TIDMAMED
RNS Number : 5533Q
Amedeo Resources PLC
07 June 2018
7 June 2018
Amedeo Resources plc
("Amedeo" or the "Company")
Audited Results for the Year Ended 31 December 2017
and Notice of AGM
Amedeo, the resource and resource infrastructure and asset
investment company, is pleased to announce its consolidated audited
results for the year ended 31 December 2017.
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
Highlights
-- Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJ
Offshore"), in which Amedeo has a 19% stake, profitable to the tune
of US$276,000 (2016: loss of US$1,802,000).
-- YZJ Offshore's Le Tourneau Super 116E Class design
self-elevating mobile offshore jack up drilling rig ("Explorer 1"),
complete and being marketed.
-- Acquisition of a 2.5% stake in Ganjine Kani Company ("GKC") a
producing copper mine with an option to acquire a further 5.0%.
-- Loss on ordinary activities before taxation decreased
significantly to US$233,000 (2016: loss of US$1,887,000)
-- Post the year end, Mr Ghanim Al Saad, a supportive
substantial shareholder of the Company, resigned as Chairman and
Non-Executive Director of the Company. Zafarullah Karim, Executive
Director, is currently acting as Interim Chairman.
S
For further information please visit www.amedeoresources.com or
contact:
Glen Lau Zafar Karim
Chief Executive Officer Interim Chairman and Executive Director
Amedeo Resources Plc Amedeo Resources Plc
Tel office: +44 20 7583 8304 Tel office: +44 20 7583 8304
Chris Fielding, Alex Bond
Nominated Adviser & Broker
WH Ireland
Tel office: +44 20 7220 1666
Notes
Amedeo Resources plc is an investment company whose policy is to
invest principally, but not exclusively, in the resources and
resources infrastructure and asset sectors. Amedeo has a deep and
broad global network and wide contact base in these sectors,
including in East and South East Asia and the Middle East which it
leverages to source and make investments. These sectors exhibit
high growth and are strategically important. Amedeo is a proactive
investor which assists its investee companies to grow by providing
investment, expertise and contacts.
CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
During the year under review, Jiangsu Yangzijiang Offshore
Engineering Co. Ltd ("YZJ Offshore") continued to market its first
completed rig, a Le Tourneau Super 116E Class design self-elevating
mobile offshore jack up drilling rig ("Explorer 1"). In addition,
it continued to seek new orders. The market, however remained soft
and the rig was not sold, nor were new orders obtained. YZJ
Offshore, however, was profitable to the tune of US$276,000 for the
year, due to work done on other components and a cost cutting
programme.
MGR Resources Pte ("MGR"), in which Amedeo has a 49% stake,
increased its activities but due to the volatility of the iron ore
price, made a small loss of US$90,000. In addition to ore trading,
it put in place steps to increase profits while reducing risk going
forward.
In January 2017, Amedeo acquired for US$500,000 a 2.5% stake in
Ganjine Kani Company ("GKC"), a copper mining company. GKC is a
producing miner which has extracted around 1 million tonnes of ore
from its three mines. MGR intends to work with GKC to supply copper
to East Asia. Amedeo has an option to increase this stake by
5.0%
Despite the ongoing difficult environment, Amedeo continues to
pursue its long-term strategy of building a vertically integrated
investment business in the resource and energy and related
infrastructure sectors, while on an operational level, using its
cash resources conservatively.
YZJ Offshore
YZJ Offshore, having built and readied Explorer 1 for delivery,
pending customary final checks, is marketing the rig to third
parties.
Explorer 1 is a Le Tourneau Super 116 Enhanced Class design
self-elevating mobile offshore jack up drilling rig. The Le
Tourneau is the most established design in the offshore world and
has a very popular footprint. Other rig designs do not have this
significant advantage.
While the offshore rig market has been soft, these factors,
along with the increasing age of currently utilised offshore rigs
and, over the course of the last several years, the oil price
rising from a low of less than US$30 per barrel in 2015 to over
US$70 per barrel, are expected to result in a strengthening of the
market for offshore rigs. YZJ Offshore remains confident that
Explorer 1 will be sold.
With respect to new orders, YZJ Offshore continues discussions
with potential customers for further orders with the benefit that
it now has a rig that is physically complete to showcase. This is
important from both a marketing perspective and from a reputational
perspective. No new orders, however, have yet been received.
Amedeo believes that the medium to long term outlook for the
offshore marine vessel market is positive with activity set to
increase. YZJ Offshore, having completed its first rig, has taken
the first step to establishing a strong reputation. This reputation
together with the resources of a large and well-equipped yard and
the expertise to build product carriers, specialised platforms,
semi-submersibles, amongst other vessels, as well as rigs,
positions it well to take advantage of the recovery in the offshore
fabrication market.
In the meantime, YZJ Offshore has been constructing components
including cutting plates for blocks and constructing hatches for
specialised gas carriers. Further, a pipe manufacturing facility
has been added which is constructing coring pipes. Work is also
being done related to liquid natural gas carriers.
This, along with a cost cutting programme has resulted in it
generating a profit of US US$276,000 (2016: loss of
US$1,802,000).
Amedeo has an indirect 19.0% stake in YZJ Offshore which it
holds through its 47.5% stake in the joint venture company, YZJ
Offshore Engineering Pte Ltd ("YZJ JV").
MGR Resources
MGR's increased activities related to iron ore trading during
2017. The iron ore price fluctuated between a high of above US$90
to a low of below US$55 a barrel during the year. Unfortunately, as
a result of the fluctuations, despite the increased activity, MGR
made a loss of US$90,000 for the year (2016: loss of
US$25,000).
Notwithstanding, during the year, MGR introduced better
technologies to the mine owner suppliers that have allowed them to
produce richer substrate. In return the mine owners have offered
better terms to MGR that reduce MGR's holding risk and improve its
price margins. MGR has also expanded its distribution network in
China which should allow it to increase its activities going
forward.
These developments put MGR in a position to do more business and
with a lower risk in the future.
Amedeo has a 49.0% stake in MGR.
Ganjine Kani Company
In January 2017, Amedeo acquired a 2.5% stake for US$500,000 in
GKC, a copper mining company close to the city of Mashhad in Iran.
As part of the transaction, Amedeo has a 5-year option to acquire a
further 5.0% of GKC for US$2 million. GKC is a producing miner and
has the required infrastructure to produce copper concentrate from
ore.
Iranian studies estimate that the producing mine alone may have
at least 6.5 million tonnes of copper ore with a 0.9% average
copper content. The extent of the ore and its copper content has
yet to be confirmed to international standards. In addition, it is
suspected that the copper mineralisation has good potential for
associated gold mineralisation. There are plans to increase the
volumes of ore which are being extracted. With respect to the
recent actions of the current US Administration regarding Iran,
Amedeo is taking no immediate action with respect to GKC but is
monitoring the situation.
Financial Review
Revenue for the year ended 31 December 2017 was US$110,000
(2016: US$108,000), an increase of US$2,000 or 1.9% on the prior
year. Revenue is invoiced in GBP and total revenue in GBP in 2017
remains the same as 2016. The increase in revenue in US$ relates
entirely to the appreciation in the GBP versus the US$. Amedeo
provides various business development and marketing services to
MGR.
Amedeo's share of profit in associates was US$41,000 (2016: loss
of US$881,000). This was made up of a profit of US$131,000 (2016:
loss of US$856,000) at YZJ JV and a loss of US$90,000 (2016:
US$25,000 profit) at MGR. The profits increase the carrying value
of the investments whilst the losses reduce the carrying value of
the investments. In both instances, these are not cash items.
Finance income increased to US$188,000 (2016: US$44,000) due to
the loan of US$800,000 to MGR.
Overall loss on ordinary activities before taxation decreased
significantly for the reasons outlined above to US$233,000 (2016:
loss of US$1,887,000) or by 87.7%. Basic and fully diluted loss per
share for the year was USc0.71 (2016: USc5.78).
Excluding non-cash items, (share-based payment charge, share of
profit/(loss) of associates and foreign exchange gain/(loss)) loss
on ordinary activities before taxation for the year ended 31
December 2017 was US$327,000 (2016: loss of US$478,000). The
decrease in loss excluding non-cash items was due to an increase in
finance income of US$144,000 to US$188,000 (2016: US$44,000).
A foreign exchange translation gain of US$841,000 (2016: loss of
US$946,000) arose, which related to Amedeo's indirect investment in
YZJ Offshore, as YZJ Offshore's presentational currency is RMB.
This translation has no impact on cash.
Overall, total comprehensive income for the year increased
significantly to US$608,000 (2016: loss of US$2,833,000), a 121%
increase on prior year.
As at the year end, the carrying amount on the statement of
financial position of investments in associates rose to
US$15,268,000 (2016: US$14,386,000), primarily due to the foreign
exchange retranslation movement. Current assets fell to
US$3,411,000 (2016: US$4,133,000). Cash as at 31 December 2017 was
US$915,000 (2016: US$2,510,000).
At the date of these financial statements, the Group had
approximately US$2,500,000 of cash and cash equivalent
balances.
Trade payables at the year-end increased to US$155,000 (2016:
US$104,000) due to timing differences on when invoices were paid
around the year end.
Overall, at the year end, net and total assets were
US$19,024,000 (2016: US$18,415,000) and US$19,179,000 (2016:
US$18,519,000), respectively.
Subsequent Events
Mr Ghanim Al Saad, a supportive substantial shareholder of the
Company, resigned as Chairman and Non-Executive Director of the
Company. Zafarullah Karim, Executive Director, is currently acting
as Interim Chairman.
On 5 April 2018, MGR repaid a loan of $800,000 to Amedeo, which
Amedeo had provided to MGR in January 2017.
On 18 May 2018, MGR repaid a loan of $1,400,000 to Amedeo and
following this, there are no outstanding loans with MGR.
Outlook
Amedeo is well resourced and remains focused on its long-term
strategy of building a vertically integrated investment business in
the resource and energy and related infrastructure sectors.
The Board looks forward confidently to the future.
Annual general meeting
The annual general meeting of the Company ("AGM") to be held at
201 Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT at 2.00pm
on 29 June 2018.
Posting of annual report accounts and notice of AGM
The annual report and accounts and notice of AGM have been
posted to shareholders and copies thereof have been placed on the
Company's website, www.amedeoresources.com.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2017 (AUDITED)
Year ended Year ended
31 Dec 2017 31 Dec 2016
Note $'000 $'000
Revenue 110 108
Administrative expenses 3 (625) (630)
Share based payments (1) (138)
Share of profit/(loss)
of associates 4 41 (881)
Foreign exchange gains/(losses) 54 (390)
______ ______
Loss from operations (421) (1,931)
Finance income 5 188 44
______ ______
Loss on ordinary activities
before taxation (233) (1,887)
Taxation 6 - -
______ ______
Loss for the year (233) (1,887)
Basic and diluted loss
per share 7 (0.71)c (5.78)c
Other Comprehensive Income
Foreign exchange translation
difference 841 (946)
______ _____
Total Comprehensive Income/(Expense)
for the year 608 (2,833)
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF CHANGES IN EQUITY
for the year ended 31 December 2017 (AUDITED)
Group Total
equity
attributable
Share Share-based Foreign to equity
Share premium payment currency Accumulated holders
capital account reserve translation losses of parent
$'000 $'000 $'000 $'000 $'000 $'000
At 1 January
2016 5,804 29,103 565 481 (14,843) 21,110
Loss for
the year - - - - (1,887) (1,887)
Share-based
payments - - 138 - - 138
Foreign exchange - - - (946) - (946)
At 31 December
2016 5,804 29,103 703 (465) (16,730) 18,415
--------- --------- ------------ ------------- ------------ --------------
Loss for
the year - - - - (233) (233)
Share-based
payments - - 1 - - 1
Foreign exchange - - - 841 - 841
At 31 December
2017 5,804 29,103 704 376 (16,963) 19,024
--------- --------- ------------ ------------- ------------ --------------
Company Total
equity
attributable
Share Share-based Foreign to equity
Share premium payment currency Accumulated holders
capital account reserve translation losses of parent
$'000 $'000 $'000 $'000 $'000 $'000
At 1 January
2016 5,804 29,103 565 922 (10,455) 25,939
Loss for
the year - - - - (757) (757)
Share-based
payments - - 138 - - 138
At 31 December
2016 5,804 29,103 703 922 (11,212) 25,320
--------- --------- ------------ ------------- ------------ --------------
Loss for
the year - - - - (90) (90)
Share-based
payments - - 1 - - 1
At 31 December
2017 5,804 29,103 704 922 (11,302) 25,231
--------- --------- ------------ ------------- ------------ --------------
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF FINANCIAL POSITION
as at 31 December 2017 (AUDITED)
Group Company
Assets Note Dec 2017 Dec Dec 2017 Dec 2016
2016
Non-current assets $'000 $'000 $'000 $'000
Investment in subsidiaries 8 - - 8 8
Investment in associates 9 15,268 14,386 - -
Financial asset 10 500 - - -
_____ _____ _ _
15,768 14,386 8 8
Current assets
Loans receivable 11 2,200 1,400 24,332 23,532
Other receivables 12 296 223 260 164
Cash and cash equivalents 915 2,510 709 1,707
____ ____ ____ ______
3,411 4,133 25,301 25,403
Total assets 19,179 18,519 25,309 25,411
Liabilities
Current liabilities
Trade and other payables 13 (155) (104) (78) (91)
____ ____ ____ ____
Total liabilities (155) (104) (78) (91)
______ ______ ______ ______
Net assets 19,024 18,415 25,231 25,320
Equity
Called up share capital 14 5,804 5,804 5,804 5,804
Share premium account 29,103 29,103 29,103 29,103
Share-based payment
reserve 15 704 703 704 703
Foreign currency
translation reserve 376 (465) 922 922
Accumulated losses (16,963) (16,730) (11,302) (11,212)
_____ _____ _____ _____
Total equity 19,024 18,415 25,231 25,320
The Company has elected to take exemption under section 408 of
the Companies Act 2006 from presenting the Company statement of
comprehensive income. The loss for the Company for the year ended
31 December 2017 was US$90,000 (2016: loss of US$757,000).
Approved by the Board and authorised for issue on 6 June 2018
and signed on behalf of the Board by
Glen Lau
Director
Registered Number 05216336
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF CASH FLOWS
for the year ended 31 December 2017 (AUDITED)
Group Company
Year Year Year Year
ended ended ended ended
31 Dec 31 Dec 31 Dec 31 Dec
2017 2016 2017 2016
$'000 $'000 $'000 $'000
Loss for the year before
tax (233) (1,887) (90) (757)
Adjustments for:
Share-based payments 1 138 1 138
Share of (profit)/loss of
associates (41) 881 - -
(Increase)/decrease in receivables (74) 304 (96) 304
Increase/(decrease) in payables 52 (43) (13) (14)
Finance (income)/cost (188) (44) (77) 2
Unrealised FX losses - 113 - 113
_____ _____ _____ _____
Cash used in operating activities (483) (538) (275) (214)
Investing activities
Investment in financial (500) - - -
asset
Loans made to associates (800) (1,000) (800) -
Loans made to subsidiaries - - - (500)
Loans repaid by associates - 1,664 - 1,664
______ ______ ______ ______
Net cash (used in)/from
investing activities (1,300) 664 (800) 1,164
Financing activities
Finance income/(cost) 188 44 77 (2)
_______ _______ _______ _______
Net cash from/(used in)
financing activities 188 44 77 (2)
_______ _______ _______ _______
Net (decrease)/increase
in cash and cash equivalents (1,595) 170 (998) 948
Cash and equivalents at
beginning of year 2,510 2,340 1,707 759
Cash and equivalents at
end of year 915 2,510 709 1,707
The accompanying notes are an integral part of these financial
statements.
NOTES TO THE GROUP FINANCIAL STATEMENTS
1. Accounting policies
The principal accounting policies are summarised below. They
have all been applied consistently throughout the year and the
preceding year unless stated otherwise.
Basis of accounting
The financial statements of the Group and the Company have been
prepared in accordance with International Financial Reporting
Standards, International Accounting Standards and Interpretations
issued by the International Accounting Standards Board as adopted
by European Union, and in accordance with the Companies Act 2006 as
regards to the Company.
The financial statements have been prepared under the historical
cost convention, with the exception of financial instruments, some
of which are measured at fair value.
The accounting policies applied are the same as those applied in
the financial statements for the year ended 31 December 2016. New
standards introduced during the year had no material impact on the
results or net assets of the Group.
The additional disclosures required by IAS 7 regarding changes
to liabilities has not resulted in additional disclosures as the
Group has no financing liabilities.
Standards and interpretations in issue but not yet effective
A number of new standards and amendments to existing standards
have been published but are not effective for the year ended 31
December 2017. The Directors do not anticipate that the adoption of
these new and revised standards and interpretations will have a
significant impact on the figures included in the Financial
Statements in the year of initial application other than the
following:
IFRS 9 Financial Instruments
The standard makes substantial changes to the classification and
measurement of financial assets and financial liabilities. There
will only be three categories of financial assets whereby financial
assets are recognised at either fair value through profit and loss,
fair value through other comprehensive income or measured at
amortised cost. On adoption of the standard, the Group will have to
re-determine the classification of its financial assets based on
the business model for each category of financial asset. This is
not considered likely to give rise to any significant adjustments
other than reclassifications.
The principal change to the measurement of financial assets
measured at amortised cost or fair value through other
comprehensive income is that impairments will be recognised on an
expected loss basis compared to the current incurred loss approach.
As such, where there are expected to be credit losses these are
recognised in profit or loss. For financial assets measured at
amortised cost the carrying amount of the asset is reduced for the
loss allowance.
For financial assets measured at fair value through other
comprehensive income the loss allowance is recognised in other
comprehensive income and does not reduce the carrying amount of the
financial asset.
Most financial liabilities will continue to be carried at
amortised cost, however, some financial liabilities will be
required to be measured at fair value through profit or loss, for
example derivative financial instruments, with changes in the
liabilities' credit risk recognised in other comprehensive income.
The Group expects this to have some impact due to the value of
financial instruments across its entities.
The standard is effective for periods beginning on or after 1
January 2018.
IFRS 15- Revenue for contracts with customers
The standard has been developed to provide a comprehensive set
of principles in presenting the nature, amount, timing and
uncertainty of revenue and cash flows arising from a contract with
a customer. The standard is based around five steps in recognising
revenue:
1. Identify the contract with the customer;
2. Identify the performance obligations in the contract;
3. Determine the transaction price;
4. Allocate the transaction price; and
5. Recognise revenue when a performance obligation is satisfied.
On application of the standard the disclosures are likely to
increase. The standard includes principles on disclosing the
nature, amount, timing and uncertainty of revenue and cash flows
arising from contracts with customers, by providing qualitative and
quantitative information.
The standard is effective for periods beginning on or after 1
January 2018. An initial assessment of the standard was carried out
and it was concluded that it will have no material effect on the
recognition and measurement.
IFRS16 - Leases The standard is effective for periods beginning
on or after 1 January 2019 but can be applied before that date if
the Company also applies IFRS 15 revenue from Contracts with
Customers. IFRS 16 eliminates the classification of leases as
either operating leases or finance leases for a lessee. Instead all
leases are treated in a similar way to finance leases applying IAS
17. Leases are 'capitalised' by recognising the present value of
the lease payments and showing them either as lease assets
(right-of-use assets) or together with property, plant and
equipment, with a corresponding financial liability representing
its obligation to make future lease payments. IFRS 16 replaces the
typical straight-line operating lease expense for those leases
applying IAS 17 with a depreciation charge for lease assets
(included within operating costs) and an interest expense on lease
liabilities (included within finance costs).
An initial assessment of the standard was carried out and it was
concluded that it will have no material effect.
Basis of consolidation
Where the Company has the power, either directly or indirectly,
to govern the financial and operating policies of another entity or
business so as to obtain benefits from its activities, it is
classified as a subsidiary. The consolidated financial statements
present the results of the Company and its subsidiary undertaking,
Amedeo Resources (Asia) PTE Ltd ("Amedeo Asia") as if they formed a
single entity. Inter-company transactions and balances between
Group companies are therefore eliminated in full.
Revenue
The revenue received from the services provided to MGR is
recognised in the accounting period in which the services are
rendered.
Investments in subsidiaries
Investments in subsidiary undertaking is stated at cost less any
provision for impairment.
Investment in associates
Where the Group, or its wholly owned subsidiary, has significant
influence over an entity, normally having an interest being more
than 20% and less than 50%, such as Amedeo Asia's holdings in YZJ
JV and MGR, then that investment is classified as an associate and
is equity accounted, see note 9.
Under the equity method, on initial recognition the investment
in an associate is recognised at cost, and the carrying amount is
increased or decreased to recognise the Company's share of the
total comprehensive income of the investee after the date of
acquisition. The Company's share of the associate's profit or loss
is recognised in its profit or loss and statement of other
comprehensive income. Distributions received from an associate
reduce the carrying amount of the investment.
After application of the equity method, an impairment review is
carried out to determine whether it is necessary to recognise any
impairment loss with respect to its net investment in the
associate.
Financial assets
Where the Group has little or no influence and control over an
entity, normally having an interest being less than 20%, such as
Amedeo Asia's holding in GKC, then the investment is classified as
a financial asset using the fair value through the profit and loss
method.
The asset is initially recognised at cost and thereafter is
measured at fair value. Any differences will increase or decrease
the value of the asset and will be recognised in the statement of
comprehensive income.
Financial assets whose fair value cannot be reliably measured
shall be accounted for at cost.
The Group has two different types of financial assets, loans and
receivables and fair value through the profit and loss. The Group's
loans and receivables comprise loans and other receivables and cash
and cash equivalents in the statement of financial position. The
financial asset comprises shares in a company where no control or
influence is exercised.
Loans receivable
Loans receivable are valued at nominal amount less provisions
against recoverability. The maximum exposure in respect of the loan
portfolio at the year-end is the amount receivable shown in note
11. No hedging transactions have been entered into with respect to
the loan portfolio.
Impairment
At each financial year end date, the Group reviews the carrying
amounts of its non-current assets to determine whether there is any
indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss.
Where it is not possible to estimate the recoverable amount of the
individual asset, the Group estimates that recoverable amount of
the cash-generating unit to which the asset belongs.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, in hand and
demand deposit and other short term highly liquid investments of
three months or less at inception that are readily convertible to a
known amount of cash and are subject to an insignificant risk of
change in value.
Financial liabilities and equity
Financial liabilities and equity are classified according to the
substance of the financial instrument's contractual obligations
rather than the financial instrument's legal form. An equity
instrument is any contract that evidences a residual interest in
the assets of the Group after deducting all of its liabilities.
Trade payables
Trade payables are not interest bearing and are stated at their
nominal value.
Equity instruments
Equity instruments issued by the Company are recorded as the
proceeds received, net of direct issue costs.
Current and deferred tax
Taxation is applied on a current basis in accordance with IAS 12
"Income taxes". Deferred taxation is provided in full on temporary
differences that result in an obligation at the reporting date to
pay more tax or a right to pay less tax, at a future date, at rates
expected to apply when they crystallise based on current tax rates
and law. Temporary differences arise from differences between the
carrying amounts of assets and liabilities for financial reporting
and the amounts used for taxation purposes. Deferred tax assets are
recognised to the extent that it is probable that future taxable
profit will be available against which unused tax losses and
credits can be utilised. Deferred tax assets and liabilities are
not discounted.
Deferred tax assets and liabilities are offset when they relate
to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net
basis.
Foreign currencies
The financial information is presented in United States Dollars
which is the functional currency of the Company.
Transactions in foreign currencies are translated at the rate
prevailing at the date of transaction, with any differences
recognised to the Income Statement. Monetary assets and liabilities
denominated in foreign currencies in each company are translated at
the rates of exchange prevailing at the accounting date.
On consolidation, revenues, costs and cash flows of undertakings
with a different functional currency are included in the Group
income statement at average rates of exchange for the year. The
assets and liabilities denominated in foreign currencies are
translated into United States Dollars using rates of exchange at
the reporting date.
Exchange differences on the re-translation of opening net assets
and results for the year of foreign subsidiary undertakings and
associates are dealt with through other comprehensive income net of
differences on loans denominated in foreign currency. Other gains
and losses arising from foreign currency transactions, mainly loans
including trading, are included in the profit or loss.
Share-based payments
All share-based payments are accounted for in accordance with
IFRS 2 - "Share-based payments". The Company issues equity-settled
share-based payments in the form of share warrants to certain
Directors and key advisers. Equity settled share-based payments are
measured at fair value at the date of grant. The fair value
determined at the grant date of equity-settled share-based payments
is expensed on a straight line basis over the vesting period, based
on the Company's estimate of shares that will eventually vest.
Fair value is estimated using a Black Scholes probability
valuation model. The expected life used in the model has been
calculated by reducing the total contractual life to management's
best estimate of the expected date of exercise.
The remainder of the warrants (of which the vesting date was
during the year ended December 2017), all vested in January
2017.
Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the
future. Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from
these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year are discussed below.
(a) Impairment of investment in associated company:
The investment in the associated company is stated on an equity
accounting basis supported by the audited financial statements of
the associate. The Group is also required to determine whether any
impairment loss should be recognised in accordance with IAS 28. The
recoverable amount is determined based on the Group estimates as
follows:
(i) its share of the present value of the estimated future cash
flows expected to be generated by the associate or joint venture,
including the cash flows from the operations of the associate or
joint venture and the proceeds from the ultimate disposal of the
investment; or
(ii) the present value of the estimated future cash flows
expected to arise from dividends to be received from the investment
and from its ultimate disposal.
b) Recoverability of loans receivable:
Separately, the Group determines the recoverability of its loans
to its associate, MGR. As the loans were used to make working
capital available to MGR, consideration of the recoverability of
the loans is related to consideration of the carrying value of the
associate.
The parent Company determines the recoverability of its loans to
its subsidiary, Amedeo Asia. These are intercompany loans which are
repayable on demand. The directors consider there to be no issue
with recoverability.
c) Impairment of investment in financial asset:
The investment in the financial asset is stated at fair value
through the profit or loss. The Group is also required to determine
whether any impairment loss should be recognised in accordance with
IAS 28. Any impairment loss will be included in the profit and
loss, there is no impairment as at 31 December 2017.
2. Segmental reporting
No segmental analysis is considered necessary as the Directors
believe that the Group has only one segment in the year under
review, being that of an investment company with a focus on
investments in, but not exclusively, the resources and/or resources
infrastructure sectors, with no specific national or regional
focus.
3. Administrative expenses
Expenses included in administrative expenses are analysed
below
Year ended Year ended
31 Dec 31 Dec
2017 2016
$'000 $'000
Administration, legal,
professional and financial
costs 396 394
Directors' fees (excluding
share-based payments) 137 141
Auditor fees 92 95
_____ _____
625 630
_____ _____
The auditor's fees payable to the associates of the company's
auditors in respect of audit of the subsidiary's financial
statements were US$11,000 (2016: US$12,000).
4. Share of profit/ loss of associates
Year ended Year ended
31 Dec 31 Dec
2017 2016
$'000 $'000
YZJ Offshore Engineering
Pte Ltd 131 (856)
MGR Resources Pte Ltd (90) (25)
_____ _____
41 (881)
_____ _____
The Company's wholly-owned Singapore-registered subsidiary,
Amedeo Asia, holds a 47.51% investment in YZJ JV, a Singapore
registered company. The profit of US$131,000 represents Amedeo
Asia's share of YZJ JV's profit for the year ended 31 December 2017
(2016: loss of US$856,000) and Amedeo Asia's share of MGR's loss
for the year ended 31 December 2017 of US$90,000 (2016:
US$25,000).
5. Finance income
Year ended Year ended
31 Dec 31 Dec
2017 2016
$'000 $'000
Interest on loans made to
associates 188 44
____ ____
Interest on loans made to associates is made up of interest
receivable from MGR. Finance income increased to US$188,000 (2016:
US$44,000) due to advance of a loan to MGR during the year.
6. Taxation Year Year ended
ended 31 Dec
31 Dec 2016
2017
$'000 $'000
UK Corporation tax
Factors affecting tax charge
in the year
Loss on ordinary activities
before tax (233) (1,887)
Loss on ordinary activities
at the effective rate
of corporation tax 19.25%
(2016: 20%) (45) (376)
Unrelieved losses 45 376
- -
___ ___
Deferred income tax assets are recognised for tax losses
carried-forward to the extent that the realisation of the related
tax benefit through future taxable profits is probable. The Group
does not recognise any deferred income tax assets relating to
carried forward tax losses as there is insufficient evidence that
any deferred tax asset recognised will be recovered.
At the reporting date, the Group's UK parent company had unused
tax losses of approximately US$11,008,000 available for offset
against future profits. US$2,119,000 represents unrecognised
deferred tax assets thereon at 19.25%. The deferred tax asset has
not been recognised due to uncertainty over timing of
utilisation.
7. Loss per share
The basic and diluted loss per share for the year to 31 December
2017 was US0.71c (2016: US5.78c). The calculation of loss per share
is based on the loss of US$233,000 for the year ended 31 December
2017 (2016: US$1,887,000 loss) and the weighted average number of
shares in issue during the year to 31 December 2017 of 32,653,843
(2016: 32,653,843).
No warrants were exercised in the year ended 31 December
2017.The outstanding warrants represent approximately 15% of the
Company's current issued share capital and are considered by the
Directors to be anti-dilutive, given that the various exercise
prices of warrants are all in excess of the average share price for
the year.
8. Investment in subsidiaries
Company
31 Dec 31 Dec
2017 2016
Cost or valuation $'000 $'000
At 1 January 8 8
___ ___
At 31 December 8 8
___ ___
The investment in subsidiary shown above is the investment in
Amedeo Asia.
The Company's subsidiary is as follows:
Name Country of Proportion of ownership
incorporation interest
Dec 2017 Dec 2016
Amedeo Resources
(Asia) Pte Limited
("Amedeo Asia") Singapore 100% 100%
The registered addressed of the above subsidiary is 17 Jalan
Mesin #04-01, Singapore, (368816).
9. Investments in associates
Amedeo's wholly owned subsidiary, Amedeo Asia has a holding in
YZJ JV, which is incorporated in Singapore, of 47.51%. YZJ JV has a
40% stake in the ordinary share capital of YZJ Offshore, which is
incorporated in Singapore. YZJ JV equity accounts for its 40%
interest in YZJ Offshore, and Amedeo Asia equity accounts for its
47.51% stake in YZJ JV. Amedeo provided an interest free unsecured
loan to Amedeo Asia to acquire the 47.51% stake in YZJ JV. The
registered address is 17 Jalan Mesin #04-01, Singapore,
(368816).
Amedeo Asia also has a 49% stake in the ordinary share capital
of MGR, which is incorporated in Singapore. Amedeo Asia equity
accounts for its 49% stake in MGR. The Group received no dividend
from either associate in either period. The registered address is
17 Jalan Mesin #04-01, Singapore, (368816).
YZJ JV MGR Total
31 Dec 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec
17 16 17 16 17 16
$'000
19,253
14
______
19,239
_______
8,937
_______
2
(1,275)
_______
(592)
_______2013
Amounts relating $'000 $'000 $'000 $'000 $'000 $'000
to associates
Current assets 856 908 4,955 4,716 5,811 5,624
Non-current
assets 30,440 28,342 - - 30,440 28,342
Current liabilities (3) (3) (3,259) (3,713) (3,262) (3,716)
Non-current
liabilities - - (877) - (877) -
______ ______ ______ _______ ______ _______
Net assets 31,293 29,247 819 1,003 32,112 30,250
_______ _______ _______ _______ _______ _______
Group's share
of net assets
of associates 14,867 13,895 401 491 15,268 14,386
_______ _______ _______ _______ _______ _______
Total revenue 334 3 306 249 640 252
(Loss)/Profit 276 (1,802) (184) (51) 92 (1,853)
Foreign exchange
translation
difference 841 (946) - - 841 (946)
_______ _______ _______ _______ _______ _______
Group's share
of (loss)/profit
of associates 972 (1,802) (90) (25) 982 (1,827)
_______ _______ _______ _______ _______ _______
2017 2016
Group's share of net assets $'000 $'000
of associates
Opening at 1 January 14,386 16,213
Group's share of gain from associates 41 (881)
Foreign exchange translation
difference 841 (946)
------- -------
Closing at 31 December 15,268 14,386
------- -------
10. Financial asset
During the year, the Group acquired a 2.5% stake in GKC for
US$500,000 (2016: Nil) with a 5 year option to acquire another 5%
at a specified exercise price.
31 Dec 31 Dec
2017 2016
$'000 $'000
Cost
At 1 January - -
Additions 500 -
At 31 December 500 -
------- -------
At the year-end, the option was valued at US$20,000.
11. Loans receivable
Group Company
31 Dec 31 Dec 31 Dec 2017 31 Dec
2017 2016 2016
$'000 $'000 $'000 $'000
Balance brought
forward 1,400 2,177 23,532 24,809
Loans advanced 800 1,000 800 500
Loans repaid - (1,664) - (1,664)
Foreign exchange
loss - (113) - (113)
______ ______ ______ ______
Balance carried
forward 2,200 1,400 24,332 23,532
______ ______ ______ ______
During the year, the Group made a USD loan to an associate, MGR,
of US$800,000 (2016: US$1,000,000). This loan was repaid subsequent
to year end in April 2018. The unsecured loan attracted an interest
rate of 10% and was due to be repaid in July 2017, which was
subsequently extended to May 2018.
The Directors consider that the carrying amount of loans
receivable approximates to their fair value.
12. Other receivables
Group Company
31 Dec 31 Dec 31 Dec 31 Dec
2017 2016 2017 2016
$'000 $'000 $'000 $'000
Prepayments and
sundry debtors 296 223 260 164
The Directors consider that the carrying amount of other
receivables approximates to their fair value.
13. Trade and other payables
Current liabilities Group Company
31 Dec 31 Dec 31 Dec 31 Dec
2017 2016 2017 2016
$'000 $'000 $'000 $'000
Trade payables
and accruals 155 104 78 91
______ ______ ______ ______
155 104 78 91
______ ______ ______ ______
14. Called up share capital
31 Dec 31 Dec
2017 2016
Allotted, called up and fully
paid
Ordinary shares
Total Ordinary shares 32,653,843 32,653,843
$'000 $'000
Ordinary Shares of 10p each 5,179 5,179
44,190,545 Deferred Shares
of 0.9p each 625 625
_____ _____
Total Share Capital 5,804 5,804
The 44,190,545 deferred shares of 0.9p each ("Deferred Shares")
do not entitle the holder thereof to receive notice of or attend
and vote at any general meeting of the Company or to receive a
dividend or other distribution or to participate in any return on
capital on a winding up unless the assets of the Company are in
excess of GBP1,000,000,000,000. The Company retains the right to
purchase the Deferred Shares from any Shareholder for a
consideration of one penny in aggregate for all that shareholder's
Deferred Shares. As such, the Deferred Shares effectively have no
value. Share certificates have not and will not be issued in
respect of the Deferred Shares.
15. Warrants
During the year ended 31 December 2017, no warrants were granted
(2016: Nil warrants were granted). This leaves 4,362,657 warrants
outstanding at 31 December 2017. All the warrants can be exercised
between the date of grant and the end of the exercise period shown
below.
Number Number Number
End of Number exercised Number lapsed of Warrants
Date of Exercise of Warrants Exercise in the exercised during at 31 Dec
grant period granted price year to date the year 2017
------------- ------------ ------------- --------- ------------ ----------- ----------- -------------
4 April 4 April
2012 2022 160,000 75 pence - - - 160,000
31 August 31 August
2012 2017 710,000 50 pence - 50,000 660,000 -
23 June 23 June
2013 2023 1,095,446 50 pence - - - 1,095,446
1 February 1 February 100
2015 2025 500,000 pence - - - 500,000
12 March 12 March 100
2015 2025 2,607,211 pence - - - 2,607,211
________ _______ _______ ________ ________
5,072,657 - 50,000 660,000 4,362,657
________ _______ _______ ________ ________
The weighted average exercise price for the warrants at the
beginning of the period was 81 pence.
The weighted average exercise price for the warrants at the end
of the period was 87 pence.
The weighted average remaining contractual life of outstanding
warrants as at the end of the period was 6.59 years.
The charge in the current year of US$1,000 (2016: US$138,000)
relates to the 3,107,211 warrants issued in the year ended 31
December 2015.
The following table sets out the warrants held by Directors, or
entities connected with the Directors, who served during the year
and up to the date of this report:
End of
Number Date of exercise Exercise Number
Warrant holder of warrants grant period price exercised
--------------- ------------- ----------- ----------- ---------- -----------
Fulton Capital
Management 31 August 31 August
Ltd (1) 250,000 2012 2017 50 pence -
Lau Lian 12 March 12 March
Seng Glen 2,607,211 2015 2025 100 pence -
Zafarullah 1 February 1 February
Karim 333,157 2015 2025 100 pence -
Zafarullah 23 June 23 June
Karim 1,095,446 2013 2023 50 pence -
Notes
(1) Fulton Capital Management Limited is a company owned and
controlled by Mr Lau, the Company's chief executive officer
The Black Scholes pricing model was used to calculate the
share-based payment charge.
16. Asset value per share
The net asset value per share at 31 December 2017 was US$0.58
(31 December 2016: US$0.56). Net asset value is based on the net
assets as at 31 December 2017 of US$19.0 million (31 December 2016:
US$18.4 million) and on the number of ordinary shares in issue at
31 December 2017 being 32,653,843 ordinary shares (31 December
2016: 32,653,843).
17. Staff numbers and costs
The average monthly number of employees of the Group, including
Directors, during the year was 4 (2016: 4). The Directors are
considered the key management of the Group. The aggregate
remuneration of the Directors is set out in the remuneration
report. All employees are Directors of the Company; therefore, no
remuneration was paid to staff of the Company (2016: US$: Nil).
18. Related party transactions
In April 2014, Amedeo signed a management services agreement
with MGR to provide marketing assistance and services to MGR.
During the year, MGR paid US$110,000 to Amedeo in respect of these
services (2016: US$108,000).
During the year, Amedeo made a loan of US$800,000 to MGR which
was outstanding at year-end. The Group earned US$188,000 in
interest on their loans to MGR for the year to 31 December 2017
(2016: US$44,000). As part of the other receivables balance at
year-end, US$228,000 includes amounts owed by MGR (2016:
US$162,000).
19. Financial instruments and risk management
Investments
All of the Group's actual and intended investments present a
risk of loss of capital. Such investments are subject to investment
specific, industry specific, sector specific, market specific and
macro-economic risks including, but not limited to, international
economic conditions, international financial policies and
performance, governmental events and changes in laws. Moreover, the
Group may only have a limited ability to vary its investments in
response to changing conditions.
The success of the Group is dependent upon the identification,
making, management and realisation of suitable investments. There
can be no guarantee that such investments can or will be made or
that such investments will be successful. Poor performance by an
investment could severely affect the net asset value per share of
the Group.
The Group may have minority interests in companies, partnerships
and ventures. As such it may be unable to exercise control over the
operations of such investments or exercise control over any exit,
or timing of any exit, by other investors in such investments. In
addition, the managements of the investee companies targeted by the
Directors may not always welcome proactive shareholder
involvement.
The Group may dispose of investments in certain circumstances
and may be required to give representations and warranties about
those investments. In certain cases, such representations and
warranties may be challenged. This may lead to the Group having to
pay damages to the extent that such representations and warranties
turn out to be inaccurate or other terms of sale are breached.
There can be no certainty that the value of investments as
reported from time to time will in fact be realised.
Investments in unquoted companies
It is intended that the Group's investment portfolio will
comprise interests predominantly in unquoted, growth companies,
which may be difficult to value and/or realise. Investments in
unquoted growth companies may involve greater risks than is
customarily associated with investments in larger, more established
quoted companies. In particular, such companies may have limited
product offerings, markets or resources and may be dependent on a
small number of key individuals. As at 31 December 2017, the
Group's holding of unquoted investments was recognised at
approximately US$15 million (31 December 2016: US$14.4 million).The
investment under financial assets is currently held at cost, $0.5
million (2016: $Nil).
Market risk
It is possible that certain investments will represent a
significant proportion of the Group's total assets, such as Amedeo
Asia's investment in YZJ JV. As a result, the impact on the
performance and the potential returns to investors will be
adversely affected to a greater degree if any one of those
investments were to perform badly than would be the case if the
portfolio of investments was more diversified. At 31 December 2017,
the overall investment allocation was a portfolio of 3 investments
all of which were in unquoted companies. As at 31 December 2017,
the Company's investment in YZJ JV represented 95% of the value of
the Group's investment portfolio and almost 78% of the Group's
gross assets.
Interest rate risk
The majority of the Group's financial assets and liabilities are
not interest bearing. As a result, the Group is not subject to
significant amounts of risk due to fluctuations in the prevailing
levels of market interest rates. Any cash and cash equivalents are
held in short notice accounts. The table below summarises the
Group's exposure to interest rate risks.
As at 31 December 2017 Non-interest Fixed
bearing interest Total
Assets $'000 $'000 $'000
Investments 15,268 - 15,268
Financial asset 500 500
Loans to MGR - 2,200 2,200
Other receivables 296 - 296
Cash and cash equivalents 915 - 915
______ ______ ______
Total financial
assets 16,979 2,200 19,179
______ ______ ______
Liabilities
Trade and other payables 155 - 155
______ ______ ______
Total financial liabilities 155 - 155
______ ______ ______
As at 31 December 2016 Non-interest Fixed
bearing interest Total
Assets $'000 $'000 $'000
Investments 14,386 - 14,386
Loan to MGR - 1,400 1,400
Other receivables 223 - 223
Cash and cash equivalents 2,510 - 2,510
______ ______ ______
Total financial
assets 17,119 1,400 18,519
______ ______ ______
Liabilities
Trade and other payables 104 - 104
______ ______ ______
Total financial liabilities 104 - 104
______ ______ ______
Hedging and currency risk
As the current focus of the Company's investment has been
outside of the UK, the majority of the Company's investments are
denominated in US$. The Company's functional currency is also US$.
As such, the company does not hedge currencies.
Liquidity risk
The Company has a procedure to manage liquidity risk whereby the
board meet regularly to review investment holdings and current and
anticipated levels of financial liabilities. Where liquidity of the
investments within the portfolio is believed to be at a level which
may adversely affect the Company's ability to service its financial
obligations, the board will consider taking action to improve cash
flow, which may include utilising bank overdrafts or other credit
arrangements.
The table below details the contractual, undiscounted cash flows
of the Group's financial liabilities.
Less
than 1-3 3 months No stated
to 1
1 month months year maturity
31 December
2017 $'000 $'000 $'000 $'000
Trade and other
payables 155 - - -
______ ______ ______ ______
Total 155 - - -
______ ______ ______ ______
31 December
2016
Trade and
other payables 104 - - -
_______ ______ ______ ______
Total 104 - - -
_______ ______ ______ ______
Credit risk
Credit risk is the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Group. The carrying amounts of
financial assets best represent the maximum credit risk exposure at
the reporting date.
Capital risk management
The Company is currently financed solely through equity and
manages its capital to ensure that it has sufficient financial
resources to implement its planned operations while maximising the
return to stakeholders. Please see the Strategic Report on page 6
for details.
20. Subsequent events
On 4 April 2018, Mr Ghanim Al Saad, a supportive substantial
shareholder of the Company, resigned as Chairman and Non-Executive
Director of the Company. Zafarullah Karim, Executive Director, is
currently acting as Interim Chairman.
On 5 April 2018, MGR repaid a loan of $800,000 to Amedeo, which
Amedeo had provided to MGR in January 2017.
On 18 May 2018, MGR repaid a loan of $1,400,000 to Amedeo and
following this, there are no outstanding loans with MGR.
There are no other significant subsequent events to report.
21. Ultimate controlling party
The ultimate controlling party is Qatar Investment Corporation,
which holds 61.1% of the issued Ordinary Share capital of the
Group. Qatar Investment Corporation is a wholly owned investment
vehicle of Mr Ghanim Al Saad, previous Non-Executive Chairman of
the Company.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCFKADDPBKDQAK
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