Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email [email protected] in the first instance.

 Information  X 
Enter a valid email address

Amedeo Resources PLC (AMED)

  Print      Mail a friend

Monday 30 June, 2014

Amedeo Resources PLC

Audited Results for the Year Ended 31 January 2014

RNS Number : 8218K
Amedeo Resources PLC
30 June 2014
 



30 June 2014

Amedeo Resources plc

("Amedeo" or the "Company")

Audited Results for the Year Ended 31 January 2014

and Notice of AGM

 

Amedeo, the resource and resource infrastructure and asset investment company, is pleased to announce itsconsolidated audited results for the year ended 31 January 2014.

 

Period highlights

 

·     The build of Jiangsu Yangzijiang Offshore Engineering Co. Ltd. ("YZJ Offshore") new offshore vessel yard ("New Yard") continued apace:

 

wharf building commenced in October 2013;

wharf and finger piers were nearing completion, with work on the skidway and 900 tonne gantry crane advanced and civil works and workshops 50% completed by January 2014; and

the New Yard became operational post the year end.

 

·     Progress on the build of YZJ Offshore's first order, a Le Tourneau Super 116E Class design self-elevating mobile offshore jack up drilling rig ("Explorer 1") continued to quality and on schedule at YZJ Offshore's New Yard: Steel was struck in August 2013 and the customer agreed an increased specification for Explorer 1 at an increased price of US$175m in October 2013. Post the year end, in April 2014, Explorer 1's keel was laid at the New Yard.

 

·     Board strengthened with the addition of two experienced directors in September 2013.

 

·     MGR has developed well and made payments to Amedeo of £311,000 (US$488,000) during the year, representing over 70% of Amedeo's cash administrative costs.

 

·     Overall loss for the year, excluding non-cash items, reduced by 46% to £417,000 (US$655,000) (2013: loss of £771,000 (US$1,230,000)).

 

Glen Lau, CEO of Amedeo, commented:

"In the year ended 31 January 2014, we have continued to build on the strong foundations laid in the previous year. Substantial progress has been made in constructing YZJ's Offshore's  New Yard, which post year end became operational. Progress on our first rig order, Explorer 1, is progressing to quality and to schedule. The client increased the specification of the rig with a resultant increase in its price from US$170m to US$175m. Post the year end, the keel for Explorer 1 was laid. MGR has developed well and during the year paid to Amedeo £311,000 (US$488,000) which covered over 70% of our cash administrative costs.

"As part of the Company's transformation we have strengthened the Board by appointing two new directors with a wealth of experience, including in building companies and in the energy resource and resource infrastructure sectors. In continuing our transformation we will be changing the accounting reference date from 31 January to 31 December. This is more typical in the resource and offshore sector generally. As a result of this change the next interim statement to be published will be for the period to 30 June 2014. In addition, with only head office expenses incurred in pounds sterling, in light of the fact that all of the current investments of the Company are in US dollars and this being the norm in the resource and infrastructure sectors, the Company shall henceforth report in US dollars.

 

"We look forward to continuing to build Amedeo in the coming years."

Copies of the Company's Annual Report and Accounts, together with a notice of the Annual General Meeting, are being posted today to shareholders and will be available to view and download from the Company's website www.amedeoresources.com.  The Annual General Meeting of the Company is to be held at 201 Temple Chambers, Temple Avenue, London EC4Y ODT at 2.30pm on 24 July 2014.

 

**ENDS**

For further information please contact:

Amedeo Resources plc

Glen Lau/Zafar Karim

 

Tel: + 44 (0) 20 7653 9850

Daniel Stewart & Company Plc

 

Paul Shackleton

Tel: + 44 (0) 20 7776 6550

Beaufort Securities Limited

 

Saif Janjua

Tel: +44 (0) 20 7382 8300

Newgate Threadneedle

Graham Herring

Tel: + 44 (0) 20 7653 9850

 

Notes

Amedeo Resources plc is an investment company whose policy is to invest principally, but not exclusively, in the resources and resources 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 the firm foundations laid last year. Progress has been made at Jiangsu Yangzijiang Offshore Engineering Co. Ltd. ("YZJ Offshore") in constructing its offshore vessel yard ("New Yard") located in Taicang, approximately 60km north west of Shanghai, as well as constructing its first offshore rig, a Le Tourneau Super 116E Class design self-elevating mobile offshore jack up drilling rig ("Explorer 1"), and in terms of attracting further potential customers to place orders with YZJ Offshore.

 

Progress has also been made at MGR Resources PTE Ltd ("MGR") which has, in the space of nine months, paid to Amedeo £311,000 (US$ 488,000), a substantial return in light of the £30,000 (US$49,900) equity investment and the £1.18m (US$1.95m) convertible loan made to MGR.

 

All of this has been achieved in a short 19 months since the recapitalisation of June 2012.

 

The directors of the Company ("Directors") believe this augurs well for Amedeo in achieving its vision of building a range of holdings in the resource, resource infrastructure and asset sectors and proactively assisting its holdings. 

 

YZJ Offshore

 

Shortly after its £12.1m (US$18.8m) recapitalisation in June 2012, Amedeo made its largest investment to date of £9.6m (US$15.3m) in July 2012 by taking a 46.5% stake in YZJ Offshore Engineering Pte Ltd, ("YZJ JV"), which has a 40.0% stake in YZJ Offshore. Amedeo's partner in this venture is Yangzijiang Shipbuilding (Holdings) Pte Ltd ("Yangzijiang Holdings"), the largest non-state owned container shipbuilder in China. The New Yard is located on 1.6m square metres of prime shorefront land in Taicang that is in the ideal location for rig construction due to its deep water and absence of bridges en route to the open sea.

 

Progress at YZJ Offshore has been excellent. Land compacting for construction of the New Yard commenced in 2012 and, in October 2013, wharf building commenced. By January 2014, construction of the New Yard was ahead of schedule with the wharf and finger pier near completion. Work on the skidway and 900 tonne gantry crane by then was advanced and the civil works and workshops were 50% completed. Post the year end, in April 2014, the keel for the first rig order was laid at the now operational New Yard.

 

The New Yard is expected to be fully completed, ahead of schedule, during autumn 2014, at which point it will have capacity to build up to ten offshore rigs, four semisubmersibles and two drill ships simultaneously.

 

As well as commencing building the New Yard immediately after being set up in July 2012, in December 2012 YZJ Offshore won its first rig order, a US$170m order to construct an Explorer 1 for delivery in mid-2015. The winning of this order, despite the fact that the New Yard was not and would not be ready for more than 18 months, was due to Amedeo being able to partner with YZJ Holdings, which has well established facilities, the reputation of the YZJ Offshore's senior management and the strength of Amedeo management's connections.

 

This year, progress on Explorer 1 has been to quality and on schedule. In August 2013, we announced that YZJ Offshore was ready to "strike steel" on Explorer 1. This followed several months of detailed technical engineering work carried out by YZJ Offshore in conjunction with Explorer 1 Limited ("E1L") (the client for Explorer 1) managed by Offshore Logistics (Asia Pacific) Pte Ltd. Explorer 1 is expected to be ready for commissioning in mid-2015. In our interim statement, we reported that E1L was so pleased with progress on Explorer 1 that it increased the specification for Explorer 1 and agreed a higher price of US$175m.

 

Post the year end, in April 2014, we announced that the keel of Explorer 1 had been laid. Importantly, this was done at the New Yard which, as mentioned above, was by then operational. The laying of the Explorer 1 keel demonstrates YZJ Offshore's ability to construct vessels on schedule and to quality. Ramlan Ahmad, Executive Director of E1L, commented at the time "We are impressed by the dedication and professionalism shown by YZJ Offshore and how the build of its first rig, our Le Tourneau Super Enhanced 116e is progressing to quality and to schedule. YZJ Offshore's welding, painting and finish are impressive. In addition, YZJ Offshore's ability to crank out steel in accordance with the drawings vetted by our management team is most impressive." He continued that "Typically, first time builders of complex drilling machines such as our Le Tourneau Super Enhanced 116e face difficulties. With progress on schedule and to quality thus far, we are confident that YZJ Offshore will deliver our rig on schedule and to quality."

 

Progress on Explorer 1 is attracting significant attention to YZJ Offshore from potential new customers.

 

Also post the year end, in February 2014, there were media reports that YZJ Offshore had been contracted by Primepoint Drilling PTE Ltd ("Primepoint") to build two semi-submersible drilling platforms. In addition, Primepoint had agreed an option on two additional semi-submersible drilling platforms. The total order contract value with the option was approximately US$1.7bn. We confirmed the reports. Importantly, we added that the contract was subject to conditions precedent to be satisfied by Primepoint. Those conditions precedent are yet to be satisfied, and until that time the contract will not be effective. The Primepoint contract was won in the face of competition from several other yards and demonstrates that YZJ Offshore is already able to win major contracts for complex vessels from international players.

 

Demand for newly designed offshore vessels over the next several years is expected to be underpinned by several factors. First, almost half of the current fleet of rigs worldwide is around 30 years or more old, and with the life of a rig being 25 to 30 years, will need replacing. Second, new major discoveries are expected to be made in deep waters and this is fuelling demand for new deep water rigs. Along with the "economics of disaster", this means that the oil and gas majors are demanding high specification rigs with the latest safety features. Finally, regulation is demanding higher safety standards on rigs. Based on the current stock and new rig builds in the pipeline, there could be an undersupply by almost 200 jack-up rigs by 2020. Both Amedeo and YZJ Holdings believe the requirement to provide higher specification rigs to enable even deeper and more efficient drilling represents an excellent investment opportunity.

 

YZJ Offshore has had an excellent start. We look forward to its continued success over the coming years.

 

MGR

 

In April 2013, Amedeo made its second investment, this time in a ferrous metals and ore wholesaler and trader, MGR. MGR sources iron ore principally from Africa, India and the Middle East and sells on to buyers in East Asia, including China.

 

The logic behind this investment was two-fold. First, Amedeo is, indirectly through YZJ Offshore, a customer of the large Chinese steel mills and has good relationships with them. By investing into MGR, Amedeo has further cemented those relationships by becoming a supplier to the steel mills. Second, offshore vessel construction has long lead times in which, typically, cashflows are received some two to three years after orders are placed whereas wholesaling and trading ferrous metals provides immediate cashflow.

 

The investment into MGR was made by acquiring a 49% stake in MGR for £30,000 (US$49,900) from Fortus PTE Ltd ("Fortus"). In addition, Amedeo provided a three year 15% coupon convertible loan to MGR of up to US$1.95 million for working capital. The convertible loan can be converted at any time during the three year period at Amedeo's option into new shares in MGR at US$1 per new share. At the time the investment was made, Mr Lau was a director of Fortus. The independent directors of the Company gave careful consideration to the terms of the convertible loan and, after consulting with Daniel Stewart & Company Plc, the Company's nominated adviser, deemed the investment fair and reasonable insofar as Amedeo's shareholders were concerned. Mr Lau is no longer a director of Fortus.

 

In October 2013, we reported that MGR was performing well and building its reputation for sourcing and amalgamating ferrous metals from several sources. One of the rationales for making the investment in MGR was to generate immediate and recurring cashflow for Amedeo. At the end of July 2013, MGR made a dividend payment of £133,000 (US$210,000) to Amedeo. Since then MGR has made further payments, including interest on the convertible loan, and marketing and consultancy fees, to Amedeo. Together these amounted to £178,000 (US$279,000). Thus, during the year Amedeo received a total of £311,000 (US$488,000) from MGR. This amount represented 74% of the cash administrative costs during the year. Moreover, as a result of the continued marketing and consultancy services which Amedeo has and is providing to MGR, post the year end, Amedeo entered into a three year contract with MGR to continue to provide such services. Fees from this contract, the interest income from the convertible loan note and the regular dividends from MGR will continue to provide cashflow to Amedeo while YZJ Offshore's business develops.

 

By the year end, MGR was broking approximately 100,000 tonnes of iron ore per month. In the pre-close update, we reported that MGR was in advanced discussions to increase this amount further with longer term contracts. These discussions are progressing well and, in addition, discussions are underway in respect of broking other metals and ores.

 

China imports around 800 million tonnes of ferrous ores per annum. The majority of these imports (up to 80%) are supplied by the majors on long term contract. The remaining 20%, or 160 million tonnes per annum, is supplied with shorter term and spot contracts by a variety of smaller players. It is in this market that MGR operates. In light of the current size of MGR's operations compared to the market, there is plenty of room for the growth of MGR.

 

Legacy Investments

 

Amedeo has two legacy investments. It retains 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 against the former, and as at the year end, the value of the latter, traded on AIM was £5,355 (US$8,845).

 

Board Changes

 

In September 2013, the Board was strengthened with the appointment of Mr Zafarullah (Zafar) Karim as an Executive Director and Mr Philippe Petitpierre as a Non-Executive Director.

 

Zafar has over two decades of business and financial experience, including investment banking, investment and risk management, financial strategy and growing and restructuring companies. Philippe, a Swiss national, has a wealth of experience and expertise in the energy sector. He represents Switzerland on the Board of IGU (International Gas Union) and is a member of the Board of Directors of EUROGAS in Brussels. Philippe is also vice-chairman of the SWISSGAS Company and of the Swiss Gas Industry Association.

 

We are delighted that both Zafar and Philippe have decided to join the Board of Amedeo.

 

Mr Guus Berting and Mr Aamir Quraishi stepped down as Non-Executive Directors during September. We would like to take this opportunity to thank Guus and Aamir for their services to the Company.

 

Change of Name

 

With the initial investments in YZJ JV and MGR made and progressing well, and the Board having been strengthened with an Executive and Non-Executive, we renamed the Company from Creon Resources plc to Amedeo Resources plc. The word Amedeo was chosen as it would be familiar to the peoples in all the major areas of the world including South and East Asia, the Middle East and the West.

 

Post Year End Fund Raise

 

In March 2014, Amedeo raised approximately £5.2m (US$8.6m) in a successful and over-subscribed equity offering by issuing 521,764,569 ordinary shares at 1.0 pence per share. Following the fund raise, the Company's enlarged issued ordinary share capital comprised 3,265,384,202 ordinary shares.

 

£3.3m (US$5.1m) of the funds were utilised to fully pay up Amedeo's stake in YZJ JV.

£1.2m (US$1.98m) of the funds were utilised to make a loan to MGR. The loan provided by Amedeo to MGR post year end is a five year 15% coupon loan, made on the 19 June 2014.

As at the date of signature of these accounts the Group had £1.0m (US$1.7m) of cash and equivalent balances. 

Financial Review

 

Review

 

For the year under review, the Company had revenue of £81,000 (US$127,000) (2013: nil (US $nil)). This was predominately due to marketing and consultancy fee income from MGR.

 

Administrative expenses for the year fell substantially by 44% to £445,000 (US$698,000) (2013: £744,000 (US$466,000)). The fall was primarily due to a fall of 95% in legal and professional fees to £17,000 (US$11,000) (2013: £348,000 (US$218,000)). The substantial fees incurred in the previous year were primarily related to the investment in YZJ JV. In addition, directors' remuneration was reduced significantly to £121,000 (US$190,000) (2013: £185,000 (US$295,000)). It is the policy of the Board to align director interests to those of shareholders. Consequently, wherever possible, director remuneration is heavily weighted towards equity and away from cash.  With a continuing focus on costs, we expect to maintain or reduce ongoing administrative costs. The administrative costs included a share-based payment charge of £25,000 (US$39,000) (2013: £150,000 (US$239,000)), and on a cash basis were £420,000 (US$659,000) (2013: £594,000 US$(947,000)).

 

The share of loss related to associates was made up of a loss of £592,000 (US$929,000) (2013: loss of £148,000 (US$236,000)) associated with YZJ JV and a loss of £61,000 (US$95,000) (2013: £nil) associated with MGR. The loss associated with YZJ JV represents Amedeo's portion of the operating costs of YZJ JV, and the loss associated with MGR also represents Amedeo's portion of MGR's loss. It is important to point out that the losses of associates were non-cash items.

 

There was a foreign exchange loss of £449,000 (US$704,000) (2013: loss of £202,000 (US$322,000)). This was primarily due to the foreign exchange loss on loans to associates. Again, it is important to point out that the foreign exchange loss was a non-cash item.

 

Finance income of £98,000 (US$154, 000) (2013: £nil (US$ nil)) and dividend income of £133,000 (US$210,000) (2013: £nil (US$ nil)) were received. The dividend income of £69,000 included in the profit and loss account is the remaining balance after Amedeo's share of 49% was eliminated against the investment in MGR. See note 9 for details. Both these items were from (and paid by) MGR. One of the reasons for making the investment in MGR was to provide immediate cashflow for Amedeo. Together with the marketing and consultancy fee of £81,000 (US$127, 000) (2013: £nil (US$ nil)), during the year, Amedeo received £311,000 (US$488,000) (2013: nil) or 74% of its cash administrative costs from MGR.

 

Overall for the year under review, Amedeo made a loss after tax of £969,000 (US$1,520,000) (2013: loss of £1,094,000 (US$1,745,000)). Removing the non-cash items (share based payment, profit/loss due to associates and foreign exchange losses) this would have been a loss of £417,000 (US$655,000) (2013: loss of £771,000 (US$1,230,000)).

 

As at the year end, the carrying value on the balance sheet of investments in associates fell to £9,161,000 (US$14,371,000) (2013: £9,517,000 (US$15,093,962)). The fall was due primarily to the share of loss of associates during the year. Current assets were £1,589,000 (US$2,625,000) (2013: £1,778,000 (US$2,820,000)). As discussed above, a convertible loan was made to MGR, which at the balance sheet date was carried at £1,181,000 (US$1,853,000) (2013: £nil).  Prepayments rose to £31,000 (US$49,000) (2013: £4,000 (US$6,400)) and cash fell to £353,000 (US$554,000) (2013: £1,750,000 (US$2,776,000)) primarily due to the convertible loan which was made to MGR.

 

Trade payables rose to £121,000 (US$200,000) (2013: £84,000 (US$133,000)).

 

Overall, at the year end, net assets were £10,629,000 (US$17,538,000) (2013: £11,211,000 (US$17,781,000)).

 

Accounting Policy, Reference Date and Reporting Currency

 

Amedeo is able to adopt a number of policies in relation to how it values its investments. Previously, its policy was to value investments at the balance sheet date using the Directors' valuation of fair value. The Directors have decided to adopt a more prudent approach going forward which is to hold investments at historic cost or impaired value, and value upwards only if there is a third party reference which can be used to justify any value uplift. In the case of investments in associates, Amedeo uses equity accounting to value the investments.

 

In addition, the Directors have 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 the next interim statement to be published will be for the period to 30 June 2014.

 

Finally, 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 only head office expenses are incurred in pounds Sterling, the Company shall henceforth report in US dollars.

 

Outlook

 

With firm foundations and two investments, both of which are performing well, MGR paying fees as well as interest and dividends and a reduced cost base, Amedeo looks confidently to the future.  New contracts are under discussion for the current investments and additional investments are being explored in the resource and resource infrastructure and asset sectors.



GROUP STATEMENT OF COMPREHENSIVE INCOME                                                                                

for the year ended 31 January 2014



2014

2013


Note

£'000

£'000





Revenue


81

-

Cost of sales


(1)

-



______

_______

Gross profit


80

-

 

 

 

 



 

 

Administrative expenses

3

(445)

(744)

Share of loss of associates

4

(653)

(148)

Foreign exchange losses

5

(449)

(202)



________

________

Loss from operations


(1,467)

(1,094)





Gain on purchase of associate                                                


331

-

Dividend income

9

69

-

Finance income


98

-



_______

________

Loss on ordinary activities before taxation


(969)

(1,094)





Taxation

6

-

-



_______

________

Loss for the year                                                                       


(969)

(1,094)





Basic and diluted loss per share

7

(0.04)p     0.03)p

(0.07)p

 

Other Comprehensive Income

Foreign exchange translation difference

9

362

-



_______

________

Total Comprehensive Loss for the year


(607)

(1,094)

 

All of the Group's activities are classed as continuing and there were no recognised gains or losses in either year other than those included above.

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 year was £642,000. (2013: £682,000).



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 2012

720

3,838

 

-

 

-

(4,485)

73

Loss for the year

-

-

-

-

(1,094)

(1,094)

 

Share-based payments

-

-

150

-

-

150

Issue of share capital

2,417

9,665

-

-

-

12,082


______

________

________

________

_________

________

At 31 January 2013

3,137

13,503

150

-

(5,579)

11,211








Loss for the year

-

-

-

-

(969)

(969)

Share-based payments

-

-

25


-

25

Foreign exchange rereser

-

-

-

362

-

362


______

________

________

________

_________

________

At 31 January 2014

3,137

13,503

175

362

(6,548)

10,629


______

________

________

________

_________

________

 

Company


Share capital

Share premium account

Share-based payment reserve

Retained earnings

Total equity attributable to equity holders of parent


£'000

£'000

£'000

£'000

£'000

At 1 February 2012

720

 

3,838

-

(4,485)

73

 

Loss for the year

-

-


(682)

(682)

Share-based payments

-

-

150

-

150

Issue of share capital

2,417

9,665

-

-

12,082


______

________

________

_________

________

At 31 January 2013

3,137

13,503

150

(5,167)

11,623







Loss for the year

-

-

-

(642)

(642)

Share-based payments

-

-

25

-

25


______

________

________

_________

________

At 31 January 2014

3,137

13,503

175

(5,809)

11,006


______

________

________

_________

________

 

 

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

 

 

 

 



STATEMENTS OF FINANCIAL POSITION

as at 31 January 2014



                          Group

                         Company

Assets

Note

2014

2013

2014

2013

Non-current assets


£'000

£'000

£'000

£'000

Investment in subsidiaries

8

-

5

5

Investment in associates

9

9,161

9,517

-

-



_____

_____

_

_



9,161

9,517

5

5







Current assets






Loans receivable

10

1,181

-

10,952

9,971

Investments in quoted shares

11

4

4

4

4

Investment in unquoted preference shares

12

20

20

20

20

Other receivables

13

31

4

31

4

Cash and cash equivalents


353

1,750

164

1,703



_____

___

______

_____



1,589

1,778

11,171

11,702







Total assets


10,750

11,295

11,176

11,707







Liabilities






Current liabilities






Trade and other payables

14

(121)

(84)

(170)

(84)



____

___

____

____

Total liabilities


(121)

(84)

(170)

(84)









_______

_______

_______

_______

Net assets


10,629

11,211

11,006

11,623







Equity






Called up share capital

15

3,137

3,137

3,137

3,137

Share premium account


13,503

13,503

13,503

13,503

Share warrant reserve

16

175

150

175

150

Foreign currency translation reserve

9

 362

-

-

-

Deficit


(6,548)

(5,579)

(5,809)

(5,167)



______

_______

______

______

Total equity


10,629

11,211

11,006

11,623

 

Approved by the Board and authorised for issue on 27 June 2014  and signed on behalf of the Board by

Glen Lau

Director

Registered Number 05216336

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

 STATEMENTS OF CASH FLOWS



Group

Company



2014

2013

2014

2013



£'000

£'000

£'000

£'000

Loss for the year before tax


(969)

(1,094)

(642)

(682)

Adjustments for:






Share-based payments


25

150

25

150

Share of loss of associates


653

148

-

-

Gain in bargain purchase


(331)

-

-

-

Foreign exchange loss on loans


-

-

439

181

Foreign exchange difference on associates


362

-

-

-

Change in receivables


(27)

(4)

(27)

(4)

Change in  payables


37

29

86

29

Interest income


(98)

-

-

-

Dividend income


(69)

-

-

-



_______

_______

_______

_______

Cash flows from operating activities


(417)

(771)

(119)

(326)







Investing activities






Investment in associates


(30)

(9,665)

-

-

Investment in subsidiaries


-

-

-

(5)

Loans made to subsidiaries


-

-

(1,420)

(10,152)

Loans receivable given


(1,181)

-

-

-

Dividends received from associate


133

-

-

-

Interest income received


98

-

-

-



______

______

______

______

Net cash used in investing activities


(980)

(9,665)

(1,420)

(10,157)







Financing activities






Issue of share capital


-

12,082

-

12,082



_______

_______

_______

_______

Net cash from financing activities


-

12,082

-

12,082



_______

_______

_______

_______







Net increase in cash and equivalents


(1,397)

1,646

(1,539)

1,599

Cash and equivalents at beginning of year


1,750

104

1,703

104

Cash and equivalents at end of year


353

1,750

164

1,703

 

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 year and the preceding year unless stated.

 

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.

 

As at the date of authorisation of these financial statements, the following standards, which have not been applied, werein issue but not yet effective (and, in some cases, had not yet been adopted by the EU):

 



Effective for accounting periods beginning on or after:

IFRS 10

Consolidated financial statements - Identification of the

concept of control of an entity and the requirement to

include in consolidated accounts

1 January 2014

IFRS 11

Joint arrangements

1 January 2014

IFRS 12

Disclosure of Interests in other entities

1 January 2014

IAS 27

Amendments for investment entities

1 January 2014

IAS 28

Investment in associates

1 January 2014

 

It is not practicable to provide a reasonable estimate of the effect of these standards until a detailed review has been completed.

 

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. Accordingly, the Directors have prepared the financial statements on the 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 £81,000 was recorded in the year ended 31 January 2014 (2013: nil). Almost all revenue was received from associate company, MGR Resources PTE Ltd ("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 year 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, hold more than 20% but less than 50% of the voting control of an entity, such as Amedeo Asia's holding in YZJ Offshore Engineering Pte Ltd ("YZJ JV") and MGR, then that investment is classified as an associate and is equity accounted for, see notes 4 and 9.

 

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 of the Company in respect of the loan portfolio at the year end is the amount receivable shown in note 11. No hedging transactions have been entered into with respect to the loan portfolio.

 

Impairment

At each financial year 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

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 at the proceeds received, net of direct issue costs.

 

Current and deferred tax

The charge for current tax is based on the results for the year 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 year 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 Kingdom pounds sterling which is the functional currency of the Company.

 

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 Kingdom pounds sterling using rates of exchange ruling at the balance sheet 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 judgments

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 subsidiary. As the loans were used to purchase the interests in the associates, consideration of the recoverability of the loans is related to consideration of the carrying value of the associates. 

 

(c) 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.

 

 

2. Segmental reporting

 

No segmental analysis is considered necessary as the Directors believe that the Group has only one segment in the year 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. Administrative expenses

 

Expenses included in administrative expenses (net) are analysed below

 


2014

2013


£'000

£'000

Administration, legal, professional and financial costs

291

165

Directors' fees

121

185

Professional costs of acquiring investment in associate

-

354

Unrecovered VAT

33

40


______

______


445

744


______

______

 

£25,000 of the Directors' fees expense of £121,000 was the charge incurred in the issue of warrants to Directors (2013: £96,000). Unrecovered VAT represents input VAT incurred during the periods which the Directors have decided prudently to provide for whilst the Company was in dispute with HMRC over its ability to recover input VAT. Subsequent to year end, this VAT dispute was settled by way of payment to HMRC of £33,000. See note 14. The auditor's fees in the year ended 31 January 2014 were £25,000 (2013 - £19,500). In addition, fees for non-audit services in the year ended 31 January 2014 were £9,000 (2013 -£nil).

 

4. Share of loss of associates


2014

2013


£'000

£'000

YZJ Offshore Engineering Pte Ltd

 

(592)

(148)

MGR Resources Pte Ltd

(61)

-


______

______


(653)

(148)


______

______

 

The Company's wholly-owned Singapore-registered subsidiary, Amedeo Asia, holds a 46.45% investment in YZJ JV, a Singapore registered company. During the year, Amedeo Asia also purchased 49% of the share capital of MGR Resources Pte Ltd, a Singapore-registered company. The loss of £653,000 represents Amedeo Asia's share of YZJ JV's loss for the year ended 31 December 2013 of £592,000 (31 December 2012: £148,000) and Amedeo Asia's share of  MGR's loss for the year ended 31 December 2013 of £61,000. See note 9.

 

5. Foreign exchange losses


2014

2013


£'000

£'000

Loss on conversion of loans made to subsidiary

449

202


______

______




In March 2013, the Company made a number of foreign currency denominated, interest free, unsecured loans to its wholly owned subsidiary, Amedeo Asia, totalling US$1.95 million, to enable Amedeo Asia to make a convertible loan to MGR ("Convertible Loan").  At 31 January 2014, one such loan of US$1.47 million was translated to £0.89 million, resulting in an unrealised loss on foreign exchange of £0.04 million. See table below, which details this.

 

Loan from Amedeo Asia to MGR in 2013 of US$1.47m



At 31 January 2014


£0.89m

Less: At 31 January 2013


(£0.93)m

Unrealised loss on foreign exchange


£0.04m

 

 

At 31 January 2014, the loans of US$15.5m made to Amedeo Asia in 2012, to enable Amedeo Asia to make its investment into YJZ Offshore, were translated to £9.4m, resulting in an unrealised loss on foreign exchange of approximately £0.40 million. See table below, which details this.

Loan from Amedeo Asia to YZJ JV in 2012 of US$15.5m $15.5m



At 31 January 2014


£9.4m

Less: At 31 January 2013


(£9.8)m

Unrealised loss on foreign exchange


£0.4m

 

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

 

 

 

 

 

6. Taxation

2014

2013


£'000

£'000

UK Corporation tax



Factors affecting tax charge in the year



Loss on ordinary activities before tax

(969)

(1,094)

Loss on ordinary activities at the effective rate

of corporation tax 20% (2013: 20%)

 

(219)

Unrelieved losses

194

219


-

-


___

___

Deferred income tax assets are recognised for tax losses carry-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 £6,750,000 (2013: £5,800,000) as there is insufficient evidence that the asset will be recovered. The deferred income tax asset relating to these losses is £1,417,500 (2013: £1,363, 000).

 

7. Loss per share

 

The basic and diluted loss per share for the year ended 31 January 2014 was 0.04p. (2013: 0.07p loss). The calculation of loss per share is based on the loss of £969,000 for the year ended 31 January 2014 (2013: £1,094,000 loss) and the weighted average number of shares in issue during the year of 2,738,619,633 (2013: 1,666,122,339). No warrants were exercised during the year under review. 109.5 million warrants were granted in the year ended 31 January 2014, see note 16, all of which were outstanding as of 31 January 2014, which, together with the 87.0 million warrants issued in the year ended 31 January 2013, took the aggregate number of  warrants outstanding at 31 January 2014 to 196.5 million (2013: 87.0 million). The outstanding warrants represent approximately 7% of the Company's current issued share capital and, due to losses, are considered by the Directors to be anti-dilutive. See note post balance sheet events note 23, for details of post year end subscription and placing.

 

8. Investment in subsidiaries


Company


2014

2013

Cost or valuation

£'000

£'000

At 1 February

5

-

Additions

-

5


_______

_______

At 31 January

5

5


_______

_______

 

The investment in subsidiaries shown in both 2013 and 2014 is the investment in Amedeo Asia.

 

The Company's subsidiaries were as follows:

 

Name

Country of incorporation

Proportion of ownership interest at 31 January

 



2014

2013

Creon Corporation Ltd

England

100%

100%

Amedeo Resources (Asia) Pte Ltd ("Amedeo Asia")

Singapore

100%

100%

 

Creon Corporation Ltd (formerly named Creon Resources Ltd) was incorporated on 24 November 2011 and acquired by the Company on 16 December 2011. It swapped names with Creon Corporation on 16 December 2011 and is dormant. Amedeo Asia was incorporated on 10 July 2012 to hold the Company's Asian based investments.

 

9. Investments in associates

 

Amedeo's wholly owned subsidiary, Amedeo Asia has a 46.45% holding in YZJ Offshore Engineering Pte Ltd, ("YZJ JV"). YZJ JV has a 40% stake in Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJ Offshore"). YZJ JV equity accounts for its 40% interest in YZJ Offshore, and Amedeo Asia equity accounts for its 46.45% stake in YZJ JV. Amedeo provided an interest free unsecured loan to Amedeo Asia to make the 46.45% stake in YZJ JV. See note 5. During the year, Amedeo Asia also purchased 49% stake in MGR Resources PTE Ltd ("MGR"). Amedeo Asia equity accounts for its 49% stake in MGR. MGR has a non-coterminous year end of 31 December, however, there the movement in the MGR balances between 31 December 2013 and 31 January 2014 is not material in nature.

 


YZJ


MGR


Total


2014

2013


2014

2013


2014

2013

Amounts relating to associates

£'000

£'000


£'000

£'000


£'000

£'000

Total assets

19,253

20,515


4,561

-


23,814

20,515

Total liabilities

14

27


4,103

-


4,103

27


______

_______


_______

_______


_______

_______

Net assets

19,239

20,488


458

-


19,697

20,488


_______

_______


_______

_______


_______

_______

Group's share of net assets of associates

8,937

9,517


224

-


9,161

9,517


_______

_______


_______

_______


_______

_______










Total revenue

2

2


31,628

-


31,630

2

Loss

(1,275)

(318)


(124)

-


(1,399)

(318)


_______

_______


_______

_______


_______

_______(148

Group's share of loss of associates

(592)

(148)


(61)

-


(653)

(148)


_______

_______


_______

_______


_______

_______

 

Group's share of net assets of associates

£'000

Opening at 1 February 2013

9,517

Group's share of loss of associates

(653)

Elimination of group share of dividends (1)

(64)

Foreign exchange gain (2)

362

Closing at 31 January 2014

9,161

 

(1) At the end of July, MGR made a dividend payment of £133,000 (US$210,000) to Amedeo. This represents 100% of the dividend paid and recorded in MGR's books in 2013. Amedeo's share of the £133,000 (US$210,000) payment, (£64,000 (US$101,000)) or 49%, was eliminated against the investment in MGR in Amedeo's books with the remaining balance of £69,000 (US$109,000)) included in the income statement of Amedeo, as dividend income received. 

      (2) The foreign currency translation reserve arises upon translation of investment >20% in foreign operations.

 

10. Loans receivable


Group

Company

 


2014

2013

2014

2013


£'000

£'000

£'000

£'000

Balance brought forward

-

-

9,971

-

Loans advanced

1,181

-

1,420

 

 

 

 

9,971

Foreign exchange loss

-

-

(439)

-


______

______

______

______

Balance carried forward

 

1,181

-

10,952

9,971


______

______

______

______

 

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 £1.42 million, which, when aggregated with loans made to Amedeo Asia in the prior year, totalled £10.95 million at the year end (2013: £9.97m). During the year, the Group also made loans to its associate, MGR, of £1.18m (2013: £nil). (note 20)

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

In the event of the conversion of the loan to MGR, it is not anticipated that there will be a change in control.

 

11. Investments in quoted shares


Group and Company


2014

2013

Cost or valuation

£'000

£'000

At 1 February

4

4

Impairment provision

-

-


_____

_____

At 31 January

4

4


_____

_____

The investment represents 2,775 ordinary shares in the capital of Ashcourt Rowan  PLC.

 

12. Investment in unquoted preference shares


Group and Company


2014

2013

Cost or valuation

£'000

£'000

Cost

400

400

Provision brought forward

(380)

-

At 1 February

20

400

Provision against carrying value

-

(380)


_______

_______

At 31 January

20

20


_______

_______

 

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 are now 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

 

13. Other receivables


            Group

Company


2014

2013

2014

2013


£'000

£'000

£'000

£'000

Prepayments and sundry debtors

31

4

31

4

 

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

 

 

 

 

 

 

14. Trade and other payables

Current liabilities

Group

         Company


2014

2013

0

2014

2013


£'000

£'000

£'000

£'000

Trade payables and accruals

96

59

145

59

VAT provision

25

25

25

25


______

______

______

______


121

84

170

84


______

______

______

______

 

The VAT provision of £25,000 represented the amount of VAT previously recovered by the Company. This amount was settled with HMRC, post year end. See note 3. The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

 

15.  Called up Share capital


2014

2013

Allotted, called up and fully paid

£'000

£'000

2,738,619,633 Ordinary Shares of 0.1p each

2,739

2,739

44,190,545 Deferred Shares of 0.9p each

398

398


_____

____


3,137

3,137

 

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 £1,000,000,000,000.  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.

 

16. Warrants

 

The Company had 87,000,000 outstanding warrants at the beginning of the year. During the year ended 31 January 2014, the Company issued 109,544,786 warrants, as set out in the table below.

 

Date of grant  

Exercise period

Number of Warrants granted/(surrendered)

Exercise price

Number exercised

Number of Warrants at 31 Jan 2014

4 April 2012

4 April 2022

16,000,000

0.75 pence

-

16,000,000

31 August 2012

31 August 2017

71,000,000

0.5 pence

-

71,000,000

23 June 2013

23 June 2023

109,544,786

0.5 pence

-

109,544,786



________ 


_______ 

________ 




196,544,786


-

196,544,786




________


 _______ 

________ 

All of the warrants granted during the prior year vested in the prior year 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 the prior year.

On the 23 June 2013, the Company awarded 109,544,786 warrants ("Karim Warrants") to Zafar Karim. 20,996,084 of the Karim Warrants vested during the year ended 31 January 2014. The Company incurred a total charge in relation to the issue of the Karim Warrants of £25,104. The Directors used the Black-Scholes option model when calculating the non-cash charge. The share price used for Karim Warrants was 0.4 pence. The expected volatility of the Karim Warrants was 7%, and was based on the historic closing mid-market share price of Ordinary Shares from the date of the grant of the respective Karim Warrants to the date of this report. The Directors, having taken advice, deemed the Company's risk free interest rate to be 5%.

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 Berting (1) (2)

5,000,000

31 August 2012

31 August 2017

0.5 pence

-

A Quraishi (1)

7,000,000

31 August 2012

31 August 2017

0.5 pence

-

Fulton Capital Management Ltd(3)

25,000,000

31 August 2012

31 August 2017

0.5 pence

-

Zafar Karim

109,544,786

23 June 2013

23 June 2023

0.5 pence

-

Notes

(1) Messrs Berting and Quraishi resigned as directors on 12 September 2013.

(2) Mr Berting exercised all 5,000,000 warrants post year end.

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

 

17. Asset value per share

 

The net asset value per share at 31 January 2014 was £0.0038 (31 January 2013; £0.0043). Net asset value is based on the net assets as at 31 January 2014 of £10.63 million (31 January 2013: £11.21 million) and on the number of Ordinary Shares in issue at 31 January 2014 being 2,738,619,633 ordinary shares (31 January 2013: 2,738,619,633).

 

18. Staff numbers and costs

 

The average monthly number of employees of the Group, including directors, during the year was 4 (2013: 4). The Directors are considered the key management of the Group. The aggregate remuneration of the Directors is set out in the remuneration report. 

 

19. Capital commitments

 

There were no capital commitments at the yearend (2013 - £nil).

 

20. Related party transactions

 

On 10 April 2013, Amedeo Asia acquired a 49% equity interest in Singapore-based MGR for US$49,900 (the "Investment"). Amedeo Asia has acquired the Investment from Fortus PTE Ltd, a company of which Mr Lau was a director. As part of the Investment, Amedeo has provided a three year unsecured 15% coupon convertible loan to MGR of up to US$1.95 million to assist MGR to increase its trading operations ("Convertible Loan"). The Convertible Loan can be converted at any time during the three year period at Amedeo's option into new shares in MGR at US$1 per new share. MGR also paid Amedeo Resources plc £80,000 for the provision of Management Services during the year. At the time the investment was made, Mr Lau was a director of Fortus. The independent directors of the Company gave careful consideration to the terms convertible loan and, after consulting with Daniel Stewart & Company Plc, the Company's nominated adviser, deemed the investment fair and reasonable insofar as the Company's shareholders were concerned. Mr Lau is no longer a director of Fortus.

YZJ JV paid Amedeo Resources plc £895 for the provision of Management Services during the year.

The non-executive Director services of A Berting were provided to the Company through Melotti, a Company of which Mr A Berting is the sole shareholder and director. During the year, fees of £10,000 were paid to Melotti (2013: £12,000) and there were no balances outstanding at the year end.

 

21. Analysis of cash and cash equivalents

2014

2013


£'000

£'000

Cash at bank and in hand

353

1,750

 

22. 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 Company 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 Company may have minority interests in the companies, partnerships and ventures. As such it may be unable to exercise control over the operations of such investments or 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 Company may dispose of investments and 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 Company 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 Company'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 January 2014, the Group's holding of unquoted investments was valued at approximately £9.2 million (2013: £9.5 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 January 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 January 2014, the Company's investment in YZJ JV represented 99% of the value of the Company's investment portfolio and almost 85% 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 January 2014


Non-interest

Variable

Fixed




bearing

interest

interest

Total

Assets


£'000

£'000

£'000

£'000

Investments at fair value

9,165

-

20

9,185

Loan to MGR


-

-

1,181

1,181

Other receivables


31

-

-

31

Cash and cash equivalents


353

-

-

353





______

_______

______

______

Total financial assets



9,549

-

1,201

10,750





______

_______

______

______

Liabilities







Trade and other payables


121

-

-

121





______

_______

______

______

Total financial liabilities


121

-

-

121



______

_______

______

______

 

As at 31 January 2013


Non-interest

Variable

Fixed




bearing

interest

interest

Total

Assets


£'000

£'000

£'000

£'000

Investments at fair value

9,521

-

20

9,541

Other receivables


4

-

-

4

Cash and cash equivalents


1,750

-

-

1,750





______

_______

______

______

Total financial assets



11,275

-

20

11,295





______

_______

______

______

Liabilities







Trade and other payables


84

-

-

84





______

_______

______

______

Total financial liabilities


84

-


84



______

_______

______

______

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 £ sterling. During the year under review, there were no hedging arrangements in place.

The YZJ and MGR investments are in US Dollar, and are valued using equity accounting. If the dollar were to appreciate by 5%, the effect would be a decrease in the value of the associates of £436,000. If the dollar were to depreciate by 5%, the effect would be an increase in the value of the associate of £482,000.

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 January 2014



£'000

£'000

£'000

£'000

Trade and other payables


121

-

-

-




______

______

______

______

Totall




121

-

-

-





______

______

______

______









31 January 2013







Trade and other payables



84

-

-

-




_______

______

______

______

Total



84

-

-

-




_______

______

______

______

 

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 Strategic report on page 9 for details. Details of additional equity raised in the year are set out in note 15.

 

23. 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.

 

On the 3 March 2014, the Company announced it had raised a total of approximately £5.2 million, through a subscription and a placing of 521,764,569 new ordinary shares of 0.1p each with institutional and other investors. Following this subscription and placing, the Company had outstanding 3,265,384,202 ordinary shares of 0.1p each.

 

£3.3m (US$5.1m) of the funds were utilised to fully pay up Amedeo's stake in YZJ JV.

£1.2m (US$1.98m) of the funds were utilised to make a loan to MGR. The loan provided by Amedeo to MGR post year end was a five year 15% coupon loan, made on the 19 June 2014.

As at the date of signature of these accounts the company had £1m (US$1.7m) of cash and equivalent balances.

24. Ultimate controlling party

 

The ultimate controlling party is Qatar Investment Corporation, which holds 61.1% of the issued Ordinary Share capital of the Group.

 


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

a d v e r t i s e m e n t