REG - APQ Global Limited - Interim Results for the Period to 30 June 2017 <Origin Href="QuoteRef">APQ.L</Origin> - Part 1

APQ GlobalAnnouncement

26/09/2017 11:31

RNS Number : 8477R
APQ Global Limited
26 September 2017
26 September 2017
APQ Global Limited
("APQ Global" or the "Company")
Interim results for the period from 1 January 2017 to 30 June 2017
FINANCIAL HIGHLIGHTS
- Book Value at 30 June 2017 was GBP76.4m, a decrease from GBP77.4m since the start of the period. Book Value is the net assets and liabilities of the Company including its subsidiary at fair value through profit or loss.
- Book Value per share in the period declined from 99.15 pence to 97.82 pence.
- Earnings per share for the period was GBP 0.00672
- Dividends totalling 2 pence per share were declared and paid during the period as follows:
 0.5 pence per share  Ex Dividend 26 January 2017 Paid 24 February 2017
 1.5 pence per share Ex Dividend 27 April 2017 Paid 24 May 2017
- After the period, a further dividend of 1.5 pence per share was declared on 17 July 2017 in relation to the quarter ended 30 June 2017. 
- In the period covered by these interim results, the share price of the Company has consistently traded at a premium over the actual Book Value of the Company. 
- On 4 September 2017, after the reporting period, the Company raised 20.09 million before expenses by the issue of 4,018 units of 5,000 nominal 3.5 per cent convertible unsecured loan stock 2024, listed and admitted to trading on the International Securities Market of the London Stock Exchange.
Enquiries:
APQ Global Limited
Bart Turtelboom - Chief Executive Officer
020 3478 9708


N+1 Singer - Nominated Adviser and Broker
James Maxwell / Lauren Kettle
020 7496 3000


Carey Group - TISE sponsor
Matt Sarl
01481 737 279


Buchanan Communication - Financial PR
Charles Ryland / Victoria Hayns
020 7466 5000
Notes to Editors
APQ Global Limited
APQ Global (ticker: APQ LN) is a global emerging markets income company with interests across Asia, Latin America, Eastern Europe, the Middle East and Africa. The Company's objective is to steadily grow earnings to deliver attractive returns and capital growth to shareholders. This objective is achieved through a combination of revenue generating operating activities and investing in growing businesses across emerging markets. APQ Global run a well-diversified and liquid portfolio, take strategic stakes in selected businesses and plan to take operational control of companies through the acquisition of minority and majority stakes in companies with a focus on emerging markets.
For more information, please visit apqglobal.com.
International Advisory Council (IAC) 
Established in February 2017, the IAC assists in locating the best investment opportunities across the globe. The panel of advisors, chaired by Tania Rotherwick, contribute insights from their own areas of geographical and sector expertise to support APQ Global's business strategy.
CHAIRMAN'S STATEMENT
For the period 1 January 2017 to 30 June 2017
This was a solid first half year for emerging markets, with more opportunities on the horizon.
At the turn of the year, we were preparing for potentially volatile markets as the world adapted to the watershed events of 2016. Six months in, however, these events have had less of an impact than many had anticipated. Despite rhetoric to the contrary, Trump's administration has so far failed to make good on many of his election pledges and the results of European elections post Brexit and the Italian referendum have on the whole been very sensible. 
While markets globally seem to be faring quite well in the year-to-date, it is emerging markets that are once more leading the pack, both in equity and debt markets. Emerging markets have been boosted in particular by a strong performance in a number of individual economies, a weakening US dollar and strong liquidity. Of course, new challenges have now come to the fore - namely the growing risks arising from the tensions in the Gulf and the muscle-flexing displays of North Korea. However, despite these tensions and challenges, there are very specific opportunities to be had across emerging markets and at APQ, we are well positioned to identify these to deliver our shareholders stable income. In this mid-year review, our recently strengthened International Advisory Council takes the opportunity to share their views and discuss the investment opportunities they have identified from regions such as Sub-Saharan Africa to Mongolia and Nigeria. 
Looking at our own performance as a company, we are pleased to confirm that our second quarterly dividend of 1.5p has been declared and paid. Our liquid portfolio is largely unchanged and our sizeable hedge on rates is serving us well. Looking forward, we remain confident of delivering a 6% yield, supported by solid capital growth. We are excited by some new strategic opportunities that we intend to pursue as we enter the second half of the year and will share more information on these in due course.
OUR FIRST YEAR AS A LISTED COMPANY
On 11 August 2016, APQ Global Limited was listed on the International Stock Exchange and was shortly thereafter admitted for trading on the London Stock Exchange's AIM Market. The mid-summer timing of the IPO was itself a reflection of market conditions in 2016: the BREXIT referendum was still being digested and investors were looking for opportunities outside the UK. Furthermore, the Trump bandwagon was gathering speed but overall income per annum returns the consensus remains that he would lose the Presidential election in November. 
Our key objective from the start was to generate sufficient income in the portfolio to retain a healthy dividend yield, and that objective remains to that day (with APQ maintaining its current target of 6%). This focus on income is not just a reflection of the current state of the investment universe but reflects our fundamental view that investors in emerging markets tend to overpay for the 'dream' of long-term growth and underpay for the cash flows readily coming from the asset class. Our approach is the exact opposite: We believe Emerging Markets ('EM') offer tremendous income opportunities regardless of index performance, asset class. If public or private bonds offer the best opportunities, we will pursue them. If we can find decent long-dated cash flows in hedging instruments or royalties, we will pursue those as well. Our edge as team, in our view, is a deep and long-standing expertise in scanning the EM universe for these opportunities and embedding them on our balance sheet to achieve the income target we have set ourselves and achieve modest book value growth in the medium term.
This approach has served us well in our first year of operation. We paid our first dividend in January, and subsequent 1.5p dividends in April and August. We have stuck to liquid exposure because we see a distinct lack of value and income potential in illiquid opportunities across EM. The latter is a reflection of a glut of liquidity compressing risk premia in global markets. For a detailed look at these trends, we refer you to our quarterly fact sheets on our website (http://apqglobal.com/investors/rns-announcements-regulatory-news/).
This approach does not mean that we hold a bearish view on emerging markets. As a whole, we believe the long-term structural arguments for EM growth are very compelling (for instance, demographics, trade and capital market liberalisation, technological leapfrogging). However, we want to remind investors that those same arguments were true in 2009, when the global EM equity index actually underperformed the S&P Index in the subsequent five years by well over 100% (the S&P rallied 83.3% during 2010-2015 while the EM equity index dropped 19.7%). Investors not only underperformed in EM equities, they actually lost money during a formidable bull market in US equities.
Our focus on income protects our shareholders from these large market swings. Immediately after the US Presidential elections, our approach insulated our shareholders from an aggressive EM market selloff; this year's rally has more than offset the selloff in Q4 last year. There is no doubt, we will see many more such gyrations and our approach is to stay the course and focus on the income potential in EM.
GLOBAL MARKETS BACKDROP
An exceptional globally synchronised macroeconomic cycle has taken hold, supported by hope of fiscal reform in the US, improving conditions in the European periphery and continuing support from favourable monetary policies in Europe, the US and Japan.
Six months into the Trump administration, the single most important driver of markets over the past year, we take a look back at how the US economy has performed over 2017-to-date, how US investor sentiment has changed and finally, whether this is impacting investors' appetite for emerging markets.
The US economy continues to be the growth story for the world. While President Trump's ambitious goals to sharply boost economic growth are yet to be achieved, the truth is that the economy has not slowed as much as some analysts anticipated and corporate finance activity is in fact reaching fever pitch. What this likely tells us is that there is a willingness on behalf of US investors to give this administration the benefit of the doubt and they believe that the markets are offering them the certainty and stability that they so desperately crave.
The monetary policy story supports this belief, with the Federal Reserve sending the signals they have and by gradually raising rates. However fiscal policy tells a different story, with a bill on tax reform yet to be drafted and healthcare on such shaky ground. While monetary policy is likely to have a greater impact for US businesses and institutional investors right now, it is hard to ignore the potential ramifications for the economy (and investor sentiment) resulting from ineffective fiscal policy. It will be interesting to see how long investors continue to give this administration the benefit of the doubt.
US investors have, on the whole, stayed away from emerging markets exposure for some years, and many are now considering how to get back into emerging markets in a risk-adjusted and liquid way. There is now a realisation that emerging markets are not as remote or as adversarial as people thought after the financial crisis, and while they may have taken on a marginal commitment, they are now seeking out strong investment stories that they can be confident investing in. These investors need a safe and smart way to invest large pools of capital with people who have broad knowledge and experience of emerging markets, which is why APQ is well positioned to help them achieve this balance. 
Please see below some headline thoughts from our Advisory Board on specific markets of interest.
A new crisis in the Middle East?
Saudi Arabia has shocked observers, setting off a new wave of instability in the Gulf region by cutting diplomatic ties with Qatar. But how did things escalate so quickly, and what does this mean for investors in the region? 
Most of those with an eye on the Middle East were unsurprised that Qatar was targeted for isolation, however almost everyone has been surprised at the intensity the diplomatic conflict has taken. The demands being made of the Qataris are impossible for any country that wants to call itself sovereign to accept. 
While the UAE and Egypt have their own reasons to punish Qatar, Saudi Arabia is clearly governing this conflict. Indeed, it seems that one person in particular is trying to make a strong political statement - that person being the recently appointed crown prince of Saudi Arabia and effectively the person running the show, Prince Mohammed bin Salman. This transitional period of a new, young regional leader with a very complex set of strategic and economic challenges is not an easy backdrop for investors. It is more difficult for regional politicians: how do you deal with your political and economic sponsor demanding greater loyalty for riskier regional enterprises, precisely when its resources are dwindling? The stakes are also higher because tail risks increase in other regional conflicts as a result. For example, in Syria, the chances increase of an accident involving two or more of Iran, Israel, Russia, US, Saudi Arabia or Turkey, although it is reassuring to note that the G20 conference bought some comforting headings reasserting Russian-US coordination. 
Another interesting transition is perhaps revealed by the Qatar crisis, being the vacuum created by US foreign policy under President Trump, exacerbated by the eroding political authority of the White House. This invariably entices (or compels) regional powers to take more unusual, riskier actions to pursue their interests. In any event, politicians and investors are trying to get used to a new world where the most important power in the region, the US, behaves with a new, less predictable style. Contradictory signals emanating from the White House and the State Department are not viewed as nuanced and coordinated signals, but rather flip-flopping policy improvisations.
As for Qatar, all this means it is difficult to predict how the crisis will be resolved. If we see sanctions increasing to such a point that the Qataris have little choice but to meet the harsh criteria set out, or Saudi Arabia threatening military action, the outlook would be pretty bleak for the Qatari leadership as it stands. Needless to say, the Qataris are fighting for their survival to find a deal to diffuse the situation. However, even such a peaceful outcome degrades the political landscape, for unprecedentedly loud ultimatums would have to be quietly forgotten. This is the new normal: the opposite of the "speak softly and carry a big stick." It reminds us not only of the peculiarity of the Trump presidency, but also of the volatility and stresses confronting Gulf ruling families in a world of persistently lower energy prices and multiple regional wars. 
The "big picture" outlook for investors in the region is therefore difficult. Political stresses and military exigencies mean that economic growth and development cannot be prioritised, something challenging enough with the very depressed oil prices. Moreover, the policy track record from better times is not stellar. Back in April, our hunch was to avoid anything with a Gulf component to it, and that view seems to have played out. Qatar's equity market recorded double-digit losses in the first six months of 2017 for obvious reasons, but other Gulf countries dependent on oil or on Saudi largesse have also performed badly (Bahrain and Kuwait are exceptions). But countries outside the Gulf conflict such as Tunisia and Morocco have performed well. Egypt, though closer to the Gulf conflict, has itself fared reasonably, no doubt largely due to revaluation effects after last year's massive currency devaluations. As it is impossible to foresee what will happen next in the Gulf, we believe as a top-down rule it is best to continue to focus on markets in the region that are smaller and less exciting. 
Green shoots for South Africa?
As Jacob Zuma shows signs of weakness in the run up to December's presidential candidacy elections, will party deputy Cyril Ramaphosa fight for control? And what does this mean for the long-suffering Rand?
South Africa has been in political and economic turmoil for some time, and 2017 has been no exception to date. Following eight years of weak economic growth in real terms under Zuma's leadership, S&P downgraded the country to junk status in April and the Rand continues to be oversold ever since. But with the country going to the polls in 2019, could we be about to see a change in the South African political landscape? And could the impact of this spill over into economic markets?
Our optimism that we could be on the brink of change is driven by the recent African National Congress ("ANC") policy conference. While the policy conference has little to no bearing on the South African political landscape, it does give us an inside view on what is happening within the party. And potentially a hint at who will have the party's support in December when the ANC chooses its candidate for the next president. 
Of course, Jacob Zuma has publically endorsed his ex-wife Nkosazana Dlamini-Zuma as the next leader, for the simple reason that he is facing continued allegations of fraud and racketeering. Accusations are so heightened that is he likely to be put in jail once his presidential immunity expires after the 2019 elections. His only options to avoid that fate are either escaping to a non-extradition country or to protect himself under his ex-wife's presidency. His prospects are bleak and that is why he is on the road trip of his lifetime to position his ex-wife into power.
However, the thorn in his side is his current deputy, Ramaphosa, who is gaining support to become the next president instead of Dlamini-Zuma. Ramaphosa has articulated a short tolerance for corruption, and has made no secret of his support for anti-Zuma protestors. The anticipated battle for power between the two candidates is literally tearing the ANC apart. The ANC is a conglomeration of three parties, including the South African Communist Party ("SACP"), who have already said they will not let Zuma's ex-wife into power and have given an ultimatum that they will break away from the ANC if that is the case. The Congress of South African Trade Unions (Cosatu) is also a massive backer of Ramaphosa, a former trade union leader. 
It was not until at the policy conference where we really started to see the balance of power shift away from Zuma. Zuma put forward eleven policies for the ANC going into the next election, ten of which were rejected outright. Even though the policy conference cannot result in any change of law, Zuma has clearly come out of this with a bloody nose and Ramaphosa seems the stronger candidate.
The Rand suffered in the aftermath of the conference, driven mostly by the ANC proposals for uncompensated land expropriation. The fact of the matter is that without a change of constitution or referendum this cannot happen, so is nothing more than a benign attempt to appeal to the uneducated masses to try and win votes before the next election.
Our view is that the Rand has now been weakened to the point where it offers interesting buying opportunities in the country. You need a strong constitution if you are going to follow the Rand, but that is exactly what our instinct is telling us right now. From now until December, we are likely to see huge volatility, but ultimately we see more risk that the Rand will strengthen rather than weaken from its current levels.
Mongolia: Virtuous recovery underway.
In our 2017 Outlook at the beginning of the year, we predicted a virtuous recovery for Mongolia, following a very troubled 2016. Year-to-date it looks like our thesis is holding and the economy has turned, driven in part by some very significant mining projects that have already started. Noted, the newly elected president, known for his pro-Kremlin stance, is a risk, however it is broadly thought that the election outcome will not have much impact on the recovery that is underway. 
Nigeria: Presidential succession issues, but economy on a better trajectory.
After currency controls caused significant issues earlier in the year, we are starting to see some more liquidity in the parallel market and even the start of some convergence with the official market. Overall, the economy is on an upward trajectory as oil production is up substantially and foreign capital is flowing into the market. The presidential succession issues are weighing on people's minds, given no one has seen President Buhari following two months of undisclosed medical treatment. While we will likely see some sectarian violence and disruption to capital markets if Buhari does not make it back, this could potentially be a buying opportunity for investors. In the short term, local bills, bonds and selective equities are our focus. In the medium to longer term, we turn our attention to power, as Nigeria has a significant power deficit and any improvement in this sector will have a very substantial follow on effect for the broader economy.
Sub-Saharan Africa: Volatile markets, but there are still opportunities for investors.
The overarching theme across Sub-Saharan Africa is political instability. Mozambique is having problems with the International Monetary Fund on the back of some dubious deals. Zambia declared a state of emergency just a few weeks ago. South African political woes continue as highlighted above. These are difficult markets to navigate and the volatility is expected to persist, certainly for the next twelve months. However, that does not mean there are not opportunities to be had in this region. South Africa seems to be the most fertile hunting ground for investment ideas given the liquidity in currency and credits.
Turkey: Unlikely to sustain growth from first half of 2017.
Following the Justice and Development Party's referendum success earlier in the year, the government has introduced various measures to stimulate growth, resulting in the largest increases in Turkish GDP in almost two years (5.0% in the first quarter, and 3.5% in the second quarter of 2017). But in our view, this is not sustainable and we remain bearish on Turkey. For example, one measure they have established to boost growth is the credit guarantee fund, allowing tradespeople and craftspeople easier access to financing. Already standing at 100 billion Turkish Lira, this measure appears to be more about helping Erdogan's political fate than his country's future stability. 
The Turkish real estate market is a particularly challenging sector, and is most definitely a story of two halves. While the mid and lower sectors are holding up due to government controls in this area, there are definite problems in the higher end of the market. Bodrum, the summer holiday spot for wealthy residents, is showing signs of a 40% discount compared to a few years ago, and buyers are very scarce.
Our current focus is on helping foreign investors who are facing difficulties collecting money from creditors in the region.
India - China: Standoff over Bhutan border dispute.
Bhutan is at the centre of escalating tensions between these Asian giants over a scrap of remote but strategically important territory. The current deadlock started in mid-June, as China started work to expand a road in east Bhutan. The Indian government responded by sending troops, following a request for assistance from Bhutan. While it is hard to imagine a sustained conflict in such a remote area, the more assertive stance from the Indian government combined with the scale of the mobilisation means that this is one to watch looking forward.
North Korea: Rising tensions from the West.
No round up of global markets would be complete without mention of North Korea, and global reactions to its escalating nuclear program. While it is unlikely the North Koreans are ready to launch a nuclear missile capable of striking North America just yet (there is no evidence they have miniaturised a nuclear warhead or developed a missile that can survive the pressure of re-entry), the speed at which they are ready to do so could be sooner than US intelligence previously anticipated, meaning leaders are under intense pressure to resolve the issues. 
Trump's call for a UN Security Council Resolution following the successful ICBM test on 4 July 2017 was vetoed by Russia and China. Instead, President Trump deployed troops in South Korea in a show of force and announced efforts to seize North Korean assets held in western banks. Russia and China subsequently joined forces to call on the Koreans and the US to sign up to a de-escalation plan designed to defuse tensions, including a request to the US to remove their missile defensive systems from the Korean peninsula. All eyes are now on the Trump administration to see how this progresses.
Final thoughts
As we reflect on both our performance and the performance of the markets more generally over the past year, there are many reasons to be cheerful. Our first year as a listed company saw us deliver our objective of stable income against an ever-changing market backdrop and emerging markets generally have performed well. As we look forward to our second year, we are confident that our approach and focus on income continues to hold us in good stead.
Despite clear challenges on the horizon, our Advisory Board has identified some very compelling opportunities in specific markets. To re-iterate, we are not bearish across emerging markets and in fact, we firmly believe in the long-term structural arguments for emerging markets growth and expect the bull run to continue for the remainder of the year. However, we are mindful of the risks and therefore taking a very considered view on selecting the right opportunities to deliver our objectives and achieve stable income.
Wayne Bulpitt CBE
Chairman, APQ Global Limited
STATEMENT OF COMPREHENSIVE INCOME
For the period 1 January 2017 to 30 June 2017















From

From the date of






1 January 2017

incorporation to






to 30 June 2017

31 December 2016



Note


GBP

GBP









Net gains / (loss) on investments
6


(315,195)

965,471 
Income





1,770,825 

- 
Expenses


7


(931,422)

(412,522)









Net Profit for the period before tax



524,208 

552,949 









Tax





- 

- 









Profit for the period



524,208 

552,949 









Basic and diluted earnings per share
9


0.00672 

0.00708 









There are no other Comprehensive Income items in the current period. The profit for the period represents the Total Comprehensive Income for the period.


















STATEMENT OF CHANGES IN EQUITY






for the period ended 31 December 2016









Share capital
Retained earnings

Total









Issue of shares


78,055,000 
- 

78,055,000 
Transaction costs of raising equity
(1,215,379)


(1,215,379)
Profit for the period



- 
552,949 

552,949 
At 31 December 2016
76,839,621 
552,949 

77,392,570 









for the period 1 January 2017 to 30 June 2017








Share capital
Retained earnings

Total









Share capital brought forward
77,392,570 
- 

77,392,570 
Profit for the period




524,208 

524,208 
Dividend


(1,561,100)


(1,561,100)
At 30 June 2017


75,831,470 
524,208 

76,355,678 









STATEMENT OF FINANCIAL POSITION
As at 30 June 2017





30 June 2017

31 December 2016



Note

GBP

GBP








Assets







Investment at fair value through profit or loss
5 & 6

76,280,520 

76,595,715 
Cash and cash equivalents
5

186,348 

913,504 








Total assets




76,466,868 

77,509,219 
















Equity







Share capital


8

77,392,570 

76,839,621 
Retained earnings

8

524,208 

552,949 
Less dividends paid

10

(1,561,100)

- 








Total equity




76,355,678 

77,392,570 








Liabilities







Other payables


13

111,190 

116,649 








Total liabilities




111,190 

116,649 








Total equity and liabilities 


76,466,868 

77,509,219 








STATEMENT OF CASH FLOW
For the period 1 January 2017 to 30 June 2017


30 June 2017

31 December 2016


GBP

GBP
Cash flows from operating activities



Profit before tax

524,208 

552,949 





Adjustments for:




Net (gain) / loss on investments
315,195 

(965,471)
Increase in creditors
(5,459)

116,649 










Cash absorbed by operating activities
833,944 

(295,873)





Cash flows from investing activities



Acquisition of investment *
- 

(58,500,000)










Net cash flow used in investing activities
- 

(58,500,000)





Financing activities



Proceeds from issue of shares *
- 

60,924,756 
Transaction costs of raising equity
- 

(1,215,379)
Payments of dividends
(1,561,100)

- 










Net cash flow from financing activities
(1,561,100)

59,709,377 





Net increase in cash
(727,156)

913,504 





Opening Cash

913,504 

- 





Closing Cash

186,348 

913,504 





NOTES TO THE FINANCIAL STATEMENTS
For the period 1 January 2017 to 30 June 2017
1. Corporate information
The financial statements of APQ Global Limited (the "Company") for the period ended 30 June 2017 were authorised for issue in accordance with a resolution of the Board of Directors on 25 September 2017. The Company is incorporated as a limited company in Guernsey. The Company was incorporated on 10 May 2016 for an unlimited duration in accordance with Guernsey law. The Company's registered office is at 1st Floor, Tudor House, Le Bordage, St Peter Port, Guernsey, GY1 1DB.
The objective of the Company is to steadily grow its earnings to seek to deliver attractive returns and capital growth through a combination of building growing businesses in emerging markets as well as earning revenue from income generating operating activities.
The Company and its subsidiary have no investment restrictions and no maximum exposure limits will apply to any investments made by the Company, unless otherwise determined and set by the Board from time to time. No material change will be made to the Company's or subsidiary's objective or investing policy without the approval of Shareholders by ordinary resolution.
The Company's investment activities are managed by the Board. 
The shares are quoted on The International Stock Exchange for informational purposes, but cannot be traded on this exchange. The ordinary shares are admitted to trading on AIM.
Ernst & Young LLP resigned as auditors of the Company on 22 September 2017. BDO LLP has indicated its willingness to act as auditors for the Company and will be appointed in due course.
2. Significant accounting policies
2.1 Basis of preparation
The financial statements of the company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (IFRS). The financial statements have been prepared on a historical-cost basis, except for financial assets and financial liabilities held at fair value through profit or loss (FVPL) that have been measured at fair value.
The financial statements are presented in Pounds Sterling, which is the functional currency of the Company, and all values are rounded to the nearest pound, except where otherwise indicated.
2.2 Basis of consolidation
The Company holds 100% of the shares in APQ Cayman Limited. As per IFRS 10 the Company is required to prepare consolidated financial statements, however management determined that the Company meets the investment entity definition and has taken advantage of the exception from consolidation as per IFRS 10 paragraph 31. Accordingly, interests in this subsidiary are classified as fair value through profit or loss (FVPL).
For a more detailed explanation please also refer to note 3. Significant accounting judgements, estimates and assumptions.
2.3 Financial instruments
The Company classifies its financial assets and financial liabilities at initial recognition into the following categories, in accordance with IAS 39 Financial Instruments: Recognition and Measurement.
Financial assets and liabilities at FVPL.
The investment in subsidiary is designated at fair value through profit or loss upon initial recognition on the basis that they are part of a group of financial assets that are managed and have their performance evaluated on a fair value basis, in accordance with risk management and investment strategies of the Company, as set out in the Company's offering document.
In accordance with the exception under IFRS 10 Consolidated Financial Statement for an investment entity, the Company does not consolidate its investment in subsidiary and has designated the investment as fair value through profit or loss in the financial statements. 
2.3 Financial instruments continued
Investments in subsidiaries are initially accounted for and subsequently measured at fair value.
Financial liabilities are classified, at initial recognition, as payables and are subsequently measured at amortised cost.
A financial asset (or, where applicable, a part of a financial asset or a part of a group of similar financial assets) is derecognised where the rights to receive cash flows from the asset have expired, or the Company has transferred its rights to receive cash flows from the asset, or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement and either:
(a) the Company has transferred substantially all of the risks and rewards of the asset; or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset (or has entered into a pass-through arrangement), and has neither transferred nor retained substantially all of the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company's continuing involvement in the asset. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
The Company derecognises a financial liability when the obligation under the liability is discharged, cancelled or expired.
2.4 Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the asset and settle the liability simultaneously. 
2.5 Fair value measurement
The Company measures its investment in subsidiaries at fair value at each reporting date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The fair value for financial instruments traded in active markets at the reporting date is based on their quoted price (bid price for long positions and ask price for short positions), without any deduction for transaction costs.
For all other financial instruments not traded in an active market, the fair value is determined by using valuation techniques deemed to be appropriate in the circumstances. Valuation techniques include the market approach (i.e., using recent arm's length market transactions adjusted as necessary and reference to the current market value of another instrument that is substantially the same) and the income approach (i.e., discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible). Please refer to Note 6 for the Company's fair value techniques.
For assets and liabilities that are measured at fair value on a recurring basis, the Company identifies transfers between levels in the hierarchy by re-assessing the categorisation (based on the lowest level input that is significant to the fair value measurement as a whole), and deems transfers to have occurred at the beginning of each reporting period.
2.6 Functional and presentation currency
The functional currency is the currency of the primary economic environment in which it operates. The Company's majority of returns are Pounds Sterling based, the capital is raised in Pounds Sterling and the performance is evaluated and its liquidity is managed in Pounds Sterling. Therefore, the Company concludes that the Pounds Sterling is its functional currency. The Company's presentation currency is also Pounds Sterling.
2.7 Foreign currency translations
Transactions during the period, including purchases and sales of securities, income and expenses, are translated at the rate of exchange prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the reporting date.
2.7 Foreign currency translations continued
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Foreign currency transaction gains and losses on financial instruments classified as at FVPL are included in profit or loss in the statement of comprehensive income as part of the 'net gain or loss on financial assets and liabilities at fair value through profit or loss'.
2.8 Share capital
In the event of the liquidation of the Company the Ordinary Shares entitle the holder to a pro rata share of the Company's net assets. Shares are issued net of transaction costs, which are defined as incremental costs directly attributable to the equity transaction that otherwise would have been avoided. 
2.9 Distributions to shareholders
Dividends are at the discretion of the Company. A dividend to the Company's shareholders is accounted for as a deduction from retained earnings. An interim dividend is recognised as a liability in the period in which it is irrevocably declared by the Board of Directors. A final dividend is recognised as a liability in the period in which it is approved by the annual general meeting of shareholders.
2.10 Cash and cash equivalents 
Cash and cash equivalents in the statement of financial position comprise cash on hand and short-term deposits in banks that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, with original maturities of three months or less.
Short-term investments that are not held for the purpose of meeting short-term cash commitments and restricted margin accounts are not considered as 'cash and cash equivalents'.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts when applicable.
2.11 Interest revenue and expenses
Interest revenue and expenses are recognised in the statement of comprehensive income for all interest-bearing financial instruments using the effective interest method.
2.12 Dividend income
Dividend income is recognised on the date when the Company's right to receive the payment is established.
2.13 Net gain or loss on financial assets and liabilities at fair value through profit or loss
Net gains or losses on financial assets and liabilities at FVPL are changes in the fair value of financial assets and liabilities held for trading or designated upon initial recognition as at FVPL and exclude interest and dividend income and expenses.
Unrealised gains and losses comprise changes in the fair value of financial instruments for the period and from reversal of the prior period's unrealised gains and losses for financial instruments which were realised in the reporting period. Realised gains and losses on disposals of financial instruments classified as at FVPL are calculated using the first-in, first-out (FIFO) method. They represent the difference between an instrument's initial carrying amount and disposal amount, or cash payments or receipts made on derivative contracts (excluding payments or receipts on collateral margin accounts for such instruments).
2.14 Fee expense
Fees are recognised on an accrual basis. Refer to Note 7 for details of fees and expenses paid in the period.
2.15 Taxes
The Company is taxable in Guernsey at the company standard rate of 0%.
However, in some jurisdictions, investment income is subject to withholding tax deducted at the source of the income. Withholding tax is a generic term used for the amount of withholding tax deducted at the source of the income and is not significant for the Company. The Company presents the withholding tax separately from the gross investment income in the statement of comprehensive income. For the purpose of the statement of cash flows, cash inflows from investments are presented gross of withholding taxes, when applicable.
3. Significant accounting judgements, estimates and assumptions
The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts recognised in the financial statements and disclosure of contingent liabilities. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods.
Judgements
In the process of applying the Company's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:
Assessment as investment entity
The Company owns 100% of the shares of APQ Cayman Limited and is Managing Partner of APQ Partners LLP. Entities that meet the definition of an investment entity within IFRS 10 are required to measure their subsidiaries at fair value through profit or loss rather than consolidate them. The criteria which define an investment entity are, as follows:
 An entity that obtains funds from one or more investors for the purpose of providing those investors with investment management services;
 An entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and
 An entity that measures and evaluates the performance of substantially all of its investments on a fair value basis.
The Company's listing document details its objective of providing investment management services to investors which includes investing in equities, fixed income securities, private equity and property investments for the purpose of returns in the form of investment income and capital appreciation.
The Company reports to its investors via quarterly investor information, and to its management, via internal management reports, on a fair value basis. All investments are reported at fair value to the extent allowed by IFRS in the Company's annual reports. The Company has a clearly documented exit strategy for all of its investments.
The Board has also concluded that the Company meets the additional characteristics of an investment entity, in that it has more than one investment; the Companies ownership interests are predominantly in the form of equities and similar securities; it has more than one investor and its investors are not related parties.
The Board has concluded that the Company meets the definition of an investment entity. These conclusions will be reassessed on an annual basis, if any of these criteria or characteristics change.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. However, existing circumstances and assumptions about future developments may change due to market changes or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
Fair value
The Directors consider that the fair value of the investment in subsidiary should be based on NAV of the subsidiary, APQ Cayman Limited, please refer to Note 6.
4. Standards issued but not yet effective
The standards and interpretations that are issued, but not yet effective and which are expected to have as impact on financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.
IFRS 9 Financial Instruments
In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces IAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.
The Company plans to adopt the new standard on the required effective date. Overall, the Company expects no significant impact on its balance sheet and equity except for the effect of applying the impairment requirements of IFRS 9. The Company expects a higher loss allowance resulting in a negative impact on equity and will perform a detailed assessment in the future to determine the extent. 
IFRS 15 Revenue from Contracts with Customers
IFRS 15 was issued in May 2014 and establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard is not expected to have any impact on the Company.
IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses - Amendments to IAS 12
The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. 
These amendments are effective for annual periods beginning on or after 1 January 2017 with early application permitted. If an entity applies the amendments for an earlier period, it must disclose that fact. These amendments are not expected to have any impact on the Company.
IFRS 2 Classification and Measurement of Share-based Payment Transactions - Amendments to IFRS 2
The IASB issued amendments to IFRS 2 Share-based Payment that addresses three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled.
On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other criteria are satisfied. The amendments are effective for annual periods beginning on or after 1 January 2018, with early application permitted. The Company is assessing the potential effect of the amendments on its consolidated financial statements.
5. Segment Information
For management purposes, the company is organised into one main operating segment, which invests in equity securities. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the company as a whole.
The following table analyses the Company's assets by geographical location. The basis for attributing the assets are the place of listing for the securities or for non-listed securities, country of domicile. 




Period ended




30 June 2017




GBP





Cayman



76,235,464 
United Kingdom



45,672 
Guernsey



185,732 





Total



76,466,868 
6. Financial Assets and Financial Liabilities at Fair Value Through Profit or Loss




Fair Value




GBP
INVESTMENTS




APQ Cayman Limited



Opening balance



76,595,715 
Acquisitions



- 
Fair value movement


(360,251)




76,235,464 
APQ Partners LLP



Opening balance


- 
Acquisitions


- 
Fair value movement


45,056 




45,056 
The Company meets the definition of an investment entity. Therefore, it does not consolidate its subsidiary but, rather, recognises it as an investment at fair value through profit or loss.
Valuation techniques
APQ Cayman Limited has a portfolio of tradable assets and liabilities which it values at fair value using the same policies as the Company. The Company is able to redeem its holding of APQ Cayman Limited at its net asset value. Fair value of the investment in APQ Cayman Limited is therefore measured at its Net Asset Value.  
APQ Partners LLP main assets are cash and trade receivables. As the Company is the Managing Partner of APQ Partners LLP, it is able to control of the assets and liabilities of the partnership. APQ Partners LLP is also therefore measured at its Net Asset Value. 
Unlisted managed funds
The Company classifies its investments into the three levels of the fair value hierarchy based on:
- Quoted prices in active markets for identical assets or liabilities (Level 1) 
- Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2) 
- Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3)
The Company has classified its investment in subsidiaries as level 3 because its net asset value is deemed to be an unobservable input. The movement in the investment is shown above.
The movement of investments classified under level 3 is the same as the table above.
Note sensitivity
The most significant unobservable input used in the fair value is the NAV of the underlying investments. A reasonable change of 5% in the NAV will have an impact of 3,829,785 on the results of the Company.
APQ Global Limited wholly owns APQ Cayman Limited whose registered office of the Company is at the offices of Mourant Ozannes Corporate Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, PO Box 1348, Grand Cayman KY1-1108, Cayman Islands.
APQ Global Limited has supported APQ Cayman Limited by paying directors fees of 2,044.16 to Richard Bray as he is a director of both entities. 





GBP
7. Expenses




APQ Partners LLP Operating Expenses Paid


657,169 
Salaries




20,000 
Audit fee




30,000 
Administration fees and expenses



46,228 
Director's fees (Wayne Bulpitt)



15,000 
Director's fees (Richard Bray)



15,000 
Director's fees (Philip Soulsby)



8,726 
Other expenses



4,480 
Professional fees



129,454 
Realised fx loss



268 
Insurance expenses



5,098 











931,422 
8. Share Capital 
The issued share capital of the Company is 78,055,000 ordinary shares of no par value listed on the International Stock Exchange and AIM.
Quantitative information about the Company's capital is provided in the statement of changes in equity and in the tables below.
The shares are entitled to dividends when declared and to payment of a proportionate share of the Companies net asset value on any approved redemption date or upon winding up of the Company.
The Company's objectives for managing capital are: 
 To invest the capital in investments meeting the description, risk exposure and expected return indicated in its listing documents.
 To maintain sufficient liquidity to meet the expenses of the Company, pay dividends and to meet redemption requests as they arise.
 To maintain sufficient size to make the operation of the Company cost-efficient.
 The Board has authority to purchase up to 14.99 per cent. of the issued Ordinary Share capital of the Company. The Board intends to seek a renewal of this authority at each annual general meeting of the Company. No buy backs occurred during the period under review. 


Ordinary Shares



GBP







As at 31 December 2016
78,055,000 



76,839,621 
Repurchase and cancellation of own shares
- 



- 
Issue of shares
- 



- 
As at 30 June 2017
78,055,000 



76,839,621 
9. Earnings Per Share
 
The basic and diluted earnings per shares are calculated by dividing the profit or loss by the average number of ordinary shares outstanding during the period.  
Profit for the period




524,208 
Average number of shares in issue during the period



78,055,000 
Earnings per share




0.00672 
10. Dividends paid 







Ex-dividend date
Payment date
Dividend
Dividend per Share
First dividend
26 January 2017
27 February 2017
390,275.00
0.005
Second dividend
27 April 2017
24 May 2017
1,170,825.00
0.015
The stated dividend policy of the Company is to target an annualised dividend yield of 6% based on the Placing issue Price. The latest dividend payment of 0.015 after the first full operating quarter of the Company is on target with the stated policy.  
 
There is no guarantee that any dividends will be paid in respect of any financial year or period. The ability to pay dividends is dependent on a number of factors including the level of income returns from the Company's businesses. There can be no guarantee that the Group will achieve the target rates of return referred to in this document or that it will not sustain any capital losses through its activities.
11. Financial risk and management objectives and policies continued
 
The Company intentionally exposes itself to these risks as part of its operations. These risks are managed on an ongoing basis by performance reviews of the underlying portfolio on a quarterly basis by the Board of the Company.   
12. Capital Management 
The Company can raise new capital which may be implemented through the issue of a convertible debt instrument or such other form of equity or debt as may be appropriate. It also has a buy-back authority subject to a maximum buy-back of 14.99 per cent of the issued Ordinary Shares. 
 
The Company's objectives for managing capital are:  
 
 To invest the capital into investments through its subsidiary, APQ Cayman Limited.  
 To maintain sufficient liquidity to meet the expenses of the Company and pay dividends. 
 To maintain sufficient size to make the operation of the Company cost-effective. 
 
The Company may utilise borrowings in connection with its business activities. Although there is no prescribed limit in the Articles or elsewhere on the amount of borrowings that the Company may incur, the Directors will adopt a prudent borrowing policy and oversee the level and term of any borrowings of the Company and will review the position on a regular basis.   
13. Other payables 
  
All of the Company's liabilities fall due within three months at 30 June 2017. 
 
As at 30 June 2017









GBP
Liabilities





Audit Fees Payable



89,000 
Salaries




20,000 
Capita Prof. Services Payable


2,824 
Director's Fees Payable (Wayne Bulpitt)


2,500 
Director's Fees Payable (Richard Bray)


2,500 
Director's Fees Payable (Philip Soulsby)


1,438 
Listing Fees Payable



978 





119,240 
14. Accounting period 
 
The accounting period is from 1 January 2017 to 30 June 2017.
 
15. Related party transactions 
 
Richard Bray is also a director of the wholly owned subsidiary, APQ Cayman Limited, as well as being a director of Active Management Services Limited which is part of the Active Group as is Active Services (Guernsey) Limited.  
 
Wayne Bulpitt founded the Active Group; he is also a shareholder of the Company.
 
Bart Turtelboom founded APQ Partners LLP and is also a Director of APQ Cayman Limited as well as the majority shareholder of the Company. 
 
The directors are remunerated in the form of fees, payable monthly in arrears. Bart Turtelboom agreed to waive his entitlement to director's fees however with effect from 1 April 2017 Bart Turtelboom will received an annual salary of 120,000 as Chief Executive Officer of the Company.  





Period ended





30 June 2017





GBP


Bart Turtelboom 
Chief Executive Officer
20,000 


Wayne Bulpitt 
Non-Executive Chairman
15,000 


Richard Bray 
Executive Director
15,000 


Philip Soulsby
Non-Executive Director 
8,726 





58,726 
APQ Global Limited has paid 46,227.50 fees and expenses to Active Services (Guernsey) Limited as administrator of the Company.
As described in the Listing Document, and under the terms of the Services Agreement, APQ Partners LLP assist the Board and the Group's management based in Guernsey with the implementation of its business strategy, provide research on business opportunities in emerging markets and provide support for cash management and risk management purposes. APQ Partners LLP are entitled to the reimbursement of expenses properly incurred on behalf of APQ Global Limited in connection with the provision of its services pursuant to the agreement. APQ Global Limited has funded 657,168.64 of the expenses incurred by APQ Partners LLP. 
16. Events after the reporting period 
At an Extraordinary General Meeting held on 4 September 2017, Resolutions were passed approving the issue of 4,018 3.5 per cent. convertible unsecured loan stock 2024 ("CULS") to raise 20.09 million before expenses. 
The CULS were admitted to trading on the International Securities Market, the London Stock Exchange's market for fixed income securities and dealings commenced at 8.00 a.m. on 5 September 2017.
Following Admission there were 4,018 CULS in issue. Holders of the CULS are entitled to convert their CULS into Ordinary Shares on a quarterly basis throughout the life of the CULS, commencing 31 December 2017, and all outstanding CULS will be repayable at par (plus any accrued interest) on 30 September 2024. The initial conversion price is 105.358 pence, being a 10 per cent. premium to the unaudited Book Value per Ordinary Share on 31 July 2017.

This information is provided by RNS
The company news service from the London Stock Exchange
  END
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