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Amedeo Resources PLC (AMED)

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Tuesday 02 June, 2015

Amedeo Resources PLC

Audited Results for 11 Months Ended 31 Dec 2014

RNS Number : 9231O
Amedeo Resources PLC
02 June 2015
 

2 June 2015

 

Amedeo Resources plc

("Amedeo" or the "Company")

 

Audited Results for Eleven Months Ended 31 December 2014

 

Highlights

 

·     Explorer 1 being built to quality and schedule, and due to be completed end 2nd half 2015. Keel laid in April 2014 and vessel launched from the skid-way on land to the water in April 2015

·     New Yard operational, and as well as building Explorer 1, New Yard absorbing overspill from Yangzijiang Holdings' principal yards by building blocks for container ships

·     Notwithstanding significant weakness in the iron ore price, MGR marginally profitable, and paid over US$400,000 of interest to Amedeo

·     Excluding non-cash items and  one-off items, loss on ordinary activities before taxation reduced by 53% to US$128,000 (year ended 31 January 2014: loss of US$272,000)

·     Successful equity fundraising of US$8,554,000

·     AGM to be held on 30 June 2015

 

Glen Lau, CEO of Amedeo, commented:

 

"YZJ Offshore's New Yard is fully operational. The build of Explorer 1 is to quality and schedule, building the New Yard's reputation and laying firm foundations for the New Yard's future. Although the rig market has slowed, we expect it to pick up in the medium term. In any case, the New Yard is able to build a range vessels and blocks and is well placed to take advantage of any upturn.

"MGR remains profitable against an extremely difficult back-drop, and has been able to pay to Amedeo over US$400,000 of interest. MGR is currently exploring opportunities in a range of commodities.

"Current market conditions have slowed the progress of Amedeo's strategy. Nonetheless, we expect recovery in the medium term which Amedeo is well placed to take advantage of."

 

**ENDS**

For further information please visit www.amedeoresources.com or contact:

Enquiries:

Zafar Karim

Executive Director

Amedeo Resources Plc 

Tel office: +44 20 7583 8304   

 

Paul Shackleton /Nick Prowting

Nominated Adviser & Broker

WH Ireland

Tel office: +44 20 7220 1667

Saif Janjua

Joint Broker

Beaufort Securities Limited

Tel office: +44 20 7382 8300

 

Notes

Amedeo Resources plc is an investment company whose policy is to invest principally, but not exclusively, in the resources and energy and related infrastructure and asset sectors. Amedeo has a deep and broad global network and wide contact base in these sectors, including in East and South East Asia and the Middle East which it leverages to source and make investments. These sectors exhibit high growth and are strategically important. Amedeo is a proactive investor which assists its investee companies to grow by providing investment, expertise and contacts.

 



CHAIRMAN'S STATEMENT

 

Introduction

 

Amedeo Resources plc ("Amedeo" or the "Company") continues to build on its progress last year. Jiangsu Yangzijiang Offshore Engineering Co. Ltd's ("YZJ Offshore") new marine vessel yard ("New Yard") located in Taicang, approximately 60km north west of Shanghai, is now operational and its first order, a Le Tourneau Super 116E Class design self-elevating mobile offshore jack up drilling rig ("Explorer 1"), has been launched. Progress on new orders has been slower than expected due to the fall in the oil price and consequent postponement of capital expenditure in the oil & gas industry. We do not expect this situation to persist in the medium term.

 

The New Yard has the capability to construct a multitude of vessels and construct blocks for container and gas carrier vessels. It has used this capability to absorb overspill from Amedeo's partner in this venture, Yangzijiang Shipbuilding (Holdings) Pte Ltd's ("Yangzijiang Holdings") main shipyards.

 

MGR Resources PTE Ltd ("MGR") has had to operate against a background of steeply declining iron ore prices which have depressed margins. Nonetheless, MGR has remained profitable and paid US$444,000 of interest to Amedeo after the year end. MGR is exploring opportunities in other commodities.

 

Despite the slowdown, Amedeo continues to make progress in achieving its vision of building a range of holdings in the resource and energy and related infrastructure and asset sectors and proactively assisting its holdings.

 

YZJ Offshore

 

YZJ Offshore's New Yard is fully operational and the build of its first order, Explorer 1, is nearing completion. The keel was laid in April 2014. Post the period end, in April 2015, Explorer 1 was launched from the skid-way on land to the water. The build is progressing to quality and to schedule, and the customer continues to be impressed with the build quality and progress. Explorer 1 is on schedule to be completed in the second half of 2015.

 

As mentioned in the interim statement, as a new fabricator, YZJ Offshore needs to develop its reputation and brand. With Explorer 1 now having been launched, third parties have been inspecting it, its build quality and the New Yard. Indications are that they are satisfied with the New Yard and build quality of Explorer 1, with both comparing favourably to other Chinese yards.

 

With the oil price having declined from circa US$115 per barrel in July 2014 to a low of circa US$47 per barrel in January 2015, there has been a general postponement of capital expenditure in the oil & gas sector. This has led to underutilisation and oversupply of existing rigs.  Whilst we believe that this situation will not persist in the medium term (as we write, the oil price has already recovered to over US$60 per barrel), and over half the world's rig fleet is over 25 years old and will require replacing in the medium term, it has made it more difficult to obtain orders over the course of 2014 and currently. Nonetheless, Amedeo is in continuous discussions with respect to obtaining further orders, and some of these discussions are at an advanced stage.

 

The trend appears to be away from deep water vessels to mid and shallow water vessels and more advanced and specialised (by locality) vessels. The New Yard is well placed to build such vessels. Moreover, in addition to building oil rigs, the New Yard has the capability to build various other vessels including offshore vessels (jackups, semi submersibles and accommodation units) and fabricate blocks for container ships and gas carrier vessels. Discussions regarding building such vessels are also underway.

 

In the meantime, the New Yard is absorbing overspill from Yangzijiang Holdings' principal yards by building blocks for container ships. Along with completing the order for Explorer 1, these activities keep the New Yard busy while new orders are obtained.

 

Amedeo has an indirect 19.0% stake in YZJ Offshore which it holds through its 47.5% stake in the joint venture company, YZJ Offshore Engineering Pte Ltd ("YZJ JV").

 

 

 

 

 

MGR

 

In the period under review, trading conditions have been difficult for MGR, whose principal activity is the amalgamation of iron ore from the Middle East and Africa and onward supply to China. In January 2014, the iron ore price was in the region of US$120 per tonne. By December 2014, it had fallen to below US$70 per tonne, and as we write it is in the region of US$50 per tonne. Brokering margins have decreased substantially as a result.

 

Despite these falls, MGR has remained marginally profitable, even after substantial interest charges of US$444,000 to Amedeo. Due to its low profitability, MGR made no dividend payments in the period under review. The interest charges were settled after the period end. In late January 2015, also after the period end, MGR repaid a loan of US$1,950,000 to Amedeo. There is a further loan to MGR of US$2,044,000 still outstanding which has an interest rate of 15%.

 

With the immediate outlook for iron ore being poor, MGR is utilising its network to explore other opportunities for broking other commodities, including into China and elsewhere.

 

Fund raise

 

In March 2014, Amedeo raised approximately US$8,783,000 via an equity fundraising, which resulted in the issue of 521,764,569 ordinary shares at 1.0 pence per share. Following the fundraising, the Company's enlarged issued ordinary share capital comprises 3,265,384,202 ordinary shares of 0.1p each ("Existing Ordinary Share").

 

Of the funds raised, US$5,059,000 was utilised to pay up fully Amedeo's stake in YZJ JV and to increase Amedeo's stake in YZJ JV from 46.5% to 47.5%, thereby raising Amedeo's stake in YZJ Offshore from 18.6% to 19.0%.

 

In June 2014, US$2,044,000 of the funds raised were utilised to make a working capital loan to MGR to enable it to expand its operations. The loan has a five year maturity and carries a 15% coupon.

 

Legacy Investments

 

At the reporting date, Amedeo had two legacy investments, its holding of 400,000 unquoted preference shares in privately owned Pinnacle Plus Limited ("Pinnacle") and its holding of shares in Ashcourt Rowan Plc.  Significant provisions have been made against the former, and the latter has been disposed of post year end for a value in excess of the book value (US$12,000 sale value versus US$7,000 book value).

 

Financial Review

 

Trading revenue for the eleven months ended 31 December 2014 was US$91,000 (year ended 31 January 2014: US$128,000). Amedeo provides various business development and marketing services to MGR which, during the period resulted in revenue of US$91,000. This lesser figure was due to the shorter period and decreased activity at MGR.

 

Administrative expenses were US$827,000 (year ended 31 January 2014: US$699,000). The increase included a number of one-off items (fees related to the investment in YZJ JV and items related to a now settled VAT dispute) amounting in total to US$149,000.

 

Amedeo's share of loss in associates was US$922,000 (year ended 31 January 2014: US$1,024,000). This was made up of a loss of US$942,000 (year ended 31 January 2014: US$929,000) at YZJ JV and a profit of US$20,000 (year ended 31 January 2014: US$96,000 loss) at MGR. The losses/profits of the associates are non-cash items.

 

Foreign exchange losses amount to US$197,000 (year ended 31 January 2014: US$704,000). These were predominately due to translating GBP denominated loans into US$. This is a non-cash item.

 

Finance income rose to US$444,000 (year ended 31 January 2014: US$154,000) due to the interest on loans to MGR.

 

Overall loss on ordinary activities before taxation fell by 7.2% to US$1,411,000 (year ended 31 January 2014: loss of US$1,520,000). Basic and fully diluted loss per share for the period was US0.04¢ (year ended 31 January 2014: US0.06¢).

 

Excluding non-cash items, loss on ordinary activities before taxation of US$277,000 was broadly in line with the prior period (year ended 31 January 2014: loss of US$272,000). However, after removing one-off items, the loss on ordinary activities before taxation was reduced by 53% to US$128,000 (year ended 31 January 2014: loss of US$272,000).

 

Foreign exchange translation differences of US$64,000 arose (year ended 31 January 2014: US$1,854,000). The current period difference relates to Amedeo's indirect investment in YZJ Offshore. The prior period difference related to a combination of Amedeo's indirect investment in YZJ Offshore (US$597,000) and the translation of historic balance sheet items from GBP into US$ (US$1,257,000). The translation of historic balance sheet items is a non-cash, one-off item. The translation of Amedeo's indirect investment in YZJ Offshore is also a non-cash item but not a one-off item.

 

Taking the balance sheet foreign exchange translation differences into account, overall, total comprehensive loss for the period was US$1,475,000 (year ended 31 Jan 2014 gain of: US$334,000).

 

As at the period end, the carrying value on the balance sheet of investments in associates rose to US$19,205,000 (31 January 2014: US$15,132,000), primarily as a result of the US$5,059,000 investment to pay up fully Amedeo's stake in YZJ JV. Current assets rose to US$5,576,000 (31 January 2014: US$2,624,000) primarily as a result of the US$2,044,000 loan made to MGR. Cash as at 31 December 2014 was US$1,179,000 (31 January 2014: US$582,000).

 

At the date of signature of these financial statements, the Group had US$2,972,000 of cash and cash equivalent balances.

 

Trade payables increased to US$344,000 (31 January 2014: US$200,000) due to timing differences on when invoices were paid around period end.

 

Overall, at the period end, net and total assets were US$24,437,000 (year ended 31 January 2014: US$17,556,000) and US$24,781,000 (year ended 31 January 2014: US$17,756,000), respectively.

 

Post the period end and in line with Amedeo's policy of aligning Directors' incentives with those of shareholders, Amedeo awarded to Glen Lau, the Chief Executive Officer of Amedeo, 260,721,118 warrants to subscribe for new ordinary shares of 0.01p in the Company. The warrants have share price performance and time vesting conditions. They have an exercise price of 1.0 pence compared with the share price of 0.35 pence at the time of the award.

 

Outlook                

 

Progress continues on the build of Explorer 1 which is nearing completion and is scheduled to be completed in the second half of 2015. The quality of the build is impressive and the build is to schedule. This is key in building the New Yard's reputation as a quality and reliable yard. The oil price has fallen substantially from January 2014 to now, as we write, and this has led to a postponement of capital expenditure in the oil and gas sector. Many rigs are underemployed and there is a current oversupply. We do not expect this to continue in the medium term. The price of oil has recovered from its lows of under US$50 per barrel to the current over US$60 per barrel. More than half the world's rig fleet is over 25 years old and will require replacing in the medium term. Further, demand for rigs is expected to be for more advanced and localised rigs.

 

The New Yard is able to meet this demand. In addition, the New Yard is able to construct a variety of other vessels. While completing Explorer 1 and waiting for further orders, the New Yard is also building blocks for container ships. As mentioned above, the New Yard is in continuous discussions with respect to obtaining further vessel orders.

 

The price of iron ore has fallen substantially from January 2014 to now, as we write. This has eroded margins in the iron ore brokering business. MGR has nonetheless remained marginally profitable and has met its interest payments. With no immediate recovery in the price of iron ore expected, MGR is exploring opportunities in broking other commodities.

 

While, due to a low oil price and falling commodity prices, progress in building Amedeo has been slower than expected, as well as seeking new orders for the New Yard and MGR exploring opportunities in broking a range of commodities, Amedeo also continues exploring additional investments in the resource and resource infrastructure sectors.

 

The Board looks forward confidently to the future.

 

Annual general meeting

 

You will find set out at the end of this document a notice convening an annual general meeting of the Company ("AGM") to be held at 201 Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT at 2.30pm on 30 June 2015. Also enclosed is a proxy form for use by shareholders in respect of the AGM. 

The Board considers that a consolidation of the existing ordinary shares will be for the benefit of the Company and its members because it should assist in improving such share's attractiveness and liquidity, through the increase in value of each share which may potentially lead to a relative reduction in the bid offer spread price of a share.   Accordingly it is proposed that every 100 Existing Ordinary Shares be consolidated into 1 ordinary share of 10p (the "Consolidation") in accordance with Resolution 5 proposed at the AGM.

To effect the Consolidation it will be necessary to issue 98 further Existing Ordinary Shares so that the Company's issued share capital is exactly divisible by 100 at the time that the Consolidation takes effect.  The additional 98 Existing Ordinary Shares would be issued to the Company Secretary for cash, conditional on the approval of Resolution 5 at the AGM.

Holders of fewer than 100 Existing Ordinary Shares would not be entitled to receive a new ordinary share of 10p each (a "New Ordinary Share") under the Consolidation.  Shareholders with a holding of Existing Ordinary Shares of greater than 100 but not exactly divisible by 100 would have their entitlement rounded down to the nearest whole number.  Fractional entitlements would be aggregated and sold in the market for the benefit of the Company except that any net proceeds after the deduction of expenses of the sale in excess of £3.00 per shareholder would be distributed to the relevant shareholders entitled thereto.

Assuming that the Consolidation is approved, it is expected to become effective, and trading in the New Ordinary Shares is expected to commence on AIM on 1 July 2015. 



 

GROUP STATEMENT OF COMPREHENSIVE INCOME                                                                                

for the 11 months ended 31 December 2014



11 months ended 31 Dec 2014

Year ended 31Jan 2014








Note

$'000

$'000





Revenue


91

128

Cost of sales


-

(2)



______

_______

Gross profit


91

126

 

 

 

 



 

 

Administrative expenses

4

(827)

(699)

Share of loss of associates

5

(922)

(1,024)

Foreign currency loss


(197)

(704)



______

______

Loss from operations


(1,855)

(2,301)





Gain on purchase of associate                                                


-

519

Dividend income

11

-

108

Finance income

7

444

154



______

______

Loss on ordinary activities before taxation


(1,411)

(1,520)





Taxation

8

-

-



______

______

Loss for the year                                                                       


(1,411)

(1,520)





Basic and diluted loss per share

9

(0.04)¢

(0.06)¢

 

Other Comprehensive Income

Foreign exchange translation difference


(64)

1,854



______

_____

Total Comprehensive (Loss)/Profit for the year


(1,475)

334

 

All of the Group's activities are classed as continuing.

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

The Company has elected to take exemption under section 408 of the Companies Act 2006 from presenting the Company statement of comprehensive income. The loss for the Company for the 11 months to 31 December 2014 was US$408,000 (year to 31 Jan 2014: loss of US$1,007,000).



 STATEMENTS OF CHANGES IN EQUITY                     

Group


Share capital

Share premium account

Share-based payment reserve

 

Foreign currency translation reserves

Retained earnings

Total equity attributable to equity holders of parent


$'000

$'000

$'000

$'000

$'000

$'000

At 1 February 2013

4,923

21,643

 

250

5

(331)

(9,302)

17,183

Loss for the year

-

-

-

-

(1,520)

(1,520)

 

Share-based payments

-

-

39

-

-

39

Foreign exchange

-

-

-

1,854

-

1,854


______

________

________

________

_________

________

At 31 January 2014

4,923

21,643

289

1,523

(10,822)

17,556








Loss for the period

-

-

-

-

(1,411)

(1,411)

Share-based payments

-

-

15

-

-

15

Foreign exchange

-

-

-

(64)

-

(64)

Issue of share capital

881

7,902

-

-

-

8,783

Issue costs

-

(442)

-

-

-

(442)


______

________

________

________

_________

________

At 31 December 2014

5,804

29,103

304

1,459

(12,233)

24,437


______

________

________

________

_________

________

 

Company


Share capital

Share premium account

Share-based payment reserve

 

Foreign currency translation reserves

Retained earnings

Total equity attributable to equity holders of parent


$'000

$'000

$'000

$'000

$'000

$'000

At 1 February 2013

4,923

 

21,643

250

-

(8,590)

18,226

 

Loss for the year

-

-

-

-

(1,007)

(1,007)

Share-based payments

-

-

39

-

-

39

Foreign exchange

-

-

-

922

-

922


______

______

______

______

_______

______

At 31 January 2014

4,923

21,643

289

922

(9,597)

18,180








Loss for the period

-

-

-

-

(408)

(408)

Share-based payments

-

-

15

-

-

15

Issue of share capital

881

7,902

-

-

-

8,783

Issue costs

-

(442)

-

-

-

(442)


______

_______

______

______

_______

______

At 31 December 2014

5,804

29,103

304

922

(10,005)

26,128


______

________

________

________

_________

________

 

 

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

 

STATEMENTS OF FINANCIAL POSITION

as at 31 December 2014



                          Group

                         Company

Assets

Note

 Dec 2014

Jan 2014

 Dec 2014

Jan 2014

Non-current assets


$'000

$'000

$'000

$'000

Investment in subsidiaries

10

-

8

8

Investment in associates

11

19,205

15,132

-

-



_____

_____

_

_



19,205

15,132

8

8







Current assets






Loans receivable

12

3,813

1,950

24,867

18,090

Investments in quoted shares

13

7

7

7

7

Investment in unquoted preference shares

14

33

33

33

33

Other receivables

15

544

52

250

52

Cash and cash equivalents


1,179

582

1,017

271



____

____

______

_____



5,576

2,624

26,174

18,453







Total assets


24,781

17,756

26,182

18,461







Liabilities






Current liabilities






Trade and other payables

16

(344)

(200)

(54)

(281)



____

___

____

____

Total liabilities


(344)

(200)

(54)

(281)









______

______

______

______

Net assets


24,437

17,556

26,128

18,180







Equity






Called up share capital

17

5,804

4,923

5,804

4,923

Share premium account


29,103

21,643

29,103

21,643

Share warrant reserve

18

304

289

304

289

Foreign currency translation reserve


1,459

1,523

 

922

922

Accumulated deficit


(12,233)

(10,822)

(10,005)

(9,597)



_____

_____

_____

_____

Total equity


24,437

17,556

26,128

18,180

 

 

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

STATEMENTS OF CASH FLOWS



Group

Company



11 months ended 31 Dec 2014

Year ended   31 Jan 2014

11 months ended 31 Dec 2014

Year ended   31 Jan 2014









$'000

$'000

$'000

$'000

Loss for the year before tax


(1,411)

(1,520)

(408)

(1,007)

Adjustments for:






Share-based payments


15

39

-

39

Share of loss of associates


922

1,024

-

-

Gain in bargain purchase


-

(519)

-

-

Loss on US$ retranslation


-

-

-

689

Foreign exchange difference on associates


-

568

-

-

Change in receivables


(492)

(42)

(198)

(43)

Change in  payables


144

58

(78)

135

Dividend income


-

(108)

-

-



_____

_____

_____

_____

Cash flows from operating activities


(822)

(500)

(684)

(187)







Investing activities






Investment in associates


(5,059)

(47)

-

-

Loans made to associates


(1,863)

-

(1,863)

-

Loans made to subsidiaries


-

-

(5,059)

(2,228)

Loans receivable given


-

(1,852)

-

-

Dividends received from associate


-

208

-

-



______

______

______

______

Net cash used in investing activities


(6,922)

(1,691)

(6,922)

(2,228)







Financing activities






Proceeds from share issue


8,783

-

8,783

-

Share issue costs


(442)

-

(442)

-



_______

_______

_______

_______

Net cash from financing activities


8,341

-

8,341

-



_______

_______

_______

_______







Net increase/(decrease) in cash and cash equivalents


597

(2,191)

735

(2,415)







Cash and equivalents at beginning of year


582

2,875

271

2,798

Effects of currency translation on cash and cash equivalents


-

(102)

11

(112)







Cash and equivalents at end of year


1,179

582

1,017

271













 

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

        

   NOTES TO THE GROUP FINANCIAL STATEMENTS

1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the period and the preceding year unless stated otherwise.

 

Basis of accounting

The financial statements of the Group and the Company have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the International Accounting Standards Board as adopted by European Union.

 

The financial statements have been prepared under the historical cost convention, with the exception of financial instruments.

 

The accounting policies applied are the same as those applied in the financial statements for the year ended 31 January 2014. New standards introduced during the period had no material impact on the results or net assets of the company.

 

The Directors anticipate that the adoption of those standards and interpretations which, at the date of authorisation of these financial statements, were in issue but not yet effective will have little or no impact on the financial statements when they come into effect.

 

Going concern

The Directors have reviewed the current budgets and cash flow projections for a period of more than 12 months from the date of this report, which take into account the current cash balances. As at the year end, the Group had US$1,179,000 of cash. The Group's administrative expenses were US$827,000 (year ended 31 January 2014: US$699,000). These included a number of one-off items (fees related to the increase in capital for YZJ Offshore Engineering Pte Ltd ("YZJ JV") and items related to a now settled VAT dispute) amounting in total to US$149,000. Excluding the one-off items, administrative expenses were US$678,000 (year ended 31 January 2014: US$699,000) and, allowing for non-cash items (i.e. the Share Based Payment Charge), administration expenses for the year were US$663,000 (year ended 31 January 2014: US$660,000). The Directors do not expect these cash costs to rise substantially in the foreseeable future. As at the date of signature of these financial statements the Group had US$2,972,000 of cash and equivalent balances, following the repayment of a loan by MGR Resources PTE Ltd  ("MGR") in January 2015.

On the basis of the above, the Directors believe that sufficient funds will be available to support the going concern status of the Group over the next 12 months following the approval of these financial statements. Consequently, the Directors believe that it is appropriate to prepare the Group's financial statements on a going concern basis.

Basis of consolidation

Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Company and its two subsidiary undertakings, Amedeo Resources (Asia) PTE Ltd ("Amedeo Asia") and Creon Corporation Limited ("Corporation"), the latter of which is dormant, as if they formed a single entity. Inter-company transactions and balances between Group companies are therefore eliminated in full.

 

Revenue

Revenue of US$91,000 was recorded in the 11 months ended 31 December 2014 (year ended 31 Jan 2014: US$128,000). All the revenue was receivable from the associate company, MGR, for the provision of marketing and consultancy services.

 

 

Investments in subsidiaries

Investment in subsidiary companies is stated at cost less provision for any impairment in value. Subsequent measurement of all investments in subsidiaries is at fair value.

 

Investments in unquoted and quoted shares

Investments in unquoted and quoted shares are initially measured at cost, including transaction costs. Subsequent measurement of all investments is at fair value. The fair values of listed investments are based on bid prices at the financial year end date.

 

Assets held by the Group at the period end include unlisted ordinary equity shares, unlisted redeemable preference shares and listed investments.

 

When managing its investments, the Group aims to profit from changes in the fair value of equity investments. Accordingly, all quoted equity investments are designated as "at fair value through the profit and loss" and are subsequently recorded in the statement of financial position as current assets at fair value.

 

Investment in associates

Where the Company, or its wholly owned subsidiaries, has significant influence over an entity, normally being more than 20% and less than 50%, such as Amedeo Asia's holdings in YZJ JV and MGR, then that investment is classified as an associate and is equity accounted for, see notes 5 and 11.

 

Where the Company, or its wholly owned subsidiaries, hold less that 20% of the voting control of an entity, the investment is valued at cost or impaired value, and subsequently revalued upwards only if there is a third party reference which can be used to justify any value uplift. It is not the policy of the Company to apply a "directors' valuation".

 

Loans receivable

Loans receivable are valued at nominal amount less provisions against recoverability. The maximum exposure in respect of the loan portfolio at the period end is the amount receivable shown in note 12. No hedging transactions have been entered into with respect to the loan portfolio.

 

Impairment

At each financial period end date, the Group reviews the carrying amounts of its non-current assets with finite lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of the individual asset, the Group estimates that recoverable amount of the cash-generating unit to which the asset belongs.

 

Cash

Cash and cash equivalents comprise cash at bank and in hand.

 

Financial liabilities and equity

Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations rather than the financial instrument's legal form. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

 

 

Financial assets

Apart from its unquoted and quoted investments and its investments in associates, the Group has only financial assets classified as loans and receivables. The Group's loans and receivables comprise loans and other receivables and cash and cash equivalents in the statement of financial position.

 

Trade payables

Trade payables are not interest bearing and are stated at their nominal value.

 

Equity instruments

Equity instruments issued by the Company are recorded as the proceeds received, net of direct issue costs.

 

Current and deferred tax

The charge for current tax is based on the results for the period as adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or substantively enacted by the financial period end date. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will arise against which the temporary difference will be utilised.

 

Foreign currencies

The financial information is presented in United States Dollars which is the functional currency of the Company.  The presentational and functional currency changed from United Kingdom Pounds Sterling in the 11 months ended 31 December 2014. Comparative balances have been restated with any effect of restatement taken to the foreign currency translation reserve.

 

Monetary assets and liabilities denominated in foreign currencies in each company are translated at the rates of exchange prevailing at the accounting date. Transactions in foreign currencies are translated at the rate prevailing at the date of transaction.

 

On consolidation, revenues, costs and cash flows of undertakings abroad are included in the Group income statement at average rates of exchange for the year. The assets and liabilities denominated in foreign currencies are translated into United States Dollars using rates of exchange at the reporting date.

 

Exchange differences on the re-translation of opening net assets and results for the year of foreign subsidiary undertakings and associates are dealt with through reserves net of differences on loans denominated in foreign currency. Other gains and losses arising from foreign currency transactions, including trading, are included in the consolidated income statement.

 

Share-based payments

All share-based payments are accounted for in accordance with IFRS 2 - "Share-based payments". The Company issues equity-settled share-based payments in the form of share warrants to certain directors and key advisers. Equity settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on the Company's estimate of shares that will eventually vest.

 

Fair value is estimated using a Black Scholes probability valuation model. The expected life used in the model has been adjusted, on the basis of management's best estimate for the effects of volatility of share price and exercise restrictions.

 

Critical accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

 

(a) Impairment of investment in associated company: 

The investment in the associated company is stated on an equity accounting basis supported by the audited financial statements of the associate. The Group is also required to determine whether any impairment loss should be recognised in accordance with IAS 39. The recoverable amount is determined based on value in use calculations. In determining the value in use, the Company estimates:

(i) its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate or joint venture and the proceeds from the ultimate disposal of the investment; or

(ii) the present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal. 

It then compares the product of these estimates with the total carrying value of the associate. 

 

(b) Recoverability of loans receivable:

Separately, the Company determines the recoverability of its loans to its associate, MGR. As the loans were used to make working capital available to MGR, consideration of the recoverability of the loans is related to consideration of the carrying value of the associate. 

 

2. Segmental reporting

No segmental analysis is considered necessary as the Directors believe that the Group has only one segment in the period under review, being that of an investment company with a focus on investments in, but not exclusively, the resources and/or resources infrastructure sectors, with no specific national or regional focus.

3. Reference Date and Presentational Currency

 

During the period under review, the Directors decided to change the accounting reference date from 31 January to 31 December. This is more typical in the resource and offshore sector and generally. As a result of this change not all amounts disclosed in the financial statements for the corresponding period may be directly comparable.

 

Also during the period under review, the directors decided to change the reporting currency to United States Dollars, in light of the fact that all of the current investments of the Company account in US Dollars and indeed, this is the norm in the resource and infrastructure sectors and that the only head office expenses are incurred in Pounds Sterling. The GBP exchange rate at 31 December 2014 was 1.5532.

 

4. Administrative expenses

 

Expenses included in administrative expenses are analysed below

 


11 months ended 31 Dec 2014

Year ended   31 Jan 2014


$'000

$'000

Administration, legal, professional and financial costs

679

496

Directors' fees

140

151

Unrecovered VAT

8

52


_____

_____


827

699


_____

_____

 

The auditor's fees in the 11 months ended 31 December 2014 for the audit of the parent company and the consolidated accounts were in respect of taxation services amounted to US$50,000 (year ended 31 January 2014: US$63,000) and auditor's fees payable to the associates of the company's auditors in respect of audit of the subsidiary's financial statements were US$30,000 (year ended 31 January 2014: US$: Nil). In addition, fees for non-audit services in respect of taxation services in the period ended 31 December 2014 were US$47,500 (year ended 31 January 2014: US$14,000).

 

5. Share of loss of associates


11 months ended 31 Dec 2014

Year ended   31 Jan 2014


$'000

$'000

YZJ Offshore Engineering Pte Ltd

 

(942)

(929)

MGR Resources Pte Ltd

20

(95)


_____

______


(922)

(1,024)


_____

______

 

The Company's wholly-owned Singapore-registered subsidiary, Amedeo Asia, holds a 47.51% investment in YZJ JV, a Singapore registered company. The loss of US$922,000 represents Amedeo Asia's share of YZJ JV's loss for the 11 months ended 31 December 2014 of US$942,000 (year ended 31 January 2014: US$929,000) and Amedeo Asia's share of  MGR's income for the 11 months  ended 31 December 2014 of US$20,000 (year ended 31 January 2014: loss of US$95,000). See note 11.

 

6. Foreign exchange losses


11 months ended 31 Dec 2014

Year ended   31 Jan 2014


$'000

$'000

Loss on conversion of loans made to associates

181

449


____

____




In June 2014, the Company made a foreign currency denominated, interest free, unsecured loan to its wholly-owned subsidiary, Amedeo Asia, totalling GBP1.2 million (translated to US$2.044 million in June 2014), to enable Amedeo Asia to make a convertible loan to MGR ("Convertible Loan").  At 31 December 2014, the loan of GBP1.2 million was retranslated to US$1.863 million at the balance sheet date, resulting in an unrealised loss on foreign exchange of US$0.181 million. See table below, which details this:

Loan from Amedeo Asia to MGR in 2014



At 30 June 2014


 $2.044m

Less: At 31 December 2014


($1.863)m

Unrealised loss on foreign exchange


US $0.181m

 

 

The Company does not hedge against movements in foreign exchange rates.

7. Loan Interest


11 months ended 31 Dec 2014

Year ended   31 Jan 2014


$'000

$'000

Interest on loans made to associates

444

154


____

____

 

Interest on loans made to associates is made up of interest receivable from MGR, both in the period under review and in the year ended 31 January 2014.

8. Taxation

11 months ended 31 Dec 2014

Year ended   31 Jan 2014


$'000

$'000

UK Corporation tax



Factors affecting tax charge in the year



Loss on ordinary activities before tax

(1,411)

(1,520)

Loss on ordinary activities at the effective rate

of corporation tax 20% (year ended 31 Jan 2014: 20%)

(282)

 

(304)

Unrelieved losses

282

304


-

-


___

___

Deferred income tax assets are recognised for tax losses carried-forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group did not recognise deferred income tax assets relating to estimated carried forward tax losses of US$12,454,000 (31 January 2014: US$11,150,000) as there is insufficient evidence that the asset will be recovered. The deferred income tax asset relating to these losses is US$2,491,000 (31 January 2014: US$ 2,341,500).

9. Loss per share

 

The basic and diluted loss per share for the 11 months to 31 December 2014 was US0.04¢(year to 31 January 2014: US0.06¢). The calculation of loss per share is based on the loss of US$1,411,000 for the 11 months ended 31 December 2014 (year to 31 January 2014: US$1,520,000 loss) and the weighted average number of shares in issue during the 11 months to 31 December 2014 of 3,222,348,757 (year ended 31 January 2014: 2,738,619,633).

 

5,000,000 warrants were exercised in the period under review (2014: Nil) and no warrants were issued during the 11 months ended 31 December 2014 (year ended 31 January 2014:109.5 million), which equates to total warrants on hand of 191.5 million (year ended 31 January 2014: 196.5 million). The outstanding warrants represent approximately 6% of the Company's current issued share capital and are considered by the Directors to be anti-dilutive, given that the various exercise prices of warrants are all in excess of the average share price for the year. See post balance sheet events note 25, for details of post year end warrant issues.

 

10. Investment in subsidiaries


Company


31 Dec 2014

31 Jan 2014

Cost or valuation

$'000

$'000

At 1 February 2014

8

8


___

___

At 31 December 2014

8

8


___

___

 

The investment in subsidiaries shown in above is the investment in Amedeo Asia.

 

The Company's subsidiaries were as follows:

 

Name

Country of incorporation

Proportion of ownership interest



Dec 2014

Jan 2014

Creon Corporation Limited

England

100%

100%

Amedeo Resources (Asia) Pte Limited ("Amedeo Asia")

Singapore

100%

100%

 

Creon Corporation Limited was incorporated on 24 November 2011 and acquired by the Company on 16 December 2011. It remains dormant. Amedeo Asia was incorporated on 10 July 2012 to hold the Company's Asian-based investments.

 

11. Investments in associates

 

During the year, Amedeo's wholly owned subsidiary, Amedeo Asia made an additional investment into YZJ JV, which is incorporated in Singapore and increased its holding from 46.45% to 47.51%. YZJ JV has a 40% stake in Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJ Offshore"), which is incorporated in Singapore. YZJ JV equity accounts for its 40% interest in YZJ Offshore, and Amedeo Asia equity accounts for its 47.51% stake in YZJ JV. Amedeo provided an interest free unsecured loan to Amedeo Asia to make the 47.51% stake in YZJ JV.

 

Amedeo Asia also has a 49% stake in MGR, which is incorporated in Singapore. Amedeo Asia equity accounts for its 49% stake in MGR. In the period to 31 December 2014 the Group received a dividend from MGR amounting to US$: Nil (year to 31 January 2014: US$108,000).

 


YZJ JV


MGR


Total


31 Dec 14

31 Jan14


31 Dec 14

31 Jan 14


31 Dec 14

31 Jan 14

 

Amounts relating to associates

$'000

$'000


$'000

$'000


$'000

$'000

Current assets

1,086

1,513


14,496

7,534


15,582

9,047

Non-current assets

38,524

30,288


-

-


38,524

30,288

Current liabilities

(16)

(23)


(11,656)

(6,777)


(11,672)

(6,800)

Non-current liabilities

-

-


(2,035)

-


(2,035)

-


______

_______


_______

_______


_______

_______

Net assets

39,594

31,778


805

757


40,399

32,535


_______

_______


_______

_______


_______

_______

Group's share of net assets of associates

18,811

14,762


394

370


19,205

15,132


_______

_______


_______

_______


_______

_______










Total revenue

2

3


43,777

49,615


43,779

49,618

Loss

(2,165)

(2,000)


46

(195)


(2,119)

(2,195)


_______

_______


_______

_______


_______

_______

Group's share of loss of associates (see note 5)

(942)

(929)


20

(95)


(922)

(1,024)


_______

_______


_______

_______


_______

_______

 

 

Group's share of net assets of associates

$'000

Opening at 1 February 2014

15,132

Additional investment in associates

5,059

Group's share of loss of associates

(922)

Foreign exchange translation difference

(64)

Closing at 31 December 2014

19,205

 

 

 

 

 

 

12. Loans receivable


Group

Company

 


31 Dec 2014

31 Jan 2014

31 Dec 2014

31 Jan 2014


$'000

$'000

$'000

$'000

Balance brought forward

1,950

-

18,090

 16,464

Loans advanced

2,044

1,950

6,958

2,314

 

 

 

 

Foreign exchange loss

(181)

-

(181)

(688)


______

______

______

______

Balance carried forward

 

3,813

1,950

24,867

18,090


______

______

______

______

During the year, the Company made a number of interest free, unsecured and repayment on demand loans to its wholly-owned subsidiary, Amedeo Asia, totalling US$6.958 million, which, when aggregated with loans made to Amedeo Asia in the prior year, totalled US$24.867 million at the period end (year to 31 January 2014: US$18.090m). During the period, the Group also made loans to an associate, MGR, of US$2.044m (year ended 31 January 2014: US$1.950m). The prior year loan was repaid in full subsequent to the year end as referred to in note 25.The loan made in the period under review, US$2.044m, is not due to be repaid until 2019.

The Directors consider that the carrying amount of loans receivable approximates to their fair value.

13. Investments in quoted shares


Group and Company


31 Dec 2014

31 Jan 2014

Cost or valuation

$'000

$'000

At 1 February

7

7

Impairment provision

-

-


_____

_____


7

7


_____

_____

The investment represents 2,775 ordinary shares in the capital of Ashcourt Rowan PLC. This investment has been disposed of post period end, for a sale value of US$12,000.

 

14. Investment in unquoted preference shares


Group and Company


31 Dec 2014

31 Jan 2014

Cost or valuation

$'000

$'000

Cost

660

660

Provision brought forward

(627)

(627)


_______

_______


33

33


_______

_______

 

The investment in unquoted preference shares represents 400,000 £1 non-voting redeemable preference shares held in Pinnacle Plus Limited ("the Preference Share") and is held at impaired value. The Preference Shares were acquired in 2008, and accrue interest at a rate of 7.0 per cent. per annum. The Preference Shares were due for redemption from 30 September 2013. The Company has not recognised any interest income accrued on the Preference Shares to date.

 

The carrying value of the Preference Shares will continue to be monitored closely by the Directors.

 

 

 

15. Other receivables


            Group

Company


31 Dec 2014

31 Jan 2014

31 Dec 2014

31 Jan 2014


$'000

$'000

$'000

$'000

Prepayments and sundry debtors

544

52

250

52

 

The Directors consider that the carrying amount of other receivables approximates to their fair value.

 

16. Trade and other payables

Current liabilities

Group

         Company


31 Dec 2014

31 Jan 2014

31 Dec 2014

31 Jan 2014


$'000

$'000

$'000

$'000

Trade payables and accruals

344

159

54

240

VAT provision

-

41

-

41


______

______

______

______


344

200

54

281


______

______

______

______

 

The VAT provision of US$41,000 represented the amount of VAT previously recovered by the Company. This amount was settled with HMRC, post year end. See note 4. The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

 

17.  Called up Share capital


31 Dec 2014

31 Jan 2014

Allotted, called up and fully paid

'000

'000

Ordinary shares



In issue at beginning of the period

2,738,619

2,738,619

Issued for cash

526,765

-

Total Ordinary shares

3,265,384

2,738,619





$'000

$'000

Ordinary Shares of 0.1p each

5,179

4,298

44,190,545 Deferred Shares of 0.9p each

625

625


_____

____

Total Share Capital

5,804

4,923

 

The 44,190,545 deferred shares of 0.9p each ("Deferred Shares") do not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company or to receive a dividend or other distribution or to participate in any return on capital on a winding up unless the assets of the Company are in excess of GBP1,000,000,000,000.  The Company retains the right to purchase the Deferred Shares from any Shareholder for a consideration of one penny in aggregate for all that shareholder's Deferred Shares.  As such, the Deferred Shares effectively have no value.  Share certificates have not and will not be issued in respect of the Deferred Shares.

In March 2014, Amedeo raised approximately US$8,783,000 via an equity fundraising, which resulted in the issue of 521,764,569 ordinary shares at 1.0 pence per share. Following the fundraising, the Company's enlarged issued ordinary share capital comprises 3,265,384,202 ordinary shares of 0.1p each ("Existing Ordinary Share").

 

As detailed in the Chairman's Statement on page 7, the Board considers that a consolidation of the Existing Ordinary Shares will be for the benefit of the Company and its members because it should assist in improving such shares attractiveness and liquidity, through the increase in value of each share which may potentially lead to a relative reduction in the bid offer spread price of a share.   Accordingly it is proposed that every 100 Existing Ordinary Shares be consolidated into 1 ordinary share of 10p (the "Consolidation") in accordance with Resolution 5 proposed at the AGM.

To effect the Consolidation it will be necessary to issue further Existing Ordinary Shares so that the Company's issued share capital is exactly divisible by 100 at the time that the Consolidation takes effect.  The additional 98 Existing Ordinary Shares would be issued to the Company Secretary for cash, conditional on the approval of Resolution 5 at the AGM.

18. Warrants

The Company had 196,544,785 outstanding warrants at 31 January 2014. In the 11 month period ended 31 December 2014, 5,000,000 warrants were exercised per the table below. This leaves 191,544,785 warrants outstanding at 31 December 2014.

 

Date of grant  

Exercise period

Number of Warrants granted /(surrendered)

Exercise price

Number exercised

Number of Warrants at 31 Dec 2014

4 April 2022

16,000,000

0.75 pence

-

16,000,000

31 August 2012

31 August 2017

71,000,000

0.5 pence

5,000,000

66,000,000

23 June 2013

23 June 2023

109,544,785

0.5 pence

-

109,544,785



________ 


_______ 

________ 




196,544,785


5,000,000

191,544,785




________


 _______ 

________ 

All of the warrants granted during 2012 vested in 2012 and there are no outstanding conditions to exercise. Therefore there is no charge in the current year related to the 87,000,000 warrants issued in 2012. The charge in the current year of US$15,000 relates to the 109,544,785 warrants issued in the prior period.

Post the period end, on 1 February 2015, 50,000,000 warrants with an exercise price of 1.0p and an expiration date of 31 January 2025 were issued to a third party.

In addition, post period end, Mr Lau was issued 260,721,118 warrants with an exercise price of 1.0p and an expiration date of 11 March 2025.

The following table sets out the warrants held by Directors and former Directors, or entities connected with the Directors, who served during the year and up to the date of this report:

Warrant holder  

Number of Warrants

Date of grant  

Exercise period

Exercise price

Number exercised

A Quraishi (1)

7,000,000

31 August 2012

31 August 2017

0.5 pence

-

Fulton Capital Management Ltd(2)

25,000,000

31 August 2012

31 August 2017

0.5 pence

-

Lau Lian Seng Glen (3)

260,721,118

11 March 2015

11 March 2025

1.0 pence

-

Zafarullah Karim (4)

33,315,774

31 January 2015

31 January 2025

1.0 pence

-

Zafarullah Karim

109,544,785

23 June 2013

23 June 2023

0.5 pence

-

Notes

(1) Mr Quraishi resigned as a director on 12 September 2013.

(2) Fulton Capital Management Limited is a company owned and controlled by Mr Lau, the Company's chief executive officer

(3) Post the period end, Mr Lau was issued 260,721,118 warrants with an exercise price of 1.0p and an expiration date of 11 March 2025.

(4)Post the period end, Mr Karim acquired from a third party 33,315,774 warrants with an exercise price of 1.0p and an expiration date of 31 January 2025.

 

No warrants were issued in the period under review. The share based payment charge in the period under review of US$15,000 relates to the 109,544,785 warrants issued in 2013 (year ended 31 January 2014: US$39,000). The Black Scholes pricing model was used to calculate the share based payment charge.

 

19. Asset value per share

 

The net asset value per share at 31 December 2014 was US$0.0075 (31 January 2014; US$0.0066). Net asset value is based on the net assets as at 31 December 2014 of US$24.44 million (31 January 2014: US$17.56 million) and on the number of ordinary shares in issue at 31 December 2014 being 3,265,384,202 ordinary shares (31 January 2014: 2,738,619,633).

 

20. Staff numbers and costs

The average monthly number of employees of the Group, including directors, during the period was 4 (2014: 4). The Directors are considered the key management of the Group. The aggregate remuneration of the Directors is set out in the remuneration report. All employees are Directors of the Company, therefore no remuneration was paid to staff of the Company (year ended 31 January 2014: US$: Nil).

21. Capital commitments

There were no capital commitments at the period end (31 January 2014: $nil).

22. Related party transactions

Fulton Capital Management Limited ("Fulton") is a company owned and controlled by Mr Lau, the Company's chief executive officer. During the period under review, Amedeo incurred commission of US$102,000 from Fulton in respect of a contract for services executed in July 2012 relating to the investment in YZJ JV (year to 31 January 2014: US$: Nil), prior to Mr Lau being appointed as a director of Amedeo. This sum was outstanding at the year end and is included in trade and other payables. This is still outstanding at the date of this report.

In April 2014, Amedeo signed a management services agreement with MGR to provide marketing assistance and services to MGR. During the period, MGR paid US$91,000 to Amedeo in respect of these services (year ended 31 January 2014: US$128,000).

In June 2014, Amedeo made a Sterling loan equivalent to US$2.04m to MGR. The Group earned US$444,000 in interest on their loans to MGR for the period to December 2014 (year to January 2014: US$ 154,000). At the period end US$444,000 was outstanding and is included in other receivables (31 January 2014: US$Nil). This has been paid in full subsequent to period end.

23. Analysis of cash and cash equivalents

31 Dec 2014

31 Jan 2014


$'000

$'000

Cash at bank and in hand

1,179

582

 

24. Financial instruments and risk management

 

Investments

All of the Group's actual and intended investments present a risk of loss of capital. Such investments are subject to investment specific, industry specific, sector specific, market specific and macro-economic risks including, but not limited to, international economic conditions, international financial policies and performance, governmental events and changes in laws. Moreover, the Company may only have a limited ability to vary its investments in response to changing conditions.

The success of the Group is dependent upon the identification, making, management and realisation of suitable investments. There can be no guarantee that such investments can or will be made or that such investments will be successful. Poor performance by an investment could severely affect the net asset value per share of the Company.

The Group may have minority interests in companies, partnerships and ventures. As such it may be unable to exercise control over the operations of such investments or exercise control over any exit, or timing of any exit, by other investors in such investments. In addition, the managements of the investee companies targeted by the Directors may not always welcome proactive shareholder involvement.

The Group may dispose of investments in certain circumstances and may be required to give representations and warranties about those investments. In certain cases such representations and warranties may be challenged. This may lead to the Group having to pay damages to the extent that such representations and warranties turn out to be inaccurate or other terms of sale are breached.

There can be no certainty that the value of investments as reported from time to time will in fact be realised.

Investments in unquoted companies

It is intended that the Group's investment portfolio will comprise interests predominantly in unquoted, growth companies, which may be difficult to value and/or realise. Investments in unquoted growth companies may involve greater risks than is customarily associated with investments in larger, more established quoted companies. In particular, such companies may have limited product offerings, markets or resources and may be dependent on a small number of key individuals. As at 31 December 2014, the Group's holding of unquoted investments was valued at approximately US$19.2 million (January 2014: US$15.13 million).

Market risk

It is possible that certain investments will represent a significant proportion of the Company's total assets, such as Amedeo Asia's investment in YZJ JV. As a result, the impact on the Company's performance and the potential returns to investors will be adversely affected to a greater degree if any one of those investments were to perform badly than would be the case if the Company's portfolio of investments was more diversified. At 31 December 2014, the overall investment allocation was a portfolio of 4 investments, of which one was in a quoted company and three investments were in unquoted companies. As at 31 December 2014, the Company's investment in YZJ JV represented 98% of the value of the Company's investment portfolio and almost 76% of the Group's gross assets.

Interest rate risk

The majority of the Group's financial assets and liabilities are not interest bearing. As a result, the Group is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. Any cash and cash equivalents are held in short notice accounts. The table below summarises the Group's exposure to interest rate risks.

 

 

 

As at 31 December 2014


Non-interest

Variable

Fixed




bearing

interest

interest

Total

Assets


$'000

$'000

$'000

$'000

Investments at fair value

19,212

-

33

19,245

Loans to MGR


-

-

3,813

3,813

Other receivables


544

-

-

544

Cash and cash equivalents


1,179

-

-

1,179





______

_______

______

______

Total financial assets



20,935

-

3,846

24,781





______

_______

______

______

Liabilities







Trade and other payables


344

-

-

344





______

_______

______

______

Total financial liabilities


344

-

-

344



______

_______

______

______

 

As at 31 January 2014


Non-interest

Variable

Fixed




bearing

interest

interest

Total

Assets


$'000

$'000

$'000

$'000

Investments at fair value

15,139

-

33

15,172

Loan to MGR


-

-

1,950

1,950

Other receivables


52

-

-

52

Cash and cash equivalents


582

-

-

582





______

_______

______

______

Total financial assets



15,773

-

1,983

17,756





______

_______

______

______

Liabilities







Trade and other payables


200

-

-

200





______

_______

______

______

Total financial liabilities


200

-

-

200



______

_______

______

______

 

Hedging and currency risk

As the current focus of the Company's investment has been outside of the UK, the majority of the Company's investments are denominated in US$. As such, the Company is exposed to fluctuations in exchange rate variations between the US$ and GBP. During the year under review, Amedeo changed its functional and presentational currency to US$, which reduces currency risk.

 

 

 

Liquidity risk

The Company's financial instruments include minority equity investments in unquoted Singapore-registered companies and an investment in an AIM-traded company As a result, the Company may not be able to quickly liquidate some of its investments in these instruments at an amount close to their fair value in order to meet its liquidity requirements.

The Company has a procedure to manage liquidity risk whereby the board meet regularly to review investment holdings and current and anticipated levels of financial liabilities. Where liquidity of the investments within the portfolio is believed to be at a level which may adversely affect the Company's ability to service its financial obligations, the board will consider taking action to improve cash flow, which may include utilising bank overdrafts or other credit arrangements.

The table below details the contractual, undiscounted cash flows of the Group's financial liabilities.






Less than

1-3

3 months

No stated






1 month

months

to 1 year

maturity

31 December 2014



$'000

$'000

$'000

$'000

Trade and other payables


344

-

-

-




______

______

______

______

Total




344

-

-

-





______

______

______

______









31 January 2014







Trade and other payables



200

-

-

-




_______

______

______

______

Total



200

-

-

-




_______

______

______

______

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Group. The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date.

 

Capital risk management

The Company is currently financed solely through equity and manages its capital to ensure that it has sufficient financial resources to implement its planned operations while maximising the return to stakeholders. Please see the Strategic Report on page 8 for details. Details of additional equity raised in the year are set out in note 17.

 

25. Post balance sheet events

 

Other than as set out below, the Directors consider that there are no events not disclosed in the Directors' Report or elsewhere in this report that require disclosure as post balance sheet events.

 

Post the period end, on 1 February 2015, 50,000,000 warrants with and exercise price of 1.0p and an expiration date of 31 January 2025 were issued to a third party for consultancy services.

On the 13 March 2015, the Company announced that it had granted 260,721,118 warrants to Mr Lau (director) to subscribe for new ordinary shares of 0.01p in the company. These warrants have an exercise price of 1.0p and an expiration date of 11 March 2025.

 

In January 2015, MGR paid back to Amedeo a loan of US$1,950,000, reducing the loans receivable due from MGR from US$3,813,000 to US$1,863,000 and increasing Amedeo's cash balance by US$1,950,000.

 

 

26. Ultimate controlling party

 

The ultimate controlling party is Qatar Investment Corporation, which holds 61.1% of the issued Ordinary Share capital of the Group. Qatar Investment Corporation is a wholly owned investment vehicle of Mr Ghanim Al Saad, Non-Executive Chairman of the Company.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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