Half Yearly Report

RNS Number : 8584U

Myanmar Investments Intl Ltd

06 December 2013

 



6 December 2013

Myanmar Investments International Limited

Unaudited Results for the period ended 30 September 2013

Myanmar Investments International Limited ("MIL" or the "Company"), an AIM-traded, investment company, has today announced its unaudited financial results for the period from 17 May 2013 to 30 September 2013.

Highlights

The Company's securities and warrants were admitted to trading on the AIM market of the London Stock Exchange ("AIM") on 27 June 2013 having raised US$6,134,750 ("Admission").

On 15 July 2013 the Company was honoured to host a breakfast for His Excellency U Thein Sein, President of the Republic of the Union of Myanmar together with five Union Ministers, on his first official visit to the UK.

In July 2013 the Company opened its office in Yangon and hired Tham Chee Chung as its Yangon resident Investment Director. Since then a further five staff have been hired.

In the period to 30 September 2013 a number of interesting investment opportunities were reviewed, some of which have since advanced to a more detailed level of negotiation and evaluation. However as of the date of this announcement no investments have been consummated.

At the time of our Admission, our net asset value, after commissions but before the other Admission expenses, was US$5,898,912 or US$0.93 per share. The other costs of the Admission reduced this to US$5,444,186 or US$0.86 per share.

Net asset value as at 30 September 2013 was US$5,227,468, representing US$0.82 per share, a 3.5 percent decrease from the net asset value post Admission and represents the running costs in the period from Admission to 30 September 2013.

Overall positive changes in Myanmar continue and although it is a challenging operating environment the Directors are pleased with what has been achieved during this initial phase of the Company's evolution. Given the interesting deal flow the Directors are confident that the Company will be able to secure its first investment soon.

A copy of the interim report will be available on the Company's website www.myanmarinvestments.com

For further information please contact:

Aung Htun Managing Director Myanmar Investments International Ltd [phone] [phone] [e-mail]	Michael Dean Finance Director Myanmar Investments International Ltd [phone] [phone] [e-mail]
Nominated Adviser Philip Secrett / Melanie Frean/ Jamie Barklem Grant Thornton UK LLP [phone]	Broker Nick Naylor/ Mark Connelly Allenby Capital Limited [phone]

Notes to Editors:

Myanmar Investments is the first Myanmar focused investment company to be admitted to trading in London and has been established for the purpose of investing in businesses operating in or with business exposure to Myanmar. The Company will target businesses operating in sectors that the Directors believe have strong growth potential and thereby can be expected to provide attractive yields, capital gains or both. In addition to investing into local businesses the Company will also partner with foreign companies investing in Myanmar.

Myanmar, a country of approximately 60 million people and roughly the size of France, has been isolated for much of the last 50 years. Once one of the more prosperous countries in Southeast Asia as it has an abundance of natural resources (oil, natural gas, arable land, tourist attractions and a long coastline), it is now one of the least developed countries in the world and has been the subject of sanctions imposed on it by the EU and the US, amongst others.

The Company's primary objective is to build capital value over the long term by making investments in a diversified portfolio of Myanmar businesses that will benefit from Myanmar's re-emergence.

For more information about MIL, please visit www.myanmarinvestments.com

Myanmar Investments International Limited

(Incorporated in the British Virgin Islands with limited liability)

Chairman's Statement

Myanmar Investments International Limited(the "Company" or "MIL") shares were admitted to trading on the AIM market of the London Stock Exchange on 27 June 2013 and the Company has had a good start as a public company.

At the time of our Admission, our net asset value, after commissions but before the other Admission expenses, was US$5,898,912 or US$0.93 per share. The other costs of the Admission reduced this to US$5,444,186 or US$0.86 per share.

Net asset value as at 30 September 2013 was US$5,227,468, representing US$0.82 per share, a 3.5 percent decrease from the net asset value post Admission and represents the running costs in the period from Admission to 30 September 2013.

Myanmar

Myanmar is undergoing significant and far reaching changes. However expectation is running ahead of delivery. The primary issue is the country's lack of capacity. Although rich in resources and blessed with beautiful historical sites and pristine beaches, the limited availability of experienced managers, whether in government or the private sector, is a constraint. It is also an opportunity. The Government and opposition are in agreement that education is a key priority.

The infrastructure (power, logistics, telecommunication) and financial sectors have to be upgraded to attract major foreign companies. All these issues are being addressed with exploration licenses being awarded and two international mobile operators being selected, to name just a few.

Change is creating optimism and opportunities but also anxiety. Traditions are being challenged and now with a freer press issues long dormant can be stirred up. Myanmar is a vast country, larger than France in land size and with a population of 60 million, but 135 fiercely proud ethnic groups. Politically the Government is grappling with centuries long ethnic and religious issues. For the first time in five decades a meeting was held between all the factions. This is a dynamic work in progress which will evolve slowly but a good start has been made.

The economy grew at 6.5 percent in 2012/13. The main drivers of growth were increased gas production, services, construction, foreign direct investment and strong commodity exports. However, inflation has been on the rise in recent months, reaching 7.3 percent in August 2013. Budget deficit has declined to 3.7 percent of GDP (from 4.6 percent) even given the increased spending on social sectors.

Myanmar's currency, the Kyat, has depreciated slightly against the US Dollar and the current account deficit has increased to 4.4 percent of GDP (from 2.4 percent) due to import liberalization and lifting of some exchange restrictions.

We expect the continued increase in gas production, increased trade and a better agricultural performance to maintain growth at 6.5 percent. But the risk remains that a slowing China and ASEAN will affect exports as will rising inflation.

Company Activities

MIL has been actively seeking and evaluating a strong pipeline of potential investments in a diverse range of sectors. There is no shortage of opportunities but there is a paucity of verifiable information. The key however will be to negotiate investment structures that comply with the prevailing legal framework in Myanmar and, as far as possible, protect us against adverse changes yet give us the potential to grow with the company.

In July the Company established an office in Yangon and hired a veteran investment executive, Tham Chee Chung, as our Yangon-based Investment Director. Since then five other local positions have been filled and we will be moving to a larger office within December.

Furthermore, on 15 July we were honoured to host His Excellency President U Thein Sein and five Union Ministers and two deputy Union Ministers to a private breakfast in London to meet a cross section of senior British businessmen.

Operating costs have been marginally higher than expected reflecting the scarcity of both high quality human resources and office space in Myanmar.

After this excellent beginning, on behalf of my fellow directors, I would like to thank you for joining us on this journey.

William Knight

Chairman

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD FROM 17 MAY 2013 (DATE OF INCORPORATION)

TO 30 SEPTEMBER 2013

	Notes	17 May 2013 to 30 Sept 2013
		US$
		Unaudited
Exchange loss		(5,129)
Administration costs		(208,033)
Loss from operations	4	(213,162)
Finance costs	6	(3,556)
Loss before tax		(216,718)
Taxation	7	0
Loss for the period attributable to equity holders		(216,718)
Loss per share
Basic (cents per share)	8	(3.42)
Fully diluted (cents per share)		(1.70)

The accompanying notes form an integral part of these financial statements.

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2013

	Notes	30 Sept 2013
		US$
		Unaudited
ASSETS
Non-current assets
Plant & equipment	10	3,909
Current assets
Deposits and prepayments		33,540
Cash and bank balances		5,238,130
		5,271,671
TOTAL ASSETS		5,275,580
EQUITY AND LIABILITIES
Equity
Issued capital	11	6,184,793
Accumulated loses		(216,718)
Other reserves		(740,607)
Total Equity		5,227,468
Liabilities
Current liabilities
Accruals		20,651
Due to Directors		27,461
Total liabilities		48,112
TOTAL EQUITY AND LIABILITIES		5,275,580
NET ASSETS		5,227,468

Net assets equates to US$0.82 per share based on 6,342,619 shares outstanding and US$0.80 per share on a fully diluted basis, including the 5,842,619 Warrants (with an exercise price of US$0.75 each) and the 584,261 Employee Share Options (with an exercise price of US$1.10 each).

Approved and authorised for issue by the Board of Directors on 5 December 2013.

The accompanying notes form an integral part of these financial statements.

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD FROM 17 MAY 2013 (DATE OF INCORPORATION)

TO 30 SEPTEMBER 2013

	Note	Share capital	Accumulated losses	Total
		US$	US$	US$
		Unaudited	Unaudited	Unaudited
At 17 May 2013		-	-	-
Issue of shares		6,184,793	-	6,184,793
Share issuance expenses		(740,607)	-	(740,607)
Total comprehensive loss for the period		-	(216,718)	(216,718)
At 30 September 2013		5,444,186	(216,718)	5,227,468

The accompanying notes form an integral part of these financial statements.

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD FROM 17 MAY 2013 (DATE OF INCORPORATION)

TO 30 SEPTEMBER 2013

		17 May 2013 to 30 Sept 2013
		US$
		Unaudited
Cash flows from operating activities
Loss before tax		(216,718)
Adjustments for:
Depreciation		172
Foreign exchange loss		5,129
Operating loss before changes in working capital		(211,416)
Working capital adjustments:
Increase in deposits and prepayments		(33,540)
Increase in accruals		20,651
Net cash used in operations		(224,306)
Cash flows from investing operations
Purchase of plant & equipment		(4,081)
Cash flows from financing activities
Proceeds from issuance of shares		6,184,793
Share issuance expenses		(740,607)
Increase in amounts due to Directors		27,461
		5,471,647
Net increase in cash and cash equivalents		5,243,260
Effect of foreign exchange rate changes, net		(5,129)
Cash and cash equivalents as at 30 September 2013		5,238,130
Analysis of cash and cash equivalents
Cash and bank balances		5,238,130

The accompanying notes form an integral part of these financial statements.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 SEPTEMBER 2013

1 General information

Myanmar Investments International Limited (the "Company") is a limited liability company incorporated on 17 May 2013 in the British Virgin Islands. The Company's registered office is at Jayla Place, Wickhams Cay I, Road Town, Tortola, British Virgin Islands.

The Company's shares and warrants are traded on the AIM market of the London Stock Exchange under the ticker symbols MIL and MILW respectively. The Company can raise additional capital as described in Note 11 below.

The Company has been established for the purpose of identifying and investing in, and disposing of, businesses operating in or with business exposure to Myanmar. The Company will target businesses operating in sectors that the Directors believe have strong growth potential and thereby can be expected to provide attractive yields, capital gains or both.

The consolidatedinterim financial statements for the period ended 30 September 2013 were approved by the Board of Directors on 5 December 2013.

2 Summary of significant accounting policies

The significant accounting policies adopted by the Company are as follow:

a. Basis of Preparation

The consolidated financial statements,  which are expressed in United States dollars, have been prepared in accordance with International Financial Reporting Standards ("IFRS") including IAS "Interim Financial Reporting" issued by the International Accounting Standards Board ("IASB") which comprise standards and interpretations approved by the IASB and International Financial Reporting Interpretations Committee ("IFRIC"), together with applicable BVI law.

The financial statements have been prepared on an historical cost basis.

For the purpose of IFRS 8 "Operating Segments", the Company has only one segment, being "Investments". No further operating segment financial information is therefore disclosed.

Change in accounting policy and disclosure

The following Standards or Interpretations have been issued by the IASB but not yet effective and adopted by the Company:

IFRS 9                                                                                       Financial Instruments

IFRS10, IFRS12 and                                                            Investment Entities

IAS 27 (2011) (Amendments)

IAS 36 (Amendments)                                                       Recoverable Amount Disclosure for Non-Financial Assets

IFRIC - INT 21                                                                      Levies

The Directors have considered the above and are of the opinion that the above Standards and Interpretations are not expected to have a material impact on the Group's financial statements except for the presentation of additional disclosures and change to the presentation of components of the financial statements. These items will be applied in the first financial period for which they are required.

b. Going Concern

After due and careful enquires, the Directors have a reasonable expectation that the Company has adequate financial resources to continue in operational existence for the foreseeable future.

Accordingly, the Directors have adopted the going concern basis in preparing the financial statements.

c. Subsidiaries

A Subsidiary is any entity over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.

Inter-company transactions, balances, income and expenses between group companies are eliminated.

Accounting policies of subsidiaries would be changed where necessary to ensure consistency with the policies adopted by the Group.

d. Plant and equipment

Components of costs

Plant and equipment are all stated at cost less accumulated depreciation and any impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items.

The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditure incurred after the plant and equipment have been put into operation, such as repairs and maintenance, is normally charged to the profits or loss in the period in which it is incurred. In situations where it can be clearly demonstrated that the expenditure has results in an increase in the future economic benefits expected to be obtained from the use of the plant and equipment, the expenditure is capitalized as an additional cost of that asset.

Depreciation

Depreciation is provided to write off the cost of plant and equipment, using the straight line method, over their useful lives. The principal annual rates are as follows:

Office equipment                            3 years

Disposals

The gain or loss arising from disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

e. Current assets and current liabilities

Current assets are expected to be realised and current liabilities are expected to be settled within twelve months of the end of reporting period or in the normal course of the Group's operating cycle.

f. Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts.

g. Share issuance costs

The share issuance costs borne by the Company are recognised in the Statements of Change in Equity, as the Company's shares are classified as equity under paragraphs 16c and 16d of ISA 32 Financial Instruments: Presentation.

h. Share capital

Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset.

The Group's shares are classified as equity instruments.

i. Revenue recognition

The Group did not generate any revenue during the reporting period.

j. Foreign currencies

Transactions in currencies other than US dollars, which is the functional currency of all of the respective Group entities, are recorded at the rate of exchange prevailing on the date of the transactions.

At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rate prevailing at the end of the reporting period.

Non-monetary items carried at fair value which are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined. Foreign exchange gains and losses arising on the settlement of monetary items, and on the retranslation of monetary items, are included in net profit or loss for the period, except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in equity in which cases, the exchange differences are also recognised directly in equity.

k. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on the taxable profit for the year.  Taxable profit differs from net profit as reported in profit or loss if it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted at the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets, if any, is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is settled or the asset is realised.  Deferred tax is charged or credited in profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

l. Share-based payments

Where equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated statement of comprehensive income over the vesting period.  Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest.  Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted.  As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied.  The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfied.

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated statement of comprehensive income over the remaining vesting period.

Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive income is charged with the fair value of goods and services received.

3 Critical Accounting Estimates and Judgements

The preparation of financial statements in conformity with IFRS requires the Directors to exercise their judgement in the process of applying the Group's accounting policies. It also requires the use of certain critical accounting estimates and assumptions.

Assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

At this time there are no matters that require critical accounting estimates.

Determination of Functional Currency

The Group measures foreign currency transactions in the functional currency of the Group. In determining the functional currency of the Group, judgement is required to determine the currency of the primary economic environment in which the Group operates. Management's assessment is that at this time the functional currency is the United States dollar.

4 Loss from Operations

The loss from operations is arrived at after charging:

                                                                                                                                                                                           US$

Foreign exchange loss                                                                                                                                          5,129

Depreciation of plant and equipment                                                                                                               172

Staff costs (including directors' remuneration - see Note 5)

- Wages and salaries                                                                                                                                           93,872

Operating lease payment in respect of office premises                                                                      16,482

5 Directors' Remuneration

For period from 17 May 2013 (date of incorporation) to 30 September 2013, no emoluments were paid by the Group to the Directors as an inducement to join or upon joining the Group or as compensation for loss of office.

For the period from 17 May 2013 (date of incorporation) to 30 September 2013:

	Salaries and other benefits
	US$
Executive directors
Maung Aung Htun	25,982
Anthony Michael Dean	19,486
Independent non-executive directors
Christopher William Knight	7,829
Craig Robert Martin	6,524
Christopher David Appleton	6,524
Total	66,345

6 Finance costs

Finance costs represent bank charges.

7 Taxation

As the Group has not derived any taxable income during the period no tax provision has been made.

8 Loss per Share

The loss per share is US3.42 cents. This is calculated by dividing the net loss for the period attributable to shareholders (US$216,718) by the number of Shares in issue during the period (6,342,619).

The fully diluted loss per share (including the exercise of the Warrants and the Share Options) is US1.70cents.

9 Investment in Subsidiaries

The principal subsidiaries of the Company, all of which have been included in these consolidated financial statements, are as follows:

Name	Country of incorporation	Principal activity	Proportion of ownership interest at 30 September 2013
Myanmar Investments Limited Note 1	Singapore	Investment holding company	100 percent
MIL Management Pte Ltd Note 2	Singapore	Provision of management services to the Group	100 percent

Notes

1    This company was incorporated on 1 March 2013 and was owned by Maung Aung Htun; Anthony Michael Dean, Christopher William Knight, Craig Robert Martin and Christopher David Appleton before it was transferred to the Company on 28 May 2013.

2    This company was incorporated on 8 November 2012 as Myanmar Investments Pte Limited and was owned by Anthony Michael Dean and Craig Robert Martin. It was transferred to Myanmar Investments Limited on 13 May 2013. It changed its name to Myanmar Investments (Singapore) Pte Limited on 20 May 2013. It subsequently changed its name to MIL Management Pte Ltd on 19 August 2013.

10 Plant and Equipment

	Office equipment	Total
	US$	US$
Cost
At 17 May 2013 (date of incorporation)	-	-
Additions	4,081	4,081
As at 30 September 2013	4,081	4,081
Accumulated depreciation
At 17 May 2013 (date of incorporation)	-	-
Charge for the period	(172)	(172)
	(172)	(172)
Net book value:
As at 30 September 2013	3,909	3,909

 

11 Share Capital

Shares

Ordinary shares of no par value               6,342,619

                                                                                                                                                                                           US$

Ordinary shares at incorporation	0.10
Issuance of 6,342,618 shares of no par value during the period	6,184,792.90
Share issuance costs	(740,607.00)
	5,444,186.00

On 21 May 2013, the Memorandum of Association of the Company was amended to allow the issue of an unlimited number of Ordinary Shares.

On 28 May 2013, the Company allotted 499,999 ordinary shares to the Directors as Founder Shares at an effective subscription price of US$0.10 each.

On 21 June 2013, the Company allotted 5,842,619 Ordinary Shares pursuant to the Placing and Subscription undertaken as part of the Admission.

All the shares have been admitted to trading on AIM under the ticker MIL.

Warrants

On 21 June 2013, the Company allotted 5,842,619 Warrants pursuant to the Placing and Subscription undertaken as part of the Admission. The Company had agreed that for every Ordinary Share subscribed for by a Subscriber or a Placee, such Subscriber or Placee would receive one Warrant at nil cost.

The Warrants entitle the holder to subscribe for an Ordinary share at an exercise price of US$0.75. The Warrants may be exercised at any time from 21 June 2015 to the fifth anniversary of the date of the Warrant Instrument, being 21 June 2018.

All Warrants have been admitted to trading on AIM under the ticker MILW.

Share Options

As at 30 September 2013 there were 584,261 Share Options available for issue of which 410,000 have been allotted.

The Company has a Share Option Plan that allows for the total number of Shares issuable under Share Options to constitute a maximum of one tenth of the number of the total number of Ordinary Shares in issue (excluding shares held by the Company as treasury shares and shares issued to the Founders prior to Admission document).

Any future issuance of Shares will give rise to the ability of the remuneration committee to award additional options. Share Options will be granted with an exercise price set at a 10 percent premium to the subscription price paid by shareholders on the relevant issue of Shares that gave rise to the availability of each tranche of the Share Options (save in relation to the Share Options that arise as a result of the Shares issued in connection with the Admission which have an exercise price of US$1.10).

Share Options can be exercised any time after the first anniversary and before the tenth anniversary of the grant (as may be determined by the remuneration committee in its absolute discretion) of the respective Share Options.

Share Options are not admitted to trading on AIM but application will be made for Shares that are issued upon the exercise of the Share Options to be admitted to trading on AIM.

12 Contingent Liabilities

The service contracts for the two executive directors, Maung Aung Htun and Anthony Michael Dean, both provide that 50 percent of their salary is to be deferred until either the Company has substantially implemented its investing policy or the Shareholders agree to extend the period for implementing the investment policy. If neither of these events occurs, their entitlement to this deferred element will lapse without any compensation.

As at 30 September 2013 this deferred compensation totals US$45,468 and has not been included in the results for the period.

As part of the Admission process, certain of the Company's professional advisers agreed to defer receipt of fees totalling US$179,903. This is only payable at the earlier of a secondary fundraising or the passing of a shareholder vote to continue the Company's business should the "substantially invested" requirement of the AIM market not be met within the time frame so specified. In the event that these events do not occur then the obligation to make such payments will lapse. As such they have not been included in the results for the period.

13 Subsequent Events

There have been no material subsequent events.

 

END

 

 

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