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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tmt Investments Plc | LSE:TMT | London | Ordinary Share | JE00B3RQZ289 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.01 | 0.27% | 3.68 | 3.60 | 3.76 | 368 | 16:35:28 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Security Brokers & Dealers | -79.75M | -81.39M | -2.5879 | -1.42 | 115.43M |
From Apr 2019 to Apr 2024
TIDMTMT
RNS Number : 8189H
TMT Investments PLC
15 March 2018
15 March 2018
TMT INVESTMENTS PLC
("TMT" or the "Company")
Results for the year ended 31 December 2017
TMT Investments PLC, the venture capital company investing in high-growth, technology companies across a number of core specialist sectors, is pleased to announce its final results for the year ended 31 December 2017.
-- NAV per share of US$2.43 (uplift of 28.6% from US$1.89 as of 31 December 2016) -- US$2.20 million of profitable partial cash exits from Wrike, Pipedrive and Scentbird -- US$20.83 million in positive revaluations -- US$4.38 million in impairments
-- Diversified portfolio of over 30 companies focused around big data, e-commerce, and business SaaS (software-as-a-service) tools
-- Many portfolio companies continue to experience rapid growth -- Strong expectations of a number of positive revaluations in 2018
Alexander Selegenev, Executive Director of TMT, commented: "2017 was another successful year for the Company, with several sizeable revaluations and partial exits across our portfolio. In line with expectations announced in our 2016 Annual Report, we were delighted to record eight positive revaluations in 2017. These have more than offset the nine smaller write-downs that we have diligently accounted for in order to maintain our portfolio free from poorly performing investees."
Alexander Selegenev added: "TMT has successfully exited from 11 investments (including 4 partial exits) since its admission to AIM in December 2010 to date. This demonstrates the management team's ability to identify highly promising companies with exceptional leadership at an early stage and to actively manage its portfolio. We are very pleased to see that a significant number of our portfolio companies have become star performers led by outstanding management teams that continue to experience rapid growth and attract additional capital at significantly higher valuations. The portfolio at present offers a diversified combination of companies including ones that are already operating globally such as Taxify, Pipedrive and Wrike and those that are preparing to scale up. We strongly expect 2018 to produce further positive revaluations across our portfolio."
The Annual Report and Accounts for the year ended 31 December 2017 are available on the Company's website at www.tmtinvestments.com, where an electronic copy can be accessed.
For further information contact:
TMT Investments PLC +44 1534 281 843 Alexander Selegenev alexander.selegenev@tmtinvestments.com Executive Director www.tmtinvestments.com Smith & Williamson Corporate Finance Ltd Nominated Adviser Russell Cook David Jones Ben Jeynes +44 (0)20 7131 4000 Hybridan LLP Broker Claire Louise Noyce +44 20 3764 2341 Kinlan Communications +44 20 7638 3435 David Hothersall davidh@kinlan.net
About TMT Investments PLC
TMT Investments PLC invests in high-growth technology companies across a number of core specialist sectors and has a significant number of Silicon Valley investments in its portfolio. Founded in 2010, TMT has invested in over 40 companies to date and has latest announced net assets of US$67m. The Company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation. The company is traded on the AIM market of the London Stock Exchange. www.tmtinvestments.com
EXECUTIVE DIRECTOR'S STATEMENT
2017 was another successful year for the Company, with a number of significant revaluations as well as three partial exits across our portfolio. As a result, TMT's net asset value ("NAV") per share as of 31 December 2017 increased to US$2.43 (up 28.6% from US$1.89 as of 31 December 2016). TMT has now invested in over 40 companies since its admission to AIM in December 2010 and has a diversified portfolio of over 30 investees focused primarily on big data, e-commerce, and business SaaS (software-as-a-service) tools.
Portfolio Performance
The following developments took place within the Company's portfolio in 2017 (i.e. between the publication dates of our 2016 Annual Report and the publication date of this 2017 Annual Report):
Cash and partial cash exits, and positive non-cash revaluations:
-- In May 2017, document management platform PandaDoc completed a US$15 million Series B equity financing round, led by Rembrandt Venture Partners, with participation from Microsoft Ventures, HubSpot, EBRD, and Altos Ventures. The transaction represented a revaluation uplift of US$740,262 (or 150%) in the fair value of TMT's investment in PandaDoc, compared to the previous reported amount as of 31 December 2016.
-- In July and September 2017, TMT disposed parts of its equity stake in work management and collaboration platform Wrike for US$800,000. The transactions represented a revaluation uplift of approximately US$4.89 million (or 114%) in the fair value of TMT's investment in Wrike compared to the previous reported amount as of 31 December 2016.
-- In September and October 2017, TMT sold parts of its equity stake in sales CRM platform Pipedrive for US$900,000. The transactions represented a revaluation uplift of approximately US$2.85 million (or 40%) in the fair value of TMT's investment in Pipedrive compared to the previous reported amount as of 31 December 2016.
-- Online fashion rental retailer LeTote completed a new equity financing round in 2017. The transaction represented a revaluation uplift of US$928,195 (or 87%) in the fair value of TMT's investment in LeTote, compared to the previous reported amount as of 31 December 2016.
-- In September and November 2017, TMT sold parts of its investment in perfume subscription service Scentbird for US$500,000. The transactions represented a revaluation uplift of approximately US$6.55 million (or 728%) in the fair value of TMT's investment in Scentbird compared to the previous reported amount as of 31 December 2016.
-- In August 2017, ride-hailing company Taxify announced a new equity financing round as part of a strategic partnership with Didi Chuxing, the world's leading mobile transportation platform. Taxify subsequently raised additional equity capital. The transactions represented a revaluation uplift of approximately US$3.47 million (or 1,054%) in the fair value of TMT's investment in Taxify, compared to the previous reported amount as of 31 December 2016.
-- Based on the results of an independent valuation report commissioned by data backup and cloud storage provider Backblaze, the fair value of TMT's equity stake in Backblaze has increased by approximately US$909,057 (or 9.5%), compared to the amount reported as of 31 December 2016.
-- IoT solutions provider Remot3.it completed an equity capital raise. The transaction represented a revaluation uplift of approximately US$495,000 (or 175%) in the fair value of TMT's investment in Remot3.it, compared to the previous reported amount as of 31 December 2016.
Impairments and write-offs:
In 2017, the following of the Company's portfolio investments were impaired:
Hot Features
Premium
Portfolio Impairment Impairment Reasons for impairment
Company amount as % of
(US$) fair value
reported
as of
31 Dec
2016
----------- ----------- ------------ -----------------------
Poor performance;
Adinch 300,000 50% Board's discretion
----------- ----------- ------------ -----------------------
Poor performance;
AppsIndep 465,921 100% Board's discretion
----------- ----------- ------------ -----------------------
Drippler 292,813 97% Disposal
----------- ----------- ------------ -----------------------
Favim 127,525 50%* Lack of progress;
Board's discretion
----------- ----------- ------------ -----------------------
Gentoo 115,494 32% Disposal
----------- ----------- ------------ -----------------------
Ninua 349,027** 58% Lack of progress;
Board's discretion
----------- ----------- ------------ -----------------------
Lack of progress;
Thusfresh 379,355 100% Board's discretion
----------- ----------- ------------ -----------------------
Try The 331,748*** 95% Disposal
World
----------- ----------- ------------ -----------------------
Virool 2,013,851 100% Disposal
----------- ----------- ------------ -----------------------
* - adjusted for the US$50,000 received by TMT from Favim
** - incl. the unpaid accumulated interest payable to TMT
*** - incl. the additional US$50,000 investment made in the first half of 2017
10 largest portfolio holdings:
Portfolio Fair value as % of
Company Name (US$), as total
of 31 Dec portfolio
2017 and value
currently
--------------- ----------- -----------
Depositphotos 10,836,105 16.28
--------------- ----------- -----------
Backblaze 10,533,334 15.82
--------------- ----------- -----------
Pipedrive 9,127,249 13.71
--------------- ----------- -----------
Wrike 8,395,508 12.61
--------------- ----------- -----------
Scentbird 6,954,545 10.45
--------------- ----------- -----------
Wanelo 5,369,400 8.07
--------------- ----------- -----------
Taxify 3,797,234 5.70
--------------- ----------- -----------
LeTote 1,997,073 3.00
--------------- ----------- -----------
Unicell 1,455,088 2.19
--------------- ----------- -----------
PandaDoc 1,233,770 1.85
--------------- ----------- -----------
Total 59,699,306 89.68
--------------- ----------- -----------
Key developments for the 10 largest portfolio holdings in 2017 (compared to 2016; source: TMT's portfolio companies)
Depositphotos (stock photo marketplace):
-- Continuing double-digit growth in revenue and number of files in the photobank -- Launched free graphic design software product Crello
Backblaze (online data backup and cloud storage provider):
-- Continuing double-digit growth in revenues and customers -- 10x year-on-year revenue growth from the new "B2" cloud storage service -- Launched new Business Backup service
Pipedrive (sales CRM software):
-- Continuing double-digit growth in revenue and number of paid accounts -- Exceeded 70,000 paying customers
Wrike (work management and collaboration software):
-- Continuing double-digit growth in revenue and number of paid accounts -- Exceeded 15,000 paying customers and 1m users
Scentbird (perfume and other beauty product subscription service):
-- Continuing double-digit growth in revenue and number of customers -- Exceeded 200,000 subscribers for Scentbird -- New product lines launched, inc. hand creams, body scrubs, home fragrances etc.
Wanelo (online social shopping platform):
-- Stable revenue
Taxify (ride hailing service):
-- Active in more than 30 cities over the world
-- Raised a sizeable equity round from the world's leading mobile transportation platform Didi Chuxing
-- Continuing triple-digit growth in revenue and number of users
LeTote (Netflix-style fashion rental platform):
-- Continuing growth in revenue and number of customers
Unicell (provider of digital marketing solutions and mobile applications and services):
-- Breakeven
-- 50%-owned Pango, a parking payment operator in Israel, is fast-growing and cash generative, helping Unicell gradually reduce its debt levels
PandaDoc (document automation software):
-- US$15m new equity raised from Rembrandt Venture Partners and others -- Continuing growth in new clients and revenues
New investments
In 2017, the Company invested an additional US$50,000 in online marketplace for authentic specialty foods Try The World (www.trytheworld.com) and US$300,000 in cloud-based PC emulator Sixa (www.sixa.io).
Other initiatives
On 7 December 2017, the Company announced that it was considering the opportunity of participating in a new proposed blockchain-related fund (the "Fund"). Details of TMT's participation in the Fund have not been finalised, but it is envisaged that certain members of the Company's senior team will join the board of directors of the Fund's management company. In addition, TMT will contribute its human resources and expertise to the Fund. TMT is not expected to be responsible for general administration of the Fund. The Fund is expected to start marketing in May 2018. Further announcements will be made, as appropriate, in due course.
On 21 February 2018, the Company announced its first blockchain related investment through participation in the first phase of the pre-ICO (Initial Coin Offering) conducted by Telegram Group, Inc. ("Telegram"). The pre sale of Telegram's tokens raised US$850m in fiat currency.
NAV per share
The value of TMT's investment portfolio as of 31 December 2017 was US$66.6 million (2016: US$52.0 million), an uplift of 28.1% over the period. Total net assets were US$67.4 million (2016: US$52.6 million).
The Company's NAV per share as of 31 December 2017 increased 28.6% to US$2.43 (31 December 2016: US$1.89).
Operating Expenses
In 2017, the Company's administrative expenses of US$1.1 million were unchanged over the same period last year (2016: US$1.1 million) despite the Company's resumption of office rent payments from 1 April 2017.
Financial position
As of 31 December 2017 the Company had no financial debt and US$1.0 million in cash reserves (2016: US$1.1 million). As of the date of this report, the Company has approximately US$509,000 in cash reserves.
Dividends
The Board is not recommending a final dividend for the year to 31 December 2017 (total dividend in 2016: US$2.77 million).
Events after the reporting period
On 1 January 2018, TMT's founders and senior managers German Kaplun, Artyom Inyutin and Alexander Morgulchik agreed to defer half of their respective 2018 salaries (a total of US$150,000) until 31 December 2020.
As mentioned above, in February 2018 the Company invested US$300,000 in the pre sale of tokens by Telegram, Inc.
Amendment to the Investing Policy
We propose to seek shareholder consent to amend the Company's existing Investing Policy, primarily by adding the ability for the Company to invest in "digital assets", as well as by making some other changes. The track-changed wording of the proposed amended Investing Policy is as follows:
"The Company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation, by taking advantage of opportunities to invest in the TMT sector. The Company aims to provide equity, debt, and equity-related investment capital, such as convertible loans, to private companies which are seeking capital for growth and development, consolidation or acquisition, or as pre-IPO financing. In addition, the Company may invest in "digital assets" defined as an electronically stored right or title to digital or non-digital property or service, including but not limited to intellectual property, software, or cryptocurrencies. In addition, the Company intends to may invest in publicly traded equities which have securities listed on a stock exchange or over-the-counter market. These investments may be in combination with additional debt or equity-related financing, and in appropriate circumstances in collaboration with other value added financial and/or strategic investors. The Company is not geographically restricted in terms of where it will consider making investments. It will consider any geographical area, to the extent that the investment fits within the Company's investment criteria. The Directors and senior managers have the relevant expertise to invest in the TMT sector, whether through equity, debt, or other equity related investment capital and in "digital assets" (including cryptocurrencies). This will include investments in small and mid-sized private companies. The Directors and Consultants have expertise in emerging markets and, in particular, in Russia and the Commonwealth of Independent States. The Company will not be subject to any borrowing or leveraging limits.
Private Companies
The Company will target small and mid-sized companies and will seek to secure at least blocking stakes and board representation, where it considers that the Company and/or an investee company would benefit from such an appointment. The Company will consider making equity investments in lower than blocking stakes only where it sees ways to increase the stakes to blocking or controlling stakes at a later date. Each investment is expected to be at least US$250,000. The investments targeted by the Company will aim to support rapidly-growing private companies to increase market share and achieve long-term shareholder value. It is envisaged that iIf the Company invested in a private company prior to that company listing on a stock market, the Company would may retain a part of its investment in the listed entity going forward. Wherever appropriate, Tthe Company intends to work closely with the management of each investee company to create value by focusing on driving growth through revenue creation, margin enhancement and extracting cost efficiencies, as well as implementing appropriate capital structures to enhance returns.
Public Companies
When investing in public equities, the Company will seek to select companies with a dominant market share or strong growth potential in their respective segments. No restrictions will be placed on the size of public companies in which the Company may make an investment. The Directors intend to make investments in companies or businesses assets with attractive valuation, growth potential, with and competent and motivated management, which enjoy brand recognition, have scalable business models, have strong relationships with customers and have in place transparent accounting policies.
Realisation of Returns
The Directors will, when appropriate, consider how best to realise value for Shareholders whether through a trade sale, flotation or secondary refinancing of the investee companies. The proposed exit route will form a key consideration of the initial investment analysis. The Company expects to derive returns on investments principally through long-term capital gains and/or the payment of dividends by investees. The primary ways in which the Company expects to realise these returns include: (a) the sale or merger of a company; (b) the sale of securities of a company by means of public or private offerings; and (c) the disposal of public equity investments through the stock exchanges on which they are listed. For private investee companies the Company believes that its typical investment holding period should provide sufficient time for investee companies to adequately benefit from the capital and operational improvements resulting from the Company's investment. The targeted holding period shall be reviewed on a regular basis by the Company, but it is expected that this will typically be between two to four years. For public equities the Company's objective is to maximise capital appreciation. Following the acquisition, the Company will continue to conduct extensive research and monitoring of the investment. Importance will be placed on the timing of any disposal which will follow a thorough review of market conditions and those reports and sources that are available to investors. Should the Company consider that the capital appreciation of a particular public equity investment has reached its peak or is likely to or has begun to decline, then the Company will consider the sale of that investment."
Outlook
We are delighted with our portfolio performance in 2017. In line with our expectations announced in our 2016 Annual Report, we had eight positive revaluations in 2017, which more than offset the write-downs that we have diligently accounted for in order to maintain our portfolio valuation updated.
We continue to see exciting investment and exit opportunities in our chosen sectors and anticipate further revaluation events across a number of our portfolio constituents. We are constantly evaluating the opportunity to raise additional capital to intensify our investing activities in the coming years. We look forward to updating our shareholders on the Company's progress through 2018.
Statement of Comprehensive Income
For the For
year ended the
31/12/2017 year
ended
31/12/2016
Notes USD USD
(Losses) Gains on investments 3 (944,889) 3,662,337
-------------------------------------------- ------ ------------ ------------
(944,889) 3,662,337
Expenses
Bonus scheme payment charge (610,107) (837,359)
Administrative expenses 5 (1,039,957) (1,065,442)
Other operating gain 12,275 -
-------------------------------------------- ------ ------------ ------------
Operating (loss) gain (2,582,678) 1,759,536
Net finance income 7 2,441 3,791
-------------------------------------------- ------ ------------ ------------
(Loss) Gain before taxation (2,580,237) 1,763,327
Taxation 8 - -
-------------------------------------------- ------ ------------ ------------
(Loss) Gain attributable to
equity shareholders (2,580,237) 1,763,327
Other comprehensive income
for the year:
Change in fair value of available-for-sale
financial assets 16 17,454,345 584,032
-------------------------------------------- ------ ------------ ------------
Total comprehensive income
for the year 14,874,108 2,347,359
-------------------------------------------- ------ ------------ ------------
(Loss) Gain per share
Basic and diluted (loss) gain
per share (cents per share) 9 (9.30) 6.36
-------------------------------------------- ------ ------------ ------------
Statement of Financial Position
At 31 December At 31 December
2017 2016
USD USD
Notes
Non-current assets
Investments in equity
shares 10 57,120,436 48,335,876
Convertible loan notes
receivable 10 9,452,503 3,650,596
Total non-current assets 66,572,939 51,986,472
Current assets
Trade and other receivables 11 171,954 226,917
Cash and cash equivalents 12 985,692 1,057,098
Total current assets 1,157,646 1,284,015
Total assets 67,730,585 53,270,487
Long term liabilities
Other payables 14 150,000 639,855
----------------------------- ------ ------------------------ ---------- ------------------------
Total long term liabilities 150,000 639,855
----------------------------- ------ ------------------------ ---------- ------------------------
Current liabilities
Trade and other payables 13 148,056 72,211
Total current liabilities 148,056 72,211
----------------------------- ------ ------------------------ ---------- ------------------------
Total liabilities 298,056 712,066
----------------------------- ------ ------------------------ ---------- ------------------------
Net assets 67,432,529 52,558,421
----------------------------- ------ ------------------------ ---------- ------------------------
Equity
Share capital 15 31,453,510 31,453,510
Fair value reserve 16 46,848,119 29,393,774
Retained losses 16 (10,869,100) (8,288,863)
Total equity 67,432,529 52,558,421
----------------------------- ------ ------------------------ ---------- ------------------------
Statement of Cash Flows
For the For the year
year ended 31/12/2016
ended
31/12/2017
USD USD
Notes
Operating activities
Operating (loss) gain (2,582,678) 1,759,536
----------------------------------------------- ----- ------------ -----------------
Adjustments for non-cash items:
Profit on disposal of available-for-sale
assets 3 (2,021,817) (5,178,466)
Impairment of available-for-sale
assets and accrued interest 3 3,013,975 1,559,828
Amortized costs of convertible
notes receivable 3 2,638 4,900
(1, 587,882) (1,854,202)
----------------------------------------------- ----- ------------ -----------------
Changes in working capital:
Decrease/(Increase) in trade
and other receivables 11 54,753 (67,693)
(Decrease)/Increase in trade
and other payables 13 (414,010) 672,689
Net cash used by operating activities (1,947,139) (1,249,206)
----------------------------------------------- ----- ------------ -----------------
Investing activities
Interest received 7 2,651 3,791
Purchase of available-for-sale
assets 10 (350,000) (2,252,995)
Proceeds from sale of available-for-sale
assets 10 2,223,082 6,170,215
----------------------------------------------- ----- ------------ -----------------
Net cash generated by investing
activities 1,975,561 3,921,011
----------------------------------------------- ----- ------------ -----------------
Financing activities
Dividends paid 16 - (2,774,496) Net cash used by financing activities - (2,774,496) ----------------------------------------------- ----- ------------ ----------------- Decrease in cash and cash equivalents (71,406) (102,691) ----------------------------------------------- ----- ------------ ----------------- Cash and cash equivalents at the beginning of the year 1,057,098 1,159,789 ----------------------------------------------- ----- ------------ ----------------- Cash and cash equivalents at the end of the year 12 985,692 1,057,098 ----------------------------------------------- ----- ------------ -----------------
Statement of Changes in Equity
For the year ended 31 December 2016 and for year ended 31 December 2017, USD
Share capital Share-based Fair value Retained losses Total
payment reserve reserve
Notes USD USD USD USD USD
Balance at 31
December 2015 31,453,510 165,454 28,614,592 (7,247,998) 52,985,558
------------------ ------ -------------- ----------------- ----------------- ---------------- --------------
Total
comprehensive
income/(loss)
for the year - - 584,032 1,763,327 2,347,359
Dividends paid 16 - - - (2,774,496) (2,774,496)
Lapse of share
options 16 - (165,454) - 165,454 -
Previous year
adjustments - - 195,150 (195,150) -
------------------ ------ -------------- ----------------- ----------------- ---------------- --------------
Balance at 31
December 2016 31,453,510 - 29,393,774 (8,288,863) 52,558,421
------------------ ------ -------------- ----------------- ----------------- ---------------- --------------
Total
comprehensive
income/(loss)
for the year - - 17,454,345 (2,580,237) 14,874,108
Balance at 31
December 2017 31,453,510 - 46,848,119 (10,869,100) 67,432,529
------------------ ------ -------------- ----------------- ----------------- ---------------- --------------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARED 31 DECEMBER 2017
1. Company information
TMT Investments Plc ("TMT" or the "Company") is a company incorporated in Jersey with its registered office at Queensway House, Hilgrove Street, St Helier, JE1 1ES, Channel Islands.
The Company was incorporated and registered on 30 September 2010 in Jersey under the Companies (Jersey) Law 1991 with registration number 106628 under the name TMT Investments Limited. The Company obtained consent from the Jersey Financial Services Commission pursuant to the Control of Borrowing (Jersey) Order 1985 on 30 September 2010. On 1 December 2010 the Company re-registered as a public company and changed its name to TMT Investments PLC.
The memorandum and articles of association of the Company do not restrict its activities and therefore it has unlimited legal capacity. The Company's ability to implement its Investment Policy and achieve its desired returns will be limited by its ability to identify and acquire suitable investments. Suitable investment opportunities may not always be readily available.
The Company will seek to make investments in any region of the world.
Financial statements of the Company are prepared by and approved by the Directors in accordance with International Financial Reporting Standards, International Accounting Standards and their interpretations issued or adopted by the International Accounting Standards Board as adopted by the European Union ("IFRSs"). The Company's accounting reference date is 31 December.
2. Summary of significant accounting policies 2.1 Basis of presentation
The principal accounting policies applied by the Company in the preparation of these financial statements are set out below and have been applied consistently.
The financial statements have been prepared on a going concern basis, under the historical cost basis as modified by the fair value of available-for-sale financial assets, as explained in the accounting policies below, and in accordance with IFRS. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
2.2 Going concern
The company does not have a steady income stream. In order to ensure that the company has sufficient working capital resources available, the company is required to raise funds through placing new shares on the AIM market, raising long-term debt capital, and/or selling its investments, from time to time. The Directors have a reasonable expectation that the Company will have adequate cash resources to continue in operational existence for the foreseeable future, and for at least one year from the date of approval of these financial statements.
2.3 Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker who is responsible for allocating resources and assessing performance of the operating segments and which has been identified as the Board of Directors that make strategic decisions. For the purposes of IFRS 8 'Operating Segments' the Company currently has one segment, being 'Investing in the TMT sector'.
Even though the Company only has one segment, there are still geographical disclosures that need to be made to comply with IFRS 8 'Operating Segments'.
The Company analyses revenue and non-current financial assets according to the geographical location of the investment (see note 4).
2.4 Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of the Company are measured in United States Dollars ('US dollars', 'USD' or 'US$'), which is the Company's functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into US$ using the exchange rates prevailing at the dates of the transactions. Exchange differences arising from the translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
Conversation rates, USD
-----------------------------------------------
Currency Average
rate,
At 31.12.2017 2017
----------------- -------------- --------
British pounds,
GBP 1.3441 1.2823
Euro, EUR 1.1942 1.1205
--------------------- -------------- --------
2.5 Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and in hand, deposits held at call with banks, bank overdrafts and other short-term highly liquid investments with maturities of three months or less from the date of acquisition.
2.6 Financial assets
Recognition and measurement
Investments are recognized and de-recognized on a date where the purchase or sale of an investment is under a contract whose terms require the delivery or settlement of the investment. The Company manages its investments with a view to profiting from the receipt of dividends and changes in fair value of equity investments.
"Available-for-sale" financial instruments include unlisted equity investments and convertible promissory loan notes. Equity instruments classified as available-for-sale are those which are neither classified as held-for-trading nor designated as fair value through profit or loss. Convertible promissory loan notes are treated as similar in nature to the unlisted equity investments and designated as available-for-sale.
Available-for-sale investments are carried at fair values except for financial assets that do not have a quoted market price in an active market and whose fair value cannot be reliably measured which are measured at cost less any identified impairment losses at the end of the period in accordance with the IAS 39 para 46 (c) exemptions. Fair value information has therefore not been disclosed for those investments.
Where there has been a relevant transaction during the year that gives an indication of the fair value of the available-for-sale unlisted shares, the shares are included at that fair value and the increase or decrease in fair value is recognised in the investment fair value reserve. The "price of recent investment" methodology is used mainly for investments in venture capital companies and includes cost of investment or valuation by reference to a subsequent financing round. Valuation increases above cost are only recognised if that round involved a new external investor and the company is meeting milestones set by investors.
Investments are classified on recognition as "fair value through profit and loss" when their fair values can be estimated reliably on a regular basis and when they are managed on a fair value basis. Fair value changes of investments at fair value through profit and loss are included within profit/loss in the income statement. At 31 December 2017 all investments are classified as "available-for-sale" and none are classified as "fair value through profit and loss".
Financial assets that qualify as an associate as 20% or more of the voting rights are held by the company, are exempt from IAS 28 'Investments in Associates', as TMT Investments plc is a venture capital organisation. Such investments are therefore treated as available-for-sale financial assets.
Income
Interest income from convertible notes receivable is recognized as it accrues by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash flows through the expected life of the financial asset to the asset's carrying value.
Impairment of available-for-sale financial assets
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. In the case of available for sale assets, a significant or prolonged decline in the fair value of the financial asset below its cost is considered an indicator that the financial assets are impaired.
If objective evidence indicates that financial assets that are carried at cost need to be tested for impairment, calculations are based on information derived from business plans and other information available for estimating their fair value. Any impairment loss is included in profit/loss for the year in the Statement of Comprehensive Income.
2.7 Net finance income
Net finance income comprises interest income on deposits. Interest income is recognized as it accrues in the statement of comprehensive income, using the effective interest method. Finance costs comprise interest expenses on borrowings and the unwinding of the discount on provisions.
2.8 Taxation
Deferred tax is provided in full using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred tax is determined using tax rates that are expected to apply when the related deferred tax asset is realised or when the deferred tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.
2.9 Equity instruments
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares are shown in equity as a deduction from the proceeds.
2.10 Share-based payments
The fair value of options granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the options. The amount recognized as an expense is adjusted to reflect the actual number of share options that vest. For equity settled share-based payment transactions other than transactions with employees the Company measures the goods or services received at their fair value, unless that fair value cannot be estimated reliably. If this is the case the Company measures their fair values and the corresponding increase in equity, indirectly, by reference to the fair value of equity instruments granted.
The Company enters into arrangements that are equity-settled share-based payments with certain employees. These are measured at fair value at the date of grant, which is then recognized in the statement of comprehensive income on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest. Fair value is measured by use of an appropriate model. In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of the shares of TMT Investments. The charge is adjusted at each year end date to reflect the actual number of forfeitures, cancellations and leavers during the period. The movement in cumulative charges since the previous year end is recognized in the statement of comprehensive income, with a corresponding entry in equity.
2.11 New IFRSs and interpretations not applied
The IASB has issued the following standards and interpretations which have been endorsed by the European Union to be applied to financial statements with periods commencing on or after the following dates:
Effective for period
beginning on or after
IFRS 9 Financial Instruments 1 January 2018
======= ===================================== ======================
IFRS 15 Revenue from Contracts with Customers 1 January 2018
======= ===================================== ======================
IFRS 16 Leases 1 January 2019
======= ===================================== ======================
The adoption of IFRS 9 may require certain changes to the presentation of the Company's financial instruments.
The Directors do not anticipate that the adoption of other standards and interpretations will have a material impact on the financial statements in the period of initial application and have decided not to adopt any of them early.
2.12 Accounting estimates and judgements
Estimates and judgements need to be regularly evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, rarely equal the related actual results.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates significant to the financial statements during the year and at the year-end is the consideration of the fair value of available-for-sale assets, the impairment of available-for-sale assets and share-based payment calculations, as set out in the relevant accounting policies shown above. A number of the available-for-sale financial assets held by the Company are at an early stage of their development. The Company cannot yet carry out regular reliable fair value estimates of some of these investments. Future events or transactions involving the companies invested in may result in more accurate valuations of their fair values (either upwards or downwards) which may affect the Company's overall net asset value.
3 (Losses) Gains on investments
For the year ended 31/12/2016 For the year ended 31/12/2016
USD USD
Gross interest income from convertible notes
receivable 49,907 48,599
Amortized costs of convertible notes receivable (2,638) (4,900)
Net interest income from convertible notes
receivable 47,269 43,699
Profit on disposal of equity investments 2,021,817 5,178,466
Impairment of available-for-sale assets (3,013,975) (1,559,828)
Total net (losses) gains on investments (944,889) 3,662,337
---------------------------------------------------- ------------------------------ ------------------------------
4 Segmental analysis
Geographic information
The Company has investments in six principal geographical areas - USA, Israel, BVI, Cyprus, Estonia and Russia.
Non-current financial assets
As at 31/12/2016
USA Israel BVI Cyprus Estonia Russia Total
USD USD USD USD USD USD USD
-------------------- ----------- ---------- -------- -------- -------- ------- -----------
Equity investments 44,481,925 2,644,411 305,050 465,921 379,473 59,096 48,335,876
Convertible
notes 3,650,596 - - - - - 3,650,596
-------------------- ----------- ---------- -------- -------- -------- ------- -----------
Total 48,132,521 2,644,411 305,050 465,921 379,473 59,096 51,986,472
-------------------- ----------- ---------- -------- -------- -------- ------- -----------
As at 31/12/2017
USA Israel BVI Cyprus Estonia Russia Total
USD USD USD USD USD USD USD
-------------------- ----------- ---------- -------- ------- ---------- ------- -----------
Equity investments 50,734,468 2,351,598 127,525 - 3,847,749 59,096 57,120,436
Convertible
notes 9,452,503 - - - - - 9,452,503
-------------------- ----------- ---------- -------- ------- ---------- ------- -----------
Total 60,186,971 2,351,598 127,525 - 3,847,749 59,096 66,572,939
-------------------- ----------- ---------- -------- ------- ---------- ------- -----------
5 Administrative expenses
Administrative expenses include the following amounts:
For the year ended 31/12/2017 For the year ended 31/12/2016
USD USD
-------------------------------- ------------------------------ ------------------------------
Staff expenses (note 6) 583,127 583,101
Professional fees 221,717 218,889
Legal fees 5,073 34,095
Bank and LSE charges 14,112 20,312
Audit and accounting fees 43,673 43,843
Rent 70,947 7,000
Other expenses 113,978 121,380
Currency exchange(income)/loss (12,670) 36,822
-------------------------------- ------------------------------ ------------------------------
1,039,957 1,065,442
-------------------------------- ------------------------------ ------------------------------
6 Staff expenses
For the year ended 31/12/2017 For the year ended 31/12/2016
USD USD
-------------------- ------------------------------ ------------------------------
Directors' fees 186,647 186,621
Wages and salaries 396,480 396,480
583,127 583,101
-------------------- ------------------------------ ------------------------------
Wages and salaries shown above include salaries relating to 2017. These costs are included in administrative expenses.
The bonus scheme payment charge for the year is analysed as follows:
For the year ended 31/12/2017 For the year ended 31/12/2016
USD USD
------------- ------------------------------ ------------------------------
Directors 167,780 230,274
Other staff 442,327 573,591
610,107 803,865
------------- ------------------------------ ------------------------------
The average number of staff employed (i.e. excluding Directors) by the Company during the year was 5 (2016: 5).
The Directors' fees and bonuses for 2017 were as follows:
For the year ended 31/12/2017 For the year ended 31/12/2016
USD USD
---------------------- ------------------------------ ------------------------------
Alexander Selegenev 219,704 262,970
Yuri Mostovoy 98,809 116,989
James Joseph Mullins 25,914 26,936
Petr Lanin 10,000 10,000
---------------------- ------------------------------ ------------------------------
354,427 416,895
---------------------- ------------------------------ ------------------------------
The Directors' fees and bonuses shown above are all classified as 'short term employment benefits' under International Accounting Standard 24. The Directors do not receive any pension contributions or other benefits.
Key management personnel of the Company are defined as those persons having authority and responsibility for the planning, directing and controlling the activities of the Company, directly or indirectly. Key management of the Company are therefore considered to be the Directors of the Company. There were no transactions with the key management, other than their Directors fees, bonuses and reimbursement of business expenses.
7 Net finance income
For the year ended 31/12/2017 For the year ended 31/12/2016
USD USD
----------------- ------------------------------ ------------------------------
Interest income 2,441 3,791
2,441 3,791
----------------- ------------------------------ ------------------------------
8 Income tax expense
For the year ended 31/12/2017 For the year ended 31/12/2016
USD USD
---------------------- ------------------------------ ------------------------------
Current taxes
Current year - -
---------------------- ------------------------------ ------------------------------
Deferred taxes
Deferred income taxes - -
---------------------- ------------------------------ ------------------------------
- -
---------------------- ------------------------------ ------------------------------
The Company is incorporated in Jersey. No tax reconciliation note has been presented as the income tax rate for Jersey companies is 0%.
9 (Loss) Gain per share
The calculation of basic gain per share is based upon the net loss for the year ended 31 December 2017 attributable to the ordinary shareholders of US$2,580,237 (2016: net gain of US$1,763,327) and the weighted average number of ordinary shares outstanding calculated as follows:
(Loss) Gain per share For the year ended 31/12/2017 For the year ended 31/12/2016 ---------------------------------------------------- ------------------------------ ------------------------------ Basic (loss) gain per share (cents per share) (9.30) 6.36 (Loss) Gain attributable to equity holders of the entity (2,580,237) 1,763,327 ---------------------------------------------------- ------------------------------ ------------------------------
The weighted average number of ordinary shares outstanding before and after adjustment for the effects of all dilutive potential ordinary shares calculated as follows:
(in number of shares weighted during the year For the year ended 31/12/2017 For the year ended 31/12/2016
outstanding)
---------------------------------------------------- ------------------------------ ------------------------------
Weighted average number of shares in issue
Ordinary shares 27,744,962 27,744,962
27,744,962 27,744,962
---------------------------------------------------- ------------------------------ ------------------------------
Effect of dilutive potential ordinary shares
Share options - -
---------------------------------------------------- ------------------------------ ------------------------------
Weighted average of shares for the year (fully
diluted) 27,744,962 27,744,962
---------------------------------------------------- ------------------------------ ------------------------------
10 Non-current financial assets
At 31 December 2017 At 31 December 2016
Available-for-sale financial assets, USD:
Investments in equity shares (i)
- unlisted shares 57,120,436 48,335,876
Convertible notes receivable (ii)
- promissory notes 9,452,503 3,650,596
------------------------------------------- -------------------- --------------------
66,572,939 51,986,472
------------------------------------------- -------------------- --------------------
Reconciliation of fair value measurements of non-current financial assets:
Available-for-sale Total
----------------------------------------------- -------------------------- ------------
Unlisted Convertible
shares notes
USD USD USD
----------------------------------------------- ------------ ------------ ------------
Balance as at 31 December 2015 49,483,857 2,202,649 51,686,506
------------------------------------------------ ------------ ------------ ------------
Total gains or losses in 2016:
- in profit or loss 3,838,207 (219,568) 3,618,639
- in other comprehensive income 584,032 - 584,032
Purchases (including consulting & legal fees) 599,995 1,653,000 2,252,995
Disposal of investment (carrying value) (6,170,215) (4,900) (6,175,115)
Conversion and other movements - 19,415 19,415
------------------------------------------------ ------------ ------------ ------------
Balance as at 31 December 2016 48,335,876 3,650,596 51,986,472
------------------------------------------------ ------------ ------------ ------------
Total gains or losses in 2017:
- in profit or loss (893,131) - (893,131)
- in other comprehensive income 11,349,800 6,104,545 17,454,345
Purchases (including consulting & legal fees) 50,000 300,000 350,000
Disposal of investment (carrying value) (1,823,120) (502,638) (2,325,758)
Conversion and other movements 101,011 (100,000) 1,011
------------------------------------------------ ------------ ------------ ------------
Balance as at 31 December 2017 57,120,436 9,452,503 66,572,939
------------------------------------------------ ------------ ------------ ------------
Available-for-sale investments are carried at fair values. Where financial assets do not have a quoted market price in an active market and their fair values cannot be reliably measured they are measured at cost less any identified impairment losses at the end of reporting period, in accordance with IAS 39 para 46 (c) exemption.
Where there has been a relevant transaction during the year that gives an indication of the fair value of the unlisted shares, the shares are included at that fair value and the increase or decrease in fair value is recognised in the fair value reserve. The "price of recent investment" methodology is used mainly for investments in venture capital companies and includes cost of investment or valuation by reference to a subsequent financing round. Valuation increases above cost are only recognised if that round involved a new external investor and the company is meeting milestones set by investors.
(i) Equity investments as at 31 December 2017:
Investee Date Value Additions Gain/loss Profit/ Disposals, Value Equity
company of at to from Impairment USD at 31 stake
initial 1 Jan equity Conversions changes charge, Dec owned
investment 2017, investments from in USD 2017,
USD during loan fair USD
the notes, value
period, USD of
USD equity
investments,
USD
--------------- ------------ ----------- ------------ ------------- ------------- ----------- ------------ ------------ -------
Unicell 15.09.2011 1,455,088 - - - - - 1,455,088 10.00%
DepositPhotos 26.07.2011 10,836,105 - - - - - 10,836,105 16.67%
RollApp 19.08.2011 600,000 - - - - - 600,000 10.00%
Wanelo 21.11.2011 5,369,400 - - - - - 5,369,400 4.69%
ThusFresh 26.03.2012 379,355 - - 130,645 (510,000) - - -
Backblaze 24.07.2012 9,624,277 - - 909,057 - - 10,533,334 14.55%
UM Liquidating
Trust 15.07.2014 29,273 - - - - - 29,273 5.89%
Gentoo
LABS 15.05.2014 260,000 - 101,111 - (116,605) (244,506) - -
Favim 24.10.2012 305,050 - - - (127,525) (50,000) 127,525 20.00%
AppsIndep 12.11.2012 465,921 - - - (465,921) - - 19.24%
Virool 29.08.2012 1,813,851 - - (1,405,600) (408,251) - -
Adinch 19.02.2013 600,000 - - - (300,000) - 300,000 22.43%
Tracks 24.11.2011 73,115 - - - - (73,115) - -
Wrike 12.06.2012 4,303,578 - - 4,186,554 705,377 (800,001) 8,395,508 3.36%
Oriense 27.01.2014 59,096 - - - - - 59,096 5.45%
E2C 15.02.2014 136,781 - - - - - 136,781 5.51%
Drippler 01.05.2014 302,400 - - (87,813) (205,000) - 9,587
Remot3.it 13.06.2014 255,000 - - 495,000 - - 750,000 2.00%
Le Tote 21.07.2014 1,068,878 - - 928,195 - - 1,997,073 1.32%
Anews 25.08.2014 1,000,000 - - - - - 1,000,000 9.41%
Twtrland 01.09.2014 155,000 - - - - - 155,000 3.27%
Drupe 02.09.2014 595,142 - - - - - 595,142 7.46%
Taxify 15.09.2014 328,958 - - 3,468,276 - - 3,797,234 2.01%
Pipedrive 30.07.2012 7,175,590 - - 1,985,224 866,439 (900,004) 9,127,249 3.65%
PandaDoc 11.07.2014 493,508 - - 740,262 - - 1,233,770 1.79%
VitalFields 20.12.2013 50,515 - - - - - 50,515
APPrise 16.08.2016 300,000 - - - - - 300,000 4.04%
Try the
World 11.10.2016 299,995 50,000 - - (331,745) - 18,250 0.81%
FullContact 11.01.2018 - 244,506 - - - - 244,506 0.21%
Total 48,335,876 294,506 101,111 11,349,800 (893,231) (2,067,626) 57,120,436
----------------------------- ----------- ------------ ------------- ------------- ----------- ------------ ------------
(ii) Convertible loan notes as at 31 December 2017:
Investee Date of Value at Additions Amortized Internal Gain/loss Profit on Disposals, Value at Term, Interest
company initial 1 Jan to costs, movements, from changes disposal/ USD 31 Dec years rate, %
investment 2017, convertible USD USD in fair Impairment 2017, USD
USD note value of charge,
investments SAFE USD
during the investments,
period, USD USD
----------- ------------ ---------- ------------ ---------- ----------- ------------- ----------- ----------- ---------- ------ ---------
Ninua 08/06/2011 500,000 - - - - (250,000) - 250,000 1.5 5.00%
Sharethis 26/03/2013 570,526 - (400) - - - - 570,126 5.0 1.09%
KitApps 10/07/2013 600,000 - - - - 600,000 1.0 2.00%
Gentoo
LABS 21/05/2014 100,000 - - (100,000) - - - - - -
ScentBird 13.04.2015 900,726 - (726) - 6,104,545 450,000 (500,000) 6,954,545 2.0 4.00%
Remot3.it 05.10.2015 27,277 - - - - - - 27,277 1.0 7.70%
Send a Job 16.05.2016 152,067 - (1,512) - - - - 150,555 2.0 4.00%
Vinebox 06.05.2016 300,000 - - - - - - 300,000 - -
Sixa 28.07.2016 300,000 300,000 - - - - - 600,000 - -
Virool 16.08.2016 200,000 - - - - (200,000) - - - -
------------ ----------
Total 3,650,596 300,000 (2,638) (100,000) 6,104,545 - (500,000) 9,452,503
------------------------- ---------- ------------ ---------- ----------- ------------- ----------- ----------- ---------- ------ ---------
11 Trade and other receivables
At 31 December 2017 At 31 December 2016
USD USD
----------------------------------------- -------------------- --------------------
Prepayments 14,647 19,269
Interest receivable on promissory notes 142,217 192,348
Interest receivable on deposits 90 300
Loans to portfolio companies 15,000 15,000
171,954 226,917
----------------------------------------- -------------------- --------------------
12 Cash and cash equivalents
The cash and cash equivalents as at 31 December 2017 include cash on hand and in banks, deposits, net of outstanding bank overdrafts. The effective interest rate at 31 December 2017 was 0.7%.
Cash and cash equivalents comprise the following:
At 31 December 2017 At 31 December 2016
USD USD
--------------- -------------------- --------------------
Deposits 150,000 500,000
Bank balances 835,692 557,098
--------------- -------------------- --------------------
985,692 1,057,098
--------------- -------------------- --------------------
The following table represents an analysis of cash and equivalents by rating agency designation based on Fitch rating or their equivalent:
At 31 December 2017 At 31 December 2016
USD USD
--------------- -------------------- --------------------
Bank balances
BBB+ rating 835,692 557,098
--------------- -------------------- --------------------
835,692 557,098
--------------- -------------------- --------------------
Deposits
BBB rating 150,000 500,000
--------------- -------------------- --------------------
150,000 500,000
--------------- -------------------- --------------------
985,692 1,057,098
--------------- -------------------- --------------------
13 Trade and other payables
At 31 December 2017 At 31 December 2016
USD USD
--------------------------- -------------------- --------------------
Directors' fees payable 10,600 33,825
Trade payables 43,995 16,275
Other current liabilities - 914
Accrued expenses 93,461 21,197
--------------------------- -------------------- --------------------
148,056 72,211
--------------------------- -------------------- --------------------
14 Other payables
At 31 December 2017 At 31 December 2016
USD USD
------------------------------- -------------------- --------------------
Other non-current liabilities 150,000 639,855
150,000 639,855
------------------------------- -------------------- --------------------
Other non-current liabilities outstanding at 31 December 2016 have been paid in the year.
15 Share capital
On 31 December 2017 the Company had an authorised share capital of unlimited shares of no par value and had issued share capital of:
At 31 December 2017 At 31 December 2016
USD USD
----------------------------- -------------------- --------------------
Share capital 31,453,510 31,453,510
Issued capital comprises: Number Number
Fully paid ordinary shares 27,744,962 27,744,962
----------------------------- -------------------- --------------------
Number of shares Share capital,
USD
----------------------------- -------------------- ----------------------
Balance at 31 December 2016 27,744,962 27,744,962
Balance at 31 December 2017 27,744,962 27,744,962
----------------------------- -------------------- ----------------------
There have been no changes to the Company's share capital between the year-end date and the date of approval of these financial statements.
16 Reserves
Share-based payment Fair value reserve Retained gain/ (losses) Total
reserve USD USD USD
USD
---------------------------- --------------------------- ------------------- ------------------------ ------------
Balance as at 31 December
2015 165,454 28,614,592 (7,247,998) 21,532,048
----------------------------
Gain for the year - - 1,763,327 1,763,327
Gain from changes in fair
value - 584,032 - 584,032
Dividends paid - - (2,774,496) (2,774,496)
Transfer on exercise of
share options (165,454) - 165,454 -
Previous year adjustments - 195,150 (195,150) -
---------------------------- --------------------------- ------------------- ------------------------ ------------
Balance as at 31 December
2016 - 29,393,774 (8,288,863) 21,104,911
---------------------------- --------------------------- ------------------- ------------------------ ------------
Loss for the year - - (2,580,237) (2,580,237)
Gain from changes in fair
value - 17,454,345 - 17,454,345
Balance as at 31 December
2017 - 46,848,119 (10,869,100) 35,979,019
---------------------------- --------------------------- ------------------- ------------------------ ------------
17 Capital management
The capital structure of the Company consists of equity share capital, fair value reserves, and retained losses.
The Board's policy is to maintain a strong capital base so as to maintain investor and market confidence and to enable the successful future development of the business.
The Company is not subject to externally imposed capital requirements.
No changes were made to the objectives, policies and process for managing capital during the year.
18 Financial risk management and financial instruments
The Company has identified the following risks arising from its activities and has established policies and procedures to manage these risks. The Company's principal financial assets are cash and cash equivalents, investments in equity shares, and convertible notes receivable.
Credit risk
As at 31 December 2017 the largest exposure to credit risk related to cash and cash equivalents, which was US$985,692. The exposure risk is reduced because the counterparties are banks with high credit ratings ("A" Liquidity banks) assigned by international credit rating agencies. The Directors intend to continue to spread the risk by holding the Company's cash reserves in more than one financial institution.
(i) Exposure to credit risk
The carrying amount of the following assets represents the maximum credit exposure. The maximum exposure to credit risk as at 31 December is as follows:
At 31 December 2017 At 31 December 2016
USD USD
------------------------------ -------------------- --------------------
Convertible notes receivable 9,452,503 3,650,596
Trade and other receivables 171,954 226,917
Cash and cash equivalents 985,692 1,057,098
------------------------------ -------------------- --------------------
10,610,149 4,934,611
------------------------------ -------------------- --------------------
Market risk
The Company's financial assets are classified as available-for-sale and are measured at fair value. The measurement of the Company's investments in equity shares and convertible notes is largely dependent on the underlying trading performance of the investee companies, but the valuation and other items in the financial statements can also be affected by the interest rate and fluctuations in the exchange rate.
Interest rate risk
Changes in interest rates impact primarily cash and cash equivalents by changing either their fair value (fixed rate deposits) or their future cash flows (variable rate deposits). Management does not have a formal policy of determining how much of the Company's exposure should be to fixed or variable rates.
At 31 December 2017 the Company had a cash deposit of US$ 150,000, earning a variable rate of interest. The Board of Directors monitors the interest rates available in the market to ensure that returns are maximized.
Foreign currency risk management
The Company is exposed to foreign currency risks on investments and salary and director remuneration payments that are denominated in a currency other than the functional currency of the Company. The currency giving rise to this risk is primarily GBP, EUR. The exposure to foreign currency risk as at 31 December 2017 was as follows:
For the For the For the For the
year ended year ended year ended year ended
31/12/2017 31/12/2017 31/12/2016 31/12/2016
GBP EUR GBP EUR
Current assets
Cash and cash equivalents 27,726 1,200 77,932 163,983
Current liabilities
Trade and other
payables (25,389) - (35,155) -
------------------------------ ------------ ------------ ------------ ------------
Net long position 2,336 1,200 42,778 163,983
------------------------------ ------------ ------------ ------------ ------------
Net exposure currency 1,738 1,005 34,813 155,062
------------------------------ ------------ ------------ ------------ ------------
Net exposure currency
(assuming a 10%
movement in exchange
rates) 2,103 1,080 38,500 147,585
------------------------------ ------------ ------------ ------------ ------------
Impact on exchange
movements in the
statement of comprehensive
income 234 120 4,277 16,398
------------------------------ ------------ ------------ ------------ ------------
The foreign exchange rates of the USD at 31 December were as follows:
31/12/2017 31/12/2016
----------------------- ----------- -----------
Currency
British pounds, GBP 1.3441 1.2288
Euro, EUR 1.1942 1.0575
----------------------- ----------- -----------
This analysis assumes that all other variables, in particular interest rates, remain constant.
Liquidity risk management
The Company's approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company.
The Company has low liquidity risk due to maintaining adequate banking facilities, by continuously monitoring actual cash flows and by matching the maturity profiles of financial assets and current liabilities.
As at 31 December 2017, the cash and equivalents of the Company were US$985,692.
The following are the maturities of liabilities as at 31 December 2017:
Carrying amount Within one year 2-5 years More than 5 years
USD USD USD USD
--------------------------- ---------------- ---------------- ---------- ------------------
Directors' fees payable 10,600 10,600 - -
Trade payables 43,995 43,995 - -
Other current liabilities 93,461 93,461 - -
Long-term liabilities 150,000 - 150,000 -
--------------------------- ---------------- ---------------- ---------- ------------------
298,056 148,056 150,000 -
--------------------------- ---------------- ---------------- ---------- ------------------
19 Financial commitments
The total minimum future payments under operating leases are as follows:
At 31 December 2017 At 31 December 2016
USD USD
-------------------------------- -------------------- --------------------
Within one year 94,596 -
Between one year and five years 94,596 -
189,192 -
-------------------------------- -------------------- --------------------
20 Related party transactions
Since May 2012, TMT's Moscow-based staff have been located in an office that belongs to a company ("Orgtekhnika") controlled by Mr. Alexander Morgulchik and Mr. German Kaplun, the Company's senior managers and applicable employees. German Kaplun also owns 19.28% of the issued share capital of TMT. Thus Orgtekhnika is considered a related party. Together with other related expenses (support personnel, company car, security and legal services, etc.), the total office rent costs to TMT from 1 April 2017 were US$7,883 per month.
21 Subsequent events
TMT's founders and senior managers German Kaplan, Artyom Inyutin and Alexander Morgulchik agreed to defer half of their respective 2018 salaries (a total of $150,000) until 31 December 2020.
In February 2018, the Company invested US$300,000 in the pre sale of tokens by Telegram, Inc.
22 Control
The Company is not controlled by any one party. Details of significant shareholders are shown in the Directors' Report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GGUMCWUPRURA
(END) Dow Jones Newswires
March 15, 2018 05:00 ET (09:00 GMT)
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