REG - Jade Road Investmnts - Final Results
28/06/2024 17:45
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RNS Number : 4562U Jade Road Investments Limited 28 June 2024
28 June 2024
RNS
JADE ROAD INVESTMENTS LIMITED
("Jade Road" or the "Company")
Final Results
Jade Road Investments Limited (AIM: JADE), the London quoted company focused
on seeking the best risk-adjusted returns globally, is pleased to announce the
publication of its final results for the year ended 31 December 2023.
Hard copies of the Annual Results are available upon request. The Results are
also available on Jade Road's
website: https://jaderoadinvestments.com/investors/financial-reports
(https://jaderoadinvestments.com/investors/financial-reports) .
Financial Highlights
2023 2022 Change*
Net Asset Value US$0.05m (GBP0.04m) US$15.1m (GBP12.2m) -99.67%
Gross Portfolio Income US$1.6m (GBP1.27m) US$2.8m (GBP2.2m) -42.86%
Net Portfolio Income / Loss US$-15.7m (GBP-12.41m) US$-50.6m (GBP-40.9m) 68.97%
Net Profit / Loss US$-17.7m (GBP -14.0m) US$-52.9m (GBP-42.8m) 66.53%
Year-end cash US$0.08m (GBP0.06m) US$0.3m (GBP0.2m) -73.33%
Net Asset Value per share US$0.0m (GBP 0.0m) US$0.13 (GBP0.10) -100%
*Exchange rate as of 27 Jun 2024
Operational Highlights
In the second half of 2023, the Board took the decision to restructure JADE by
disposing of all of its legacy Asian assets and transferring them to a
separate privately held company Eastern Champion Limited (SPV) whose
shareholders would be a mirror of the shareholders in JADE. Whereby
shareholders in JADE would receive an equivalent number of shares in the
SPV. The main reason for taking this action is that the JADE's share price
has never remotely reflected the full value of the assets, and therefore the
benefit of them remaining part of a publicly quoted company became minimal.
The other key benefit of moving the assets to the SPV is that the costs of
managing the assets has been radically reduced which in turn will increase the
net proceeds from asset sales.
Post Period End Activity
On 1 May 2024 the transfer of the Asian Legacy Assets was approved by the
shareholders at the annual general meeting. The corporate bond issued by the
Group was also transferred. All assets and liabilities have been transferred
to an independent SPV which is not owned or controlled by the JADE.
John Croft, Chairman of Jade Road Investments, commented:
"Following the restructuring outlined above, JADE effectively becomes a shell
company in search of a potential acquisition via a Reverse Take Over (RTO) or
an alternative investment platform with new principals.
Discussions are ongoing with a number of potential acquisition targets.
Further details of any such putative transactions will be provided in due
course. The Company will need to raise interim capital by the end of August
2024 to advance discussions for an RTO.
I would like to take this opportunity to thank the Company's Shareholders and
Bondholders for their support in achieving this successful restructuring which
provides an opportunity for the Company to pursue a different and hopefully
more value enhancing future."
FOR FURTHER INFORMATION, PLEASE CONTACT:
Jade Road Investments Limited +44 (0) 778 531 5588
John Croft
WH Ireland Limited - Nominated Adviser +44 (0) 20 7220 1666
James Joyce
Andrew de Andrade
Hybridan LLP - Corporate Broker +44 (0) 203 764 2341
Claire Noyce
Jade Road Investments Limited
Annual Report 2023
Company Description
Jade Road Investments Limited ("Jade Road" or the "Company") was previously
focused on providing growth capital and financing to emerging and established
Small and Medium Enterprises ("SMEs") worldwide. However the Company
recently disposed of its entire asset portfolio and is now seeking to raise
new capital to invest in and/or acquire a business via a Reverse Take Over
(RTO).
Our common stock is publicly traded on the Alternative Investment Market
("AIM") market of the London Stock Exchange, under the ticker symbol "JADE".
Investing Policy
1) The Company has an indefinite life, is sector
agnostic and is targeting assets in any class which will produce income
returns, with a secondary focus on capital gains over time for its
Shareholders.
2) The Company will seek the best risk-adjusted
returns globally, with a preference for investments governed by legal
systems that the Company understands and believes to be reliable.
3) The Company may invest directly into listed
securities, over-the-counter traded securities, currencies, companies, real
assets, contractual obligations, or commodities ("Direct Financings").
4) The Company may provide financing to entities,
becoming a lender to, or a limited partner or shareholder of, an affiliated
or third party which itself has a strategy to invest in underlying listed
securities, over-the-counter traded securities, currencies, companies, real
assets, contractual obligations or commodities ("Indirect Financings").
5) The Company shall ensure that at the time of
entering into a Direct Financing, it shall represent not more than 30% of
the Company's net asset value immediately following the relevant transaction.
There is no limit on the number of investments the Company may take.
6) The Company shall ensure that at the time of
entering into an Indirect Financing, no underlying asset of the indirectly
financed entity shall represent more than 30% of the Company's net asset
value immediately following the relevant transaction.
7) There is no restriction on the duration the
Company will hold any investment nor any restriction on the time for the
Company to make its investments in such assets.
8) The Company will pursue a predominantly passive
management strategy. However, on a case by case basis, it may consider
securing additional governance rights such as observer or board appointments
where the situation or asset dictates such additional oversight.
9) The Company may utilise gearing when
appropriate. The Company will continue to exercise prudence in determining
whether prevailing market conditions and investor expectations warrant the
utilisation of any leverage over its portfolio.
10) The Company will consider issuing its own shares
as consideration for interests in other companies but such cross holdings will
be limited to 20 per cent. of the Company's issued shares in aggregate from
time to time.
Chairman's Statement
In the second half of 2023 your Board took the decision to restructure the
Company by disposing of all of its legacy Asian assets and transferring them
to a separate privately held company Eastern Champion Limited (SPV) whose
shareholders would be a mirror of the shareholders in JADE, whereby
shareholders in JADE would receive an equivalent number of shares in the SPV.
The main reason for taking this action is that the Company's share price has
never remotely reflected the full value of the assets, and therefore the
benefit of them remaining part of a publicly quoted company became minimal.
The other key benefit of moving the assets to the SPV is that the costs of
managing the assets has been radically reduced which in turn will increase the
net proceeds from asset sales. Details of all aspects of the transfer were
provided in the Shareholder Circular dated 8 April 2024
https://www.londonstockexchange.com/news-article/JADE/posting-of-circular-and-notice-of-agm/16413017
(https://www.londonstockexchange.com/news-article/JADE/posting-of-circular-and-notice-of-agm/16413017)
An important element of the restructuring is that the Company's debt of $3.6m
represented by the Corporate Bond has also been transferred to the SPV.
Additionally, debt amounting to US$670k owing to the Company's former
Investment Manager Harmony Capital has also been transferred to the SPV.
Shareholders and Bondholders voted in favour of the above restructuring on May
1, 2024 and over December 2023 respectively.
In April 2024, prior to completion of the restructuring, the Company announced
the sale of Future Metal Holdings Ltd. the largest asset by value in the
Company's portfolio to a local Chinese buyer. The gross sale proceeds
amounting to the equivalent of approximately US$ 5.5m have been lodged with
the Company's Chinese lawyers in escrow pending completion of a number of
formalities required to obtain approval for the proceeds to be remitted
offshore. The net proceeds are anticipated to be sufficient to repay the
Corporate Bonds in full, whilst the timing to complete this process remains
uncertain. Sale proceeds from this transaction will accrue to the SPV
following the restructuring.
Following the restructuring outlined above, JADE effectively becomes a shell
company in search of a potential acquisition via a Reverse Take Over (RTO) or
an alternative investment platform with new principals.
Discussions are ongoing with a number of potential acquisition targets.
Further details of any such putative transactions will be provided in due
course.
I would like to take this opportunity to thank the Company's Shareholders and
Bondholders for their support in achieving this successful restructuring which
provides an opportunity for the Company to pursue a different and hopefully
more value enhancing future.
John Croft
28 June 2024
Chairman of the Board
Portfolio at 31 December 2023
Principal assets Effective interest Instrument type Valuation at 31 December 2022 Credit income US$ million Credit investment Equity investment/ other movement US$ million Fair value adjustment US$ million Transfer to investments available for sale Valuation at
% US$ million US$ million 31 December 2023
US$ million
Fook Lam Moon Holdings - Convertible Bond - 0.5 - - (0.5) - -
Future Metal Holdings Limited 84.8 Structured Equity 5.3 0.6 - - (1.6) (4.3) -
Meize Energy Industrial Holdings Ltd 6.3 Redeemable convertible preference shares 8.8 - - - (8.8) - -
DocDoc Pte Ltd - Convertible Bond 2.8 0.2 - - (3.0) - -
Infinity Capital Group - Secured Loan Notes 1.4 0.3 - - (1.7) - -
Infinity TNP 40 Equity - - - - - - -
Project Nicklaus - 1.8 - - (0.1) (1.7) - -
Heirloom Investment Fund and Heirloom Litigation Funding - - 0.8 (0.3) - 0.5
Investments available for sale - - - - - 4.3 4.3
Corporate debt - (3.9) - - 0.1 - - (3.8)
Other liabilities - (1.4) - - 0.4 - - (1.0)
Cash 0.3 - - (0.2) - - 0.1
Total Net Asset Value 15.1 1.6 0.8 (0.1) (17.3) - 0.1
Biographies of Directors and Senior Management
Board of Directors
Mr. John Croft, Executive Chairman
John Croft is an experienced Chairman, non-executive Director and executive
with a successful international career in the technology and financial
services sectors.
He is also a non-executive Director at Aura Renewable Acquisitions PLC and
Golden Rock Global PLC, both Special Acquisitions Companies (SPACs) quoted on
the Standard List of the London Stock Exchange and is also a non-executive
Director at Brazilian Nickel PLC. He has previously held senior Director level
positions in Racal Electronics and NCR Corporation, following an early career
in banking with HSBC and Citibank.
Hugh Viscount Trenchard, Non-executive Director
Viscount Trenchard began his career as an investment banker at Kleinwort
Benson in 1973. He has more than 40 years' experience of Japanese business,
including 12 years as a resident of Japan. He ran Kleinwort Benson's East
Asian operations for 15 years and was later Head of Japanese Investment
Banking for Robert Fleming & Co. Limited, before working with Mizuho
International plc from 2007 to 2014. He served as a Senior Adviser for Japan
and Korea to Prudential Financial, Inc. from 2002 to 2008. Lord Trenchard is a
member of the House of Lords and a Vice-Chairman of the British-Japanese
Parliamentary Group.
Mr. Charles Stuart Crocker, Non-executive Director
In 1975 Stuart graduated from the Royal Military Academy Sandhurst and served
for ten years in the United Kingdom, Northern Ireland and Germany. His second
career began in 1985 in Private Banking, primarily with Merrill Lynch and HSBC
in London, Geneva, and Dubai. Latterly he was CEO HSBC Private Bank UAE and
Oman, and he was concurrently the SEO for HSBC in the Dubai International
Financial Centre (DIFC). He was finally the Global Head Private Banking Group
for Abu Dhabi Islamic Bank.
During his career Stuart has accumulated multiple banking and finance
qualifications and has studied at Manchester Business School, Insead and
Duke. Stuart retired from banking in 2013 and has subsequently
held Non-Executive Chairman, NED, and Trustee appointments in public and
private companies and charities across a variety of industry sectors. He was
admitted into the Freedom of the City of London in 2006 as a "Citizen and
International Banker of London" and was "progressed" as a Liveryman of the
Worshipful Company of International Bankers in June 2022.
Dr. Lee George Lam, Non-executive Director
Dr. Lam is Chair of the United Nations Economic and Social Commission for Asia
and the Pacific (UN ESCAP) Sustainable Business Network (ESBN), Vice Chairman
of Pacific Basin Economic Council (PBEC), Chairman of the Permanent Commission
on Economic and Financial Issues of the World Union of Small and Medium
Enterprises (WUSME), and a member of the Belt and Road and Greater Bay Area
Committee of the Hong Kong Trade Development Council. A former member of the
Hong Kong Bar, Dr. Lam is a Solicitor of the High Court of Hong Kong, an
Accredited Mediator of the Centre for Effective Dispute Resolution (CEDR), a
Fellow of Certified Management Accountants (CMA) Australia, the Hong Kong
Institute of Arbitrators and the Hong Kong Institute of Directors, an Honorary
Fellow of Certified Public Accountants (CPA) Australia, the Hong Kong
Institute of Facility Management and the University of Hong Kong School of
Professional and Continuing Education, an International Affiliate of the Hong
Kong Institute of Certified Public Accountants, and a Distinguished Fellow of
the Hong Kong Innovative Technology Development Association.
Key Personnel of the Investment Manager, Heirloom Investment Management LLC
Mr. Geoff Dover is the founder and President of Heirloom Family Office, and
the President and Chief Investment Officer of Heirloom Investment Management
LLC, a regulated investment management firm that offers other family offices
the opportunity to co-invest in investments made by Heirloom Family Office. He
has over 25 years' experience of fundamentals-based investment expertise
across asset classes with a particular expertise in originating, evaluating,
structuring and executing on unique alternative investments.
Directors' Report
The Board (the "Board") of Directors (the "Directors") are pleased to present
their report on the affairs of the Company and its subsidiaries (collectively
referred to as the "Group"), together with the audited financial statements
for the year ended 31 December 2023.
PRINCIPAL ACTIVITIES
The Company was incorporated with limited liability under the laws of the
British Virgin Islands ("BVI"). The Company's shares were admitted to the AIM
Market of the London Stock Exchange on 19 October 2009 and on the Quotation
Board of the Open Market of the Frankfurt Stock Exchange on 6 December 2012.
The company, along with its subsidiaries, act as an investment group. Since
the year end, the legacy assets have been transferred to an independent third
party company and the investments in Heirloom funds have been repaid.
RESULTS AND DIVIDENDS
The Company recorded a loss before taxation of US$17.7 million (2022: loss
US$52.9 million).
The loss reflects fair value decrease on assets in the portfolio of US$17.3
million (2022: decrease US$47.4 million), net finance cost of US$0.03 million
(2022: net finance income of US$0.8 million) and total operating expenses of
US$1.5 million (2022: US$1.8 million). The decrease in the fair value of the
assets is due to the revaluation of the assets to the value at which they have
been transferred to an independent third party on 1 May 2024.
The Directors are not recommending the payment of a dividend for the year.
REVIEW OF THE BUSINESS
The Group's audited net asset value as at 31 December 2023 stood at US$0.1
million (2022: US$15.1 million) equivalent to US$0.00 per share (2022:
US$0.13), excluding the effect of treasury shares held by the Group.
The principal investment assets held by the Company at the year-end, together
with their valuations are set out in the Chairman's statement.
EVENTS AFTER THE REPORTING PERIOD
The significant events after the reporting period are set out in Note 18 of
the financial statements, none of which impact on the results and net assets
reported in these financial statements.
DIRECTORS AND DIRECTORS' INTERESTS
The Directors who served during the year and up to the date of this report
were as follows:
Mr. John Croft
Hugh Viscount Trenchard
Dr. Lee George Lam
Mr. Stuart Crocker
Mr. John Batchelor (resigned Mar 2023)
John Batchelor, Non-Executive Director, has resigned from the Board of Jade
Road Investments on 24 March 2023.
With the exception of the related party transactions stated in Note 16 to the
Financial Statements, there were no other significant contracts, other than
Directors' contracts of service, in which any Director had a material
interest. The Directors who held office as at 31 December 2023 had the
following beneficial interests in the shares of the Company and Group
companies as follows:
Number of ordinary shares of no par value as at 31 December
2023 2022
Direct Indirect Direct Indirect
Mr. John Croft 130,463 10,733 130,463 10,733
Hugh Viscount Trenchard 60,634 - 60,634 -
Dr. Lee George Lam 101,057 - 101,057 -
Mr. Stuart Crocker 80,845 - 80,845 -
Number of warrants over ordinary shares of no par value as at 31 December
2023 2022
Direct Indirect Direct Indirect
Mr. John Croft 800,000 - 877,346 -
Hugh Viscount Trenchard 400,000 - 457,634 -
Dr. Lee George Lam 400,000 - 496,057 -
Mr. Stuart Crocker - - 76,845 -
Mr. John Batchelor - - - -
SUBSTANTIAL SHAREHOLDINGS IN THE COMPANY
As far as the Directors are aware at 26 June 2024, the following persons were
interested in 3% or more of the issued share capital of the Company:
Shareholder Number of Percentage of
ordinary shares issued share capital
Heirloom Group 191,712,713 54.66%
- Heirloom SPV 2022 II 156,303,842 44.57%
- Ocorian Singapore Trust Company Pte Ltd as Trustee of Fidelis Fund 21,135,665 6.08%
- Heirloom Investment Management LLC 7,785,192 2.22%
- Heirloom Fixed Return Fund 4,883,570 1.39%
- Geoff Dover 1,404,444 0.40%
Elypsis Solutions Limited 55,225,127 15.75%
Infinity Capital Group Limited 16,179,310 4.61%
First Equity Limited 10,000,000 2.85%
Heirloom SPV 2022 II, Heirloom Investment Management LLC, Ocorian Singapore
Trust Company Pte Ltd as Trustee of Fidelis Fund, Heirloom Fixed Return
Fund and Geoff Dover are under one controlling group - Heirloom Group.
The total shareholdings of Heirloom Group are 54.66%.
FINANCIAL INSTRUMENTS
The Group's use of financial instruments is described in Note 9 and Note 15.
FINANCIAL RISK MANAGEMENT OBJECTIVES
Management has adopted certain policies on financial risk management with the
objective of ensuring that appropriate funding strategies are adopted to meet
the Group's short-term and long-term funding requirements, taking into
consideration the cost of funding, gearing levels, and cash flow projections.
The policies are also set to ensure that appropriate strategies are adopted to
manage related interest and currency risk funding and to ensure that credit
risks on receivables are properly managed. In addition, Note 14 to the
financial statements include the Group's objectives, policies, and processes
for managing its capital, its financial risk management objectives, details of
its financial instruments and its exposures to credit risk, interest rate
risk, liquidity risk, price risk, and currency risk.
POLICY AND PRACTICE ON PAYMENT OF CREDITORS
The Group seeks to maintain good terms with all of its trading partners. In
particular, it is the Group's policy to agree appropriate terms and conditions
for its transactions with suppliers and, provided the supplier has complied
with its obligations, to abide by the terms of payment agreed
SHARE CAPITAL
The Company has a single class of shares which is divided into ordinary shares
of no par value.
At 31 December 2023, the number of ordinary shares in issue was 358,193,134,
of which 7,480,000 were held in treasury by the group. Details of movements in
the issued share capital during the year are set out in Note 14 to the
financial statements.
DIRECTORS' INDEMNITY
The Company's Articles of Association provide, subject to the provisions of
BVI legislation, an indemnity for Directors and officers of the Company in
respect of liabilities they may incur in the discharge of their duties or in
the exercise of their powers, including any liabilities relating to the
defence of any proceedings brought against them which relate to anything done
or omitted, or alleged to have been done or omitted, by them as officers or
employees of the Company.
Appropriate directors' and officers' liability insurance cover is in place in
respect of all of the Directors.
EMPLOYEE INFORMATION
As at 31 December 2023, the Group had Nil (2022: Nil) employees excluding
Directors.
CHARITABLE DONATIONS
The Group didn't make any charitable donations during the year (2022: Nil).
GOING CONCERN
Notwithstanding the operating loss of US$17.7Mn and operating cash outflows of
USD$1.7Mn for the year ended 31 December 2023 and net current assets of
$0.05Mn at year-end, the group has prepared the financial statements under the
going concern.
Following the recent transfer of assets the Company is seeking to acquire a
business via a Reverse Take Over (RTO). The Company will need to raise interim
capital to advance discussions for an RTO. The Company also continues to
manage a small number of creditors. The Company is confident that it will be
able to raise the interim capital required, and is in advanced discussions
with a number of parties with respect to this. In addition, the company has
also received a letter of support from its largest shareholder Heirloom in
regard to the Company's fundraising plans. However, were the company to not
obtain this funding in the short term, and Heirloom unable to financially
support the company in the foreseeable future, then the company would not be
able to meet its liabilities as they fall due. Were the company not to be
considered a going concern, there would be no material impact on these
financial statements as all significant items are already held at their fair
value.
Accordingly, the financial statements have been prepared on a going concern
basis and do not include any adjustments that would result if the group was
unable to continue as a going concern.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with applicable laws and regulations.
Company Law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have prepared the Group financial
statements in conformity with EU-adopted International Financial Reporting
Standards. Under Company Law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and the profit and loss of the Group for
that period.
In preparing the financial statements the Directors are required to:
• Select suitable accounting policies and then apply them
consistently.
• Make judgements and accounting estimates that are reasonable
and prudent;
• Ensure statements are in conformity with EU-adopted
International Financial Reporting Standards; and
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue in
business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable
them to ensure that the Group financial statements comply with EU-adopted
International Financial Reporting Standards. They are also responsible for
safeguarding the assets of the Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Financial Statements are published on the Group's website
https://jaderoadinvestments.com (https://jaderoadinvestments.com) . The work
carried out by the Auditor does not involve consideration of the maintenance
and integrity of this website and accordingly, the Auditor accepts no
responsibility for any changes that have occurred to the financial statements
since they were initially presented on the website. Visitors to the website
need to be aware that legislation in the United Kingdom covering the
preparation and dissemination of the financial statements may differ from
legislation in their jurisdiction.
The company is compliant with AIM Rule 26 with regard to the company website.
AUDITOR INFORMATION
The Directors who held office at the date of approval of the Directors' Report
confirm that, so far as they are each aware, there is no relevant audit
information of which the Group's Auditor is unaware; and each Director has
taken all the steps that he ought to have taken as a director to make himself
aware of any relevant audit information and to establish that the Group's
Auditor is aware of that information.
On behalf of the Board
John Croft
28 June 2024
Chairman of the Board
Corporate Governance Statement
THE BOARD
The Board of Jade Road Investments Limited, in accordance with the AIM Rules,
adopted an appropriate corporate governance code. It has decided to apply the
Quoted Companies Alliance Corporate Governance Code (the QCA Code). The QCA
Code is a pragmatic and practical corporate governance tool which adopts a
proportionate, principles-based approach which the Board believes will enable
the explanation of how the Company applies the QCA Code and its overall
corporate governance arrangements. The QCA Code is constructed around 10 broad
principles which are set out below together with an explanation of how the
Company complies with each principle, and where it does not do so, an
explanation for that.
As suggested by the QCA, our Chairman, John Croft makes the following
statement in relation to corporate governance:
"As Chairman of the Company, I lead our Board of Directors and have primary
responsibility for ensuring that the Company meets the standards of corporate
governance expected of an AIM investment company of our size. Our over-arching
role as a Board is to monitor the Company's progress with its investing policy
and to ensure that it is being properly pursued. In pursuing that strategy,
our second key focus is to supervise, manage and objectively assess the
performance of our Investment Manager, Heirloom Investment Management LLC.
Given there is no executive team in the Company and no other employees, this
relationship is critically important in terms of delivering value to our
shareholders.
We set out below how we as a Board seek to apply the QCA Code, bearing in mind
the particular nature of the Company and its business. Being an investment
company means we are naturally focused on investment strategy and deploying
our cash resources in the most efficient way to produce returns for
shareholders in the medium to long term, balancing the potential risks and
rewards of each investment which our Investment Manager proposes. We have a
rigorous investment process including third-party legal, commercial, and
financial due diligence, site visits, management meetings, and independent
valuations where relevant. The output of this work is consolidated and
presented to the Board by the Investment Manager in high-quality investment
presentations which are reviewed and discussed at length at investment board
meetings. We are not a large corporate with multiple stakeholders and, as
noted above, our Board is primarily non-executive as at the year end. We,
therefore, intend to take a pragmatic approach to governance structures and
processes and whilst retaining a high-performance culture at Board level,
adopt policies and procedures which we think are appropriate to an investment
company on AIM."
The Board, the Investment Manager and Board Committees
The Board is responsible for reviewing and approving the Company's Investing
Policy and for monitoring the performance of Heirloom Investment Management
LLC in the performance of its obligations under the Services Agreement. The
Company holds board meetings as required and not less than four times
annually. The Board has constituted committees with responsibility for
overseeing audit, remuneration, valuation and investment matters.
The Board has constituted the following Committees:
The Remuneration Committee constituted by Hugh Viscount Trenchard and Dr Lee
George Lam.
The Remuneration Committee reviews the scale and structure of the Directors'
remuneration and the terms of their service or employment contracts, including
warrant schemes and other bonus arrangements. The remuneration and terms and
conditions of the non-executive Directors are set by the entire Board, with
Directors absenting themselves, at the appropriate time, from discussions on
matters directly reflecting their remuneration.
The Investment Committee constituted by John Croft, Hugh Viscount Trenchard,
Dr Lee George Lam, and Stuart Crocker.
The Investment Committee has the primary authority to develop the Company's
investment objectives and corporate policies on investing. It reviews and
approves investment opportunities presented by the Company's Investment
Manager. The Committee will at all times be constituted by all the Company's
directors.
The Audit Committee constituted by John Croft and Stuart Crocker.
The Audit Committee appoints and determines the terms of engagement of the
Group's auditors and will determine, in consultation with the auditors, the
scope of the audit. The Audit Committee monitors the independence of the
Group's auditor, and the appropriateness of any non-audit services. The Audit
Committee receives and reviews reports from management and the Group's
auditors relating to the interim and annual accounts and the accounting and
internal control systems in use throughout the Group. The Audit Committee has
unrestricted access to the Group's auditors. The Audit Committee makes
recommendations to the Board.
The Valuation Committee constituted by Hugh Viscount Trenchard and Dr. Lee
George Lam.
The Valuation Committee is responsible for reviewing the valuation process for
all investments, including the application of appropriate valuation standards,
based on the input of the Company's Investment Manager and on the Company's
Valuation Policy which was formally adopted in 2020. Its members are sourced
from independent directors of the Board. It retains the authority to engage
with independent 3(rd) parties at any time with respect to valuation matters.
The Committee comprises a minimum of two members, currently Stuart Crocker and
John Croft, and reports directly to the Board.
DELIVER GROWTH
Principle 1 Establish a strategy and business model which promote long-term
value for shareholders
Principle
The Board must be able to express a shared view of the Company's purpose,
business model and strategy. It should go beyond the simple description of
products and corporate structures and set out how the company intends to
deliver shareholder value in the medium to long term. It should demonstrate
that the delivery of long term growth is underpinned by a clear set of values
aimed at protecting the company from unnecessary risk and securing its
long-term future.
Compliance
The Company provides equity and credit funding to companies, principally in
the Pan-Asian region or with a connection to Asia. It will do this through
investing in direct financings, pre-IPO investments, growth private equity,
event driven special situations, opportunistic special situations, and
indirect financing.
The Company is sector agnostic in its investment activities.
New investments will be managed actively, including through appropriate
investor protections which will be negotiated on each transaction as
appropriate and relevant.
The Company will consider using debt to finance transactions on a
case-by-case basis and may assume debt on its own balance sheet when
appropriate to enhance returns to Shareholders and/or to bridge the financing
needs of its investment pipeline.
The Company has completed its disposal programme post year end for its
"legacy" assets.
The Board, in collaboration with the Investment Manager, maintains a vigilant
watch over the current investment climate and macro-economic conditions
worldwide.
These factors have the potential to impact and, at times, pose challenges to
the Company's strategic execution. This includes considerations of regulatory
and governmental policy changes that may arise, requiring the Company to adapt
and navigate accordingly.
Principle 2 Seek to understand and meet shareholder needs and expectations
Principle
Directors must develop a good understanding of the needs and expectations of
all elements of the Company's shareholder base. The Board must manage
shareholders' expectations and should seek to understand the motivations
behind shareholder voting decisions.
Compliance
The Board is aware of the need to protect the interests of minority
shareholders and the balancing of these interests with those of the majority
shareholder. The Board also considers the terms of the relationship agreement
the Company has entered with its largest shareholder and, where necessary,
will enforce any relevant terms.
The Company holds regular investor events in London, Hong Kong and Dubai,
where the Chairman, other members of the Board and the Investment Manager
update attendees on key developments in the portfolio. All shareholders are
invited to attend these events. The Chairman is principally responsible for
shareholder liaison.
The Company regularly updates the market via its RNS news feed of any
disclosable matters and where appropriate, also uses social media platforms to
engage with a wider audience.
The Company publishes all relevant materials, according to QCA definitions, on
its website. This includes annual reports and shareholder circulars.
Principle 3 Take into account wider stakeholder and social responsibilities
and their implications for long-term success
Principle
Long-term success relies upon good relations with a range of different
stakeholder groups both internal (workforce) and external (suppliers,
customers, regulators, and others). The Board needs to identify the Company's
stakeholders and understand their needs, interests, and expectations.
Where matters that relate to the Company's impact on society, the communities
within which it operates or the environment have the potential to affect the
company's ability to deliver shareholder value over the medium to long term,
then those matters must be integrated into the Company's strategy and business
model.
Feedback is an essential part of all control mechanisms. Systems need to be in
place to solicit, consider and act on feedback from all stakeholder groups.
Compliance
The balance of economic value to the Group and social impact is carefully
considered, not only throughout the due diligence for any potential
investments but also ongoing monitoring by of periodical site visits for the
invested projects, with the maintenance of high environmental standards is a
key priority. The Board is conscious of its responsibilities in relation to
society, particularly in a developing economy such as China.
The key resources for the Company are principally the Investment Manager and
the Company's advisory team, including its nominated adviser, brokers,
solicitors, and auditors. The Investment Manager and therefore the Company
rely on a network of intermediaries to originate investment deal flow. The
Board speaks to the advisory team on a regular basis and takes feedback from
it throughout the year. In particular, it seeks advice in relation to
compliance with the AIM Rules and their impact on its investments from the
nominated adviser and solicitors and from the auditors in relation to
accounting matters including net asset value and the annual audit.
Principle 4 Embed effective risk management, considering both opportunities
and threats, throughout the organisation
Principle
The Board needs to ensure that the Company's risk management framework
identifies and addresses all relevant risks in order to execute and deliver
strategy; companies need to consider their extended business, including the
Company's supply chain, from key suppliers to end-customer.
Setting strategy includes determining the extent of exposure to the identified
risks that the company is able to bear and willing to take (risk tolerance and
risk appetite).
Compliance
Effective risk management in relation to the Company's portfolio is key to the
Board's assessment of the Investment Manager's performance. Measuring risk in
each investment case, in terms of both how it can be mitigated and the
potential upside of taking on such risk are critical elements of the analysis
produced by the Investment Manager and reviewed by the Board on each proposed
investment. Similarly, in conducting the managed disposal programme, the Board
is focused on achieving the best possible value for the assets being disposed
of. At the same time, the Board assesses the risk of maintaining those
positions with the potential for further value to be eroded at the same time
as it requires additional time to be spent by the Board and by the Investment
Manager.
MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
Principle 5 Maintain the Board as a well-functioning, balanced team led by the
Chairman
Principle
The Board members have a collective responsibility to promote the interests of
the company and are collectively responsible for defining corporate governance
arrangements. Ultimate responsibility for the quality of, and approach to,
corporate governance lies with the Chairman.
The Board (and any committees) should be provided with high-quality
information in a timely manner to facilitate proper assessment of the matters
requiring a decision or insight.
The Board should have an appropriate balance between Executive and
Non-Executive Directors and should have at least two independent Non-Executive
Directors. Independence is a board judgement.
The Board should be supported by committees (e.g., audit, remuneration) that
have the necessary skills and knowledge to discharge their duties and
responsibilities effectively.
Directors must commit the time necessary to fulfil their roles.
Compliance
The Board consists of the Executive Chairman and three Non-Executive
Directors.
The Executive Chairman has been involved with the Company since its
predecessor company, China Private Equity Investment Holdings Limited was
admitted to AIM in 2009. Viscount Trenchard, Dr. Lee George Lam, Mr. Stuart
Crocker, and Mr. John Batchelor were all appointed to the Board in 2017 or
later. These four individuals serve as Non-Executive Directors and are
regarded as independent members. However, it is important to note that as of
March 2023, Mr. John Batchelor has departed from the Board.
Each Non-Executive Director is engaged on a 12-month contract with three
months' notice on either side and is required to commit to a minimum of two
days per calendar month.
The Executive Chairman's roles and responsibilities include but are not
limited to engaging potential clients across Jade Road's domain in the APAC
region, initiating and agreeing Terms of Engagement with clients, providing
the lead consultancy services to clients and support the business development
of the Company, liaising with the Company's NOMAD and other advisors in
London, and being the main contact between the Board and the Investment
Manager, approving public announcements, engaging with Shareholders, Investors
and other Stakeholders to promote the Company and its business objectives.
As explained above, the Board receives detailed investment papers from the
Investment Manager in relation to any asset which is either recommended for
investment or disposal, including an executive summary of the due diligence
findings, results of site visits and management meetings (including an
assessment of the investee company's management team), key financial metrics,
key risk factors, the potential returns available, security for the investment
and the type of instrument to be used.
Principle 6 Ensure that between them the directors have the necessary
up-to-date experience, skills, and capabilities.
Principle
The Board must have an appropriate balance of sector, financial and public
markets skills and experience, as well as an appropriate balance of personal
qualities and capabilities. The Board should understand and challenge its own
diversity, including gender balance, as part of its composition.
The Board should not be dominated by one person or a group of people. Strong
personal bonds can be important but can also divide a board.
As companies evolve, the mix of skills and experience required on the board
will change, and board composition will need to evolve to reflect this change.
Compliance
Directors who have been appointed to the Company have been chosen because of
the skills and experience they offer. The identity of each Director and his
full biographical details are provided on the website, which include each
Director's relevant experience, skills, personal qualities, and capabilities.
The current team of Directors offer a mix of investment, quoted company,
sector and geographical expertise and exposure.
The Board has not taken any specific external advice on a specific matter,
other than in the normal course of business as an AIM-quoted company and in
pursuit of the investment policy. There are no internal advisors to the Board.
The Directors rely on the Company's advisory team to keep their skills up to
date and through attending market updates and other seminars provided by the
advisory team, the London Stock Exchange plc, and other intermediaries.
The Investment Manager is the key external adviser to the Board.
Principle 7 Evaluate Board performance based on clear and relevant objectives,
seeking continuous improvement
Principle
The Board should regularly review the effectiveness of its performance as a
unit, as well as that of its committees and the individual Board members.
The Board performance review may be carried out internally or, ideally,
externally facilitated from time to time. The review should identify
development or mentoring needs of individual directors or the wider senior
management team.
It is healthy for membership of the Board to be periodically refreshed.
Succession planning is a vital task for Boards. No member of the Board should
become indispensable.
Compliance
The Board consists predominantly of Non-Executive Directors, the Company
having no employees. In this regard, Board performance and oversight lies
predominantly with the Chairman and other stakeholders, particularly
shareholders. In early 2020, it was determined by the Remuneration Committee
that John Croft be designated as Executive Chairman to align with his time
commitment and contribution to the Company's affairs.
Events are held with shareholders where feedback on the Company's progress is
sought on a regular basis, and this interaction provides valuable input on
Board performance. Advice is also sought on Board composition on an ongoing
basis from the Company's NOMAD.
The composition of the Board is reviewed regularly, and changes made where
appropriate. As the Company recently disposed of its entire asset portfolio
and is now seeking to raise new capital to invest in and/or a business via a
RTO, the Company may look to broaden its skills and experience base by the
appointment of additional Directors and/or advisors in due course.
The Board does not carry out a formal review process.
Principle 8 Promote a corporate culture that is based on ethical values and
behaviours
Principle
The Board should embody and promote a corporate culture that is based on sound
ethical values and behaviours and use it as an asset and source of competitive
advantage.
The policy set by the Board should be visible in the actions and decisions of
the chief executive and management team. Corporate values should guide the
objectives and strategy of the company.
The culture should be visible in every aspect of the business, including
recruitment, nominations, training, and engagement. The performance and reward
system should endorse the desired ethical behaviours across all levels of the
company.
Compliance
The Board is focused on investment returns for its shareholders and will at
all times seek to make ethical investments, but this is not an investment
focus or determinant for an asset being included in the portfolio. As
discussed above, given the Company is an investment company with no employees
or other internal stakeholders, the Board does not drive a corporate culture
within the business.
Principle 9 Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board
Principle
The Company should maintain governance structures and processes in line with
its corporate culture and appropriate to its:
- size and complexity; and
- capacity, appetite, and tolerance for risk. The governance structures should
evolve over time in parallel with the company's objectives, strategy, and
business model to reflect the development of the company.
Compliance
This section provides full disclosure on the Company's corporate governance.
There are no immediate plans to make any changes to the governance processes
and framework which are described in the commentary above.
The Chairman has overall responsibility for shareholder liaison.
There are no specific matters reserved for the Board.
BUILD TRUST
Principle 10 Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders
Principle
A healthy dialogue should exist between the Board and all of its stakeholders,
including shareholders, to enable all interested parties to come to informed
decisions about the Company.
In particular, appropriate communication and reporting structures should exist
between the Board and all constituent parts of its shareholder base. This will
assist:
- the communication of shareholders' views to the Board; and
- shareholders' understanding of the unique circumstances and constraints
faced by the Company.
Compliance
The Board attaches great importance to providing shareholders with clear and
transparent information on the Group's activities, strategy, and financial
position. Details of all shareholder communications are provided on the
Company's website, including historical annual reports and governance-related
material together with notices of all general meetings for the last five
years. The Company discloses outcomes of all general meeting votes.
The Company has appointed a professional Financial Public Relations firm with
an office in London to advise on its communications strategy and to assist in
the drafting and distribution of regular news and regulatory announcements.
Regular announcements are made regarding the Company's investment portfolio as
well as other relevant market and regional news.
The Company lists contact details on its website and on all announcements
released via RNS, should shareholders wish to communicate with the Board.
Independent Auditor's Report to the Members of Jade Road Investments Limited
We have audited the financial statements of Jade Road Investments Limited (the
'group') for the year ended 31 December 2023 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Statement of Changes in Equity, the Consolidated
Statement of Cash Flows and notes to the financial statements, including
significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
· give a true and fair view of the state of the group's affairs as at
31 December 2023 and of its loss for the year then ended; and
· have been properly prepared in accordance with IFRSs as adopted by
the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2(c) in the financial statements, which indicates
that the group is reliant on securing further financing alongside the
realisation of the carrying value of investments to meet working capital needs
as they fall due. Whilst management is confident that they can secure funding
based on advance discussions with investors, there is no guarantee that such
funding would be secured within the required timelines. As stated in Note
2(c), these events or conditions, indicate that a material uncertainty exists
that may cast significant doubt on the group's ability to continue as a going
concern.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our evaluation of the directors' assessment of the group's ability to continue
to adopt the going concern basis of accounting included:
· reviewing management's assessment of going concern and discussing
with management the future strategic plans of the group and sources of funding
that are expected to be available, as well as plans for cash preservation;
· reviewing management-prepared cash flow forecasts up to Dec 2025,
including checking the mathematical accuracy, and assessing their
reasonableness through reference to current year actual financial information;
· obtaining corroborative evidence for, and providing appropriate
challenge to, the key assumptions and inputs used in the cashflow forecast;
and
· reviewing the adequacy and completeness of disclosures surrounding
going concern in the financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
For the purposes of determining whether the financial statements are free from
material misstatement, we define materiality as a magnitude of misstatement,
including omission, that makes it probable that the economic decisions of a
reasonably knowledgeable person, relying on the financial statements, would be
changed, or influenced. We have also considered those misstatements including
omissions that would be material by nature and would impact the economic
decisions of a reasonably knowledgeable person based our understanding of the
business, industry and complexity involved.
We apply the concept of materiality both in planning and throughout the course
of our audit, and in evaluating the effect of misstatements. Materiality is
used to determine the financial statements areas that are included within the
scope of our audit and the extent of sample sizes during the audit.
We also determine a level of performance materiality which we use to assess
the extent of testing needed to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole.
In determining materiality and performance materiality, we considered the
following factors:
· our cumulative knowledge of the group and its environment;
· the change in the level of judgement required in respect of the key
accounting estimates;
· significant transactions during the year;
· the stability in key management personnel; and
· the level of misstatements identified in prior periods
Materiality for the financial statements as a whole was set at $63,200 (2022:
$422,000) based on the draft financial statements. We set the materiality
threshold at 1.5% of total asset for the group in line with the prior year.
The benchmark used is the one which we determined, in our professional
judgment, to be the principal benchmark within the financial statements
relevant to shareholders in assessing financial performance of the group as
the principal activity is to invest in quoted and unquoted financial assets
for capital appreciation.
Performance materiality for the financial statements was set at $47,400 (2022:
$253,200) being 75% (2022: 60%) of the materiality for the financial
statements as a whole. This threshold was considered appropriate in light of
the current size and level of complexity of the group, and our assessment of
inherent risk.
We agreed to report to those charged with governance all corrected and
uncorrected misstatements we identified through our audit with a value higher
than $3,160 (2022: $21,100) for the group. We also agreed to report any other
audit misstatements below that threshold that we believe warranted reporting
on qualitative grounds.
Due to audit adjustments, the materiality benchmark set at the planning stage
of the audit has increased significantly. As all the audit adjustments and
significant transactions have been tested using lower materiality, the risk of
material misstatement based on the planning materiality has not increased. We
therefore believe that the materiality determined at the planning stage is
still applicable as the audit evidence we have obtained through audit
procedures is sufficient and appropriate to provide a basis for our opinion.
Our approach to the audit
Our audit was risk based and was designed to focus our efforts on the areas at
greatest risk of material misstatement, as well as aspects subject to
significant management judgement or greatest complexity, risk and size. In
designing our audit, we determined materiality, as above, and assessed the
risk of material misstatement in the financial statements. We tailored the
scope of our audit to ensure that we performed sufficient work to be able to
give an opinion on the financial statements, having regard to the structure of
the group.
The group includes the listed parent company, Jade Road Investments Limited
('Jade BVI'), and its subsidiary, Jade Road Investments (HK) Limited ('Jade
HK').
The scope of our audit was based on the materiality and significance of
component operations. Each component was assessed as to whether they were
significant to the group on the basis of size and risk. The parent company was
identified as a significant component due to its size and identified risks.
Due to Jade BVI being a significant component of the group, we performed a
full scope audit on the parent company as part of the group audit. The work on
this significant component of the group was performed by us as group auditor.
Jade HK is a non-significant component of the group and we performed
analytical review procedures over the financial information of this component
only.
In designing our audit approach, we considered those areas which were deemed
to involve significant judgement by the directors, such as the key audit
matters relating to the fair valuation of unquoted financial assets and assets
held for sale. Other judgemental areas were the consideration of future events
that are inherently uncertain impacting going concern. We also addressed the
risk of management override of controls, including evaluating whether there
was evidence of bias by the directors that represented a risk of material
misstatement due to fraud.
The group's key accounting function is based in both Hong Kong and the United
Kingdom and our audit was performed by our team in London with regular contact
maintained with group management throughout.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section, we
have determined the matters described below to be the key audit matters to be
communicated in our report.
We have determined the matters described below to be the key audit matters to
be communicated in our report
Key Audit Matter How our scope addressed this matter
Fair value unquoted financial assets and assets held for sale (Notes 9 and 11) Our work in this area included:
The financial statements include investments in unquoted financial assets at • Understanding the process adopted by management in relation to valuation
fair value through profit and loss amounting to $500k and assets held for sale of investments and assets held for sale;
amounting to $4,290k.
• Reviewing documentation in respect of the ownership of investments and
The unquoted investments are held in a private fund. assets held for sale;
Due to a change in the Group's investment strategy, the Group decided to • Reviewing management's assessment and accounting for assets held for sale;
divest its legacy assets. The transaction to dispose of the assets was
consummated post year end and the assets were classified as being held for • Obtaining direct Net Asset Value (NAV) statements from the investee funds;
sale at the year end.
• Challenging key assumptions in management's valuation models used to
All of these investments and assets held for sale are measured at fair value determine fair value and/or recoverable amount, including sensitivity of
based on Level 3 inputs. valuations to changes in assumptions and inputs;
The valuation of investments and assets held for sale requires the exercise of • Reviewing purchase and sale/potential sale transactions used for fair
considerable judgement and use of estimates which increases the risk that valuation determination to ensure that such transactions are at arm's length;
valuation and presentation may be misstated, and therefore has been determined
to be a Key Audit Matter. • Considering any subsequent events or developments that may impact the
valuation or classification of the assets held for sale; and
• Reviewing the classification of investments, disclosure and presentation
of assets held for sale and valuation inputs within the financial statements
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon. In connection with our audit of the financial
statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether there is a material misstatement in the financial statements
or a material misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Statement of directors' responsibilities, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and the sector in which it
operates to identify laws and regulations that could reasonably be expected to
have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management, industry
research, application of cumulative audit knowledge and experience of the
sector. We also selected a specific audit team with experience of auditing
entities facing similar audit and business risks.
· We determined the principal laws and regulations relevant to the
group in this regard to be those arising from:
- AIM rules;
- General Data Protection Regulations;
- Anti-Bribery Act;
- Anti Money Laundering Regulations; and
- Local tax laws and regulations.
The audit team remained alert to instances of non-compliance with laws and
regulations throughout the audit.
· We designed our audit procedures to ensure the audit team considered
whether there were any indications of non-compliance by the group with those
laws and regulations. These procedures included, but were not limited to:
- Making enquiries of management;
- Reviewing Board meeting minutes;
- Reviewing the nature of legal professional fees;
- Reviewing Regulatory News Service announcements.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls and revenue recognition, inappropriate application of the going
concern assessment in the financial statements and management bias in
determining key accounting estimates and judgements used in relation to the
fair valuation of unquoted financial assets and assets held for sale. We
addressed this by challenging the estimates/judgements made by management when
auditing these significant accounting estimates/judgements (refer to the key
audit matter and going concern sections above).
· As in all of our audits, we addressed the risk of fraud arising from
management override of controls by performing audit procedures, which
included, but were not limited to testing of journals, reviewing key
accounting judgements for evidence of bias (refer to the key audit matter and
going concern sections above) and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of
business.
· Our review of non-compliance with laws and regulations incorporated
the listed parent company. The risk of actual or suspected non-compliance was
not sufficiently significant to our audit to result in our response being
identified as a key audit matter.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with our engagement letter dated 2 May 2024. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Nicholas Joel (Engagement
Partner)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Registered
Auditor
London E14 4HD
28 June 2024
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
2023 2022
Notes US$'000 US$'000
Income from unquoted financial assets 1,090 1,174
Finance income from loans 545 1,359
Realised (losses) / gains (1) 300
Gross portfolio income 3 1,634 2,833
Fair value changes on financial assets at fair value through profit or loss 4 (17,295) (47,409)
Investment provisions - (6,003)
Net portfolio loss 3 (15,661) (50,579)
Management fees (350) (1,200)
Incentive fees 16 43 158
Administrative expenses (1,171) (763)
Operating loss 5 (17,139) (52,384)
Finance expense 6 (577) (520)
Loss before taxation (17,716) (52,904)
Taxation 8 - -
Total comprehensive loss for the year (17,716) (52,904)
Loss per share
Basic and diluted loss per share 17 (5.94) cents (45.89) cents
The results reflected above relate to continuing operations.
The accompanying notes on pages 40 to 59 are an integral part of these
financial statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Share capital Treasury share reserve Share based payment reserve Accumulated Total
losses
US$'000 US$'000 US$'000 US$'000 US$'000
Group balance at 1 January 2022 148,903 (615) 2,936 (83,196) 68,028
- - - (52,904) (52,904)
Loss for the year
Other comprehensive income - - - - -
Total comprehensive loss for the year - - - (52,904) (52,904)
Group balance at 31 December 2022 and 1 January 2023 148,903 (615) 2,936 (136,100) 15,124
- - -
Loss for the year
Other comprehensive income - - - (17,716) (17,716)
Total comprehensive loss for the year - - - (17,716) (17,716)
Issue of shares net of issue costs 2,783 - - - 2,783
Repurchase of shares - (139) - - (139)
Group balance at 31 December 2023 151,686 (754) 2,936 (153,816) 52
The following describes the nature and purpose of each reserve within owners'
equity.
Share capital Amount subscribed for share capital at no par value
Treasury share reserve Cost of the Company's shares re-purchased and held by the Group
Share based payment reserve The share-based payment reserve represents amounts in previous and the current
periods, relating to share-based payment transactions granted as
options/warrants and under the Group's share option scheme (Note 15)
Accumulated losses Represents the cumulative net gains and losses recognised in the statement of
comprehensive income
The accompanying notes on pages 40 to 59 are an integral part of these
financial statements.
Consolidated Statement of Financial Position
As at 31 December 2023
2023 2022
Notes US$'000 US$'000
Current Assets
Unquoted financial assets at fair value through profit or loss 9 500 18,227
Other receivables at fair value through profit or loss 19 1,769
10
Investments held for sale 11 4,290 -
Cash and cash equivalents 77 321
Total assets 4,886 20,317
Current Liabilities
Other payables and accruals 12 991 1,334
Loans & borrowings 13 3,843 3,859
Total liabilities 4,834 5,193
Net assets 52 15,124
Equity and reserves
Share capital 14 151,686 148,903
Treasury share reserve 14 (754) (615)
Share based payment reserve 2,936 2,936
Accumulated losses (153,816) (136,100)
Total equity and reserves attributable to owners of the parent 52 15,124
The financial statements were approved by the Board of Directors and
authorised for issue on
28 June 2024 and signed on its behalf by:
John Croft
Executive Chairman
The accompanying notes on pages 40 to 59 are an integral part of these
financial statements.
Consolidated Cash Flow Statement
For the year ended 31 December 2023
2023 2022
US$'000 US$'000
Cash flows from operating activities
Loss before taxation (17,716) (52,904)
Adjustments for:
Finance income (545) (1,359)
Finance expense 577 520
Foreign exchange 47 83
Fair value changes on unquoted financial assets at fair value through profit 13,938 47,074
or loss
Fair value changes on loans and receivables at fair value through profit or 2,236 5,059
loss
Realised gain on investments - (300)
Decrease in other receivables 13 28
(Decrease)/increase in other payables and accruals (323) 325
Net cash used in operating activities (1,773) (1,477)
Cash flows from investing activities
Sale proceeds of unquoted financial assets at fair value through 250 1,200
profit or loss
Purchase of unquoted financial assets at fair value (750) -
Net cash used in investing activities (500) 1,200
Cash flows from financing activities
Issue of shares net of issue costs 2,763 -
Purchase of treasury shares (139) -
Payment of interest (594) (228)
Net cash generated from/(used in) financing activities 2,030 (228)
Net decrease in cash and cash equivalents (243) (505)
Cash and cash equivalents and net debt at the beginning of the year 321 848
Foreign exchange on cash balances (1) (22)
Cash and cash equivalents and net debt at the end of the 77 321
year
The accompanying notes on pages 40 to 59 are an integral part of these
financial statement
JADE ROAD INVESTMENTS LTD
Notes to the Financial Statements
For the year ended 31 December 2023
1. GENERAL INFORMATION
The Company is a limited (by shares) company incorporated in the British
Virgin Islands ("BVI") under the BVI Business Companies Act 2004 on 18 January
2008. The address of the registered office is Commerce House, Wickhams Cay 1,
PO Box 3140, Road Town, Tortola, British Virgin Islands VG1110 and its
principal place of business is c/o Harmony Capital, 20/F, Infinitus Plaza, 199
Des Voeux Road Central, Hong Kong.
The Company is the holding company of a group of companies comprising a
subsidiary, Jade Road Investments (HK) Limited. The address of the registered
office and its principal place of business is c/o Harmony Capital, --20/F,
Infinitus Plaza, 199 Des Voeux Road Central, Hong Kong and a number of wholly
owned special purpose vehicles ("SPV") each of which holds investments.
The Company is quoted on the AIM Market of the London Stock Exchange (code:
JADE) and the Quotation Board of the Open Market of the Frankfurt Stock
Exchange (code: 1CP1).
The Company is targeting delivery of income and capital gain from a
diversified mix of pan-Asian investments in the Small- and Medium-Sized
Enterprise ("SME") sector.
The Groups investment policy is stated in pages 4-5 of the
annual report.
2. ACCOUNTING POLICIES
a) Basis of Preparation
The principal accounting policies adopted in the preparation of the financial
statements are set out below.
The Group's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs and IFRIC interpretations)
as adopted by the EU. The financial statements have been prepared under the
historical cost convention. Financial instruments are measured at fair value
at the end of each reporting period.
Historical cost is generally based on the fair value of the consideration
given in exchange for goods and services.
Fair Value Measurements:
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 under current market conditions.
The fair value of investments is first based on quoted prices, where
available. Where quoted prices are not available, the fair value is estimated
using consistent valuation techniques across periods of measurement.
The Group's private credit and equity investments are recorded at fair value
or at amounts whose carrying values approximate fair value. Net gains and
losses, including any interest or dividend income, are recognised in its
profit or loss statement.
In accordance with IFRS 13, fair value measurements are categorised into Level
I, II or III based on the degree to which the inputs to the fair value
measurements are observable and the significance of the inputs to the fair
value measurement in its entirety. These are described as follows:
Level I Fair value measurements are those derived from quoted prices
(unadjusted) in active markets for identical assets or liabilities.
Level II Fair value measurements are those derived from inputs other than
quoted prices included within Level I that are observable for the assets or
liability, either directly or indirectly.
Level III Fair value measurements are those derived from inputs that are not
based on observable market data.
b) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of
the Company and entities (other than structured entities) controlled by the
Company. Control is achieved where the Company:
§ has the power over the investee;
§ is expected, or has rights, to variable returns from its involvement with
the investee; and
§ has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls a subsidiary if facts and
circumstances indicate that there are changes to one or more of the three
elements of control listed above.
The Company holds investments through a number of unlisted wholly owned
special purpose vehicles ("SPVs"). The directors have considered the
definition of an investment entity in IFRS10 and the associated application
guidance and consider that the Company meets that definition. Consequently,
the Group's investments in SPVs and the underlying investments are accounted
for at fair value through profit and loss and the SPVs are not consolidated as
subsidiaries. Please see Note 4(o) Critical accounting estimates and
judgements for description of fair value methodology.
Consolidation of a subsidiary other than those held for investment purposes
begins when the Company obtains control over the subsidiary and ceases when
the Company loses control of the subsidiary. Specifically, income and expenses
of a subsidiary acquired or disposed of during the year are included in the
consolidated statement of profit or loss and other comprehensive income from
the date the Company gains control until the date when the Company ceases to
control the subsidiary.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated statement of comprehensive income from the
effective date of acquisition and up to the effective date of disposal, as
appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with those used by
other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in
full on consolidation. Associates are those entities in which the Group has
significant influence, but not control, over the financial and operating
activities.
Investments that are held as part of the Group's investment portfolio are
carried in the balance sheet at fair value even though the Group may have
significant influence over those companies. This treatment is permitted by IAS
28 - Investment in Associates, which requires investment held by venture
organisations to be excluded from its scope where those investments are
designated, upon initial recognition, as at fair value through profit or loss
and accounted for in accordance with IFRS 9, with changes in fair value
recognised in the statement of comprehensive income in the period of change.
The Group has no interests in associates through which it carries on its
business.
c) Going Concern
Notwithstanding the operating loss of US$17.7Mn and operating cash outflows of
USD$1.7Mn for the year ended 31 December 2023 and net current assets of
$0.05Mn at year-end, the group has prepared the financial statements under the
going concern.
Following the recent transfer of assets the Company is seeking to acquire a
business via a Reverse Take Over (RTO). The Company will need to raise interim
capital to advance discussions for an RTO. The Company also continues to
manage a small number of creditors. The Company is confident that it will be
able to raise the interim capital required, and is in advanced discussions
with a number of parties with respect to this. In addition, the company has
also received a letter of support from its largest shareholder Heirloom in
regard to the Company's fundraising plans. However, were the company to not
obtain this funding in the short term, and Heirloom unable to financially
support the company in the foreseeable future, then the company would not be
able to meet its liabilities as they fall due. Were the company not to be
considered a going concern, there would be no material impact on these
financial statements as all significant items are already held at their fair
value.
Accordingly, the financial statements have been prepared on a going concern
basis and do not include any adjustments that would result if the group was
unable to continue as a going concern.
d) Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the senior management and Board members. The senior
management and Board members, who are responsible for allocating resources and
assessing performance of the operating segments, have been identified as the
senior management and Board members that make strategic decisions. The Group
is principally engaged in investment business, the Directors consider there is
only one business activity significant enough for disclosure. This activity
consists of entities which operate in two geographical locations, i.e., BVI
and Hong Kong.
e) Revenue Recognition
Revenue is recognised when it is probable that the economic benefits will flow
to the Group and when the revenue and costs, if applicable, can be measured
reliably and on the following basis:
§ Dividend income is recognised when the Company's right to receive payment
is established.
§ Interest revenue is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset's net carrying amount.
§ Fair value changes on financial assets represents the overall changes in
net assets from the investment portfolio net of deal-related costs.
Other income comprised management recharges from the parent
company to its subsidiary which are eliminated on consolidation.
f) Impairment of Non-Financial Assets
At each balance sheet date, the Group reviews internal and external sources of
information to determine whether its fixtures, fittings and equipment and
investment in subsidiaries have suffered an impairment loss or impairment loss
previously recognised no longer exists or may be reduced. If any such
indication exists, the recoverable amount of the asset is estimated, based on
the higher of its fair value less costs to sell and value in use. Where it is
not possible to estimate the recoverable amount of an individual asset, the
Group estimates the recoverable amount of the smallest group of assets that
generates cash flows independently (i.e., cash-generating unit).
If the recoverable amount of an asset or a cash-generating unit is estimated
to be less than its carrying amount, the carrying amount of the asset or
cash-generating unit is reduced to its recoverable amount. Impairment losses
are recognised as an expense immediately.
A reversal of impairment loss is limited to the carrying amount of the asset
or cash-generating unit that would have been determined had no impairment loss
been recognised in prior years. Reversal of impairment loss is recognised as
income immediately.
g) Financial Instruments
Financial assets and financial liabilities are recognised on the balance sheet
when a group entity becomes a party to the contractual provisions of the
instrument. Financial assets and financial liabilities are initially measured
at fair value. Financial assets at fair value through profit or loss includes
loans and receivables.
Transaction costs that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are added to or
deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets
or financial liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
Financial assets are classified, at initial recognition, as subsequently
measured at amortised cost or fair value through profit or loss. The
classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Group's
business model for managing them.
Unquoted Financial Assets:
Classification
The Group classifies its unquoted financial assets as financial assets at fair
value through profit or loss. These financial assets are designated by the
directors as at fair value through profit or loss at inception.
Financial assets designated as at fair value through profit or loss at
inception are those that are managed as part of an investment portfolio and
their performance evaluated on a fair value basis in accordance with the
Group's Investment Strategy.
Recognition/Derecognition
Regular-way purchases and sales of investments are recognised on the trade
date - the date on which the Group commits to purchase or sell the investment.
A fair value through profit or loss asset is derecognised when the Group loses
control over the contractual rights that comprise that asset. This occurs when
rights are realised, expire or are surrendered and the rights to receive cash
flows from the investments have expired or the Group has transferred
substantially all risks and rewards of ownership. Realised gains and losses on
fair value through profit or loss assets sold are calculated as the difference
between the sales proceeds and cost. Fair value through profit or loss assets
that are derecognised and corresponding receivables from the buyer for the
payment are recognised as of the date the Group has transacted an
unconditional disposal of the assets.
Measurement
Financial assets at fair value through profit or loss are initially recognised
at fair value. Transaction costs are expensed through the profit or loss.
Subsequent to initial recognition, all financial assets at fair value through
profit or loss are measured at fair value in accordance with the Group's
valuation policy, as the Group's business is to invest in financial assets
with a view to profiting from their total return in the form of capital growth
and income. Gains and losses arising from changes in the fair value of the
financial assets at fair value through profit or loss are presented in the
period in which they arise. For more information on valuation principles
applied, please see section 4(o) Critical Accounting Estimates.
Quoted Financial Assets:
The fair values of financial assets with standard terms and conditions and
traded on active liquid markets are determined with reference to quoted market
bid prices and are classified as current assets. Purchases and sales of quoted
investments are recognised on the trade date where a contract of sale exists
whose terms require delivery within a time frame determined by the relevant
market.
In the opinion of the Directors, cash flows arising from transactions in
equity investments represent cash flows from investing activities.
Allowance for Expected Credit Losses:
An allowance for ECLs may be established for amounts due from credit contracts
within Loans and Receivables where evidence of credit deterioration is
observed. In order to assess credit deterioration, the Group considers
reasonable and supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on its historical experience and informed
credit assessment, that includes forward-looking information. The main factors
considered include material financial deterioration of the borrower, breach of
contract such as default or delinquency in interest or principal repayments,
probability that a borrower will enter bankruptcy or financial re-organisation
and material decline in the value of the underlying applicable security. ECL
allowances are distinguished from Likely Credit Loss ("LCL") allowances based
on the expectation of a loss. An LCL reserve is established when a loss is
both probable and the amount is known.
ECLs are a probability-weighted estimate of lifetime credit losses. Under the
ECL model, the Group calculates the allowance for credit losses by considering
on a discounted basis the cash shortfalls it would incur in various default
scenarios for prescribed future periods and multiplying the shortfalls by the
probability of each scenario occurring. The allowance is the sum of these
probability weighted outcomes. Credit losses are measured as the present value
of all cash shortfalls (i.e., the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the Group
expects to receive) with a discount factor applied.
Cash and Cash Equivalents:
For the purpose of the cash flow statement, cash equivalents represent
short-term highly liquid investments which are readily convertible into known
amounts of cash, and which are subject to an insignificant risk of change in
value, net of bank overdrafts.
Financial Liabilities
The Group's financial liabilities include other payables and accruals and
amounts due to related parties. All financial liabilities except for
derivatives are recognised initially at their fair value and subsequently
measured at amortised cost, using effective interest method, unless the effect
of discounting would be insignificant, in which case they are stated at cost.
Equity Instruments
Equity instruments issued by the Group are recorded at the proceeds received,
net of direct issue costs.
h) Investment in Subsidiaries
Investments in subsidiaries are stated at cost less provision for any
impairment in value. Under IFRS 10, where the parent company is qualified as
an investment entity, the subsidiaries have been deconsolidated from the Group
financial statements.
i) Taxation
The charge for current income tax is based on the results for the period as
adjusted for items that are non-assessable or disallowed. It is calculated
using tax rates that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is provided, using the liability method, on all temporary
differences at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. However,
if the deferred tax arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the
transaction affects neither the accounting profit nor taxable profit or loss,
it is not accounted for.
The deferred tax liabilities and assets are measured at the tax rates that are
expected to apply to the period when the asset is recovered or the liability
is settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the balance sheet date. Deferred tax assets are
recognised to the extent that it is probable that future taxable profit will
be available against which the deductible temporary differences, tax losses
and credits can be recognised.
j) Dividends
Dividends payable are recorded in the financial statements in the period in
which they meet the IAS 32 definition of having been declared.
k) Share Based Payments
The Group has applied the requirements of IFRS 2 "Share Based Payments". The
Group issues share options/warrants as an incentive to certain key management
and staff (including Directors) and its Investment Manager. The fair value of
options/warrants granted to Directors, management personnel, employees and
Investment Manager under the Company's share option/warrant scheme is
recognised as an expense with a corresponding credit to the share-based
payment reserve. The fair value is measured at grant date and spread over the
period during which the awards vest. The fair value is measured using the
Black Scholes Option pricing model.
The Group, on special occasions as determined by the Directors, may issue
options/warrants to key consultants, advisers and suppliers in payment or part
payment for services or supplies provided to the Group. The fair value of
options/warrants granted is recognised as an expense with a corresponding
credit to the share-based payment reserve. The fair value is measured at grant
date and spread over the period during which the options/warrants vest. The
fair value is measured at the fair value of receivable services or supplies.
The options/warrants issued by the Group are subject to both market-based and
non-market based vesting conditions.
Non-market vesting conditions are not taken into account when estimating the
fair value of awards as at grant date; such conditions are taken into account
through adjusting the equity instruments that are expected to vest.
The proceeds received, net of any attributable transaction costs, are credited
to share capital when options/warrants are converted into ordinary shares.
l) Earnings Per Share
The Group calculates both basic and diluted earnings per share in accordance
with IAS 33 "Earnings per Share". Under IAS 33, basic earnings per share is
computed using the weighted average number of shares outstanding during the
period. Diluted earnings per share is computed using the weighted average
number of shares during the period plus the period dilutive effect of options
outstanding during the period. Potential ordinary shares are only treated as
dilutive if their conversion to shares would decrease earnings per share or
increase loss per share from continuing operations.
m) Share Issue Expenses
Share issue expenses are written off against the share capital account arising
on the issue of share capital.
n) Critical Accounting Estimates and Judgements
Preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of
making judgements about carrying values of assets and liabilities that are not
readily apparent from other sources.
In particular, significant areas of estimation, uncertainty and critical
judgements in applying accounting policies that have the most significant
effect on the amount recognised in the Financial Statements are in the
following areas:
Assessment of accounting treatment under IFRS 10, IFRS 12, and IAS 27 -
Investment entities
The directors have concluded that the Company meets the definition of an
Investment Entity because the Company:
a. obtains funds from one or more investors for the purpose
of providing those investor(s) with investment management services;
b. commits to its investor(s) that its business purpose is
to invest funds solely for returns from capital appreciation, investment
income, or both; and
c. measures and evaluates the performance of substantially
all of its investments on a fair value basis.
The investment objective of the Company is to produce returns from capital
growth and to pay shareholders a dividend. The Group has multiple unrelated
investors and indirectly holds multiple investments. Investment positions are
in the form of structured loans or equity instruments in private companies
operating which is valued on a fair value basis.
As a result, the unlisted open-ended investments, also referred to as SPVs,
and in which the Company invests in are not consolidated in the Group
financial statements.
Assessment of Accounting Treatment under IAS 28 - Investment in Associates
The Group has taken advantage of the exemption under IAS28 Investments in
Associates whereby IAS 28's requirements do not apply to investments in
associates held by venture capital organisations. This exemption is
conditional on the investments being designated as at fair value through
profit and loss or being classified as held for trading upon initial
recognition. Such investments are measured at fair value with changes in fair
value being recognised in the statement of comprehensive income.
Valuation of Investments
The Group's investment portfolio includes a number of investments in the form
of structured loans or equity instruments in private companies operating in
emerging markets. In the second half of 2023, the Board took the decision to
restructure the Company by disposing of all of its legacy Asian assets, the
loan note, and the payable to the Company's previous Investment Manager
Harmony Capital Investors Limited, and transferring them to a separate
privately held company whose shareholders would be a mirror of the
shareholders in JADE.
As the legacy assets are transferred for no consideration, the US$3.62m loan
notes plus the value of the payable to Harmony Capital Investors Limited
US$670k are considered to represent the fair value of the Legacy Assets to be
transferred between Jade and the SPV. Therefore, the Board has decided to
write down the fair value of the Legacy Assets equal to the liabilities
transferred to the SPV.
o) Foreign currency translation
- Functional and Presentation Currency
Both the functional and presentational currency of the Group's entities are
the United States Dollar. The financial statements are presented in United
States Dollars and rounded to the nearest thousand dollars, except when
otherwise indicated.
Transactions in foreign currencies are converted into the
functional currency on initial recognition, using the exchange rates
approximating those ruling at the transaction dates. Monetary assets and
liabilities at the end of the reporting period are translated at the rates
ruling as of that date. Non-monetary assets and liabilities are translated
using exchange rates that existed when the values were determined. All
exchange differences are recognised in profit or loss.
p) Assets held for sale
During the year, the Group reached an agreement to dispose of legacy assets
held by the Group. These assets, along with the convertible loan note issued
by the Group, will be transferred to an independent third party for nil
consideration. The agreement was signed on 29 December 2023, however
conditions required for the sale completed had not all been met at this date,
and therefore it cannot be considered an adjusting event for the purposes of
IAS 10 Events after the reporting period. However, as the sale was highly
probably and a buyer for the assets had already been agreed, these assets meet
the criteria to be considered assets held for sale under IFRS 5 Non-current
Assets Held for Sale and Discontinued Operations.
The assets held for sale are being transferred at nil consideration. However,
the convertible loan notes issued by the Group are also being transferred.
Therefore, the value of the loan notes is considered to represent the fair
value of the legacy assets, and therefore the assets are impaired to this
value.
New Standards, Amendments to Standards or Interpretations adopted in these
financial statements:
No standards, amendments or interpretations which became effective from 1
January 2023 had an impact on the Group Financial Statements.
Standards, amendments and interpretations to existing standards that are not
yet effective and have not been early adopted by the Company in the 31
December 2023 financial statements
Amendments to IAS 1: Presentation of Financial Statements: Classification of
Liabilities as Current of Non-current 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements: Non-current
Liabilities with Covenants 1 January 2024
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) 1 January 2024
The Directors do not expect that their adoption will have a material impact on
the financial statements of the company in future years. The Directors
continue to monitor the impact of future changes to the reporting requirements
but do not believe the proposed changes will significantly impact the
financial statements.
3. SEGMENT INFORMATION
The operating segment has been determined and reviewed by the senior
management and Board members to be used to make strategic decisions. The
senior management and Board members consider there to be a single business
segment, being that of investing activity. The reportable operating segment
derives its revenue primarily from structured equity and debt investment in
several companies and unquoted investments.:
4. FAIR VALUE CHANGES ON FINANCIAL ASSETS AT FAIR VALUE THROUGH
PROFIT OR LOSS
2023 2022
Unquoted Financial Assets US$'000 US$'000
Income through profit or loss 1,090 1,174
Equity fair value adjustments:
- Meize/ Swift Wealth (8,801) 1,500
- FMHL (1,538) (45,146)
- ICG (1,659) -
- Infinity TNP - (3,650)
- DocDoc (3,016)
- Other (15)
(15,029) (47,296)
Realised Gain - 300
Expected credit loss provision:
- ICG - (363)
- FMHL - (581)
Foreign exchange on unquoted financial assets at fair value through profit or
loss
2 (8)
Total fair value changes on unquoted financial assets at fair value through (13,937) (46,774)
profit or loss
2023 2022
Loans & Receivables financial assets US$'000 US$'000
Income through profit or loss 545 1,359
Fair value adjustments:
- FMHL (loan principal) - -
- FMHL (Accrued interest) (532) -
- CJRE (Project Nichlaus) (1,736) (83)
Expected credit loss provision:
- FLMHL (Accrued interest) - (1,359)
- HKMH (Loan principal) - (3,700)
Foreign exchange on Loans & Receivables at fair value through profit or -
loss
(22)
Total fair value changes on Loans & Receivables at fair value through (1,723) (3,805)
profit or loss
Expected Credit Loss Provision
Balance at 1 January 6,038 35
ECL charged (utilitised) to profit or loss (6,038) 6,003
Balance at 31 December - 6,038
The impact of foreign exchange on the investments in the portfolio is as
follows:
2023 2022
US$'000 US$'000
FMHL 2 (8)
Foreign exchange on unquoted financial assets at fair value through profit or 2 (8)
loss
CJRE (44) (83)
Foreign exchange on loans and receivables (44) (83)
Cash (1) (22)
Foreign exchange on portfolio (43) (113)
5. OPERATING LOSS
Operating loss is stated after charging expenses:
2023 2022
US$'000 US$'000
Investment Manager fee 350 1,200
Investment Manager incentive fee (43) (158)
Fees to the Group's auditor for audit of the 51 53
Company and its subsidiaries
Directors' remuneration 321 260
Professional fees 727 414
Business travel expenses 19 4
Bank charges 11 9
Foreign exchange - 1
Other expenses 67 22
The Investment Manager's incentive fee is only payable in any given year
depending on the performance of the Company's net asset value. The charge
above is a result of warrants owed (not yet issued) revalued to their
prevailing share price at 31 December 2023. (Also see Note 16).
6. NET FINANCE INCOME
2023 2022
US$'000 US$'000
Interest from financial assets measured at fair value through profit and loss 545 1,359
Finance income 545 1,359
Interest payable on debt (577) (520)
Finance cost (577) (520)
Net finance income (32) 839
Finance income in the year is from the Convertible Bond issued by FLMH which
has been fully provided against.
7. DIRECTORS' REMUNERATION
Short term employment benefits 2023C 2022
US$ US$
John Croft 167,000 120,755
Hugh Trenchard 44,795 44,223
Lee George Lam 46,000 45,971
Stuart Crocker 63,000 49,112
320,795 260,061
Directors' remuneration includes all applicable social security payments.
There was no pension cost incurred during 2023 (2022:US$ Nil).
There are no employees within the group other than the Directors (2022: Nil)
8. TAXATION
The Group companies are incorporated in the BVI and Hong Kong. Not subject to
any income tax in the BVI. The company does not engage in any business
activities or generate income in Hong Kong; therefore it is not subject to
taxation in Hong Kong.
9. UNQUOTED FINANCIAL ASSETS AT FAIR VALUE THROUGH
PROFIT OR LOSS
2023 2023 2022 2022
Unquoted financial assets Loans and Unquoted financial assets Loans and
receivables receivables
US$'000 US$'000 US$'000 US$'000
Balance as at 1 January 18,227 1,769 66,202 5,556
Additions 750 - - -
Reclassification - - - -
Fair value changes through profit or loss (13,937) (2,314) (46,131) (87)
Transferred to held for sale (4,290) - - -
Disposal (250) - (1,200) -
Realised gain - - 300 -
ECL - - (944) (5,059)
Finance income on loans - 545 - 1,359
Balance as at 31 December 500 - 18,227 1,769
The Group values its investments at fair value through profit or loss, as
prescribed by the investment methodology
adopted by the Board which is summarised in Note 2(o) Critical accounting
estimates and judgements, for non-legacy assets.
SPVs
The unlisted open-ended investments below are defined as SPVs and are reported
at the fair value of their underlying investments described above at 31
December 2023.
Name of SPV Country of Percentage owned Principal activities
Incorporation
2023 2022
Lead Winner Limited BVI 100% 100% Investment Holdings
Dynamite Win Limited BVI 100% 100% Investment Holdings
Future Metal Holdings Limited BVI 100% 100% Investment Holdings
Swift Wealth Investments Limited BVI 100% 100% Investment Holdings
Ultimate Prosperity Limited BVI 100% 100% Investment Holdings
TNP Asia Limited BVI 100% 100% Investment Holdings
Eastern Champion Limited BVI 100% 100% Investment Holdings
Further details of financial assets are set out in Note 15, and investment
valuation methodologies are set out in Note 2(o) Critical accounting estimates
and judgements.
10. LOANS AND OTHER RECEIVABLES AT FAIR VALUE THROUGH PROFIT OR LOSS
2023 2022
US$'000 US$'000
Other receivables 19 1,769
19 1,769
2023 2022
US$'000 US$'000
FLMHL
Loan principal - 26,500
Accrued PIK interest 532 2,248
Accrued interest payable in cash - 3,070
Fair Value Adjustments - Principal - (26,500)
Fair Value Adjustments - Accrued Interest (532) (5,318)
Gross loans receivable - -
HKMH
Loan principal - 3,700
Fair Value Adjustments - Principal - (3,700)
Gross loans receivable - -
As at 31 December 2022, Loans represent the Convertible Bond issued by Fook
Lam Moon Holdings plus accrued Paid-in-Kind ("PIK") and cash interest. This
balance is included within the legacy assets that will be transferred post
year-end and, as described in note 9, the value of this asset is considered to
be zero. The remaining balance represents prepayments.
11. ASSETS HELD FOR SALE
2023 2022
US$'000 US$'000
Opening balance - -
Transferred from unquoted investments at fair value through profit or loss 4,290 -
(Future Metal Holdings Limited)
Assets available for sale 4,290 -
The assets held for sale represent the legacy assets of the group. The assets
and the basis of their valuation is described in Note 2(n).
12. OTHER PAYABLES AND ACCRUALS
2023 2022
US$'000 US$'000
Accounts payable 794 1,254
Accruals 197 80
Other payables and accruals 991 1,334
13. LOANS AND BORROWINGS
2023 2022
US$'000 US$'000
Corporate debt 3,843 3,859
Loans and borrowings 3,843 3,859
The movement in loans and borrowings is as follows
2023 2022
US$'000 US$'000
Opening balance 3,859 3,568
Borrowing costs amortised - 52
Interest expense accrued 577 467
Payment of interest liability (594) (228)
Closing balance 3,843 3,859
i. Terms and conditions of the outstanding debt is as follows:
Currency Interest rate Year of maturity
Secured loan notes US$ 17% 2024
The corporate debt US$3.8 million are proceeds from loan notes issued to a
family office investor, with a related debenture which constitutes a fixed
over the assets and undertakings of the Company. Capitalised debt issue costs
have been fully amortised.
In December 2022 the Company agreed an extended maturity of the loan notes
issued to 31 December 2023 and an increased interest rate of 15% from December
2022. The interest rate payable on the principal amount of the loan notes
ranged between 16%-18% per annum as US$1.8m or more of the principal amount
remained outstanding. This bond will be transferred as part of the 'Legacy
Asset' transfer after the year end.
ii. Reconciliation of movements of liabilities & equity to cashflows
arising from financing activities
Loans & borrowings Share capital/ premium Treasury reserve
US$'000 US$'000 US$'000
Opening balance at 1 January 2023 3,859 148,903 (615)
Changes from cashflows
Issue of shares - 2,763 -
Purchase of treasury shares (139)
Payment of interest (594) - -
Total changes from financing cashflows (594) 2,763 (139)
Other changes:
Issue of shares to settle liability - 20 -
Interest expense 577 - -
Total other changes to liabilities (17) 2,783 (139)
Closing balance at 31 December 2023 3,843 15,666 (754)
Loans & borrowings Share capital/ premium Treasury reserve
US$'000 US$'000 US$'000
Opening balance at 1 January 2022 3,568 148,903 (615)
Changes from cashflows
Payment of interest (228) - -
Total changes from financing cashflows (228) - -
Other changes:
Interest expense 519 - -
Total other changes to liabilities 519 - -
Closing balance at 31 December 2022 3,859 148,903 (615)
For non-cash movement on account of investing activities refer note 4.
14. SHARE CAPITAL AND TREASURY SHARE RESERVE
Share capital
Number of shares Amount
US$'000
Issued share capital excluding treasury shares at 31 December 2022 115,277,869 148,288
Issued share capital excluding treasury shares at 31 December 2023 350,713,130 150,922
Consisting of:
Authorised, called-up and fully paid ordinary shares of no par value each at 358,193,134 151,686
31 December 2023
Authorised, called-up and fully paid ordinary shares of no par value held as (7,480,004) (754)
treasury shares by the Company at 31 December 2023
15. FINANCIAL INSTRUMENTS
Financial Risk Management Objectives and Policies
Management has adopted certain policies on financial risk management with the
objective of ensuring that:
(i) appropriate funding strategies are adopted to meet the
Company's and Group's short-term and long-term funding requirements taking
into consideration the cost of funding, gearing levels, and cash flow
projections;
(ii) appropriate strategies are also adopted to manage related
interest and currency risk funding; and
(iii) credit risks on receivables are properly managed.
Financial instruments by category
The accounting policies for financial instruments have been applied to the
line items below:
Financial assets
2023 2022
US$'000 US$'000
Unquoted financial assets at fair value through P&L 500 18,227
Other receivables at fair value through P&L - 1,738
Cash and cash equivalents at amortised cost 77 321
Financial assets 577 20,286
Financial liabilities
2023 2022
US$'000 US$'000
Other payables and accruals at amortised cost 991 1,334
Corporate debt at amortised cost 3,843 3,859
Financial liabilities 4,834 5,193
The Company has agreed an extended maturity of the loan notes issued to 31
December 2023. Capitalised debt issue costs have been fully amortised. All
other financial liabilities are due within 12 months.
Financial assets at fair value through profit or loss
The following table provides an analysis of financial instruments that are
measured subsequent to initial recognition at fair value, grouped into Levels
1, 2, or 3 based on the degree to which the fair value is observable as
described in Note 2(a) Basis of preparation:
2023 2022
US$'000 US$'000
Level 3
Unquoted financial assets at fair value through profit or loss (Note 9) 500 18,227
Other receivables at fair value through the profit or loss (Note 9) - 1,769
500 19,996
There were no transfers between levels in the current period. Carrying values
of all financial assets and liabilities (not measured at fair value through
profit or loss) are approximate to their fair values.
Significant unobservable inputs used in measuring fair value - Level 3
Description Fair value at 31 Dec 2023 US$'000 Fair value hierarchy Valuation technique Significant unobservable input(s) Relationship of unobservable inputs to fair value
Heirloom Investment Fund SPC $250 Level 3 Net asset value of fund Not applicable Not applicable
Heirloom Litigation Funding $250
The above table sets out information about significant unobservable inputs
used at 31 December 2023 in measuring material financial instruments
categorised as Level 3 in the fair value hierarchy.
Credit Risk
The Group's credit risk is primarily attributable to other receivables.
Management has a credit policy in place and the exposure to credit risks are
monitored on an ongoing basis.
The Group's maximum exposure to credit risk is represented by the total
financial assets held by the Group.
Interest Rate Risks
The Group currently operates with positive cash and cash equivalents as a
result of issuing share capital and corporate debt in anticipation of future
funding requirements.
The Group has a US$10 million debt facility with a private family office
investor, under which the Company has issued US$3.6 million loan notes, with
an associated fixed interest rate of 15.0% and a maturity date of 31 December
2023. The interest rate payable on the principal amount of the loan notes
ranged between 16%-18% per annum as US$1.8m or more of the principal amount
remained outstanding. As the interest rate has been fixed for the term of the
facility, there is no interest rate risk associated with the instruments.
Liquidity Risk
The Group manages its liquidity requirements by the use of both short-term and
long-term cash flow forecasts. The Group's policy to ensure facilities are
available as required is to issue equity share capital and/or loan notes in
accordance with long-term cash flow forecasts.
The Group's financial liabilities are primarily operational costs and debt
instruments. All operational costs are due for payment in accordance with
agreed settlement terms with professional firms, and all are due within one
year. Debt principal and related interest are due for settlement in December
2023.
Market (Price and valuation) Risk
The Group's investment portfolio is susceptible to risk arising from
uncertainties about future values of the investment securities, either in
relation to market prices (for quoted securities) or fair values (for unquoted
securities). This risk is that the fair value or future cash flows will
fluctuate because of changes in market prices or valuations, whether those
changes are caused by factors specific to the individual investment or
financial instrument or its holder or factors affecting all similar financial
instruments or investments traded in the market. The Group's investment
committee provides the Board of Directors with investment recommendations that
are consistent with the Group's objectives. The investment committee
recommendations are carefully reviewed by the Board of Directors before the
investment decisions are implemented.
During the year under review, the Group did not hedge against movements in the
value of its investments. A 10% increase/decrease in the fair value of
investments would result in a US$0.05m (2022: US$2m) increase/ decrease in the
net asset
value.
While investments in companies whose business operations are based in China
may offer the opportunity for significant capital gains, such investments also
involve a degree of business and financial risk, in particular for unquoted
investment.
Generally, the Group prepares to hold the unquoted investments for a middle to
long term time frame, in particular, if admission to trading on a stock
exchange is considered likely in the future. Sales of securities in unquoted
investments may result in a discount to the book value at the time of future
disposal.
Currency Risks
Management considers that foreign currency exposure is not significant to the
Group and as such, there is no hedging of foreign currencies.
Capital Management
The Group's financial strategy is to utilise its resources to further grow the
Group's portfolio. The Group keeps investors and the market informed of its
progress with its portfolio through regular announcements and raises
additional equity finance at appropriate times when market conditions allow.
The Company regularly reviews and manages its capital structure for the
portfolio companies to maintain a balance between the higher shareholder
returns that might be possible with certain levels of borrowings for the
portfolio and the advantages and security afforded by a sound capital
position, and makes adjustments to the capital structure of the portfolio in
the light of changes in economic conditions.
The capital structure of the Company and the Group consists of cash and cash
equivalents, loans and equity comprising issued capital and reserves.
15. SHARE BASED PAYMENTS
15.1 Ownership-Based Compensation Scheme for Senior Management
The Group has an ownership-based compensation scheme for senior management of
the Group. In accordance with the provisions of the plan, senior management
may be granted warrants to purchase ordinary shares. Each warrant converts
into one ordinary share of Jade Road Investments Limited on exercise. No
amounts are paid or payable by the recipient of the warrants. The warrants
carry neither rights to dividends nor voting rights. Warrants may be exercised
at any time from the date of vesting to the date of their expiry.
At 31 December 2023, there were 1,600,000 (2022: 1,907,882) warrants
outstanding, issued to the Company's Directors in previous periods in respect
of services provided to the Group. 1,600,000 warrants have an exercise price
of US$1.21 per share, equivalent to £1.00 at 31 December 2022. The warrants
will expire in 2027, 10 years after the date of grant.
In the event that a Director's appointment is terminated for any reason, then
in such circumstances each Director's subscription rights shall, to the extent
he/she has not been issued or exercised either (i) prior to the date of
termination (Date of Termination); or (ii) within the period of 60 days
immediately following the Date of Termination, be immediately cancelled.
15.2 Equity Compensation Scheme for Harmony Capital Investors
Limited (the "Investment Manager")
The Group has an equity compensation scheme for Investment Manager of the
Group. In accordance with the provision of the scheme, the Investment Manager
is granted warrants to subscribe for 20 million (before share consolidation
undertaken by the Company on 20 September 2017) ordinary shares, which is to
be issued in five equal tranches. No amounts are paid or payable by the
recipient of the warrants. The warrants carry neither rights to dividends nor
voting rights. Warrants may be exercised at any time from the date of vesting
to the date of their expiry. Any equity compensation shares issued to or
acquired by Investment Manager are subject to an orderly market period, which
is 12 months after each date of issue. During each orderly market period, the
Investment Manager undertakes to the Company and the broker not to effect a
disposal of the relevant shares unless the Investment Manager gives written
notice to do so.
All warrants are equity-settled, the only conditions for all warrants granted
is that the warrants holder remains in the office when the warrant is
exercised.
The number of warrants due to the Investment Manager to subscribe for ordinary
shares in respect of services provided to the Group were recalculated pursuant
to paragraph 2 of Section 2 of the warrant instruction to reflect the share
consolidation undertaken by the Company on 20 September 2017. The warrants
have an exercise price of US$1.21 per share, equivalent to £0.89 at 31
December 2022. The warrants will expire 10 years after the date of grant. In
total Harmony Capital Investors Limited owns 8,000,000 warrants as at 31
December 2023 (2022: 8,000,000).
During the year, the Company issued 11,004,064 warrants to bond holders,
shareholders and underwriters at an exercise price ranging from 0.75p-1.1p
with an expiry of 3 years.
2023 2022
Number of options Number of warrants Weighted average exercise price US$ Number of options Number of warrants Weighted average exercise price US$
Balance at beginning of the financial year - 17,567,663 0.84 - 17,567,663 0.84
Issuance during the financial year
-Investment manager - - - - - -
-Directors - - - - - -
-Shareholders - 11,004,063 0.01 - - -
Expired during the financial year - (7,967,663) 0.80 - - -
Balance at end of financial year - 20,604,063 0.55 - 17,567,663 0.84
Exercisable at end of financial year - 20,604,063 0.55 - 17,567,663 0.84
The weighted-average remaining contractual life of outstanding warrants at 31
December 2023 was 3 years and 2 months (2022: 3 years and 3 months). During
the year there has been a credit of $ Nil m (2022: $0.2m) relating to
share-based compensation of the Investment Manager.
15.3 Equity-Settled Share-Based Payment for Investment Manager as
Incentive Fee
Investment Manager is entitled to receive an incentive fee from the Company in
the event that the audited net asset value for each year is (1) equal to or
greater than the audited net asset value for the last year in relation to
which an incentive fee became payable ("High Water Mark"); and (2) in excess
of 105% of the audited net asset value as at the last calendar year end ("the
Hurdle"). Subject to the High Water Mark and Hurdle being excessed in respect
of any calendar year, the incentive fee will be equal to 20% of the difference
between the current year end NAV and the previous year end NAV. 50% of the
incentive fee shall be paid in cash and the remaining 50% of the incentive fee
shall be paid by ordinary shares.
The remaining 50% of incentive fee ("Equity Compensation Amount") shall be
satisfied by the Company issuing to Investment Manager such number of ordinary
shares as have a Fair Market Value which in aggregate is equal to the Equity
Compensation Amount. The Fair Market Value is the closing Volume Weighted
Average Price ("VWAP") for the ordinary shares trading on AIM for the ninety
prior trading days as at the relevant calculation period year end, i.e., 31
December 2017. The shares issued to or acquired as incentive fee by Investment
Manager is subject to an orderly market period, which is 12 months after each
date of issue. During each orderly market period, Investment Manager
undertakes to the Company and the broker not to effect a disposal of the
relevant shares unless the Investment Manager gives written notice to do so.
No incentive fee was accrued in 2023 (2022: $0.0m).
16. RELATED PARTY TRANSACTIONS
During the year, the Company and the Group entered into the following
transactions with related parties and connected parties under existing
contracts:
2023 2022
Notes US$'000 US$'000
Remuneration payable to Directors (see Note 7) (i) 321 260
Re-imbursement of expenses to directors 26 -
Heirloom Investment Management LLC*
Administration Fee 47 -
Harmony Capital Investors Ltd**
Management Fee 350 1,200
Incentive Fee (43) (158)
Amount due to
Harmony Capital Investors Limited 745 1,234
Heirloom Investment Management LLC 16 -
Directors 75 -
*9,964,952 shares were issued to Heirloom Investment Management LLC for
underwriting fees netted of with share capital
**2,179,011 shares were issued to Harmony Capital Investors Ltd to settle
prior year incentive fees
17. LOSS PER SHARE
The calculation of the basic and diluted loss per share attributable to the
ordinary equity holders of the Company is based on the following:
2023 2022
US$'000 US$'000
Numerator
Basic/Diluted: Net loss (17,716) (52,904)
No. of shares No. of shares
'000 '000
Denominator
Basic/Diluted: Weighted average shares 298,477 115,278
Loss per share:
Basic/Diluted (5.94) cents (45.89) cents
Treasury shares issued by the company totalling 7,480,004 as at the reporting
date, have been excluded from the weighted average shares calculation.
18. EVENTS AFTER THE REPORTING PERIOD
On 1 May 2024 the transfer of the 'Legacy Assets' consisting of the holdings
in DocDoc Pte Limited, Future Metal Holdings Limited, Meize Energy Industrial
Holdings Limited, Infinity Capital Group Infinity TNP, Project Nicklaus and
Fook Lam Moon Holdings was approved by the shareholders at the annual general
meeting. The corporate bond issued by the Group was also transferred. All
assets and liabilities have been transferred to an independent third party
company which is not owned or controlled by the Group. The Group received no
consideration in return for the transfer. As the transfer had been
substantially agreed at the year-end date, the assets had been included within
assets held for sale.
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