TIDMOPP TIDMOPPP
RNS Number : 2324C
Origo Partners PLC
28 September 2018
Origo Partners PLC
("Origo" or the "Group" or the "Company")
Interim Unaudited Financial Statements
Origo Partners PLC today announces its audited results for the
period ended 30 June 2018.
For further information, please contact:
Origo Partners plc IOMA House, Hope Street,
John Chapman Douglas
Chairman Isle of Man, IM1 1AP
Nominated Adviser and Broker Arden
Partners plc
Chris Hardie
Ben Cryer +44 (0)20 7614 5900
Chairman's Statement
Dear Shareholders,
Origo's net asset value as at 30 June 2018 was US$13.6 million
as compared with US$14.1 million as at 31 December 2017 and about
US$81 million as at 30 June 2017 (with the preference shares
counted as equity). The reduction in NAV over the last six months
is primarily a reflection of the Company's running costs, which
include the settlement of ongoing financial obligations incurred by
the previous board as well as a realisation at a small discount to
book value. As compared with the Company's NAV as at 30 June 2017,
the year over year decline in NAV is primarily a reflection of the
substantial write down of assets the current board took at year end
2017 to better reflect likely realisation amounts.
During the first half of 2018, the Origo board has endeavoured
to better comprehend the Company's portfolio, sell those assets
that are liquid, and cut operating expenses as far as operating
expenses for a listed public company can be cut. The Company sold
its two listed assets, Kincora Copper and Niutech Energy Ltd., for
close to book value. Post the Niutech sale, some of which was
completed after period end with proceeds expected later this year,
we have no remaining liquid assets and no clear visibility as to
future asset sales. We expect however that our cash position plus
disciplined expense management will enable us to obtain a fair
value for our remaining assets without the necessity of a fire
sale.
When this board took office late last year, the Company's
solvency was in question due to a minimal cash position as well as
substantial debts and future contractual obligations. During the
first half of 2018, we built up an acceptable cash position,
eliminated all debt on our balance sheet and entered into future
arrangements appropriate for a Company with our portfolio. During
that same period, we agreed with Origo's Advisor to terminate the
advisory agreement and replace it with an arrangement that
compensated the Advisor solely based on cash distributed to
shareholders.
Our administrator has taken control of all of the Company's bank
accounts, which has, for the first time, given this board
visibility into all Company expenses. This has enabled our
administrator to spot, for example, recent travel expenses billed
to the Company by a former promoter who had supposedly departed
Origo's Advisor close to four years ago. We are grateful to our
administrator for its diligence on the Company's behalf.
We have now put in place systems to ensure that no Company money
is paid to anyone without director approval and that all director
payments are subject to the approval of another director. We are
also reviewing historic expenses to the extent any may be
recoverable. We have negotiated fees with all service providers and
expect that our largest single provider expense, audit, will be
reduced substantially for the year end 2018 audit. Our expense
reductions are not fully visible in these financial statements
because they still include payments for obligations incurred under
the previous board. Future financial statements should however
reflect substantial cost reductions.
Origo's Portfolio
Jilin Dechun Grains
Jilin Dechun Grains is a company Origo invested about US$28
million into by way of debt and equity investments in a complicated
multi-layer offshore structure with a BVI company, "China Rice
Ltd.," at the head of that structure. That structure was controlled
by one Li Dechun, a local entrepreneur in China's Jilin Province.
The current Origo board learned this past spring that nearly a year
earlier China Rice's operating company, Jilin Dechun Grains, had
defaulted on a loan obligation to ICBC, the large Chinese
state-owned bank. Mr. Li also defaulted on other obligations to
ICBC in connection with assets apparently unrelated to China Rice.
We have no real understanding as to why Jilin Dechun Grains was
permitted to incur this debt, what the debt was used for or why it
was defaulted on, except to note that Mr. Li's obligations
unrelated to China Rice seem to have been intertwined with Jilin
Dechun Grains' assets. We have repeatedly asked the Company's
Advisor for documents showing why the investment was structured the
way it was and why Jilin Dechun Grains was permitted to incur the
debt that appears to have led to its insolvency. We have yet to see
a single piece of paper that might answer either question and
curiously have been told that no copies of any board minutes of the
investee company exist, notwithstanding that a nominee of the
Advisor sat on its board for six or seven years.
Subsequent to the default, we learned that ICBC had transferred
the defaulted debt to Great Wall, a state-owned asset manager.
According to legal advice we have received, China does not have a
functional bankruptcy regime so situations like the Jilin Dechun
Grains' default are dealt with on an ad hoc basis. Besides legal
problems stemming from the absence of an insolvency or bankruptcy
framework, the Jilin Dechun Grains' default also involves political
considerations having to do with the Chinese Government's efforts
to rationalize the rice industry and reduce bad debt at state owned
banks.
We met with Mr. Li in Beijing in July and listened to his plan
to try to recover control of Jilin Dechun Grains by purchasing the
defaulted debt from Great Wall. His plan seemed to be to first
negotiate a discounted price for the defaulted debt and second to
find someone to finance the transaction since he appears insolvent.
Reports indicate that Mr. Li is in negotiations with Great Wall as
to price and also with third parties to provide financing. We do
not have any visibility over whether these negotiations will
succeed (in part because we are not directly involved in them and
in part because they seem to hinge on political considerations that
are difficult for outsiders to get their hands around) and if so
create any value for Origo. We have consequently decided to
maintain China Rice's nil valuation.
Moly World
There was a positive development in connection with Moly World,
which purports to own the right to mine a large molybdenum deposit
in Mongolia. I noted in June that an arm of the Mongolian
government had contested that right because the mining area
included a protected zone. Moly World sued the Mongolian government
and a lower court in Mongolia has ruled in Moly World's favour. The
Government has, however, appealed that decision. Notwithstanding
this positive development, we are maintaining a nil valuation for
Moly World because, first, the chances of the Moly World's claim
succeeding on appeal are unclear and, second, we lack visibility
over Moly World's future prospects in the event that the
Government's efforts to overturn the lower court decision were
unsuccessful and the mining rights reverted to Moly World.
Celadon Mining Ltd.
There have been reports of positive developments in connection
with the controlling shareholder's efforts to monetize Celadon's
assets, but we have received these sorts of positive reports before
- note for example the representation in Origo's 2015 Annual Report
that "[a]fter an active sales process during the second half of the
year, Celadon entered into a Letter of Intent for the sale of Chang
Tan West in November 2015 with a large Chinese state-owned
enterprise." The truth of the matter is that we as minority
shareholders in this privately held enterprise have no visibility
into any negotiations to sell Celadon's assets and have never seen
any letter of intent. On the other hand, the underlying assets
appear to have intrinsic value. We consequently maintain the
Celadon valuation at US$4.48 million, the same as period end
2017.
Gobi Coal & Energy Ltd.
Gobi Coal is a story similar to Celadon - no control rights on
the part of Origo, apparently valuable underlying assets, reported
progress but no real visibility as to the timing or amount of any
future cash distributions. Origo's 2016 annual report explained
that "[w]ith coal prices rebounding strongly in 2016, we have been
informed by [Gobi Coal that it is] . . . exploring a capital market
event . . . to provide liquidity for its shareholders." To date
that "liquidity event" noted in 2016 has not transpired. We
consequently maintain the Gobi Coal valuation at US$1 million, the
same as period end 2017. We hope to meet the Gobi Coal management
later this year, which we hope will provide insight into the
likelihood of the "liquidity event" referred to above.
Unipower Battery Ltd.
This past July, the Origo board decided to stop providing any
further financial support to Unipower, which likely means that that
company will provide no future value for Origo. We consequently
maintain Unipower's nil valuation.
Unipower is a curious story. Origo made several investments into
in Unipower, the first in 2010 and the last in 2015, for a total of
about US$13.5 million. Unipower supposedly owned some sort of
proprietary technology and valuable government licenses for the
manufacture of batteries for electric powered automobiles. For
example, about fifteen months ago, Origo represented that Unipower
was a "provider of lithium-ion materials and battery solutions.
Producing high quality material and batteries solution[s] for the
Electric Vehicle and power storage industries, Unipower is
supported by patents, facilities and a technical management team
with more than 20 years of experience."
We are further told that at some point in the past Unipower ran
into legal and financial difficulties. This board has not been able
to attain a real understanding of those difficulties except that
when we started looking into Unipower about nine months ago (i.e.,
about five months following the publication of the 2016 Annual
report, quoted above), it did not appear either to be a going
concern or to own anything that could be converted into cash.
In addition to the US$13.5 million investment, Origo over a
period of years had effectively provided financial support to
Unipower by paying the salary of a part time executive officer, who
had been brought on by our Advisor but paid by Origo. Our
administrator has reviewed Origo's records and it appears that over
the years Origo has paid this person US$430,000 for his services.
When we last met, the executive officer put forward a vague plan to
move Unipower to a distant province where the local government, for
reasons that were never clear, would supposedly provide financial
support to rescue the company. We retained lawyers in Beijing to
look into this company but ultimately concluded that the prospects
for any future success on the part of the company were dim and that
further funding for the executive officer were a waste of Company
money. We told the executive officer in early July that Origo would
no longer pay his salary and that if he wished to continue as
Origo's representative he should propose a success-based
compensation. Negotiations are in progress, but I am not optimistic
that this sort of arrangement will be finalized.
* * * * *
The current board was constituted about ten months ago. The road
to removing the old board and Nomad was arduous and, in my case,
took about a year to overcome the resistance of the status quo.
Origo is quite a mess so I can well understand why those inside
were reluctant for outsiders to take a look. Basic Company records
are missing such as the due diligence and the investment rationale
for any of the Company's investments, both those that are
identified above and those that have long since been written
off.
Now that we have had about ten months as corporate insiders we
see that the situation inside the Company is quite unsatisfactory
and a lot of what the Company had announced over the last few years
does not seem in accord with what this board has observed.
Shareholders will recall that in 2014 the Company adopted a
realisation strategy with the objective being to realise Origo's
entire portfolio and return the net capital to shareholders no
later than November 2018. Thereafter the Origo board disseminated
information that realisations were underway.
In an RNS announcement of 23 November 2016, the Company
announced that "a total of 68 per cent of the portfolio (in terms
of fair value as of 30 June 2016) is now either listed or subject
to indicative terms of merger or disposal." According to the
Company's balance sheet as at 30 June 2016, the Company's
investments at "fair value" were about US$78 million and loans due
within a year were about US$26 million. Thus, this RNS seems to
indicate that as at 30 June 2016, i.e., 27 months ago, about US$71
million was "either listed or subject to indicative terms of merger
or disposal." It is not entirely clear what this phrase means, but
my take away is that it was meant to indicate that the bulk of the
Company's portfolio was well on its way to being realised in the
near future.
The Company's 2016 annual report released about seven months
later represented that there had been "continued progress in the
realisation programme with a majority of the portfolio (in terms of
fair value) now either publicly listed or subject to indicative
merger or disposal terms." As of the 2016 year-end balance sheet,
the Company's equity and debt investments were carried at a "fair
value" of about US$96 million, the "majority" of which were
supposedly "subject to indicative merger or disposal terms." This
US$96 million figure included investments now carried at nil, such
as China Rice which was then carried at US$31.36 million, Unipower
which was then carried at US$15.79 million, and a Norwegian Company
called "Staur Aqua AS ("a world class supplier of desalination
technology") that seems to have some connection with one of Origo's
promoters, with an investment of US$4.57 million and a carrying
value of US$1.06 million.
Since the November 2016 RNS, which seemed to indicate about
US$66 million was "either listed or subject to indicative terms of
merger or disposal," and today, the Company has had net realisation
of a little less than US$14 million. Of this figure, more than a
third was then paid to the Advisor as fees and expenses, a third
was paid in "professional fees," and the remaining third comprises
running costs and the Company's current cash position. Further, as
noted above, following the completion of the Niutech sale this
board has no visibility as to further future realisations.
* * * *
The Origo board will continue its efforts to recover value from
Origo's investments. We will endeavour to better comprehend the
Company's investments and operations by trying to locate books and
records that are missing but may shed light on investments such as
China Rice and Unipower referred to above as well as other
investments that were once on the Company's balance sheet but seem
now to have vanished - such as a farm in Australia in which the
Company invested over US$20 million or the Norwegian desalinization
company I have mentioned. We will continue working with our lawyers
in various jurisdictions as we try to comprehend how so much money
was lost and will take those steps practicable to recover what can
be recovered. We will write further in due course.
Very truly yours,
John D. Chapman
Chairman
Origo Partners Plc
28 September 2018
Interim Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2018
(Unaudited) (Unaudited)
Six months Six months (Audited)
ended ended Year ended
30 June 30 June 31 December
2018 2017 2017
Notes $'000 $'000 $'000
------------------------------------------ ------ ------------- ------------- --------------
Investment income/(losses): 5
Realised gains/(losses) on disposal
of investments (292) 395 423
Unrealised gains/(losses) on investments (22) (11,341) (74,440)
Income from loans - 267 -
(314) (10,679) (74,017)
------ ------------- ------------- --------------
Investment Advisory Fees 19 (154) (740) (1,390)
Other income 6 629 25 29
Share-based payments - (215) (21)
Other administrative expenses 7 (1,095) (1,306) (4,856)
Foreign exchange gains/(losses) (10) 8 50
Net loss before Finance Costs and
Taxation (944) (12,907) (80,205)
Finance costs 9 332 (2,352) (3,598)
Profit before tax (612) (15,259) (83,803)
------------------------------------------ ------ ------------- ------------- --------------
Income tax credit 10 - 704 819
Profit after tax (612) (14,555) (82,984)
------------------------------------------ ------ ------------- ------------- --------------
Other comprehensive income
------------------------------------------ ------ ------------- ------------- --------------
Other comprehensive income to be
reclassified to profit or loss
in subsequent periods
Exchange differences on translating
foreign operations (47) (37) 6
------------------------------------------ ------ ------------- ------------- --------------
Net other comprehensive income
to be reclassified to profit or
loss in subsequent periods (47) (37) 6
------------------------------------------ ------ ------------- ------------- --------------
Tax on other comprehensive income - - -
------------------------------------------ ------ ------------- ------------- --------------
Other comprehensive income net
of tax (47) (37) 6
Total comprehensive loss after
tax (659) (14,592) (82,978)
------------------------------------------ ------ ------------- ------------- --------------
Total comprehensive loss (659) (14,592) (82,978)
------------------------------------------ ------ ------------- ------------- --------------
Basic loss per share 11 (0.04) cents (4.15) cents (11.70 cents)
------------------------------------------ ------ ------------- ------------- --------------
Basic loss per redeemable zero (279.57)
dividend preference share 11 (3.52) cents - cents
------------------------------------------ ------ ------------- ------------- --------------
The accompanying notes from an integral part of these
consolidated financial statements.
Interim Consolidated Statement of Financial Position
As at 30 June 2018
(Unaudited) (Audited) (Unaudited)
30 June 31 December 30 June
2018 2017 2017
Notes $'000 $'000 $'000
----------------------------------- ------ ------------ -------------- ------------
Non-current assets
Property, plant and equipment 12 13 20 27
Investments at fair value through
profit and loss 14 9,357 17,045 60,676
Loan investments 15 350 350 350
9,720 17,415 61,053
----------------------------------- ------ ------------ -------------- ------------
Current assets
Trade and other receivables 250 881 4,060
Loans investments due within
one year 15 384 384 24,293
Cash and cash equivalents 4,312 1,199 880
4,946 2,464 29,233
----------------------------------- ------ ------------ -------------- ------------
Total assets 14,666 19,879 90,286
----------------------------------- ------ ------------ -------------- ------------
Current liabilities
Trade and other payables 322 1,381 4,248
Performance fees payable within
one year - - 8
Financial guarantee contracts 16 435 435 435
----------------------------------- ------ ------------ -------------- ------------
Total current liabilities 757 1,816 4,691
----------------------------------- ------ ------------ -------------- ------------
Non-Current Liabilities
Short/Long term borrowings 17 - 2,500 2,500
Redeemable preference shares - - 49,623
Provision 103 103 296
Current tax liabilities 6 - 499 -
Deferred income tax liability 10 247 796 1,314
------
Total non-current liabilities 350 3,898 53,733
----------------------------------- ------ ------------ -------------- ------------
Net assets 13,559 14,165 31,862
----------------------------------- ------ ------------ -------------- ------------
Equity attributable to equity holders
of the company
Share capital 56 56 56
Share premium 150,414 150,414 150,414
Share-based payment reserve 5,048 5,048 5,048
Accumulated Losses (192,272) (191,613) (124,123)
Translation reserve (1,431) (1,484) (1,527)
Other reserve 18 51,744 51,744 1,056
----------------------------------- ------ ------------ -------------- ------------
13,559 14,165 30,924
Non-Controlling Interests - - 938
----------------------------------- ------ ------------ -------------- ------------
Total equity 13,559 14,165 31,862
----------------------------------- ------ ------------ -------------- ------------
The accompanying notes from an integral part of these
consolidated financial statements.
Interim Consolidated statement of changes in equity
For the six months ended 30 June 2018
Attributable to equity holders of the parent
--------------------------------------------------------------------------------
Share-based
Issued Share payment Accumulated Other Translation Non-controlling Total
capital premium reserve Losses reserve reserve Total interests equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
-------- -------- ------------ ------------ -------- ------------ -------- ---------------- --------
At 1 January (109,567 (1,490
2017 56 150,414 5,048 ) 1,056 ) 45,517 492 46,009
---------------- -------- -------- ------------ ------------ -------- ------------ -------- ---------------- --------
Loss for the (82,984 (82,984 (82,984
period - - - ) - - ) - )
Other
comprehensive
income - - - - - 6 6 - 6
---------------- -------- -------- ------------ ------------ -------- ------------ -------- ---------------- --------
Total
comprehensive (82,984 (82,978 (82,978
income/loss - - - ) - 6 ) - )
Capitalisation
of Redeemable
Preference
shares - - - - 50,688 - 50,688 - 50,688
Disposals of
subsidiaries - - - 938 - - 938 (492 ) 446
At 31 December (191,613 (1,484
2017 56 150,414 5,048 ) 51,744 ) 14,165 - 14,165
---------------- -------- -------- ------------ ------------ -------- ------------ -------- ---------------- --------
Loss for the
period - - - (659 ) - - (659 ) - (659 )
Other
comprehensive
income - - - - - 53 53 - 53
---------------- -------- -------- ------------ ------------ -------- ------------ -------- ---------------- --------
Total
comprehensive
income/loss - - - (659 ) - 53 (606 ) - (606 )
Minority
interests - - - - - - - - -
(192,272 (1,431
At 30 June 2018 56 150,414 5,048 ) 51,744 ) 13,559 - 13,559
---------------- -------- -------- ------------ ------------ -------- ------------ -------- ---------------- --------
Reserve Description and purpose
Share premium Amounts subscribed for share capital in excess of nominal
value.
Share-based Equity created to recognise share-based payment expense.
payment reserve
Accumulated Cumulative net gains and losses recognised in profit
losses or loss.
Translation Equity created to recognise foreign currency translation
reserve differences.
Other reserve Own shares acquired, EBT ( as defined in Note 18) shares
and capital redemption and capitalisation of redeemable
preference shares
The accompanying notes from an integral part of these
consolidated financial statements.
Interim Consolidated statement of cash flows
For the six months ended 30 June 2018
(Unaudited) (Audited) (Unaudited)
30 June 31 December 30 June
2018 2017 2017
Notes $'000 $'000 $'000
---------------------------------------- ------- ------------ ------------- ------------
Loss before tax (659) (83,803) (15,259)
---------------------------------------- ------- ------------ ------------- ------------
Adjustments for:
Depreciation and amortisation 12 7 14 7
Share-based payments - 21 215
Other income 6 (629) - -
Provision for bad debts 7 125 3,386 833
Realised losses/(gains) on disposal
of investments 5 292 (423) (395)
Unrealised losses on investments
at FVTPL* 5 22 50,526 11,344
Unrealised (gain)/loss on loans - 23,914 (3)
Income from loans - - (267)
Foreign exchange (gains)/losses 10 - (8)
Interest expenses of redeemable
preference shares - (50) 2,155
Interest expenses of long term
borrowing 9 (335) 3,554 176
---------------------------------------- ------- ------------ ------------- ------------
Operating loss before changes in
working capital and provisions (1,167) (2,861) (1,202)
---------------------------------------- ------- ------------ ------------- ------------
Purchases of investments at FVTPL* 14 (4) - -
Proceeds from disposals of investments
at FVTPL* 7,927 4,954 14
Decrease/(increase) in trade and
other receivables 487 (345) (53)
(Decrease)/increase in trade and
other payables (1,607) (2,395) 321
---------------------------------------- ------- ------------ ------------- ------------
Net cash outflow from operations 5,636 (647) (920)
---------------------------------------- ------- ------------ ------------- ------------
Investing activities
Net cash acquired with subsidiary - - 14
Net cash flows outflow from investing
activities - - 14
---------------------------------------- ------- ------------ ------------- ------------
Financing activities
Repayment of short-term borrowings 17 (2,500) - -
Net cash flows inflow from financing
activities (2,500) - -
---------------------------------------- ------- ------------ ------------- ------------
Net increase/(decrease) in cash
and cash equivalents 3,136 (647) (906)
---------------------------------------- ------- ------------ ------------- ------------
Effect of exchange rate changes
on cash and cash equivalents (23) 60 -
Cash and cash equivalents at beginning
of period 1199 1,786 1,786
---------------------------------------- ------- ------------ ------------- ------------
Cash and cash equivalents at end
of period 4,312 1,199 880
---------------------------------------- ------- ------------ ------------- ------------
* FVTPL refers to the fair value through profit and loss
The accompanying notes from an integral part of these
consolidated financial statements.
Notes to the Interim Consolidated Financial Statements
For the six months ended 30 June 2018
1 General Information
Origo Partners Plc is a limited liability company incorporated
and domiciled in the Isle of Man whose shares are publicly traded
on the AIM market of the London Stock Exchange.
The Company and its subsidiaries are collectively referred to as
the Group.
The principal activities of the Group are private equity
investment, focused on growth opportunities created by the
urbanization and industrialization of China. The Group's Investing
Policy has now changed from that of a closed-ended, permanent
capital vehicle to that of a realisation company with the mandate
to return the net proceeds of realisations to shareholders.
These interim consolidated financial statements have been
approved and authorised for issue by the Company's board of
directors on 27 September 2018.
2 Basis of preparation and significant accounting policies
2.1 Basis of preparation
These interim consolidated financial statements have been
prepared in accordance with International Accounting Standard 34
"Interim Financial Reporting". These interim consolidated financial
statements do not include all the information and disclosures
required in the annual financial statements, and should be read in
conjunction with the Group's annual financial statements for the
year ended 31 December 2017, which were prepared in accordance with
IFRSs as adopted by the European Union.
The consolidated financial statements of the Group as at and for
the year ended 31 December 2017 are available upon request from the
Company's registered office at IOMA House, Hope Street, Douglas,
Isle of Man or the Company website http://origoplc.com
2.2 Summary of significant accounting policies
The accounting policies adopted in the preparation of the
interim consolidated financial statements are consistent with those
followed in the preparation of the Group's annual financial
statements for the year ended 31 December 2017.
The Group has not early adopted any other standard,
interpretation or amendment that was issued but is not yet
effective.
3 Critical accounting estimate and assumptions
The preparation of condensed consolidated interim financial
statements in conformity with IFRSs requires management to make
judgements, estimates, and assumptions that affect the application
of accounting policies and reported amounts of assets and
liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other
factors that are believed to be reasonable under the circumstances,
the results for which form the basis of making the judgements about
carrying values of assets and liabilities that are not readily
available from other sources. Actual results may differ from these
estimates.
In preparing these condensed consolidated financial statements,
the significant judgements made by management in applying the
Group's accounting policies were the same as those that applied to
the consolidated financial statements for the year ended 31
December 2017.
4 Financial risk management policies
The principal risks and uncertainties are consistent with those
disclosed with the preparation of the Group's annual financial
statements for the year ended 31 December 2017.
5 Investment loss
(Unaudited) (Unaudited)
Six months
Six months ended ended
30 June 2018 30 June 2017
$'000 $'000
------------------------------------------- -------------------- ----------------
Realised (losses)/gains on disposal
of investments (292) 395
- Investments at FVTPL (292) 9
- Subsidiary - 386
------------------------------------------- -------------------- ----------------
Unrealised (losses)/gains on investments (22) (11,341)
- Investments at FVTPL (22) (11,344)
- Loans at FVTPL - 3
------------------------------------------- -------------------- ----------------
Income from Loans - 267
------------------------------------------- --------------------
Total (314) (10,679)
------------------------------------------- -------------------- ----------------
6 Other income
(Unaudited) (Unaudited)
Six months Six months
ended ended
30 June 2018 30 June 2017
$'000 $'000
------------------------ --------------- ---------------
Tax payable reversal* 499 -
Sundry 130 25
Total 629 25
------------------------ --------------- ---------------
* This relates to a provision dating back to 2011 which is no
longer payable and written back into the income statement within
the period ended 30 June 2018.
7 Other Administrative expenses
(Unaudited) (Unaudited)
Six months ended Six months ended
30 June 2018 30 June 2017
$'000 $'000
------------------------------- -------------------- --------------------
Employee expenses (237) (91)
Professional fees (449) (289)
Depreciation expenses (7) (7)
Provision for bad debts (125) (833)
Travelling and Entertainment (89) -
Rent (72) -
Others (116) (86)
Total (1,095) (1,306)
------------------------------- -------------------- --------------------
Included within other administrative expenses are costs and
expenses incurred by Origo Advisors Limited which have been
recharged to the Company.
8 Directors remuneration
Directors' remuneration for the six month period ended 30 June
2018 and the number of options held were as follows:
Directors Share-based 30 June 2018
fee payment* Number of
Name US$'000 US$'000 options
------------------------ ----------- ------------- --------------
Mr. Niklas Ponnert** - - 4,500,000
Hiroshi Funaki** 38 - -
Philip Peter Scales** 25 - -
John Chapman** 45 - -
108 - 4,500,000
------------------------ ----------- ------------- --------------
Directors' remuneration for the six month period ended 30 June
2017 and the number of options held were as follows:
Directors Share-based 30 June 2017
fee payment* Number of
Name US$'000 US$'000 options
-------------------------------- ----------- ------------- --------------
Mr. Niklas Ponnert** - 22 4,500,000
Mr. Lionel de Saint-Exupery** 78 - -
Ms. Shonaid Jemmett
Page** 75 - -
153 22 4,500,000
-------------------------------- ----------- ------------- --------------
* Share-based payment refers to expenses arising from the Company's share option scheme
** Mr. Lionel de Saint-Exupery and Ms. Shonaid Jemmett Page
resigned as non-executive directors of the Company in October 2017.
Mr. Hiroshi Funaki was appointed as director of the Company in
September 2017, and Mr. Philip Peter Scales and Mr. John Chapman
were appointed as directors of the Company in October 2017. Mr.
Niklas Ponnert resigned as executive director of the Company in
April 2018.
9 Finance Costs
(Unaudited)
Six months (Unaudited)
ended Six months
30 June ended
2018 30 June 2017
$'000 $'000
-------------------------------------------- ------------- ---------------
Interest expense on redeemable preference
shares - (2,155)
Interest expense on long term borrowing 335 (176)
Bank charges (3) (21)
Total 332 (2,352)
-------------------------------------------- ------------- ---------------
In April 2018, the Company repaid the US$2.5 million loan that
the Company entered into on 5 December 2016 by repaying the US$2.5
million principal amount of the loan in full satisfaction of the
obligation with no interest or penalty payments. Accrued interest
of $335,000 has been written back into the income statement in the
period ended 30 June 2018.
10 Income Tax
As the Company is not in receipt of income from Manx land,
certain related business or property and does not hold a Manx
banking licence, it is taxed at the standard rate of 0% on the Isle
of Man. The Company is resident for tax purposes in the Isle of Man
and subject to corporate income tax at the standard rate of 0% and
as such no provision for tax in the Isle of Man has been made.
(Audited)
(Unaudited) Year ended
Six months ended 31 December
30 June 2018 2017
$'000 $'000
------------------------------------------------- ------------------- --------------
Current tax
Current year - -
Deferred tax
Deferred income tax 247 796
------------------------------------------------- ------------------- --------------
Total income tax liability in the consolidated
statement of financial position 247 796
------------------------------------------------- ------------------- --------------
The deferred income tax liability as at June 2018 US$ 247,000
(Dec 2017: US$796,000) relates to the fair value gain of Niutech
Environment Technology Corporation ("Niutech") estimated in
accordance with the relevant tax laws and regulations in the
People's Republic of China ("PRC") based on a tax rate of 10%.
11 Loss per share
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2018 2017 2017
US$'000 US$'000 US$'000
----------------------------------------- -------------- -------------- ---------------
Loss for the year attributable
to ordinary shareholders of the
parent as used in the calculation
of basic loss per share (131,747) (14,555) (41,071)
Weighted average number of ordinary
shares 351,035,389 351,035,389 351,035,389
Basic loss per share of ordinary
shares (0.04) cents (4.15) cents (11.70) cents
----------------------------------------- -------------- -------------- ---------------
Loss for the year attributable
to redeemable preference shareholders
of the parent as used in the
calculation of basic loss per
share (526,988) N/A (41,913)
Weighted average number of redeemable
preference shares 14,991,781 N/A 14,991,781
Basic loss per share of redeemable (279.57)
preference shares (3.52) cents N/A cents
----------------------------------------- -------------- -------------- ---------------
12 Property, Plant and Equipment
Vehicles
$'000
--------------------------- ----------
Cost
At 1 January 2018 85
Additions -
Disposals -
--------------------------- ----------
At 30 June 2018 85
------------------------------ ----------
Accumulated depreciation
At 1 January 2018 65
Charge for the period 7
------------------------------ ----------
At 30 June 2018 72
------------------------------ ----------
Net Book Value
---------------------------
At 1 January 2018 20
At 30 June 2018 13
------------------------------ ----------
13 Investments in subsidiaries
Proportion Proportion
of ownership of ownership
interest interest
at at
Country of 30 June 30 June
Name incorporation 2018 2017
-------------------------------------- ----------------- --------------- ---------------
Ascend Ventures Ltd Malaysia 100% 100%
Origo Resource Partners Ltd Guernsey 100% 100%
PHI International Holding Ltd Bermuda 100% 100%
PHI International (Bermuda) Holding
Ltd* Bermuda 100% 100%
Ascend (Beijing) Consulting Ltd** China 100% 100%
China Cleantech Partners, L.P.
("CCP Fund")*** Cayman Islands - 100%
-------------------------------------- ----------------- --------------- ---------------
* Owned by Origo Resources Partners Limited
** Owned by Ascend Ventures Limited
*** Struck Off
14 Investments at fair value through profit and loss
As at 30 June 2018
(Unaudited)
Proportion
Country of of ownership Cost Fair value
Name incorporation interest US$'000 US$'000
----------------------------- ----------------- --------------- ---------- ------------
British Virgin
China Rice Ltd* Islands 32.1% 13,000 -
British Virgin
Moly World Ltd* Islands 20.0% 10,000 -
British Virgin
Niutech Energy Ltd* Islands 3.67% 6,350 2,654
Unipower Battery Ltd* Cayman Islands 16.5% 4,301 -
Gobi Coal & Energy British Virgin
Ltd* Islands 10.8% 14,963 1,017
Staur Aqua AS* Norway 9.2% 719 -
British Virgin
Celadon Mining Ltd* Islands 8.9% 13,069 4,477
British Virgin
Six Waves Inc* Islands 1.1% 240 1,065
Fram Exploration AS* Norway 0.6% 1,223 133
Other quoted investments** 593 11
------------
9,357
----------------------------------------------- --------------- ---------- ------------
As at 31 December 2017 (Audited)
Proportion
Country of of ownership Cost Fair value
Name incorporation interest US$'000 US$'000
----------------------------- ----------------- --------------- ---------- ------------
British Virgin
China Rice Ltd* Islands 32.1% 13,000 -
Kincora Copper Ltd** Canada 30.9% 8,571 1,607
British Virgin
Moly World Ltd* Islands 20.0% 10,000 -
British Virgin
Niutech Energy Ltd* Islands 18.4% 6,350 8,555
Unipower Battery Ltd* Cayman Islands 16.5% 4,301 -
Gobi Coal & Energy British Virgin
Ltd* Islands 10.8% 14,960 1,013
Staur Aqua AS* Norway 9.2% 719 -
British Virgin
Celadon Mining Ltd* Islands 8.9% 13,069 4,477
British Virgin
Six Waves Inc* Islands 1.1% 240 1,065
Marula Mines Ltd* South Africa 0.9% 250 162
Fram Exploration AS* Norway 0.6% 1,223 133
Other quoted investments** 682 33
------------------------------------------------ --------------- ---------- ------------
17,045
----------------------------------------------- --------------- ---------- ------------
* Measured at a fair value hierarchy level of 3
** Measured at a fair value hierarchy level of 1
The shares held in China Rice Ltd and Unipower Battery Ltd are
all convertible preference shares whilst the remaining investments
held in the other entities are all ordinary equity shares. The
'proportion of ownership interest' represents the percentage of the
shares held by the Group in all share classes.
15 Loan Investments
As at 30 June 2018 (Unaudited) & 31 December 2017
(Audited)
Loan Loan Loans due Loans due
rates principal within one after one Fair value
Borrower % US$'000 year US$'000 year US$'000 US$'000
Staur Aqua AS 0-15 3,848 384 350 734
---------------- --------------- --------------- ------------
Total 384 350 734
---------------- -------- ------------ --------------- --------------- ------------
The loan consists of a convertible credit agreement and is
measured at fair value, in accordance with level 3 of the fair
value hierarchy.
16 Financial guarantee Contracts
(Unaudited) (Audited)
Six months Year ended
ended 31 December
30 June 2018 2017
$'000 $'000
Financial guarantee contracts 435 435
Total 435 435
-------------------------------- --------------- --------------
In July 2013, the Group entered into a guarantee agreement with
IRCA Holdings Ltd and ABSA Bank Limited to guarantee the repayment
of loan facilities of up to Rand 6,769,000 extended by ABSA Bank
Limited to IRCA Holdings Ltd, which has applied for liquidation, so
the Group recognised it as a liability. The payment request by ASA
Bank related to this provision is expected at any time.
17 Short/Long Term Borrowings
On 2 December 2016, the Company entered into an unsecured loan
agreement with an independent third party for an unsecured loan
US$2,500,000 (the "Facility"). The Facility carried a rate of
return (payable at repayment) of the higher of 12% per annum
(calculated on a non-compounding basis) and US$1,250,000 (accrued
on a day to day basis).
The Facility was repayable on the earlier of (i) 2 December
2020; and (ii) when the Company has distributed US$6,000,000 to the
Company's shareholders in accordance with articles 4.10 to 4.12 of
the Company's Articles provided it has sufficient funds to repay
the Facility. The Company was entitled at any time prepay the
Facility, in whole or in part, without penalty.
The Company settled the loan in April 2018. The lender agreed to
waive interest.
18 Other reserve
(Unaudited) (Audited)
Six months Year ended
ended 31 December
30 June 2018 2017
$'000 $'000
--------------------------------------- --------------- --------------
Employee Benefit Trust (2,106) (2,106)
Capital Redemption - China Cleantech
Partners Fund 3,162 3,162
Redeemable preference shares 50,688 50,688
Total 51,744 51,744
--------------------------------------- --------------- --------------
19 Related party Transactions
Identification of related parties
The Group has a related party relationship with its
subsidiaries, associates and key management personnel. The Company
receives and pays certain debtors and creditors on behalf of its
subsidiaries and the amounts are recharged to the entities.
Transactions between the Company and its subsidiaries have been
eliminated on consolidation.
Transactions with key management personnel
The Group's key management personnel are the executive and
non-executive directors as identified in Note 8.
Service receiving transactions
The following table provides the total amount of significant
transactions and outstanding balances which have been entered into
with related parties during the six month ended 30 June 2018 and 31
December 2017.
(Audited)
(Unaudited) Year ended
Six months ended 31 December
30 June 2018 2017
$'000 $'000
----------------------------------- ------------------- --------------
Amounts due to related parties
Key management personnel:
Hiroshi Funaki - (8)
Philip Peter Scales - (9)
John Chapman (45) (9)
Other:
Origo Advisors Ltd (82) (760)
Amounts due from related parties
Origo Advisors Ltd 111 278
Transactions
Origo Advisors Ltd
- Investment Advisory Fees (154) (1,390)
----------------------------------- ------------------- --------------
Ms. Shonaid Jemmett Page and Mr. Lionel de Saint-Exupery
resigned as non-executive directors of the Company in October 2017.
Mr. Hiroshi Funaki was appointed as director of the Company in
September 2017, and Mr. Philip Peter Scales and Mr. John Chapman
were appointed as directors of the Company in October 2017.
As at 30 June 2018 the Group was committed to pay Origo Advisors
Limited nil (USD $1 million: 31(st) December 2017) for consulting
services. Origo Advisors Limited is controlled by entities whose
ultimate beneficiaries include Niklas Ponnert (director of the
Company who resigned in April 2018) and Chris A Rynning (former
director of the Company). A new Asset Realisation Support Agreement
was signed in May 2018 to waive the fixed sum of US$1 million for
2018.
20 Commitments and contingencies
There were no material contracted commitments or contingent
assets or liabilities at 30 June 2018 (31 December 2017: none).
21 Subsequent events
There have been no significant subsequent events.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFEEALIDFIT
(END) Dow Jones Newswires
September 28, 2018 02:00 ET (06:00 GMT)
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