TIDMTMT
RNS Number : 7600K
TMT Investments PLC
21 April 2015
21 April 2015
TMT INVESTMENTS PLC
("TMT" or the "Company")
Final results for the year ended 31 December 2014
TMT Investments PLC, which invests in high-growth,
internet-based companies across a variety of sectors, is pleased to
announce its final results for the year ended 31 December 2014.
-- US$1.36 NAV per share (up from US$1.30 as of 31 December 2013)
-- TMT has now invested in just under 40 companies since its floatation in December 2010
-- Diversified portfolio of investees focused around mobile
software applications, cloud solutions, advertising technologies,
social discovery shopping, and business SaaS tools
-- Successful capital raise of US$2.65 million at US$1.85 per share
-- US$3.37 million invested in eleven new companies
-- Additional US$0.95 million invested in four existing portfolio companies
-- A number of significant positive portfolio revaluations expected in 2015
Alexander Selegenev, Executive Director of TMT, commented:
"2014 was our fourth full year as a publicly traded company.
During the year, we reviewed dozens of opportunities and invested
US$3.37 million in eleven new companies. Our current portfolio
includes 32 investees, providing a good level of
diversification.
In 2014, the portfolio had one profitable cash exit (The
One-Page Company, Inc.), two positive non-cash revaluations (Gild,
Inc. and Backblaze, Inc.), one impairment (Graphicly, Inc.) and one
negative non-cash revaluation (UsingMiles, Inc.).
Although 2014 turned out relatively uneventful for TMT in terms
of number of exits and revaluations, a significant number of our
portfolio companies have experienced rapid growth. In addition, a
number of our investees are currently in the process of completing
follow-on capital raises at notably higher valuation levels, so we
expect a number of positive revaluations of our portfolio holdings
in 2015. At the same time, given the risky nature of earlier-stage
venture capital investments, we expect some negative revaluations
in due course as well.
We continue to see exciting investment opportunities in our
sector and look forward to updating our shareholders on the
Company's progress in the near future."
The Annual Report and Accounts for the year ended 31 December
2014 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
Mr. Alexander Selegenev alexander.selegenev@tmtinvestments.com
www.tmtinvestments.com
ZAI Corporate Finance
Ltd.
NOMAD and Broker
Richard Morrison/Irina
Lomova +44 20 7060 2220
Kinlan Communications Tel. +44 20 7638 3435
David Hothersall davidh@kinlan.net
EXECUTIVE DIRECTOR'S STATEMENT
2014 has been a relatively quiet year for the Company, with only
a limited number of revaluations across our portfolio. As a result,
our NAV per share as of 31 December 2014 increased only slightly to
US$1.36 (from US$1.30 as of 31 December 2013). TMT has now invested
in just under 40 companies since its floatation in December 2010
and has a diversified portfolio of investees focused around mobile
software applications, cloud solutions, advertising technologies,
social discovery shopping and business SaaS tools.
Portfolio Performance
Similarly to previous years, the biggest "reporting challenge"
faced by the Company in 2014 was due to the fact that the majority
of our investments are made in earlier-stage, privately held
companies, which do not have a sufficiently long history of
earnings. This means that, regardless of how impressively (or
otherwise) some of our portfolio companies may have grown in terms
of revenue and operating metrics, changes in fair value of our
portfolio companies cannot be justified under the IFRS rules unless
there has been an independent equity financing round or other
measurable reliable evidence to support a change in the valuation.
We hope that the growing number of investee companies will increase
the chances of more regular revaluations across our portfolio in
the future.
In 2014, the following developments took place in the Company's
portfolio:
Cash and part-cash exits:
-- In August 2014, the Company sold its entire equity stake in
The One-Page Company, Inc. ("One-Page"). TMT's total consideration
received pursuant to the transaction was US$509,740, representing
an internal rate of return ("IRR") of 32%. TMT originally invested
US$250,000 in One-Page in February 2012.
Positive non-cash revaluations:
-- In May 2014, Gild, Inc. ("Gild"), a proprietary IT talent
sourcing and candidate relationship management platform, completed
a new equity financing round. The transaction represents an uplift
of approximately US$379,000 (or 223%) in the fair value of TMT's
investment in Gild, compared to the amount reported as of 31
December 2013.
-- Based on the results of an independent valuation report
commissioned by Backblaze, Inc. ("Backblaze"), the fair value of
TMT's equity stake in Backblaze has increased by approximately
US$1.19 million (or 24%), compared to the amount reported as of 31
December 2013.
Impairments and write-offs:
-- In May 2014, Graphicly, Inc. ("Graphicly"), an e-book
publishing and distribution platform, announced its decision to
wind up its operations. As a result, the fair value of TMT's
investment in Graphicly has reduced by approximately US$345,000 (or
70%), compared to the amount reported as of 31 December 2013.
Negative non-cash revaluations:
-- In October 2013, Universal Points Exchange, LLC, a wholly
owned subsidiary of Source, Inc. ("Source") and Help Worldwide,
Inc. ("HelpWW"), agreed to acquire the assets of UsingMiles Inc.
("UM") for shares. A UM liquidating trust ("Trust") has been
established for the purposes of the transaction. The transaction
closed on 31 December 2013, and TMT agreed to be included in the
Trust on 11 August 2014. The transaction represents a reduction of
approximately US$230,000 (or 89%) in the fair value of TMT's
investment in UM, compared to the amount reported as of 31 December
2013.
Key developments for the 10 largest portfolio holdings in 2014
(compared to 2013; source: TMT's portfolio companies)
Adinch (online advertising platform):
-- Joined the Plug and Play incubator program in the USA
-- Six new advertising platforms integrated
-- US$1.7m new equity raised
Anews (news reading app):
-- Monthly active users up 301%
-- Over 2m total app downloads
-- Reached top 3 in the "News" category in AppStore and Google Play
-- Monetization started in Q4 2014
-- US$2.7m new equity raised
AppsIndep (online games developer):
-- Revenues below expectations
-- Seeking additional capital
Backblaze (online data backup provider):
-- Revenues up 43%
-- Total number of licensed computers up 54%
Depositphotos (photobank):
-- Revenues up 42%
-- Total number of authors up 19%
-- Total number of files in the photobank up 50%
Pipedrive (sales CRM software):
-- Revenues up 115%
-- Total paying customers up 118%
rollApp (provider of access to 3rd party apps from any
browser):
-- Total applications available on the platform up 100%
-- Premium subscription plan launched
-- Several file storage services integrated
-- "Awesome File Opener" plugin for Chrome and Mozilla browsers released
Unicell (Provider of digital marketing solutions and mobile
applications and services):
-- Remained marginally profitable, but highly overleveraged
Wanelo (online social shopping platform):
-- Over 350,000 stores and 20 million products on the platform
-- Total subscribers up 27%
-- In-app purchases launched
Wrike (project management and collaboration software):
-- Revenues up 107%
-- Total number of paid accounts up 47%
New investments
In 2014 the Company invested US$3.37 million in eleven new
companies (technology developer for visually impaired people
PROvision/Oriense; smartphone solution provider for senior citizens
E2C; mobile tech discovery service Drippler; on-demand business
research platform Whale Path; "Internet of Everything" software
developer Weaved; business productivity SaaS provider PandaDoc;
fashion rental platform for women Le Tote; news reading app Anews;
social intelligence platform Twtrland; mobile interface app Drupe;
and taxi booking app Taxify), as well as an additional US$950,000
in four existing portfolio companies (Gentoo/Contacts+, rollApp,
KitApps/Attendify, and Adinch).
NAV per share
The Company's net asset value per share as of 31 December 2014
increased to US$1.36 (31 December 2013: US$1.30).
Operating Expenses
In 2014, the Company's Administrative Expenses of US$1,382,874
were generally in line with 2013 levels (US$1,293,538). Total
Operating Expenses decreased in the reporting period due to the
lower share-based option charge of US$166,282 (2013: US$576,207).
This is a non-cash item resulting from the Company's share option
program adopted in October 2012.
Financial position
In July 2014, TMT raised US$2.65 million at US$1.85 per share
from a number of new and existing investors. As of 31 December
2014, the Company had US$2.6 million in cash reserves. As of the
date of this report, the Company has no debt and approximately US$2
million in cash reserves.
Events after the reporting period
In February 2015, TMT's portfolio company Drippler, a mobile
tech discovery service, completed a new sizable equity financing
round. The transaction represents an uplift of approximately
US$97,000 (or 48%) in the fair value of TMT's investment in
Drippler, compared to the amount announced as of 30 June 2014.
In April 2015, the Company invested US$300,000 in fragrance
subscription service ScentBird.
Outlook
Although 2014 turned out relatively uneventful for TMT in terms
of number of exits or revaluations, a significant number of our
portfolio companies have experienced rapid growth. In addition, a
number of our investees are currently in the process of completing
follow-on capital raises at notably higher valuation levels, so we
expect a number of positive revaluations of our portfolio holdings
in 2015. At the same time, given the risky nature of earlier-stage
venture capital investments, we expect some negative revaluations
in due course as well.
We look forward to updating our shareholders on the Company's
progress in the near future.
Alexander Selegenev
Executive Director
Statement of Comprehensive Income
For the For the
year ended year ended
31/12/2014 31/12/2013
Notes USD USD
Losses on investments 3 (23,911) (29,593)
-------------------------------------------- ------ ------------ ------------
(23,911) (29,593)
Expenses
Share-based payment charge 15 (166,282) (576,207)
Administrative expenses 5 (1,382,874) (1,293,538)
-------------------------------------------- ------ ------------ ------------
Operating loss (1,573,067) (1,899,338)
Net finance income 7 11,079 50,035
-------------------------------------------- ------ ------------ ------------
Loss before taxation (1,561,988) (1,849,303)
Taxation 8 - -
-------------------------------------------- ------ ------------ ------------
Loss attributable to equity
shareholders (1,561,988) (1,849,303)
Other comprehensive income
for the year:
Change in fair value of available-for-sale
financial assets 16 2,171,251 5,932,139
-------------------------------------------- ------ ------------ ------------
Total comprehensive income
for the year 609,263 4,082,836
-------------------------------------------- ------ ------------ ------------
Loss per share
Basic and diluted loss per
share (cents per share) 9 (5.96) (7.42)
-------------------------------------------- ------ ------------ ------------
Statement of Financial Position
At 31 December At 31 December
2014 2013
USD USD
Notes
Non-current assets
Investments in equity
shares 10 31,854,151 26,932,335
Convertible loan notes
receivable 10 3,091,702 2,193,304
Total non-current assets 34,945,853 29,125,639
Current assets
Trade and other receivables 11 159,784 79,532
Cash and cash equivalents 12 2,639,070 3,242,269
Total current assets 2,798,854 3,321,801
Total assets 37,744,707 32,447,440
Current liabilities
Trade and other payables 13 59,399 96,008
Total liabilities 59,399 96,008
----------------------------- ------ ------------------------ ---------- ------------------------
Net assets 37,685,308 32,351,432
----------------------------- ------ ------------------------ ---------- ------------------------
Equity
Share capital 14 31,453,510 26,895,179
Share-based payment
reserve 16 392,659 695,970
Fair value reserve 16 10,108,618 7,937,367
Retained losses 16 (4,269,479) (3,177,084)
Total equity 37,685,308 32,351,432
----------------------------- ------ ------------------------ ---------- ------------------------
Statement of Cash Flows
For the year For the
ended year
31/12/2014 ended
31/12/2013
USD USD
Notes
Operating activities
Operating loss (1,573,067) (1,899,338)
----------------------------------------------- ----- ------------ -----------
Adjustments for non-cash items:
Profit on disposal of available-for-sale
assets 3 (355,010) (320,563)
Gain on conversion of loan notes
to equity (2,221) (92,841)
Impairment of available-for-sale
assets and accrued interest 3 451,482 458,863
Employee salaries settled by
issue of shares 14 300,000 300,000
Share-based payment charge 15 166,282 576,207
Amortized costs of convertible
notes receivable 3 14,036 28,263
(998,498) (949,409)
----------------------------------------------- ----- ------------ -----------
Changes in working capital:
(Increase)/decrease in trade
and other receivables 11 (80,252) 56,276
Decrease in trade and other
payables 13 (36,609) (18,307)
Net cash used by operating activities (1,115,359) (911,440)
----------------------------------------------- ----- ------------ -----------
Investing activities
Interest received 7 11,079 50,035
Purchase of available-for-sale
assets 10 (4,370,612) (5,412,720)
Proceeds from sale of available-for-sale
assets 613,362 1,339,909
----------------------------------------------- ----- ------------ -----------
Net cash used by investing activities (3,746,171) (4,022,776)
----------------------------------------------- ----- ------------ -----------
Financing activities
Cash proceeds from issue of shares 14 4,258,331 1,158,930
Purchase of own shares - (699,999)
----------------------------------------------- ----- ------------ -----------
Net cash from financing activities 4,258,331 458,931
----------------------------------------------- ----- ------------ -----------
Decrease in cash and cash equivalents (603,199) (4,475,285)
----------------------------------------------- ----- ------------ -----------
Cash and cash equivalents at the
beginning of the year 3,242,269 7,717,554
----------------------------------------------- ----- ------------ -----------
Cash and cash equivalents at the
end of the year 12 2,639,070 3,242,269
----------------------------------------------- ----- ------------ -----------
Statement of Changes in Equity
For the year ended 31 December 2014 and for year ended 31
December 2013, USD
Share capital Share-based Fair value Retained losses Total
payment reserve reserve
Notes USD USD USD USD USD
Balance at 1
January 2013 26,136,248 128,183 2,005,228 (1,336,201) 26,933,458
------------------- ------ -------------- ------------------ ------------------ ---------------- -----------
Total
comprehensive
income/(loss)
for the year - - 5,932,139 (1,849,303) 4,082,836
Issue of shares 14 1,458,930 - - - 1,458,930
Buy back and
cancellation of
shares (699,999) - - - (699,999)
Share-based
payment charge 15 - 576,207 - - 576,207
Lapse of share
options 15 - (8,420) - 8,420 -
Balance at 31
December 2013 26,895,179 695,970 7,937,367 (3,177,084) 32,351,432
------------------- ------ -------------- ------------------ ------------------ ---------------- -----------
Total
comprehensive
income/(loss)
for the year - - 2,171,251 (1,561,988) 609,263
Issue of shares 14 4,558,331 - - - 4,558,331
Share-based
payment charge 15 - 166,282 - - 166,282
Transfers on
exercise / lapse
of share options 15 - (469,593) - 469,593 -
------------------- ------ -------------- ------------------ ------------------ ---------------- -----------
Balance at 31
December 2014 31,453,510 392,659 10,108,618 (4,269,479) 37,685,308
------------------- ------ -------------- ------------------ ------------------ ---------------- -----------
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER
2014
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 Directors confirm that, after giving due consideration to
the financial position and expected cash flows of the Company; they
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 and they have therefore
adopted the going concern basis in preparing the 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 31.12.2014 2014
----------------- -------------- --------
British pounds,
GBP 1.5569 1.6478
Euro, EUR 1.2162 1.3258
--------------------- -------------- --------
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 2014 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 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 10 Consolidated Financial Statements 1 January 2014
======= ================================================================= ==========================================
IFRS 11 Joint Arrangements 1 January 2014
======= ================================================================= ==========================================
IFRS 12 Disclosure of Interests in Other Entities 1 January 2014
======= ================================================================= ==========================================
IFRS 13 Fair Value Measurement 1 January 2014
======= ================================================================= ==========================================
IFRS 15 Revenue from Contracts with Customers 1 January 2017
======= ================================================================= ==========================================
IAS 27 Separate Financial Statements (2011) 1 January 2014
======= ================================================================= ==========================================
IAS 28 Investments in Associates and Joint Ventures (2011) 1 January 2014
======= ================================================================= ==========================================
IAS 32 Amendments to IAS 32 Disclosures - Offsetting Financial Assets 1 January 2014
and Financial Liabilities
======= ================================================================= ==========================================
IAS 36 Amendments to IAS 36 - Recoverable Amount Disclosures for 1 January 2014
Non-Financial Assets
======= ================================================================= ==========================================
There is no material impact on the financial statements of the
application of new standards with an effective date of 1 January
2014. 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 on investments
For the year ended 31/12/2014 For the year ended 31/12/2013
USD USD
Gross interest income from convertible notes
receivable 86,597 136,970
Amortized costs of convertible notes receivable (14,036) (28,263)
Net interest income from convertible notes
receivable 72,561 108,707
Profit on disposal of equity investments 251,388 -
Profit on disposal of convertible notes 103,622 320,563
Impairment of available-for-sale assets (451,482) (390,683)
Impairment of interest accrued - (68,180)
---------------------------------------------------- ------------------------------ ------------------------------
Total net losses on investments (23,911) (29,593)
---------------------------------------------------- ------------------------------ ------------------------------
4 Segmental analysis
Geographic information
The Company has investments in six principal geographical areas
- USA, Israel, BVI, Estonia, Cyprus, and Russia.
Non-current financial assets
As at 31/12/2014
USA Israel BVI Cyprus Estonia Russia Total
USD USD USD USD USD USD USD
-------------------- ----------- ---------- -------- ---------- -------- ------- -----------
Equity investments 25,490,710 3,806,652 305,050 1,863,685 328,958 59,096 31,714,151
Convertible
notes 2,954,852 - - - 136,850 - 3,091,702
-------------------- ----------- ---------- -------- ---------- -------- ------- -----------
Total 28,445,562 3,806,652 305,050 1,863,685 465,808 59,096 34,945,853
-------------------- ----------- ---------- -------- ---------- -------- ------- -----------
As at 31/12/2013
USA Israel BVI Cyprus Estonia Total
USD USD USD USD USD USD
-------------------- ----------- ------------------ -------- ---------- -------- -----------
Equity investments 21,781,129 2,982,471 305,050 1,863,685 - 26,932,335
Convertible notes 2,051,605 - - - 141,699 2,193,304
-------------------- ----------- ------------------ -------- ---------- -------- -----------
Total 23,832,734 2,982,471 305,050 1,863,685 141,699 29,125,639
-------------------- ----------- ------------------ -------- ---------- -------- -----------
5 Administrative expenses
Administrative expenses include the following amounts:
For the year ended 31/12/2014 For the year ended 31/12/2013
USD USD
------------------------------- ------------------------------ ------------------------------
Staff expenses (note 6) 796,309 718,030
Professional fees 173,963 177,365
Legal fees 27,266 56,341
Bank and LSE charges 24,412 26,118
Audit and accounting fees 49,837 43,281
Rent 172,608 172,608
Other expenses 119,717 106,709
Currency exchange loss/(gain) 18,762 (6,914)
------------------------------- ------------------------------ ------------------------------
1,382,874 1,293,538
------------------------------- ------------------------------ ------------------------------
6 Staff expenses
For the year ended 31/12/2014 For the year ended 31/12/2013
USD USD
-------------------- ------------------------------ ------------------------------
Directors' fees 356,269 268,283
Wages and salaries 440,040 449,747
796,309 718,030
-------------------- ------------------------------ ------------------------------
Wages and salaries shown above include salaries and bonuses
relating to 2014. These costs are included in administrative
expenses. As discussed in note 14, wages and salaries include
US$300,000 of employee salaries that were settled by the issue of
shares in lieu of cash payments. In addition to the above, there
are employment expenses for share-based payments of US$166,282 (for
the year ended 31 December 2013: $576,207).
The average number of staff employed (excluding Directors) by
the Company during the year was 5 (2013: 5).
The Directors' fees (including bonuses where applicable) for
2014 were as follows:
For the year ended 31/12/2014 For the year ended 31/12/2013
USD USD
---------------------- ------------------------------ ------------------------------
Alexander Selegenev 186,826 110,852
Yuri Mostovoy 115,500 100,000
James Joseph Mullins 32,912 31,161
Petr Lanin 21,031 26,270
---------------------- ------------------------------ ------------------------------
356,269 268,283
---------------------- ------------------------------ ------------------------------
The Directors' fees 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 share options.
7 Net finance income
For the year ended 31/12/2014 For the year ended 31/12/2013
USD USD
----------------- ------------------------------ ------------------------------
Interest income 11,079 50,035
11,079 50,035
----------------- ------------------------------ ------------------------------
8 Income tax expense
For the year ended 31/12/2014 For the year ended 31/12/2013
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 per share
The calculation of basic loss per share is based upon the net
loss for the year ended 31 December 2014 attributable to the
ordinary shareholders of US$1,561,988 (2013: net loss of
US$1,849,303) and the weighted average number of ordinary shares
outstanding calculated as follows:
Loss per share For the year ended 31/12/2014 For the year ended 31/12/2013
--------------------------------------------------- ------------------------------ ------------------------------
Basic loss per share (cents per share) (5.96) (7.42)
Loss attributable to equity holders of the entity (1,561,988) (1,849,303)
--------------------------------------------------- ------------------------------ ------------------------------
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 31/12/2014 For the year ended 31/12/2013
outstanding)
---------------------------------------------------- ------------------------------ ------------------------------
Weighted average number of shares in issue
Ordinary shares 26,199,590 24,914,735
26,199,590 24,914,735
---------------------------------------------------- ------------------------------ ------------------------------
Effect of dilutive potential ordinary shares
Share options 1,004,720 1,042,733
---------------------------------------------------- ------------------------------ ------------------------------
Weighted average of shares for the year (fully
diluted) 27,204,310 25,957,468
---------------------------------------------------- ------------------------------ ------------------------------
The diluted loss per share for both 2014 and 2013 is kept the
same as the basic loss per share because the conversion of the
share options decreases the basic loss per share and is therefore
anti-dilutive.
10 Non-current financial assets
At 31 December 2014 At 31 December 2013
Available-for-sale financial assets, USD:
Investments in equity shares (i)
- unlisted shares 31,854,151 26,932,335
Convertible notes receivable (ii)
- promissory notes 3,091,702 2,193,304
------------------------------------------- -------------------- --------------------
34,945,853 29,125,639
------------------------------------------- -------------------- --------------------
Reconciliation of fair value measurements of non-current
financial assets:
Available-for-sale Total
----------------------------------------------- ---------------------------------- ------------
Unlisted Convertible
shares notes
USD USD USD
----------------------------------------------- ---------------- ---------------- ------------
Balance as at 1 January 2013 15,434,540 3,691,691 19,126,231
------------------------------------------------ ---------------- ---------------- ------------
Total gains or losses in 2013:
- in profit or loss - impairment - (390,683) (390,683)
- in other comprehensive income 5,932,139 - 5,932,139
Purchases (including consulting & legal fees) 3,582,550 1,830,170 5,412,720
Disposal of investment (carrying value) - (1,047,609) (1,047,609)
Conversion of notes to equity and net gain 1,983,106 (1,890,265) 92,841
------------------------------------------------ ---------------- ---------------- ------------
Balance as at 31 December 2013 26,932,335 2,193,304 29,125,639
------------------------------------------------ ---------------- ---------------- ------------
Total gains or losses in 2014:
- in profit or loss - impairment (451,482) - (451,482)
- in other comprehensive income 2,171,251 - 2,171,251
Purchases (including consulting & legal fees) 3,074,752 1,295,860 4,370,612
Disposal of investment (carrying value) (258,352) (14,036) (272,388)
Conversion and other movements 385,647 (383,426) 2,221
------------------------------------------------ ---------------- ---------------- ------------
Balance as at 31 December 2014 31,854,151 3,091,702 34,945,853
------------------------------------------------ ---------------- ---------------- ------------
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
investor.
(i) Equity investments as at 31 December 2014:
Investee Date Value Additions Capitalized Gain/loss Impairments Internal Value Equity
company of at to consulting from and movements, at stake
initial 1 Jan equity and changes Disposals, USD 31 owned
investment 2014, investments legal in USD Dec
USD during fees, fair 2014,
the USD value USD
period, of
USD equity
investments,
USD
--------------- ------------ ----------- ------------ ------------ ------------- ------------ ----------- ----------- -------
Unicell 15/09/2011 2,982,471 - - - - - 2,982,471 10.00%
DepositPhotos 26/07/2011 4,997,285 - - - - - 4,997,285 27.75%
RollApp 19/08/2011 550,000 50,000 - - - - 600,000 10.00%
Wanelo 21/11/2011 5,369,400 - - - - - 5,369,400 4.72%
Gild 05/12/2011 170,038 - - 379,307 - - 549,345 1.04%
One-Page 06/02/2012 305,367 - - (47,015) (258,352) - - -
ThusFresh 26/03/2012 510,000 - - (130,645) 379,355 3.53%
Backblaze 24/07/2012 5,034,439 - - 1,191,478 - - 6,225,917 16.45%
(29
UsingMiles 23/08/2012 260,000 - - - (230,727) 273) - -
UM Liquidating 29
Trust 15/07/2014 - - - - - 273 29,273 5.89%
Gentoo
LABS 17/09/2012 260,000 - - - - - 260,000 6.25%
Favim
Holding 24/10/2012 305,050 - - - - - 305,050 20.00%
Appsindep 12/11/2012 1,863,685 - - - - - 1,863,685 19.24%
Virool 29/08/2012 502,275 - - - - - 502,275 1.69%
Adinch 19/02/2013 1,004,000 600,000 - 796,001 - - 2,400,001 22.43%
Tracks
Media 24/11/2011 341,350 - - - - - 341,350 6.83%
Wrike 12/06/2012 1,991,150 - - - - - 1,991,150 4.39%
Graphicly 03/04/2013 485,825 - - (125,070) (220,755) - 140,000 -
Oriense 27/01/2014 - 59,095 - - - - 59,095 5.45%
E2C 15/02/2014 - 124,732 10,000 2,049 - - 136,781 5.51%
Drippler 01/05/2014 - 200,000 5,000 97,400 - - 302,400 1.44%
Weaved 13/06/2014 - 250,000 5,000 - - - 255,000 2.44%
Le Tote 21/07/2014 - 200,000 - (654) - 251,014 450,360 1.62%
Anews 25/08/2014 - 1,000,000 - - - - 1,000,000 9.41%
Twtrland 01/09/2014 - 150,000 5,000 - - - 155,000 3.27%
Drupe
Mobile 02/09/2014 - 225,000 5,000 - - - 230,000 9.37%
Taxify 15/09/2014 - 185,925 - 8,400 - 134,633 328,958 2.8%
Total 26,932,335 3,044,752 30,000 2,171,251 (709,834) 385,647 31,854,151
----------------------------- ----------- ------------ ------------ ------------- ------------ ----------- ----------- -------
(ii) Convertible loan notes as at 31 December 2014:
Investee Date of Value at Additions Capitalized Amortized Internal Profit on Disposals, Value at Term, Interest
company initial 1 Jan to consulting costs, movements, disposal/ USD 31 Dec years rate, %
investment 2014, convertible and legal USD USD Impairment 2014, USD
USD note fees, USD charge,
investments USD
during the
period, USD
------------- ------------ ---------- ------------ ------------ ---------- ----------- ----------- ----------- ---------- ------ ---------
Ninua 08/06/2011 500,000 - - - - - - 500,000 1.5 5.00%
Pipedrive 30/07/2012 777,266 - - (1,914) - - - 775,352 2.0 2.00%
Sharethis 26/03/2013 571,723 - - (400) - - - 571,323 5.0 1.09%
KitApps 10/07/2013 202,616 200,000 585 (2,862) - - - 400,339 1.0 2.00%
VitalFields 20/12/2013 141,699 - - (4,849) - - - 136,850 1.0 15.00%
Gentoo LABS 21/05/2014 - 100,000 685 (210) - - - 100,475 2.0 0.28%
Whale Path 02/06/2014 - 200,000 5,000 (1,452) - - - 203,548 2.0 5.00%
Quote Roller 11/07/2014 - 400,000 5,000 (1,185) - - - 403,815 2.0 2.00%
Le Tote 21/07/2014 - 250,000 - - (250,000) - - - - -
Taxify 15/09/2014 - 129,590 5,000 (1,164) (133,426) - - - - -
------------ ------------
Total 2,193,304 1,279,590 16,270 (14,036) (383,426) - - 3,091,702
--------------------------- ---------- ------------ ------------ ---------- ----------- ----------- ----------- ---------- ------ ---------
11 Trade and other receivables
At 31 December 2014 At 31 December 2013
USD USD
----------------------------------------- -------------------- --------------------
Prepayments 6,438 9,767
Interest receivable on promissory notes 152,528 68,151
Interest receivable on deposits 818 1,614
159,784 79,532
----------------------------------------- -------------------- --------------------
12 Cash and cash equivalents
The cash and cash equivalents as at 31 December 2014 include
cash on hand and in banks, deposits, net of outstanding bank
overdrafts. The effective interest rate at 31 December 2014 was
0.95%.
Cash and cash equivalents comprise the following:
At 31 December 2014 At 31 December 2013
USD USD
--------------- -------------------- --------------------
Deposits 1,000,000 1,500,000
Bank balances 1,639,070 1,742,269
--------------- -------------------- --------------------
2,639,070 3,242,269
--------------- -------------------- --------------------
The following table represents an analysis of cash and
equivalents by rating agency designation based on Fitch rating or
their equivalent:
At 31 December 2014 At 31 December 2013
USD USD
--------------- -------------------- --------------------
Bank balances
A rating 1,639,070 1,742,269
--------------- -------------------- --------------------
1,639,070 1,742,269
--------------- -------------------- --------------------
Deposits
A rating 1,000,000 1,500,000
--------------- -------------------- --------------------
1,000,000 1,500,000
--------------- -------------------- --------------------
2,639,070 3,242,269
------------------------------------ --------------------
13 Trade and other payables
At 31 December 2014 At 31 December 2013
USD USD
--------------------------- -------------------- --------------------
Directors' fees payable 23,902 40,540
Trade payables 34,874 55,424
Other current liabilities 623 44
Accrued expenses - -
--------------------------- -------------------- --------------------
59,399 96,008
--------------------------- -------------------- --------------------
14 Share capital
On 31 December 2014 the Company had an authorised share capital
of unlimited shares of no par value and had issued share capital
of:
At 31 December 2014 At 31 December 2013
USD USD
--------------------------------- -------------------- --------------------
Share capital 31,453,510 26,895,179
Issued capital comprises: Number Number
Fully paid ordinary shares 27,744,962 24,977,728
--------------------------------- -------------------- --------------------
Number of shares Share capital,
USD
--------------------------------- -------------------- ----------------------
Balance at 31 December 2013 24,977,728 26,895,179
Issue of shares 2,767,234 4,558,331
Share buy-back and cancellation - -
Balance at 31 December 2014 27,744,962 31,453,510
--------------------------------- -------------------- ----------------------
On 29 April 2014, as a result of Alexander Selegenev's
exercising his option, the Company allotted 33,334 new ordinary
shares of no par value each in the Company to Alexander Selegenev
at a price of US$1.00 per share, raising US$33,334.
On 20 June 2014, as a result of the Company's senior managers
German Kaplun, Alexander Morgulchik and Artyom Inyutin's exercising
their options, the Company allotted 1,125,000 ordinary shares, at
the exercise price of US$1.40 per share. The share price on the
date of exercise was US$1.975 per share.
On 22 July 2014, the Company allotted 1,432,431 new ordinary
shares of no par value each in the Company to new investors at a
price of US$1.85 per share, being a discount of 5.6% over the
closing price of the Company's shares on 21 July 2014 and raising
US$2.65 million.
In December 2013, German Kaplun, Alexander Morgulchik and Artyom
Inyutin entered into agreements with the Company to receive all of
their 2014 salaries, collectively amounting to US$300,000, in TMT
shares on 31 December 2014 rather than monthly in cash.
Accordingly, on 31 December 2014, the Company allotted 176,469
ordinary shares of no par value each in the Company at a price of
US$1.70 per share (31 December 2013: the Company allotted 187,500
ordinary shares of no par value each in the Company at a price of
US$1.60 per share amounting to US$300,000 ).
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.
15 Share-based payments
For the year ended 31/12/2014 For the year ended 31/12/2013
USD USD
------------------------------------- ------------------------------ ------------------------------
Share option (compensation expense) 166,282 576,207
------------------------------------- ------------------------------ ------------------------------
Total share-based payment charge 166,282 576,207
------------------------------------- ------------------------------ ------------------------------
On 27 April 2011, on the recommendation of the independent
directors, the Company granted share options to subscribe for up to
100,000 ordinary shares to Mr. Alexander Selegenev, an executive
director of the Company.
The terms and conditions of the options granted were as
follows:
Options granted to Alexander Selegenev
----------------------- ---------------------------------------
Date granted 1 January 2011
Number of instruments 100,000
Option life, years 1-3
Exercise price US$1.00
Options granted to Mr. Alexander Selegenev vested as
follows:
No. of ordinary shares Exercise Price Exercise Period
----------------------- --------------- -------------------
33,333 US$1 31/12/11-30/01/12*
33,333 US$1 31/12/12-30/01/13*
33,334 US$1 31/12/13-30/01/14*
----------------------- --------------- -------------------
* or a period of 30 days starting from the date on which certain
circumstances preventing exercise during these periods have
ended.
As at 31 December 2014 all options for 100,000 ordinary shares
had either been exercised by Mr. Alexander Selegenev or lapsed.
On 24 October 2012, Board of Directors approved a share option
plan (the "Plan") for directors, officers, employees of or
consultants to the Company and/or any company directly or
indirectly controlled by the Company.
Under the Plan, options for a total of 7,500,000 ordinary shares
in the Company, representing approximately 30% of the then issued
share capital (or 23% of the enlarged share capital at the time,
assuming full exercise of the options), could be made available at
an exercise price determined by the Board or its remuneration
committee, which would not be less than the closing middle market
price for the Company's share on AIM on the date of grant as
published by or on behalf of the London Stock Exchange plc.
Options were to vest on a daily basis over a period of 3 years
whilst the option holder remains eligible, and vested options could
be exercised on each anniversary of the grant, but if not exercised
within 1 year from the allowable date of exercise, would lapse.
The following options, without performance conditions, have been
granted under the Plan on 24 October 2012:
Option
Price Option Option
Option Year Price Year Price
Name Shares 1 2 Year 3
---------------------- ---------- -------- ------------ --------
German Kaplun
(Employee) 1,125,000 US$1.40 US$1.55 US$1.70
Alexander Morgulchik
(Employee) 1,125,000 US$1.40 US$1.55 US$1.70
Alexander Selegenev
(Director) 1,125,000 US$1.40 US$1.55 US$1.70
Artyom Inyutin
(Employee) 1,125,000 US$1.40 US$1.55 US$1.70
Yuri Mostovoy
(Director) 562,500 US$1.40 US$1.55 US$1.70
Alexander Pak
(Employee) 300,000 US$1.40 US$1.55 US$1.70
Levan Kavtaradze
(Employee) 150,000 US$1.40 US$1.55 US$1.70
TOTAL 5,512,500
---------------------- ---------- -------- ------------ --------
The fair value of services received in return for share options
granted is based on the fair value of share options and warrants
granted, measured using the Black-Scholes formula, using the
following assumptions:
(in USD, except Option Option Option
for number of shares Price Price Year Price
and percent) Year 1 2 Year 3
----------------------- ---------- ------------ ----------
Number of share
options granted 1,837,500 1,837,500 1,837,500
Fair value of share
option at date
of grant 0.25 0.15 0.09
Share price at
date of grant 1.65 1.65 1.65
Exercise price 1.40 1.55 1.70
Expected volatility,
per cent 9.39% 9.39% 9.39%
Option life, years 0-1 0-2 0-3
Expected dividends,
percent 0 0 0
Risk free interest
rate, percent 0.41% 0.41% 0.41%
------------------------- ---------- ------------ ----------
Expected volatility is estimated from the Company's share price
performance on AIM.
Weighted average
Number exercise price
of shares of share options
------------------------------ ------------ ------------------
Outstanding share options
at 31 December 2013 5,512,500 1.55
Options exercised during
the year ended 31 December
2014 (1,125,000) 1.40
Options expired during the
year ended 31 December 2014 (712 500) 1.40
Outstanding share options
at 31 December 2014 3,675,000 1.63
Exercisable share options
at 31 December 2014 1,837,500 1.55
------------------------------ ------------ ------------------
On 20 June 2014, the Company's senior managers German Kaplun,
Alexander Morgulchik and Artyom Inyutin each exercised options over
375,000 (in total 1,125,000) ordinary shares, at the exercise price
of US$1.40 per share. The share price on the date of exercise was
US$1.975 per share.
No other options that vested in Year 1 under the Plan were
exercised, and those options have now lapsed.
16 Reserves
Share-based payment reserve Fair value reserve Retained losses Total
USD USD USD USD
----------------------------------- ---------------------------- ------------------- ---------------- ------------
Balance as at 1 January 2013 128,183 2,005,228 (1,336,201) 797,210
----------------------------------- ---------------------------- ------------------- ---------------- ------------
Loss for the year - - (1,849,303) (1,849,303)
Gain from changes in fair value - 5,932,139 - 5,932,139
Share-based payment charge 576,207 - - 576,207
Transfer on lapse of share options (8,420) - 8,420 -
Balance as at 31 December 2013 695,970 7,937,367 (3,177,084) 5,456,253
-----------------------------------
Loss for the year - - (1,561,988) (1,561,988)
Gain from changes in fair value - 2,171,251 - 2,171,251
Share-based payment charge 166,282 - - 166,282
Transfer on exercise of share
options (469,593) - 469,593 -
----------------------------------- ---------------------------- ------------------- ---------------- ------------
Balance as at 31 December 2014 392,659 10,108,618 (4,269,479) 6,231,798
----------------------------------- ---------------------------- ------------------- ---------------- ------------
17 Capital management
The capital structure of the Company consists of equity share
capital, 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 2014 the largest exposure to credit risk
related to cash and cash equivalents, which was US$2,639,070. 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 asat
31 December is as follows:
At 31 December 2014 At 31 December 2013
USD USD
------------------------------ -------------------- --------------------
Convertible notes receivable 3,091,702 2,193,304
Trade and other receivables 159,784 79,532
Cash and cash equivalents 2,639,070 3,242,269
------------------------------ -------------------- --------------------
5,890,556 5,515,105
------------------------------ -------------------- --------------------
Market risk
The Company's financial assets areclassified 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 2014 the Company had a cash deposit of
US$1,000,000, 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 2014 was as
follows:
For the year ended For the year ended For the year ended For the year ended
31/12/2014 31/12/2014 31/12/2013 31/12/2013
GBP EUR GBP EUR
Current assets
Cash and cash
equivalents 207,618 12,026 123,891 13,760
Current liabilities
Trade and other
payables (40,022) - (40,756) -
----------------------- --------------------- --------------------- --------------------- ----------------------
Net (short) long
position 167,596 12,026 83,135 13,760
----------------------- --------------------- --------------------- --------------------- ----------------------
Net exposure currency 107,647 9,888 50,400 9,964
----------------------- --------------------- --------------------- --------------------- ----------------------
Net exposure currency
(assuming a 10%
movement in exchange
rates) 150,836 10,823 74,821 12,384
----------------------- --------------------- --------------------- --------------------- ----------------------
Impact on exchange
movements in the
statement of
comprehensive income 16,760 1,203 8,314 1,376
----------------------- --------------------- --------------------- --------------------- ----------------------
The foreign exchange rates of the USD at 31 December were as
follows:
31/12/2014 31/12/2013
----------------------- ----------- -----------
Currency
British pounds, GBP 1.5569 1.6495
Euro, EUR 1.2162 1.3810
----------------------- ----------- -----------
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 2014, the cash and equivalents of the Company
were US$2,639,070.
The following are the maturities of current liabilities as at 31
December 2014:
Carrying amount Within one year 2-5 years More than 5 years
USD USD USD USD
--------------------------- ---------------- ---------------- ---------- ------------------
Directors' fees payable 23,902 23,902 - -
Trade payables 34,874 34,874 - -
Other current liabilities 623 623 - -
--------------------------- ---------------- ---------------- ---------- ------------------
59,399 59,399 - -
--------------------------- ---------------- ---------------- ---------- ------------------
19 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, who collectively own
22.12% of the issued share capital of TMT and are thus considered
related parties. There are currently 5 TMT staff involved working
substantially full time on TMT's business. TMT started paying rent
from 1 October 2012. Rent was being paid to Orgtekhnika at the rate
of US$700 per sq meter per year of space utilised. The board
believes this represented a discount from the prevailing market
rate for similar office space in Moscow at the time. Together with
other related expenses (support personnel, company car, security
services, etc.), the total costs to TMT were US$14,384 per month
(US$172,608 per year). Following the recent negative developments
in the Russian economy and Moscow office rental market in
particular, starting from 1 February 2015 these office costs have
been reduced to US$7,000 per month.
In December 2012, Alexander Morgulchik, German Kaplun and Artyom
Inyutin agreed to receive all of their 2013 salaries in TMT shares
on 31 December 2014 rather than monthly in cash. The number of
shares receivable in each case was fixed at a price of US$1.60 per
share. Also in December 2013, Alexander Morgulchik, German Kaplun
and Artyom Inyutin agreed to receive all of their 2014 salaries in
TMT shares on 31 December 2014 rather than monthly in cash. The
number of shares receivable in each case was fixed at a price of
US$1.70 (2013: US$1.60) per share.
20 Subsequent events
In February 2015, TMT's portfolio company Drippler, a mobile
tech discovery service, completed a new sizable equity financing
round. The transaction represents an uplift of approximately
US$97,000 (or 48%) in the fair value of TMT's investment in
Drippler, compared to the amount announced as of 30 June 2014.
In April 2015, the Company invested US$300,000 in fragrance
subscription service ScentBird.
21 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 PGURACUPAGAU
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