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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Power Capital | LSE:PCGB | London | Ordinary Share | VGG7208M1095 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 12.00 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMPCGB
RNS Number : 6380R
Power Capital Global Ltd
30 June 2015
30 June 2015
POWER CAPITAL GLOBAL LIMITED
("Power Capital" or "the Company")
Audited results for the year ended 31 December 2014
Power Capital Global Limited (AIM:PCGB) announces its audited results for the year ended 31 December 2014. The Reports and Financial Statements for the year ended 31 December 2014 are expected to be posted to shareholders and to be available to download on the Company's website, www.powercapitalglobal.com shortly.
Further information Power Capital Global Limited Craig Niven Tel: 01473 313800 Northland Capital Partners Limited Edward Hutton/Gerry Tel: +44 (0)20 7382 1100 Beany
Chairman's Statement
Summary
The Company's limited progress in developing an Asia based natural resources trading and logistics platform during the first half of 2014 suffered further deterioration during the second half of the year under review. The Company announced on 29(th) September 2014 that it would undertake a strategic review in recognition of an extremely competitive resources trading environment where margins are generally under pressure and volume growth is modest to non-existent.
No improvement in market conditions was detected during the following nine months and with little prospect of an improvement in the foreseeable future, the Board concluded its strategic review and announced on 12(th) June 2015 that it had determined that Company would exit the natural resources trading business with immediate effect.
Investing company status and suspension of trading
Following the cessation of its trading business, the Company was deemed to have become an investing company for the purposes of Rule 15 of the AIM Rules for Companies. As previously stated, the directors propose to despatch a circular to shareholders convening a general meeting to adopt an investing policy (the "Circular") to make investments in the gaming, leisure, entertainment, gambling and associated financial product sectors in Asia. Further details of the proposed investing policy will be contained in the Circular.
The Company is required either to complete a reverse takeover under Rule 14 of the AIM Rules or otherwise implement the investing policy (to the satisfaction of the London Stock Exchange) within twelve months of becoming an investing company.
In light of the Company's inability, given the level of its cash balances, to implement an investing policy as required under Rule 15 of the AIM Rules, the Board requested that trading in the Company's shares on AIM be suspended (pursuant to Rule 40 of the AIM Rules) pending the Company either completing a reverse takeover under Rule 14 of the AIM Rules or securing an increase in its cash balances sufficient to facilitate the implementation of its proposed investing policy to the satisfaction of the London Stock Exchange without completing a reverse takeover. The suspension was effective on 12 June 2015.
Indonesia
PCG Coal (Indonesia) Limited ("PCI"), our 51% joint venture operating company, sought to manage its off-take agreement (the "Agreement") with PT Perdana Maju Utama ("PMU") throughout 2014.
PCI had previously provided advance payments under the Agreement of US$2 million (the "Advance") in 2013 and these funds were used by PMU to commence commercial strip mining activities on its concession. Under an addendum signed in September 2013, PMU was permitted to sell its mined concession thermal coal direct to third party customers rather than to PCI but was required to compensate PCI at a rate of US$3.20 per metric tonne sold, comprised of two parts: (i) US$1.50 in commission payments; and (ii) a repayment of the Advance principal of US$1.70. The minimum committed monthly sales volume was agreed at 50,000 metric tonnes.
PCI invoiced PMU for the minimum monthly contract delivery of 50,000 metric tonnes in accordance with the Agreement, as amended, in each month during the reporting period. PMU made its last monthly payment to the Company on 2(nd) September 2014. At the date of this report, PCI has invoiced PMU fully for the committed off-take volume under the Agreement (1,000,000 metric tonnes).
The total value of commission income generated under the Agreement in the reporting period was approximately GBP573,000 and the balance on the Advance has been reduced under invoice to approximately GBP208,000 as at the reporting date. A total amount of GBP808,000 was invoiced but unpaid at the end of the reporting period.
TSI
The Company is disappointed to report that it has made no progress in its efforts to hold constructive discussions with the management and owners of TSI Holdings Limited ("TSI"). The Company is taking formal steps to achieve redress over the current default on loan repayments from TSI using all forms of recourse available to it. The amount outstanding under the TSI facility (including accrued interest) is GBP0.72 million (US$1.12 million) and it is fully provided for.
Mongolia
The Company has a 1.4% equity stake in Asia Pacific Investment Partners Limited ("APIP"). APIP continues to progress its plan to secure a stock exchange listing in Singapore. APIP reported profit for 2014 of US$19.9 million (GBP12.7 million) and its net assets increased to US$42.0 million (GBP26.7 million).
As part of its investment strategy, the Board plans to realise the Company's trading and investment assets which includes the APIP stake, however, this is not expected to be achieved during the coming six months and consequently this investment is reported as a non-current asset.
APIP has developed an early stage exploration license targeting an identified major copper-gold porphyry system located in the South Gobi. APIP re-organised its mineral exploration and mining subsidiary assets into a standalone corporate entity known as Mongolian Metals Corporation at the end of 2013 and this was subsequently de-merged from APIP through a distribution of its shares by way of a dividend in specie. A suitable strategic and financial partner is currently being sought to advance the mineral exploration program.
Corporate Matters
Operating costs have been substantially reduced during the reporting period. All of the employees resigned at the end of October 2014 with the exception of Simon Dewhurst, the Chief Executive Officer, who resigned in June 2015 but remained on the board. Lin Kung-Min, the Company's non-executive Chairman, immediately assumed the role of interim Chief Executive Officer.
The board had previously agreed to suspend cash settlement of fee payments due to directors in 2013. The total amount accrued but unpaid to directors at the end of the reporting period is GBP425,000. The total amount of salary accrued but unpaid to the former Chief Executive Officer at the end of the reporting period is GBP29,000. It remains the position of the Company's directors that the moratorium on the settlement of director fees and Chief Executive Officer salary should remain in place until the Company's funding and / or positive cashflow outlook is significantly improved.
Mr Newell resigned from the board of the Company in August 2014.
The Company continues to benefit from financial support from Kolarmy Technology INC ("Kolarmy"), a related party company, in the form of a loan facility. The existing facility (US$9 million) was renewed on 13(th) June 2015 for a further 12 months. The facility is drawn by approximately US$5.8 million (GBP3.7 million) as of the reporting date of these financial statements.
Lin Heng-Jui is the majority shareholder of Kolarmy. The renewal of the Kolarmy facility is a related party transaction under the AIM Rules. The directors of the Company, other than Lin Heng-Jui, having consulted with Northland Capital Partners Limited, the Company's nominated adviser, consider that the terms of the renewal of the Kolarmy loan facility are fair and reasonable so far as the shareholders of the Company are concerned.
Lin Kung-Min
Chairman
30 June 2015
Consolidated Statement of Profit Or Loss And Other Comprehensive Income
For The Year Ended 31 December 2014
Hot Features
Premium
Notes 2014 2013
GBP GBP
Revenue 2 - 532,971
Cost of sales - (492,475)
------------- -------------
Gross profit - 40,496
Administrative expenses (2,338,796) (2,193,786)
------------- -------------
Operating loss (2,338,796) (2,153,290)
Other income 2 582,076 253,079
Finance costs 4 (97,256) (119,834)
------------- -------------
Loss before taxation 5 (1,853,976) (2,020,045)
Income tax expense 6 - (2,226)
------------- -------------
Loss for the year
after taxation (1,853,976) (2,022,271)
Other comprehensive
income - -
------------- -------------
Total comprehensive
loss (1,853,976) (2,022,271)
============= =============
Attributable to:
Owners of the parent (1,253,232) (2,026,093)
Non-controlling interests (600,744) 3,822
------------- -------------
Total comprehensive
loss (1,853,976) (2,022,271)
============= =============
Loss per share (basic) 7 (GBP0.017) (GBP0.030)
============= =============
Consolidated Statement of Financial Position
As At 31 December 2014
Notes 2014 2013
GBP GBP
Non-current assets
Property, plant and
equipment 10 9,703 21,107
Available-for-sale
investments 11 1,273,502 1,273,502
------------ ------------
1,283,205 1,294,609
Current assets
Trade and other receivables 12 549,827 1,657,711
Cash and cash equivalents 3,046 109,001
552,873 1,766,712
Current liabilities
Other payables and
accruals 14 1,307,582 799,259
Amounts due to related
companies 15 3,603,228 3,481,857
Provision for current
tax - 961
------------ ------------
4,910,810 4,282,077
Net current liabilities (4,357,937) (2,515,365)
------------ ------------
Net liabilities (3,074,732) (1,220,756)
============ ============
Equity
Share capital 16 6,229,328 6,229,328
Reserves (8,751,513) (7,498,281)
------------ ------------
Equity attributable
to owners of the parent (2,522,185) (1,268,953)
Non-controlling interests (552,547) 48,197
------------ ------------
Capital deficiencies (3,074,732) (1,220,756)
============ ============
Company Statement of Financial Position
As At 31 December 2014
Notes 2014 2013
GBP GBP
Non-current assets
Investments in subsidiaries 9 2 2
------------ ------------
Current assets
Other receivables 12 418,330 418,330
Amounts due from subsidiaries 13 1,273,322 1,273,322
Cash and cash equivalents 4 2,384
------------ ------------
1,691,656 1,694,036
Current liabilities
Other payables and accruals 14 592,359 227,206
Amounts due to subsidiaries 13 673,370 632,453
1,265,729 859,659
Net current assets 425,927 834,377
------------ ------------
Net assets 425,929 834,379
============ ============
Equity
Share capital 16 6,229,328 6,229,328
Reserves (5,803,399) (5,394,949)
------------ ------------
Total equity 425,929 834,379
============ ============
Consolidated Statement of Cash flows
For The Year Ended 31 December 2014
Notes 2014 2013
GBP GBP
Cash flows from operating
activities
Loss before taxation (1,853,976) (2,020,045)
Adjustments for:
Depreciation of property,
plant and equipment 11,404 15,563
Dividend income - (180)
Provision for bad and doubtful
debts 949,818 696,735
Equity-settled share-based
payment - 86,939
Interest income 2 - (31,834)
Finance costs 4 97,256 119,834
Operating cash flows before
movements in working capital (795,498) (1,132,988)
Decrease/(Increase) in
trade
and other receivables 158,066 (1,466,728)
Increase in other payables
and accruals 411,067 304,244
Net cash used in operations (226,365) (2,295,472)
Income tax paid (961) (2,211)
Net cash used in operating
activities (227,326) (2,297,683)
Cash flows from investing
activities
Additions of property, plant
and equipment - (895)
Interest received - 1
Net cash used in investing
activities - (894)
Cash flows from financing
activities
Loans from related companies 134,104 2,364,324
Repayments of loans from
a related company (12,733) (159,165)
Net cash generated from
financing activities 121,371 2,205,159
Decrease in cash and cash
equivalents (105,955) (93,418)
Cash and cash equivalents
at beginning of the year 109,001 202,419
Cash and cash equivalents
at end of the year 3,046 109,001
Cash and cash equivalents
consist of:
Cash at bank and in hand 3,046 109,001
Company Statement of Cash
flows
For The Year Ended 31 December
2014 2014 2013
GBP GBP
Cash flows from operating
activities
Loss before taxation (408,450) (868,116)
Adjustments for:
Equity-settled share-based
payment - 86,939
Operating cash flows before
movements in working capital (408,450) (781,177)
Increase in trade and
other
receivables - (418,330)
Decrease in amounts due from
subsidiaries - 467,992
Increase in other payables
and accruals 365,153 92,325
Increase in amounts due to
subsidiaries 40,917 632,453
Net cash used in operating
activities (2,380) (6,737)
Decrease in cash and cash
equivalents (2,380) (6,737)
Cash and cash equivalents
at beginning of the year 2,384 9,121
Cash and cash equivalents
at end of the year 4 2,384
Cash and cash equivalents
consist of:
Cash at bank and in hand 4 2,384
Consolidated Statement of Changes In Equity
For The Year Ended 31 December 2014
Share Accumulated Total Non- Total
capital losses controlling
interest
GBP GBP GBP GBP GBP
At 1 January
2013 3,057,598 (5,472,188) (2,414,590) 44,375 (2,370,215)
Loss for
the year - (2,026,093) (2,026,093) 3,822 (2,022,271)
Other comprehensive - - - - -
income
----------- ------------- ------------- ------------- -------------
Total comprehensive
loss - (2,026,093) (2,026,093) 3,822 (2,022,271)
----------- ------------- ------------- ------------- -------------
Issue of
shares upon
conversion
of Convertible
Loan Notes 3,075,977 - 3,075,977 - 3,075,977
Issue of
shares upon
equity-settled
share-based
arrangement
(Note 17) 95,753 - 95,753 - 95,753
----------- ------------- ------------- ------------- -------------
At 31 December
2013 and
1 January
2014 6,229,328 (7,498,281) (1,268,953) 48,197 (1,220,756)
Loss for
the year - (1,253,232) (1,253,232) (600,744) (1,853,976)
Other comprehensive -
income - - - -
----------- ------------- ------------- ------------- -------------
Total comprehensive
loss - (1,253,232) (1,253,232) (600,744) (1,853,976)
----------- ------------- ------------- ------------- -------------
At 31 December
2014 6,229,328 (8,751,513) (2,522,185) (552,547) (3,074,732)
=========== ============= ============= ============= =============
Company Statement of Changes In Equity
For The Year Ended 31 December 2014
Share capital Accumulated Total
losses
GBP GBP GBP
At 1 January
2013 3,057,598 (4,526,833) (1,469,235)
Loss for the
year - (868,116) (868,116)
Other comprehensive - - -
income
-------------- ------------- -------------
Total comprehensive
loss - (868,116) (868,116)
Issue of shares
upon conversion
of Convertible
Loan Notes 3,075,977 - 3,075,977
Issue of shares
upon equity-settled
share-based arrangement
(Note 17) 95,753 - 95,753
-------------- ------------- -------------
At 31 December
2013 and
1 January 2014 6,229,328 (5,394,949) 834,379
Loss for the
year - (408,450) (408,450)
Other comprehensive
income - - -
-------------- ------------- -------------
Total comprehensive
loss - (408,450) (408,450)
At 31 December
2014 6,229,328 (5,803,399) 425,929
============== ============= =============
Notes To The Financial Statements
For The Year Ended 31 December 2014
1 Accounting Policies
Basis of accounting
The financial statements of Power Capital Global Limited on pages 9 to 48 have been prepared in accordance with International Financial Reporting Standards ("IFRSs") which collective term includes all applicable individual International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the International Accounting Standards Board (the "IASB"), as adopted by the European Union.
The significant accounting policies adopted are detailed below:
Accounting convention
The accounts have been prepared under the historical cost convention.
Going concern basis
As at 31 December 2014, the Group had net current liabilities of GBP4,357,937 and made a loss of GBP1,253,232.
On 29 September 2014 the Company announced that it was undertaking a strategic review of its Asia-based natural resources trading and logistics business in the light of adverse market conditions.
Board has not detected any improvement in market conditions since that time and it considers that there is little prospect of an improvement in the foreseeable future. Consequently, the Board concluded on 12 June 2015 that the Company should exit this business with immediate effect.
Following the cessation of its trading business, the Company is deemed to have become an investing company for the purposes of Rule 15 of the AIM Rules for Companies. In due course, the Company will dispatch a circular to shareholders convening a general meeting to adopt an investing policy (the "Circular") to make investments in the gaming, leisure, entertainment, gambling and associated financial product sectors in Asia. Further details of the proposed investing policy will be contained in the Circular.
The Company is required either to complete a reverse takeover under Rule 14 of the AIM Rules or otherwise implement the investing policy (to the satisfaction of the London Stock Exchange) within twelve months of becoming an investing company.
As required under Rule 15 of the AIM Rules, the Board has requested that trading in the Company's shares on AIM be suspended.
The Company's cash balances at the end of April 2015 were under GBP20,000. The Board considers that the Company is able to pay its liabilities as they fall due by virtue of its loan facility with Kolarmy Technology Inc. to fund its day-to-day working capital requirements (the undrawn amount of which is approximately US$2 million). However, the Board recognises that the Company would need to increase its cash resources to a more meaningful level in order to facilitate the implementation of its proposed investing policy.
Accordingly, the directors have prepared the financial statements on a basis other than the going concern basis.
On 13 June 2015, the Group secured a new agreement for a total of US$9 million twelve month loan facility from Kolarmy Technologies Inc. ("Kolarmy"), a company under the control of Mr. Lin Heng-Jui and the director of the Company, to be drawn by the Group to fund its investing and operating expenditure requirements. This loan facility has a term of one year and bears interest at LIBOR plus 3% per annum and replaced the previous loan agreement with Kolarmy dated 13 June 2014. Kolarmy has confirmed to the Directors of the Company that it is committed to providing financial support to the extent necessary, to enable the Group to meet its liabilities as and when they fall due for at least twelve months from the date that these financial statements are approved by the directors.
The Board also plans to raise new equity and expects to complete a fund raise within the next few months in order to facilitate its proposed investing policy.
Basis of consolidation
The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) prepared to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration the existence and effect of potential voting rights that currently are exercisable or convertible.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group.
All intra-group transactions and balances and any unrealised gains and losses arising from intra-group transactions are eliminated in preparing the consolidated financial statements.
Subsidiaries
Subsidiaries are entities over which the Group has the power to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
In consolidated financial statements, acquisition of subsidiaries (other than those under common control) is accounted for by applying the acquisition method. This involves the estimation of fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the consolidated statement of financial position at their fair values, which are also used as the bases for subsequent measurement in accordance with the Group's accounting policies.
In the Company's statement of financial position, subsidiaries are carried at cost less any impairment loss unless the subsidiary is held for sale or included in a disposal group. The results of subsidiaries are accounted for by the Company on the basis of dividends received and receivable at the reporting date.
Subsidiaries
All dividends whether received out of the investee's pre or post-acquisition profits are recognised in the Company's profit or loss.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable net of discounts and other sales related taxes.
Sales of goods are recognised when goods are delivered and title has passed.
Commission income is recognised when the agreed services have been provided.
Dividend income is recognised when the right to receive the dividend is established.
Interest income, is calculated using the effective interest method by applying the rate that discounts the estimated future cash receipts through the expected life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
Property, plant and equipment
Property, plant and equipment, other than construction in progress, are stated at cost less accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.
Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment, other than construction in progress, to its residual value over its estimated useful life, as follows:
Furniture, fixtures and
equipment 20%
Electronic equipment 331/3%
Computer equipment 331/3%
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at least at the end of each reporting period.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on disposal or retirement recognised in profit or loss in the period the asset is derecognised is the difference between the net sales proceeds and the carrying amount of the relevant asset.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other costs, such as repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Leases
An arrangement, comprising a transaction or a series of transactions, is or contains a lease if the Group determines that the arrangement conveys a right to use a specific asset or assets for an agreed period of time in return for a payment or a series of payments. Such a determination is made based on an evaluation of the substance of the arrangement and is regardless of whether the arrangement takes the legal form of a lease.
Classification of assets leased to the Group
Assets that are held by the Group under leases which transfer to the Group substantially all the risks and rewards of ownership are classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the Group are classified as operating leases.
Operating lease charges as the lessee
Where the Group has the right to use of assets held under operating leases, payments made under the leases are charged to profit or loss on a straight-line basis over the lease terms except where an alternative basis is more representative of the time pattern of benefits to be derived from the leased assets. Lease incentives received are recognised in profit or loss as an integral part of the aggregate net lease payments made.
Financial assets
Classification of financial assets
The Group's financial assets are classified into loans and receivables and available-for-sale investments.
Management determines the classification of its financial assets at initial recognition depending on the purpose for which the financial assets were acquired and where allowed and appropriate, re-evaluates this designation at the end of reporting period.
All financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the instrument. Regular way purchases of financial assets are recognised on trade date.
Derecognition of financial assets occurs when the rights to receive cash flows from the instruments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred.
At the end of each reporting period, financial assets are reviewed to assess whether there is objective evidence of impairment. If any such evidence exists, impairment loss is determined and recognised based on the classification of the financial asset.
Loans and receivables
These are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are initially recognised at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method, less any impairment losses. Amortised cost is calculated taking into account any discount or premium on acquisition and includes fees that are an integral part of the effective interest rate and transaction cost.
Available-for-sale investments
These are initially measured at fair value, which ordinarily equates to cost, including transaction costs. At subsequent reporting dates, available-for-sale investments are measured at fair value or at cost where fair value is not readily measurable. Gains and losses arising from changes in fair value are recognised in other comprehensive income and taken to the investment revaluation reserve until the investment is disposed of or is determined to be impaired, at which time the accumulated fair value adjustments recognised in equity are included in the income statement as 'gains and losses from investments'.
Impairment loss of financial assets
Objective evidence of impairment of individual financial assets includes observable data that comes to the attention of the Group about one or more of the following loss events:
- significant financial difficulty of the debtor;
- a breach of contract, such as a default or delinquency in interest or principal payments;
- it becoming probable that the debtor will enter bankruptcy or other financial reorganisation; and
- significant changes in the technological, market, economic or legal environment that have an adverse effect on the debtor.
For loans and receivables
An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. The carrying amount of financial asset is reduced through the use of an allowance account. When any part of financial asset is determined as uncollectible, it is written off against the allowance account for the relevant financial asset.
Impairment losses are reversed in subsequent periods when an increase in the asset's recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
For available-for-sale financial assets
For available-for-sale equity investment that is carried at cost, the amount of impairment loss is measured as the difference between the carrying amount of the asset and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss is not reversed.
Financial liabilities
The Group's financial liabilities include other payables and accruals, amounts due to related companies and convertible loan notes.
Financial liabilities at amortised cost
Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. All interest related charges are recognised as finance costs in profit or loss.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
Other payables and accruals, amounts due to related companies are recognised initially at their fair value, net of directly attributable transaction costs incurred and subsequently measured at amortised cost, using the effective interest method.
Convertible loan notes at amortised costs
Convertible loan notes that can be converted to equity share capital at the option of the holder, where the number of shares that would be issued on conversion and the value of the consideration that would be received at that time do not vary, are accounted for as compound financial instruments which contain both a liability component and an equity component.
Convertible loan notes issued by the Company that contain both financial liability and equity components are classified separately into respective liability and equity components on initial recognition. On initial recognition, the fair value of the liability component is determined using the prevailing market interest rate for similar non-convertible debts. The difference between the proceeds of the issue of the convertible loan notes and the fair value assigned to the liability component, representing the call option for conversion of the notes into equity, is included in equity as convertible loan notes equity reserve.
On the issue date of convertible loan notes, if:
i. the noteholders confirm that the convertible loan notes will be converted into the Company's shares within one year;
ii. the convertible loan notes carry a market interest rate, with fixed conversion prices and exchange rate; and
iii. the directors of the Company opine that the fair value of the embedded derivative relating to the foreign currency component is immaterial on initial recognition,
then it would not be separated out. Accordingly the principal amount of convertible loan notes would be fully recognised as a current liability in the statement of financial position. The liability component is subsequently carried at amortised cost using the effective interest method.
When the notes are converted, the carrying value of the liability component at the time of conversion is transferred to share capital as consideration for the shares issued. If the note is redeemed, the convertible loan notes liability will be reversed.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
Accounting for income tax
Income tax comprises current tax and deferred tax.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting period, that are unpaid at the end of reporting period. They are calculated according to the tax rates and tax laws applicable to the fiscal periods to which they relate, based on the taxable profit for the year. All changes to current tax assets or liabilities are recognised as a component of income tax expense in profit or loss.
Deferred tax is calculated using the liability method on temporary differences at the end of reporting period between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, tax losses available to be carried forward as well as other unused tax credits, to the extent that it is probable that taxable profit, including existing taxable temporary difference, will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.
Deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither taxable nor accounting profit or loss.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax is calculated, without discounting, at tax rates that are expected to apply in the period the liability is settled or the asset realised, provided they are enacted or substantively enacted at the end of reporting period.
Changes in deferred tax assets or liabilities are recognised in profit or loss, or in other comprehensive income or directly in equity if they relate to items that are charged or credited to other comprehensive income or directly to equity.
Current tax assets and current tax liabilities are presented in net if, and only if,
(a) the Group has the legally enforceable right to set off the recognised amounts; and
(b) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
The Group presents deferred tax assets and deferred tax liabilities in net if, and only if,
(a) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
(b) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
(i) the same taxable entity; or
(ii) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Retirement benefits and pensions schemes
Retirement benefits to employees are provided through defined contribution plans. The Group operates a defined contribution retirement benefit plan under the Mandatory Provident Fund Schemes Ordinance (the "MPF Scheme"), for all of its employees who are eligible to participate in the MPF Scheme. Contributions are made based on a percentage of the employees' basic salaries.
Contributions are recognised as an expense in profit or loss as employees render services during the year. The Group's obligations under these plans are limited to the fixed percentage contributions payable.
Share based payments
The cost of share-based employee compensation arrangements, whereby employees receive remuneration in the form of shares or share options, is recognised as an employee benefit expense in the profit or loss.
All share-based compensation is ultimately recognised as an expense in full at the grant date when the share options granted vest immediately, with a corresponding increase in reserve. If vesting periods or other vesting conditions apply, the expense is recognised over the vesting period, based on the best available estimate of the number of share options expected to vest. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised, if there is any indication that the number of share options expected to vest differs from previous estimates. No adjustment to expense recognised in prior periods is made if fewer share options ultimately are exercised than originally vested.
When share options are exercised, the company issues new shares. The proceeds (if any) received net of any directly attributable transaction costs are credited to share capital account.
Foreign currencies
The financial statements are presented in Pounds Sterling. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. The functional currency of the Company is Pounds Sterling.
In the individual financial statements of the consolidated entities, foreign currency transactions are translated into the functional currency of the individual entity using the exchange rates prevailing at the dates of the transactions. At reporting date, monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the reporting date retranslation of monetary assets and liabilities are recognised in profit or loss.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined and are reported as part of the fair value gain or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
In the consolidated financial statements, all individual financial statements of foreign operations, originally presented in a currency different from the Group's presentation currency, have been converted into Pounds Sterling.
Assets and liabilities have been translated into Pounds Sterling at the closing rates at the reporting date. Income and expenses have been converted into Pounds Sterling at the exchange rates ruling at the transaction dates or at the average rates over the reporting period provided that the exchange rates do not fluctuate significantly.
Any differences arising from this procedure have been recognised in other comprehensive income and accumulated separately in the exchange reserve in equity, if any.
Share capital
Ordinary shares are classified as equity. Share capital is determined using the nominal value (if any) of shares that have been issued and any premiums received on the issuance of shares over the par value.
Any transaction costs associated with the issuance of shares are deducted from share capital (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction.
Segment reporting
The Group identifies operating segments and prepares segment information based on the regular internal financial information reported to the executive directors for their decisions about resources allocation to the Group's business components and for their review of the performance of those components. The business components in the internal financial information reported to the executive directors are determined following the Group's major operations.
Segment revenue, expenses, results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis to that segment. They are determined before intragroup balance and intragroup transactions are eliminated as part of the consolidation process.
Significant judgements and estimates
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, 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.
Impairment of loans and receivables
The provision policy for doubtful debts of the Group is based on the on-going evaluation of the collectability and ageing analysis of the outstanding receivables and on the management's judgment. A considerable amount of judgment is required in assessing the ultimate realisation of these receivables, including creditworthiness and the past collection history of each customer and the related parties. If the financial conditions of the customers and other debtors of the Group were to deteriorate, resulting in an impairment of their ability to make payments, additional impairment may be required.
Issued International Financial Reporting Standards ("IFRS")
In the current year, the Group has applied for the first time the following new standards, amendments and interpretations (the "new IFRSs") issued by the IASB and the International Financial Reporting Interpretations Committee of the IASB, which are relevant to and effective for the Group's financial statements for the annual period beginning on 1 January 2014:
IFRS 10 Consolidated Financial Statements IFRS 11 Joint Arrangements IFRS 12 Disclosure of Interests in Other Entities IAS 27 (Amendment) Separate Financial Statements (2011) IAS 28 (Amendment) Investments in Associates and Joint Ventures IAS 32 (Amendment) Offsetting Financial Assets and Financial Liabilities
The adoption of these and other amended IFRSs had no material impact on how the results and financial position for the current and prior periods have been prepared and presented.
New or amended IFRSs that have been issued but are not yet effective
The following new or amended IFRSs, potentially relevant to the Group's financial statements, have been issued, but are not yet effective and have not been early adopted by the Group.
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 15 Revenue from contracts with customers IAS 19 (Amendment) Defined Benefit Plans: Employee Contributions
The directors of the Company (the "Directors") anticipate that all of the pronouncements will be adopted in the Group's accounting policy for the first period beginning after the effective date of the pronouncement. The Directors are currently assessing the impact of other new and amended IFRSs upon initial application.
2 Revenue and Other Income
2014 2013
GBP GBP
Revenue - 532,971
======== ========
Other income
Sundry income 9,081 22,614
Commission income 572,995 198,451
Dividend income - 180
Loan interest income - 31,833
Bank interest income - 1
-------- --------
582,076 253,079
======== ========
3 Segment Information
Segment revenues and results
The Group identifies operating segments and prepares segment information based on the regular internal financial information reported to the executive directors for their decisions about resources allocation to the Group's business components and for their review of the performance of those components. The business components in the internal financial information reported to the executive directors are determined following the Group's major operations.
The Group's operating business are organised and managed separately according to the nature of products, which each segment representing a strategic business segment that offers different natural resources products in Asia market.
No operating segments have been aggregated to form the following reportable segments.
Coal business - Sales and distribution of steam coal
The following is an analysis of the Group's revenues and results by reportable segments:
Segment revenue Segment profit/(loss)
2014 2013 2014 2013
GBP GBP GBP GBP
Sales of coal - 532,971 - 40,496
Other income 582,076 253,079
Unallocated corporate
expenses (2,338,796) (2,193,786)
Finance costs (97,256) (119,834)
---------------- ------------
Loss before taxation (1,853,976) (2,020,045)
================ ============
Revenue reported above represents revenue generated from external customers. There were no intersegment sales during the year (2013: Nil).
Segment loss represents the loss incurred by each segment without allocation of central administration costs including directors and administrative staff salaries, other income, finance costs and income tax expense. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.
Segment Assets and Liabilities
2014 2013
GBP GBP
Segment assets
Coal business 10,336 1,065,403
Total segment assets 10,336 1,065,403
Unallocated corporate assets
* Property, plant and equipment 9,703 21,107
* Available-for-sale investments 1,273,502 1,273,502
* Trade and other receivables 539,640 593,115
* Cash and cash equivalents 2,897 108,194
------------ ------------
Consolidated assets 1,836,078 3,061,321
============ ============
Segment liabilities
Coal business (1,630,138) (1,631,168)
Total segment liabilities (1,630,138) (1,631,168)
Unallocated corporate liabilities
* Other payables and accruals (946,975) (438,583)
* Amount due to related companies (2,333,697) (2,212,326)
Consolidated liabilities (4,910,810) (4,282,077)
============ ============
For the purposes of monitoring segment performance and allocating resources between segments:
- all assets are allocated to reportable segments other than corporate assets; and
- all liabilities are allocated to reportable segments other than corporate liabilities.
Geographical information
The geographical location of customers is based on the location at which the goods are delivered and title has passed.
2014 2013
GBP GBP
Indonesia - 532,971
------- --------
- 532,971
======= ========
The Company is an investment holding company and the principal place of the Group's operation is in Hong Kong.
For the purpose of segment information disclosures under IFRS 8, the Group regarded Hong Kong as its country of domicile. Most of the Group's non-current assets are principally attributable to Hong Kong, being the single geographical region.
Information about major customers
Percentage of the customers accounting for 10% or more of total revenue of the Group is as follows:
2014 2013
GBP GBP
Customer A - -
Customer B - 532,971
Customer C - -
======= ========
4 FINANCE COSTS
2014 2013
GBP GBP
Interest on advances from
a related company 97,256 86,140
Interest on convertible loan
notes - 33,694
------- --------
97,256 119,834
======= ========
5 Loss Before Taxation
Loss before taxation is stated after charging/(crediting) the following:
2014 2013
GBP GBP
Auditors' remuneration 20,000 20,000
Depreciation of property,
plant and equipment 11,404 15,563
Staff costs (including directors'
emoluments)
- Salaries, wages and other
benefits 728,046 826,457
- Equity-settled share-based
payments - 86,939
- contributions to defined
contribution retirement plans 8,696 10,662
---------- --------
736,742 924,058
Operating lease expenses
- land and building 85,583 82,803
Provision for bad and doubtful
debts 1,139,213 696,735
Exchange loss net 7,974 9,626
========== ========
6 Income Tax Expense
No Hong Kong profits tax has been provided as the Group had no estimated assessable profits arising in or derived from Hong Kong for both years. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof during the year.
2014 2013
GBP GBP
Group
Current tax - Indonesia
In respect of current year - 2,226
Income tax expense - 2,226
======= ======
Pursuant to the rules and regulations of the British Virgin Islands ("BVI"), the Group is not subject to any income tax in the BVI.
Reconciliation between Group's income tax expense and accounting loss at applicable tax rates is as follows:
2014 2013
GBP GBP
Loss before taxation (1,853,976) (2,020,045)
Notional tax at the rates
applicable to profits in
the jurisdictions concerned (305,906) (333,307)
Effect of different tax rates
of subsidiaries operating
in Indonesia - 293
Tax effect of non-assessable
income - (15)
Tax effect of non-deductible
expenses 8,275 210,169
Tax effect of temporary differences
not recognised
for deferred tax purposes 1,638 2,201
Tax effect of unrecognised
tax losses 295,993 122,885
------------ ------------
Income tax expense - 2,226
============ ============
No deferred tax asset has been recognised in relation to tax loss of approximately HK$31 million (i.e. GBP2.5 million) (2013: approximately HK$25 million (i.e. GBP2 million)) due to the unpredictability of the future profit streams.
The Company is resident for corporation tax purposes in the British Virgin Islands.
7 Loss Per Share Attributable to Owners of The parent
The basic loss per share has been calculated on the basis of the net loss for the year attributable to owners of the Company of GBP1,253,232 (2013: loss GBP2,026,093) and the weighted average number of shares in issue as at 31 December 2014 of 74,423,932 (2013: 67,950,037).
Diluted loss per share is the same as basic loss per share as there are no dilutive potential ordinary shares in issue.
8 Directors' Emoluments
The following directors' emoluments were received or receivable by the Directors holding office during the year:
Salaries,
allowances, Contribution
and
other to pension
Fees benefits plans Total
GBP GBP GBP GBP
Year ended 31 December
2014
Executive Director
Simon Dewhurst 76,839 70,704 1,227 148,770
-------- ------------ ------------- --------
Non-Executive Directors
Craig Lees Baxter
Niven** 42,000 - - 42,000
Graham Newall 43,424 15,508 775 59,707
Lin Heng-Jui 46,045 - - 46,045
Lin Kung-Min* 120,000 - - 120,000
251,469 15,508 775 267,752
-------- ------------ ------------- --------
328,308 86,212 2,002 416,522
======== ============ ============= ========
Year ended 31 December
2013
Executive Director
Simon Dewhurst 78,870 70,704 1,227 150,801
-------- ------------ ------------- --------
Non-Executive Directors
Craig Lees Baxter
Niven** 42,000 - - 42,000
Graham Newall - 92,700 1,227 93,927
Lin Heng-Jui 35,890 - - 35,890
Lin Kung-Min* 120,000 - - 120,000
197,890 92,700 1,227 291,817
-------- ------------ ------------- --------
276,760 163,404 2,454 442,618
======== ============ ============= ========
* Long Sheng Asset Management Company, a company controlled by Lin Kung-Min and his immediate family, received fees under a consultancy agreement of GBP120,000 (2013: GBP120,000), for the provision of advisory and support services to the Group.
** Zetachoice Limited, a company controlled by Craig Niven and his immediate family, received fees under a consultancy agreement of GBP42,000 (2013: GBP42,000), for the provision of advisory and support services to the Group.
9 Investments in Subsidiaries - The Company
2014 2013
GBP GBP
At Cost
At 31 December 2 2
===== =====
Particulars of the principal subsidiaries at 31 December 2014 are as follows:
Class
of Proportion
Share of shares Nature Country
Name held held of business of incorporation
Directly held
PCG Resources Investment BVI
Limited Ordinary 100% holding
PCG Resources Investment Alderney
(C.I.) Limited Ordinary 100% holding
Indirectly held
PCG Minerals BVI
Trading Limited
(formerly known
as PCG Minerals
Limited and
PCG International Investment
Limited) Ordinary 100% holding
PCG Services Administrative
Limited Ordinary 100% support Hong Kong
PCG Minerals
Trading (HK)
Limited (formerly
known as PCG Trading
Coal Limited) Ordinary 100% of coal Hong Kong
PCG Coal (Indonesia)
Limited (formerly
known as PCG
Mineral (HK) Trading
Limited) Ordinary 51% of coal Hong Kong
PCG Engineering Investment
Limited Ordinary 100% holding BVI
Trading
of clinkers
PCG Mongolia and investment
Limited Ordinary 100% holding BVI
Class
of Proportion
Share of shares Nature Country
Name held held of business of incorporation
Indirectly held
PT Power Capital Trading
Global Mineral Ordinary 75% of coal Indonesia
PCG Tin Limited Ordinary 100% Dormant BVI
PCG Ports Limited Ordinary 100% Dormant BVI
PCG Galaxy Trading
(HK) Limited Ordinary 100% Dormant Hong Kong
The place of business for each trading subsidiary is Hong Kong, with the exception of PT Power Capital Global Mineral whose place of business is Indonesia and whose company only financial information is as follows:
2014 2013
GBP GBP
Turnover - 289,260
Loss for the year (12,216) (61,001)
Current assets 10,240 411,899
Current liabilities (160,622) (550,065)
========== ==========
10 Property, Plant And Equipment - The Group
Furniture,
Computer fixtures
and Electronic
equipment equipment equipment Total
GBP GBP GBP GBP
Cost
At 1 January 2014 24,965 34,154 1,410 60,529
Additions during
the year - - - -
---------- ----------- ----------- -------
At 31 December 2014 24,965 34,154 1,410 60,529
---------- ----------- ----------- -------
Accumulated depreciation
At 1 January 2014 20,553 18,021 848 39,422
Charge for the year 4,412 6,430 562 11,404
---------- ----------- ----------- -------
At 31 December 2014 24,965 24,451 1,410 50,826
---------- ----------- ----------- -------
Net book value
At 31 December 2014 - 9,703 - 9,703
========== =========== =========== =======
At 31 December 2013 4,412 16,133 562 21,107
========== =========== =========== =======
11 Available For Sale Investments
2014 2013
GBP GBP
Unlisted shares, at cost 1,273,502 1,273,502
========== ==========
The Group's available-for-sale investments represented the unlisted equity investments which were carried at costs less impairment loss.
12 Trade And Other Receivables
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
Trade receivables 949,818 257,439 - -
Less: Provision for
impairment (949,818) (60,074) - -
---------- ---------- -------- --------
- 197,365 - -
Unpaid capital contribution
due from non-controlling
interests 63,666 63,666 - -
Prepayments and other
receivables 486,161 1,396,680 418,330 418,330
---------- ---------- -------- --------
549,827 1,657,711 418,330 418,330
========== ========== ======== ========
All of the Group's trade receivables are denominated in United States Dollars ("US$").
The customers are obliged to settle the amounts upon satisfaction of the sales and purchase agreements. Based on relevant agreements, all outstanding trade receivables as at 31 December 2014 were aged over 90 days.
At each reporting date, the Group reviews trade receivables for evidence of impairment on both an individual and collective basis. As at 31 December 2014, impairment losses of GBP949,818 (2013: GBP60,074) were recognised. The Group did not hold any collateral as security or other credit enhancements over the impaired trade receivables, whether determined on an individual or collective basis.
Impairment losses on trade receivables are recorded using an allowance account unless the Group is satisfied that recovery of amount is remote, in which case the impairment loss is written off against trade receivables directly.
Movements in the allowance for bad and doubtful debts during the year are as follows:
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
At 1 January 60,074 81,184 - -
Impairment losses
recognised 949,818 60,074 - -
Written off (60,074) (81,184) - -
At 31 December 949,818 60,074 - -
========== ========== ===== =====
13 Amounts Due From/ (To) Subsidiaries - The Company
2014 2013
GBP GBP
Amounts due from/(to):
PCG Resources (C.I.)
Limited 1,015,524 1,015,524
PCG Minerals Trading
(HK) Limited 1,451,493 1,451,493
PCG Services Limited 11,411 61,838
PCG Engineering Limited 394,730 394,730
PCG Mongolia Limited 1,273,322 1,273,322
PCG Resources Limited (673,370) (632,453)
------------ ------------
3,473,110 3,564,454
Less: Provision for
impairment (2,873,158) (2,923,585)
------------ ------------
599,952 640,869
============ ============
During the year, the Directors reviewed the carrying value of the amounts due from subsidiaries with reference to the businesses operated by these subsidiaries and their net asset values. As at the reporting date, the Directors are of the opinion that provision for impairment is necessary in respect of the amounts due from subsidiaries. During the year ended 31 December 2014, a reversal of impairment loss of approximately GBP50,427 (2013: impairment of GBP376,347) was recognised in the Company's statement of comprehensive income.
The amounts due from/(to) subsidiaries were unsecured, interest free and repayable on demand. Due to their short maturities, the carrying amount of amounts due from/(to) subsidiaries is a reasonable approximation of their fair value.
14 Other payables and accruals - The Group And Company
The Group
2014 2013
GBP GBP
Accrued expenses 1,029,998 480,928
Other payables 277,584 318,331
1,307,582 799,259
========== ========
The Company
2014 2013
GBP GBP
Accrued expenses 592,359 227,206
======== ========
15 Amounts Due To Related Companies - The Group
Notes 2014 2013
GBP GBP
Kolarmy Technologies
Inc. (i) 3,381,681 3,294,042
Aylmer Capital Limited (ii) 221,547 187,815
3,603,228 3,481,857
========== ==========
Note:
(i) Kolarmy is a company under the control of Mr. Lin Heng-Jui, the director of the Company. The amounts due to Kolarmy were unsecured, bearing interest at LIBOR plus 3% per annum and repayable within twelve months. For the amount due to Kolarmy, accrued interest of GBP327,674 (2013: GBP230,418) was included in accrued expenses.
(ii) Aylmer Capital Limited ("Aylmer") is a company in which Mr. Simon Dewhurst is the common director. The amounts due to Aylmer were unsecured, interest free and repayable on demand.
Due to their short maturities, the carrying amounts due to related companies are reasonable approximation of their fair value.
16 Share Capital - The Group and Company
2014 2013
Number GBP Number GBP
of shares of shares
Authorised
At 1 January and
31 December,
Par value 1,000,000,000 - 1,000,000,000 -
============== ===== ============== ====
2014 2013
Number Number
of shares GBP of shares GBP
Paid-in capital
At 1 January 74,423,932 6,229,328 57,534,810 3,057,598
Shares issued upon
conversion of Convertible
Loan Notes - - 16,233,765 3,075,977
Shares issued upon
equity-settled share-based
arrangement - - 655,357 95,753
-------------- ----------------- -------------- ----------------
At 31 December 74,423,932 6,229,328 74,423,932 6,229,328
============== ================= ============== ================
17 Share Option Scheme
A share option scheme (the "Scheme") was adopted pursuant to a resolution passed at the annual general meeting of the Company held on 11 October 2012 for the purpose of providing incentives or rewards to selected participants. Under the Scheme, it will enable selected eligible persons (including any director, employee, consultant or professional adviser) of the Company and of its subsidiaries to be granted options ("Options") to acquire ordinary shares in the capital of the Company ("Shares").
The total number of shares in respect of which options may be granted under the Scheme must not exceed 18 million shares of the Company prior to the third anniversary of the adoption of the Scheme (the "Scheme Mandate").
It is intended that Options will normally vest over a period of three years beginning with the Option grant date (the "Vesting Period") and may also be subject to performance conditions set at the time the Option is granted. Options cannot, in any event, be exercised later than the tenth anniversary of the Option grant date. Options are not transferable (except on death).
Options may be satisfied by newly issued Shares, or existing Shares, including Shares purchased in the market by an employees' trust. Operation of the Scheme will be overseen by the board of directors of the Company (the "Board").
The number of Shares in respect of which Options may be granted under the Scheme shall be limited, so that immediately following the grant of any Options, the aggregate of the number of Shares issued or remaining capable of being issued pursuant to Options granted prior to the third anniversary of the adoption of the Scheme will not exceed 18 million.
Options may be granted during the period of 42 days beginning with the dealing day following the announcement of the Company's results for any period or with the day on which an announcement is made of amendments to be made to the relevant tax legislation or on which any such amendments come into force.
No payment will be required for the grant of an Option.
The price per share at which Shares may be acquired upon the exercise of an Option ("Exercise Price") shall be determined at the time of grant.
The vesting of an Option may be subject to a time-based vesting schedule to be specified at the date of grant. In addition, the Scheme provides that the vesting of an Option may be subject to performance conditions, to be specified at the date of grant. Once set, performance conditions may be waived or amended if an event occurs which causes the Company to consider that such performance conditions could not fairly or reasonably be met, provided that any amended conditions shall not be more difficult to satisfy than the original conditions
were intended to be at the time of their imposition.
If a participant terminates employment for cause, an outstanding Option will lapse in full.
If a participant terminates employment other than for cause, an outstanding Option shall lapse at the termination date if it is not then exercisable. To the extent an Option is exercisable at the termination date, it shall remain exercisable for 90 days and shall thereafter lapse to the extent not exercised.
If a participant becomes disabled whilst employed by the Company, any Options shall be retained and exercised in accordance with the Scheme. If a participant dies in service, his Option shall become fully exercisable and remain exercisable for its full term.
In the event of a change of control of the Company or compromise or arrangement in connection with a scheme for the reconstruction of the Company or its amalgamation, or a voluntary winding-up, Options shall become exercisable within specified periods and shall lapse to the extent not exercised at the end of the applicable period.
Alternatively, on a change of control, by agreement with the acquiring company, participants may, release their Options in consideration of the grant of Options over shares in the acquiring company.
If there is a rights or capitalisation issue, sub-division, consolidation, reduction or other variation of the Company's ordinary share capital, the Board may adjust the number of Shares subject to an Option and/or the Exercise Price, subject (except in the case of a capitalisation) to written confirmation by the Auditors that in their opinion such adjustment is fair and reasonable provided that the aggregate amount payable on the exercise of the Option in full is not increased.
On 28 November 2012 and 9 December 2013, 478,309 and 655,357 Options with exercise price of GBP0.00000000001 were granted to certain employees of the group respectively. As mutually agreed between these employees and the Company, the Options must be exercised immediately at each date of grant. On each of date of grant, all Options were fully exercised by these employees into Company's shares by issue of new shares. In the opinion of the directors, the fair value of the share options was approximately the same as the open market value of 478,309 and 655,357 new shares issued which were also approximated to the employees' compensation amounted to GBP74,772 and GBP95,753 respectively which had been credited to share capital directly. The average share price on each of date of exercise was 13p and 12p respectively.
18 Related Party Transactions
18.1 In addition to the transactions and balances disclosed in Note 13 and 15, the Group had the following significant related party transactions during the year:
Notes 2014 2013
GBP GBP
Interest payable to
Kolarmy Technologies
Inc. (i) 97,256 119,834
======= ========
Note:
(i) Interest paid to Kolarmy Technologies Inc., a company under the control of Mr. Lin Heng-Jui, the director of the Company. The Directors have consulted with the Group's nominated adviser to confirm that the terms of the transaction are fair and reasonable so far as the shareholders of the Company are concerned.
18.2 Compensation of key management personnel of the Group
The Directors are of the opinion that the key management personnel were the Directors of the Company, details of whose emoluments are set out in note 8.
18.3 The Company is listed on the Alternative Investment Market. Mr. Lin Kung-Min is the ultimate controlling party.
19 Financial Risk Management Objectives and Policies
The Group is exposed to a variety of financial risks which result from its operating, investing and financing activities. The Group's major financial instruments include loans receivables, available-for-sale investments, trade and other receivables, cash and cash equivalents, other payables and accruals and amount due to related companies. Details of these financial instruments are disclosed in the respective notes. The risks associated with these financial instruments and the policies applied by the Group to mitigate these risks are set out below. The Directors manage and monitor these exposures to ensure appropriate measures are implemented in a timely and effective manner.
Categories of financial assets and liabilities
The carrying amounts presented in the statements of financial position relate to the following categories of financial assets and financial liabilities:
Group Company
2014 2013 2014 2013
GBP GBP GBP GBP
Financial assets
Loans and receivables
* Trade and other receivables 549,827 1,657,711 418,330 418,330
* Amounts due from subsidiaries - - 1,273,322 1,273,322
---------- ---------- ---------- ------------
549,827 1,657,711 1,691,652 1,691,652
Available-for-sale
investments 1,273,502 1,273,502 - -
Cash and cash equivalents 3,046 109,001 4 2,384
---------- ---------- ---------- ------------
1,826,375 3,040,214 1,691,656 1,694,036
========== ========== ========== ============
Financial liabilities
At amortised cost
* Other payables and accruals 1,307,582 799,259 592,359 227,206
* Amounts due to related companies 3,603,228 3,481,857 - -
* Amounts due to subsidiaries - - 673,370 632,453
4,910,810 4,281,116 1,265,729 859,659
========== ========== ========== ============
Credit risk
Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge its obligation under the terms of the financial instrument and cause a financial loss to the Group.
The Group has adopted procedures in extending credit terms to customers and in monitoring its credit risk. The Group's credit policy and practices include assessment and valuation of customer's credit reliability and periodic review of their financial status to determine the credit limits to be granted. To manage credit risks, the management reviews regularly the recoverable amount of each individual debt to ensure that adequate impairment is made for the irrecoverable amounts. At 31 December 2014, the Group had no credit risk as there was no sales income generated. As at 31 December 2013, the concentration of credit risk was 100% as the Group's trade receivables were due from a single customer of whom transactions have exceeded 10% of the Group's total revenue.
Majority of the Group's bank balances are deposited with banks in Hong Kong, Indonesia and United Kingdom. The credit risk on liquid funds is limited because the counterparties are banks with good credit-rating.
Foreign currency risk
Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Several subsidiaries of the Group have foreign currency sales and purchases, which expose the Group to foreign currency risk. Certain trade and other receivables and payables of the Group are denominated in either Pounds Sterling ("Sterling"), Hong Kong dollars ("HK$"), Renminbi ("RMB"), Indonesia Rupiah ("Rp") or US$. The Group currently does not have a foreign currency hedging policy. However, the Directors monitor the foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arises.
The table below illustrates the monetary assets and liabilities denoted in various currencies by the Group as at reporting date:
2014 2013
GBP GBP
Monetary Assets:
Sterling 53 2,433
US$ 25 258,356
Rp 53 384
HK$ 1,296 40,138
RMB 1,619 5,055
---------- ----------
3,046 306,366
========== ==========
Monetary Liabilities:
US$ 3,589,770 3,468,399
RMB 13,458 13,458
---------- ----------
3,603,228 3,481,857
========== ==========
The table below illustrates the hypothetical sensitivity of the Group's reported profits and equity to a 10% increase and decrease in the exchange rates at the reporting date assuming all other variables remain unchanged. The sensitivity rate of 10% represents the Directors assessment of a reasonable possible change. Positive figures represent an increase in profit and equity.
2014 2013
GBP GBP
Sterling strengthens by 10%
US$ 358,974 321,004
Rp (5) (38)
HK$ (130 ) (4,014)
RMB 1,184 840
Sterling weakens by 10%
US$ (358,974) (321,004)
Rp 5 38
HK$ 130 4,014
RMB (1,184) (840)
Fair values
There is no significant difference between the carrying amounts and the fair values of the Group and Company's financial instruments. For current trade and other receivables/payables with a remaining life of less than one year, the nominal amount is deemed to reflect the fair value.
Capital risk
The capital of the Group consists of equity attributable to equity holders of the Company, comprising share capital and retained earnings / losses. The Group manages its capital to ensure that entities within the Group to maximise the return to shareholders. The Group is not subject to any externally imposed capital requirements.
Liquidity risk
Liquidity risk relates to the risk that the Group will not be able to meet its obligations associated with its financial liabilities. In the management of liquidity risk, the Directors monitor and maintain a level of cash and cash equivalents deemed adequate to finance the Group's operations and to meet its debt obligations as they fall due. The Group finances its working capital requirements mainly by the funds obtained from advances from related companies. As at 31 December 2014, the Group had net current liabilities and net liabilities of GBP4,357,937 and GBP3,074,732 respectively. In the opinion of Directors, the Group's exposure to liquidity risk is significantly reduced.
The following tables detail the remaining contractual maturities at the reporting date of the Group's and the Company's financial liabilities, which are based on the contractual undiscounted payments (including interest payments computed using contractual rates) and the earliest date the Group and the Company can be required to pay:
The Group
Total
contractual
Carrying undiscounted Within
1 year
amounts payments or on
demand
GBP GBP GBP
Year ended 31 December
2014
Other payables and
accruals 1,307,582 1,307,582 1,307,582
Amounts due to related
companies 3,603,228 3,603,228 3,603,228
4,910,810 4,910,810 4,910,810
========== ============= ==========
Year ended 31 December
2013
Other payables and
accruals 799,259 799,259 799,259
Amount due to a related
company 3,481,857 3,481,857 3,481,857
4,281,116 4,281,116 4,281,116
The Company
Total
contractual
Carrying undiscounted Within
1 year
amounts payments or on
demand
GBP GBP GBP
Year ended 31 December
2014
Other payables and
accruals 592,359 592,359 592,359
Amounts due to subsidiaries 673,370 673,370 673,370
1,265,729 1,265,729 1,265,729
========== ============= ==========
Year ended 31 December
2013
Other payables and
accruals 227,206 227,206 227,206
Amounts due to subsidiaries 632,453 632,453 632,453
---------- ------------- ----------
859,659 859,659 859,659
========== ============= ==========
Interest rate risk
At 31 December 2014, the Group's exposure to interest rate risk mainly arises on an amount due to a related company which bore floating interests. The Group has not used any derivative contracts to hedge its exposure to interest rate risk. The Group has not formulated a policy to manage the interest rate risk.
Interest rate sensitivity analysis
The following tables illustrate the sensitivity of the loss for the year and accumulated losses to a reasonably possible change in interest rates of +25 basis points and -25 basis points (2013: +/- 25 basis points), with effect from the beginning of the year. These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on the Group's financial instruments held at each reporting date. All other variables are held constant. There is no impact on other components of consolidated equity in response to the possible change in interest rate.
Group
2014 2013
+25 +25 -25
basis -25 basis basis basis
points points points points
GBP GBP GBP GBP
Effect on loss for
the year
and accumulated losses (84,669) 84,669 (82,351) 82,351
========= ========== ========= ========
Company
2014 2013
+25 +25 -25
basis -25 basis basis basis
points points points points
GBP GBP GBP GBP
Effect on loss for
the year
and accumulated losses - - - -
======== ========== ======== ========
20 Commitments Under Operating Leases
At 31 December 2014, the total future minimum lease payments under non-cancellable operating leases payable by the Group are as follows:
2014 2013
GBP GBP
Within one year 19,203 80,239
In the second to fifth years
inclusive 648 19,851
------- --------
19,851 100,090
======= ========
The Group leases certain of its office premises and photocopying machines. The leases run for an initial period of one to five years, with options to renew the lease and renegotiated the terms at the expiry date or at dates as mutually agreed between the Group and respective landlords/lessors. None of the leases include contingent rentals.
The Company did not have any operating lease commitments as at 31 December 2014 and 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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