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MEDI - Medilink Global UK News Story

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Last Trade - 13/06/17

Sector
Healthcare
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £1.78m
Position in Universe th / 1826

Medilink-Global UK - Final Results - Part 1

Mon 27th June, 2016 2:53pm
RNS Number : 3843C
Medilink-Global UK Limited
27 June 2016

27 June 2016

MEDILINK-GLOBAL UK LIMITED

("Medilink", the "Company" or the "Group")

FINAL RESULTS

Medilink-Global UK Limited (AIM: MEDI), the provider of electronic healthcard network services to insurance companies and corporateorganisationsto help them facilitate the administration of medical claims and healthcare data management, is pleased to announce its audited results for the year ended 31 December 2015. A copy of the annual report and accounts will be posted to shareholders tomorrow morning Malaysia time and will be available shortly thereafter from the Company's website, www.medilink-global.com.

FINANCIAL HIGHLIGHTS

Total revenue for the year increased by 10% to 1,540,000 (FY2014: 1,405,000). There was a significant increase in revenue in Malaysia of 31% to 998,000 (2014: 762,000).

Software licensing revenues increased by 130% to 250,000 (FY2014: 109,000) following the completion of the Great Eastern Life Assurance Co., Ltd project, which contributed 213,000 of revenue in the period (total contract value SGD625,600).

The Group registered a profit after tax from continued operations of 322,000 (FY2014: Loss after tax of 1,931,000). The main contributing factors were the gain on disposal of its subsidiary, Medilink (Beijing) TPA Pte Ltd (783,000) tempered by an impairment loss (322,000) and the software licensing revenues from the GE Singapore project of 213,000. The previous year's result was impacted by a goodwill impairment of 1,700,000.

Administrative costs have decreased by 10% to 460,000 (FY2014: 511,000).

On 1 August 2014, the Group entered into a Sale and Purchase Agreement with Selfdoctor (Beijing) Technology Co., Limited to divest 51% of its interest in Medilink (Beijing) TPA Services Co Limited. The divestment was fully completed on 10 July 2015 when the transfer of ownership took place.

OPERATIONAL HIGHLIGHTS

The business highlights of Medilink-Global UK Limited (the "Company") in the following regions.

People's Republic of China ("China")

Medilink (Beijing) TPA Co., Ltd ("Medilink China"), now a 49% held associate company of Medilink-Global UK Limited, continues to secure and renew its Third Party Administration ("TPA") service contracts with reputable and established insurers in China.

Contract renewals

During the financial year under review, Medilink China renewed contracts with 9 insurance companies.

Malaysia and Singapore

Great Eastern Life Assurance Co. Ltd ("GE Singapore")

As previously reported Medilink-Global (Asia) Pte Ltd received an order from Great Eastern Life Assurance Co., Ltd, in 2013, to study and outline the user requirement and system specification and commenced work to develop and implement its Claims Management System in 2014. The system went live in September 2015.

ETIQA Insurance Berhad ("ETIQA")

Upon completion of the system licensing and implementation for GE Singapore, MedilinkGlobal (M) Sdn Bhd entered into an agreement to provide its proprietary claims application software, 'Managed Care System' ("MCS Software"), to ETIQA Insurance Berhad ("ETIQA"), as announced on 14 January 2016.

ETIQA is a Malaysian incorporated company and is the insurance and Takaful division of Malaysia's largest financial services group, Maybank Group. It provides a wide range of personal and corporate insurance services and products as well as Sharia-compliant Takaful products.

MediLink Malaysia will license its MCS Software to ETIQA for the purpose of facilitating and allowing ETIQA to administer and process its health related insurance portfolios; relating to its insurance and Takaful plans; as well as settlement of claims to the beneficiaries.

The MCS Software project will be delivered in three phases and is expected to be completed within 19 months, and by no later than 31 December 2017. Payments will be made to Medilink Malaysia in stages throughout the project and are subject to agreed milestones, The total value of the agreement is approximately 275,000.

AIA Co., Ltd

AIA contributed to more than 150,000 members of the membership growth of Medilink Malaysia during the period under review.

The Directors of Medilink are confident that our relationship with AIA will continue to have a positive effect on growth for Medilink Malaysia in the years to come.

Syarikat Takaful Malaysia Bhd.

Syarikat Takaful Malaysia Bhd is a Takaful insurance company that was incorporated based on the recommendation of the "Task Force on the Study for the Establishment of an Islamic Insurance Company in Malaysia" (Task Force) set up by the Government of Malaysia in 1981.

Medilink Malaysia renewed its third party administration (TPA) contract with Syarikat Takaful Malaysia Bhd, during the period under review.

Medilink Malaysia has 2 corporate clients whose group hospitalisation and surgical insurance are insured by Syarikat Takaful Malaysia Bhd. This contract helped in contributing to an increase in 2000 members to the growth of TPA membership of Medilink Malaysia in the period under review.

The Board of Directors are confident that the collaboration between the parties shall bring positive and significant increase in the TPA membership for the years to come.

Self-funded and Government-Linked Employers market

Medilink Malaysia made small in-roads into the self-funded employer market and government-linked organisations, which collectively contributed 5,000 members to the membership growth of Medilink Malaysia during the period under review.

GOING CONCERN

The Board wishes to bring to shareholders' attention the following section from note 2 in the annual report and accounts:

Going Concern

The directors report that after making enquiry, they have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Certain shareholders and directors of the Company have provided working capital loans to the Group to finance its on-going expansion. Loans of an aggregate value of 678,000 are either repayable with 12 months of the date of approval of these financial statements or are not subject to a formal repayment term. The providers of the loans have informed the directors that repayment will not be sought within 12 to 18 months of the date of approval of these financial statements unless the Group has sufficient available working capital to support the making of repayments. The directors have considered and assessed the support provided by shareholders and directors and are satisfied that they will and can, if required, continue to provide the support for the development of the Group's growth over at least the next twelve months from the date of approval of these financial statements and are therefore satisfied that the going concern basis of preparation is appropriate. In considering the appropriateness of this basis of preparation. The directors have reviewed working capital forecasts for the Group and performed sensitivity analysis thereon and the key inputs into these can be found in note 10 in the annual report and accounts. The directors believe that the increasing revenues from trading activities and the continuing support of shareholders and directors will be sufficient for the Group's purposes for a minimum of 12 months from the date of the approval of these financial statements.

Enquiries:

MediLink-Global UK Limited

Allenby Capital Limited
(Nominated Adviser and Broker)

Shia Kok Fat,Chief Executive Officer

Tel: 00 603 2296 3028

www.medilink-global.com

Nick Athanas/ James Reeve

Tel: +44(0)20 3328 5656

CHAIRMAN'S STATEMENT

Medilink-Global UK Limited is pleased to present the Group's results for the year ended 31 December 2015.

FINANCIAL REVIEW

The Group recorded revenues of 1.540 million (FY 2014: 1.405 million) and a profit after taxation, including the discontinued operation, of 0.265 million (FY 2014: loss of 1.992 million) for the year ended 31 December 2015.

The increase in revenues which were largely due to good revenue growth from our Malaysia operations as detailed below, The Group recorded a profit after taxation of 265,000 for the period under review representing a significant improvement on last year. In addition to the growth in the Malaysian operations the main contributing factors were the gain on disposal of its subsidiary, Medilink (Beijing) TPA Pte Ltd (783,000), which was tempered by an impairment loss (322,000), together with the software licensing revenues from the GE Singapore project totalling 213,000.

The average monthly revenue per employee during the year for our Malaysia and Singapore operations was 3,100, an improvement of approximately 19% compared to the previous year figure of 2,609. We expect the monthly average revenue per employee to continue to improve as business volumes increase.

GROUP'S OPERATIONS REVIEW

Malaysia

As previously reported the acquisition of ING Malaysia by AIA is an important corporate development which we expect will create a positive impact for Medilink Malaysia in terms of larger business volumes and enhanced market position. The merged insurance entity has become the number one insurer in the country in terms of total premium size and policyholders' base. In this respect our business with AIA Malaysia, both conventional and Takaful business, grew by 13% compared to FY2014.

AIA had fully completed its merger exercise to operate under a single license in Malaysia after acquiring ING Group's local insurance operations. We have seen an increase of150,000 members in the Medilink Malaysia portfolio.

Overall revenue from our TPA business grew by 15% to 748,000 in 2015 (FY2014 653,000). We expect continuing growth in TPA revenue arising from both the self-insured as well as insured sector in the coming years.

Singapore

Revenues from Singapore decreased by 16% to 539,000 (FY 2014: 643,000) from the previous year while the number of healthcare providers in our network remained at 146.

PROSPECTS

Medilink will continue to provide excellent services to its customers and with our new initiatives in Malaysia and Singapore, we anticipate that the Group's prospects will continue to improve in 2016.

We will look to strengthen all areas of the organisation and maintain our position as a leading regional Third Party Administrator, Electronic Card Network Operator and an Insurance Claims system solutions provider in the Asia Pacific region with a global servicing capacity.

The Company continues to monitor its cash position, which is currently relatively constrained. Cash and cash equivalents at 31 December 2015 were 573,000 (31 December 2014: 254,000). Cost cutting measures implemented during 2014 and 2015 have assisted in improving the Company's working capital position in the period under review. The Directors will continue to explore options for supplementing the Group's cash resources, at both the Company and subsidiary level.

Certain shareholders and directors of the Company have previously provided working capital loans to the Group to finance its on-going expansion. Loans of an aggregate value of 678,000 are either repayable with 12 months of the date of approval of these financial statements or are not subject to a formal repayment term. The providers of the loans have informed the directors that repayment will not be sought within 12 to 18 months of the date of approval of these financial statements unless the Group has sufficient available working capital to support the making of repayments.

ACKNOWLEDGMENTS

On behalf of the board, I would like to extend our thanks to our business partners, customers, associates, healthcare providers and valued shareholders for their support throughout the year. We also wish to thank the management and staff of the entire Medilink-Global Group for their continued loyalty and commitment in discharging their duties.

Norman Lott

Chairman

27 June 2016

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2015

Note

2015

2014

Continuing operations

'000

'000

Revenue

3

1,540

1,405

Cost of sales

(1,166)

(1,154)

Gross profit

374

250

Other income

4

68

Goodwill impairment

10

-

(1,700)

Impairment loss

12

(322)

-

Gain on disposal of subsidiary

21

783

-

Administrative expenses

4

(460)

(511)

Operating profit/(loss)

379

(1,893)

Finance expenses

7

(44)

(38)

Profit/(loss) before taxation from continuing operations

335

(1,931)

Taxation

8

(13)

-

Profit/(loss) for the year from continuing operations

322

(1,931)

Discontinued operations

Loss after tax for the year from discontinued operations

21

(57)

(61)

Profit/(loss) for the year

265

(1,992)

Other comprehensive loss

Items that may be reclassified subsequently to profit or loss:

Exchange difference on translation of foreign subsidiaries

9

(60)

Total comprehensive income/(loss) for the year attributable to equity holders

274

(2,052)

Profit / (loss) for the year attributable to:

Owners of the company

261

(1,990)

Non-controlling interest

4

(2)

265

(1,992)

Total comprehensive income/(loss) attributable to:

Owners of the company

270

(2,049)

Non-controlling interest

4

(3)

274

(2,052)

Earnings per share (pence)

20

Basic and diluted

0.21

(1.64)

Earnings per share for continuing operations (pence)

Basic and diluted

0.26

(1.59)

The notes to the financial statements form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT 31 DECEMBER 2015

Note

2015

2014

ASSETS

'000

'000

Non-current assets

Property, plant and equipment

9

35

75

Investment in associates

12

-

-

Intangible assets

10

1,532

1,505

Total non-current assets

1,567

1,580

Current assets

Trade and other receivables

13

1,157

1,388

Cash and cash equivalents

14

573

254

1,730

1,642

Assets held for sale

21

-

876

Total current assets

1,730

2,518

TOTAL ASSETS

3,297

4,098

EQUITY

Equity attributable to the equity holders of the parent:

Share capital

19

6,074

6,074

Share premium

1,507

1,507

Reserves

(7,252)

(7,522)

Total shareholders' equity

329

59

Non-controlling interests

(1)

(5)

Total equity interest

328

54

Current liabilities

Term loan

18

169

161

Trade and other payables

15

2,622

2,628

Hire purchase liabilities

3

3

2,794

2,792

Liabilities directly associated with the assets held for sale

21

-

1,090

Total current liabilities

2,794

3,882

Non-current liabilities

Advance from a director

17

118

118

Deferred tax

16

57

44

Total non-current liabilities

175

162

TOTAL EQUITY AND LIABILITIES

3,297

4,098

The notes to the financial statements form an integral part of these financial statements.

Approved and authorised by the Board on 27 June 2016 and signed on its behalf by:

Shia Kok Fat

Director

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2015

2015

2014

'000

'000

Cash flows from operating activities

Loss before taxation

335

(1,931)

Loss before taxation for discontinued operation

(57)

(61)

Adjustments for:

Amortisation of intangible assets

11

20

Depreciation of property, plant and equipment

49

61

Gain on disposal of subsidiary

(783)

-

Goodwill impairment

-

1,700

Finance costs

27

20

Cash from operating activities before changes in working capital

(401)

(191)

Decrease /(increase) in inventory

-

(5)

Decrease /(increase) in trade and other receivables

231

(772)

Increase / (decrease) in trade and other payables

730

1,012

Cash flow from operations

560

44

Interest received

-

-

Net cash flow from operations

560

44

Investing activities

Purchase of intangible assets

(38)

(85)

Net cashflow arising from loss of control of subsidiary

(180)

-

Purchase of property, plant and equipment

(24)

(13)

Cash flow used in investing activities

(242)

(98)

Financing activities

Interest paid

(28)

(20)

Advance from shareholders

60

27

Repayment of hire purchase liabilities

-

(4)

Cash flow from financing activities

32

3

Net increase/(decrease) in cash and cash equivalents

350

(51)

Effect of exchange rate changes

(31)

1

Cash and cash equivalents at the beginning of the year

254

304

Cash and cash equivalents at the end of the year

573

254

The notes to the financial statements form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2015

Share capital

Share Premium

Exchange Reserves

Retained Earnings

Total

Non Controlling Interest

Total

'000

'000

'000

'000

'000

'000

'000

Balance at

01 January 2014

6,045

1,507

5

(5,478)

2,079

(2)

2,077

Loss for the year

-

-

-

(1,990)

(1,990)

(2)

(1,992)

Other comprehensive income

Exchange differences

-

-

(59)

-

(59)

(1)

(60)

Total comprehensive loss for the year

-

-

(59)

(1,990)

(2,049)

(3)

(2,052)

Transactions with owners in their capacity as owners

Issue of shares

29

-

-

-

29

-

29

Balance at

31 December 2014

6,074

1,507

(54)

(7,468)

59

(5)

54

Loss for the year

-

-

-

261

261

4

265

Other comprehensive income

Exchange differences

-

-

9

-

9

-

9

Total comprehensive loss for the year

-

-

9

261

270

4

274

Transfer of foreign exchange attributable to the loss of control of subsidiary

-

-

122

(122)

-

-

-

Balance at

31 December 2015

6,074

1,507

77

(7,329)

329

(1)

328

The notes to the financial statements form an integral part of these financial statements

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2015

1. General information

The Company was incorporated in Jersey as a limited liability par value company under the laws of Jersey, with the name Medilink-Global UK Limited and with company number 99680. The Company is governed by its articles of association and the principal statute governing the Company is Jersey law. The liability of the members of the Company is limited. The Company's registered office is Queensway House, Hilgrove Street, St Helier Road, Jersey, JE1 1ES. The Company is domiciled in Jersey. The Company's principal place of business is Asia.

These financial statements are presented in Pound Sterling ("") and rounded to the nearest thousand ("000"). The functional currency of the entities in the Group is the Malaysian Ringgit as that is the currency of the primary economic environment in which the Group operates. The directors have chosen to present these financial statements in Pound Sterling due to the international exposure and shareholders of the entity.

2. Accounting policies

The principal accounting policies adopted by the Group and Company in the preparation of the financial statements are set out below.

i. Basis of preparation

The financial statements of the Group and the Company have been prepared and presented in accordance with International Financial Reporting Standards as adopted by the European Union and the historical cost convention as modified by the use of fair values. The Board had reviewed the accounting policies set out in the financial statements and consider them to be the most appropriate to Group's business activities.

New standards, amendments to standards or interpretations

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and in some cases have not yet been adopted by the EU.

The directors do not expect that the adoption of these standards will have a material impact on the financial statements of the Group in future periods, except that IFRS 9 will impact both the measurement and disclosures of financial instruments and IFRS 15 may have an impact on revenue recognition and related disclosures. At this point it is not practicable for the directors to provide a reasonable estimate of the effect of IFRS 9 and IFRS 15 as their detailed review of these standards is still ongoing.

ii. Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 31 December. Intra-group sales and profits are eliminated fully on consolidation. The results of subsidiaries acquired or disposed of during the period are dealt with in the consolidated income statement from or up to their effective dates of acquisition or disposal respectively. Uniform accounting policies are applied across the group.

Control is achievedwhere the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the abilityto affect those returns through its power over the investee.

iii. Business combinations

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated statement of financial position, the acquiree's identifiable assets and liabilities are initially recognised at their fair values at the acquisition date except as described below in (iv). The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained.

iv. Transactions under common control

The acquisition of Medilink-Global (Asia) Pte. Ltd during the year ended 31 December 2008 was outside the scope of IFRS 3 because it was not a business combination (Medilink-Global UK Limited was a shell company at the time of the transaction) and all parties were under common control before and afterwards.

lAS 8 "Accounting policies, changes in accounting estimates and errors" requires the management to develop a relevant and reliable policy in respect of the business combination. Management has therefore chosen to apply purchase accounting rules. As a result the consideration given and the assets and liabilities acquired are recorded at their fair value. The excess of nominal value of the shares issued over the fair value of the net assets acquired is recorded as goodwill.

v. Disposal of subsidiary

When the Group ceases to have control any retained interest in the entity is remeasured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

vi. Going concern

The directors report that after making enquiry, they have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Certain shareholders and directors of the Company have provided working capital loans to the Group to finance its on-going expansion. Loans of an aggregate value of 678,000 are either repayable with 12 months of the date of approval of these financial statements or are not subject to a formal repayment term. The providers of the loans have informed the directors that repayment will not be sought within 12 to 18 months of the date of approval of these financial statements unless the Group has sufficient available working capital to support the making of repayments. The directors have considered and assessed the support provided by shareholders and directors and are satisfied that they will and can, if required, continue to provide the support for the development of the Group's growth over at least the next twelve months from the date of approval of these financial statements and are therefore satisfied that the going concern basis of preparation is appropriate. In considering the appropriateness of this basis of preparation. The directors have reviewed working capital forecasts for the Group and performed sensitivity analysis thereon and the key inputs into these can be found in note 10 in the annual report and accounts. The directors believe that the increasing revenues from trading activities and the continuing support of shareholders and directors will be sufficient for the Group's purposes for a minimum of 12 months from the date of the approval of these financial statements.

vii. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

The cost of an item of property, plant and equipment comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.

Depreciation is provided to write off the cost less accumulated impairment losses of property, plant and equipment over their estimated useful lives as set out below from the date on which they are available for use and after taking into account their estimated residual values, using the straight-line method. Where parts of an item of property, plant and equipment have different useful lives, the cost or valuation of the item is allocated on a reasonable basis and depreciated separately. The estimated useful lives of property, plant and equipment are as follows:

Computer equipment 33.3%

EDC terminals 33.3%

Motor vehicles 20%

Furniture, fittings and renovations 33.3%

An impairment review is undertaken where there are indicators of impairment. Maintenance and repairs are charged to expenses when incurred.

viii. Inventories

Inventories are valued on a first in, first out basis at the lower of cost and net realisable value. Cost includes all expenditure incurred during the normal course of business in bringing in stocks to their present location and condition, including in the case of work-in-progress and finished goods an appropriate proportion of production overheads. Net realisable value is based on the estimated useful selling price less further costs expected to be incurred to completion and subsequent disposal.

ix. Goodwill on consolidation

Goodwill arising on the acquisition of a subsidiary or jointly controlled entity represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in subsequent periods.

x. Intangible assets

Acquired intangible assets are valued at cost less accumulated amortisation. Amortisation is calculated using the straight line method. The annual rates used for this purpose are as follows:

System software 10% - 33.33% per annum

Contracted customers 20% per annum

Trademark Fully impaired as the group does not continue the use of the acquired trademark

The assets residual value and useful lives are reviewed and adjusted if appropriate, at each statement of financial position date. An asset's carrying value is written down immediately to its recoverable value if the asset's carrying value is greater than its listed recoverable amount.

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset's recoverable amount. An asset's recoverable amount is the higher of the asset's or cash-generating unit's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. Impairment losses of continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at a revalued amount (in which case the impairment is treated as a revaluation decrease).

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated, a previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior periods. Such reversal is recognised in the statement of comprehensive income unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

xi. Associated companies

Associated companies are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20 % and 50 % of the voting rights. Investments in associated companies are accounted for using the equity method of accounting and are initially recognised at cost. A company's investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss.

The Group's share of associates' post-acquisition profits or losses is recognised in the statement of comprehensive income, and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When its share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, a company does not recognise future losses, unless it has incurred obligations or made payments on behalf of the associate.

xii. Receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for impairment. A provision for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The impairment loss is reversed through the statement of comprehensive income. A reversal of an impairment loss is measured as the difference between the asset's carrying amount and its estimated recoverable amount.

The carrying amount of the asset is reduced through the use of an allowance amount and the amount of the loss is recognised in the statement of comprehensive income. If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the impairment loss was recognised, the impairment loss is reversed through the statement of comprehensive income. A reversal of an impairment loss is limited to the asset's carrying amount that would have been determined had no impairment loss been recognised in prior periods.

xiii. Hire purchase

Assets financed by hire purchase arrangements which transfer substantially all the risks and rewards of ownership to the Group are capitalised as property, plant and equipment, and the corresponding obligations are treated as liabilities. The assets capitalised are depreciated in accordance with the accounting policy on property, plant and equipment. Finance charges are charged to the aggregated statement of comprehensive income over the periods of the respective agreements.

xiv. Borrowing costs

Borrowing costs are expensed to the statement of comprehensive income except where they arise from financing used on qualifying assets, where they are capitalised.

xv. Payables

Payables are stated at cost which is the fair value of the consideration to be paid in the future, whether or not billed to the Group. Trade payables are subsequently measured at amortised cost using the effective interest method and are not interest bearing.

xvi. Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each statement of financial position date and adjusted to reflect the current best estimate. Provisions have been made in the financial statements for benefits accruing in respect of sick leave, annual leave and long service leave.

xvii. Taxation

The tax expense in the statement of comprehensive income represents the aggregate amount of current tax and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the period and is measured using the tax rates that have been enacted at the statement of financial position date.

Deferred tax is provided for, using the liability method, on temporary differences at the statement of financial position date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principal, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the statement of financial position date. Deferred tax is recognised in the statement of comprehensive income, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity.

xviii. Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the Group's activities. Revenue is shown net of service tax, returns and discounts. The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity as follows:

(a) Revenue arising from third party administration services charged to insurance companies are billed on a monthly basis so as to reflect monthly changes in membership of each scheme.

(b) Corporate clients and individual policyholders are billed annually in advance based on membership at the time of renewal. Amounts billed in advance at each statement of financial position date are carried forward to future periods as deferred revenue and recognised as revenue in the period to which the services provided relate.

(c) Service and network transaction fees are billed and recognised as revenue on a monthly basis by reference to the usage by scheme members of their electronic swipe cards. A membership fee per member per annum is charged annually in advance. Amounts billed in advance at each statement of financial position date are carried forward to future periods as deferred revenue and recognised as revenue in the period to which the services provided relate.

(d) Software licence sales are recognised when all contractual arrangements have been satisfied, typically on completion of user acceptance testing.

(e) Terminal rentals are billed and recognised on a monthly basis.

xix. Foreign currency translation

(a) Functional and presentational currency

Items included in the financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (the "functional currency"). The functional currency of the entities in the Group is Ringgit Malaysia ("RM"). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Pounds Sterling (""), for reporting in the United Kingdom, which is the company's presentational currency.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period and exchange rates of the monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income.

The foreign exchange reserve represents the differences arising translation of foreign operations into the presentational currency.

(c) Group companies

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentational currency are translated into the presentational currency as follows:

assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position;

income and expenses for each Statement of Comprehensive Income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transactions dates, in which case income and expenses are translated at the rate on the dates of the transactions); and all resulting exchange differences are recognized as a separate component of equity.

(d) Exchange difference on translation of foreign subsidiaries

The functional currency of the Group's entities is the currency of their primary economic environment. In individual companies, transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at year-end rates. Any resulting exchange differences are taken to the Income statement.

On consolidation, assets and liabilities of Group entities reported in their functional currencies are translated into British Pound, the Group's presentation currency, at year-end exchange rate. Income and expense items are translated into British Pound at the annual weighted average rates of exchange.

Differences arising from the retranslation of opening net assets of Group entities, together with differences arising from the restatement of net result for the year of Group entities, are recognised in other comprehensive income.

xx. Financial assets

Financial assets within the scope of IAS 39 are classified as either financial assets at fair value through profit and loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate. Financial assets are recognised in the

statement of financial position when, and only when, the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets are initially recognised at fair value, plus transaction costs for all financial assets not carried at fair value through profit or loss. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end.

All arms length purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset. Such purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market place concerned.

(a) Financial assets at fair value through profit and loss

Financial assets classified as held for trading are included in the category financial assets at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of sale in the short term. Derivative financial instruments are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on investments held for trading are recognised in the statement of comprehensive income.

The Group does not designate any financial assets not held for trading as financial assets at fair value through profit and loss.

(b) Held-to-maturity investments

Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intention and ability to hold the assets to maturity. Investments intended to be held for an undefined period are not included in this classification. Other long-term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost using the effective interest method. This cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount and minus any reduction for impairment or uncollectibility. This calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and losses are recognised in the income statement when the investments are derecognised or impaired, as well as through the amortisation process.

(c) Loans and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(d) Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified in any of the three preceding categories. After initial recognition, available-for-sale financial assets are measured at fair value with gains or losses being recognised in the fair value adjustment reserve until the investment is derecognised or until the investment is determined to be impaired at which time the cumulate gain or loss previously reported in equity is included in the statement of comprehensive income.

The fair value of investments that are actively traded in organised financial markets is determined by reference to the relevant stock exchange's quoted market bid prices at the close of business on the statement of financial position date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.

xxi. Derecognition of financial assets and liabilities

(a) Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where:

The contractual rights to receive cash flows from the asset have expired;

The Group retains the contractual rights to receive cash flows from the assets, but has assumed an obligation to pay them in full without material delay to a third party under a 'pass-through' arrangement; or

The Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Where continuing involvement takes the form of a written and/or purchased option on the transferred asset, the extent of the Group's continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option on an asset measured at fair value, the extent of the Group's continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of (a) the consideration received (including any new asset obtained less any new liability assumed) and (b) any cumulative gain or loss that has been recognised directly in equity is recognised in the statement of comprehensive income.

(b) Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument under IFRS. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such as exchange or modification, is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the statement of comprehensive income.

Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date.

Trade and other payables

Trade and other payables are stated initially at their fair value and subsequently measured at amortised cost using the effective interest method unless the effect of discounting would be immaterial, 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.

xxii. Impairment of assets

(a) Financial assets

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value.

Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.

An impairment loss is recognised in the statement of comprehensive income. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to the statement of comprehensive income.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in the statement of comprehensive income. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

(b) Non-financial assets

The carrying amounts of the Group's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For assets that have indefinite lives, the recoverable amount is estimated at each reporting date.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risk specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash generating unit"). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-generating units that are expected to benefit from the synergies of the combination.

An impairment loss is recognised if the carrying amount of an asset or its cash generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of comprehensive income. Impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

xxiii. Cash and cash equivalents

For the purpose of the statements of cash flows, cash and cash equivalents include cash in hand, deposits, bank balances, demand deposits and other short term, highly liquid investments that are readily convertible to known amounts of cash and which are subjected to an insignificant risk of change in value.

xxiv. Share capital

Ordinary shares are recorded at nominal value and proceeds received in excess of nominal value of shares issued, if any, are accounted for as share premium. Both ordinary shares and share premium are classified as equity. Costs incurred directly to the issue of shares are accounted for as a deduction from share premium, otherwise they are charged to the statement of comprehensive income.

xxv. Events after the balance sheet date

Post period-end events that provide additional information about the Group's position are reflected in the financial statements. Post period-end events that are not adjusting events are disclosed in the notes when material.

xxvi. Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the accounts. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group. Contingent assets are not recognised but are disclosed in the notes to the accounts when an inflow of economic benefits is probable. When inflow is virtually certain, an asset is recognised.

xxvii. Pensions

The Group makes no other contributions to individual pension schemes except for the contributions to defined contribution plans, including the Employees' Provident Fund, the national defined contribution plan in Malaysia, the Central Provident Fund in Singapore and basic pension insurance in China for all the employees in the respective countries.

xxviii. Leased assets

Operating lease

Operating lease rentals are included in the determination of the operating profit or loss for the period in accordance with the contracted lease payment agreement.

xxix. Discontinued operation

A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operation, which has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is re-presented as if the operation had been discontinued from the start of the comparative period.

xxx. Assets held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets or deferred tax assets, which continue to be measured in accordance with the Group's other accounting policies. Impairment losses on initial classification held-for-sale and subsequent gains and losses on re-measurement are recognized in profit or loss.

Once classified as held for sale, intangible assets and property, plant and machinery are no longer amortised or depreciated, and any equity accounted investee is no longer equity accounted.

xxxi. Employee benefits

(a) Short term employee benefits

Wages, salaries, annual leave and sick leave, social security contributions, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by the employees.

(b) Post-employment benefits

Contributions to defined contribution plans, including the Employees' Provident Fund, the national defined contribution plan in Malaysia, the Central Provident Fund in Singapore and basic pension insurance in China are charged to the statement of comprehensive income in the period to which they are related. A defined contribution plan is a pension plan under which the Group pays fixed contributions and will have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current or prior financial periods. Once the contributions have been paid, the Group has no further payment obligations.

xxxii. Significant accounting estimates and judgements

Estimates, assumptions and judgements concerning the future are made in the preparation of the financial statements. They affect the application of the Group's accounting policies, reported amounts of assets, liabilities, income and expenses and disclosures made. They are assessed on an ongoing basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the statement of financial position date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are as stated below:

(a) Carrying value of goodwill - Group

The Group follows the guidance of IAS 36 in determining whether goodwill is impaired. This determination requires the assumption made regarding the duration and extent to which the fair value of the goodwill is less than its costs and the financial health of and near-term business outlook for the goodwill.

Management's assessment for impairment of goodwill is based on the estimation of value in use of the cash-generating unit ("CGU") by forecasting the expected future cash flows for a period of up to five years, using a suitable discount rate in order to calculate the present value of those cash flows.

Impairment testing inherently involved a number of judgmental areas: the preparation of cash flow forecasts for periods that are beyond the normal requirements of management reporting; the assessment of the discount rate appropriate to the business; estimation of the fair value of cash-generating units; and the valuation of the separable assets of each business whose goodwill is being reviewed.

The methods, assumptions, sensitivity and possible outcomes in relation to the calculation of the estimates are detailed in note 10.

(b) Carrying value of investment and long term loan in subsidiaries - Company

The Company follows the guidance of IAS 36 in determining whether investment in and long term loans to subsidiaries are impaired. This determination requires the assumption made regarding the duration and extent to which the fair value of an investment or a financial asset is less than its costs and the financial health of and near-term business outlook for the investment or financial asset. The Company has a sole direct investment in Medilink-Global (Asia) Pte Ltd, which then owns the other entities in the group.

Management's assessment for impairment of investment and long term loans in subsidiaries is based on the estimation of value in use of the cash-generating unit ("CGU") by forecasting the expected future cash flows for a period of up to five years, using a suitable discount rate in order to calculate the present value of those cash flows.

Impairment testing inherently involved a number of judgmental areas: the preparation of cash flow forecasts for periods that are beyond the normal requirements of management reporting; the assessment of the discount rate appropriate to the business; estimation of the fair value of cash-generating units; and the valuation of the separable assets of each business in the sub-group.

As Medilink-Global (Asia) Pte Ltd forms an individual sub-group, the Company has assessed the recoverability of the investment and long term loans on the underlying value of this sub-group. In this respect, the methods, assumptions, sensitivity and possible outcomes in relation to the calculation of the estimates are detailed in note 10 as they are the same as those used on the impairment review of the carrying value of goodwill.

3. Business segments

The Group applies IFRS 8 Operating Segments. Per IFRS 8 operating segments are based on internal reports about components of the group, which are regularly reviewed and used by the Board of Directors being the Chief Operating Decision Maker ("CODM") for strategic decision making and resource allocation, in order to allocate resources to the segment and to assess its performance. The Group's reportable operating segments are as follows:

i) Third party administrator

ii) Software licensing

The CODM monitors the operating results of each segment for the purpose of performance assessments and making decisions on resource allocation. The management has organised the entity based on differences in products and services. Third party administrator segment is derived from aggregating Malaysia and Singapore entity while software licensing segment represent a single entity from Malaysia. Performance is based on external and internal revenue generations and profit before tax, which the CODM believes are the most relevant in evaluating the results relative to other entities in the industry. Segment assets and liabilities are presented inclusive of inter-segment balances, as inter-segment pricing. Information regarding each of the operations of each reportable segment is included below.

2015

Third party administrator

Software licensing

Consolidation

Total

'000

'000

'000

'000

External revenue

1,290

250

-

1,540

Internal revenue

133

79

(212)

-

Total revenue

1,423

329

(212)

1,540

Interest expenses

44

-

-

44

Depreciation and

amortisation

59

1

-

60

Impairment loss

-

-

(322)

(322)

Earnings before tax (EBT)

94

(13)

254

335

Assets

4,404

152

(1,259)

3,297

Liabilities

(5,616)

(284)

2,931

(2,969)

The assets of third party administrator are including the goodwill on consolidation of 1,257,000 (2014: 1,257,000)

Revenues from a single customer amounted to 280,142 (2014: 263,249) arising from sales by third party administrator segment.

2014

Third party administrator

Software licensing

Consolidation

Total

'000

'000

'000

'000

External revenue

1,296

109

-

1,405

Internal revenue

133

90

(223)

-

Total revenue

1,429

199

(223)

1,405

Interest expenses

38

-

-

38

Depreciation and

amortisation

80

1

-

81

Impairment loss

(1,700)

-

-

(1,700)

Earnings before tax (EBT)

(2,097)

(8)

174

(1,931)

Assets

4,654

185

(741)

4,098

Liabilities

(6,810)

(326)

3,092

(4,044)

The geographical split of revenue and non-current assets arises as follows:

2015

Jersey

Singapore

Malaysia

Discontinued Operation

(China)

Total

'000

'000

'000

'000

'000

Revenue

3

539

998

-

1,540

Intangible assets

-

-

194

-

194

Goodwill

1,338

-

-

-

1,338

PPE

-

-

35

-

35

2014

Jersey

Singapore

Malaysia

Discontinued Operation (China)

Total

'000

'000

'000

'000

'000

Revenue (restated)

-

643

762

-

1,405

Intangible assets

-

-

167

-

167

Goodwill

1,338

-

-

-

1,338

PPE

-

-

75

-

75

The geographical split of revenue reflects the continued operation same as its comparative period.

4. Loss from operations

Loss from operation has been arrived at after charging:

2015

2014

'000

'000

Unrealised loss/(gain) on exchange difference

(33)

65

Depreciation

49

61

Amortisation of intangible assets

11

20

Auditor remuneration - audit of the company accounts

21

21

Impairment of goodwill

-

1,700

Operating lease payment

20

184

5. Directors emoluments

2015

2014

'000

'000

Directors' remuneration

30

30

Directors' fees

28

28

58

58

All the executive directors have a fixed base fee or salary and participate in discretionary bonus arrangement, according to the performance as determined by the Remuneration Committee.

Details of the directors' emoluments are set out below.

2015

2014

'000

'000

Executive

Shia Kok Fat

46

46

Non-executive

Norman Lott

12

12

Chen Shien Yee

-

-

Total

58

58

6. Staff costs

2015

2014

'000

'000

Wages and salaries

245

686

Defined contribution plans

21

140

266

826

7. Finance expenses

2015

2014

'000

'000

Finance cost bank borrowing and hire purchase

26

20

Other interest

18

18

44

38

8. Taxation

2015

2014

'000

'000

Current tax charge

-

-

Deferred tax

13

-

13

-

Factors affecting tax charge:

Loss before tax

335

(1,931)

Tax at the corporate rate 23.5% (2014:23.5%)

79

(454)

Tax effects of:

- Non taxable income

(58)

-

- Non deductible expenses

5

400

- Tax loss not recognised

(13)

54

- Difference in overseas tax rate

-

-

13

-

The applicable tax of the Group is derived from the consolidation of all Group companies applicable tax band on their domestic tax rates.

9. Property, plant and equipment

GROUP 2015

Computer, office equipment

EDC terminals

Furniture, fitting & renovation

Motor vehicles

Total

'000

'000

'000

'000

'000

Cost

As at 1 January 2015

302

352

76

17

747

Exchange differences

(48)

(49)

(12)

(2)

(111)

Additions

7

-

17

-

24

Disposal

-

-

-

-

-

As at 31 December 2015

261

303

81

15

660

Accumulated depreciation

As at 1 January 2015

245

341

76

10

672

Exchange differences

(38)

(49)

(8)

(1)

(96)

Depreciation

37

1

8

3

49

Disposal

-

-

-

-

-

As at 31 December 2015

244

293

76

12

625

Net book value

17

10

5

3

35

A motor vehicle with the carrying amount of 3,000 (2014: 7,000) was acquired by hire purchase and is pledged as security for liabilities.

GROUP 2014

Computer, office equipment

EDC terminals

Furniture, fitting & renovation

Motor vehicles

Total

'000

'000

'000

'000

'000

Cost

As at 1 January 2014

434

440

93

33

1,000

Additions

12

1

-

-

13

Assets held for sale

(144)

(89)

(17)

(16)

(266)

As at 31 December 2014

302

352

76

17

747

Accumulated depreciation

As at 1 January 2014

320

404

91

22

837

Depreciation

49

4

4

4

61

Assets held for sale

(124)

(67)

(19)

(16)

(226)

As at 31 December 2014

245

341

76

10

672

Net book value

57

11

-

7

75

10. Intangible assets

2015

Intellectual Property

Goodwill

Trademark

System software

Contracted customers

Total

'000

'000

'000

'000

'000

Cost

As at 1 January 2015

4,138

2

433

213

4,786

Additions

38

38

As at 31 December 2015

4,138

2

471

213

4,824

Amortisation

As at 1 January 2015

2,800

2

266

213

3281

Amortisation

-

-

11

-

11

Provision for impairment

-

-

-

-

-

As at 31 December 2015

2,800

2

277

213

3,292

Net book value

As at 31 December 2015

1,338

-

194

-

1,532

2014

Intellectual Property

Goodwill

Trademark

System software

Contracted customers

Total

'000

'000

'000

'000

'000

Cost

As at 1 January 2014

4,138

2

348

213

4,701

Additions

-

-

85

-

85

As at 31 December 2014

4,138

2

433

213

4,786

Amortisation

As at 1 January 2014

1,100

2

246

213

1,561

Amortisation

-

-

20

-

20

Provision for impairment

1,700

-

-

-

1,700

As at 31 December 2014

2,800

2

266

213

3,281

Net book value

As at 31 December 2014

1,338

-

167

-

1,505

The amortisation recognised in respect of intellectual property has been included in the line item, administrative expenses in the consolidated statement of income.

Description of intangible assets

Goodwill arising on the acquisition of the subsidiaries represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiaries recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. The carrying value of goodwill is allocated to the respective segments as follows: -

2015

'000

2014

'000

Third party administrator

1,257

1,257

Software licensing

81

81

Total carrying value of goodwill

1,338

1,338

System software comprises Electronics Claims Clearance System and Loyalty Programme software. The system software is initially recognised based on the cost that would be incurred in re-creating the asset and subsequently amortised based on straight-line method over a period of three years. Contracted customers are the existing customers of the acquired subsidiaries. The contracted customers are initially recognised based on the estimated net present value of the service contracts entered into between the customers and subsidiaries acquired and is subsequently amortised based on straight-line method over a period of five years. The recoverable amount of cash generating unit is determined based on value in use calculation as set out below.

The goodwill and other intangible assets are reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. The 2015 review was undertaken in the first quarter of year 2016 and the impairment of goodwill amounting to nil (2014:1,700,000) is recognised in the income statement. The impairment provision was to reflect the loss control of the operating segment in China as well as the ongoing economic uncertainty impact on the group's operation.

Management have approved the forecast for 2016 and have prepared additional projections based on the 2015 numbers for the next five years. This was used as the basis for determining the recoverable amount of each CGU.

In conducting the review we used a market beta of 4 and a growth rate as below:

The growth rate ranges from 5% to 54% per year with an average of 34% with a peak in growth due to new prospect for technologies and solutions from overseas over the next 2-3 years. The discount rate applied had been set at 25%.

Management are satisfied that there are no reasonably possible changes in key assumptions, which would cause the recoverable amount of any of our GGUs to be below their carrying amount.

The key assumptions used in the forecast are as follows:

Assumption (%)

Growth Rate

5% - 50%

Discount Rate

25%

Sensitivity analysis

A sensitivity analysis has been carried out for each CGU. The results of the analysis can be summarised as follow:

If the estimated growth rate to forecast the revenue had been 10 percentage point lower than the basis assumption, total recoverable amount would be 20% lower.

If the estimated discount rate used for the Group's discount cash flow had been one percentage point higher than the starting assumption of 25%, total recoverable amount would be 2% lower.

These calculations are hypothetical and should not be viewed as an indication that these figures are any more or less likely to be changed. The sensitivity analysis should therefore be interpreted with caution.

11. Investments

Company

2015

'000

2014

'000

Cost

Balance as at 1 January

4,500

4,500

Additions

-

-

Balance as at 31 December

4,500

4,500

Impairment

Balance as at 1 January

3,000

1,450

Impairment loss recognised

-

1,550

Balance as at 31 December

3,000

3,000

Net book value as at 31 December

1,500

1,500

Details of the subsidiaries:

Name of subsidiaries

Country of incorporation

Principal activities

2015

% of ownership interest held

2014

% of ownership interest held

Direct

Indirect

Direct

Indirect

Medilink-Global (Asia) Pte Ltd

Singapore

Investment holding and provision of third party administrator services

100%

-

100%

-

Medilink (Beijing) TPA Services Co., Ltd

People Republic of China

Provision of third party administrator services

-

49%

-

100

MedilinkGlobal (Malaysia) Sdn Bhd

Malaysia

Provision of third party administrator services

-

100%

-

100

Datalink Technologies Sdn Bhd

Malaysia

Provision of project management, facilities management and provision of system integration services to the third party administration and insurance companies

-

100%

-

100

Medilink-Global TPA Pte Ltd

Singapore

Provision of third party administrator services

-

70%

-

70

Medilink-Global (HK) Ltd

Hong Kong

Dormant

-

100%

-

100

Trade investments

Name of Company

Country of incorporation

Principal activities

2015

% held

2014

% held

Medilink (Thailand) Co Ltd

Thailand

Provision of third party administrator services

19

19

The forecast assumptions and sensitivity analysis for the impairment review are included in Note 10.

12. Investment in associate

Investment

Loan to associates

Total

'000

'000

'000

Cost

Balance as at 1 January 2015

-

-

-

Reclassified long term receivables

-

322

322

Transfer from investment in subsidiaries

650

-

650

Balance as at 31 December 2015

650

322

972

Impairment

Balance as at 1 January 2015

-

-

-

Impairment loss recognized

-

(322)

(322)

Transfer from investment in subsidiaries

(650)

-

(650)

Balance as at 31 December

(650)

(322)

(972)

Net book value as at 31 December 2015

-

-

-

On 10 July 2015, Medilink (Beijing) TPA Services Co., Ltd became an indirect held associate undertakings (see Note 21).

13. Trade and other receivables

Group

2015

2014

'000

'000

Current assets

Trade and other receivables

1,157

1,388

Less: Provision of Impairment Loss

-

-

1,157

1,388

Company

2015

2014

'000

'000

Non-current asset

Other receivable

-

Amount owed by Group undertakings

2,237

2,487

Less: Provision against amounts owed by Group undertakings

(2,237)

(2,487)

-

-

As at 31 December 2015, trade and other receivables of 822,000 (2014: 904,000) were past due but not impaired. It is management's belief that these debts will be fully repaid by reference to no default experience to date. In determining the recoverability of trade and other receivables, the Group considers any change in the credit quality of the trade receivables from the date credit was initially granted up to the reporting date.

Gross

2015

'000

Impairment

2015

'000

Gross

2014

'000

Impairment

2014

'000

Current

335

-

484

-

31 - 60 days

121

127

61 - 90 days

50

-

13

-

More than 90 days

651

-

764

-

1,157

-

1,388

-

The carrying amounts of the Group's trade and other receivables are denominated in the following currencies:

2015

2014

'000

'000

Malaysia Ringgit

1,005

1,284

Singapore Dollar

141

94

Great Britain Pound Sterling

11

10

1,157

1,388

Financial asset

The Group's financial assets by each financial instrument category are as follows:-

2015

2014

'000

'000

Trade receivables

970

1,318

Amount due from related company

110

-

Other receivables

77

70

Cash and cash equivalents

573

254

Total

1,730

1,642

14. Cash and cash equivalents

Group

2015

2014

'000

'000

Cash and bank balance

573

254

573

254

Company

2015

2014

'000

'000

Cash and bank balance

4

1

4

1

15. Trade and other payables

Group

2015

2014

'000

'000

Trade payables

1,383

1,174

Other payables

628

913

Amount owed to a shareholder

561

501

Amount owed to directors

50

40

2,622

2,628

Company

2015

2014

'000

'000

Other payables

823

842

823

842

The carrying amount of trade and other payables approximates to their fair value.

It is the Group's policy to pay suppliers in accordance with the terms of business agreed with them. The number of days of trade purchases outstanding for the Group at the year end was 90 days (2014: 90 days).

The carrying amounts of the Group's trade and other payables are denominated in the following currencies:

2015

2014

'000

'000

Malaysia Ringgit

1,662

1,843

Singapore Dollar

154

106

Great Britain Pound Sterling

805

678

Hong Kong Dollar

1

1

2,622

2,628

Financial liabilities

Thegroup's financial liabilities by each financial instrument category are as follows:-

2015

2014

Amortised cost

'000

'000

Trade and other payables

2,011

2,087

Amount owed to director

50

40

Amount owed to a shareholder

561

501

Finance lease

3

3

Total

2,625

2,631

Gross maturity analysis of the financial liabilities is as follows:

2015

2014

Non derivatives

'000

'000

Within 1 year

2,475

2,090

Later than 1 year not later than 5 years

150

541

Greater than 5 years

-

-

Total

2,625

2,631

16. Deferred taxation

Movements in deferred tax liability for the Group during the year are as follows:

2015

2014

'000

'000

Balance as at 1 January

44

44

Movement in deferred tax

13

-

Balance as at 31 December

57

44

Deferred tax asset of 141,000 (2014: 138,000) arising from the unused tax losses has not been recognised and there is no expiry period for the said unrecognised deferred tax assets.

17. Advance from a director

Group

2015

2014

'000

'000

Advance from a director

118

118

118

118

Company

2015

2014

'000

'000

Advance from a director

118

118

118

118

The terms and conditions of the advance are as follows:-

i) It carries interest at 6% per annum;

18. Term loan

Group

2015

2014

'000

'000

Borrowing from financial institution

169

161

169

161

The terms and conditions of term loans are as below:-

(i) It carries interest at 13% per annum;

(ii) The maturity of principal on 15 October 2016. The term loan shall auto renew for another one (1) year, on similar terms and conditions as stated herein or shall be mutually agreed in writing between both parties

19. Share capital

The Company has one class of ordinary share capital which carries no rights to fixed income, any preferences or restrictions.

2015

2014

'000

'000

Ordinary shares issued and fully paid

At 1 January

6,074

6,045

Additions

-

29

At 31 December

6,074

6,074

As at 31 December 2015, the total issued share capital were 121,492,003 ordinary shares.

20. Earnings per share

Basic earnings per share is calculated by dividing the earning attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period. The diluted earning per share was not applicable as there were no dilutive potential ordinary shares outstanding at the end of reporting period.

2015

2014

Profit/(loss) after taxation attributable to owners of the company ('000)

- Continued operation

322

(1,931)

- Discontinued operation

(57)

(61)

265

(1,992)

Basic weighted average shares in issue

121,492,003

121,091,163

Basic earning/(loss) per share based on issued share capital as at 31 December (pence)

0.21

(1.64)

21. Medilink (Beijing) TPA Services Co Limited ("Medilink China")

On 1 August 2014, the Group publicly announced the divestment of 51% interest in Medilink (Beijing) TPA Services Co Limited ("Medilink China"), a wholly owned subsidiary, to Selfdoctor (Beijing) Technology Co Limited ("Selfdoctor") for a nominal consideration of RMB 10.00 (approximately 1.00) (the "Divestment"). The Group retains a 49% interest in Medilink China.

On 10 July 2015, the divestment completed when the transfer of ownership actually took place. At 31 December 2014, Medilink China was classified as a disposal group held for sale and as discontinued operations.

Details of the carrying value of identifiable assets and liabilities disposed of and sales consideration is, as follow:

2015

'000

Consideration

-

Investment retained in Medilink China at fair value

-

Net liabilities disposed of (see below)

783

Gain on disposal

783

The business of Medilink China represents the entirety of the Group's operating segment in China. With Medilink China being classified as discontinued operations, the China operating segment is no longer presented as an operating segment. The results of Medilink China for the year are presented below:

2015

2014

'000

'000

Revenue

407

886

Expenses

(462)

(944)

Operating income

-

1

Finance costs

(2)

(4)

Loss before tax from discontinued operations

(57)

(61)

Taxation

-

-

Loss for the year from discontinued operations

(57)

(61)

The major classes of assets and liabilities of Medilink China classified as assets held for sale as at 10 July 2015 and 31 December 2014 are, as follow:

2015

2014

'000

'000

Property, plant and equipment

35

46

Trade and other receivables

800

787

Cash and cash equivalents

180

43

Assets held for sale

1,015

876

Trade and other payables

1,588

889

HP creditors

-

1

Loan from a director

210

200

Liabilities directly associated with assets held for sale

1,798

1,090

Net liabilities directly associated with disposal group

214

Net liabilities disposed of

783

The net cash flows incurred by Medilink China are, as follow:

2015

2014

'000

'000

Operating

323

329

Investing

(34)

(34)

Financing

(246)

(256)

Net cash inflow/(outflow)

43

(39)

2015

2014

Loss per share from discontinued operations

Basic loss per shares (pence)

0.05

0.05

22. Financial instruments

Capital management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain optimal capital structure to reduce the cost of capital. Management considers, as part of its capital, the financial sources of funding from shareholders and third parties. Our key process for managing capital is regular Board reviews of our capital structure and needs.

The Group's financial instruments, which are recognised in the statement of financial position, comprise cash and cash equivalents, receivables and payables and ordinary shares. The accounting policies and methods adopted, including the basis of measurement applied are disclosed above, where relevant. The information about the extent and nature of these recognised financial instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows are disclosed in the respective notes above, where applicable.

The Group does not generally enter into derivative transactions (such as interest rate swaps and forward foreign currency contracts) and it is, and has been throughout the year, the Group's policy that no trading in financial instruments shall be undertaken.

There were no financial instruments not recognised in the statement of financial position.

Fair values

Management assessed that the fair values of cash and short-term deposits, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments which are measured at fair value by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly;

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

Set out below is a comparison by class of the carrying amounts and fair value of the Group's financial

instruments, other than those whose carrying amounts are a reasonable approximation of fair value:

2015

2014

Type

'000

Type

'000

Carrying value

Financial assets

Intangible assets

Level 3

1,338

Level 3

1,338

Fair value

Financial assets

Intangible assets

Level 3

1,338

Level 3

1,338

The Group's activities expose it to a variety of financial risks: currency risk, credit risk, liquidity risk and cash flow interest-rate risk. These risks are limited by the Group's financial management policies and practices as described below:

(a) Credit risks

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group's receivables from customers and investment securities.

The Group has credit risk management policies in place and exposure to credit risk is monitored on an ongoing basis. Management generally adopts conservative strategies and tight control on credit policy. The Group has limited the amount of credit exposure to customers.

The average credit period on sales of services is 120 days. No interest is charged on the trade receivables.

(a) Credit risks (continued)

Before accepting any new customer, the Group will check the credit worthiness of any new customers.

The credit risk on cash and cash equivalent is limited because the counterparties are banks with high credit ratings recognised by international credit rating agencies.

The maximum exposure to credit risk at the reporting date is the fair value of trade receivables of 970,000 (2014: 1,318,000) and other receivables of 187,000 (2014: 70,000). The Group does not hold any collateral as security.

(b) Liquidity risks

The principal risk to the Group is liquidity, which arises from the Group's management of working capital. It is a risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. This aspect is kept under review by the directors and in this respect management carries out rolling 12 month cash flow projections on a monthly basis as well as information regarding cash balances. It is the Group's policy as regards liquidity to ensure sufficient cash resources are maintained to meet short-term liabilities. All long term financial liabilities at the year-end are due in year 2017.

(c) Foreign currency exchange risks

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of the changes in foreign exchange rates. The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities (when revenue or expense is denominated in a foreign currency) and the Group's net investments in foreign subsidiaries.

The Group does not hedge its foreign currencies. Transactions with customers and vendors are mainly denominated in Malaysia Ringgit, Singapore Dollars, US Dollars and Chinese Yuan Renminbi. The Group has bank accounts in Malaysia Ringgit, Singapore Dollar, US Dollars and Chinese Yuan Renminbi to mitigate against the exchange risks.

The sensitivity analyses in the table below details the impact of changes in foreign exchange rates on the group's post-tax profit for the year ended 31 December 2015 and 31 December 2014.

(c) Foreign currency exchange risks (continued)

In each case, it is assumed that the named currency is strengthening or weakening against all other currencies, while all the other currencies remain constant. Results are shown for all currencies where the impact on group post tax profit. If the GBP weakened or strengthen by 10% against Malaysia Ringgit, with all other variables in each case remaining constant, then:

Impact on group post-tax profit - gain/(losses)

Strengthening

Weakening

'000

'000

2015

Singapore Dollars

201

(246)

Malaysia Ringgit

15

(18)

2014

Singapore Dollars

164

(200)

Malaysia Ringgit

25

(31)

(d) Cash flow and fair value interest rate risks

The Group's primary interest rate risk relates to interest bearing debts. Investments in financial assets are mainly short term in nature and are not held for speculative purposes but are placed in fixed deposits.

The Group manages its interest rate exposure by maintaining a fixed rate borrowing to mitigate the risk associated to interest rate fluctuation.

At the reporting date the interest rate profile of the Group's interest-bearing financial instruments were as follows:

2015

2014

Fixed rate instruments - financial liabilities

'000

'000

- Hire purchase creditors

3

4

- Term loan

169

161

- Advance from director

100

300

Carrying value

272

465

23. Related party transactions

Related party transactions during the year were as follow:

2015

2014

'000

'000

Amount due from:

Adviser fee payable to shareholders

50

40

Loan from a shareholder

561

501

Advance from a director

100

300

Transaction with director

Interest on advance from a director (note 17)

18

18

The term of the loan from a shareholder is interest free and with no fixed term of repayment. The loan is secured against the corporate guarantee issued by the Company.

As at balance sheet, the amount due to the director, excluding the term loan, was approximately 50,000 (2014: 40,000) relating to expenses paid on behalf by the directors. The advance from a director, originally provided to the Company in March 2012, amounts to 300,000 of which 200,000 is owed by Medilink China, the associate undertaking of the Group.

As at 31 December 2015, the amount due from Medilink China was approximately 110,000.

Details of the remunerations of the directors (who are considered to be the key management of the Group) are as follows:

2015

Short term employment benefits

Share-based payment

Total

'000

'000

'000

Executive directors

44

-

44

Non-executive directors

12

-

12

Senior management staff

31

-

31

2014

Short term employment benefits

Share-based payment

Total

'000

'000

'000

Executive directors

46

-

46

Non-executive directors

12

-

12

Senior management staff

31

-

31

24. Control

The controlling parties of the Group as at 31 December 2015 were Mr. Shia Kok Fat and Heah Zhong Tak. Mr. Shia Kok Fat is a Malaysian and a significant shareholder and director of the Company. Mr Heah Zhong Tak is a Malaysian and a significant shareholder.

25. Commitments

There are no other significant capital commitments contracted for but not provided.

26. Operating leases

The Group's future minimum lease payments under non-cancellable operating leases are as follows:

Land and buildings

2015

2014

'000

'000

Leases which expire:

Not later than one year

20

137

Later than one year and not later than five years

17

43


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