tax in the Isle of Man has been made.
2020
US$ 2019
'000 US$ '000
--------------------------------------------- ------- ----------
Current tax
Current year - -
Deferred tax
Deferred income tax * - 247
Total income tax credit in the consolidated
statement of comprehensive income - 247
--------------------------------------------- ------- ----------
* The deferred income tax credit in 2019 relates to the
write-back of the 2018 deferred tax provision, which was reversed
after the disposal of Niutech (see below).
6 Income tax (continued)
The income tax for the year can be reconciled per the
consolidated statement of comprehensive income as follows :
2020
US$ 2019
'000 US$ '000
------------------------------------------------- -------- ----------
Loss before tax (1,257) (814)
Loss before tax multiplied by rate of corporate
income tax in the Isle
of Man of 0% (2019: 0%) - -
Deferred tax
Effects of:
Release of deferred tax provision ** - 247
Release of current taxation provision - -
Total income tax credit in the consolidated
statement of comprehensive income - 247
------------------------------------------------- -------- ----------
Deferred income tax liability:
2020
US$ 2019
'000 US$ '000
------------------------------------ ------ ----------
Deferred income tax liability** - -
Total deferred income tax liability - -
------------------------------------ ------ ----------
** As at 31 December 2020, the deferred income tax liability was
US$nil (2019: US$NIL). The amount released in the year ended 31
December 2019 was in respect of the investment held in Niutech.
This investment has been disposed of and the final funds were
received in the year ended 31 December 2019 from the sale of this
investment from the State Administration of Foreign Exchange (SAFE)
in China.
7 Loss per share ("LPS")
2020 2019
Numerator US$ '000 US$ '000
-------------------------------------------------- ------------ -------------
Loss for the year attributable to ordinary
shareholders of the parent
as used in the calculation of basic loss
per share (251) (122)
-------------------------------------------------- ------------ -------------
Loss for the year attributable to redeemable
zero dividend preference
shareholders of the parent as used in
the calculation of basic loss per share (1,006) (486)
-------------------------------------------------- ------------ -------------
Loss for the year attributable to ordinary
shareholders of the parent
as used in the calculation of diluted
loss per share (251) (122)
-------------------------------------------------- ------------ -------------
Loss for the year attributable to redeemable
zero dividend preference
shareholders of the parent as used in
the calculation of diluted loss per share (1,006) (486)
-------------------------------------------------- ------------ -------------
2020
Number 2019
of Number of
Denominator Shares shares
-------------------------------------------------- ------------ -------------
Weighted average number of ordinary shares
for basic LPS 351,035,389 351,035,389
-------------------------------------------------- ------------ -------------
Effect of dilution*:
Share options - -
Weighted average number of ordinary shares
adjusted for the effect of dilution 351,035,389 351,035,389
-------------------------------------------------- ------------ -------------
Weighted average number of redeemable zero
dividend preference shares for
basic LPS before and after adjusted for
the effect of dilution 14,991,781 14,991,781
-------------------------------------------------- ------------ -------------
(0.07)
Basic LPS of ordinary shares cents (0.03) cents
-------------------------------------------------- ------------ -------------
(0.07)
Diluted LPS of ordinary shares cents (0.03) cents
-------------------------------------------------- ------------ -------------
Basic LPS of redeemable zero dividend preference (6.71)
shares cents (3.24) cents
-------------------------------------------------- ------------ -------------
Diluted LPS of redeemable zero dividend (6.71)
preference shares cents (3.24) cents
-------------------------------------------------- ------------ -------------
* Diluted loss per share for the years ended 31 December 2020
and 31 December 2019 is the same as the basic loss per share, as
the Company's outstanding share options and convertible zero
dividend preference shares had an anti-dilutive effect on the basic
loss per share for the years ended 31 December 2020 and 31 December
2019.
8 Property, plant and equipment
Vehicles
US$ '000
-------------------------- ---------
Cost
At 1 January 2020 85
------------------------------ ---------
Disposal (85)
------------------------------ ---------
At 31 December
2020 -
-------------------------- ---------
Accumulated depreciation
At 1 January 2019 80
------------------------------ ---------
Charge for the
year 2019 5
Disposal
-------------------------- ---------
At 31 December
2019 85
------------------------------ ---------
Charge for the
year 2020 -
Disposal (85)
At 31 December
2020 -
------------------------------ ---------
Net book value
------------------------------ ---------
At 31 December
2019 -
At 31 December
2020 -
------------------------------ ---------
9 Investments in subsidiaries
The principal subsidiaries of the Group are as follows:
Proportion Proportion
of ownership of ownership
interest interest
Country of at 31 December at 31 December
Name incorporation 2020 2019
----------------------------- ---------------- ---------------- ----------------
Ascend Ventures Ltd Malaysia - 100%
Origo Resource Partners
Ltd Guernsey 100% 100%
PHI International Holding
Ltd Bermuda - 100%
PHI International (Bermuda)
Holding Ltd* Bermuda - 100%
Ascend (Beijing) Consulting
Ltd** China - 100%
----------------------------- ---------------- ---------------- ----------------
* Owned by Origo Resource Partners Ltd
** Owned by Ascend Ventures Ltd
During 2020 the Company disposed of its interest in Ascend
Ventures Limited, Ascend (Beijing) Consulting Ltd, PHI
International Holding Ltd and PHI International (Bermuda) Holding
Ltd realizing a loss of US$2,000. Origo Resource Partners Ltd has
been placed in liquidation after the year end.
10 Investments at fair value through profit or loss
As at 31 December 2020
Fair
value Proportion Fair
Country of hierarchy of ownership Cost value
Name incorporation level interest US$'000 US$'000
-------------------------- ----------------- ----------- -------------- --------- ---------
British Virgin
Celadon Mining Ltd Islands 3 8.9% 13,069 564
British Virgin
Six Waves Inc Islands 3 1.1% 240 -
Gobi Coal & Energy British Virgin
Ltd Islands 3 7. 5 % 14,960 275
1,2
Fram Exploration AS Norway 3 0. 6 % 23 -
Staur Aqua AS Norway 3 9.2% 719 -
Unipower (Note a) Cayman Islands 3 16.5% 4,301 -
British Virgin
China Rice (Note a) Islands 3 32.1% 13,000 -
Moly World Ltd (Note British Virgin
a) Islands 3 20.0% 10,000 -
Other quoted investments 1 593 3
842
-------------------------------------------- ----------- -------------- --------- ---------
The shares held in China Rice and Unipower are all convertible
preference shares whilst the remaining investments held in the
other entities are all ordinary equity shares. The 'proportion of
ownership interest' represents the percentage of the shares held by
the Group in all share classes.
As at 31 December 2019
Fair
value Proportion Fair
Country of hierarchy of ownership Cost value
Name incorporation level interest US$'000 US$'000
-------------------------- ----------------- ----------- -------------- --------- ---------
British Virgin
Celadon Mining Ltd Islands 3 8.9% 13,069 1,129
British Virgin
Six Waves Inc Islands 3 1.1% 240 -
Gobi Coal & Energy British Virgin
Ltd Islands 3 7. 5 % 14,960 275
Marula Mines Ltd South Africa 3 0.9% 250 -
1,2
Fram Exploration AS Norway 3 0. 6 % 23 -
Staur Aqua AS Norway 3 9.2% 719 -
Unipower (Note a) Cayman Islands 3 16.5% 4,301 -
British Virgin
China Rice (Note a) Islands 3 32.1% 13,000 -
Moly World Ltd (Note British Virgin
a) Islands 3 20.0% 10,000 -
Other quoted investments 1 593 3
1,407
-------------------------------------------- ----------- -------------- --------- ---------
The shares held in China Rice and Unipower are all convertible
preference shares whilst the remaining investments held in the
other entities are all ordinary equity shares. The 'proportion of
ownership interest' represents the percentage of the shares held by
the Group in all share classes.
Notes
a. These investments are associates of the Group measured at
fair value through profit or loss.
In accordance with IFRS 13 "Fair Value Measurement", investments
recognised at fair value are required to be analysed between those
whose fair value is based on:
a) Quoted prices in active markets for identical assets or liabilities (Level 1);
b) Those involving inputs other than quoted prices included in
level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2);
and
c) Those with inputs for the asset or liability that are not
based on observable market data (unobservable inputs) (Level
3).
For assets and liabilities that are recognised in the
consolidated financial statements on a recurring basis, the Group
determines whether transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole)
at the end of each reporting period. There have been no transfers
between levels during the year of 2020.
10 Investments at fair value through profit or loss (continued)
The following table provides an analysis of investments carried
at fair value by level of fair value hierarchy:
2020
Level Level Level Total
1 2 3
US$'000 US$'000 US$'000 US$'000
------------------------------------ -------- -------- -------- --------
Investments at fair value
through profit or loss
* Listed equity investments 3 - - 3
* Unlisted equity investments - - 839 839
3 - 839 842
------------------------------------ -------- -------- -------- --------
2019
Level Level Level Total
1 2 3
US$'000 US$'000 US$'000 US$'000
------------------------------------ -------- -------- -------- --------
Investments at fair value
through profit or loss
* Listed equity investments 3 - - 3
* Unlisted equity investments - - 1,404 1,404
3 - 1,404 1,407
------------------------------------ -------- -------- -------- --------
Changes in investments at fair value through profit or loss
based on Level 3:
2020 2019
US$'000 US$'000
---------------------------------------------- --------- ---------
Opening balance 1,404 3,521
Proceeds from disposals of investments (24) (2,042)
Realised gain/(losses) on disposals of
investments 24 (75)
Movement in unrealised losses on investments
- In profit or loss (565) -
Closing balance 839 1,404
---------------------------------------------- --------- ---------
Description of significant unobservable inputs to valuation:
As at 31 December 2020
Significant
unobservable
Valuation technique inputs Range
-------------------- --------------------- ------------------------ -----------
Discount for
Celadon Mining Ltd Multiples method lack of marketability 80%
Gobi Coal & Energy Consensus pricing Offered quote US$275,348
Ltd method and
post year end
sale
In June 2020 Celadon Mining Ltd announced the sale of their
assets had been agreed at RMB 330m. Under the terms of this sale
the Company would have been due approximately US$ 4.2m. As detailed
in note 27, in March 2021, the terms of the sale agreement were
renegotiated with a sale price of RMB 282m which would have given
sales proceeds to the Company of approximately US$ 3.4m This offer
came with an agreed payment schedule which would have seen the
Company receive US$ 1.8m in September 2021 and the remaining US$
1.6 m in March 2022.
In May 2021, the controlling shareholder of Celadon informed the
Company that there were delays in receiving the payments and that
at the present time they were unable to advise of likely payment
dates. In light of the uncertainties over the timing and ultimate
recoverability of funds, the Board have elected to reduce the
carrying value of the investment by 50% to US$ 565,000.
As disclosed in Note 27, the Company disposed of its holding in
Gobi Coal at the carrying value above.
As at 31 December 2019
Significant
unobservable
Valuation technique inputs Range
-------------------- --------------------- ------------------------ -----------
Discount for
Celadon Mining Ltd Multiples method lack of marketability 80%
Gobi Coal & Energy Consensus pricing Offered quote US$275,348
Ltd method
11 Loans
The Group has entered into convertible credit agreements and has
the right to convert the outstanding principal balance of relevant
loans into borrower's shares according to certain conversion
conditions, and loan agreements with certain investee companies as
set forth in the table below.
As at 31 December
2020:
Loans
due within Loans
Loan Loan one year due after Fair
rates principal one year value
Borrower % US$'000 US$'000 US$'000 US$'000
-------------------- ------- ----------- ------------ ------------ --------
Convertible credit
agreements*
Staur Aqua AS 0-15 3,848 - - -
- - -
-------------------- ------- ----------- ------------ ------------ --------
The convertible loan issued to Staur Aqua was fully impaired in
2018.
As at 31 December
2019 :
Loans
due within Loans
Loan Loan one year due after Fair
rates principal one year value
Borrower % US$'000 US$'000 US$'000 US$'000
-------------------- ------- ----------- ------------ ------------ --------
Convertible credit
agreements*
Staur Aqua AS 0-15 3,848 - - -
- - -
-------------------- ------- ----------- ------------ ------------ --------
* Loans in relation to convertible credit agreements are
measured at fair value. Loans in relation to loan agreements are
measured at amortised cost using the effective interest rate method
less any identified impairment losses.
12 Trade and other receivables
2020 2019
US$'000 US$'000
--------------- --------- ---------
Trade debtors - -
Other debtors - 8
Prepayments 20 26
Total 20 34
----------------- --------- ---------
13 Cash and cash equivalents
2020 2019
US$'000 US$'000
--------------------------------- --------- ---------
Current account 1,651 2,455
Total cash and cash equivalents 1,651 2,455
----------------------------------- --------- ---------
14 Trade and other payables
2020 2019
US$'000 US$'000
---------------- --------- ---------
Trade payables - -
Other payables 170 296
Total 170 296
------------------ --------- ---------
15 Financial guarantee contracts
2020 2019
US$'000 US$'000
------------------------------- --------- ---------
Financial guarantee contracts* - -
------------------------------- --------- ---------
Total - -
------------------------------- --------- ---------
* In July 2013, the Group entered into a purported guarantee
agreement with IRCA Holdings Ltd and ABSA Bank Limited purportedly
to guarantee the repayment of loan facilities of up to Rand
6,769,000 extended by ABSA Bank Limited to IRCA Holdings Ltd, which
has applied for liquidation, so the Group recognised the purported
guarantee as a liability.
IRCA Holdings Ltd was struck off the company register in British
Virgin Islands in the year ended 31 December 2018, and in the
period since strike-off the Company has received no request for
payment of any amounts under this guarantee. Given the time lapse
since the guarantee was purportedly given and that IRCA Holdings
Ltd., the counterparty has been stricken from the Companies'
Register, the Board now considers that the possibility of the
purported guarantee being exercised as remote. The Board has
therefore decided to no longer recognize the purported guarantee as
a Company liability resulting in the write back to income of
US$435,000 during 2019.
16 Redeemable / convertible zero dividend preference shares
Number Other
of Liability Equity reserve
shares component component
US$ '000 US$ '000 US$ '000
---------------------------- ----------- ----------- ----------- ----------
Balance at 1 January 2019 57,000,000 - - 50,688
----------------------------- ----------- ----------- ----------- ----------
Distribution to redeemable
preference share holders - - - (1,680)
Balance at 3 1 December
2019 57,000,000 - - 49,008
----------------------------- ----------- ----------- ----------- ----------
Balance at 3 1 December
2020 57,000,000 - - 49,008
----------------------------- ----------- ----------- ----------- ----------
In September 2017, the Company restructured the terms of its
existing convertible zero dividend preference shares, where the
conversion feature has been removed, which were revised as
redeemable zero dividend preference shares. The principal terms of
restructure includes: i) removal of redemption of at least 12
million convertible zero dividend preference shares and/or maturity
date; ii) reset of the accreted principal amount per preference
shares to US$1.0526 each; iii) no rate of return on the outstanding
amount will begin to accrete until 1 January 2018 and, iv) in
respect of each preference share still in issue on 1 January 2018,
its principal amount of US$1.0526 shall be subject to the accretion
of a rate of return equal to 4 per cent per annum from (and
including) 1 January 2018 to (and including) the date on which such
amount is redeemed, with such return accruing on a simple and not
compound basis. Due to the revised terms, the convertible zero
dividend preference shares were regarded as an extinguishment and
redeemable zero dividend preference shares were therefore
recognised.
On 27 September 2017, the rights attaching to the redeemable
zero dividend preference shares and the ordinary shares changed so
that they rank alongside each other, and the redeemable zero
dividend preference shareholders receive distributions when
ordinary shareholders do. Post 27 September 2017, the redeemable
zero dividend preference shares are accounted for as an equity
instrument in accordance with the accounting policies disclosed in
Note 1.5.
All future distributions to ordinary and redeemable zero
dividend preference shareholders are on the following basis (pro
rata within the respective classes of shares):
-- in respect of the first US$15 million of distributions, 80
percent (i.e. US$12 million) to the redeemable zero dividend
preference shareholders and 20 percent (i.e. US$3 million) to the
ordinary shareholders;
-- in respect of distributions in excess of the first US$15
million: until such time as all redeemable zero dividend preference
shares have been redeemed in full, 44 percent to the redeemable
zero dividend preference shareholders and 56 percent to the
ordinary shareholders; thereafter, 100 percent to the ordinary
shareholders.
The redeemable zero dividend preference shares are now subject
to the distribution in accordance with articles 4.10 to 4.12 of the
Articles. In summary, the distributions will be made, at such
reasonable time as the Board shall decide, when:
(i) the Company has available funds, which is the aggregate
amount of the Company's net cash less working capital requirements
for the following 12 months and;
(j) the Company would be able to comply with the solvency test
under the Companies Act 2006 ("Solvency Test") immediately after
distribution.
In the year ended 31 December 2019 a distribution of
US$1,680,000 was made to holders of the redeemable zero dividend
preference shares.
17 Issued capital
2020 2019
Number of Number of
Authorised shares GBP'000 shares GBP'000
------------------------------- ------------ -------- ------------ --------
Ordinary shares of GBP 0.0001
each 500,000,000 50 500,000,000 50
------------------------------- ------------ -------- ------------ --------
Number of Number of
Issued and fully paid shares US$'000 shares US$'000
------------------------------- ------------ -------- ------------ --------
Ordinary shares of GBP 0.0001
each
------------------------------- ------------ -------- ------------ --------
At beginning and end of the
year 358,746,814 56 358,746,814 56
------------------------------- ------------ -------- ------------ --------
Redeemable zero dividend
preference shares of no par
value (note 16)
------------------------------- ------------ -------- ------------ --------
At 1 January 57,000,000 - 57,000,000 -
------------------------------- ------------ -------- ------------ --------
- - - -
------------------------------- ------------ -------- ------------ --------
At 31 December 57,000,000 - 57,000,000 -
------------------------------- ------------ -------- ------------ --------
18 Other reserve
This mainly comprised 57,000,000 (US$49,008,000) redeemable zero
dividend preference shares at no par value capitalised in September
2017 (see note 16).
19 Note to the consolidated statement of cash flows
(a) Major non-cash transaction
During the year ended 31 December 2020, interest expenses of
US$nil (2019: (US$335,000)) related to interest on borrowings and
redeemable zero dividend preference shares.
20 Financial instruments - Risk management
The Group are exposed through their operations to one or more of
the following risks:
- Fair value risk
- Cash flow interest rate risk
- Currency risk
- Liquidity risk
- Concentration risk
- Price risk
The policy for managing these risks is set by the board. The
policy for each of the above risks is described in more detail
below:
Fair value risk
The Group's financial assets are predominantly investments in
unquoted companies, and the fair value of each investment depends
upon a combination of market factors and the performance of the
underlying asset. The Group does not hedge the market risk inherent
in the portfolio but manages asset performance risk on an
asset-specific basis by continuous ly monitoring each asset's
performance and charging the change of each asset's fair value to
the consolidated statement of comprehensive income as
necessary.
Cash flow interest rate risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group's exposure to the risk
of changes in market interest rates is relatively small as the
Group's outstanding debt is fixed rate. Meanwhile, the interest
income is not material in the context of the total portfolio return
as a whole.
Currency risk
Some of the Group's assets, liabilities, income and expenses are
effectively denominated in currencies other than US Dollars (the
Group's presentation and functional currency). Fluctuations in the
exchanges rates between these currencies and US Dollars will have
an effect on the reported value of those items.
The following table demonstrates the sensitivity of the Group's
loss before tax due to a change in the fair value of monetary
assets and liabilities resulting from a reasonably possible change
in the US dollar, with all other variables held constant.
Appreciation/ Effect on loss Effect on net
(depreciation) before tax asset value
in US$ US$'000 US$'000
------ ---------------- --------------- --------------
2020 +10% 9 9
-10% (9) (9)
2019 +10% 72 72
-10% (72) (72)
------ ---------------- --------------- --------------
The assumed movement for currency rate sensitivity analysis is
based on the currently observable market environment.
The Group's assets and liabilities that are effectively
denominated in currencies other than the functional currency, US
Dollars, are:
GBP NOK RMB HKD CAD ZAR Total
2020 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------- --------- --------- --------- --------- --------- --------- ---------
Cash and bank
balances 93 - - - - - 93
Investments at
FVTPL* - - - - - - -
Loans - - - - - - -
Trade and other
receivables - - - - - - -
Total Assets 93 - - - - - 93
--------------------- --------- --------- --------- --------- --------- --------- ---------
Trade and other
payables - - - - - - -
Financial guarantee
contracts - - - - - - -
Provision - - - - - - -
Total Liabilities - - - - - - -
--------------------- --------- --------- --------- --------- --------- --------- ---------
GBP NOK RMB HKD CAD ZAR Total
2019 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------------------- --------- --------- --------- --------- --------- --------- ---------
Cash and bank
balances 24 - 1 63 - - 88
Investments at
FVTPL* - - - - - - -
Loans - - - - - - -
Trade and other
receivables - - (4) - - - (4)
Total Assets 24 - (3) 63 - - 84
--------------------- --------- --------- --------- --------- --------- --------- ---------
Trade and other
payables - - - - - - -
Financial guarantee
contracts - - - - - - -
Provision - - - - - - -
Total Liabilities - - - - - - -
--------------------- --------- --------- --------- --------- --------- --------- ---------
Liquidity risk
The table below analyses the Group 's financial liabilities into
relevant maturity groupings based on the remaining period at the
end of reporting period to the contractual maturity date or, if
earlier, the expected date on which the financial liabilities will
be settled . The amounts in the table are the contractual
undiscounted cash flows.
Liabilities
Carrying Less 3-12 over Total
amount than 1-3 months months 12 months
31 December 2020 1 month
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
---------------------- ------------------- ---------- ------------- --------- ------------ ---------
Other payables 170 170 - - - 170
Upper share rights
/contingent share
awards - - - - - -
Short-term borrowing - - - - - -
Total 170 170 - - - 170
---------------------- ------------------- ---------- ------------- --------- ------------ ---------
Liabilities
Carrying Less 3-12 over Total
amount than 1-3 months months 12 months
31 December 2019 1 month
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
---------------------- ------------------- ---------- ------------- --------- ------------ ---------
Other payables 296 296 - - - 296
Upper share rights
/contingent share
awards - - - - - -
Short-term borrowing - - - - - -
Total 296 296 - - - 296
---------------------- ------------------- ---------- ------------- --------- ------------ ---------
Concentration risk
The main concentration risk for Origo is that the largest
investments are concentrated in China for the amount of US$567,000
(2019: US$1,133,000), 67% (2019: 81%) out of the total portfolio
value of US$842,000 (2019: US$1,407,000).
Price risk
Price risk may affect the value of listed and unlisted
investments as a result of changes in market prices (other than
arising from interest rate risk or currency risk), whether caused
by factors specific to an individual investment, its issuer or
factors affecting all instruments traded in the market.
As the majority of financial instruments are carried at fair
value, with fair value changes recognised in the consolidated
statement of comprehensive income, all changes in market conditions
will directly affect reported portfolio returns.
Price risk is managed by constructing a diversified portfolio of
instruments traded on various markets and hedging where
appropriate.
The following table details the sensitivity to a 10% variation
in equity prices. The sensitivity analysis includes all equity
investments held at fair value through profit or loss and adjusts
their valuation at the year-end for a 10% change in value.
2020 2019
US$'000 US$'000
------------------- --------- ---------
Increase in price 84 141
Decrease in price (84) (141)
------------------- --------- ---------
The sensitivity to equity and fund investments has not increased
during the year due to net investments and investment portfolio
loss in the year.
21 Share-based payments
The Group has a number of share schemes that allow an
ex-director, certain ex-employees and its advisors to acquire
shares in the Company, as detailed in Note 1.4(d).
The total cost recognised in the consolidated statement of
comprehensive income is shown below:
2020 2019
US$'000 US$'000
-------------------------------------------- ---------- ---------
Equity-settled option - -
Upper share rights/contingent share awards - (103)
Total - (103)
-------------------------------------------- ---------- ---------
The following table illustrates the number ("No . ") and
weighted average exercise prices ("WAEP") of, and
movement s in, share options during the year s ended 31 December 2020 and 31 December 2019.
2020 2020 2019 2019
No. WAEP No. WAEP
---------------------------- ---------- ------- ----------- -------
Outstanding at 1 January 9,500,000 31.00p 10,000,000 32.37p
---------------------------- ---------- ------- ----------- -------
Granted during the year - - - -
Forfeited during the year - - - -
Exercised during the year - - - -
Expired during the year - - (500,000) -
Outstanding at 31 December 9,500,000 31.00p 9,500,000 31.00p
---------------------------- ---------- ------- ----------- -------
Exercisable at 31 December 9,500,000 31.00p 9,500,000 31.00p
---------------------------- ---------- ------- ----------- -------
The weighted average remaining contractual life for the share
options outstanding as at 31 December 2020 was 1.08 years (31
December 2019: 2.09 years).
Outstanding options include 9,500,000 equity-settled options
granted on 2 February 2012 respectively to certain directors and
employees of the Company. The Company did not enter into any
share-based transactions with parties other than employees during
the years from 2007 to 2018, except as described above.
During the years 2019 and 2020, there were no options granted,
forfeited or exercised.
The following table illustrates the number ("No.") and weighted
average exercise prices ("WAEP") of, and movements in upper share
rights and contingent share awards during the years ended 31
December 2020 and 31 December 2019.
2020 2020 2019 2019
No. WAEP No. WAEP
--------------------------- ---------- ------ ------------ ------
Outstanding at 1 January 2,993,358 9.48p 7,711,425 9.48p
--------------------------- ---------- ------ ------------ ------
Granted during the year - - - -
Forfeited during the year - - - -
Exercised during the year - - - -
Expired during the year - - (4,718,067) -
Outstanding at the end of
the year 2,993,358 9.48p 2,993,358 9.48p
--------------------------- ---------- ------ ------------ ------
Exercisable at the end of
the year 2,993,358 9.48p 2,993,358 9.48p
--------------------------- ---------- ------ ------------ ------
The weighted average remaining contractual life for the share
options outstanding as at 31 December 2020 was 1.08 years (2019:
2.09 years).
On 16 October 2009, 4,847,099 of upper share rights were granted
to certain director, executives and key employees under the
Company's joint share ownership scheme ("JSOS"). 50% of upper share
rights vested 12 months from the date of grant and 50% of upper
share rights vested 24 months from the date of grant. The fair
value of the upper share rights is estimated at the end of each
reporting period using the binomial tree option pricing model. The
contractual life of each upper share rights granted is 10 years and
therefore these all expired in the year ended 31 December 2019.
On 20 July 2012, 1,120,000 of contingent share awards were
granted to certain directors, executives and key employees under
the Company's JSOS, which vested 197 days from the date of grant.
The contractual life of each contingent share award granted is 10
years.
On 30 December 2014, 2,423,358 of share awards were granted to
certain key employees under the Company's JSOS, which vested
immediately at the date of grant. The contractual life of each
share offer granted is 10 years.
The carrying amount of the liability relating to the upper share
rights and the contingent share award as at 31 December 2020 is
US$nil (2019: US$nil) and the credit expense recognised as
share-based payments during the year is US$nil (2019:
US$103,000).
22 Related party transactions
Identification of related parties
The Group has a related party relationship with its
subsidiaries, associates and key management personnel. The Company
receives and pays certain debtors and creditors on behalf of its
subsidiaries and the amounts are recharged to the entities.
Transactions between the Company and its subsidiaries have been
eliminated on consolidation.
Transactions with key management personnel
The Group's key management personnel are the non-executive
directors as identified in the director's report.
The following balances were included in trade and other payables
and were outstanding in respect of Directors remuneration at the
year end.
2020 2019
--------------------------------
US$'000 US$'000
-------------------------------- -------- --------
Amounts due to related parties
Key management personnel:
Hiroshi Funaki - (19)
Philip Peter Scales (15) (15)
John Chapma n (80) (35)
23 Capital management
The primary objective s of the Group's capital management are to
safeguard the Group's ability to maintain healthy capital ratios in
order to support its business and maximise shareholder s'
value.
The Group manages and makes appropriate adjustments to its
capital structure on an ongoing basis in light of changes in
economic conditions and the risk characteristic of the underlying
assets. To maintain or adjust the capital structure, the Group may
adjust dividend payments to shareholders, return capital to
shareholders and/or issue new shares. The Group is not subject to
any externally imposed capital requirements. No changes were made
in the processes during the year s ended 31 December 2020 and 31
December 2019.
The Group monitors capital using a gearing ratio, which is net
debt divided by capital plus net debt. Net debt includes total
liabilities less cash and bank balances. Capital includes equity
attributable to equity holders of the parent company. The gearing
ratios as at the reporting dates were as follows:
2020 2019
US$'000 US$'000
------------------------------ -------- --------
Total liabilities 170 296
Less: Cash and bank balances (1,651) (2,455)
Net debt (1,481) (2,159)
------------------------------ -------- --------
Equity attributable to equity holders
of the parent 2,343 3,600
Capital 2,343 3,600
--------------------------------------- ------- -------
Capital and net debt 862 1,441
--------------------------------------- ------- -------
Gearing ratio (172%) (150%)
--------------------------------------- ------- -------
25 Summary of financial assets and financial liabilities by category
2020 2019
US$'000 US$'000
--------------------------------------------- -------- --------
Financial assets
Cash 1,651 2,455
Financial assets at amortised cost 20 34
Fair value through profit or loss -
designated 842 1,407
--------------------------------------------- -------- --------
2,513 3,896
--------------------------------------------- -------- --------
Financial liabilities
Financial liabilities measured at amortised
cost 170 296
Financial guarantee contracts - -
--------------------------------------------- -------- --------
170 296
--------------------------------------------- -------- --------
26 Commitments and contingencies
There were no material contracted commitments or contingent
assets or liabilities at 31 December 2020 (31 December 2019: none)
that have not been disclosed in the consolidated financial
statements.
27 Subsequent events
Celadon Mining Limited
In June 2020, the controlling shareholder of Celadon Mining Ltd.
("Celadon") informed the Company that Celadon had entered into an
agreement with a third party to sell Celadon's assets for
approximately RMB 330 million or approximately US$47 million with
closing scheduled for the earlier of (i) the lifting of certain
restrictions on travel in connection with the global pandemic or
(ii) 31 December 2020.
In March 2021 the controlling shareholder informed the Company
that the sale terms had been renegotiated and that RMB 282 million
was expected to be paid over the 12 month period to 31 March 2022.
This would have provided a return of approximately US$ 3.4 million
after expenses to the Company.
During May 2021, the controlling shareholder of Celadon advised
that the agreed payment schedule is not being met and that there
are difficulties in getting the money from China. The Company has
been informed that the payments will be made but that the timing
will be delayed. No details have been supplied as to the likely
timing of any payments.
The Company invested approximately US$ 13.1 million in Celadon
in 2011. In the Company's last interim accounts dated 30 June 2020,
the Celadon investment was carried at a fair value of US$1.129
million. In light of the information received and the level of
uncertainty as to the recoverability of any funds, the Directors
have agreed to write the value down by 50% to US$ 0.565 million.
This is approximately 25% of the likely return.
The Company has not been involved in the negotiations for the
sale of the Celadon assets and has no direct insight into whether
closing will occur as planned.
Gobi Coal & Energy Ltd.
On 7 June 2021 the Company announced the sale of its entire
investment in Gobi Coal & Energy Ltd. (Gobi Coal) for
US$275,438.
COVID-19
The extent of the impact of the coronavirus ("COVID-19")
outbreak on the financial performance of the company's investments
will depend on future developments, including the duration and
spread of the outbreak and related advice and restrictions and the
impact of COVID-19 on the financial markets and the overall
economy, all of which are highly uncertain and cannot be predicted.
If the financial markets and/or the overall economy are impacted
for an extended period, the company's investment results may be
materially adversely affected.
Statement of Compliance with the QCA Corporate Governance
Code
(This disclosure was last reviewed and updated on 25 June
2021)
Introduction
The Board of Origo Partners Plc (the "Company") has adopted the
2018 QCA Corporate Governance Code (the "QCA Code"). The Board
intends to take appropriate measures to ensure that the Company
complies with the QCA Code.
Principle 1 - Establish a strategy and business model which
promote long-term value for shareholders
The Company is now in realisation mode and entered into an
amended Asset Realisation Agreement with the Company's investment
consultant Origo Advisers Limited on 20 April 2018. This Agreement
was terminated for cause in March 2019.The Company holds the
remainder of a portfolio of unquoted interests and illiquid,
publicly traded, equity interests, in companies principally based
or active in China and Mongolia ("Portfolio").The Board of Origo
Partners Plc (the "Company") has adopted the 2018 QCA Corporate
Governance Code (the "QCA Code"). The Board intends to take
appropriate measures to ensure that the Company complies with the
QCA
Code.Principle 1 - Establish a strategy and business model which
promote long-term value for shareholders
The Company is now in realisation mode and entered into an
amended Asset Realisation Agreement with the Company's investment
consultant Origo Advisers Limited on 20 April 2018. This Agreement
was terminated for cause in March 2019.
The Company holds the remainder of a portfolio of unquoted
interests and illiquid, publicly traded, equity interests, in
companies principally based or active in China and Mongolia
("Portfolio").
The Company shall, through an orderly realisation program, seek
to divest the entire Portfolio over a period of no longer than 4
years ("Realisation Period") at such time and under such conditions
as the Independent Directors may determine in order to maximize
value on behalf of Shareholders. The 4-year period ended on 20
November 2018. On 24 December 2019, the Company announced its
intention to put the remaining assets up for auction. On 7 May 2020
the Company announced that the auction process had been delayed due
to the effect of the Covid-19 pandemic.
The Company's realisation policy will not result in any
immediate or accelerated sales; investments will only be realised
when, in the opinion of the Independent Directors, appropriate
terms can be agreed.
During the Realisation Period, the Company shall maintain the
ability at its discretion, to pursue follow-on investments in the
existing Portfolio companies in order to maximize value and/or
facilitate future divestments.
All divestments, and any follow-on investments relating to a
Portfolio company, above a cumulative threshold of US$500,000, will
be considered and approved by the Independent Directors.
Net proceeds of divestments shall, pursuant to the Company's
Articles of Association, be distributed to shareholders at such
time as determined by the Board of Directors, at its absolute
discretion, for the purpose of maximizing returns to shareholders
while maintaining sufficient liquidity for working capital and
provisions for follow-on investments.
Principle 2 - Seek to understand and meet shareholder needs and
expectations
Although the Company is in realisation mode the Directors
actively seek to build a relationship with its shareholders and
continue to manage shareholder's expectations. The Company remains
committed to listening and communicating openly with its
shareholders to ensure that its strategy and performance are
clearly understood. Meetings are held with shareholders, typically
following the issuing of results.
For shareholders the AGM is the main forum for dialogue with the
Board and Directors are available to answer questions raised by
shareholders. The results of the AGM are subsequently published on
the Company's website.
There are also periodic class meetings held which is another
forum for dialogue with the Directors, the results of these class
meetings are also published on the Company's website. The Directors
are the main point of contact for the shareholders.
Principle 3 - Take into account wider stakeholder and social
responsibilities and their implications for long-term success.
This principle now has limited applicability, given that the
investment policy of the Company is to realise its portfolio and to
return the net proceeds to shareholders. The Board has oversight,
accountability and contact with key resources and
relationships.
The Group's stakeholders include shareholders, auditors,
regulators and industry bodies.
Engaging with stakeholders strengthens relationships and helps
with business decisions in order to deliver the investment
policy.
Principle 4 - Embed effective risk management, considering both
opportunities and threats, throughout the organisation.
The Company's investment activities expose it to various types
of risks, which are associated with the financial instruments and
markets in which it invests. The Board needs to ensure that the
Company's risk management framework identifies and addresses all
relevant risks.
The Board is responsible for reviewing and evaluating risk and
considers the risks to the business at regular board meetings.
The Group is exposed through their operations to one or more of
the following risks:
Country risk
-- Fair value risk
-- Cash flow interest rate risk
-- Currency risk
-- Credit risk
-- Liquidity risk
-- Concentration risk
-- Price riskCovid-19 pandemic risk
The policy for managing these risks is set by the board and is
available to view on the Company's website.
The Board has overall responsibility for the Company's systems
of internal controls, for reviewing their effectiveness and
ensuring efficient day to day operations. These controls aim to
ensure that assets of the Company are safeguarded, proper
accounting records are maintained and the financial information
used within the business and for publication are reliable.
Following their appointment in 2017, the new board appointed FIM
Capital Limited as Administrator in order to improve the levels of
corporate governance, accounting and day to day management of the
Company.
Principle 5 - Maintain the board as a well-functioning, balanced
team led by the chair.
The Origo board was reconstituted in late 2017 with the
appointment of three new directors and the resignations of two of
the incumbent directors. In September 2017, Hiroshi Funaki joined
the Origo board as a nominee of Origo's largest ordinary
shareholder. On 31 October 2017, John Chapman joined the Origo
board as a nominee of our largest preference shareholder. Also, on
31 October 2017, Philip Scales joined the board as an independent
director. John Chapman was elected the Company's Chairman. In April
2018, Niklas Ponnert an employee of the investment adviser resigned
from the Board.
In the period since the new board was appointed, the primary
focus has been to establish more robust controls over company
assets, strengthen the Company's capital position by repaying debt,
reduce costs, renegotiate the advisory agreement, clarify the
assets owned and begin to accelerate the realization of company
assets in order to be able to return cash to shareholders.
The Board now comprises three non- executive directors, John
Chapman (Chairman), Hiroshi Funaki and Philip Scales and all three
have an effective and an appropriate balance of skills and
experience for a company of this size.
The Board holds regular meetings, a minimum of at least 4 times
per annum, either formally in person or informally by telephone and
ad hoc meetings are held as required. For the year ended 31
December 2020 five board meetings took place. All meetings were
attended by all directors.
Principle 6 - Ensure that between them the directors have the
necessary up-to-date experience, skills and capabilities.
The Board currently consists of three Non- Executive Directors.
The Board is satisfied that between the Directors it has an
effective and appropriate balance of skills and experience,
reflecting a broad range of commercial and professional skills
across geographies and industries that is necessary to ensure the
Company is equipped to deliver is investment objective.
Additionally, each Director has experience with public
companies.
John Chapman is an experienced investment company director with
significant experience in managing and advising investment
companies in many emerging and developed markets. Mr. Chapman is a
member of the New York State Bar and holds the Chartered Financial
Analyst (CFA) credential.
Hiroshi Funaki worked at Edmond de Rothschild Securities from
2000 to 2015 where he led the Investment Companies team, focusing
on Emerging Markets and Alternative Assets. Prior to that, he was
Head of Research at Robert Fleming Securities, also specialising in
closed-end funds. He currently acts as a consultant to a number of
emerging market investors. He has a BA in Mathematics and
Philosophy from Oxford University.
Philip Scales has over 40 years' experience working in offshore
corporate, trust, and third party administration. For 18 years, he
was Managing Director of Barings Isle of Man (subsequently to
become Northern Trust) where he specialised in establishing
offshore fund structures, latterly in the closed-ended arena (both
listed and unlisted entities). Mr. Scales subsequently co-founded
FIM Capital Limited where he is Deputy Chairman. He is a Fellow of
the Institute of Chartered Secretaries and Administrators and holds
a number of directorships of listed companies and collective
investment schemes.
FIM Capital Limited ("FIM") is the Fund's administrator,
registrar and registered agent, and provide specialist fund
administration services to a variety of closed ended funds and
collective investment schemes. Many of the closed ended schemes are
quoted on the London Stock Exchange. FIM Capital Limited act as
secretary to the Company and are available to advise and support
the Board on corporate governance and secretarial matters.
Legal firms in London and China have been appointed to
specifically provide advice to the Board on all matters relating to
the sale of the portfolio of assets.
Principle 7 - Evaluate board performance based on clear and
relevant objectives, seeking continuous improvement.
As the Company is in realisation mode, no formal board
evaluation has been carried out.
Principle 8 - Promote a corporate culture that is based on
ethical values and behaviours.
It is the Board who set the standard/culture within the
organisation and they ensure that there are appropriate codes of
practice in place.
Principle 9 - Maintain governance structures and processes that
are fit for purpose and support good decision-making by the
board.
The Board has joint authority and decision-making powers for all
aspects of the Company's activities.
The Board has adopted appropriate delegations of authority that
set out matters that are reserved to the Board.
The Non-Executive Chairman is responsible for the effectiveness
of the Board together with the responsibility to oversee the
Company's corporate governance practices.
The responsibility for the Company's day-to-day operations has
been delegated by the Board to FIM.
There are no separate committees as the board does not feel
these are necessary given the size of the Board, the Company and
the investment objective of realising all assets matters normally
considered by a committee are considered by the Board as a
whole.
Whilst there has been no formal adoption of matters reserved for
the Board, the Directors review and approve the following:
-- Strategy and management
-- Policies and procedures
-- Financial reporting and controls
-- Capital structure
-- Contracts
-- Shareholder documents / Press announcements
-- Adherence to Corporate Governance and best practice procedures
Principle 10 - Communicate how the Company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders.
There are no additional committees and the board does not feel
it is necessary at this time due to the size of the Company and the
fact that it is in realisation mode.
If a significant proportion of votes (e.g. 20% of independent
votes) have been cast against a resolution at any general meeting,
the Company will include, on a timely basis, an explanation of what
actions it intends to take to understand the reasons behind that
vote result, and, where appropriate, any different action it has
taken, or will take, as a result of the vote
The results of votes taken at meetings are published on the
Company's website. Historical annual reports and notices are also
published on the website.
COMMITTEES
As detailed in Principle 5 there are no Board committees (and
therefore no committee reports) and this will be highlighted in
future Reports and Accounts.
The Company will monitor and review the need to form Committees
to support the function of the Board.
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END
FR DKPBPPBKDAAB
(END) Dow Jones Newswires
June 28, 2021 02:00 ET (06:00 GMT)
Origo Partners (LSE:OPP)
過去 株価チャート
から 11 2024 まで 12 2024
Origo Partners (LSE:OPP)
過去 株価チャート
から 12 2023 まで 12 2024
