TIDMRADG
RNS Number : 3988Y
Radiant Growth Investments Ltd
01 December 2014
01 December 2014
Radiant Growth Investments Limited
("RADG" or "the Company")
Annual Results
Posting of Notice of AGM
Radiant Growth is pleased to announce its Annual Report for the
year ended 31 July 2014
The Company's Annual General Meeting ("AGM") will be held at the
offices of the Company at W07A1, 7th Floor, West Block, Wisma
Selangor Dredging, 142C, Jalan Ampang, 50450 Kuala Lumpur, Malaysia
at 12.00 p.m. Malaysian time on 8 January 2015. The Notice of AGM
and form of proxy will be sent to shareholders along with the
Annual Report and Accounts on 12 December 2014, all of which will
shortly be available to view on the Company's website at
www.radgltd.com.
For further information please contact:
Radiant Growth Investments Limited
www.radgltd.com
Dato Sri' Dr Alex Teh Chee Teong, Director
Tel: + 6016 2086 666
Daniel Stewart & Company plc
www.danielstewart.co.uk
Antony Legge
Tel: + 44 (0) 20 7776 6550
CHAIRMAN'S STATEMENT
As the Chairman of Radiant Growth Investments Limited
("Company"), I am pleased once again to report to our Shareholders
for the year ended 31st July 2014.
While the investment climate in the oil and gas, energy and
mining sectors remains favourable and although our relations with
the Malaysian administration remains good, decision making is slow
and this is especially so in respect of some of the other countries
which we are targeting, specifically Vietnam and Cambodia.
Oil and gas
An update was given to the market on 20th August 2014 concerning
our agreement with Rancang Istemewa Sdn. Bhd. ("RISB") to manage a
multi-buoy mooring system which is designed to deliver natural gas
to ocean going tankers and is due to be constructed at a proposed
gas separation plant at Songkhla in Thailand. As was then
announced, this agreement and in consequence the repayment of the
deposit we made has been extended and will now continue until 3rd
June 2015.
Energy
As I reported at this time last year, monies have been deposited
with RISB for its proposed waste to energy projects. The systems we
are involved in convert solid waste to syngas which is then used to
power turbines creating electricity for sale to local and or
national governments.
In Sri Lanka and Cambodia, discussions with the relevant parties
in those two countries continue.
In Malaysia the assessment of suitable locations for the
construction and operation of five plants capable of processing
1000 tons of waste per day is continuing following meetings with
the Malaysian Department of Energy. This follows meetings that RISB
had with the Energy Minister in 2012.
In Vietnam, as indicated in our last interim report, we decided
to discontinue discussions with the relevant authorities concerning
waste to energy projects we had been discussing for some time.
However as indicated in our "Update to the market" on 20th August
2014, we were advised by RISB that the discussions they were having
with relevant parties in Vietnam were worth continuing despite the
difficulty in obtaining all the permissions required. Therefore in
the belief that the project remains viable we took a decision that
it was in the best interests of our shareholders to extend the
conditional period for the project and thereby extend the repayment
period of the funds advanced to RISB until 2nd July 2015.
Mining
As reported at this time last year we have an agreement with
Swissbay Holdings Sdn. Bhd. ("Swissbay") to mine iron ore in
Kelantan, Malaysia. Although this agreement still remains in place
we have not yet heard from Swissbay that they have received a
letter of approval from the State Government enabling them to lease
the land in question so that they can proceed with the project.
In 2012 a deposit of RM 3.52 million (GBP0.65 million) was paid
for the purchase of iron ore. At the time that this deposit was
paid I indicated that your Company was acting as an agent for the
sale of iron ore to another company based in China. Although the
iron ore was delivered to the purchaser during the last financial
year, your Company received no payment from the Chinese company. In
consequence we instructed our lawyers in Malaysia to demand the
payment of USD937,000 and RM600,000 that was advanced pursuant to
the two Letters of Guarantee dated March and April 2012. This
demand for repayment was duly undertaken by our lawyers on 23rd of
July 2014. Whilst legal action is taking place to recover these
amounts, we have made a provision against this deposit in these
financial statements, as a precautionary measure; however we fully
expect to be able to recover our deposit in the coming months.
CHANGE OF NOMINATED ADVISER
As announced on 7 November 2014, Daniel Stewart & Company
Plc has tendered its resignation as our nominated adviser,
effective as of 4 December 2014. The Company has not yet appointed
another nominated adviser and so it is likely that trading on AIM
in the Company's shares will be suspended on this date. If a
nominated adviser is not appointed by 4 January 2015 then trading
on AIM in the Company's shares will be cancelled.
Outlook
Despite the best efforts of your directors to move our projects
forward, progress in the past year has been slow and continues to
be slow. We remain confident however that in the long term the
benefits to our shareholders will be worthwhile. We continue to
review other new projects but we have not as yet found one that we
feel would be in the interests of our shareholders.
The directors believe that we have sufficient funds to meet our
operating expenses for the next twelve months.
Finally I would like to take this opportunity to thank my fellow
Board Directors for their ongoing advice in the past year and also
would like to express my appreciation to our staff who continue to
work hard and with due diligence on behalf of your company. Again I
look forward with confidence that our ongoing projects will reach
fruition for the benefit of our shareholders.
Dato' Sri Dr. Alex Teh Chee Teong.
Chairman
1 December 2014
INVESTMENT POLICY
The Company's Investment Policy is to invest in or acquire one
or more companies, partnerships, joint ventures, or businesses in
the Asia Pacific region in the mining, oil and gas, energy and
utility and palm oil and other natural oil sectors. The investments
or acquisitions may be funded wholly by cash, the issue of new
shares or debt, or a mix thereof, as the Directors deem
appropriate. The Company's equity interest in a proposed investment
may range from a minority position to 100 per cent ownership; the
proposed investments may be either quoted or unquoted, although
will likely to be unquoted in the majority of cases.
The Company will specifically make investments which the
Directors believe offer high growth opportunities, utilising the
Company's access to capital markets to help fund the requirements
of the investment target. It is anticipated that the investments
will be held for the long term but the Directors will place no
minimum or maximum limit on the length of time that any investment
may be held, so that short term disposal of investments cannot be
ruled out in exceptional circumstances. The Company intends to
deliver Shareholder returns through capital growth. As such, the
Board do not envisage the distribution of dividends in the short to
medium term.
The Company intends to be an involved and active investor.
Accordingly, where necessary, the Company may seek participation in
the day to day management through board representatives in an
entity in which the Company invests with a view to seeking to
improve the performance and use of its assets in order to grow the
business. The Board may appoint consultants or independent industry
experts or other representatives to represent the Company in
managing the investments it makes and/or their business
operations.
Despite considerable efforts, the Company has not substantially
implemented its investing policy within eighteen months of
admission. Accordingly, the Directors will seek the consent of its
shareholders for its investing policy at the coming annual general
meeting and on an annual basis thereafter, until such time that its
investing policy has been substantially implemented. If it appears
unlikely that the Investment Policy can be implemented at any time,
the Directors may consider returning any remaining funds to the
Shareholders.
The Directors consider that as investments are made, and new
opportunities arise, further funding of the Company will be
required.
Statement of Comprehensive Income
for the year ended 31 July 2014
2014 2013
Notes GBP'000 GBP'000
Revenue - -
Administrative expenses (1,419) (381)
Operating loss (1,419) (381)
Finance income - 3
Loss before tax 3 (1,419) (378)
Income tax expense 6 - -
Loss attributable to equity shareholders (1,419) (378)
Other comprehensive income for the year - -
-------- --------
Total comprehensive loss for the year attributable
to equity
holders (1,419) (378)
Loss per share
Basic and diluted (pence per share) 7 (1.31) (0.36)
======== ========
The above items relate entirely to continuing operations.
The accompanying notes and accounting policies form an integral
part of these financial statements.
Statement of Financial Position
at 31 July 2014
2014 2013
Notes GBP'000 GBP'000
Assets
Current assets
Receivables, deposits and prepayments 8 4,574 5,635
Cash and cash equivalents 9 199 397
-------- --------
4,773 6,032
-------- --------
Total assets 4,773 6,032
-------- --------
Liabilities
Current liabilities
Trade and other payables 10 41 166
-------- --------
Total liabilities 41 166
-------- --------
Net assets 4,732 5,866
======== ========
Equity and reserves
Share capital 11 7,184 6,899
Share-based payment reserve 61 61
Retained losses (2,513) (1,094)
-------- --------
Total equity 4,732 5,866
The financial statements were approved by the Board of Directors
on 1 December2014 and signed on its behalf by:
Dato' Sri Dr. Alex Teh Chee Teong Geoffrey Baillie Fielding
Chairman Non-Executive Director
The accompanying notes and accounting policies form an integral
part of these financial statements.
Statement of Changes in Equity
for the year ended 31 July 2014
Share-based
Share payment Retained Total
Note capital reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000
At 1 August 2012 6,899 61 (716) 6,244
Total comprehensive loss for
the year - - (378) (378)
At 31 July 2013 6,899 61 (1,094) 5,866
========== ============ =========== =========
At 1 August 2013 6,899 61 (1,094) 5,866
Total comprehensive loss for
the year - - (1,419) (1,419)
Transactions with owners:
Shares issued 11 300 - - 300
Share issue costs 11 (15) - - (15)
285 - - 285
At 31 July 2014 7,184 61 (2,513) 4,732
All reserves are attributable to the equity holders of the
parent company.
The accompanying notes and accounting policies form an integral
part of these financial statements.
Statement of Cash flows
for the year ended 31 July 2014
2014 2013
Notes GBP'000 GBP'000
Cash flows from operating activities
Operating loss (1,419) (378)
Add back: impairment of deposit 653 -
-------- --------
(766)
Adjustments for changes in working
capital:
Decrease in other receivables, deposits
and prepayments 408 1
(Decrease)/increase in payables (125) 58
-------- --------
Net cash used in operating activities (483) (319)
-------- --------
Cash flows from investing activities
Loans made to third parties - (2,526)
-------- --------
Net cash used in investing activities - (2,526)
-------- --------
Cash flows from financing activities
Proceeds from issue of shares (net
of issue costs) 11 285 -
-------- --------
Net cash from financing activities 285 -
-------- --------
Net decrease in cash and cash equivalents (198) (2,845)
Cash and cash equivalents at beginning
of the year 397 3,242
-------- --------
Cash and cash equivalents at end
of the year 9 199 397
======== ========
The accompanying notes and accounting policies form an integral
part of these financial statements.
Notes to the Financial Statements
for the year ended 31 July 2014
1 General information
Radiant Growth Investments Limited (the "Company") is a company
incorporated in Jersey under the Companies (Jersey) Law 1991 (the
"Act") on 6 July 2011. The Company is governed by its articles of
association and the principal statute governing the Company is the
Act. The Company is domiciled and has its registered office in
Jersey and the Company's registration number is 108544.
The Company's place of business is Malaysia.
These financial statements are presented in Pounds Sterling
("GBP"), this being the Company's functional and presentational
currency, and rounded to the nearest thousand ("000"). The
functional currency of the Company is the Pound Sterling ("GBP")
because that is the currency of the primary economic environment in
which the Company raises funds.
Financial statements of the Company are prepared by and approved
by the Directors in accordance with International Financial
Reporting Standards, International Accounting Standards and their
interpretations issued or adopted by the International Accounting
Standards Board, as adopted by the European Union ("IFRSs"). The
Company's accounting reference date is 31 July.
These financial statements were approved for issue by the Board
of Directors on 1 December 2014.
2 Summary of significant accounting policies
2.1 Basis of preparation
The principal accounting policies applied by the Company in the
preparation of these financial statements are set out below and
have been applied consistently.
The financial statements have been prepared on a going concern
basis and in accordance with IFRS.
2.2 Going concern
The financial statements of the Company are prepared on a going
concern basis. In common with many similar companies, the Company
raises finance for their investment activities mainly based in Asia
Pacific region.
The Company successfully raised via a share placing, GBP300,000
of working capital during the year. At the year end the Company had
GBP199,000 of cash balances and will need to raise additional
funding or require the return of its deposits with third parties to
meet its working capital requirements for the foreseeable
future.
The Directors believe that the Company will be able to raise as
required, sufficient cash to enable it to continue its operations,
and continue to meet, as and when they fall due, its liabilities
for at least the next twelve months from the date of approval of
these financial statements. For this reason the Directors continue
to adopt the going concern basis in preparing the accounts.
However, there can be no guarantee that the required funds will
be raised or deposits repaid within the necessary timeframe,
consequently a material uncertainty exists that may cast doubt on
the Company's ability to continue to operate as planned and to be
able to meet its commitments and discharge its liabilities in the
normal course of business for a period not less than twelve months
from the date of this report. The financial statements do not
include the adjustments that would result if the Company was unable
to continue in operation.
2.3 Segmental reporting
For the purposes of IFRS 8 'Operating Segments' the Company
currently has one segment, being investing in the Natural Resources
sector in the Asia Pacific region. No further operating segment
financial information is therefore disclosed.
2.4 Foreign currency translation
(a) Functional and presentational currency
Items included in the financial statements of the entity are
presented in the currency of the primary economic environment in
which the entity operates (the "functional currency"). The
functional currency of the entity is Pounds Sterling ("GBP").
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period
end exchange rates of the monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement
of Comprehensive Income.
2.5 Cash and cash equivalents
Cash and cash equivalents (readily convertible into a known
amount of cash) include cash in hand and deposits held at call with
banks with an original maturity of three months or less. For the
purpose of the cash flow statement, cash and cash equivalents are
as defined above, net of outstanding bank overdrafts. Fixed
deposits secured against bank loans are shown separately on the
statement of financial position as they do not meet the definition
of cash and cash equivalents.
2.6 Loans and other receivables
Trade and other receivables are initially recognised at fair
value, which is usually the original invoiced amount plus
transaction costs, and subsequently carried at amortised cost using
the effective interest method less provisions made for impairment
of receivables.
2.7 Trade and other payables
Trade and other payables are initially recognised at fair value,
which is usually the original invoiced amount, and subsequently
carried at amortised cost using the effective interest method.
2.8 Taxation
Deferred tax is provided in full using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a
business combination that, at the time of the transaction, affects
either accounting nor taxable profit or loss. Deferred tax is
determined using tax rates that are expected to apply when the
related deferred tax asset is realised or when the deferred tax
liability is settled. Deferred tax assets are recognised to the
extent that it is probable that future taxable profits will be
available against which the temporary differences can be
utilised.
2.9 Equity instruments
Ordinary shares are classified as equity. Costs directly
attributable to the issue of new shares are recognised in equity as
a deduction from the proceeds.
2.10 Share-based payments
The fair value of options and warrants granted is recognized as
an expense, with a corresponding increase in equity, over the
period that the holders become unconditionally entitled to the
options and warrants. The amount recognized as an expense is
adjusted to reflect the actual number of share options and warrants
that vest.
For equity settled share-based payment transactions other than
transactions with employees the Company measures the goods or
services received at their fair value, unless that fair value
cannot be estimated reliably. If this is the case the Company
measures their fair values and the corresponding increase in
equity, indirectly, by reference to the fair value of equity
instruments granted. Fair value is measured by use of an
appropriate model. In valuing equity-settled transactions, no
account is taken of any vesting conditions, other than conditions
linked to the price of the shares of Radiant Growth Investments
Limited. The charge is adjusted at each balance sheet date to
reflect the actual number of forfeitures and cancellations during
the period. The movement in cumulative charges since the previous
balance sheet is recognized in the statement of comprehensive
income, with a corresponding entry in equity.
2.11 Standards and Interpretations in issue not yet adopted
Certain changes to IFRS will be applicable for the Company's
accounts in future periods. To the extent that the Company has not
adopted these early in the current financial statements, they will
not affect the Company's reported profit or equity but they may
affect disclosures.
As at the date of approval of these financial statements, the
following standards and interpretations were in issue but not yet
effective:
IAS 27 "Separate Financial Statements (2011)"
IAS 28 "Investments in Associates and Joint Ventures (2011)"
IFRS 9 "Financial Instruments"
IFRS 10 "Consolidated Financial Statements"
IFRS 12 "Disclosure of Interests in Other Entities"
Amendments to IAS 32 "Offsetting Financial Assets and Financial
Liabilities"
Amendments to IAS 12 "Deferred Tax: recovery of Underlying
Assets"
Amendments to IFRS 10, IFRS 12 and IAS 27 "Investment
Entities"
Amendments to IAS 36 "Recoverable amount disclosures for
non-financial assets"
IFRIC 21 "Levies"
IFRS 9 "Financial Instruments (Hedge Accounting and amendments
to IFRS 9, IFRS 7 and IAS 39)"
Amendments to IAS 19 "Defined Benefit Plans: Employee
Contributions"
Numerous other minor amendments to standards have been made as a
result of the IASB's annual improvement project.
The Directors do not anticipate that the adoption of these
standards in future years will have a material impact on the
financial statements in the year of adoption and have decided not
to adopt them early.
2.12 Critical accounting judgments and key sources of estimation uncertainty
Estimates and judgements need to be regularly evaluated and are
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances. The Company makes estimates and
assumptions concerning the future. The resulting accounting
estimates will, by definition, rarely equal the related actual
results.
The estimates and underlying assumptions are reviewed on an
on-going basis. Revisions to accounting estimates are recognised in
the year in which the estimate is revised if the revision affects
only that year or in the year of the revision and future years if
the revision affects both current and future years.
The estimate significant to the financial statements during the
year and at the year end is the consideration of impairment of
financial assets, as set out in the relevant accounting policy.
3 Expenses by nature
2014 2013
GBP'000 GBP'000
Included within administrative expenses are:
Staff expenses (note 4) 166 168
Foreign exchange losses 499 88
Provision against deposit (note 8) 653 -
Auditors' remuneration 14 12
======== ========
4 Staff expenses
2014 2013
GBP'000 GBP'000
Staff wages 58 56
Staff pension - 4
Directors' fees 108 108
166 168
======== ========
The average number of employees (including executive directors)
employed by the Company during the year is 7 (2013: 5).
5 Directors' remuneration
Details of Directors' remuneration (who are considered to be the
key management personnel of the Company) are as follows:
Short term Bonus Others Total Total
employment 2014 2013
benefits
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Dato' Sri Alex Teh Chee
Teong 84 - - 84 84
Geoffrey Baillie Fielding 12 - - 12 12
Mohd Anuar Bin Mohd Hanadzlah 12 - - 12 12
------------ --------- --------- --------- ---------
Aggregate remunerations 108 - - 108 108
============ ========= ========= ========= =========
6 Income tax expense
2014 2013
GBP'000 GBP'000
Current tax charge - -
Deferred tax - -
-------- --------
- -
======== ========
The Company is incorporated in Jersey. No tax reconciliation
note has been presented as the income tax rate for Jersey companies
is 0%.
7 Loss per share
Basic
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 year.
2014 2013
Loss attributable to equity holders of
the Company (GBP'000) 1,419 378
Weighted average number of ordinary shares
in issue 108,335,094 105,502,217
Basic loss per share in pence (1.31) (0.36)
============ ============
Diluted
Potential ordinary shares of 730,555 have been excluded from the
computation of diluted EPS as the shares are anti-dilutive.
8 Receivables and deposits
2014 2013
GBP'000 GBP'000
Current
Receivables 52 -
Deposits 4,519 5,635
Prepayments 3 -
4,574 5,635
======== ========
As discussed in previous statements, the Company proposes to
invest in RISB, a Malaysian company that has been established to
manage a multi-buoy mooring system that will be constructed at the
border between Thailand and Malaysia at the gas separation plant at
Songkhla, Thailand which will deliver Natural Gas Liquids directly
to ocean-going tankers ('Gas Project'). A total deposit of GBP2.51
million has been placed with RISB in relation to the Gas
Project.
RISB is also the entity which will be participating in the
waste-to-energy project in Vietnam ('Energy Project'). A total
deposit of GBP1.82 million has been placed with RISB to enable the
Company to participate in the Energy Project. RISB is obligated to
return these funds on 2 July 2015 in the event that Energy Project
does not proceed.
A deposit of GBP0.65 million has been paid for the purchase of
iron ore in the previous financial years. Radiant Growth is acting
as an agent on the sale of iron ore to a company based in China. As
a result of the non-payment for the delivery, the Company has
commenced legal action to recover the deposit paid. Whilst legal
action is taking place to recover these amounts, we have made a
provision against this deposit in these financial statements as a
precautionary measure; however we fully expect to be able to
recover our deposit in the coming months.
In the previous financial period, the Company discovered a
potential opportunity to invest in an iron ore mining project
situated in Malaysia and entered into a preliminary agreement with
Swissbay Holdings Sdn Bhd (Swissbay), a company incorporated in
Malaysia, which has obtained preliminary approval from the State of
Kelantan to lease a piece of land located in Malaysia, for the
purpose of iron ore mining. The consideration for entry into the
agreement was RM1 million (GBP0.19 million). The advance has been
used to help secure the lease and associated mineral rights
following which, work will be undertaken to further evaluate the
project. Swissbay is currently waiting for the letter of approval
from the State Government to lease the Designated Land to be used
for an iron ore mine. Once the conditions of the agreement have
been met the company has the right to subscribe for 46% of the
ordinary share capital of Swissbay, a related party (see note 13 to
the financial statements).
9 Cash and cash equivalents
2014 2013
GBP'000 GBP'000
Cash at bank and in hand 199 397
Short-term deposits - -
199 397
======== ========
10 Trade and other payables
2014 2012
GBP'000 GBP'000
Non-trade
Other payables 20 63
Accruals 21 103
41 166
======== ========
The carrying amounts of other payables and accruals equate to
their fair value and are repayable within 12 months of the year
end.
11 Share capital and share warrants
2014 2014 2013 2013
No. of shares GBP'000 No. of shares GBP'000
Authorised share capital
Ordinary shares with no Unlimited Unlimited Unlimited Unlimited
par value
Issued and fully paid
At 1 August 105,502,217 6,899 105,502,217 6,899
Issue of shares 14,000,000 300 - -
Share issue costs deducted
from share capital - (15) - -
At 31 July 119,502,217 7,184 105,502,217 6,899
=============== ========== =============== ==========
On 9 September 2011 the company entered into a deed of warrant
with Daniel Stewart, conditional upon Admission, to subscribe for
2% (2,064,000 shares) of the aggregate value of the shares of the
company on Admission. The warrants are exercisable at any time up
to five years from the date of Admission at the Placing price of
GBP0.10. These warrants were granted for services rendered relating
to the AIM Admission.
Additional share warrants outstanding at 31 July 2014 were as
follows:
Date of grant Number granted Exercise Expiry date
price
20 September
20 September 2011 730,775 10p 2016
Using the Black Scholes method, the fair value of these warrants
was calculated to be GBP0.061 million and the charge was shown as
an expense in the income statement in a previous year.
Share price at grant date GBP0.10
Exercise price GBP0.10
Expected volatility, per cent 122%
Warrant life, years 5
Expected dividends, per cent 0
Risk free interest rate, per cent 3%
Expected volatility is estimated by considering the Company's
share price since admission to AIM.
None of the warrants have been exercised during the year.
12 Contingencies
There were no contingent liabilities at 31 July 2014.
13 Related party transactions
During the previous financial year, the Company deposited RM1
million (GBP0.19 million) to Swissbay Holding Sdn Bhd (Swissbay) a
company incorporated in Malaysia for the purpose of entering into
an iron ore mining agreement in which Dato' Sri Alex Teh, a
director of the Company is also a director of Swissbay (see also
note 8 above).
The directors are of the opinion that the related party
transaction was entered into in the normal course of business and
was based on negotiated and mutually agreed terms.
14 Capital commitments
The Company had no contracted capital commitments at 31 July
2014.
15 Financial risk management
The Company's activities expose it to credit risk, liquidity
risk and market risk (including interest rate risk, currency risk
and commodity price risk). The Company's overall risk management
strategy seeks to minimise adverse effects from the volatility of
financial markets on the Company's financial performance.
The Board of Directors is responsible for setting the objectives
and underlying principles of financial risk management for the
Company. The Company management then establishes the detailed
policies such as risk identification and measurement, exposure
limits and hedging strategies, in accordance with the objectives
and underlying principles approved by the Board of Directors.
There has been no change to the Company's exposure to these
financial risks or the manner in which it manages and measures the
risk. Market risk exposures are measured using sensitivity analysis
indicated below.
Credit risk
Credit risk refers to the risk that counterparty will default on
its contractual obligations resulting in a loss to the Company. The
Company has adopted a policy of only dealing with creditworthy
counterparties and does not hold any collateral as security over
its customers. The Company's major classes of financial assets are
deposits made to third parties and cash and cash equivalents.
As at the end of the financial year, the Company's maximum
exposure to credit risk is represented by the carrying amount of
each class of financial assets recognised in the statements of
financial position.
As at 31 July 2014, substantially all the cash and bank balances
as detailed in notes 9 to the financial statements, are held in
major financial institutions which are regulated and located in
Hong Kong, which management believes are of high credit quality.
The management does not expect any losses arising from
non-performance by these counterparties.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date of the Company is as follows:
2014 2013
GBP'000 GBP'000
Other receivables deposits, and prepayments 4,574 5,635
Cash and cash equivalents 199 397
4,773 6,032
======== ========
Currency risk
Currency risk arises from a change in foreign currency exchange
rate, which is expected to have adverse effect on the Company in
the current reporting year and in future years.
The Company maintains its books and accounts in its functional
currency. As a result, the Company is subject to transaction and
translation exposures resulting from currency exchange rate
fluctuations. It is, and has been throughout the current financial
period the Company's policy that no derivatives shall be undertaken
except for the use as hedging instruments where appropriate and
cost-efficient. The Company does not apply hedge accounting.
The Company incurs foreign currency risk on operating expenses
that are denominated in currencies other than the functional
currency.
The Company's currency exposure is as follows:
2014 2013
GBP'000 GBP'000
Financial assets
Deposits to third parties denominated in Malaysia
Ringgits (RM) 4,574 5,635
Bank balances denominated in Hong Kong Dollars
(HK$) 2 3
Bank balances denominated in Malaysia Ringgits -
(RM) 166
Bank balances denominated in US Dollars (USD) 1 394
-------- --------
Net currency exposure 4,753 6,032
======== ========
Sensitivity analysis
If the RM varies against the GBP by 10% with all other variables
including tax rate being held constant, the effect on the net
profit will be as follows:
2014 2013
GBP'000 GBP'000
GBP against RM
- strengthen/weaken +/- 450 +/- 570
GBP against HKD
- strengthen/weaken +/- 0.2 +/- 0.3
GBP against USD
- strengthen/weaken +/- 0.1 +/- 43
======== ========
Interest rate risk
The Company monitors the interest rates on its interest bearing
assets closely to ensure favourable rates are secured.
As at the year ended, the Company's only interest-bearing assets
relate to bank balances held. A change in interest rates at the
reporting date would not materially affect profit or loss and as
such sensitivity analysis have not been disclosed.
Liquidity risk
Liquidity risk is the risk that the Company will encounter
difficulty in meeting financial obligations due to shortage of
funds. The Company's exposure to liquidity risk arises primarily
from mismatches of the maturities of financial assets and
liabilities. The Company's objective is to maintain a balance
between continuity of funding and flexibility through financial
support of shareholders and secures committed funding facilities
from financial institution.
The table below summarises the maturity profile of the Company's
financial liabilities at the reporting date based on contractual
undiscounted payments:
Less than Later than
one year one year Total
GBP'000 GBP'000 GBP'000
31 July 2014
Other payables and accruals 41 - 41
------------- ----------- --------
41 - 41
============= =========== ========
31 July 2013
Other payables and accruals 166 - 166
------------- ----------- --------
166 - 166
============= =========== ========
Capital risk management
The Company's objectives when managing capital (defined as share
capital and reserves) are to safeguard the Company's ability to
continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital.
The Company has no borrowing and cash and cash equivalents
consist of the Company's own cash at bank only.
16 Control
The Company is not controlled by any one party. Details of
significant shareholders are shown in the Directors' Report.
17 Subsequent events
There were no other material events subsequent to the end of the
year under review.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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