TIDMMEDI
RNS Number : 5376L
Medilink-Global UK Limited
05 September 2012
MEDILINK-GLOBAL UK LIMITED
("Medilink" or the "Group")
FINAL RESULTS
Medilink-Global UK Limited (AIM: MEDI), the electronic health
card network service provider, is pleased to announce its final
results for the year ended 31 December 2011. A copy of the annual
report and accounts and notice of the Company's annual general
meeting, to be held at 4(th) Floor, Office Tower, Syed Kechik
Foundation Building, Jalan Kapas, 59100 Kuala Lumpur, Malaysia on
15 October 2012at 10.30 am (Malaysian time) has been posted to
shareholders today and will be available shortly from the Company's
website, www.medilink-global.com.
OPERATIONAL HIGHLIGHTS
-- Renewal of Third Party Administrator ("TPA") contract and new
TPA contracts secured in China including.
o On 7 Nov 2011, the Company entered into a one year contract
with Now Health International (Asia Pacific) Limited.
o On 20 Dec 2011, the Company entered into a one year contract
with China Life GZ.
o On 1 Jan 2012, the Company renewed the contract with CITIC
Prudential for one year.
o On 30 April 2012, the Company entered into a one year contract
with Aetna International Inc.
o On 1 July 2012, the Company entered into a one year contract
with Liberty Insurance.
o On 1 Aug 2012, the Company renewed the contract with Generali
China Life Insurance Co. Ltd for three years.
-- On 1 March 2011, Datalink Technologies Sdn Bhd ( a wholly
owned subsidiary of the Company), renewed the Managed Care System
maintenance contract with Great Eastern Life Assurance Berhad for
one year and it will be automatically renewable for another year
upon its expiry on February 29, 2012.
-- On 1 October 2011, Datalink Healthcard Network Sdn Bhd
("Datalink Healthcard") (a wholly owned subsidiary of the Company)
renewed the contract with ING Insurance Berhad ("ING") for a
further three year period up to 30 September 2014; and
automatically renewable for another period of two years (01 October
2014 to 30 September 2016) based on terms that shall be mutually
agreed upon. With this renewal, it brings a total of 15 years long
standing business relationship between the Company and ING. The
estimated value of the 3 year + 2 years option renewal is RM6
million (approximately GBP1.2 million).
-- On 1 October 2011, Datalink Healthcard renewed the contract
with AXA Affin General Insurance Berhad ("AXA") for one year. This
renewal signifies 9 years of strong business relationship between
the Company and AXA.
-- On 2 January 2012, AXA Affin Life Insurance Berhad
("AXA-Life") launched its health insurance product and appointed
Datalink Healthcard as the Third Party Administrator in
administering and processing the medical claims for this business
portfolio. An addendum to the existing service agreement between
AXA Affin General Insurance Berhad and the Company was concluded on
April 20, 2012.
-- On 1 December 2011, Datalink Healthcard entered into a 3
years + 2 years Call Centre, System and Electronic Healthcard
Network Infrastructure service contract with ING PUBLIC Takaful
Ehsan Berhad (IPTE"), a 60% owned subsidiary of ING Management
Holdings (Malaysia) Sendirian Berhad ("ING"). The company was
formed through the strategic alliance between ING, Public Bank
Berhad ("PBB") and Public Islamic Bank Berhad ("PIBB"), a wholly
owned subsidiary of PBB. IPTE aims to drive growth and increase
Family Takaful penetration both in Malaysia and the Asia market;
through the bancatakaful and agency distribution channels.
-- Datalink Healthcard had signed up 29 new self-insured
corporate clients in year 2011 to July 2012, the estimated annual
value of these contracts is RM425,000 (approximately GBP85,000).
Among all, Bank Muamalat Malaysia Berhad with a total enrolled
membership of 6,285, contributed significantly to this annual
contract.
For further information contact:
MediLink-Global UK Limited Tel: + 603 2296 3028
Shia Kok Fat, Chief Executive
Officer
www.medilink-global.com
Allenby Capital Limited Tel: +44 (0)20 3328 5656
(Nominated Adviser and Broker)
Nick Athanas, James Reeve
CHAIRMAN'S STATEMENT
Medilink-Global UK Limited is pleased to present the Group's
results for the year ended 31 December 2011.
OVERVIEW
It has been a challenging year in managing the rapid pace of
business development activities of our subsidiary in China whilst
seeing a hike in operating expenses, particularly due to the
planned expansion of our workforce to a right size in order to
function effectively. From a strategic perspective, it was an
achievement for our subsidiary company in China securing bigger
market share and strengthening its leading positioning in the
industry. While our overall Group sales increased marginally
compared to 2010, the Group's costs were also higher due to an
increased headcount, which has impacted on the performance for the
year under review.
FINANCIAL REVIEW
The Group recorded revenue of GBP1.85 million (2010 revenue:
GBP1.79 million) and a loss after taxation of GBP3.34 million
(2010: loss after taxation GBP0.69 million) for the year ended 31
December 2011. The marginal increase in revenue was largely due to
a 30% increase in revenue from the Company's subsidiary in China.
However, the revenues from South East Asia declined by 2% compared
to 2010, largely as a result of the Singapore operation (decrease
of 6%) and the decrease in revenues from system development
activities (31%) The core TPA business in Malaysia continues to
grow (increase of 8%). The marginal increase in Group revenue was
insufficient to cover the increase in operating costs in China and
Malaysia.
The administrative costs of GBP3,964,000 appear to be
considerably higher than 2010 (GBP1,395,000), but these are
distorted by the inclusion of a share based payment charge of
GBP845,000 as a result of 16,100,000 shares transferred for no
consideration by our Chief Executive Officer, Shia Kok Fat as
reward to key employees of the Group in recognition for their
direct and strategic contribution to the Company. This is a
notional charge based on the market value of the shares with the
corresponding credit going to the retained earnings and therefore
has no impact on the overall reserves of the Group. In addition
there has been an impairment of goodwill of GBP1.10 million in
relation to the goodwill arising from investment in subsidiaries
and an impairment loss of GBP0.48 million in relation to trade and
other receivables. As a result, the loss after taxation of GBP3.34
million for the year under review has materially exceeded the
previous year's loss after taxation of GBP0.69 million.
GROUP'S OPERATIONS REVIEW
China
Revenue from our China operations increased by 30% to GBP0.405
million (2010 China revenue: GBP0.301 million) as a result of
organic growth in the TPA contracts. However, its operating cost
had also increased mainly due to an increase in manpower, as
planned. Thus, the Group's China operations recorded a higher loss
after tax as compared to 2010.
The average monthly revenue per employee during the year for
China operations of GBP768 was an improvement of 22% compared to
the previous year of GBP627. We expect the monthly average revenue
per employee for China will continue to improve as the business
matures.
To date we have signed TPA contracts with 20 insurance companies
and 1 corporate customer, which represents 6 new customers in 2011
and a further 6 have been signed up to date in 2012. At the end of
2011 there were 270 (2010: 288) healthcare providers operating in
our network in China. This number has increased to 294 as at the
end of July 2012.
As previously stated it can take a number of months before newly
signed-up insurance companies make an impact on revenue in terms in
terms of membership levels. The number of members increased by over
2,500 in 2011. We expect membership levels to accelerate during the
coming year.
Malaysia
The Group increased its headcount in Malaysia, in order to
improve the quality of services which lead to a lower average
monthly revenue per employee during the year of GBP1,161, as
compared to the monthly revenue per employee of GBP1,410 in
2010.
The Board decided to focus its energies on its TPA business,
which lead to an increase in TPA revenue of 8% compared to 2010,
with less resources concentrated on system development. As a result
the revenue from this segment declined by 30% compared to previous
year, although there will still be opportunities for one off deals
in the future.
With our expanding portfolio of customers we are hopeful that
this will underpin our growth in TPA income.
Singapore
The Group relocated its Singapore operations to Malaysia in the
last quarter of 2011, in order to improve the efficiency of the
Group and as a cost saving measure, which had effectively reduced
operating cost by 57%. Revenue in Singapore decreased by 6% over
the previous year and the number of healthcare providers in our
network remained at 146. The average monthly gross profit per
employee reduced to GBP1,981 in 2011, compared to GBP2,211 per
employee in the previous year.
Thailand
We reduced our stake in our associate company in Thailand from
48% to 19% in the fourth quarter of 2011, as we do not foresee a
significant improvement in the results of our Thailand operations
in the near future. The reduced shareholding interest in Thailand
should allow the Group's manpower and financial resources to be
utilized more intensively to develop and grow its business in
Malaysia and Singapore where we are better positioned in these
market. A further loss of GBP0.26 million was incurred in 2011 in
relation to a provision against loans made to the former Thailand
associate company, which became an investment during the course of
2011.
PROSPECTS
Medilink will continue to provide excellent services to its
customers and we anticipate the Group will sustain significantly
lower losses in 2012. The expected increase in revenues in 2012 is
not however expected to be sufficient to cover the overall
operating cost.
We will continue to strengthen all areas of the organisation and
maintain our position as a leading regional TPA with a global
servicing capacity.
ACKNOWLEDGMENTS
On behalf of the board, I would like to extend our heartfelt
thanks to our business partners, customers, associates, healthcare
providers and valued shareholders for their support throughout the
year. We would also wish to thank the management and staff of the
entire Medilink-Global Group for their continued loyalty and
commitment in discharging their duties.
Norman Lott
Chairman
4 September 2012
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2011
Note Year ended Year ended
2011 2010
GBP'000 GBP'000
Revenue 3 1,848 1,786
Cost of sales (1,260) (1,157)
Gross profit 588 629
Other income 50 114
Administrative expenses (3,964) (1,395)
Operating loss (3,326) (652)
Share of associate undertakings' loss - (33)
Finance expenses 7 (12) (11)
Loss before taxation (3,338) (696)
Taxation 8 - 10
Loss after taxation attributable to
equity holders (3,338) (686)
=========== ===========
Other comprehensive income
Exchange difference on translation
of foreign subsidiaries ( 20) (41)
----------- -----------
Total comprehensive income for the
year attributable to equity holders (3,358) (727)
=========== ===========
Loss per ordinary share (pence) 18
Basic (2.80) (0.64)
Diluted* (2.80) (0.64)
* In accordance with IAS 33 "Earnings per share" and as the
Group has reported a loss for the period the shares are not
diluted. The Group has not issued any instruments with dilutive
effects.
All operations of the Group are continuing.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2011
Note 2011 2010
ASSETS GBP'000 GBP'000
Non-current assets
Property, plant and equipment 9 171 283
Intangible assets 10 3,278 4,329
Loans and other financial assets 12 - 313
-------- --------
Total non-current assets 3,449 4,925
-------- --------
Current assets
Trade receivables 12 837 717
Other receivables 12 148 429
Cash and cash equivalents 13 290 880
-------- --------
Total current assets 1,275 2,026
-------- --------
TOTAL ASSETS 4,724 6,951
======== ========
EQUITY
Equity attributable to the equity
holders of Medilink-Global UK Ltd:
Share capital 17 6,045 5,946
Share premium 1,507 1,502
Reserves (4,253) (1,636)
-------- --------
Total equity 3,299 5,812
-------- --------
Current liabilities
Trade payables 14 313 215
Other payables 14 620 489
Advance from directors and a shareholder 14 449 366
Hire purchase liabilities 15 3 6
Total current liabilities 1,385 1,076
-------- --------
Non-current liabilities
Hire purchase liabilities 15 - 16
Deferred tax 16 40 47
-------- --------
Total non-current liabilities 40 63
-------- --------
TOTAL EQUITY AND LIABILITIES 4,724 6,951
======== ========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2011
Year ended Year
ended
2011 2010
GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (3,338) (696)
Adjustments for:
Amortisation of intangible assets 88 84
Depreciation of property, plant and equipment 195 166
Gain on disposal of property, plant & equipment (2) (5)
Impairment loss on trade and other receivables 408 -
Impairment loss on goodwill 1,100 -
Fair value of shares transferred to employees 845 -
and directors
Share of loss of associated company - 33
Finance costs 12 11
----------- --------
Cash from operating activities before changes
in working capital (692) (407)
Decrease /(Increase) in trade and other receivables 73 (699)
Increase in trade and other payables 195 58
----------- --------
Cash flow from operations (424) (1,048)
Tax refund / (paid) 12 (8)
Interest paid (12) (11)
----------- --------
Net cash flow from operations (424) (1,067)
----------- --------
Investing activities
Purchase of property, plant and equipment (237) (144)
Proceed from disposal of property, plant
and equipment 15 19
Cash flow used in investing activities (222) (125)
----------- --------
Financing activities
Proceeds from issue of shares - 1,648
Share issue costs - (130)
Proceed from loan by a shareholder 93 308
Loan from / (repayment made to) director - (14)
Repayment of bank borrowings - (14)
Repayment of hire purchase liabilities (19) (15)
----------- --------
Cash flow from financing activities 74 1,783
----------- --------
Net decrease in cash and cash equivalents (572) (591)
Effect of exchange rate changes (18) (26)
Cash and cash equivalents at the beginning
of the year 880 315
--------
Cash and cash equivalents at the end of the
year 290 880
=========== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2011
Share Share Exchange Retained Total
capital premium reserve earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 January
2010 5,193 737 (34) (875) 5,021
Loss for the year - - - (686) (686)
Exchange differences - - (41) - (41)
--------- --------- --------- ---------- --------
Total comprehensive
income
for the year 5,193 737 (75) (1,561) 4,294
Issue of shares 753 895 - - 1,648
Share issue costs - (130) - - (130)
Balance at 31 December
2010 5,946 1,502 (75) (1,561) 5,812
Loss for the year - - - (3,338) (3,338)
Exchange differences - - (20) - (20)
--------- --------- --------- ---------- --------
Total comprehensive
income
for the year - - (20) (3,338) (3,358)
Issue of shares 99 5 - (104) -
Transfer of shares from
shareholder to employees
and directors (note
17) - - - 845 845
Balance at 31 December
2011 6,045 1,507 (95) (4,158) 3,299
========= ========= ========= ========== ========
NOTES TO THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2011
1. General information
The Company was incorporated in Jersey as a limited liability
par value company under the laws of Jersey, with the name
Medilink-Global UK Limited and with company number 99680. The
Company is governed by its articles of association and the
principal statute governing the Company is Jersey law. The
liability of the members of the Company is limited. The Company's
registered office is Queensway House, Hilgrove Street, St Helier
Road, Jersey, JE1 1ES. The Company is domiciled in Jersey. The
Company's principal place of business is Asia.
These financial statements are presented in Pound Sterling
("GBP") and rounded to the nearest thousand ("000"). The functional
currency of the entities in the Group is the Malaysian Ringgit as
that is the Currency of the primary economic environment in which
the Group operates. The directors have chosen to present these
financial statement in Pound Sterling due to the international
exposure and shareholders of the entity.
2. Basis of preparation
The financial information has been prepared in accordance with
International Financial Reporting Standards as adopted by the
European Union and using accounting policies which are consistent
with those adopted in the financial statements, with the following
comment in respect of going concern made in note 2(v) to the
financial statements:
"The financial statements have been prepared on a going concern
basis. The Group's ability to continue as a going concern is
reliant upon continuing shareholder support or successfully
obtaining alternative means of funding as it moves towards
self-sustainability and to finance its on-going expansion. In
considering the appropriateness of this basis of preparation, the
Directors have reviewed the Company's working capital forecasts and
performed sensitivity analysis thereon and the key inputs into
these can be found in note 10 in the annual report and accounts.
They believe that the increasing revenues from trading activities
and the support of key shareholders will be sufficient for the
Group's purposes for a minimum of 12 months from the date of the
approval of these financial statements. The Directors have
considered and assessed the letter of support provided by these key
shareholders and are satisfied that they will and can, if required,
provide the support for the development of the growth over at least
the next twelve months from signing these financial statements. If
the Group was unable to secure sufficient funding to enable it to
continue on a going concern basis then adjustments would be
necessary to write down assets to their recoverable amounts,
reclassify fixed assets and long-term liabilities as current and
provide for additional liabilities."
The financial information set out in this announcement does not
constitute the Group's statutory financial statements for the year
ended 31 December 2010, but was derived from those financial
statements. The auditors have reported on the statutory financial
statements for the year ended 31 December 2011; this report was
unqualified but included the following emphasis of matter:
"In forming our opinion on the financial statements, which is
not modified, we have considered the adequacy of the disclosure
made in note 2 (v) to the financial statements concerning the
company's ability to continue as a going concern. The financial
statements have been prepared on the going concern basis, which
depends on the continued shareholder support and the generation of
increased revenues. These conditions, along with the other matters
explained in note 2 (v) to the financial statements, indicate the
existence of a material uncertainty which may cast significant
doubt about the company's ability to continue as a going concern.
The financial statements do not include the adjustments that would
result if the company was unable to continue as a going
concern."
The financial information set out in this announcement was
approved by the board on 4 September 2012.
The directors do not recommend the payment of a dividend.
3. Business segments
The Group has adopted IFRS 8 Operating Segments with effect from
1 January 2009. Per IFRS 8 operating segments are based on internal
reports about components of the group, which are regularly reviewed
and used by the Board of Directors being the Chief Operating
Decision Maker ("CODM") for strategic decision making and resource
allocation, in order to allocate resources to the segment and to
assess its performance. The Group's reportable operating segments
are as follows:
i) Third party administrator
ii) Software licensing
The CODM monitors the operating results of each segment for the
purpose of performance assessments and making decisions on resource
allocation. The management has organised the entity based on
differences in products and services. Third party administrator
segment is derived from aggregating China, Malaysia and Singapore
entity while Software licensing segment represent a single entity
from Malaysia. Performance is based on external and internal
revenue generations and profit before tax, which the CODM believes
are the most relevant in evaluating the results relative to other
entities in the industry. Segment assets and liabilities are
presented inclusive of inter segment balances, as inter-segment
pricing. Information regarding each of the operations of each
reportable segment is included below.
Third party Software Consolidation Total
2011 administrator licensing
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 1,673 175 - 1,848
Internal revenue - 74 (74) -
---------------- ---------------- ---------------------- ----------------
Total revenue 1,673 249 (74) 1,848
---------------- ---------------- ---------------------- ----------------
Interest revenue 1 - - 1
Interest expenses (11) - - (11)
Depreciation and
amortization (270) (13) - (283)
Share of associate
undertakings' loss - - - -
Corporation tax
Earning before tax
(EBT) (3,180) (158) - (3,338)
Assets 3,430 263 1,031 4,724
Liabilities (4,599) (349) 3,523 (1,425)
---------------- ---------------- ---------------------- ----------------
(i) The assets of third party administrator are including the
goodwill on consolidation of GBP3,038,000 (2010: GBP4,138,000)
Revenues from two customers amounted to GBP506,000 : ING
Insurance Bhd GBP310,000 and AXA Insurance Bhd GBP196,000 (2010:
GBP450,000: ING Insurance Bhd GBP296,000 and AXA Insurance Bhd
GBP154,000), arising from sales by third party administrator
segment.
Third party Software Consolidation Total
2010 administrator licensing
----------------------------- ---------------- ---------------- ---------------------- ----------------
GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ---------------- ---------------- ---------------------- ----------------
External revenue 1,567 219 - 1,786
----------------------------- ---------------- ---------------- ---------------------- ----------------
Internal revenue 79 (79) -
----------------------------- ---------------- ---------------- ---------------------- ----------------
Total revenue 1,567 298 (79) 1,786
----------------------------- ---------------- ---------------- ---------------------- ----------------
Interest revenue 1 - - 1
----------------------------- ---------------- ---------------- ---------------------- ----------------
Interest expenses (11) - - (11)
----------------------------- ---------------- ---------------- ---------------------- ----------------
Depreciation and
amortisation (225) (24) - (249)
----------------------------- ---------------- ---------------- ---------------------- ----------------
Share of associate
undertakings' loss (17) - - (17)
----------------------------- ---------------- ---------------- ---------------------- ----------------
Corporation tax 7 3 - 10
----------------------------- ---------------- ---------------- ---------------------- ----------------
Earning before tax
(EBT) (660) (28) - (688)
----------------------------- ---------------- ---------------- ---------------------- ----------------
Assets 11,598 402 (5,049) 6,951
-----------------------------
Liabilities (4,065) (336) 3,262 (1,139)
----------------------------- ---------------- ---------------- ---------------------- ----------------
(i) The assets of third party administrator are including the
goodwill on consolidation of GBP4,138,000.
The geographical split of revenue and non-current assets arises
as follows:
2011 Jersey Singapore China Malaysia Total
--------------------------- -------- ------------ ---------- ----------- --- -----------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- ------------ ---------- ----------- --- -----------
Revenue - 608 405 835 1,848
--------------------------- -------- ------------ ---------- ----------- --- -----------
Intangible assets 107 - - 133 240
--------------------------- -------- ------------ ---------- ----------- --- -----------
Goodwill 3,038 - - - 3,038
---------------------------
PPE - 9 92 70 171
--------------------------- -------- ------------ ---------- ----------- --- -----------
2010 Jersey Singapore China Malaysia Total
--------------------------- -------- ---------- -------- --------- --------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- ---------- -------- --------- --------
Revenue - 629 311 846 1,786
--------------------------- -------- ---------- -------- --------- --------
Intangible assets 191 - - - 191
--------------------------- -------- ---------- -------- --------- --------
Goodwill 4,138 - - - 4,138
---------------------------
PPE - 20 119 144 283
--------------------------- -------- ---------- -------- --------- --------
4. Loss from operations
Loss from operation has been arrived at after
charging/(crediting):
2011 2010
GBP'000 GBP'000
Unrealised loss/(gain) on exchange
difference 47 (105)
Depreciation 195 166
Amortisation of intangible assets 88 84
Auditor remuneration - audit of the
company accounts 24 25
- non -audit services 2 1
Impairment of goodwill 1,100 -
Impairment of loan 260 -
Operating lease payment 112 115
======== ========
5. Directors emoluments
2011 2010
GBP'000 GBP'000
Directors' remuneration 21 42
Directors' fees 32 33
-------- --------
53 75
======== ========
All the executive directors have a fixed base fee or salary and
participate in discretionary bonus arrangement, according to the
performance as determined by the Remuneration Committee.
Details of the directors' emoluments are set out below.
2011 2010
GBP'000 GBP'000
Executive
Shia Kok Fat 17 33
Yap Tai Tee - 1
Chen Shien Yee 21 25
Non-executive
Norman Lott 12 12
Ng Lai Siang 3 4
-------- --------
Total 53 75
======== ========
The shares issued to directors as payment of bonus is disclosed
under Note 17.
.
6. Staff costs
2011 2010
GBP'000 GBP'000
Wages and salaries 967 810
Defined contribution plans 126 88
1,093 898
======== ========
7. Finance expenses
2011 2010
GBP'000 GBP'000
Finance cost bank borrowing and hire
purchase 12 11
12 11
======== ========
8. Taxation
2011 2010
GBP'000 GBP'000
Current tax charge - -
Deferred tax 7 10
-------- --------
7 10
======== ========
Factors affecting tax charge:
Loss before tax (2,083) (688)
Tax at the corporate rate 28% (2010:28%) (583) (193)
Tax effects of:
* Non deductible expenses 583 171
* Reversal charges of deferred tax liability 7 10
* Foreign tax rates - 22
- -
* Other
7 10
======== ========
The applicable tax of the Group is derived from the
consolidation of all Group companies applicable tax band on their
domestic tax rates.
9. Property, plant and equipment
GROUP 2011
Computer, Furniture
office equipment EDC terminals , fitting Motor Total
& renovation vehicles
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
As at 1 January
2011 271 386 81 21 759
Exchange differences (5) (10) (3) - (18)
Additions 29 64 8 - 101
Disposal - - - (20) (20)
------------------ ---------------- -------------- ----------- --------
As at 31 December
2011 295 440 86 1 822
================== ================ ============== =========== ========
Accumulated depreciation
As at 1 January
2011 152 247 74 3 476
Exchange differences (4) (8) (1) - (13)
Depreciation 62 (117) 12 4 195
Disposal - - - (7) (7)
As at 31 December
2011 210 356 85 - 651
================== ================ ============== =========== ========
Net Book Value 85 84 1 1 171
================== ================ ============== =========== ========
Motor vehicle with the carrying amount of GBP1,000 (2010:
GBP18,000) were acquired by hire purchase and are pledged as
securities for liabilities.
GROUP 2010
Computer, Furniture
office equipment EDC terminals , fitting Motor Total
& renovation vehicles
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
As at 1 January
2010 132 289 55 22 498
Exchange differences 33 75 14 3 125
106 30 12 21 169
- (8) - (25) (33)
------------------ ---------------- -------------- ----------- --------
Additions
------------------ ---------------- -------------- ----------- --------
Disposal
------------------ ---------------- -------------- ----------- --------
As at 31 December
2010 271 386 81 21 759
================== ================ ============== =========== ========
Accumulated depreciation
As at 1 January
2010 82 131 34 15 262
Exchange differences 22 24 19 2 67
48 93 21 4 166
- (1) - (18) (19)
------------------ ---------------- -------------- ----------- --------
Depreciation
------------------ ---------------- -------------- ----------- --------
Disposal
------------------ ---------------- -------------- ----------- --------
As at 31 December
2010 152 247 74 3 476
================== ================ ============== =========== ========
Net Book Value 119 139 7 18 283
================== ================ ============== =========== ========
Motor vehicle with the carrying amount of GBP18,000 (2009:
GBP7,000) were acquired by hire purchase and are pledged as
securities for liabilities.
10. Intangible assets
2011 Intellectual Property
Goodwill Trademark System Contracted
software customers Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
As at 1 January
2011 4,138 2 209 213 4,562
Addition - - 137 - 137
Acquisition of subsidiary - - - - -
As at 31 December
2011 4,138 2 346 213 4,699
========= ========== ========== =========== ========
Amortisation
As at 1 January
2011 - 2 110 121 233
Amortisation - - 46 42 88
Impairment loss 1,100 - - - 1,100
--------- ---------- ---------- ----------- --------
As at 31 December
2011 1,100 2 156 163 1,421
========= ========== ========== =========== ========
Net book value
As at 31 December
2011 3,038 - 190 50 3,278
========= ========== ========== =========== ========
2010 Intellectual Property
Goodwill Trademark System Contracted Total
software customers GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
As at 1 January 2010 4,138 2 209 213 4,562
Acquisition of subsidiary - - - - -
As at 31 December 2010 4,138 2 209 213 4,562
========= ========== ========== =========== =========
Amortisation
As at 1 January 2010 - 2 68 79 149
Amortisation - - 42 42 84
As at 31 December 2010 - 2 110 121 233
========= ========== ========== =========== =========
Net book value
As at 31 December 2010 4,138 - 99 92 4,329
========= ========== ========== =========== =========
The amortisation recognised in respect of intellectual property
has been included in the line item, administrative expenses in the
consolidate statement of income.
Description of intangible assets
Goodwill arising on the acquisition of the subsidiaries
represents the excess of the cost of acquisition over the Group's
interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities of the subsidiaries
recognised at the date of acquisition. Goodwill is initially
recognised as an asset at cost and is subsequently measured at cost
less any accumulated impairment losses. The carrying value of
goodwill is allocated to the respective segments as follows: -
2011 2010
GBP'000 GBP'000
Third party administrator 2,957 4,057
Software licensing 81 81
--------- ---------
Total carrying value of Goodwill 3,038 4,138
========= =========
System software comprises Electronics Claims Clearance System
and Loyalty Programme software. The system software is initially
recognised based on the cost that would be incurred in re-creating
the asset and is subsequently amortised based on straight-line
method over a period of three years. Contracted customers are the
existing customers of the acquired subsidiaries. The contracted
customers are initially recognised based on the estimated net
present value of the service contracts entered into between the
customers and subsidiaries acquired and is subsequently amortised
based on straight-line method over a period of five years. The
recoverable amount of cash generating unit is determined based on
value in use calculation as set out below.
The goodwill and other intangible assets are reviewed for
impairment annually or more frequently if events or changes in
circumstances indicate that the assets might be impaired. The 2011
review was undertaken in the first quarter of year 2012 and the
impairments of goodwill amounting to GBP1,100,000(2010: Nil) is
recognised in the income statement.
Management have approved the forecast for 2012 and have prepared
additional projection based on the 2011 numbers for the next four
years. This was used as the basis for determining the recoverable
amount of each CGU.
In conducting the review we used a growth rate 10% to 50% and a
market beta of 4.
Management are satisfied that there are no reasonably possible
changes in key assumptions, which would cause the recoverable
amount of any of our GGUs to be below their carrying amount.
The key assumptions used in the forecast are as follows:
Assumption
%
Growth rate 10-50%
Discount rate 25%
Sensitivity analysis
A sensitivity analysis has been carried out for each CGU. The
results of the analysis can be summarises as follow:
If the estimated growth rate to forecast the revenue had been 10
percent point lower than the basis assumption, total recoverable
amount would be 12 percent lower.
If the estimated discount rate used for the Group's discount
cash flow had been one percentage point higher than the starting
assumption of 25%, total recoverable amount would be 3%lower.
These calculations are hypothetical and should not be viewed as
an indication that these figures are any more or less likely to be
changed. The sensitivity analysis should therefore be interpreted
with caution.
11. Investments
2011 2010
Company GBP'000 GBP'000
Cost
Beginning of the year 4,500 4,500
Additions - -
--------- ---------
Balance as at 31 December 4,500 4,500
========= =========
Impairment
Beginning of the year - -
Impairment loss recognized 1,450 -
--------- ---------
Balance as at 31 December 1,450 -
--------- ---------
Net book value as at 31 December 3,050 4,500
========= =========
Details of the subsidiaries:
Name of subsidiaries Country Principal activities 2011 2010
of incorporation
% held % held
Medilink-Global Investment holding and
(Asia) Pte provision of third party
Ltd Singapore administrator services 100 100
Medilink (Beijing)
TPA Services People Republic Provision of third party
Co., Ltd of China administrator services 100 100
Datalink Healthcard
Network Sdn Provision of third party
Bhd Malaysia administrator services 100 100
Provision of project
management, facilities
management and provision
of system integration
services to the third
Datalink Technologies party administration
Sdn Bhd Malaysia and insurance companies 100 100
Lifeinc Holdings Provision of third party
Pte Ltd Singapore administrator services 100 100
Medilink-Global
(HK) Ltd* Hong Kong Dormant 100 100
* During the prior year the Group formed Medilink-Global (HK)
Limited with 10,000 shares of no par stock issued on 24 May 2010 to
Medilink-Global (Asia) Pte Ltd, the sole shareholder.
Medilink-Global UK Limited is the ultimate parent of the
Group.
Disposal of investments in associates
Name of Company Country Principal activities 2011 2010
of incorporation
% held % held
Medilink (Thailand) Provision of third party
Co Ltd Thailand administrator services 19 48
-------- --------
On 27 December 2011, the Company's investment in Medilink
(Thailand) Co Ltd ("MTH") was decreased from 48% to 19% as a result
of the sales of shares to Heah Zhong Tak for a total cash
consideration of 40 pence. Subsequent to the disposal, the Company
has no significant influence over MTH and hence the investment and
its net carrying amount are reclassified as available for sale
financial assets.
The forecast assumptions and sensitivity analysis for the
impairment review are included in Note 10.
12. Trade and other receivables
Group
2011 2010
GBP'000 GBP'000
Non-current asset
Amount owed by associate - 313
Current assets
Trade receivables 837 717
Other receivables 148 429
985 1,459
======== ========
As at 31 December the following trade receivables were past
their due date (of 0 to 3 months) but not impaired. It is
management's belief that these debts will be fully repaid by
reference to no default experience to date. In determining the
recoverability of trade receivables, the Group considers any change
in the credit quality of the trade receivables from the date credit
was initially granted up to the reporting date.
Ageing of past due but not impaired
2011 2010
GBP'000 GBP'000
60 - 90 days 38 80
More than 90 days 350 469
-------- --------
At 31 December 388 549
======== ========
The carrying amounts of the Group's trade and other receivables
are denominated in the following currencies:
2011 2010
GBP'000 GBP'000
Malaysia Ringgit 575 689
US Dollar 11 9
Chinese Yuan Renminbi 322 276
Singapore Dollar 77 89
Botswana Pula - 83
985 1,146
======== ========
Financial Asset
The Group's financial assets by each financial instrument
category are as follows:-
2011 2010
Loan and receivables GBP'000 GBP'000
Trade receivables 837 717
Other receivables 148 429
Amount owed by associate - 313
Cash and cash equivalents 290 880
------------------------ --------------------
Total 1,275 2,339
======================== ====================
13. Cash and cash equivalents
Group
2011 2010
GBP'000 GBP'000
Fixed Deposit 20 23
Cash and Bank Balance 270 857
290 880
======== ========
Company
2011 2010
GBP'000 GBP'000
Cash and Bank Balance 11 122
11 122
======== ========
14. Trade and other payables
Group
2011 2010
GBP'000 GBP'000
Trade payables 313 215
Other payables 620 489
Amount owed to a shareholder 401 308
Amount owed to directors 48 58
1,382 1,070
======== ========
Company
2011 2010
GBP'000 GBP'000
Other payables 415 350
415 350
======== ========
The carrying amount of trade and other payables approximates to
their fair value.
It is the Group's policy to pay suppliers in accordance with the
terms of business agreed with them. The number of days of trade
purchases outstanding for the Group at the year end was 91 days
(2010: 71 days).
The carrying amounts of the Group's trade and other payables are
denominated in the following currencies:
2011 2010
GBP'000 GBP'000
Malaysia Ringgit 577 349
Chinese Yuan Renminbi 131 114
Singapore Dollar 126 198
Great Britain Pound Sterling 98 42
Hong Kong Dollar 1 -
US Dollar - 1
933 704
======== ========
Financial Liabilities
The Group's financial liabilities by each financial instrument
category are as follows:-
2011 2010
Amortised cost GBP'000 GBP'000
Trade and other payables 933 704
Amount owed to director 48 58
Amount owed to a shareholder 401 308
Finance lease 3 22
-------- --------
Total 1,385 1,092
======== ========
Gross maturity analysis of the financial liabilities is as
follows:
2011 2010
Non derivatives GBP'000 GBP'000
Within 1 year 919 710
Later than 1 year not later than 5
years 456 378
Greater than 5 years 10 4
-------- --------
Total 1,385 1,092
======== ========
15. Hire Purchase
Group
2011 2010
GBP'000 GBP'000
Minimum Hire Purchase payments:
- not later than one year 4 7
- later than one year and not later
than five years - 18
- after five years - -
-------- --------
4 25
Less: future interest charges (1) (3)
-------- --------
3 22
======== ========
Represented By:
Current - Not later than one year 3 6
Long term - Later than one year and
not later than 5 years - 12
After five years - 4
-------- --------
3 22
======== ========
16. Deferred taxation
Movements in deferred taxation for the Group during the year are
as follows:
2011 2010
GBP'000 GBP'000
Balance as at 1 January 47 56
Reversal of prior year deferred tax
liability 7 (9)
-------- --------
Balance as at year end 40 47
======== ========
Deferred tax asset of GBP138,000 (2010: GBP138,000) arising from
the unused tax losses has not been recognised and there is no
expiry period for the said deferred tax assets.
17. Share Capital
The Company has one class of ordinary share capital which
carries no rights to fixed income, any preferences or
restrictions.
2011 2010
GBP'000 GBP'000
Issued:
120,909,108 (2010:118,920,280) Ordinary
shares
of 5p each 6,045 5,946
-------- --------
On 3 November 2011, 1,988,828 ordinary shares of 5p each were
issued at GBP0.0525 to various employees and certain directors of
Medilink-Global UK Ltd for GBPNil consideration. The Employee
Shares have been issued in lieu of certain salary and bonus
payments due for year ended 31 December 2009.
The Employee Shares issued to Directors of Medilink-Global UK
Ltd are as follow:-
Fair value
Number of of shares
share issued issued
GBP
Norman Lott - Chairman 100,000 5,028
Chen Shien Yee - Finance Director 14,295 715
-------------- -----------
On 3 November 2011, 10,000,000 ordinary shares of 5p each were
transferred at GBP0.0525 to various employees and a director of
Medilink-Global UK Ltd for GBPNil consideration. The Employee
Shares have been issued in lieu of certain salary and bonus
payments due for year ended 31 December 2009.
The Employee Shares issued to the Director of Medilink-Global UK
Ltd is as follow:-
Fair value
Number of of shares
share issued issued
GBP'000
Chen Shien Yee - Finance Director 3,500,000 185
-------------- -----------
18. Loss Per Share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period. In
accordance with IAS 33, and as the Group has reported a loss for
the year, the shares are not diluted.
2011 2010
GBP'000 GBP'000
Loss after taxation (3,338) (686)
Basic weighted average shares in issue 119,181,825 107,189,696
Basic and diluted loss per share based
on issued share capital as at 31 December
(pence) (2.80) (0.64)
------------ ------------
19. Financial instruments
Capital Management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders, benefits for other stakeholders
and to maintain optimal capital structure to reduce the cost of
capital. Management considers, as part of its capital, the
financial sources of funding from shareholders and third parties.
Our key process for managing capital is regular Board reviews of
our capital structure and needs.
The Group's financial instruments, which are recognised in the
statement of financial position, comprise cash and cash
equivalents, receivables and payables and ordinary shares. The
accounting policies and methods adopted, including the basis of
measurement applied are disclosed above, where relevant. The
information about the extent and nature of these recognised
financial instruments, including significant terms and conditions
that may affect the amount, timing and certainty of future cash
flows are disclosed in the respective notes above, where
applicable.
The Group does not generally enter into derivative transactions
(such as interest rate swaps and forward foreign currency
contracts) and it is, and has been throughout the year, the Group's
policy that no trading in financial instruments shall be
undertaken.
There were no financial instruments not recognised in the
statement of financial position.
The Group's activities expose it to a variety of financial
risks: currency risk, credit risk, liquidity risk and cash flow
interest-rate risk. These risks are limited by the Group's
financial management policies and practices as described below:
(a) Credit risks
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the
Group's receivables from customers and investment securities.
The Group has credit risk management policies in place and
exposure to credit risk is monitored on an ongoing basis.
Management generally adopts conservative strategies and tight
control on credit policy. The Group has limited the amount of
credit exposure to customers.
The average credit period on sales of services is 120 days. No
interest is charged on the trade receivables.
Before accepting any new customer, the Group will check the
credit worthiness of any new customers.
The credit risk on cash and cash equivalent is limited because
the counterparties are banks with high credit ratings recognised by
international credit rating agencies.
The maximum exposure to credit risk at the reporting date is the
fair value of trade receivables of GBP677,000 (2010: GBP717,000)
and other receivables of GBP172,000 (2010: GBP429,000). The Group
does not hold any collateral as security.
(a) Liquidity risks
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible,
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
Group's reputation.
To ensure liquidity, the Group maintains sufficient cash and
cash equivalents on demand to meet its obligations as and when they
fall due.
(c) Foreign currency exchange risks
The Group does not hedge its foreign currencies. Transactions
with customers and vendors are mainly denominated in Malaysia
Ringgit, Singapore Dollars, US Dollars and Chinese Yuan Renminbi.
The Group has bank accounts in Malaysia Ringgit, Singapore Dollar,
US Dollars and Chinese Yuan Renminbi to mitigate against exchange
risks.
The sensitivity analyses in the table below details the impact
of changes in foreign exchange rates on the group's post-tax profit
for the year ended 31 December 2011 and 31 December 2010.
In each case, it is assumed that the named currency is
strengthening or weakening against all other currencies, while all
the other currencies remain constant. Results are shown for all
currencies where the impact on group post tax profit would be more
than 5%. If the GBP weakened or strengthen by 10% against the
Chinese Yuan Renminbi, with all other variables in each case
remaining constant, then:
Impact on group post-tax
profit - gain/(losses)
Strengthening Weakening
GBP'000 GBP'000
2011
Chinese Yuan Renminbi (52) 52
2010
Chinese Yuan Renminbi (28) 28
(d) Cash flow and fair value interest rate risks
The Group's primary interest rate risk relates to interest
bearing debts. Investments in financial assets are mainly short
term in nature and are not held for speculative purposes but are
placed in fixed deposits.
The Group manages its interest rate exposure by maintaining a
fixed rate borrowing to mitigate the risk associated to interest
rate fluctuation.
At the reporting date the interest rate profile of the Group's
interest-bearing financial instruments were as follows:
Hire purchase interest at 4.87% per annum
2011 2010
GBP'000 GBP'000
Fixed rate instruments
Financial assets - -
Financial liabilities (3) (22)
-------- --------
Carrying value (3) (22)
======== ========
20. Related party transactions
Related party transactions during the year were as follow:
2011 2010
GBP'000 GBP'000
Adviser fee payable to shareholders 50 49
Loan from a shareholder 401 308
Amount owing to director 48 58
======== ========
The term of the loan from a shareholder is interest free and
with no fixed term of repayment.
The loan is secured against the corporate guarantee issued by
the Company.
Details of Directors' remunerations (who are considered to be
the key management of the Group) are as follows:
Short term
employment Share-based
benefits payment Total
GBP'000 GBP'000 GBP'000
Executive directors 38 185 223
Non-executive directors 15 5 20
Senior management staff - 687 687
============ ============== ========
Short term
employment Share-based
benefits payment Total
GBP'000 GBP'000 GBP'000
Executive directors 40 - 40
Non-executive directors 16 - 16
Senior management staff 30 - 30
============ ============== ========
21. Control
The controlling parties of the Grou as at 31 December 2011 were
Mr. Shia Kok Fat and Asdion Digital Advance System Sdn Bhd. Mr.
Shia Kok Fat is a Malaysian and a significant shareholder and
director of the Company. Asdion Digital Advance System Sdn Bhd, a
company incorporated in Malaysia, is also a significant shareholder
of the Company.
22. Commitments
There are no other significant capital commitments contracted
for but not provided.
Operating Leases
The Group's future minimum lease payments under non-cancellable
operating leases are as follows:
As at 31 December 2011
Land and buildings
GBP
Leases which expire:
Within one year 29,681
Within two to five years 86,909
===================
As at 31 December 2010
Land and buildings
GBP
Leases which expire:
Within one year 58,956
Within two to five years 10,215
===================
23. Subsequent events
On 19 March 2012, Asdion Digital Advance System Sdn Bhd and Mr
Heah Theare Haw have sold 8,000,000 and 22,000,000 ordinary shares
of 5p each in the Company respectively to Ms Lei Nga Wan at 2.2
pence per ordinary shares.
On 18 June 2012, shareholders of Asdion Digital Advance System
Sdn Bhd during the Extraordinary General Meeting of Asdion Berhad
approved the proposal to dispose of 22,000,000 ordinary shares of
5p each in the Company to Mr Law Chee Kheong for total
consideration of GBP484,000.
There were no other subsequent events that require adjustment to
or disclosure in the financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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