TIDMAMED
RNS Number : 5843G
Amedeo Resources PLC
30 May 2017
30 May 2017
Amedeo Resources plc
("Amedeo" or the "Company")
Audited Results for the Year Ended 31 December 2016
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 2016.
Highlights
-- Order of Le Tourneau Super 116E Class design self-elevating
mobile offshore jack up drilling rig ("Explorer 1"), completed
pending final delivery checks
-- Loss on ordinary activities before taxation decreased by 28%
to US$1,887,000 (2015: loss of US$2,610,000)
-- Post the year end, in January 2017, Amedeo acquired a 2.5%
stake in Ganjine Kani Company ("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
S
For further information please visit www.amedeoresources.com or
contact:
Enquiries:
Glen Lau Zafar Karim
Chief Executive Officer Executive Director
Amedeo Resources Plc Amedeo Resources Plc
Tel office: +44 20 7583 8304 Tel office: +44 20 7583 8304
Paul Shackleton Elliott Hance
Nominated Adviser & Broker Joint Broker
WH Ireland Beaufort Securities Limited
Tel office: +44 2072201666 Tel office: +44 20 7382 8300
Notes
Amedeo Resources plc is an investment company whose policy is to
invest principally, but not exclusively, in the resources and
resources infrastructure and asset sectors. Amedeo has a deep and
broad global network and wide contact base in these sectors,
including in East and South East Asia and the Middle East which it
leverages to source and make investments. These sectors exhibit
high growth and are strategically important. Amedeo is a proactive
investor which assists its investee companies to grow by providing
investment, expertise and contacts.
CHAIRMAN'S STATEMENT
Introduction
During the year under review, Jiangsu Yangzijiang Offshore
Engineering Co. Ltd ("YZJ Offshore") completed its first order, a
Le Tourneau Super 116E Class design self-elevating mobile offshore
jack up drilling rig ("Explorer 1"), pending final delivery checks.
The rig has yet to be delivered as the purchaser of Explorer 1 is
in the process of securing financing and employment for the rig. In
the meantime, YZJ has continued to seek further orders, and with
Explorer 1 completed to a high standard, is utilising it as a
showpiece. The rig market has been soft and no new orders have been
secured. Signs of improvement, however, are evident as YZJ Offshore
has had credible enquiries including interest in Explorer 1. In the
meantime, YZJ offshore has been utilising its facilities to provide
berthing capacity and build modules for LNG vessels.
Iron ore prices remained depressed during 2016. As such, MGR
Resources Pte ("MGR") cut back activities to a bare minimum. Due to
the low level of activity, in February 2016, MGR paid back to
Amedeo a loan of GBP1,200,000. Near the end of the year, however,
MGR saw an uplift in activities with iron ore prices rising. As a
result, post the year end, in January 2017, Amedeo made available
to MGR a loan facility of US$800,000 to expand activities.
Also post the year end, in January 2017, Amedeo acquired a 2.5%
stake in Ganjine Kani Company ("GKC") for US$500,000, a copper
mining company. GKC is a producing miner which has, to date
extracted around 1 million tonnes of ore. GKC has three mines. MGR
intends to work with GKC to supply copper to East Asia.
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, cash
resources are used conservatively.
YZJ Offshore
YZJ Offshore continued with the commissioning of its first
order, Explorer 1. This process was completed in late December
2016, pending final checks which are customarily made by the
purchaser immediately prior to delivery.
The purchaser of Explorer 1 is in the process of securing
financing and employment for the rig, and is in discussions with
third parties regarding both. The purchaser has requested that that
delivery of the Explorer 1 be delayed until financing and an
employment are secured.
While the rig market has been soft, 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, has a very popular footprint and therefore as
well as being used for new wells it can be used for existing wells.
Other rig designs do not have this significant advantage.
YZJ Offshore remains confident that Explorer 1 will be sold
either to the original purchaser, or failing which, to another
party. YZJ Offshore has already received serious indications of
interest from third parties.
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 also from a
reputational perspective. No new orders, however, have been
forthcoming as currently the offshore vessel market remains
difficult due to the volatility in the oil price from its high
around US$115 per barrel in July 2014, to below c.US$30 per barrel,
with only a recent partial recovery. At the time of writing, the
oil price was around US$50 per barrel, an increase of over 70% from
its lows.
While the current outlook in the offshore vessel sector remains
challenging, there are signs of improvement. Amedeo believes that
the medium to long term outlook is positive with activity set to
increase. YZJ Offshore, having completed its first rig, has taken
the first step to establishing a strong reputation. Such a
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.
YZJ Offshore has been fabricating blocks for container ships and
gas carrier vessels. As such it generated revenues by employing its
berthing capacity and modules for liquefied natural gas tanks. It
is also exploring the building of other types of modules and other
vessels.
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
With iron ore prices depressed, MGR cut back activities to a
bare minimum. Due to the low level of activity, in February 2016,
it paid back to Amedeo a loan of GBP1,200,000.
Near the end of the year, however, MGR saw an uplift in
activities with iron ore prices rising since their lows (around
US$38 per tonne) at the end of 2015 and now around US$70 per tonne.
This rise has led to increasing opportunities in the iron ore
market which MGR intends to take advantage of. As a result, post
the year end, in January 2017, Amedeo made available to MGR a loan
facility of US$800,000. The facility bears interest at 10% per
annum and is intended to be used for working capital.
In addition, post year end Amedeo acquired a 2.5% stake in a
producing copper miner (see below). This investment should assist
MGR in broadening its activities to copper by providing MGR with a
captive supply of copper.
Amedeo has a 49.0% stake in MGR.
Ganjine Kani Company
Post the year end, also 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. GKC also has the required
infrastructure to produce copper concentrate from ore. To date,
around 1 million tonnes of ore has been extracted by GKC which
contains, on average, 0.9% copper. GKC has three mines in
total.
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.
MGR, intends to work with GKC to widen the commodities MGR
trades and brokers and, at the same time, the acquisition gives MGR
a preferential supply of copper.
Financial Review
Revenue for the year ended 31 December 2016 was US$108,000
(2015: US$128,000), a decrease of US$20,000 or 15.6% on the prior
year. Revenue is invoiced in GBP and total revenue in GBP in 2016
remains the same as 2015. The decrease in revenue in US$ relates
entirely to the depreciation in the GBP versus the US$. Amedeo
provides various business development and marketing services to
MGR.
Amedeo's share of loss in associates was US$881,000 (2015:
US$2,014,000). This was made up of a loss of US$856,000 (2015:
US$2,059,000) at YZJ JV and a loss of US$25,000 (2015: US$45,000
profit) at MGR. These losses write down the carrying value of the
investments and have no impact on cash.
Foreign exchange losses amount to US$390,000 (2015: US$115,000).
These were predominately due to translating GBP denominated loans
into US$. These also have no impact on cash.
Finance income decreased to US$44,000 (2015: US$300,000) due to
the repayment of US$1,664,000 of loans from MGR.
Overall loss on ordinary activities before taxation
significantly decreased to US$1,887,000 (2015: loss of
US$2,610,000) or by 28%. Basic and fully diluted loss per share for
the year was USc5.78 (2015: USc7.99).
Excluding non-cash items, defined as; share-based payment
charge, share of loss of associates and foreign exchange loss, loss
on ordinary activities before taxation for the year ended 31
December 2016 was US$478,000 (2015: loss of US$220,000). The
increase in loss excluding non-cash items was due to a decrease in
finance income of US$256,000 to US$44,000 (2015: US$300,000).
Foreign exchange translation loss of US$946,000 (2015:
US$978,000 loss) arose, which relate 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 loss for the year significantly
decreased to US$2,833,000 (2015: loss of US$3,588,000), a 21.2%
decrease on prior year.
As at the year end, the carrying amount on the balance sheet of
investments in associates fell to US$14,393,000 (2015:
US$16,213,000), primarily as a result of the share of loss from
Amedeo's stake in YZJ JV. Current assets fell to US$4,133,000
(2015: US$5,044,000). Cash as at 31 December 2016 was US$2,510,000
(2015: US$2,340,000).
Subsequent to the year end, Amedeo made a loan facility of
US$800,000 to MGR. Consequently, at the date of these financial
statements, the Group had approximately US$1,142,000 of cash and
cash equivalent balances.
Trade payables at the year-end decreased to US$104,000 (2015:
US$147,000) due to timing differences on when invoices were paid
around the year end.
Overall, at the year end, net and total assets were
US$18,415,000 (2015: US$21,110,000) and US$18,519,000 (2015:
US$21,257,000), respectively.
Subsequent Events
Post the year end, in January 2017, Amedeo acquired a 2.5% stake
in GKC for US$500,000, 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.
Also post the year end and also in January 2017, Amedeo made
available to MGR a loan facility of US$800,000. The facility bears
interest at 10% per annum and is intended to be used for working
capital.
Outlook
With the current soft state of the rig market, winning new
orders at YZJ Offshore has been difficult. Amedeo does not expect
this situation to continue in the medium term, and indeed there are
already signs of recovery. When a recovery does come, YZJ Offshore,
having proved itself with Explorer 1 and with its capability to
produce advanced, specialised and localised rigs as well as a range
of modules for other vessels, is well placed to take advantage of
it. Iron ore prices are now rising, and MGR expects to increase and
broaden its activities, particularly with Amedeo's investment in to
GKC.
Amedeo 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
An 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 26 June 2017.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2016
Year ended Year ended
31 Dec 2016 31 Dec 2015
Note $'000 $'000
Revenue 108 128
Administrative expenses 3 (630) (651)
Share based payments (138) (261)
Share of loss of associates 4 (881) (2,014)
Foreign exchange losses 5 (390) (115)
______ ______
Loss from operations (1,931) (2,913)
Profit on sale of quoted shares - 3
Finance income 6 44 300
______ ______
Loss on ordinary activities before
taxation (1,887) (2,610)
Taxation 7 - -
______ ______
Loss for the year (1,887) (2,610)
Basic and diluted loss per share 8 (5.78)c (7.99)c
Other Comprehensive Income
Foreign exchange translation difference (946) (978)
______ _____
Total Comprehensive Expense for
the year (2,833) (3,588)
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF CHANGES IN EQUITY
for the year ended 31 December 2016
Group
Total equity
Foreign attributable
Share Share-based currency to equity
premium payment translation Accumulated holders of
Share capital account reserve reserve losses parent
$'000 $'000 $'000 $'000 $'000 $'000
At 1 January
2015 5,804 29,103 304 1,459 (12,233) 24,437
Loss for the
year - - - - (2,610) (2,610)
Share-based
payments - - 261 - - 261
Foreign exchange - - - (978) - (978)
______ ________ ________ ________ _________ ________
At 31 December
2015 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
______ ________ ________ ________ _________ ________
Company
Foreign Total equity
Share-based currency attributable to
Share premium payment translation Accumulated equity holders
Share capital account reserve reserves losses of parent
$'000 $'000 $'000 $'000 $'000 $'000
At 1 January 2015 5,804 29,103 304 922 (10,005) 26,128
Loss for the year - - - - (450) (450)
Share-based
payments - - 261 - - 261
______ ______ ______ ______ _______ ______
At 31 December 2015 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
______ _______ ______ ______ _______ ______
The accompanying notes are an integral part of these financial
statements.
STATEMENTS OF FINANCIAL POSITION
as at 31 December 2016
Group Company
Assets Note Dec 2016 Dec 2015 Dec 2016 Dec 2015
Non-current assets $'000 $'000 $'000 $'000
Investment in subsidiaries 9 - - 8 8
Investment in associates 10 14,386 16,213 - -
_____ _____ _ _
14,386 16,213 8 8
Current assets
Loans receivable 11 1,400 2,177 23,532 24,809
Other receivables 12 223 527 164 468
Cash and cash equivalents 2,510 2,340 1,707 759
____ ____ ____ ______
4,133 5,044 25,403 26,036
Total assets 18,519 21,257 25,411 26,044
Liabilities
Current liabilities
Trade and other payables 13 (104) (147) (91) (105)
____ ____ ____ ____
Total liabilities (104) (147) (91) (105)
______ ______ ______ ______
Net assets 18,415 21,110 25,320 25,939
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 15 703 565 703 565
Foreign currency translation
reserve (465) 481 922 922
Accumulated losses (16,730) (14,843) (11,212) (10,455)
_____ _____ _____ _____
Total equity 18,415 21,110 25,320 25,939
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 2016 was US$760,000 (2015: loss of US$450,000).
Approved by the Board and authorised for issue on 26 May 2017
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 2016
Group Company
Year ended Year ended Year ended Year ended
31 Dec 31 Dec 2015 31 Dec 2016 31 Dec 2015
2016
$'000 $'000 $'000 $'000
Loss for the year before tax (1,887) (2,610) (757) (450)
Adjustments for:
Share-based payments 138 261 138 261
Share of loss of associates 881 2,014 - -
Decrease/(increase) in receivables 304 17 304 (218)
(Decrease)/increase in payables (43) (197) (14) 51
Loss on sale of quoted shares - (3) - (3)
Provision for unquoted preference
shares - 33 - 33
Finance income (44) (300) 2 (300)
Unrealised FX losses 113 86 113 86
_____ _____ _____ _____
Cash used in operating activities (538) (699) (214) (540)
Investing activities
Receipt on sale of quoted
shares - 10 - 10
Loans made to associates (1,000) (400) - -
Loans made to subsidiaries - - (500) (28)
Loans repaid by associates 1,664 1,950 1,664 -
______ ______ ______ ______
Net cash from (used in) investing
activities 664 1,560 1,164 (18)
Financing activities
Finance income/(cost) 44 300 (2) 300
_______ _______ _______ _______
Net cash used in financing
activities 44 300 (2) 300
_______ _______ _______ _______
Net increase/(decrease) in
cash and cash equivalents 170 1,161 948 (258)
Cash and equivalents at beginning
of year 2,340 1,179 759 1,017
Cash and equivalents at end
of year 2,510 2,340 1,707 759
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.
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 2015. New
standards introduced during the year had no material impact on the
results or net assets of the company.
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 2016. 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 and was endorsed by the EU on 22 November 2016.
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 and was endorsed by the EU 22 September 2016.
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).
The standard is effective for periods beginning on or after 1
January 2019 but is yet to be endorsed by the EU.
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 undertakings,
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 note10.
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
other 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 statement of 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.
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 with finite lives to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss. Where it is not possible to estimate the
recoverable amount of the individual asset, the Group estimates
that recoverable amount of the cash-generating unit to which the
asset belongs.
Cash 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.
Financial assets
Apart from its unquoted investments and investments in
associates, the Group has only financial assets classified as loans
and receivables. The Group's loans and receivables comprise loans
and other receivables and cash and cash equivalents in the
statement of financial position.
Trade payables
Trade payables are not interest bearing and are stated at their
nominal value.
Equity instruments
Equity instruments issued by the Company are recorded as the
proceeds received, net of direct issue costs.
Current and deferred tax
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
abroad are included in the Group income statement at average rates
of exchange for the year. The assets and liabilities denominated in
foreign currencies are translated into United States Dollars using
rates of exchange at the reporting date.
Exchange differences on the re-translation of opening net assets
and results for the year of foreign subsidiary undertakings and
associates are dealt with through 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 consolidated income
statement.
Share-based payments
All share-based payments are accounted for in accordance with
IFRS 2 - "Share-based payments". The Company issues equity-settled
share-based payments in the form of share warrants to certain
Directors and key advisers. Equity settled share-based payments are
measured at fair value at the date of grant. The fair value
determined at the grant date of equity-settled share-based payments
is expensed on a straight line basis over the vesting period, based
on the Company's estimate of shares that will eventually vest.
Fair value is estimated using a Black Scholes probability
valuation model. The expected life used in the model has been
calculated by reducing the total contractual life to management's
best estimate of the expected date of exercise.
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.
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 2016 31 Dec 2015
$'000 $'000
Administration, legal, professional
and financial costs 394 391
Directors' fees (excluding share
based payments) 141 143
Auditor fees 95 117
_____ _____
630 651
_____ _____
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$12,000 (2015: US$35,000).
4. Share of loss of associates
Year ended Year ended
31 Dec 2016 31 Dec 2015
$'000 $'000
YZJ Offshore Engineering Pte Ltd (856) (2,059)
MGR Resources Pte Ltd (25) 45
_____ _____
(881) (2,014)
_____ _____
The Company's wholly-owned Singapore-registered subsidiary,
Amedeo Asia, holds a 47.51% investment in YZJ JV, a Singapore
registered company. The loss of US$856,000 represents Amedeo Asia's
share of YZJ JV's loss for the year ended 31 December 2016 (2015:
US$2,059,000) and Amedeo Asia's share of MGR's loss for the year
ended 31 December 2016 of US$25,000 (2015:gain of US$45,000).
5. Foreign exchange losses
Year ended Year ended
31 Dec 2016 31 Dec 2015
$'000 $'000
Loss on translation of loans made
to associates 113 86
____ ____
In June 2014, the Company made a foreign currency denominated,
interest free, unsecured loan to its wholly-owned subsidiary,
Amedeo Asia, totalling GBP1.2 million (translated to US$2.044
million in June 2014), to enable Amedeo Asia to make a convertible
loan to MGR ("Convertible Loan"). At February 2016, the loan of
GBP1.2 million was retranslated to US$1.664 million, resulting in
an unrealised loss on foreign exchange of US$0.113 million. See
table below, which details this:
Loan from Amedeo Asia to MGR in
2014
At 1 January 2016 $1.777m
Less: At 31 December 2015 ($1.664)m
Unrealised loss on foreign exchange US $0.113m
The Company does not hedge against movements in foreign exchange
rates.
6. Finance income
Year ended Year ended
31 Dec 2016 31 Dec 2015
$'000 $'000
Interest on loans made to associates 44 300
____ ____
Interest on loans made to associates is made up of interest
receivable from MGR. Finance income decreased to US$44,000 (2015:
US$300,000) due to the repayment of US$1,664,000 of loans from MGR
during the year.
7. Taxation Year ended Year ended 31
31 Dec 2016 Dec 2015
$'000 $'000
UK Corporation tax
Factors affecting tax charge in the
year
Loss on ordinary activities before
tax (1,880) (2,610)
Loss on ordinary activities at the
effective rate
of corporation tax 20% (2015: 20%) (376) (522)
Unrelieved losses 376 522
- -
___ ___
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$8,900,000 available for offset
against future profits. US$1,513,000 represents unrecognized
deferred tax assets thereon at 17%. The deferred tax asset has not
been recognized due to uncertainty over timing of utilization.
8. Loss per share
The basic and diluted loss per share for the year to 31 December
2016 was US$5.78c (2015: US$7.99c). The calculation of loss per
share is based on the loss of US$1,887,000 for the year ended 31
December 2016 (2015: US$2,610,000 loss) and the weighted average
number of shares in issue during the year to 31 December 2016 of
32,653,843 (2015: 32,653,843).
No warrants were exercised in the year ended 31 December 2016.
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.
9. Investment in subsidiaries
Company
31 Dec 2016 31 Dec 2015
Cost or valuation $'000 $'000
At 1 January 8 8
___ ___
At 31 December 8 8
___ ___
The investment in subsidiaries shown above is the investment in
Amedeo Asia.
The Company's subsidiaries were as follows:
Name Country of incorporation Proportion of ownership
interest
Dec 2016 Dec 2015
Amedeo Resources (Asia)
Pte Limited ("Amedeo
Asia") Singapore 100% 100%
10. 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 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.
Amedeo Asia also has a 49% stake in 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.
YZJ JV MGR Total
31 Dec 16 31 Dec15 31 Dec 31 Dec 31 Dec 31 Dec
16 15 16 15
Amounts relating $'000 $'000 $'000 $'000 $'000 $'000
to associates
Current assets 908 973 4,716 10,407 5,624 11,380
Non-current
assets 28,547 32,282 - - 28,547 32,282
Current liabilities (3) (9) (3,713) (7,568) (3,716) (7,577)
Non-current
liabilities - - - (1,949) - (1,949)
______ ______ ______ _______ ______ _______
Net assets 29,452 33,246 1,003 890 30,455 34,136
_______ _______ _______ _______ _______ _______
Group's share
of net assets
of associates 13,990 15,777 491 436 14,481 16,213
_______ _______ _______ _______ _______ _______
Total revenue 3 3 249 9,261 252 9,264
(Loss)/Profit (1,802) (4,334) (51) 92 (1,853) (4,242)
_______ _______ _______ _______ _______ _______
Group's share
of (loss)/profit
of associates (856) (2,059) (25) 45 (881) (2,014)
_______ _______ _______ _______ _______ _______
Group's share of net assets of associates $'000
Opening at 1 January 2016 16,213
Group's share of loss of associates (881)
Foreign exchange translation difference (946)
-------
Closing at 31 December 2016 14,386
-------
11. Loans receivable
Group Company
31 Dec 31 Dec 31 Dec 2016 31 Dec
2016 2015 2015
$'000 $'000 $'000 $'000
Balance brought forward 2,177 3,813 24,809 24,867
Loans advanced 1,000 400 500 28
Loans repaid (1,664) (1,950) (1,664) -
Foreign exchange loss (113) (86) (113) (86)
______ ______ ______ ______
Balance carried forward 1,400 2,177 23,532 24,809
______ ______ ______ ______
During the year, the Group made a USD loan to an associate, MGR,
of US$1,000,000 (2015: US$400,000), and received repayment of a GBP
loan of GBGBP1,200,000 from MGR, which translated to US$1,664,000
at the date of repayment. This loan is expected to be repaid within
a year with no interest charged.
The Directors consider that the carrying amount of loans
receivable approximates to their fair value.
12. Other receivables
Group Company
31 Dec 2016 31 Dec 2015 31 Dec 2016 31 Dec 2015
$'000 $'000 $'000 $'000
Prepayments and sundry
debtors 223 527 164 468
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 2016 31 Dec 2015 31 Dec 2016 31 Dec 2015
$'000 $'000 $'000 $'000
Trade payables and
accruals 104 147 91 105
______ ______ ______ ______
104 147 91 105
______ ______ ______ ______
14. Called up share capital
31 Dec 2016 31 Dec 2015
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
During the year ended 31 December 2015, the Company undertook a
share capital reorganisation so that every 100 Existing Ordinary
Shares of 0.1p be consolidated into 1 ordinary share of 10p. This
reduced number of ordinary shares in issue from 3,265,384,300 to
32,653,843.
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 2016, no warrants were granted
(2015: 3,107,211 warrants were granted). This leaves 5,022,657
warrants outstanding at 31 December 2016. All the warrants can be
exercised between the date of grant and the end of the exercise
period shown below.
Number Number of
End of Number exercised Number Warrants
Date of Exercise of Warrants Exercise in the exercised at 31 Dec
grant period granted price year to date 2016
------------- -------------- ------------- ---------- ----------- ----------- -----------
4 April
2012 4 April 2022 160,000 75 pence - - 160,000
31 August 31 August
2012 2017 710,000 50 pence - 50,000 660,000
23 June
2013 23 June 2023 1,095,446 50 pence - - 1,095,446
1 February 1 February
2015 2025 500,000 100 pence - - 500,000
12 March 12 March
2015 2025 2,607,211 100 pence - - 2,607,211
________ _______ _______ ________
5,072,657 - 50,000 5,022,657
________ _______ _______ ________
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 81 pence.
The weighted average remaining contractual life of outstanding
warrants as at the end of the period was 5.74 years.
The charge in the current year of US$138,000 relates to the
3,107,211warrants 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 of exercise Exercise Number
Warrant holder warrants Date of grant period price exercised
------------------- ---------- -------------- ------------- ---------- -----------
Fulton Capital 31 August 31 August
Management Ltd(1) 250,000 2012 2017 50 pence -
Lau Lian Seng 12 March 12 March
Glen 2,607,211 2015 2025 100 pence -
1 February 1 February
Zafarullah Karim 333,157 2015 2025 100 pence -
Zafarullah Karim 1,095,446 23 June 2013 23 June 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 share based payment charge in the year under review of
US$138,000 relates to the 3,107,211 warrants issued in 2015 (2015:
US$261,000). 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 2016 was US$0.56
(31 December 2015: US$0.65). Net asset value is based on the net
assets as at 31 December 2016 of US$18.4 million (31 December 2015:
US$21.1 million) and on the number of ordinary shares in issue at
31 December 2016 being 32,653,843 ordinary shares (31 December
2015: 32,653,843).
17. Staff numbers and costs
The average monthly number of employees of the Group, including
Directors, during the year was 4 (2015: 4). The Directors are
considered the key management of the Group. The aggregate
remuneration of the Directors is set out in the remuneration
report. All employees are Directors of the Company, therefore no
remuneration was paid to staff of the Company (2015: US$: 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$108,000 to Amedeo in respect of these
services (2015: US$128,000).
During the year, Amedeo made a loan of US$1,000,000 to MGR and
MGR repaid a loan of US$1,664,000 to Amedeo. The Group earned
US$44,000 in interest on their loans to MGR for the year to 31
December 2016 (2015: US$300,000). Also, subsequent to year end, MGR
took out a loan facility of US$800,000 from Amedeo, in January
2017.
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 2016, the
Group's holding of unquoted investments was valued at approximately
US$14.4 million (31 December 2015: US$16.2 million).
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 2016,
the overall investment allocation was a portfolio of 2 investments
both of which were in unquoted companies. As at 31 December 2016,
the Company's investment in YZJ JV represented 97% of the value of
the Group's investment portfolio and almost 76% of the Group's
gross assets.
Interest rate risk
The majority of the Group's financial assets and liabilities are
not interest bearing. As a result, the Group is not subject to
significant amounts of risk due to fluctuations in the prevailing
levels of market interest rates. Any cash and cash equivalents are
held in short notice accounts. The table below summarises the
Group's exposure to interest rate risks.
As at 31 December 2016 Non-interest Fixed
bearing interest Total
Assets $'000 $'000 $'000
Investments 14,393 - 14,393
Loans to MGR - 1,400 1,400
Other receivables 223 - 223
Cash and cash equivalents 2,510 - 2,510
______ ______ ______
Total financial
assets 17,126 1,400 18,526
______ ______ ______
Liabilities
Trade and other payables 104 - 104
______ ______ ______
Total financial liabilities 104 - 104
______ ______ ______
As at 31 December 2015 Non-interest Fixed
bearing interest Total
Assets $'000 $'000 $'000
Investments 16,213 - 16,213
Loan to MGR - 2,177 2,177
Other receivables 527 - 527
Cash and cash equivalents 2,340 - 2,340
______ ______ ______
Total financial
assets 19,080 2,177 21,257
______ ______ ______
Liabilities
Trade and other payables 147 - 147
______ ______ ______
Total financial liabilities 147 - 147
______ ______ ______
Hedging and currency risk
As the current focus of the Company's investment has been
outside of the UK, the majority of the Company's investments are
denominated in US$. The Company's functional currency is also
US$.
Liquidity risk
The Company's financial instruments include minority equity
investments in unquoted Singapore-registered companies. The Company
should be able to liquidate its investments in these instruments at
an amount close to their fair value in order to meet its liquidity
requirements.
The Company has a procedure to manage liquidity risk whereby the
board meet regularly to review investment holdings and current and
anticipated levels of financial liabilities. Where liquidity of the
investments within the portfolio is believed to be at a level which
may adversely affect the Company's ability to service its financial
obligations, the board will consider taking action to improve cash
flow, which may include utilising bank overdrafts or other credit
arrangements.
The table below details the contractual, undiscounted cash flows
of the Group's financial liabilities.
Less than 1-3 3 months No stated
1 month months to 1 year maturity
31 December 2016 $'000 $'000 $'000 $'000
Trade and other payables 104 - - -
______ ______ ______ ______
Total 104 - - -
______ ______ ______ ______
31 December 2015
Trade and other
payables 147 - - -
_______ ______ ______ ______
Total 147 - - -
_______ ______ ______ ______
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
In January 2017, Amedeo brought a 2.5% stake in Ganjine Kani
Company for US$500,000, a copper mining company based in Iran.
Also in January 2017, the Group loaned MGR a further US$800,000
due to the positive outlook on the iron ore price.
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, Non-Executive Chairman of the
Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAASEDFEXEFF
(END) Dow Jones Newswires
May 30, 2017 08:19 ET (12:19 GMT)
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