Press Release                                                                                                              28 June 2017

 

All Asia Asset Capital Limited

 

("All Asia Asset Capital", "AAA" or the "Company")

 

Results for the year ended 31 December 2016

 

All Asia Asset Capital (AIM: AAA), an investment company focused on investing in the growing markets of the Asia Pacific region, today announces its results for the year ended 31 December 2016.

 

All Asia Asset Capital Limited
Robert Berkeley, Executive Chairman and Finance Director
Tel: +44 (0) 207 621 8910
Tel: +852 3756 0124
www.aaacap.com
Allenby Capital Limited (Nominated Adviser and Broker)
Nick Athanas / Alex Brearley / Nick Naylor
Tel: +44 (0) 203 328 5656
www.allenbycapital.com

 

About AAA

 

AAA is an investment company that has been established as a platform for investors looking to access growing markets in the Asia-Pacific region. The Company invests in a portfolio of companies with at least a majority of operations (or early-stage companies that intend to have at least a majority of their operations) in the Asia-Pacific region in industries with high growth potential including, but not limited to: agriculture, forestry and plantations, mining, natural resources, property, and/or technology. AAA is publicly quoted and its shares are traded on the AIM Market, which is operated by the London Stock Exchange.

 

 

CHAIRMAN'S STATEMENT

I am pleased to present the results of All Asia Asset Capital Limited (the "Company") together with its subsidiaries (the "Group") for the year ending 31 December 2016.

 

Business Review

 

Between October 2013 and July 2014, the Company invested a total of US$1,800,000 in cash to acquire the Company's stake in Andaman Power & Utilities Co., Ltd. ("APU") (equivalent to approximately GBP1,415,000 at current exchange rates). In addition, in July 2014 the Company issued 11,000,000 new shares in AAA to the Purchaser as part consideration for the acquisition of shares in APU. The value attributed to AAA's investment in APU in the Company's interim results for the period ended 30 June 2016, announced by the Company on 16 September 2016, was £4,338,000, which was based on an independent valuation report that was commissioned by the Company.

 

In September 2016 and previously, the Company announced that APU had become majority owned by United Power of Asia Public Company Limited ("UPA"), a public listed company in Thailand, and that APU was moving forward to further developments of 200 Megawatt plants in the region. On 15 December 2016, the Company further announced that it had become apparent to the Board that, due to the actions of third parties, APU's effective economic interest in the project company which intended to construct and operate the proposed power plant project was likely to be substantially diluted. At that point in time, the Board estimated that it was likely that AAA's effective interest in the Proposed Power Plant Project would be reduced to a level in the region of 0.07%. The Company highlighted that these events would likely lead to a very substantial decrease value in the Company's seven per cent interest in APU.

 

The Board investigated the above events and sought to take further steps to clarify the situation. Following these actions, on 6 February 2017, the Board received an initial approach regarding the purchase of 100% of the issued share capital of AAA's subsidiary, Energy Central Limited ("Energy Central") for a cash consideration of Thai Baht 34,889,000, which is equivalent of approximately £0.8m at current exchange rates. Energy Central's sole asset was the Company's interest in APU.

 

Subsequently the Company entered into a conditional sale and purchase agreement with Chakris Kajkumjohndej (the "Purchaser") for the disposal of Energy Central (the "Disposal").  Following the approval of the Disposal by shareholders of AAA in a general meeting held on 24 March 2017, full payment has been received and the Disposal was subsequently completed. As part of the disposal, the Company released the Purchaser and Mr. Upakit Pachariyangkun from any and all claims, demands, obligations, liabilities, or causes of action which the Company has or shall have in relation to the purchase of APU's shares and potential damage to the Company due to the action(s) of those persons or the majority shareholder(s) of APU.

 

The consideration for the sale of Energy Central was determined after arm's length negotiations between the Company and the Purchaser. In the context of the difficulties described above, the Directors considered that the consideration was fair and reasonable and that pursuing the disposal was in the best interests of the Company and its shareholders as a whole. The Directors believe that this was especially the case when compared with alternative courses of action, such as pursuing formal legal claims against the original sellers of the shares in APU, given the likely timeframe for the pursuit of any such legal claims and the uncertainly regarding the likelihood of a superior outcome from any such litigation.

 

With regard the Companies other investment, AAA still holds a minority investment representing a 7% interest in Myanmar Allure Group Co., Ltd. ("MAG"). During the year MAG continued operating the Allure Resort, a combined hotel, resort and gaming facilities located in Tachileik province, Myanmar, in the vicinity of the Thailand-Myanmar Mae Sai border.

 

MAG is continuing to search for a partner and partnership opportunities together with other entities who have a gaming background, with a view to potentially having a partner co-invest in new building development. During this time, MAG plan to continue to improve their operations' performance and capacity utilisation by maximising their existing resources.

 

The Company announced on 2 November 2016 that it was seeking to take steps to actively realise the Company's investment in MAG. At this stage the Company has not engaged in any advanced discussions with third parties in respect of realising AAA's interest in MAG.

 

In December 2016, the Company signed an agreement with Nature Cove Holdings Limited, through which the Company was provided with a convertible loan of £100,000 in cash provided by a shareholder of the Company, in order to provide a short-term financing for the Company. This loan was subsequently repaid in June 2017 and no conversion of the loan's principal amount or interest into new ordinary shares in the capital of the Company took place during the term of the loan. 

 

Financial Results

 

During the 12 months ended 31 December 2016, the Company made a net loss of £0.5 million before taking into account the impairment on the Company's investment in APU (2015: net loss of £0.3 million). An impairment charge of £3.8 million was incurred in the 12 months ended 31 December 2016 reflecting the situation encountered with APU as detailed above and the subsequent sale by AAA of its interest in APU for approximately £0.8m.

 

During the 12 months ended 31 December 2016, the majority of the assets of the Group consisted of its two investments in APU and MAG which, as at 31 December 2016, had a carrying value of £2.4 million in AAA's balance sheet. AAA's investments in APU and MAG have been attributed fair values of £0.8 million and £1.59 million respectively as at 31 December 2016. The valuation on APU takes into consideration, retrospectively, the sale of Energy Central Limited that took place post year end.

 

As at 31 December 2016 the net assets of the Group were £2.12 million (31 December 2015: net assets of £5.68 million) and the Group had cash and cash equivalents of £0.04 million (31 December 2015: cash and cash equivalents of £0.19 million). Further details on the methodology for valuing the investments is contained in note 7 to the financial statements. The Company's cash position has improved since 31 December 2016 as a result of the cash consideration received from the sale of Energy Central Limited.

 

Board Changes

 

On 21 April 2017 the Company announced that Mr. Paniti Junhasavasdikul would step down as an executive director and general counsel of the Company as of 30 April 2017. We extend our gratitude to him for his diligence, commitment and contribution to the Company during his tenure of office and we wish him the best for his future endeavours.

 

The Company believes that it is very important that they identify the right candidate to replace Paniti Junhasavasdikul who possesses the skills and experience that match the strategic direction of the business. The Company will provide an update on their plans for the board once they have further assessed the strategic direction of the Group following the sale of Energy Central.

 

The Company announced on 2 November 2016 that they were considering a proposal to amend the existing investing policy of the Company and it was noted that this change in investing policy would be subject to approval of shareholders. The Company intends to re-assess this proposal once they have appointed a new Chief Executive Officer.

 

Economic Outlook

 

With the Company's investee company, MAG, being located in Myanmar is it important that we consider the current economic climate. In a recent report, the World bank commented that Myanmar's economy will grow by an average of 7.1% per year in the next three years, as inflation pressures are expected to ease up and private and public investments in infrastructure services and non-commodity sectors, such as light manufacturing and hospitality, are forecasted to rise. Given that MAG's focus is on the local tourism and hospitality sector, this should be a positive trend.

 

Appreciation

 

I would like to thank all the hard work of my fellow Board members and staff, our advisers and of course our shareholders for their continuing support for AAA. I sincerely hope that the Company will continue to enjoy such support towards the development of the Group in the years to come.

 

Robert Anthony Rowland Berkeley

Chairman

 

London, 28 June 2017

DIRECTORS' REPORT

 

The directors of the Company (the "Directors") present their report and the audited financial statements for the year ended 31 December 2016.

 

Principal activity and investing policy3

 

All Asia Asset Capital Limited ("AAA" or "Company") is an investment company incorporated in the British Virgin Islands on 14 September 2012. The Company has been established as a platform for investors looking to access growing markets in the Asia Pacific region. Its main country of operation is in Hong Kong.

The investment objective of the Company is to invest in a portfolio of companies with at least the majority of their operations (or early stage companies that intend to have at least the majority of their operations) in the Asia Pacific region with an expected initial focus on: Malaysia, Thailand, Indonesia and Myanmar. The Directors intend to invest in companies that operate (or early stage companies that intend to operate) in industries with high growth potential including, but not limited to: agriculture, forestry and plantations, mining, natural resources, property and/or technology.

 

Review of business

 

As at 31 December 2016, the Company held two investments in its portfolio.

 

Andaman Power and Utility Company Limited

 

Until 11 May 2017, All Asia Asset Capital Limited held a 7 per cent. stake in Andaman Power and Utility Company Limited ("APU"), a company based in Thailand and Myanmar, which operates in the development of utility plants and the provision of electricity.

 

In September 2016 and previously, the Company announced that APU had become majority owned by United Power of Asia Public Company Limited ("UPA"), a public listed company in Thailand, and that APU was moving forward to further developments of 200 Megawatt plants in the region. On 15 December 2016, the Company further announced that it had become apparent to the Board that, due to the actions of third parties, APU's effective economic interest in the project company which intended to construct and operate the proposed power plant project was likely to be substantially diluted. At that point in time, the Board estimated that it was likely that AAA's effective interest in the Proposed Power Plant Project would be reduced to a level in the region of 0.07%. The Company highlighted that these events would likely lead to a very substantial decrease value in the Company's seven per cent interest in APU.

 

The Board investigated the above events and sought to take further steps to clarify the situation. Following these actions, on 6 February 2017, the Board received an initial approach regarding the purchase of 100% of the issued share capital of AAA's subsidiary, Energy Central Limited ("Energy Central"), for a cash consideration of Thai Baht 34,889,000, which is equivalent of £0.8m at current exchange rates. Energy Central's sole asset was the Company's interest in APU.

 

The Company entered into a conditional sale and purchase agreement with Chakris Kajkumjohndej (the "Purchaser") for the disposal of Energy Central (the "Disposal").  Following the approval of the Disposal by shareholders, full payment has been received and the Disposal was completed. As part of the disposal, the Company released the Purchaser and Mr. Upakit Pachariyangkun from any and all claims, demands, obligations, liabilities, or causes of action which the Company has or shall have in relation to the purchase of APU's shares and potential damage to the Company due to the action(s) of those persons or the majority shareholder(s) of APU.

 

Myanmar Allure Group Company Limited

 

All Asia Asset Capital currently holds 7 per cent. stake in Myanmar Allure Group Co., Ltd. ("MAG"). MAG is a privately held company based in Thailand and Myanmar, which operates in the hospitality and entertainment business.

 

MAG owns and operates the Allure Resort, a combined hotel, resort and gaming facilities located in Tachileik province, Myanmar, in the vicinity of the Thailand-Myanmar Mae Sai border. The resort is situated in an 11-acre plot and is easily accessible from Chiang Rai, Thailand and located within 5 minutes walk from the border. It offers a variety of entertainment including gaming, shopping and cultural sightseeing. MAG is continuing to search for a partner and partnership opportunities together with other entities who have a gaming background, with a view to potentially having a partner co-invest in the new building development. During this time, MAG plan to continue to improve their operations' performance and capacity utilisation by maximising their existing resources.

 

Capital Resources and Financing Structure

 

During the year ended 31 December 2015 the Company continued utilising proceeds raised through two subscriptions with certain of the Company's existing shareholders of the Company in April 2015 and May 2015 in which the Company raised approximately £490,000 by issuing 2,965,000 new ordinary shares in the Company of no par value each at a price of 16.5 pence per share. No equity finance was raised in 2016, although in December 2016, the Company signed an agreement with Nature Cove Holdings Limited, through which the Company was provided with a convertible loan of £100,000 in cash provided by a shareholder of the Company, in order to provide a short-term financing for the Company. This loan was subsequently repaid in June 2017 and no conversion of the loan's principal amount or interest into new ordinary shares in the capital of the Company took place during the term of the loan. 

 

International Financial Reporting Standards

 

The consolidated financial statements for the year ended 31 December 2016 together with comparative figures from the year ended 31 December 2015 have been prepared by using International Financial Reporting Standards (IFRSs).

 

Results and dividends

The reported loss for the year was £4.35 million mainly attributable to the impairment on AAA's investment in APU and administrative expenses. Further details are set out in the consolidated statement of profit or loss. No dividend has been paid or proposed for the period.

 

Directors and their interests

The following Directors who served during the year ended 31 December 2016, together with their beneficial interests in the ordinary share capital of the Company at the date of admission of the Company to trading on AIM of London Stock Exchange are as follows:

 

Directors	Position	Shares held at 2 May 2013	Shares held at 31 December 2016	% at 31 December 2016
Robert Anthony Rowland Berkeley	Executive Chairman and Finance Director	14,914,575	14,914,575	7.01%
Paniti Junhasavasdikul (1)	Executive Director	-	-	-
Wai Tak Jonathan Chu	Executive Director	-	-	-
(Dominic) Seah Boon Chin	Independent Non-Executive Director	-	-	-

 

Notes:

(1) Appointed on 9 September 2016 and resigned on 30 April 2017

 

Substantial interests

As at 31 December 2016, save for the Directors listed above, the Directors were aware of the following interests amounting to 3% or more of the ordinary share capital of the Company.

Shareholder	Number of Shares	Percentage Shareholding
W B Nominees Limited	37,371,384	17.56%
Vidacos Nominees Limited	36,523,193	17.16%
Euroclear Nominees Limited	30,004,150	14.10%
Mr Robert John Sali	16,666,667	7.83%
Mr Blake Gordon Olafson	15,000,000	7.05%
Oxbow Enterprise Limited	14,914,575	7.01%
Chakris Kajkumjohndej	11,000,000	5.17%
The Bank of New York (Nominees Limited)	7,881,001	3.70%
Chiefland Trading Limited	7,333,334	3.45%

 

Directors' Responsibilities Statement

The Directors are responsible for the preparation of consolidated financial statements for each financial year. The consolidated financial statements must give a true and fair view of the state of affairs of the Company and its subsidiaries (the "Group"), and the Group's profit and loss for that period.

When preparing consolidated financial statements, the Directors are required to:

·      Select suitable accounting policies and apply them consistently

·      Make judgments and estimates that are reasonable

·      State whether they adhered to applicable accounting standards subject to any material departures disclosed and explained in the consolidated financial statements

·      Prepare the consolidated financial statements on a going concern basis, unless it is inappropriate to presume that the Company will continue in business

The Directors must keep proper accounting records, which disclose, with reasonable accuracy at any time, the financial position of the Group and the Company. The Directors must ensure that the consolidated financial statements comply with applicable laws and follow International Financial Reporting Standards. The Directors must also safeguard the assets of the Group and the Company, and take reasonable steps to prevent and detect fraud or other irregularities.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with AIM Rules. The maintenance and integrity of information presented in the Company's website is the responsibility of the Directors, therefore the Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Auditors

 

Elite Partners CPA Limited was appointed auditors at the conclusion of the Company's annual general meeting held on 18 July 2016. A resolution to re-appoint Elite Partners CPA Limited as the Company's auditors will be proposed at the forthcoming Annual General Meeting.

 

 

Approved by the Board and signed on behalf of the Board.

 

 

 

 

Robert Anthony Rowland Berkeley

Chairman

London, 28 June 2017

 

CORPORATE GOVERNANCE STATEMENT

Board of Directors

During the year ended 31 December 2016, the following persons served as directors of the Company:

 

Executive Directors:

Robert Anthony Rowland Berkeley

Paniti Junhasavasdikul (appointed on 9 September 2016)

Wai Tak Jonathan Chu

 

Independent Non-Executive Director:

(Dominic) Seah Boon Chin

 

The Directors are not related to each other.

Responsibilities of the Board

The Directors are responsible for the overall management and control of the Company as well as identifying investment opportunities, managing the investment/acquisition process and monitoring the investee companies' operating performance. The Directors will review the operations of the Company at regular board meetings and it is currently intended that the Board will meet at least four times a year and at other times as and when required.

The Directors recognise the importance of sound corporate governance commensurate with the size of the Company and the interests of Shareholders and intend that, following Admission, the Company will comply with the main provisions of the Corporate Governance Guidelines for Smaller Quoted Companies published by the Quoted Companies Alliance to the extent that they believe it is appropriate in light of the size, stage of development and resources of the Company.

Board Committee

 

As there is currently only one independent non-executive director of the Company, being Dominic Seah Boon Chin, the Board has not established remuneration, nomination and audit committees. Until the appointment of a further independent non-executive director, Dominic Seah Boon Chin will be responsible for the Company's remuneration policy and the Board as a whole will monitor the performance of the Board and plans for succession and the functions usually carried out by a nominations committee. Until an audit committee is appointed, the Board as a whole will be responsible for reviewing and monitoring internal financial control systems and risk management systems on which the Company is reliant, considering annual and interim accounts and audit reports, considering the appointment and remuneration of the Company's auditor and monitoring and reviewing annually their independence, objectivity, effectiveness and qualifications

INVESTING POLICY

(Adopted at the Annual General Meeting of the Company on 10 December 2013)

The Company intends to invest in companies with at least the majority of their operations (or early stage companies that intend to have at least the majority of their operations) in the Asia Pacific region. The Company intends to invest in a portfolio of companies with an initial focus on companies that operate (or early stage companies that intend to operate) in industries with likely high growth potential including, but not limited to: agriculture, forestry and plantation, mining, natural resources, property and/or technology.

The Directors intend to source and identify potential investments in line with the Investing Policy through their own research and network of contacts and possibly strategic partnerships with other companies or persons who can assist the Company in sourcing and identifying potential investments. Investments are expected to be mainly in the form of equity although investments may be by way of debt, convertible securities or investments in specific projects. In the case of equity investments, the Directors intend typically to take minority positions (with suitable minority protection rights), primarily in unquoted companies. Investments will therefore typically be of a passive nature. However, whilst the Directors intend that typical investments will constitute minority positions in investee companies, should the Company make majority investments, the Company may seek participation in the management or board of directors of such an entity with a view to seeking to improve the performance and growth of the business.

There is no limit on the size of an investment in a project. The Directors expect that each investment will typically yield a targeted internal rate of return of at least 20 to 30 per cent. per annum. It is likely that a substantial portion of the Company's financial resources will be invested in a small number of companies, however the Company has not excluded the possibility of making just one investment. Depending on the size of investments, they may be deemed to be reverse takeovers for the purposes of the AIM Rules, which would require Shareholder approval and re-admission of the Company, as enlarged by the acquisition, to trading on AIM.

In addition to paying the costs of the Company's ongoing expenses, the Company's cash resources will primarily be used to identify, evaluate and select suitable investment opportunities and to make investments, either in part or in full, as applicable. The Directors consider that as investments are made, or promising new investment opportunities arise, further funding of the Company will be required and they anticipate further equity fundraisings by the Company. Subject to prevailing authorities to issue new Ordinary Shares or, if required, with Shareholder approval, new Ordinary Shares may be used as consideration, in whole or in part, for investments. The Company will not be subject to any borrowing or leverage limits. In order to mitigate investment risk, the Directors intend to carry out a thorough due diligence process in evaluating each potential investment including: site visits, analysis of financial, legal and operational aspects of each investment opportunity, meetings with management, risk analysis, review of corporate governance and anti-corruption procedures and the seeking of third party expert opinions and valuation reports where the Directors see fit.

The Directors will apply investment criteria including: the potential for capital growth and/or the potential for profit generation with a view to receiving dividend income over time, high attractiveness to potential buyers of the company in question in order to facilitate exits and a strong and experienced management team.

Given the time frame to fully maximise the value of an investment, the Board expects that investments will be held for the medium to long term, although short-term disposals of assets cannot be ruled out in exceptional or opportunistic circumstances. The Directors intend to re-invest the proceeds of disposals in accordance with the Company's Investing Policy unless, at the relevant time, the Directors believe that there are no suitable investment opportunities in which case the Directors will consider returning the proceeds to Shareholders in a tax efficient manner.

Cash held by the Company pending investment, reinvestment or distribution will be managed by the Company and placed in bank deposits or in capital guaranteed schemes offered by major global financial institutions, in order to protect the capital value of the Company's cash assets. The Company may, where appropriate, also enter into agreements or contracts in order to hedge against interest rate or currency risks. Investments are expected to be held by the Company or a subsidiary to be incorporated for the purpose of holding an investment.

Any material change to the Company's Investing Policy will only be made following the approval by ordinary resolution of Shareholders in general meeting. In addition, if the Company has not substantially implemented its Investing Policy within 18 months of Admission, the Company will seek the approval of Shareholders at its next annual general meeting for its Investing Policy and on annual bases thereafter until such time that its Investing Policy has been substantially implemented. If it appears unlikely that the Company's Investing Policy can be implemented at any time, the Directors will consider returning remaining funds to Shareholders.

The Directors will review the Investing Policy on an annual basis and will implement any non-material changes or variations as they consider fit. Details of any such non-material changes or variations will be announced as appropriate. Any material change or variation of the Investing Policy will be subject to the prior approval of Shareholders

BOARD OF DIRECTORS

 

Robert Berkeley (Executive Chairman and Finance Director)

Robert qualified as a chartered accountant with Arthur Andersen and Co in 1990 and has had a successful career in senior management within the retail, construction, headhunting and financial services sectors. In 1999, he was appointed to Harvey Nash Plc's European Management Board, significantly developing the business across Europe, as well as placing senior executives within major international organisations. Since 2009, Robert has successfully established Vantage FX UK Trading Limited, an FSA regulated online forex broker based in London, a significant player in the FX market across Europe with strong growth year on year. Robert is currently the Managing Director of Vantage FX UK Trading Limited. Robert's position as Executive Chairman and Finance Director is on a part time basis. 

 

Paniti Junhasavasdikul (Chief Executive Officer)

Mr. Junhasavasdikul has 20 years of legal, interim management and private equity experience. He has worked as a lawyer in various transactions and investments ranging from start-ups, M&A, special situation investments, debt trades, turnarounds, disputes and corporate governance. He was a co-founder of FBLP Legal Co., Ltd where he was a partner from 2000 to 2007 before the practice was merged with DFDL International Law Offices where he was an equity partner between 2007 to 2010, based in the CLMV (Cambodia, Laos, Myanmar and Vietnam) countries. Paniti was a member of the International Advisory Council of International and Executive Legal Education (IELE), Berkeley Law, University of California between 2009 and 2014. He graduated with an LLB from Chulalongkorn University, Faculty of Law in 1992 and received an LLM from University of California, Berkeley in 1995. He is a member of the Thai Bar Association and the Law Society of Thailand.

 

Mr. Junhasavasdikul was appointed to the board of AAA on 9 September 2016 and subsequently resigned on 30 April 2017.

 

Wai Tak Jonathan Chu 

Jonathan has over twenty years of experience in property investment and asset management, investor relations and corporate finance mostly in Hong Kong. He was a Senior Property Manager at Hon Kwok Land Investments Co. Ltd., a property developer company listed on the main board of the Hong Kong Stock Exchange, from September 1988 to April 2004. He was a consultant with Ketchum Newscan Public Relations Limited in Hong Kong from December 2009 to February 2011. He was an Investor Relations Manager at Zhengye International Holdings Co. Ltd. from June 2012 to October 2013 and an Investor Relations Manager at Modern (HR) Limited from August 2011 to April 2012, both companies listed on the main board of the Hong Kong Stock Exchange. Jonathan received his BA (Hons) in Economics and Social Studies from the University of Manchester and a Master of Science in Financial Engineering from the City University of Hong Kong.

 

Dominic Seah Boon Chin (Independent Non-Executive Director)

Dominic began his career in 1995 as a senior officer at Chung Khiaw Bank (Malaysia) Bhd. (now known as United Overseas Bank (Malaysia) Berhad). From 1997 to January 2007, he worked in several established financial institutions in Malaysia and Singapore, including CIMB Investment Bank Berhad, Affin Investment Bank Berhad and Public Investment Bank Berhad, mainly focused in corporate finance. Subsequently he joined MobilityOne Limited (which is quoted on AIM) as its corporate finance director and has been a non-executive director there since November 2011. He is currently the head of corporate finance at TA Securities Holdings Berhad, a stockbroking firm in Malaysia. He obtained his Bachelor of Commerce (Honours) degree with distinction from McMaster University, Canada.

 

 

INDEPENDENT AUDITOR'S REPORT

 

 

TO THE MEMBERS OF ALL ASIA ASSET CAPITAL LIMITED

(Incorporated in the British Virgin Islands with limited liability)

 

Opinion

We have audited the consolidated financial statements of All Asia Asset Capital Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") set out on pages 21 to 57, which comprise the consolidated statement of financial position as at 31 December 2016, and the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

 

In our opinion, the consolidated financial statements present fairly, in all materials respects the consolidated financial position of the Group as at 31 December 2016, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board ("IASB").

 

Basis for Opinion 

We conducted our audit in accordance with International Standards on Auditing ("ISAs") issued by the International Federation of Accountants ("IFAC"). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' "Code of Ethics for Professional Accountants" (the "Code") and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

 

Key Audit Matters

Key audit matters are the matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended 31 December 2016. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

 

 

 

TO THE MEMBERS OF ALL ASIA ASSET CAPITAL LIMITED

(Incorporated in British Virgin Islands with limited liability)

 

Key audit matter	How the matter was addressed in our audit
Valuation of the Group's available-for-sale financial assets measured at fair value categorised as level 3 of fair value hierarchy
As at 31 December 2016, the Group's available-for-sale financial assets of approximately GBP2.42 million were investments in unlisted equity securities whose fair value measurements were categorised as level 3 in the fair value hierarchy defined in IFRS 13.   The valuation of the available-for-sale financial assets involved high degree of estimation uncertainty, subjectivity and management judgement.   We have identified the fair value measurement of the Group's available-for-sale financial assets as a key audit matter because the fair value of which were derived from valuation techniques that include inputs for assets that are not based on observable market date and high degree of management judgement was required in determining the assumptions to use in arriving at the unobservable inputs.	Our major audit procedures in relation to this matter included the following: •     We evaluated the competence, capabilities and independence of the Group's external valuer; •     We assessed the appropriateness for the selection of the discounted cash flow model as the valuation technique used by management based on the market practice and our knowledge of the nature of the financial assets; •     We evaluated the judgement made by management in determining the key assumptions, including credit spread rate and volatility, by comparing the supporting documentation to external market analysis. We also performed an independent sensitivity analysis to evaluate those assumptions applied to the valuation model for calculating the fair value of the financial assets; and •     We checked the mathematical accuracy of the discounted cash flow model prepared by management via reperformance.

 

Information other than the Consolidated Financial Statements and Auditor's Report Thereon

The directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

 

TO THE MEMBERS OF ALL ASIA ASSET CAPITAL LIMITED

(Incorporated in British Virgin Islands with limited liability)

 

Responsibilities of Directors and Those Charged with Governance for the Consolidated Financial Statements

The directors are responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRSs issued by the IFAC, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

 

The directors are also responsible for overseeing the Group's financial reporting process.

 

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. 

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

·     Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

·     Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

·     Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

·     Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

 

 

 

 

 

INDEPENDENT AUDITOR'S REPORT (CONTINUED)

 

 

TO THE MEMBERS OF ALL ASIA ASSET CAPITAL LIMITED

(Incorporated in British Virgin Islands with limited liability)

 

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements (continued)

 

·     Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

·     Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

 

We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

 

From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

 

The engagement partner on the audit resulting in the independent auditor's report is Yip Kai Yin with Practising Certificate number P05131.

 

 

 

 

 

 

Elite Partners CPA Limited

Certified Public Accountants

 

 

10/F., 8 Observatory Road,

Tsim Sha Tsui, Kowloon,

Hong Kong                                                                                                                 

28 June 2017

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

 

 

		Notes		2016		2015
				GBP		GBP
Other income		5		377		6,101
Impairment of available-for-sale financial assets				(3,881,471)		-
Change in fair value of convertible loan designated at fair value through profit or loss				(220,243)		-
Administrative expenses				(250,096)		(307,247)
Loss before tax		6		(4,351,433)		(301,146)
Income tax		8		-		-
Loss for the year				(4,351,433)		(301,146)
Loss per ordinary share (in pence)
-  Basic		9(a)		(2.04)		(0.14)
-  Diluted		9(b)		(2.04)		(0.14)

 

 

 

 

 

		Notes		2016		2015
				GBP		GBP
Loss for the year				(4,351,433)		(301,146)
Other comprehensive income:
Items that may reclassified subsequently to profit or loss
Fair value (loss)/ gain on available-for-sale financial assets				(3,941,228)		33,104
Reclassification adjustment relating to impairment of available-for-sale financial assets during the year				3,881,471		-
Exchange difference on translating financial statements of foreign subsidiaries				858,489		255,870
Other comprehensive income, net of tax				798,732		288,974
Total comprehensive expense for the year				(3,552,701)		(12,172)

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

				As at		As at
		Notes		31 Dec 2016		31 Dec 2015
				GBP		GBP
ASSETS
Non-current assets
Property, plant and equipment		11		10,276		12,919
Available-for-sale financial assets		13		2,416,336		5,490,437
				2,426,612		5,503,356
Current assets
Prepayments and deposits				8,932		4,830
Cash and bank balances		14		44,648		186,783
Total current assets				53,580		191,613
Total assets				2,480,192		5,694,969
CAPITAL AND RESERVES
Share capital		15		6,284,194		6,284,194
Reserves		17		(4,158,176)		(605,475)
Total equity				2,126,018		5,678,719
LIABILITIES
Current liabilities
Other payables and accruals		18		33,931		16,250
Non-current liabilities
Convertible loan		20		320,243		-
Total liabilities				354,174		16,250
Total equity and liabilities				2,480,192		5,694,969
Net current assets				19,649		175,363
Total assets less current liabilities				2,446,261		5,678,719
Net assets				2,126,018		5,678,719

 

Approved by the board of directors on 28 June 2017

Wai Tak Jonathan Chu Director		Robert Anthony Rowland Berkeley Director

 

      

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

				Fair		Share
		Share		value		option		Exchange		Accumulated
		capital		reserve		reserve		reserve		loss		Total
		GBP		GBP		GBP		GBP		GBP		GBP
At 1January 2015		5,794,969		147,675		180,051		345,234		(1,130,337)		5,337,592
Loss for the year		-		-		-		-		(301,146)		(301,146)
Other comprehensive income:
Loss on fair value  change on available- for-sale financial  assets		-		33,104		-		-		-		33,104
Exchange difference  on translating of  financial statement  of overseas subsidiaries		-		-		-		255,870		-		255,870
Total comprehensive income for the year		-		33,104		-		255,870		(301,146)		(12,172)
Issuance of shares		489,225		-		-		-		-		489,225
Lapse of share option		-		-		(135,926)		-		-		(135,926)
As at 31 Dec 2015 and 1 Jan 2016		6,284,194		180,779		44,125		601,104		(1,431,483)		5,678,719
Loss for the year		-		-		-		-		(4,351,433)		(4,351,433)
Other comprehensive income:
Loss on fair value change on available- for-sale financial assets		-		(4,169,030)		-		-		-		(4,169,030)
Reclassification adjustment relating to impairments of available-for-sale investment during the year		-		3,881,471		-		-		-		3,881,471
Exchange difference on translating of financial statement  of overseas subsidiaries		-		-		-		1,086,291		-		1,086,291
Total comprehensive income for the year		-		(287,559)		-		1,086,291		(4,351,433)		(3,552,701)
As at 31 December 2016		6,284,194		(106,780)		44,125		1,687,395		(5,782,916)		2,126,018

                                                                                                                                      

 

 

 

      

CONSOLIDATED STATEMENT OF CASH FLOWS

 

		2016		2015
		GBP		GBP
Operating activities
Loss before taxation		(4,351,433)		(301,146)
Adjustments for:
Bank interest income		(3)		(6)
Depreciation of property, plant and equipment		2,979		2,786
Impairment loss on available-for-sale financial assets		3,881,471		-
Change in fair value of convertible loans designated at fair value through profit or loss		220,243		-
Reversal of equity-settled share-based payments		-		(135,926)
Operating loss before working capital changes		(276,743)		(434,292)
(Increase)/ Decrease in prepayments and deposits		(4,102)		10,722
Increase/ (Decrease) in other payables and accruals		17,681		(329,822)
Cash used in operations		(233,164)		(753,392)
Interest received		3		6
Net cash used in operating activities		(233,161)		(753,386)
Investing activities
Purchase of property, plant and equipment		-		(810)
Net cash used in investing activities		-		(810)
Financing activities
Issuance of share capital		-		489,225
Proceeds from issue of convertible loans		100,000		-
Net cash generated from financing activities		100,000		489,225
Net decrease in cash and cash equivalents		(133,161)		(264,971)
Effect of foreign exchange rate changes, net		(8,974)		(641)
Cash and cash equivalents at the beginning of the year		186,783		452,395
Cash and cash equivalents at the end of the year		44,648		186,783
Analysis of balances of cash and cash equivalents
Cash and bank balances		44,648		186,783

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

1.     GENERAL INFORMATION

 

The Company was incorporated in the British Virgin Islands on 14 September 2012 with limited liability and had obtained the admission by the London Stock Exchange to be traded in AIM market on 2 May 2013. The registered office of the Company is located at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola, British Virgin Islands and the operating office is located at Unit 2302, 23/F., New World Tower 1, 18 Queen's Road Central, Central, Hong Kong.

 

The principal activity of the Company and its subsidiaries (collectively referred as to the "Group") is to invest in growing markets of Asia Pacific.

 

The consolidated financial statements are presented in Great British Pounds ("GBP"), which is the same as the functional currency of the Company, and all value is round to the nearest GBP. It is prepared on historical cost basis except for available-for-sale financial assets and the share-based payment that are stated at fair value.

 

2.    APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs")

 

2.1   Amendments to IFRSs that are mandatorily effective for the current year 

 

In the current year, the Group has applied a number of amendments to IFRSs issued by the International Accounting Standards Board ("IASB") that are mandatorily effective for an accounting period that begins on or after 1 January 2016. These amendments have been applied by the Group for the first time in the current year unless otherwise specified. The impact of these amendments are described below.

 

Amendments to IAS 1 Disclosure Initiative

 

The amendments clarify that an entity need not provide a specific disclosure required by a IFRS if the information resulting from that disclosure is not material (even if the IFRS contains a list of specific requirements or describes them as minimum requirements). The amendments also give guidance on the bases of aggregating and disaggregating information for disclosure purposes. The amendments emphasise that an entity should consider whether to provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users of financial statements to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance.

 

The application of these amendments has not resulted in any impact on the financial performance or financial position of the Group.

 

 

 

 

 

 

2.2   New and revised IFRSs that are not mandatorily effective for the current year 

 

The Group has not applied any of the following new and revised IFRSs that have been issued but are not yet mandatorily effective:

 

IFRS 9                                              Financial Instruments¹ 

IFRS 15                                          Revenue from Contracts with Customers¹

IFRS 16                                             Leases²

IFRS 17                                          Insurance Contracts⁶

IFRIC 22                                         Foreign Currency Transactions and Advance

                                                                      Consideration¹

IFRIC 23                                         Uncertainty over Income Tax Treatments²

Amendments to IFRS 2                   Classification and Measurement of Share-based Payment

                                                               Transactions¹

Amendments to IFRS 4                   Applying IFRS 9 Financial Instruments with IFRS 4

                                                          Insurance Contracts¹

Amendments to IFRS15                   Clarifications to IFRS 15 Revenue from Contracts with

                                                          Customers¹

Amendments to IFRS 10                  Sale or Contribution of Assets between an Investor and its

  and IAS 28                                        Associate or Joint Venture³

Amendments to IAS 7                     Disclosure Initiative⁴

Amendments to IAS 12                    Recognition of Deferred Tax Assets for Unrealised Losses⁴

Amendments to IAS 40                    Transfers of Investment Property¹

Amendments to IFRSs                    Annual Improvements to IFRSs 2014-2016 Cycle⁵

  

¹ Effective for annual periods beginning on or after 1 January 2018

² Effective for annual periods beginning on or after 1 January 2019

³ Effective for annual periods beginning on or after a date to be determined

⁴ Effective for annual periods beginning on or after 1 January 2017

⁵ Effective for annual periods beginning on or after 1 January 2017 or 1 January 2018, as appropriate

⁶ Effective for annual periods beginning on or after 1 January 2021

 

IFRS 9 Financial Instruments

IFRS 9 has introduced new requirements for a) classification and measurement of financial assets, b) impairment of financial assets and c) general hedge accounting.

 

Specifically, with regard to the classification and measurement of financial assets, IFRS 9 requires all recognised financial assets that are within the scope of IFRS 9 to be subsequently measured at amortised cost or fair value. Debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of each of the subsequent accounting periods. Debt investments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms that are solely payments of principal and interest on the principal amount outstanding, are generally measured at fair value through other comprehensive income (FVTOCI). All other debt investments and equity investments are measured at their fair value at the end of subsequent accounting periods. Further, under IFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of an equity investment (that is not held for trading nor contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies) in other comprehensive income, with only dividend income generally recognised in profit or loss and that cumulative fair value changes will not be reclassified to profit or loss upon derecognition of the investment.

 

 

2.2   New and revised IFRSs that are not mandatorily effective for the current year 

IFRS 9 Financial Instruments (continued)

With regard to the measurement of financial liabilities designated as at fair value through profit or loss, IFRS 9 requires that the amount of change in the fair value of a financial liability that is attributable to changes in the credit risk of that liability is presented in other comprehensive income, unless the recognition of such changes in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability's credit risk are not subsequently reclassified to profit or loss. Under IAS 39, the entire amount of the change in the fair value of the financial liability designated as fair value through profit or loss is presented in profit or loss.

 

With regard to impairment of financial assets, IFRS 9 has adopted an expected credit loss model, as opposed to an incurred credit loss model required under IAS 39. In general, the expected credit loss model requires an entity to assess the change in credit risk of the financial asset since initial recognition at each reporting date and to recognise the expected credit loss depending on the degree of the change in credit risk.

 

With regard to the general hedge accounting requirements, IFRS 9 retains the three types of hedge accounting mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an 'economic relationship'. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity's risk management activities have also been introduced.

 

The Group is still in the process of assessing the impact of IFRS 9. The directors of the Company believe that it is impractical to disclose the impact in these consolidated financial statements until the Group has completed the assessment.

 

Amendments to IAS 7 Disclosure Initiative

The amendments require an entity to make disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities. The directors of the Company do not anticipate that the application of these amendments will have a material impact on the Group's consolidated financial statements.

 

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The consolidated financial statements have been prepared on a going concern basis. The preparation of these financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires the directors of the Company to exercise judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to these financial statements are disclosed in Note 4.

 

(a)    Basis of consolidation

 

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company and its subsidiaries. Control is achieved when the Company:

 

   has power over the investee;

   is exposed, or has rights, to variable returns from its involvement with the investee; and

   has the ability to use its power to affect its returns.

 

 

 

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

 

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss from the date the Group gains control until the date when the Group ceases to control the subsidiary.

 

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

 

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the members of the Group.

 

All intra-group transactions, balance, income and expenses are eliminated in full on consolidation.

 

The Group does not have any non-controlling interest during the year.

 

(b)    Segment reporting

 

For the purpose of IFRS 8 "Operating Segments" the Company currently has one segment being "Investment sector". No further operating segment financial information is therefore disclosed.

 

(c)    Property, plant and equipment

 

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

 

Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful lives, using the straight-line method. The following annual rates are used for the depreciation of property, plant and equipment:

 

Furniture and fixture                                                          20%

Office equipment                                                                        30%

 

If there is an indication that there has been a significant change in the depreciation rate, useful life or residual value of an asset, the depreciation of that asset is revised prospectively to reflect the new expectations.

 

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.

 

(d)    Cash and cash equivalents

 

Cash and cash equivalents include cash on hand and other short-term highly liquid investments with original maturities of three months or less. Bank overdraft is shown within borrowings in current liabilities on the consolidated statement of financial position.

 

(e)    Financial instruments

 

Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument.

 

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 

Financial assets

                  

Financial assets are classified into the following specified categories: "available-for-sale" (AFS) financial assets and "loans and receivables". The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

 

Effective interest method

 

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period to the net carrying amount of initial recognition.

 

Income is recognised on an effective interest basis for debt.

 

Available-for-sale financial assets ("AFS financial assets")

 

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial assets at FVTPL.

 

AFS financial assets are measured at fair value at the end of each reporting period. Changes in fair value are recognised in other comprehensive income and accumulated under the heading of available-for-sale investments revaluation reserve. Where the financial asset is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the available-for-sale investments revaluation reserve is reclassified to profit or loss (see the accounting policy in respect of impairment loss on financial assets below).

 

Loans and receivables

 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables (including deposits and other receivables, cash and cash equivalents) are measured at amortised cost using the effective interest method, less any impairment.

 

Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

 

Impairment of financial assets

 

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

 

For AFS equity investments, a significant or prolonged decline in the fair value of the security below its costs is considered to be objective evidence of impairment.

 

For all other financial assets, objective evidence of impairment could include:

 

·      significant financial difficulty of the issuer or counterparty; or

 

·      breach of contract, such as a default or delinquency in interest or principal payments; or

 

·      it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or

 

·      the disappearance of an active market for that financial asset because of financial difficulties.

 

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

 

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

 

For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is revered does not exceed what the amortised cost would have been had the impairment not been recognised.

 

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

 

In respect of AFS equity investments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of available-for-sale investments revaluation reserve. In respect of AFS debt investments, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

                  

                   Financial liabilities and equity instruments

 

Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

 

Equity instruments

 

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.

 

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

 

Financial liabilities at fair value through profit or loss ("FVTPL")

 

Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL on initial recognition.

 

A financial liability is classified as held for trading if:

 

·    it has been acquired principally for the purpose of repurchasing in the near term; or

 

·    on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

 

·    it is a derivative that is not designated and effective as a hedging instrument.

 

Financial liabilities at fair value through profit or loss ("FVTPL") (continued)

 

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

 

·    such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

 

·    the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

 

·    it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

 

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the "other gain and losses" line item in the consolidated income statement.

 

Other financial liabilities

 

Other financial liabilities (including other payables and others) are subsequently measured at amortised cost using the effective interest method.

 

Convertible loan designated at fair value through profit or loss

 

The convertible loan includes a liability component and a conversion option. The conversion option that will not be settled by the exchange of a fixed amount of cash for a fixed number of the Company's own equity instruments is treated as a derivative. Derivatives embedded in a financial instrument are treated as separate derivatives when their economic risks and characteristics are not closely related to those of the host contract (the liability component) and the host contract is not carried at fair value through profit or loss.

 

The convertible loan (including the liability component and the conversion option) as a whole is designated as a financial liability at fair value through profit or loss on initial recognition. In subsequent periods, the entire convertible loan is measured at fair value, with changes in fair value recognised directly in profit or loss in the period in which they arise.

 

Transaction costs that are directly attributable to the issue of the convertible bond designated as financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 

Effective interest method

 

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying amount on initial recognition.

 

Interest expense is recognised on an effective interest basis except for those financial liabilities designated at FVTPL.

 

Derecognition

 

The Group de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group continues to recognise the asset to the extent of its continuing involvement and recognises an associated liability. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

 

On de-recognition of a financial asset in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.

 

On de-recognition of a financial asset other than in its entirety, the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.

 

The Group de-recognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

 

 

         (f)   Current assets and current liabilities

 

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

 

(g)    Foreign currency translation

 

        (i)   Functional and presentation currency

 

Items included in the financial statements of each of the group entities are measured using the currency in accordance to the location where shares of the Company are traded (the functional currency). These consolidated financial statements are presented in Great British Pound ("GBP"), which is the Company's functional and the Group's presentation currency.

 

        (ii)   Transactions and balances

 

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

 

(h)    Revenue recognition

 

Revenue is recognised when it is probable that the economic benefits will flow to the Group and the revenue and costs, if applicable, can be measured reliably, the Group did not generate any gain or loss on disposal of available-for-sale financial assets the reporting period whereas interest income is recognised on a time-proportion basis using the effective interest method.

 

 (i)    Provisions

 

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable that the Group will be required to settle that obligation, and reliable estimate can be made of the amount of the obligation. Provisions are measured at the Group;s best estimate of the expenditure required to settle the present obligation at the end of the reporting period, and are discounted to present value where the effect of the time value of money is material.

 

(j)     Leasing

 

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

 

Rental payable under operating leases are recognised as an expenses on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

 

 

(k)    Share-based payment transactions

 

The fair value of services received determined by reference to the fair value of share warrants and options granted under the share warrants and share award scheme of the Company on the grant date is expensed on the year of grant.

 

At the end of each reporting period, the Group revises its estimates of the number of options that are expected to ultimately vest. The impact of the revision of the estimates during the vesting period, if any, is recognised in profit or loss such that cumulative expenses reflects the revised estimate, with a corresponding adjustment to equity. At the time when the share options are exercised, forfeited after the vesting date or are still not exercised at the expiry date, the amount previously recognised will continue to be held in equity.

 

(l)     Retirement benefit cost

 

Payments to retirement benefits plans and government-managed retirement benefits schemes are recognised as an expense when employees have rendered service entitling them to the contributions.

 

(m)   Taxation

 

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

 

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of income and retained earnings because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

 

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases using in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that is probable that taxable profit will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

 

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

 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. However, the measurement of deferred tax liabilities associated with an investment property measured at fair value does not exceed the amount of tax that would be payable on its sale to an unrelated market participant at fair value at the reporting date. Deferred tax is recognised in profit or loss, except when it relates to items that are recognised in other comprehensive income or directly in equity, in which case the deferred tax is also recognised in other comprehensive income or directly in equity respectively.

 

(n)   Impairment of assets

 

Assets that have an indefinite useful life are not subject to amortisation, which are at least tested annually for impairment and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment assets are grouped at the lower levels for which there are separately identifiable cash flow (cash-generating units).

 

(o)   Contingent liabilities and contingent assets

 

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.  It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably. A contingent liability is not recognised but is disclosed in the notes to the financial statements.  When a change in the probability of an outflow occurs so that outflow is probable, they will then be recognised as a provision. 

 

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within control of the Group.  A contingent asset is not recognised but is disclosed in the notes to the financial statements when an inflow of economic benefits is probable.  When inflow is virtually certain, an asset is recognised.

 

(p)   Related parties

 

For the purpose of these financial statements, related party includes a person and entity as defined below:

 

(a) A person or a close member of that person's family is related to the Group if that person:

 (i)     has control or joint control over the Group;

(ii)      has significant influence over the Group; or

(iii)     is a member of the key management personnel of the Group or the Group's parent.

 

(b) An entity is related to the Group if any of the following conditions applies:

(i)      the entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii)      either entity is an associate or joint venture of the other entity (or of a member of a        group of which the other entity is a member).

(iii)     both entities are joint ventures of a third entity.

(iv)     either entity is a joint venture of a third entity and the other entity is an associate of       the third entity.

(v)     the entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group. If the reporting entity is itself such a plan, the sponsoring employers are also related to the plan.

(vi)     the entity is controlled or jointly controlled by a person identified in (a).

(vii)    a person identified in (a)(i) has significant influence over the entity or is  member if the key management personnel of the entity (or of a parent of the entity).

(viii)    Close members of the family of a person are those family members who may be expected to influence or be influenced management personnel of the entity (or of a parent of the entity).

 

4.     CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

 

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

 

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. 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.

 

Valuation of financial instruments

 

The Group uses valuation techniques that include inputs that are not based on observable market data to estimate the fair value of certain types of financial instruments. Notes 13 provide information the estimation of the fair value of financial instruments.

 

The directors of the Company believe that the chosen valuation techniques used are appropriate in determining the fair value of financial instruments.

 

5.    OTHER INCOME

 

Other income represents the bank interest income and foreign exchange gain incurred during the year, as presented below:

                                                                                                                                                                  

         

	2016		2015
	GBP		GBP
Bank interest income	3		6
Foreign exchange gain	374		4,541
Sundry income	-		1,554
	377		6,101

 

6.      LOSS BEFORE TAX

 

Loss before tax arrived at after charging/ (crediting):

			2016		2015
			GBP		GBP
Auditors' remuneration			20,491		17,249
Depreciation of property, plant and equipment			2,979		2,786
Foreign exchange loss			1,196		5,947
Operating lease payment in respect of office premises			7,984		34,129
Staff costs (including directors' remuneration)
	- Fees		20,625		22,500
	- Salaries and other benefits		73,410		140,411
	- Retirement scheme contribution		2,901		2,981
	- Reversal of share-based payment		-		(135,926)
Total staff costs			96,936		29,966

 

 

7.    DIRECTORS' REMUNERATION

 

During the year, no emoluments were paid by the Group to the Directors as an inducement to join or upon joining the Group or as compensation for loss of office.

 

For the year ended 31 December 2016:

 

			Salaries		Share-		Retirement
			and other		based		scheme
	Fees		benefits		payment		contribution		Total
	GBP		GBP		GBP		GBP		GBP
Executive directors
Mr. Robert Anthony Rowland Berkeley	-		11,430		-		-		11,430
Mr. Wai Tak Jonathan Chu	-		6,843		-		342		7,185
Mr. Paniti Junhasavasdiku (iii)	-		26,133		-		-		26,133
	-		44,406		-		342		44,748
Independent non-executive director
Mr. Seah Boon Chin	20,625		-		-		-		20,625
	20,625		44,406		-		342		65,373

 

For the year ended 31 December 2015:

 

				Salaries		Share-		Retirement
				and other		based		scheme
	Fee			benefits		payment		contribution		Total
	GBP			GBP		GBP		GBP		GBP
Executive directors
Dr. Sri Hartati Kurniawan (i)	-		74,536			(120,031)		886		(44,609)
Mr. Robert Anthony Rowland Berkeley	-		12,000			(15,895)		-		(3,895)
Mr. Wai Tak Jonathan Chu	-		7,088			-		454		7,542
Mr. Akekachat Leelapanyalert (ii)	-		3,000			-		-		3,000
	-			96,624		(135,926)		1,340		(37,962)
Independent non-executive
director
Mr. Seah Boon Chin	22,500			-		-		-		22,500
	22,500			96,624		(135,926)		1,340		(15,462)

Notes:

 

(i)      Dr. Sri Hartati Kurniawan resigned on 20 July 2015.

(ii)        Mr. Akekachat Leelapanyalert was appointed on 1 August 2014 and resigned on 25 March 2015.

(iii)       Mr.Paniti Junhasavasdiku was appointed on 9 September 2016.

 

8.      INCOME TAX

 

	2016		2015
	GBP		GBP
Current income tax	-		-

 

 

i)  Pursuant to the rules and regulations of the BVI, the Company is not subject to any income tax in the BVI.

 

ii) No provision for Hong Kong profits tax has been made for subsidiary incorporated in Hong Kong as the subsidiary did not have any assessable profits subject to Hong Kong profits tax during the years ended 31 December 2016 and 2015.

 

Tax charge for the year is reconciled to loss before taxation as follows:

 

        

	2016		2015
	GBP		GBP
Loss before taxation	(4,351,433)		(301,146)
Tax at the application income tax rate	(717,986)		(49,689)
Tax effect of expenses not deductible	717,986		49,689
Tax charge and effective tax rate for the year	-		-

 

9.     LOSS PER SHARE

 

The calculation of basic loss per share is based on the loss attributable to owners of the Company and the weighted average number of ordinary shares in issue during the year.

 

(a)    Basic loss per share

 

During the year ended 31 December 2016, the calculation of basic loss per share amount is based on the net loss for the year of GBP4,351,433 (2015: GBP301,146) attributable to the equity holders of the Company, and weighted average of 212,826,072 (2015: 211,853,195) ordinary shares in issued during the year.

 

(b)    Diluted loss per share

 

No adjustment has been made to the basic loss per share presented for the year ended 31 December 2016 and 2015 in respect of a dilution as the impact of the convertible loan and share options outstanding (2015: share options outstanding) had an anti-dilutive effect on the basic loss per share presented.

 

10.   DIVIDEND

 

No dividend has been paid or declared by the Company during the year ended 31 December 2016 (2015: nil).

 

11.    PROPERTY, PLANT AND EQUIPMENT

 

	Furniture		Office
	and fixture		equipment		Total
	GBP		GBP		GBP
At cost:
At 1 January 2015	325		17,008		17,333
Additions	344		466		810
Exchange realignment	27		122		149
At 31 December 2015
and 1 January 2016	696		17,596		18,292
Additions	-		-		-
Exchange realignment	139		551		690
At 31 December 2016	835		18,147		18,982
Accumulated depreciation:
At 1 January 2015	101		2,430		2,531
Charge for the year	98		2,688		2,786
Exchange realignment	7		49		56
At 31 December 2015
and 1 January 2016	206		5,167		5,373
Charge for the year	152		2,827		2,979
Exchange realignment	57		297		354
At 31 December 2016	415		8,291		8,706
Net carrying value:
At 31 December 2016	420		9,856		10,276
At 31 December 2015	490		12,429		12,919

 

        

 

12.    SUBSIDIARIES

 

Particulars of the subsidiaries of the Company are as follows:

 

Name of subsidiaries	Place of incorporation	Issued/Paid-up share/registered capital	Effective interest held by the Company		Principal activities
			Direct	Indirect
All Asia Asset Energy Limited	British Virgin Islands	Ordinary Share US$1	100%	-	Investment holding
All Asia Assets (Hong Kong) Limited	Hong Kong	Ordinary Shares	100%	-	Administrative supporting services
		HK$100
Energy Central Limited	British Virgin	Ordinary Share	-	100%	Investment holding
	Islands	US$1
Fortune House Group Limited	British Virgin	Ordinary Share	-	100%	Investment holding
	Islands	US$1

 

 

13.    AVAILABLE-FOR-SALE FINANCIAL ASSETS

 

         Available-for-sale financial assets comprise of:

 

		2016		2015
		GBP		GBP
Unlisted equity securities, at cost		4,702,021		4,702,021
Add: fair value adjustment		(3,988,251)		180,779
exchange realignment		1,702,566		607,637
		2,416,336		5,490,437

 

The unlisted equity securities are measured at fair value and are classified as Level 3 fair value measurement. Fair value is estimated using Discounted Cash Flow ("DCF") method. Details of which the model's parameters adopted were shown in corresponding note to each category of available-for-sale financial assets.

 

The details of movement in available-for-sale financial assets have been set out as follow:

	Place of			Fair value		Exchange		At fair
	Incorporation	At cost		adjustment		difference		value
		GBP		GBP		GBP		GBP
Andaman Power
and Utility Co.,
Limited (a)	Thailand	3,462,095		(3,883,191)		1,249,230		828,134
Myanmar Allure
Group Company
Limited (b)	Myanmar	1,239,926		(105,060)		453,336		1,588,202
		4,702,021		(3,988,251)		1,702,566		2,416,336

 

As at 31 December 2015

                                            

	Place of				Fair value		Exchange		At fair
	Incorporation		At cost		adjustment		difference		value
			GBP		GBP		GBP		GBP
Andaman Power
and Utility Co.,
Limited (a)	Thailand		3,462,095		(1,720)		464,744		3,925,119
Myanmar Allure
Group Company
Limited (b)	Myanmar		1,239,926		182,499		142,893		1,565,318
			4,702,021		180,779		607,637		5,490,437

 

 

 

Notes:

 

(a)    As at 31 December 2016, the Group owns 7% interest of Andaman Power and Utility Co., Limited ("APU"). APU has obtained the rights to develop and operate a 500MW combined-cycle power plant construction project in Shan Province of Myanmar. In the opinion of the directors, the Group has not been in a position to exercise any significant influence over the financial and operating policies of APU. Accordingly, APU has been accounted for as an available-for-sale financial asset.

 

As at 31 December 2016, the fair value of approximately US$1,022,000 (equivalent to GBP828,134) (2015: US$5,810,000 (equivalent to GBP3,925,119) was derived by an independent professional valuer using a DCF method. In determining the fair value, a risk-adjusted discount rate of 31.74% was being used.

 

Subsequent to the end of the reporting period, on 3 May 2017, the Group disposed all interests in APU through a disposal of the entire issued capital of Energy Central Limited for a consideration of Thai Baht 34,889,000 settled in cash.

 

(b)    As at 31 December 2016, the Group owns 7% equity interest of Myanmar Allure Group Company Limited ("MAG"). MAG, a private company with limited liability, owns and operates a resort hotel in Tachileik, Shan Province of Myanmar. In the opinion of the directors, the Group has not been in a position to exercise any significant influence over the financial and operating policies of MAG. Accordingly, MAG has been accounted for as an available-for-sale financial asset.

 

            As at 31 December 2016, a fair value of approximately US$1,960,000 (equivalent to GBP1,588,202) (2015: US$2,317,000 (equivalent to GBP1,565,318) was derived by an independent professional valuer using a DCF method. In determining the fair value, a risk-adjusted discount rate of 32.22% was being used.

 

 

14.    CASH AND BANK BALANCE

 

        

			2016		2015
			GBP		GBP
Cash and bank balance			44,648		186,783

 

At 31 December 2016, bank balances carry interest at market rate of 0.05% (2015: 0.05%) per annum. The bank balances are deposited with creditworthy banks of high credit rating.

 

 

 

       

15.    SHARE CAPITAL

			Number of
			ordinary shares
			of £0.10each		GBP
Authorised
	At 31 December 2015 and 2016		1,000,000,000		N/A
Issued
	As at 1 January 2015		209,861,072		5,794,969
	Issue of shares under subscription of share(i)		2,000,000		330,000
	Issue of shares under subscription of share(ii)		965,000		159,225
	At 31 December 2015, 1 January 2016 and 31 December 2016		212,826,072		6,284,194

         

Notes:

(i)         On 7 May 2015, 2,000,000 ordinary shares of 16.5 pence each in the Company were issued at subscription price of 16.5 pence per share by subscription of share. The net proceeds of GBP330,000 was intended to fund further investment opportunities of the Group and general working capital of the Group.

 

(ii)        On 27 May 2015, 965,000 ordinary shares of 16.5 pence each in the Company were issued at subscription price of 16.5 pence share by subscription of share. The net proceeds of      GBP159,225 was intended to fund further investment opportunities of the Group and general working capital of the Group.

 

All the shares issued were ranked pari passu in all respects with the existing ordinary shares of the Company.

 

16.    WARRANTS AND SHARE APPRECIATION AWARDS

 

The Group has issued or generated one-off warrants and share appreciation awards (the "Awards") to the executive directors of the Company during the Reporting Period.

 

         Warrants

 

On 25 April 2013, the Company has issued one-off warrants to the executive directors of the Company which given the right to subscribe for new Ordinary Shares of the Company at 3 pence per ordinary share and are exercisable 2 years after the date of grant and will lapse if not exercised within 5 years from the date of grant. There are no performance conditions that are required to be satisfied in order for the Warrants to become exercisable.

	2016		2015
		Weighted		Weighted
		average		average
		exercise price		exercise price
	No. of	per share	No. of	per share
	share	(pence)	share	(pence)
Outstanding at 1 January	4,176,082	3	12,528,247	3
Lapsed during the year	-	-	(8,352,165)	3
Outstanding at 31 December	4,176,082	3	4,176,082	3
Exercisable at 31 December	4,176,082	-	4,176,082	-

 

The exercisable period of warrants of the Company are as follows:

        

	2016		2015
		Weighted		Weighted
		average		average
		exercise price		exercise price
		per share		per share
	No. of	(pence)	No. of	(pence)
24 April 2015 - 24 April 2018	4,176,082	3	4,176,082	3

 

The fair value of the warrants is initially recognised on the grant date was GBP133,839. The fair value was estimated by the directors with reference to a valuation report issued by an independent valuer the Black-Scholes option pricing model by Bloomberg and taking into account the terms and conditions upon which the warrants granted.

 

On 20 July 2015, one of the executive directors, Dr. Sri Hartati Kurniawan resigned from her office and the 8,352,165 of warrants granted to her lapsed accordingly.

        

         Share Appreciation Awards

 

On 25 April 2013, the Company issued one-off share appreciation awards ("the Awards") to the executive directors which are spilt into five tranches with different exercise timeframe. The Awards are given the rights to receive the new Ordinary Shares of the Company based on the performance of the Company which are measured by the share price of the Company of each tranche. The Awards will become exercisable in respect of that number of Ordinary Shares subject to the relevant tranche and the Awards are exercisable for two years from the date upon which the relevant performance condition is satisfied and are not exercisable during the close period. Where a Performance Condition is not satisfied within the relevant measurement period, the relevant tranche shall lapse and not carry over. The Company does not intend to grant further share appreciation awards.

 

		2016		2015
Outstanding at 1 January		1,789,749		26,846,240
Lapsed during the year		-		(25,056,491)
Outstanding as at 31 December		1,789,749		1,789,749
Exercisable as at 31 December		-		-

 

The performance condition and exercise period of share awards are as follow:

 

Share price		Measurement period
22.8 pence		Any 12 month period before 31 December 2017

 

 

The fair value of the Awards is initially recognised on the grant date was GBP66,218. The fair value was estimated by the directors with reference to a valuation report issued by an independent valuer using Black-Scholes option pricing model and taking into account the terms and conditions upon which the warrants granted.

 

On 20 July 2015, one of the executive directors, Dr. Sri Hartati Kurniawan resigned from her office and the 8,352,165 of Awards granted to her lapsed accordingly.

 

17.    RESERVES

 

 

	Fair		Share
	value		option		Exchange		Accumulated
	reserve		reserve		reserve		loss		Total
	GBP		GBP		GBP		GBP		GBP
At 1 January 2015	147,675		180,051		345,234		(1,130,337)		(457,377)
Loss for the period	-		-		-		(301,146)		(301,146)
Other comprehensive income:
Fair value change on available for-sale financial assets	33,104		-		-		-		33,104
Exchange difference on translating financial statements of overseas subsidiaries	-		-		255,870		-		255,870
Total comprehensive income for the year	33,104		-		255,870		(301,146)		(12,172)
Lapse of share options	-		(135,926)		-		-		(135,926)
At 31 December 2015 and 1 January 2016	180,779		44,125		601,104		(1,431,483)		(605,475)
Loss for the year		-	-		-		(4,351,433)		(4,351,433)
Other comprehensive income:
Fair value change on available-for-sale financial assets	(4,169,030)		-		-		-		(4,169,030)
Exchange difference on translating financial  statements of overseas subsidiaries	-		-		1,086,291		-		1,086,291
Reclassification adjustment relating to impairments of available-for-sale investment during the year	3,881,471								3,881,471
Total comprehensive income for the year	(287,559)		-		1,086,291		(4,351,433)		(3,552,701)
Lapse of share options	-		-		-		-		-
As at 31 December 2016	(106,780)		44,125		1,687,395		(5,782,916)		(4,158,176)

 

 

Nature and purpose of the reserves

 

(i)  Fair Value reserve

 

The fair value reserve comprises the change in fair value of available-for-sale financial assets as at the end of each reporting period. The amount will be reclassified to profit or loss as realised gain on disposal of available-for-sale financial assets when the available-for-sale financial assets have been disposed.

 

(ii)   Share options reserve

 

Share options reserve comprises the fair value of warrants and the Awards granted which are yet to be exercised, the amount will transferred to share capital account when the related warrants and Awards are exercised or to retained profits should the related warrants and Awards expire or be forfeited.

 

(iii)  Exchange reserve

 

The exchange fluctuation reserve comprises all foreign exchange difference arising from translation of financial statements of the overseas subsidiaries.

 

18.    OTHER PAYABLES AND ACCRUALS

        

	2016		2015
	GBP		GBP
Accruals expenses	33,931		16,250

 

 

19.    OPERATING LEASES ARRANGEMENT

 

The Group leases certain of its office property under operating lease arrangements. Leases for properties are negotiated for terms ranging from one to two years.

 

As at the year ended of 31 December 2016, the Group had the following total future minimum lease payments payable under non-cancellable operating lease:

 

	2016		2015
	GBP		GBP
Not later than one year	-		9,548
Later than one year	-		-
	-		9,548

 

20.    CONVERTIBLE LOAN

 

The Company issued a two years convertible bond with principal amount of GBP100,000, bearing interest rate at 15% per annum, to Nature Cove Holdings Limited ("Nature Cove") on 1 December 2016. The convertible loan entitled Nature Cove to convert them into ordinary shares of the Company at any time between the date of issue of the convertible loan and the date of maturity on 1 December 2018 at the lower of conversion price of GBP 0.03 per ordinary share or the market price. If the convertible loan has not been converted, they will be redeemed on 1 December 2018 at the principal amount outstanding plus accrued interest.

 

The convertible loan contains a liability component and a conversion option derivative. The convertible loan was designated at fair value through profit or loss entirely and measured at fair value with changes in fair value recognised in profit or loss.

 

         The movements of the convertible loan notes are set out below:

	Total
	GBP
At 1 January 2016	-
Issued during the year	100,000
Change in fair value	220,243
At 31 December 2016	320,243

 

         The following assumptions were used to calculate the fair values of the embedded derivatives:

Valuation date	2016
Spot price	GBP0.095
Conversion price	GBP0.030
Time to maturity	1.9 year
Risk-free rate	0.0844%
Volatility	81%

 

The monte carlo simulation model has been used to estimate the fair value of the embedded derivatives. The variables and assumptions used in computing the fair value of the embedded derivatives are based on the directors' best estimate. Changes in variables and assumptions may result in changes in the fair value of the embedded derivatives.

 

21.   RELATED PARTY TRANSACTIONS

 

 

         Compensation of key management personnel of the Group

 

	2016		2015
	GBP		GBP
Short term employee benefits	65,031		119,124
Past-employment benefit	342		1,340
Equity-settled share option expenses	-		(135,926)
	65,373		(15,462)

 

22.    CAPITAL RISK MANGEMENT

 

The Group manages its capital to that entities in the Group will be able to continue a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance.

 

The capital structure of the Group consists of cash and cash equivalents and equity attributable to shareholders of the Company, comprising issued share capital and reserves.

 

The directors of the Company review the capital structure by considering the cost of capital and the risks associated with capital. In view of this, the Group will balance its overall capital structure through new shares issues as well as issue of new debt.

 

23.    FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

 

The Group's major financial instruments include equity investment, other payables and bank and cash balances. Detail instruments are disclosed in the respective notes. The risks associated with these financial instruments and the policies applied by the Group to mitigate these risks are set out below. Management monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

 

Foreign currency risk

 

The Group has no significant assets and liabilities which denominated in the currency other than functional currency of the group entities. The Group currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange exposure and will consider hedging significant currency exposure should the need arises. Accordingly, no sensitivity analysis presented.

 

Interest rate risk

 

The Group's cash flow interest rate risk is mainly concentrated on the bank balances carried at floating interest rate. The Group currently does not have a hedge policy against the interest rate exposure. However, the management monitors interest rate exposure and will consider the hedging significant interest rate exposure as needed.

 

The directors consider that the Group's exposure to interest rate risk of bank balances, which are short term in nature, is insignificant, accordingly no sensitivity analysis is presented.

 

 

 

Credit risk

 

The Group's maximum exposure to credit risk is represented by total financial assets held by the Group. The Group does not hold any collateral during the reporting period.

 

Cash and bank deposits are placed with financial institutions with sound credit ratings and the directors of the Company do not expect any counterparty failing to meet its obligation.

 

The Group does not provide any financial guarantees which would expose the Group to credit risk.

 

Liquidity risk

 

Liquidity risk is the risk that the Group are unable to meet their payment obligations associated with its financial liabilities when they fall due. The Group manages liquidity risk by maintaining adequate reserves, as well as continuously monitoring cash flow forecast and actual cash flows.

 

In managing the liquidity risk, the Group monitors and maintains a level of cash and cash equivalents that is adequate in discretion of the directors of the Company. In formulating their strategy, the directors of the Company would consider the financing of the Group's operations and the effects of fluctuation in operating and investing cash flows. As at 31 December 2016, the liquidity of the Group is primarily dependent on its ability to maintain adequate cash flows from operations and to raise funds through issue of convertible loans to meet its obligations and investment project opportunities as they fall due or arise.

 

The maturity profile of the Group's financial liabilities as at the end of the year is as follows:

			Weighted
			average
			effective						-		Total
			interest		Less than		More than		undiscounted		carrying
			rate		1 year		1 year		cash flows		amount
			%		GBP		GBP		GBP		GBP
At 31 December 2016
Accruals and other payables			N/A		33,931		-		33,931		33,931
Convertible loan			15%		15,000		100,000		115,000		320,243
					48,931		100,000		148,931		354,174
At 31 December 2015
Accruals and other payables			N/A		16,250		-		-		16,250

 

 

Fair values on financial instruments

 

        (i)     Financial instruments carried at fair value on a recurring basis

The following table presents the carrying amount of financial instruments measured at fair value at 31 December 2016 across the three levels of the fair value hierarchy defined in IFRS 13 Fair Value Measurements, with the fair value of each financial instrument categorised in its entirely based on the lowest level of input that is significant to the fair value measurement. The levels are defined as follows:

 

-       Level 1 (highest level): fair value measurements are those derived from quoted price (unadjusted) in active markets for identical asset or liabilities;

 

-       Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

-       Level 3 (lowest level): fair value measures are those derived from valuation techniques that include inputs for assets or liability that are not based on observable market data (unobservable inputs).

 

As at 31 December 2016, the Group had following financial instrument carried at fair value all of which are based on the level 3.

     

	2016		2015
	GBP		GBP
Financial assets:
Available-for-sale financial assets	2,416,336		5,490,437
Financial liabilities
Convertible loan	320,243		-

 

 

(i)    Financial instruments carried at fair value on a recurring basis (continued)

 

Level 3 movement tables

 

For the year ended 31 December 2016

		Available- for-sale financial asset		Convertible loan		Total
		GBP		GBP		GBP
At the beginning of the year		5,490,437		-		5,490,437
Total gains or losses
	in profit or loss	(3,881,471)		(220,243)		(4,101,714)
	in other comprehensive income	(287,559)		-		(287,559)
Issue				(100,000)		(100,000)
Exchange realignment		1,094,929				1,094,929
At the end of the year		2,416,336		(320,243)		2,096,093

 

For the year ended 31 December 2015

						Available- for-sale financial asset
						GBP
At the beginning of the year						5,200,876
Total gains or losses
	in profit or loss					-
	in other comprehensive income					33,104
Purchase						-
Exchange realignment						256,457
At the end of the year						5,490,437

 

 

(i)    Financial instruments carried at fair value on a recurring basis (continued)

The following table gives information about how the fair values of the Group's available-for-sale financial assets are determined (in particular, the valuation technique(s) and inputs used).

 

	2016	2015	Valuation technique(s)	Significant unobservable inputs	Range	Relationship of unobservable inputs to fair value
	GBP	GBP
Financial assets
Available-for-sale financial assets	2,416,336	5,490,437	Discounted cash flow	Free cash flow	N/A	The higher the free cash flow, the higher the fair value
				Discount rate	31.74% to 31.22%	The higher the discount rate, the lower the fair value
				Discount for lack of marketability	11.73% to 15.03%	The higher the discount for lack of marketability, the lower fair value
Financial liabilities
Convertible loan	320,243	-	Monte Carlo simulation pricing model	Volatility	81%	The higher the volatility, the higher the fair value

 

 

        (ii)    Fair Value of Financial instruments carried at other than fair value

 

The carrying amounts of the Group's financial instruments carried at cost or amortised cost are not materially different from their fair value as at 31 December 2016 and 2015 due to their short-term maturities.

 

2016
		Carrying
		amount		Fair value
		GBP		GBP
Bank and cash balances		44,648		44,648
Deposits		8,932		8,932
Accruals and other payable		(33,931)		(33,931)

 

2015
		Carrying
		amount		Fair value
		GBP		GBP
Bank and cash balances		186,783		186,783
Deposits		4,830		4,830
Accruals and other payable		(16,250)		(16,250)

 

Estimation of fair value

 

Fair value for unquoted equity investments are estimated using the discount cash flow valuation techniques.

 

Classification and fair value of financial assets and liabilities

 

The carrying amounts of each of the categories of financial instruments are as at the end of the reporting period are as follows:

                                                                                                                                                                                                              

	2016		2015
	GBP		GBP
Financial assets
Available-for-sales financial assets	2,416,336		5,490,437
Loan and receivables	2,683		2,683
	2,419,019		5,493,120
Financial liabilities
Amortised cost	33,931		16,250
Designated at FVTPL	223,708		-
	257,528		16,250

 

24.   SUBSEQUENT EVENT

 

On 6 February 2017, the Board received an initial approach regarding the purchase of 100% of the issued share capital of AAA's subsidiary, Energy Central Limited ("Energy Central"), for a cash consideration of Thai Baht 34,889,000, which is equivalent of approximately £0.8m. Energy Central's sole asset was the Company's interest in APU. The Company entered into a conditional sale and purchase agreement with Chakris Kajkumjohndej (the "Purchaser") for the disposal of Energy Central (the "Disposal").  Following the approval of the Disposal by shareholders, the Disposal was completed and full payment has been received.

 

On 21 April 2017 the Company announced that Mr. Paniti Junhasavasdikul has tendered his resignation and his resignation become effective on 30 April 2017.

 

25.    AUTHORISATION FOR ISSUE OF CONSOLIDATED FINANCIAL STATEMENTS

 

The consolidated financial statements were approved and authorised for issue by the board of directors on 28 June 2017.

 

 

 

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