TIDMPCGB
RNS Number : 6380R
Power Capital Global Ltd
30 June 2015
30 June 2015
POWER CAPITAL GLOBAL LIMITED
("Power Capital" or "the Company")
Audited results for the year ended 31 December 2014
Power Capital Global Limited (AIM:PCGB) announces its audited
results for the year ended 31 December 2014. The Reports and
Financial Statements for the year ended 31 December 2014 are
expected to be posted to shareholders and to be available to
download on the Company's website, www.powercapitalglobal.com
shortly.
Further information
Power Capital Global
Limited
Craig Niven Tel: 01473 313800
Northland Capital
Partners Limited
Edward Hutton/Gerry Tel: +44 (0)20 7382 1100
Beany
Chairman's Statement
Summary
The Company's limited progress in developing an Asia based
natural resources trading and logistics platform during the first
half of 2014 suffered further deterioration during the second half
of the year under review. The Company announced on 29(th) September
2014 that it would undertake a strategic review in recognition of
an extremely competitive resources trading environment where
margins are generally under pressure and volume growth is modest to
non-existent.
No improvement in market conditions was detected during the
following nine months and with little prospect of an improvement in
the foreseeable future, the Board concluded its strategic review
and announced on 12(th) June 2015 that it had determined that
Company would exit the natural resources trading business with
immediate effect.
Investing company status and suspension of trading
Following the cessation of its trading business, the Company was
deemed to have become an investing company for the purposes of Rule
15 of the AIM Rules for Companies. As previously stated, the
directors propose to despatch a circular to shareholders convening
a general meeting to adopt an investing policy (the "Circular") to
make investments in the gaming, leisure, entertainment, gambling
and associated financial product sectors in Asia. Further details
of the proposed investing policy will be contained in the
Circular.
The Company is required either to complete a reverse takeover
under Rule 14 of the AIM Rules or otherwise implement the investing
policy (to the satisfaction of the London Stock Exchange) within
twelve months of becoming an investing company.
In light of the Company's inability, given the level of its cash
balances, to implement an investing policy as required under Rule
15 of the AIM Rules, the Board requested that trading in the
Company's shares on AIM be suspended (pursuant to Rule 40 of the
AIM Rules) pending the Company either completing a reverse takeover
under Rule 14 of the AIM Rules or securing an increase in its cash
balances sufficient to facilitate the implementation of its
proposed investing policy to the satisfaction of the London Stock
Exchange without completing a reverse takeover. The suspension was
effective on 12 June 2015.
Indonesia
PCG Coal (Indonesia) Limited ("PCI"), our 51% joint venture
operating company, sought to manage its off-take agreement (the
"Agreement") with PT Perdana Maju Utama ("PMU") throughout
2014.
PCI had previously provided advance payments under the Agreement
of US$2 million (the "Advance") in 2013 and these funds were used
by PMU to commence commercial strip mining activities on its
concession. Under an addendum signed in September 2013, PMU was
permitted to sell its mined concession thermal coal direct to third
party customers rather than to PCI but was required to compensate
PCI at a rate of US$3.20 per metric tonne sold, comprised of two
parts: (i) US$1.50 in commission payments; and (ii) a repayment of
the Advance principal of US$1.70. The minimum committed monthly
sales volume was agreed at 50,000 metric tonnes.
PCI invoiced PMU for the minimum monthly contract delivery of
50,000 metric tonnes in accordance with the Agreement, as amended,
in each month during the reporting period. PMU made its last
monthly payment to the Company on 2(nd) September 2014. At the date
of this report, PCI has invoiced PMU fully for the committed
off-take volume under the Agreement (1,000,000 metric tonnes).
The total value of commission income generated under the
Agreement in the reporting period was approximately GBP573,000 and
the balance on the Advance has been reduced under invoice to
approximately GBP208,000 as at the reporting date. A total amount
of GBP808,000 was invoiced but unpaid at the end of the reporting
period.
TSI
The Company is disappointed to report that it has made no
progress in its efforts to hold constructive discussions with the
management and owners of TSI Holdings Limited ("TSI"). The Company
is taking formal steps to achieve redress over the current default
on loan repayments from TSI using all forms of recourse available
to it. The amount outstanding under the TSI facility (including
accrued interest) is GBP0.72 million (US$1.12 million) and it is
fully provided for.
Mongolia
The Company has a 1.4% equity stake in Asia Pacific Investment
Partners Limited ("APIP"). APIP continues to progress its plan to
secure a stock exchange listing in Singapore. APIP reported profit
for 2014 of US$19.9 million (GBP12.7 million) and its net assets
increased to US$42.0 million (GBP26.7 million).
As part of its investment strategy, the Board plans to realise
the Company's trading and investment assets which includes the APIP
stake, however, this is not expected to be achieved during the
coming six months and consequently this investment is reported as a
non-current asset.
APIP has developed an early stage exploration license targeting
an identified major copper-gold porphyry system located in the
South Gobi. APIP re-organised its mineral exploration and mining
subsidiary assets into a standalone corporate entity known as
Mongolian Metals Corporation at the end of 2013 and this was
subsequently de-merged from APIP through a distribution of its
shares by way of a dividend in specie. A suitable strategic and
financial partner is currently being sought to advance the mineral
exploration program.
Corporate Matters
Operating costs have been substantially reduced during the
reporting period. All of the employees resigned at the end of
October 2014 with the exception of Simon Dewhurst, the Chief
Executive Officer, who resigned in June 2015 but remained on the
board. Lin Kung-Min, the Company's non-executive Chairman,
immediately assumed the role of interim Chief Executive
Officer.
The board had previously agreed to suspend cash settlement of
fee payments due to directors in 2013. The total amount accrued but
unpaid to directors at the end of the reporting period is
GBP425,000. The total amount of salary accrued but unpaid to the
former Chief Executive Officer at the end of the reporting period
is GBP29,000. It remains the position of the Company's directors
that the moratorium on the settlement of director fees and Chief
Executive Officer salary should remain in place until the Company's
funding and / or positive cashflow outlook is significantly
improved.
Mr Newell resigned from the board of the Company in August
2014.
The Company continues to benefit from financial support from
Kolarmy Technology INC ("Kolarmy"), a related party company, in the
form of a loan facility. The existing facility (US$9 million) was
renewed on 13(th) June 2015 for a further 12 months. The facility
is drawn by approximately US$5.8 million (GBP3.7 million) as of the
reporting date of these financial statements.
Lin Heng-Jui is the majority shareholder of Kolarmy. The renewal
of the Kolarmy facility is a related party transaction under the
AIM Rules. The directors of the Company, other than Lin Heng-Jui,
having consulted with Northland Capital Partners Limited, the
Company's nominated adviser, consider that the terms of the renewal
of the Kolarmy loan facility are fair and reasonable so far as the
shareholders of the Company are concerned.
Lin Kung-Min
Chairman
30 June 2015
Consolidated Statement of Profit Or Loss And Other Comprehensive
Income
For The Year Ended 31 December 2014
Notes 2014 2013
GBP GBP
Revenue 2 - 532,971
Cost of sales - (492,475)
------------- -------------
Gross profit - 40,496
Administrative expenses (2,338,796) (2,193,786)
------------- -------------
Operating loss (2,338,796) (2,153,290)
Other income 2 582,076 253,079
Finance costs 4 (97,256) (119,834)
------------- -------------
Loss before taxation 5 (1,853,976) (2,020,045)
Income tax expense 6 - (2,226)
------------- -------------
Loss for the year
after taxation (1,853,976) (2,022,271)
Other comprehensive
income - -
------------- -------------
Total comprehensive
loss (1,853,976) (2,022,271)
============= =============
Attributable to:
Owners of the parent (1,253,232) (2,026,093)
Non-controlling interests (600,744) 3,822
------------- -------------
Total comprehensive
loss (1,853,976) (2,022,271)
============= =============
Loss per share (basic) 7 (GBP0.017) (GBP0.030)
============= =============
Consolidated Statement of Financial Position
As At 31 December 2014
Notes 2014 2013
GBP GBP
Non-current assets
Property, plant and
equipment 10 9,703 21,107
Available-for-sale
investments 11 1,273,502 1,273,502
------------ ------------
1,283,205 1,294,609
Current assets
Trade and other receivables 12 549,827 1,657,711
Cash and cash equivalents 3,046 109,001
552,873 1,766,712
Current liabilities
Other payables and
accruals 14 1,307,582 799,259
Amounts due to related
companies 15 3,603,228 3,481,857
Provision for current
tax - 961
------------ ------------
4,910,810 4,282,077
Net current liabilities (4,357,937) (2,515,365)
------------ ------------
Net liabilities (3,074,732) (1,220,756)
============ ============
Equity
Share capital 16 6,229,328 6,229,328
Reserves (8,751,513) (7,498,281)
------------ ------------
Equity attributable
to owners of the parent (2,522,185) (1,268,953)
Non-controlling interests (552,547) 48,197
------------ ------------
Capital deficiencies (3,074,732) (1,220,756)
============ ============
Company Statement of Financial Position
As At 31 December 2014
Notes 2014 2013
GBP GBP
Non-current assets
Investments in subsidiaries 9 2 2
------------ ------------
Current assets
Other receivables 12 418,330 418,330
Amounts due from subsidiaries 13 1,273,322 1,273,322
Cash and cash equivalents 4 2,384
------------ ------------
1,691,656 1,694,036
Current liabilities
Other payables and accruals 14 592,359 227,206
Amounts due to subsidiaries 13 673,370 632,453
1,265,729 859,659
Net current assets 425,927 834,377
------------ ------------
Net assets 425,929 834,379
============ ============
Equity
Share capital 16 6,229,328 6,229,328
Reserves (5,803,399) (5,394,949)
------------ ------------
Total equity 425,929 834,379
============ ============
Consolidated Statement of Cash flows
For The Year Ended 31 December 2014
Notes 2014 2013
GBP GBP
Cash flows from operating
activities
Loss before taxation (1,853,976) (2,020,045)
Adjustments for:
Depreciation of property,
plant and equipment 11,404 15,563
Dividend income - (180)
Provision for bad and doubtful
debts 949,818 696,735
Equity-settled share-based
payment - 86,939
Interest income 2 - (31,834)
Finance costs 4 97,256 119,834
Operating cash flows before
movements in working capital (795,498) (1,132,988)
Decrease/(Increase) in
trade
and other receivables 158,066 (1,466,728)
Increase in other payables
and accruals 411,067 304,244
Net cash used in operations (226,365) (2,295,472)
Income tax paid (961) (2,211)
Net cash used in operating
activities (227,326) (2,297,683)
Cash flows from investing
activities
Additions of property, plant
and equipment - (895)
Interest received - 1
Net cash used in investing
activities - (894)
Cash flows from financing
activities
Loans from related companies 134,104 2,364,324
Repayments of loans from
a related company (12,733) (159,165)
Net cash generated from
financing activities 121,371 2,205,159
Decrease in cash and cash
equivalents (105,955) (93,418)
Cash and cash equivalents
at beginning of the year 109,001 202,419
Cash and cash equivalents
at end of the year 3,046 109,001
Cash and cash equivalents
consist of:
Cash at bank and in hand 3,046 109,001
Company Statement of Cash
flows
For The Year Ended 31 December
2014 2014 2013
GBP GBP
Cash flows from operating
activities
Loss before taxation (408,450) (868,116)
Adjustments for:
Equity-settled share-based
payment - 86,939
Operating cash flows before
movements in working capital (408,450) (781,177)
Increase in trade and
other
receivables - (418,330)
Decrease in amounts due from
subsidiaries - 467,992
Increase in other payables
and accruals 365,153 92,325
Increase in amounts due to
subsidiaries 40,917 632,453
Net cash used in operating
activities (2,380) (6,737)
Decrease in cash and cash
equivalents (2,380) (6,737)
Cash and cash equivalents
at beginning of the year 2,384 9,121
Cash and cash equivalents
at end of the year 4 2,384
Cash and cash equivalents
consist of:
Cash at bank and in hand 4 2,384
Consolidated Statement of Changes In Equity
For The Year Ended 31 December 2014
Share Accumulated Total Non- Total
capital losses controlling
interest
GBP GBP GBP GBP GBP
At 1 January
2013 3,057,598 (5,472,188) (2,414,590) 44,375 (2,370,215)
Loss for
the year - (2,026,093) (2,026,093) 3,822 (2,022,271)
Other comprehensive - - - - -
income
----------- ------------- ------------- ------------- -------------
Total comprehensive
loss - (2,026,093) (2,026,093) 3,822 (2,022,271)
----------- ------------- ------------- ------------- -------------
Issue of
shares upon
conversion
of Convertible
Loan Notes 3,075,977 - 3,075,977 - 3,075,977
Issue of
shares upon
equity-settled
share-based
arrangement
(Note 17) 95,753 - 95,753 - 95,753
----------- ------------- ------------- ------------- -------------
At 31 December
2013 and
1 January
2014 6,229,328 (7,498,281) (1,268,953) 48,197 (1,220,756)
Loss for
the year - (1,253,232) (1,253,232) (600,744) (1,853,976)
Other comprehensive -
income - - - -
----------- ------------- ------------- ------------- -------------
Total comprehensive
loss - (1,253,232) (1,253,232) (600,744) (1,853,976)
----------- ------------- ------------- ------------- -------------
At 31 December
2014 6,229,328 (8,751,513) (2,522,185) (552,547) (3,074,732)
=========== ============= ============= ============= =============
Company Statement of Changes In Equity
For The Year Ended 31 December 2014
Share capital Accumulated Total
losses
GBP GBP GBP
At 1 January
2013 3,057,598 (4,526,833) (1,469,235)
Loss for the
year - (868,116) (868,116)
Other comprehensive - - -
income
-------------- ------------- -------------
Total comprehensive
loss - (868,116) (868,116)
Issue of shares
upon conversion
of Convertible
Loan Notes 3,075,977 - 3,075,977
Issue of shares
upon equity-settled
share-based arrangement
(Note 17) 95,753 - 95,753
-------------- ------------- -------------
At 31 December
2013 and
1 January 2014 6,229,328 (5,394,949) 834,379
Loss for the
year - (408,450) (408,450)
Other comprehensive
income - - -
-------------- ------------- -------------
Total comprehensive
loss - (408,450) (408,450)
At 31 December
2014 6,229,328 (5,803,399) 425,929
============== ============= =============
Notes To The Financial Statements
For The Year Ended 31 December 2014
1 Accounting Policies
Basis of accounting
The financial statements of Power Capital Global Limited on
pages 9 to 48 have been prepared in accordance with International
Financial Reporting Standards ("IFRSs") which collective term
includes all applicable individual International Financial
Reporting Standards, International Accounting Standards and
Interpretations issued by the International Accounting Standards
Board (the "IASB"), as adopted by the European Union.
The significant accounting policies adopted are detailed
below:
Accounting convention
The accounts have been prepared under the historical cost
convention.
Going concern basis
As at 31 December 2014, the Group had net current liabilities of
GBP4,357,937 and made a loss of GBP1,253,232.
On 29 September 2014 the Company announced that it was
undertaking a strategic review of its Asia-based natural resources
trading and logistics business in the light of adverse market
conditions.
Board has not detected any improvement in market conditions
since that time and it considers that there is little prospect of
an improvement in the foreseeable future. Consequently, the Board
concluded on 12 June 2015 that the Company should exit this
business with immediate effect.
Following the cessation of its trading business, the Company is
deemed to have become an investing company for the purposes of Rule
15 of the AIM Rules for Companies. In due course, the Company will
dispatch a circular to shareholders convening a general meeting to
adopt an investing policy (the "Circular") to make investments in
the gaming, leisure, entertainment, gambling and associated
financial product sectors in Asia. Further details of the proposed
investing policy will be contained in the Circular.
The Company is required either to complete a reverse takeover
under Rule 14 of the AIM Rules or otherwise implement the investing
policy (to the satisfaction of the London Stock Exchange) within
twelve months of becoming an investing company.
As required under Rule 15 of the AIM Rules, the Board has
requested that trading in the Company's shares on AIM be
suspended.
The Company's cash balances at the end of April 2015 were under
GBP20,000. The Board considers that the Company is able to pay its
liabilities as they fall due by virtue of its loan facility with
Kolarmy Technology Inc. to fund its day-to-day working capital
requirements (the undrawn amount of which is approximately US$2
million). However, the Board recognises that the Company would need
to increase its cash resources to a more meaningful level in order
to facilitate the implementation of its proposed investing
policy.
Accordingly, the directors have prepared the financial
statements on a basis other than the going concern basis.
On 13 June 2015, the Group secured a new agreement for a total
of US$9 million twelve month loan facility from Kolarmy
Technologies Inc. ("Kolarmy"), a company under the control of Mr.
Lin Heng-Jui and the director of the Company, to be drawn by the
Group to fund its investing and operating expenditure requirements.
This loan facility has a term of one year and bears interest at
LIBOR plus 3% per annum and replaced the previous loan agreement
with Kolarmy dated 13 June 2014. Kolarmy has confirmed to the
Directors of the Company that it is committed to providing
financial support to the extent necessary, to enable the Group to
meet its liabilities as and when they fall due for at least twelve
months from the date that these financial statements are approved
by the directors.
The Board also plans to raise new equity and expects to complete
a fund raise within the next few months in order to facilitate its
proposed investing policy.
Basis of consolidation
The Group financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) prepared to 31 December each year. Control is
achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain
benefits from its activities. In assessing control, the Group takes
into consideration the existence and effect of potential voting
rights that currently are exercisable or convertible.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated statement of comprehensive
income from the effective date of acquisition or up to the
effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group.
All intra-group transactions and balances and any unrealised
gains and losses arising from intra-group transactions are
eliminated in preparing the consolidated financial statements.
Subsidiaries
Subsidiaries are entities over which the Group has the power to
control the financial and operating policies so as to obtain
benefits from their activities. The existence and effect of
potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group
controls another entity.
In consolidated financial statements, acquisition of
subsidiaries (other than those under common control) is accounted
for by applying the acquisition method. This involves the
estimation of fair value of all identifiable assets and
liabilities, including contingent liabilities of the subsidiary, at
the acquisition date, regardless of whether or not they were
recorded in the financial statements of the subsidiary prior to
acquisition. On initial recognition, the assets and liabilities of
the subsidiary are included in the consolidated statement of
financial position at their fair values, which are also used as the
bases for subsequent measurement in accordance with the Group's
accounting policies.
In the Company's statement of financial position, subsidiaries
are carried at cost less any impairment loss unless the subsidiary
is held for sale or included in a disposal group. The results of
subsidiaries are accounted for by the Company on the basis of
dividends received and receivable at the reporting date.
Subsidiaries
All dividends whether received out of the investee's pre or
post-acquisition profits are recognised in the Company's profit or
loss.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable net of discounts and other sales related
taxes.
Sales of goods are recognised when goods are delivered and title
has passed.
Commission income is recognised when the agreed services have
been provided.
Dividend income is recognised when the right to receive the
dividend is established.
Interest income, is calculated using the effective interest
method by applying the rate that discounts the estimated future
cash receipts through the expected life of the financial instrument
or a shorter period, when appropriate, to the net carrying amount
of the financial asset.
Property, plant and equipment
Property, plant and equipment, other than construction in
progress, are stated at cost less accumulated depreciation and any
accumulated impairment losses. The cost of an item of property,
plant and equipment comprises its purchase price and any directly
attributable costs of bringing the asset to its working condition
and location for its intended use.
Depreciation is calculated on the straight-line basis to write
off the cost of each item of property, plant and equipment, other
than construction in progress, to its residual value over its
estimated useful life, as follows:
Furniture, fixtures and
equipment 20%
Electronic equipment 331/3%
Computer equipment 331/3%
The assets' residual values, useful lives and depreciation
methods are reviewed, and adjusted if appropriate, at least at the
end of each reporting period.
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss on disposal or retirement
recognised in profit or loss in the period the asset is
derecognised is the difference between the net sales proceeds and
the carrying amount of the relevant asset.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. All other costs, such as repairs and maintenance are
charged to profit or loss during the financial period in which they
are incurred.
Leases
An arrangement, comprising a transaction or a series of
transactions, is or contains a lease if the Group determines that
the arrangement conveys a right to use a specific asset or assets
for an agreed period of time in return for a payment or a series of
payments. Such a determination is made based on an evaluation of
the substance of the arrangement and is regardless of whether the
arrangement takes the legal form of a lease.
Classification of assets leased to the Group
Assets that are held by the Group under leases which transfer to
the Group substantially all the risks and rewards of ownership are
classified as being held under finance leases. Leases which do not
transfer substantially all the risks and rewards of ownership to
the Group are classified as operating leases.
Operating lease charges as the lessee
Where the Group has the right to use of assets held under
operating leases, payments made under the leases are charged to
profit or loss on a straight-line basis over the lease terms except
where an alternative basis is more representative of the time
pattern of benefits to be derived from the leased assets. Lease
incentives received are recognised in profit or loss as an integral
part of the aggregate net lease payments made.
Financial assets
Classification of financial assets
The Group's financial assets are classified into loans and
receivables and available-for-sale investments.
Management determines the classification of its financial assets
at initial recognition depending on the purpose for which the
financial assets were acquired and where allowed and appropriate,
re-evaluates this designation at the end of reporting period.
All financial assets are recognised when, and only when, the
Group becomes a party to the contractual provisions of the
instrument. Regular way purchases of financial assets are
recognised on trade date.
Derecognition of financial assets occurs when the rights to
receive cash flows from the instruments expire or are transferred
and substantially all of the risks and rewards of ownership have
been transferred.
At the end of each reporting period, financial assets are
reviewed to assess whether there is objective evidence of
impairment. If any such evidence exists, impairment loss is
determined and recognised based on the classification of the
financial asset.
Loans and receivables
These are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market.
Loans and receivables are initially recognised at fair value plus
directly attributable transaction costs and subsequently measured
at amortised cost using the effective interest method, less any
impairment losses. Amortised cost is calculated taking into account
any discount or premium on acquisition and includes fees that are
an integral part of the effective interest rate and transaction
cost.
Available-for-sale investments
These are initially measured at fair value, which ordinarily
equates to cost, including transaction costs. At subsequent
reporting dates, available-for-sale investments are measured at
fair value or at cost where fair value is not readily measurable.
Gains and losses arising from changes in fair value are recognised
in other comprehensive income and taken to the investment
revaluation reserve until the investment is disposed of or is
determined to be impaired, at which time the accumulated fair value
adjustments recognised in equity are included in the income
statement as 'gains and losses from investments'.
Impairment loss of financial assets
Objective evidence of impairment of individual financial assets
includes observable data that comes to the attention of the Group
about one or more of the following loss events:
- significant financial difficulty of the debtor;
- a breach of contract, such as a default or delinquency in interest or principal payments;
- it becoming probable that the debtor will enter bankruptcy or
other financial reorganisation; and
- significant changes in the technological, market, economic or
legal environment that have an adverse effect on the debtor.
For loans and receivables
An impairment loss is recognised in profit or loss when there is
objective evidence that the asset is impaired, and is measured as
the difference between the asset's carrying amount and the present
value of the estimated future cash flows discounted at the original
effective interest rate. The carrying amount of financial asset is
reduced through the use of an allowance account. When any part of
financial asset is determined as uncollectible, it is written off
against the allowance account for the relevant financial asset.
Impairment losses are reversed in subsequent periods when an
increase in the asset's recoverable amount can be related
objectively to an event occurring after the impairment was
recognised, subject to a restriction that the carrying amount of
the asset at the date the impairment is reversed does not exceed
what the amortised cost would have been had the impairment not been
recognised.
For available-for-sale financial assets
For available-for-sale equity investment that is carried at
cost, the amount of impairment loss is measured as the difference
between the carrying amount of the asset and the present value of
estimated future cash flows discounted at the current market rate
of return for a similar financial asset. Such impairment loss is
not reversed.
Financial liabilities
The Group's financial liabilities include other payables and
accruals, amounts due to related companies and convertible loan
notes.
Financial liabilities at amortised cost
Financial liabilities are recognised when the Group becomes a
party to the contractual provisions of the instrument. All interest
related charges are recognised as finance costs in profit or
loss.
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires.
Other payables and accruals, amounts due to related companies
are recognised initially at their fair value, net of directly
attributable transaction costs incurred and subsequently measured
at amortised cost, using the effective interest method.
Convertible loan notes at amortised costs
Convertible loan notes that can be converted to equity share
capital at the option of the holder, where the number of shares
that would be issued on conversion and the value of the
consideration that would be received at that time do not vary, are
accounted for as compound financial instruments which contain both
a liability component and an equity component.
Convertible loan notes issued by the Company that contain both
financial liability and equity components are classified separately
into respective liability and equity components on initial
recognition. On initial recognition, the fair value of the
liability component is determined using the prevailing market
interest rate for similar non-convertible debts. The difference
between the proceeds of the issue of the convertible loan notes and
the fair value assigned to the liability component, representing
the call option for conversion of the notes into equity, is
included in equity as convertible loan notes equity reserve.
On the issue date of convertible loan notes, if:
i. the noteholders confirm that the convertible loan notes will
be converted into the Company's shares within one year;
ii. the convertible loan notes carry a market interest rate,
with fixed conversion prices and exchange rate; and
iii. the directors of the Company opine that the fair value of
the embedded derivative relating to the foreign currency component
is immaterial on initial recognition,
then it would not be separated out. Accordingly the principal
amount of convertible loan notes would be fully recognised as a
current liability in the statement of financial position. The
liability component is subsequently carried at amortised cost using
the effective interest method.
When the notes are converted, the carrying value of the
liability component at the time of conversion is transferred to
share capital as consideration for the shares issued. If the note
is redeemed, the convertible loan notes liability will be
reversed.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
Accounting for income tax
Income tax comprises current tax and deferred tax.
Current income tax assets and/or liabilities comprise those
obligations to, or claims from, fiscal authorities relating to the
current or prior reporting period, that are unpaid at the end of
reporting period. They are calculated according to the tax rates
and tax laws applicable to the fiscal periods to which they relate,
based on the taxable profit for the year. All changes to current
tax assets or liabilities are recognised as a component of income
tax expense in profit or loss.
Deferred tax is calculated using the liability method on
temporary differences at the end of reporting period between the
carrying amounts of assets and liabilities in the financial
statements and their respective tax bases. Deferred tax liabilities
are generally recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary
differences, tax losses available to be carried forward as well as
other unused tax credits, to the extent that it is probable that
taxable profit, including existing taxable temporary difference,
will be available against which the deductible temporary
differences, unused tax losses and unused tax credits can be
utilised.
Deferred tax assets and liabilities are not recognised if the
temporary difference arises from goodwill or from initial
recognition (other than in a business combination) of assets and
liabilities in a transaction that affects neither taxable nor
accounting profit or loss.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary
differences and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred tax is calculated, without discounting, at tax rates
that are expected to apply in the period the liability is settled
or the asset realised, provided they are enacted or substantively
enacted at the end of reporting period.
Changes in deferred tax assets or liabilities are recognised in
profit or loss, or in other comprehensive income or directly in
equity if they relate to items that are charged or credited to
other comprehensive income or directly to equity.
Current tax assets and current tax liabilities are presented in
net if, and only if,
(a) the Group has the legally enforceable right to set off the recognised amounts; and
(b) intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
The Group presents deferred tax assets and deferred tax
liabilities in net if, and only if,
(a) the entity has a legally enforceable right to set off
current tax assets against current tax liabilities; and
(b) the deferred tax assets and the deferred tax liabilities
relate to income taxes levied by the same taxation authority on
either:
(i) the same taxable entity; or
(ii) different taxable entities which intend either to settle
current tax liabilities and assets on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
Retirement benefits and pensions schemes
Retirement benefits to employees are provided through defined
contribution plans. The Group operates a defined contribution
retirement benefit plan under the Mandatory Provident Fund Schemes
Ordinance (the "MPF Scheme"), for all of its employees who are
eligible to participate in the MPF Scheme. Contributions are made
based on a percentage of the employees' basic salaries.
Contributions are recognised as an expense in profit or loss as
employees render services during the year. The Group's obligations
under these plans are limited to the fixed percentage contributions
payable.
Share based payments
The cost of share-based employee compensation arrangements,
whereby employees receive remuneration in the form of shares or
share options, is recognised as an employee benefit expense in the
profit or loss.
All share-based compensation is ultimately recognised as an
expense in full at the grant date when the share options granted
vest immediately, with a corresponding increase in reserve. If
vesting periods or other vesting conditions apply, the expense is
recognised over the vesting period, based on the best available
estimate of the number of share options expected to vest.
Non-market vesting conditions are included in assumptions about the
number of options that are expected to become exercisable.
Estimates are subsequently revised, if there is any indication that
the number of share options expected to vest differs from previous
estimates. No adjustment to expense recognised in prior periods is
made if fewer share options ultimately are exercised than
originally vested.
When share options are exercised, the company issues new shares.
The proceeds (if any) received net of any directly attributable
transaction costs are credited to share capital account.
Foreign currencies
The financial statements are presented in Pounds Sterling. Each
entity in the Group determines its own functional currency and
items included in the financial statements of each entity are
measured using that functional currency. The functional currency of
the Company is Pounds Sterling.
In the individual financial statements of the consolidated
entities, foreign currency transactions are translated into the
functional currency of the individual entity using the exchange
rates prevailing at the dates of the transactions. At reporting
date, monetary assets and liabilities denominated in foreign
currencies are translated at the foreign exchange rates ruling at
that date. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the reporting date
retranslation of monetary assets and liabilities are recognised in
profit or loss.
Non-monetary items carried at fair value that are denominated in
foreign currencies are retranslated at the rates prevailing on the
date when the fair value was determined and are reported as part of
the fair value gain or loss. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not
retranslated.
In the consolidated financial statements, all individual
financial statements of foreign operations, originally presented in
a currency different from the Group's presentation currency, have
been converted into Pounds Sterling.
Assets and liabilities have been translated into Pounds Sterling
at the closing rates at the reporting date. Income and expenses
have been converted into Pounds Sterling at the exchange rates
ruling at the transaction dates or at the average rates over the
reporting period provided that the exchange rates do not fluctuate
significantly.
Any differences arising from this procedure have been recognised
in other comprehensive income and accumulated separately in the
exchange reserve in equity, if any.
Share capital
Ordinary shares are classified as equity. Share capital is
determined using the nominal value (if any) of shares that have
been issued and any premiums received on the issuance of shares
over the par value.
Any transaction costs associated with the issuance of shares are
deducted from share capital (net of any related income tax benefit)
to the extent they are incremental costs directly attributable to
the equity transaction.
Segment reporting
The Group identifies operating segments and prepares segment
information based on the regular internal financial information
reported to the executive directors for their decisions about
resources allocation to the Group's business components and for
their review of the performance of those components. The business
components in the internal financial information reported to the
executive directors are determined following the Group's major
operations.
Segment revenue, expenses, results, assets and liabilities
include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis to that segment. They
are determined before intragroup balance and intragroup
transactions are eliminated as part of the consolidation
process.
Significant judgements and estimates
The preparation of the financial statements requires management
to make judgments, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and liabilities, and
the disclosure of contingent liabilities. However, uncertainty
about these assumptions and estimates could result in outcomes that
could require a material adjustment to the carrying amounts of the
assets or liabilities affected in the future.
The key assumptions concerning the future and other key sources
of estimation uncertainty at the end of the reporting period, that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year, are discussed below.
Impairment of loans and receivables
The provision policy for doubtful debts of the Group is based on
the on-going evaluation of the collectability and ageing analysis
of the outstanding receivables and on the management's judgment. A
considerable amount of judgment is required in assessing the
ultimate realisation of these receivables, including
creditworthiness and the past collection history of each customer
and the related parties. If the financial conditions of the
customers and other debtors of the Group were to deteriorate,
resulting in an impairment of their ability to make payments,
additional impairment may be required.
Issued International Financial Reporting Standards ("IFRS")
In the current year, the Group has applied for the first time
the following new standards, amendments and interpretations (the
"new IFRSs") issued by the IASB and the International Financial
Reporting Interpretations Committee of the IASB, which are relevant
to and effective for the Group's financial statements for the
annual period beginning on 1 January 2014:
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests in Other Entities
IAS 27 (Amendment) Separate Financial Statements (2011)
IAS 28 (Amendment) Investments in Associates and Joint Ventures
IAS 32 (Amendment) Offsetting Financial Assets and Financial Liabilities
The adoption of these and other amended IFRSs had no material
impact on how the results and financial position for the current
and prior periods have been prepared and presented.
New or amended IFRSs that have been issued but are not yet
effective
The following new or amended IFRSs, potentially relevant to the
Group's financial statements, have been issued, but are not yet
effective and have not been early adopted by the Group.
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 15 Revenue from contracts with customers
IAS 19 (Amendment) Defined Benefit Plans: Employee Contributions
The directors of the Company (the "Directors") anticipate that
all of the pronouncements will be adopted in the Group's accounting
policy for the first period beginning after the effective date of
the pronouncement. The Directors are currently assessing the impact
of other new and amended IFRSs upon initial application.
2 Revenue and Other Income
2014 2013
GBP GBP
Revenue - 532,971
======== ========
Other income
Sundry income 9,081 22,614
Commission income 572,995 198,451
Dividend income - 180
Loan interest income - 31,833
Bank interest income - 1
-------- --------
582,076 253,079
======== ========
3 Segment Information
Segment revenues and results
The Group identifies operating segments and prepares segment
information based on the regular internal financial information
reported to the executive directors for their decisions about
resources allocation to the Group's business components and for
their review of the performance of those components. The business
components in the internal financial information reported to the
executive directors are determined following the Group's major
operations.
The Group's operating business are organised and managed
separately according to the nature of products, which each segment
representing a strategic business segment that offers different
natural resources products in Asia market.
No operating segments have been aggregated to form the following
reportable segments.
Coal business - Sales and distribution of steam coal
The following is an analysis of the Group's revenues and results
by reportable segments:
Segment revenue Segment profit/(loss)
2014 2013 2014 2013
GBP GBP GBP GBP
Sales of coal - 532,971 - 40,496
Other income 582,076 253,079
Unallocated corporate
expenses (2,338,796) (2,193,786)
Finance costs (97,256) (119,834)
---------------- ------------
Loss before taxation (1,853,976) (2,020,045)
================ ============
Revenue reported above represents revenue generated from
external customers. There were no intersegment sales during the
year (2013: Nil).
Segment loss represents the loss incurred by each segment
without allocation of central administration costs including
directors and administrative staff salaries, other income, finance
costs and income tax expense. This is the measure reported to the
chief operating decision maker for the purposes of resource
allocation and assessment of segment performance.
Segment Assets and Liabilities
2014 2013
GBP GBP
Segment assets
Coal business 10,336 1,065,403
Total segment assets 10,336 1,065,403
Unallocated corporate assets
* Property, plant and equipment 9,703 21,107
* Available-for-sale investments 1,273,502 1,273,502
* Trade and other receivables 539,640 593,115
* Cash and cash equivalents 2,897 108,194
------------ ------------
Consolidated assets 1,836,078 3,061,321
============ ============
Segment liabilities
Coal business (1,630,138) (1,631,168)
Total segment liabilities (1,630,138) (1,631,168)
Unallocated corporate liabilities
* Other payables and accruals (946,975) (438,583)
* Amount due to related companies (2,333,697) (2,212,326)
Consolidated liabilities (4,910,810) (4,282,077)
============ ============
For the purposes of monitoring segment performance and
allocating resources between segments:
- all assets are allocated to reportable segments other than
corporate assets; and
- all liabilities are allocated to reportable segments other
than corporate liabilities.
Geographical information
The geographical location of customers is based on the location
at which the goods are delivered and title has passed.
2014 2013
GBP GBP
Indonesia - 532,971
------- --------
- 532,971
======= ========
The Company is an investment holding company and the principal
place of the Group's operation is in Hong Kong.
For the purpose of segment information disclosures under IFRS 8,
the Group regarded Hong Kong as its country of domicile. Most of
the Group's non-current assets are principally attributable to Hong
Kong, being the single geographical region.
Information about major customers
Percentage of the customers accounting for 10% or more of total
revenue of the Group is as follows:
2014 2013
GBP GBP
Customer A - -
Customer B - 532,971
Customer C - -
======= ========
4 FINANCE COSTS
2014 2013
GBP GBP
Interest on advances from
a related company 97,256 86,140
Interest on convertible loan
notes - 33,694
------- --------
97,256 119,834
======= ========
5 Loss Before Taxation
Loss before taxation is stated after charging/(crediting) the
following:
2014 2013
GBP GBP
Auditors' remuneration 20,000 20,000
Depreciation of property,
plant and equipment 11,404 15,563
Staff costs (including directors'
emoluments)
- Salaries, wages and other
benefits 728,046 826,457
- Equity-settled share-based
payments - 86,939
- contributions to defined
contribution retirement plans 8,696 10,662
---------- --------
736,742 924,058
Operating lease expenses
- land and building 85,583 82,803
Provision for bad and doubtful
debts 1,139,213 696,735
Exchange loss net 7,974 9,626
========== ========
6 Income Tax Expense
No Hong Kong profits tax has been provided as the Group had no
estimated assessable profits arising in or derived from Hong Kong
for both years. Taxes on profits assessable elsewhere have been
calculated at the rates of tax prevailing in the jurisdictions in
which the Group operates, based on existing legislation,
interpretations and practices in respect thereof during the
year.
2014 2013
GBP GBP
Group
Current tax - Indonesia
In respect of current year - 2,226
Income tax expense - 2,226
======= ======
Pursuant to the rules and regulations of the British Virgin
Islands ("BVI"), the Group is not subject to any income tax in the
BVI.
Reconciliation between Group's income tax expense and accounting
loss at applicable tax rates is as follows:
2014 2013
GBP GBP
Loss before taxation (1,853,976) (2,020,045)
Notional tax at the rates
applicable to profits in
the jurisdictions concerned (305,906) (333,307)
Effect of different tax rates
of subsidiaries operating
in Indonesia - 293
Tax effect of non-assessable
income - (15)
Tax effect of non-deductible
expenses 8,275 210,169
Tax effect of temporary differences
not recognised
for deferred tax purposes 1,638 2,201
Tax effect of unrecognised
tax losses 295,993 122,885
------------ ------------
Income tax expense - 2,226
============ ============
No deferred tax asset has been recognised in relation to tax
loss of approximately HK$31 million (i.e. GBP2.5 million) (2013:
approximately HK$25 million (i.e. GBP2 million)) due to the
unpredictability of the future profit streams.
The Company is resident for corporation tax purposes in the
British Virgin Islands.
7 Loss Per Share Attributable to Owners of The parent
The basic loss per share has been calculated on the basis of the
net loss for the year attributable to owners of the Company of
GBP1,253,232 (2013: loss GBP2,026,093) and the weighted average
number of shares in issue as at 31 December 2014 of 74,423,932
(2013: 67,950,037).
Diluted loss per share is the same as basic loss per share as
there are no dilutive potential ordinary shares in issue.
8 Directors' Emoluments
The following directors' emoluments were received or receivable
by the Directors holding office during the year:
Salaries,
allowances, Contribution
and
other to pension
Fees benefits plans Total
GBP GBP GBP GBP
Year ended 31 December
2014
Executive Director
Simon Dewhurst 76,839 70,704 1,227 148,770
-------- ------------ ------------- --------
Non-Executive Directors
Craig Lees Baxter
Niven** 42,000 - - 42,000
Graham Newall 43,424 15,508 775 59,707
Lin Heng-Jui 46,045 - - 46,045
Lin Kung-Min* 120,000 - - 120,000
251,469 15,508 775 267,752
-------- ------------ ------------- --------
328,308 86,212 2,002 416,522
======== ============ ============= ========
Year ended 31 December
2013
Executive Director
Simon Dewhurst 78,870 70,704 1,227 150,801
-------- ------------ ------------- --------
Non-Executive Directors
Craig Lees Baxter
Niven** 42,000 - - 42,000
Graham Newall - 92,700 1,227 93,927
Lin Heng-Jui 35,890 - - 35,890
Lin Kung-Min* 120,000 - - 120,000
197,890 92,700 1,227 291,817
-------- ------------ ------------- --------
276,760 163,404 2,454 442,618
======== ============ ============= ========
* Long Sheng Asset Management Company, a company controlled by
Lin Kung-Min and his immediate family, received fees under a
consultancy agreement of GBP120,000 (2013: GBP120,000), for the
provision of advisory and support services to the Group.
** Zetachoice Limited, a company controlled by Craig Niven and
his immediate family, received fees under a consultancy agreement
of GBP42,000 (2013: GBP42,000), for the provision of advisory and
support services to the Group.
9 Investments in Subsidiaries - The Company
2014 2013
GBP GBP
At Cost
At 31 December 2 2
===== =====
Particulars of the principal subsidiaries at 31 December 2014
are as follows:
Class
of Proportion
Share of shares Nature Country
Name held held of business of incorporation
Directly held
PCG Resources Investment BVI
Limited Ordinary 100% holding
PCG Resources Investment Alderney
(C.I.) Limited Ordinary 100% holding
Indirectly held
PCG Minerals BVI
Trading Limited
(formerly known
as PCG Minerals
Limited and
PCG International Investment
Limited) Ordinary 100% holding
PCG Services Administrative
Limited Ordinary 100% support Hong Kong
PCG Minerals
Trading (HK)
Limited (formerly
known as PCG Trading
Coal Limited) Ordinary 100% of coal Hong Kong
PCG Coal (Indonesia)
Limited (formerly
known as PCG
Mineral (HK) Trading
Limited) Ordinary 51% of coal Hong Kong
PCG Engineering Investment
Limited Ordinary 100% holding BVI
Trading
of clinkers
PCG Mongolia and investment
Limited Ordinary 100% holding BVI
Class
of Proportion
Share of shares Nature Country
Name held held of business of incorporation
Indirectly held
PT Power Capital Trading
Global Mineral Ordinary 75% of coal Indonesia
PCG Tin Limited Ordinary 100% Dormant BVI
PCG Ports Limited Ordinary 100% Dormant BVI
PCG Galaxy Trading
(HK) Limited Ordinary 100% Dormant Hong Kong
The place of business for each trading subsidiary is Hong Kong,
with the exception of PT Power Capital Global Mineral whose place
of business is Indonesia and whose company only financial
information is as follows:
2014 2013
GBP GBP
Turnover - 289,260
Loss for the year (12,216) (61,001)
Current assets 10,240 411,899
Current liabilities (160,622) (550,065)
========== ==========
10 Property, Plant And Equipment - The Group
Furniture,
Computer fixtures
and Electronic
equipment equipment equipment Total
GBP GBP GBP GBP
Cost
At 1 January 2014 24,965 34,154 1,410 60,529
Additions during
the year - - - -
---------- ----------- ----------- -------
At 31 December 2014 24,965 34,154 1,410 60,529
---------- ----------- ----------- -------
Accumulated depreciation
At 1 January 2014 20,553 18,021 848 39,422
Charge for the year 4,412 6,430 562 11,404
---------- ----------- ----------- -------
At 31 December 2014 24,965 24,451 1,410 50,826
---------- ----------- ----------- -------
Net book value
At 31 December 2014 - 9,703 - 9,703
========== =========== =========== =======
At 31 December 2013 4,412 16,133 562 21,107
========== =========== =========== =======
11 Available For Sale Investments
2014 2013
GBP GBP
Unlisted shares, at cost 1,273,502 1,273,502
========== ==========
The Group's available-for-sale investments represented the
unlisted equity investments which were carried at costs less
impairment loss.
12 Trade And Other Receivables
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
Trade receivables 949,818 257,439 - -
Less: Provision for
impairment (949,818) (60,074) - -
---------- ---------- -------- --------
- 197,365 - -
Unpaid capital contribution
due from non-controlling
interests 63,666 63,666 - -
Prepayments and other
receivables 486,161 1,396,680 418,330 418,330
---------- ---------- -------- --------
549,827 1,657,711 418,330 418,330
========== ========== ======== ========
All of the Group's trade receivables are denominated in United
States Dollars ("US$").
The customers are obliged to settle the amounts upon
satisfaction of the sales and purchase agreements. Based on
relevant agreements, all outstanding trade receivables as at 31
December 2014 were aged over 90 days.
At each reporting date, the Group reviews trade receivables for
evidence of impairment on both an individual and collective basis.
As at 31 December 2014, impairment losses of GBP949,818 (2013:
GBP60,074) were recognised. The Group did not hold any collateral
as security or other credit enhancements over the impaired trade
receivables, whether determined on an individual or collective
basis.
Impairment losses on trade receivables are recorded using an
allowance account unless the Group is satisfied that recovery of
amount is remote, in which case the impairment loss is written off
against trade receivables directly.
Movements in the allowance for bad and doubtful debts during the
year are as follows:
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
At 1 January 60,074 81,184 - -
Impairment losses
recognised 949,818 60,074 - -
Written off (60,074) (81,184) - -
At 31 December 949,818 60,074 - -
========== ========== ===== =====
13 Amounts Due From/ (To) Subsidiaries - The Company
2014 2013
GBP GBP
Amounts due from/(to):
PCG Resources (C.I.)
Limited 1,015,524 1,015,524
PCG Minerals Trading
(HK) Limited 1,451,493 1,451,493
PCG Services Limited 11,411 61,838
PCG Engineering Limited 394,730 394,730
PCG Mongolia Limited 1,273,322 1,273,322
PCG Resources Limited (673,370) (632,453)
------------ ------------
3,473,110 3,564,454
Less: Provision for
impairment (2,873,158) (2,923,585)
------------ ------------
599,952 640,869
============ ============
During the year, the Directors reviewed the carrying value of
the amounts due from subsidiaries with reference to the businesses
operated by these subsidiaries and their net asset values. As at
the reporting date, the Directors are of the opinion that provision
for impairment is necessary in respect of the amounts due from
subsidiaries. During the year ended 31 December 2014, a reversal of
impairment loss of approximately GBP50,427 (2013: impairment of
GBP376,347) was recognised in the Company's statement of
comprehensive income.
The amounts due from/(to) subsidiaries were unsecured, interest
free and repayable on demand. Due to their short maturities, the
carrying amount of amounts due from/(to) subsidiaries is a
reasonable approximation of their fair value.
14 Other payables and accruals - The Group And Company
The Group
2014 2013
GBP GBP
Accrued expenses 1,029,998 480,928
Other payables 277,584 318,331
1,307,582 799,259
========== ========
The Company
2014 2013
GBP GBP
Accrued expenses 592,359 227,206
======== ========
15 Amounts Due To Related Companies - The Group
Notes 2014 2013
GBP GBP
Kolarmy Technologies
Inc. (i) 3,381,681 3,294,042
Aylmer Capital Limited (ii) 221,547 187,815
3,603,228 3,481,857
========== ==========
Note:
(i) Kolarmy is a company under the control of Mr. Lin Heng-Jui,
the director of the Company. The amounts due to Kolarmy were
unsecured, bearing interest at LIBOR plus 3% per annum and
repayable within twelve months. For the amount due to Kolarmy,
accrued interest of GBP327,674 (2013: GBP230,418) was included in
accrued expenses.
(ii) Aylmer Capital Limited ("Aylmer") is a company in which Mr.
Simon Dewhurst is the common director. The amounts due to Aylmer
were unsecured, interest free and repayable on demand.
Due to their short maturities, the carrying amounts due to
related companies are reasonable approximation of their fair
value.
16 Share Capital - The Group and Company
2014 2013
Number GBP Number GBP
of shares of shares
Authorised
At 1 January and
31 December,
Par value 1,000,000,000 - 1,000,000,000 -
============== ===== ============== ====
2014 2013
Number Number
of shares GBP of shares GBP
Paid-in capital
At 1 January 74,423,932 6,229,328 57,534,810 3,057,598
Shares issued upon
conversion of Convertible
Loan Notes - - 16,233,765 3,075,977
Shares issued upon
equity-settled share-based
arrangement - - 655,357 95,753
-------------- ----------------- -------------- ----------------
At 31 December 74,423,932 6,229,328 74,423,932 6,229,328
============== ================= ============== ================
17 Share Option Scheme
A share option scheme (the "Scheme") was adopted pursuant to a
resolution passed at the annual general meeting of the Company held
on 11 October 2012 for the purpose of providing incentives or
rewards to selected participants. Under the Scheme, it will enable
selected eligible persons (including any director, employee,
consultant or professional adviser) of the Company and of its
subsidiaries to be granted options ("Options") to acquire ordinary
shares in the capital of the Company ("Shares").
The total number of shares in respect of which options may be
granted under the Scheme must not exceed 18 million shares of the
Company prior to the third anniversary of the adoption of the
Scheme (the "Scheme Mandate").
It is intended that Options will normally vest over a period of
three years beginning with the Option grant date (the "Vesting
Period") and may also be subject to performance conditions set at
the time the Option is granted. Options cannot, in any event, be
exercised later than the tenth anniversary of the Option grant
date. Options are not transferable (except on death).
Options may be satisfied by newly issued Shares, or existing
Shares, including Shares purchased in the market by an employees'
trust. Operation of the Scheme will be overseen by the board of
directors of the Company (the "Board").
The number of Shares in respect of which Options may be granted
under the Scheme shall be limited, so that immediately following
the grant of any Options, the aggregate of the number of Shares
issued or remaining capable of being issued pursuant to Options
granted prior to the third anniversary of the adoption of the
Scheme will not exceed 18 million.
Options may be granted during the period of 42 days beginning
with the dealing day following the announcement of the Company's
results for any period or with the day on which an announcement is
made of amendments to be made to the relevant tax legislation or on
which any such amendments come into force.
No payment will be required for the grant of an Option.
The price per share at which Shares may be acquired upon the
exercise of an Option ("Exercise Price") shall be determined at the
time of grant.
The vesting of an Option may be subject to a time-based vesting
schedule to be specified at the date of grant. In addition, the
Scheme provides that the vesting of an Option may be subject to
performance conditions, to be specified at the date of grant. Once
set, performance conditions may be waived or amended if an event
occurs which causes the Company to consider that such performance
conditions could not fairly or reasonably be met, provided that any
amended conditions shall not be more difficult to satisfy than the
original conditions
were intended to be at the time of their imposition.
If a participant terminates employment for cause, an outstanding
Option will lapse in full.
If a participant terminates employment other than for cause, an
outstanding Option shall lapse at the termination date if it is not
then exercisable. To the extent an Option is exercisable at the
termination date, it shall remain exercisable for 90 days and shall
thereafter lapse to the extent not exercised.
If a participant becomes disabled whilst employed by the
Company, any Options shall be retained and exercised in accordance
with the Scheme. If a participant dies in service, his Option shall
become fully exercisable and remain exercisable for its full
term.
In the event of a change of control of the Company or compromise
or arrangement in connection with a scheme for the reconstruction
of the Company or its amalgamation, or a voluntary winding-up,
Options shall become exercisable within specified periods and shall
lapse to the extent not exercised at the end of the applicable
period.
Alternatively, on a change of control, by agreement with the
acquiring company, participants may, release their Options in
consideration of the grant of Options over shares in the acquiring
company.
If there is a rights or capitalisation issue, sub-division,
consolidation, reduction or other variation of the Company's
ordinary share capital, the Board may adjust the number of Shares
subject to an Option and/or the Exercise Price, subject (except in
the case of a capitalisation) to written confirmation by the
Auditors that in their opinion such adjustment is fair and
reasonable provided that the aggregate amount payable on the
exercise of the Option in full is not increased.
On 28 November 2012 and 9 December 2013, 478,309 and 655,357
Options with exercise price of GBP0.00000000001 were granted to
certain employees of the group respectively. As mutually agreed
between these employees and the Company, the Options must be
exercised immediately at each date of grant. On each of date of
grant, all Options were fully exercised by these employees into
Company's shares by issue of new shares. In the opinion of the
directors, the fair value of the share options was approximately
the same as the open market value of 478,309 and 655,357 new shares
issued which were also approximated to the employees' compensation
amounted to GBP74,772 and GBP95,753 respectively which had been
credited to share capital directly. The average share price on each
of date of exercise was 13p and 12p respectively.
18 Related Party Transactions
18.1 In addition to the transactions and balances disclosed in
Note 13 and 15, the Group had the following significant related
party transactions during the year:
Notes 2014 2013
GBP GBP
Interest payable to
Kolarmy Technologies
Inc. (i) 97,256 119,834
======= ========
Note:
(i) Interest paid to Kolarmy Technologies Inc., a company under
the control of Mr. Lin Heng-Jui, the director of the Company. The
Directors have consulted with the Group's nominated adviser to
confirm that the terms of the transaction are fair and reasonable
so far as the shareholders of the Company are concerned.
18.2 Compensation of key management personnel of the Group
The Directors are of the opinion that the key management
personnel were the Directors of the Company, details of whose
emoluments are set out in note 8.
18.3 The Company is listed on the Alternative Investment Market.
Mr. Lin Kung-Min is the ultimate controlling party.
19 Financial Risk Management Objectives and Policies
The Group is exposed to a variety of financial risks which
result from its operating, investing and financing activities. The
Group's major financial instruments include loans receivables,
available-for-sale investments, trade and other receivables, cash
and cash equivalents, other payables and accruals and amount due to
related companies. Details of these financial instruments are
disclosed in the respective notes. The risks associated with these
financial instruments and the policies applied by the Group to
mitigate these risks are set out below. The Directors manage and
monitor these exposures to ensure appropriate measures are
implemented in a timely and effective manner.
Categories of financial assets and liabilities
The carrying amounts presented in the statements of financial
position relate to the following categories of financial assets and
financial liabilities:
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
Financial assets
Loans and receivables
* Trade and other receivables 549,827 1,657,711 418,330 418,330
* Amounts due from subsidiaries - - 1,273,322 1,273,322
---------- ---------- ---------- ------------
549,827 1,657,711 1,691,652 1,691,652
Available-for-sale
investments 1,273,502 1,273,502 - -
Cash and cash equivalents 3,046 109,001 4 2,384
---------- ---------- ---------- ------------
1,826,375 3,040,214 1,691,656 1,694,036
========== ========== ========== ============
Financial liabilities
At amortised cost
* Other payables and accruals 1,307,582 799,259 592,359 227,206
* Amounts due to related companies 3,603,228 3,481,857 - -
* Amounts due to subsidiaries - - 673,370 632,453
4,910,810 4,281,116 1,265,729 859,659
========== ========== ========== ============
Credit risk
Credit risk refers to the risk that the counterparty to a
financial instrument would fail to discharge its obligation under
the terms of the financial instrument and cause a financial loss to
the Group.
The Group has adopted procedures in extending credit terms to
customers and in monitoring its credit risk. The Group's credit
policy and practices include assessment and valuation of customer's
credit reliability and periodic review of their financial status to
determine the credit limits to be granted. To manage credit risks,
the management reviews regularly the recoverable amount of each
individual debt to ensure that adequate impairment is made for the
irrecoverable amounts. At 31 December 2014, the Group had no credit
risk as there was no sales income generated. As at 31 December
2013, the concentration of credit risk was 100% as the Group's
trade receivables were due from a single customer of whom
transactions have exceeded 10% of the Group's total revenue.
Majority of the Group's bank balances are deposited with banks
in Hong Kong, Indonesia and United Kingdom. The credit risk on
liquid funds is limited because the counterparties are banks with
good credit-rating.
Foreign currency risk
Foreign currency risk refers to the risk that the fair value or
future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. Several subsidiaries of the
Group have foreign currency sales and purchases, which expose the
Group to foreign currency risk. Certain trade and other receivables
and payables of the Group are denominated in either Pounds Sterling
("Sterling"), Hong Kong dollars ("HK$"), Renminbi ("RMB"),
Indonesia Rupiah ("Rp") or US$. The Group currently does not have a
foreign currency hedging policy. However, the Directors monitor the
foreign exchange exposure and will consider hedging significant
foreign currency exposure should the need arises.
The table below illustrates the monetary assets and liabilities
denoted in various currencies by the Group as at reporting
date:
2014 2013
GBP GBP
Monetary Assets:
Sterling 53 2,433
US$ 25 258,356
Rp 53 384
HK$ 1,296 40,138
RMB 1,619 5,055
---------- ----------
3,046 306,366
========== ==========
Monetary Liabilities:
US$ 3,589,770 3,468,399
RMB 13,458 13,458
---------- ----------
3,603,228 3,481,857
========== ==========
The table below illustrates the hypothetical sensitivity of the
Group's reported profits and equity to a 10% increase and decrease
in the exchange rates at the reporting date assuming all other
variables remain unchanged. The sensitivity rate of 10% represents
the Directors assessment of a reasonable possible change. Positive
figures represent an increase in profit and equity.
2014 2013
GBP GBP
Sterling strengthens by 10%
US$ 358,974 321,004
Rp (5) (38)
HK$ (130 ) (4,014)
RMB 1,184 840
Sterling weakens by 10%
US$ (358,974) (321,004)
Rp 5 38
HK$ 130 4,014
RMB (1,184) (840)
Fair values
There is no significant difference between the carrying amounts
and the fair values of the Group and Company's financial
instruments. For current trade and other receivables/payables with
a remaining life of less than one year, the nominal amount is
deemed to reflect the fair value.
Capital risk
The capital of the Group consists of equity attributable to
equity holders of the Company, comprising share capital and
retained earnings / losses. The Group manages its capital to ensure
that entities within the Group to maximise the return to
shareholders. The Group is not subject to any externally imposed
capital requirements.
Liquidity risk
Liquidity risk relates to the risk that the Group will not be
able to meet its obligations associated with its financial
liabilities. In the management of liquidity risk, the Directors
monitor and maintain a level of cash and cash equivalents deemed
adequate to finance the Group's operations and to meet its debt
obligations as they fall due. The Group finances its working
capital requirements mainly by the funds obtained from advances
from related companies. As at 31 December 2014, the Group had net
current liabilities and net liabilities of GBP4,357,937 and
GBP3,074,732 respectively. In the opinion of Directors, the Group's
exposure to liquidity risk is significantly reduced.
The following tables detail the remaining contractual maturities
at the reporting date of the Group's and the Company's financial
liabilities, which are based on the contractual undiscounted
payments (including interest payments computed using contractual
rates) and the earliest date the Group and the Company can be
required to pay:
The Group
Total
contractual
Carrying undiscounted Within
1 year
amounts payments or on
demand
GBP GBP GBP
Year ended 31 December
2014
Other payables and
accruals 1,307,582 1,307,582 1,307,582
Amounts due to related
companies 3,603,228 3,603,228 3,603,228
4,910,810 4,910,810 4,910,810
========== ============= ==========
Year ended 31 December
2013
Other payables and
accruals 799,259 799,259 799,259
Amount due to a related
company 3,481,857 3,481,857 3,481,857
4,281,116 4,281,116 4,281,116
The Company
Total
contractual
Carrying undiscounted Within
1 year
amounts payments or on
demand
GBP GBP GBP
Year ended 31 December
2014
Other payables and
accruals 592,359 592,359 592,359
Amounts due to subsidiaries 673,370 673,370 673,370
1,265,729 1,265,729 1,265,729
========== ============= ==========
Year ended 31 December
2013
Other payables and
accruals 227,206 227,206 227,206
Amounts due to subsidiaries 632,453 632,453 632,453
---------- ------------- ----------
859,659 859,659 859,659
========== ============= ==========
Interest rate risk
At 31 December 2014, the Group's exposure to interest rate risk
mainly arises on an amount due to a related company which bore
floating interests. The Group has not used any derivative contracts
to hedge its exposure to interest rate risk. The Group has not
formulated a policy to manage the interest rate risk.
Interest rate sensitivity analysis
The following tables illustrate the sensitivity of the loss for
the year and accumulated losses to a reasonably possible change in
interest rates of +25 basis points and -25 basis points (2013: +/-
25 basis points), with effect from the beginning of the year. These
changes are considered to be reasonably possible based on
observation of current market conditions. The calculations are
based on the Group's financial instruments held at each reporting
date. All other variables are held constant. There is no impact on
other components of consolidated equity in response to the possible
change in interest rate.
Group
2014 2013
+25 +25 -25
basis -25 basis basis basis
points points points points
GBP GBP GBP GBP
Effect on loss for
the year
and accumulated losses (84,669) 84,669 (82,351) 82,351
========= ========== ========= ========
Company
2014 2013
+25 +25 -25
basis -25 basis basis basis
points points points points
GBP GBP GBP GBP
Effect on loss for
the year
and accumulated losses - - - -
======== ========== ======== ========
20 Commitments Under Operating Leases
At 31 December 2014, the total future minimum lease payments
under non-cancellable operating leases payable by the Group are as
follows:
2014 2013
GBP GBP
Within one year 19,203 80,239
In the second to fifth years
inclusive 648 19,851
------- --------
19,851 100,090
======= ========
The Group leases certain of its office premises and photocopying
machines. The leases run for an initial period of one to five
years, with options to renew the lease and renegotiated the terms
at the expiry date or at dates as mutually agreed between the Group
and respective landlords/lessors. None of the leases include
contingent rentals.
The Company did not have any operating lease commitments as at
31 December 2014 and 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFMGFVRGRGKZG
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