REG - Myanmar Investments - Audited results to 30 September 2021
30/11/2021 07:00
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RNS Number : 9525T Myanmar Investments Intl Ltd 30 November 2021
This announcement contains inside
information
30 November 2021
Myanmar Investments International Limited
Audited financial results for the year to 30 September 2021
Myanmar Investments International Limited [AIM: MIL] ("MIL" or the "Company"),
the Myanmar focused investment company, today announces its audited financial
results for the year to 30 September 2021.
Copies of the Company's annual report and accounts will be sent to
shareholders and warrant holders shortly and will also be available to
download from the Company's website on
www.myanmarinvestments.com/financial-reports.
Highlight
During the financial year our net asset value ("NAV") has decreased by 27.5
per cent and was US$25.6 million as at 30 September 2021, equivalent to US$
0.67 per share.
Myanmar: Covid-19 and Political Turmoil
Please find a detailed report about the situation in Myanmar in the
"Chairmen's Letter".
Future Strategy
In late 2018, the Directors felt that the investment environment in Myanmar is
unlikely to generate an appropriate risk adjusted return commensurate with an
investment in a frontier economy. Accordingly, the Directors thought that it
was appropriate to start planning for an orderly disposal of our three
investments with a view to ultimately winding up the Company.
At the Company's AGM, held in Yangon on 24 October 2019, the shareholders
approved a resolution to amend the Company's Investment Policy such that the
Board can:
· undertake an orderly disposal of its investments; and
· return surplus capital to shareholders.
Since then, the Directors have taken the following action to implement this
new strategy:
· We sold our investment in Medicare International Health & Beauty
("Medicare") for US$1 million to our main joint venture partner in November
2019. The transaction was completed in December 2019.
· We are in the process of selling our investment in Myanmar Finance
International Limited ("MFIL").
· We have continued to streamline our operations and as a result
reduced our overheads. As part of the cost reduction process, we closed our
office in Yangon and removed staff costs from the operation as of 31 March
2020.
Business review
The Company has invested in two businesses:
AP Towers Holdings Pte. Ltd ("AP Towers") / Apollo Towers
· The Company had invested US$21 million in Apollo Towers.
· The share exchange with AP Towers was completed in January 2020. Under
the share exchange, the Company swapped its indirect interest of 9.1 per cent
of Apollo Towers for an indirect interest of 4.1 per cent of AP Towers. The
share exchange effectively brought Apollo Towers and Pan Asia Towers, another
Myanmar independent tower company, under the common ownership of AP Towers.
· As at 30 September 2021, Apollo Towers and Pan Asia Towers together had
an aggregated portfolio of 3,254 towers, 6,669 tenants and a co-location ratio
("Lease-up-Rate" or "LUR") of 2.05x which is unchanged since 30 September
2020.
· Based on AP Towers actual results for the 6 months ended 30 September
2021, AP Towers annualised adjusted "run rate" revenue has decreased to
US$102.5 million. This represents a decline of 1.9 per cent over the same
period last year. The annualised adjusted "run rate" EBITDA has increased to
US$85.9 million. This represents an increase of 3.0 per cent over the same
period last year.
· Going forward, AP Towers will, when market conditions allow, be looking
to increase the number of tenancies either from new "Build to Suit" towers or
from adding co-locations to its existing towers.
· AP Towers' net debt was US$396.2 million as at the end of September
2021, a decrease of US$ 20.6 million since 31 March 2021 and a decrease of
US$33.1 million since 30 September 2020.
· Contrary to other industries, the telecoms sector has not suffered
greatly due to the outbreak of Covid-19.
Myanmar Finance International Limited ("MFIL")
· MIL has invested US$2.7 million for a 37.5 per cent shareholding.
· It is one of Myanmar's leading microfinance companies.
· Covid and the political turmoil has severely impacted the Myanmar
economy and has affected borrowers. The Portfolio at Risk over 30 days ("PAR
30+") has risen to 14.2 percent.
· MFIL has been restructuring its balance sheet with agreements reached
with all lenders to extend their loan maturities by 12 months and formal
documentation are currently being signed.
· MFIL has cash of MMK 8 billion and has reduced its loan book to MMK
16.5 billion
· MFIL focuses on urban and semi-rural lending in Yangon, Bago,
Ayeyarwady and Mon State.
· The Company is in the process of selling this investment. On 1 April
2020, the Company announced that it had accepted an offer to sell its
shareholding in MFIL and on 23 April 2020 the purchaser's AGM approved the
purchase subject to completion of certain conditions precedent including a
closing audit, lender's consents, and Myanmar regulatory approval. Subsequent
to that announcement, and because of logistical problems in completing the
conditions precedent, the purchaser's AGM on 26 April 2021 approved a one-year
extension of their agreement to purchase MFIL.
Financial review
During the past year our net asset value ("NAV") has decreased by 27.5 per
cent and was US$25.6 million as at 30 September 2021. This was driven mainly
by the decrease in the assessed value of our investments in AP Towers (down
US$6.1 million to US$22.3 million) and in MFIL (down US$2.9 million to US$1.5
million).
During the period we achieved our in 2020 projected operating "run-rate" costs
of US$0.7 million per annum.
Henrik Bodenstab, Chairman of MIL, "It has been a challenging year. Myanmar
was hit hard by Covid-19 and on top came the political crisis when the
military took over the government on 1 February 2021. We intend to complete
the sale of MFIL as soon as it is practical which will include finalising the
closing audit and obtaining regulatory approval. We have reduced our operating
costs significantly. In order to maximise the return of surplus capital to our
shareholders, we are considering the option of cancelling the admission to
trading of the ordinary shares of Myanmar Investments International Limited
from the AIM market of the London Stock Exchange which would save a
substantial amount of money."
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
For further information please contact:
Nick
Paris Michael
Rudolf
Managing Director CFO
Myanmar Investments International Limited +95 (0) 1 387 947 Myanmar Investments International Limited +95 (0) 1 387 947
nickparis@myanmarinvestments.com michaelrudolf@myanmarinvestments.com
Nominated Adviser Broker
Philip Secrett / George Grainger William Marle
Grant Thornton UK LLP finnCap Ltd
+44 (0) 20 7383 5100 +44 (0) 20 7220 0500
For more information about MIL, please visit www.myanmarinvestments.com
(http://www.myanmarinvestments.com)
CHAIRMEN'S LETTER
Dear fellow shareholder
MYANMAR: COVID-19 AND POLITICAL TURMOIL
Myanmar is a resource rich and strategically located country with substantial
economic potential but one that has consistently proven to be difficult to
invest in.
In 2020 Myanmar was affected by the global Covid-19 pandemic which, although
the number of cases were minimal, led to two lockdowns and border
restrictions. During this period there was also an election that returned Daw
Aung San Suu Kyi's party, the National League for Democracy ("NLD"), to power
with an increased majority. However, on 1 February 2021 before the new
government could be sworn in, the military took over and promised a new
election within 2 years. Since then, there has been continuous resistance
across the country. The new military installed government, the Special
Administrative Council ("SAC"), has not been recognized by most countries but
neither has the National Unity Government ("NUG") established by a group of
former members of parliament been accredited, although some countries such as
South Korea have allowed NUG to open an Information Office.
In the early days public dissatisfaction was shown through demonstrations
across the country. These were often met with force by the army, known as the
Tatmadaw. Large demonstrations morphed into a Civil Disobedience Movement
campaign ("CDM") that included strikes by bank staff, civil servants and
teachers that paralyzed the country. Eight months later flash mobs still take
place and, at different levels, CDM is still on-going.
The political conflict has also turned violent with frequent clashes between
the Tatmadaw, and many of the Ethnic Armed Organizations ("EAOs"). Numerous
locally formed People's Defence Forces ("PDF"), akin to militia groups, have
also sprung up to resist the SAC or to protect their community. In cities such
as Yangon or Mandalay PDFs tend to use assassinations and bombings. While in
the rural areas there has been an upsurge in armed conflicts with the EAOs
particularly in the northwest (Chin State, Sagaing and Magway regions) and
southeast (Kayah State).
To date neither ASEAN nor the international community have been able to broker
a resolution to this situation.
In June 2021, compounding the political crisis, there was a surge in Covid-19
cases which overwhelmed a fragile medical infrastructure that was understaffed
from CDM.
Inevitably, the ongoing political crisis and a third wave of Covid-19
materially impacted an economy that had already been weakened by the pandemic
in 2020. According to the World Bank Myanmar's economy is expected to have
contracted by around 18 per cent in fiscal year 2021 (Myanmar's fiscal year is
to 30 September). An 18 per cent contraction, coming on top of weak growth in
fiscal year 2020, would mean that the country's economy is around 30 per cent
smaller than it would have been in the absence of Covid-19 and the military
takeover of February 2021.
Despite interventions from the central bank, liquidity in the financial system
has dried up and commercial banks are restricting transfers and withdrawals.
By September 2021 the Myanmar Kyat had nearly halved against the US Dollar
although it has partially recovered in recent weeks. The weaker currency is
feeding through to higher import prices. In August 2021 the World Food
Programme reported a 68 per cent increase in the price of fuel, 40 per cent
for cooking oil and 16 per cent for rice.
United Nations Development Programme ("UNDP") has forecast that almost half of
the population, in the worst-case scenario, risks falling into poverty by 2022
doubling the pre Covid-19 level and reversing all economic gains made since
2005.
All sectors have been affected. Construction activities have slowed or
stopped, farm input costs have risen sharply while importers do not have
access to US dollars and are now unable to open letters of credit at foreign
banks. Foreign companies have either adopted a wait-and-see approach while
reducing expatriate staff or have announced that they are withdrawing. Notable
exits include Telenor, British American Tobacco, Amata and Adani Ports.
Economic contraction and a weaker Kyat are fuelling inflation, unemployment
and the poverty rate. Covid precaution has closed the borders with Thailand
and China. In the past there were as many as 4 million migrant Myanmar workers
in Thailand that would send money home but in 2020 an estimated 30 per cent
temporarily went home to avoid infection and are now unable to return to work.
It is unclear how the political situation will playout. The SAC appears to be
digging in for the long term and continues to prosecute senior NLD leaders and
protesters while ignoring ASEAN and international appeals. However, it does
not appear able to fully control the country and continues to suffer from
widespread attacks by EAOs and PDFs that are being formed across the country.
On the other hand, the opposition National Unity Government continues to
organize international opposition to the coup while trying to influence local
administration and soldiers to defect. However, it has a limited budget and
does not have a permanent infrastructure that can govern.
Therefore, neither side appears able to deliver a knockout blow and a
stalemate has developed.
The last twelve months have been difficult with violence, poverty level,
inflation and unemployment rising but, at least in the cities, there are
tentative signs that the economy is beginning to stabilize at a much lower
level of economic activity. Anecdotally traffic jams are back despite of
higher fuel prices and smart restaurants are busy again. Myanmar people are
resilient and resourceful having endured multiple periods of harsh military
rule over the last 50 years. Businesses are adapting and reverting to the old
cash economy ways of doing business. People still need to eat, to try to build
their business, to borrow and make phone calls. A "new normal" way of life is
settling in.
Against this background MIL will continue to actively manage its investments
while seeking an orderly exit from them as soon as the opportunity to do so
arises. In the meantime, the MIL Directors are considering a range of cost
cutting measures to conserve the Company's cash balances including the
possibility of cancelling the admission of trading of MIL's ordinary shares
from the AIM market of the London Stock Exchange. They intend to consult with
MIL Shareholders on these measures and on an appropriate method by which to
return surplus capital to Shareholders.
REPORTING PERIOD
The State Administration Council (SAC) announced in August 2021 that Myanmar's
fiscal year will be re-changed from 1 April to 31 March starting from the 2022
- 2023 financial year. Our investee companies (MFIL and AP Towers) have
decided to change their fiscal years accordingly and the Board has decided to
follow this decision. Therefore, we will issue interim accounts for the
periods from 1 October 2021 to 31 March 2022 and from 1 April 2022 to 30
September 2022 which will both be published within 3 months of the period end.
Our next full audited set of financial statements will therefore be on 31
March 2023 which will comprise the 18-month period from 1 October 2021 to
31 March 2023 which will be published within 3 months of the period end.
As a result of this change, we need to alter the Articles of Association of
the Company (the "Articles") to delete the maximum time period of 15 months
between AGMs. We do urge all Shareholders to approve this resolution which
will help us to produce the next financial statements without breaching the
terms of our Articles.
CHANGE IN STRATEGY AND POSSIBLE DELISTING FROM LONDON STOCK EXCHANGE ("LSE")
At the Annual General Meeting ("AGM") in 2019 shareholders approved a
resolution to amend the investment objective and policies of the Company as
follows:
"The Company will seek to realise the Company's investments in an orderly
manner, such realisations to be effected at such times, on such terms and in
such manner as the Directors (in their absolute discretion) may determine.
Following such realisations, the Company will make periodic returns of surplus
capital to Shareholders on such terms and in such manner as the Directors (in
their absolute discretion) may determine.
The Company shall not make any new investments in projects to which it is not
already committed. However, this will not preclude the Directors (in their
absolute discretion) from:
(a) authorising the expenditure of such capital as is necessary to: (i)
complete arrangements pertaining to the Company's existing investments; or
(ii) carry out any activities that the Directors (in their absolute
discretion) deem appropriate to ensure the sale ability of any existing
investment; or (b) entering into any contract or other arrangement with any
third party to realise all or any part of the Company's existing investments.
Following the disposal of all of the Company's existing investments, the
Directors intend to put a winding up proposal to the Shareholders."
Important steps have been made to implement this new strategy:
· We sold our investment in Medicare International Health & Beauty
("Medicare") for US$1 million to our main joint venture partner in November
2019. The transaction was completed in December 2019. This represented a loss
of US$1.1 million on the cost of the investment which largely reflected our
share of the operating losses from opening a chain of new stores in Myanmar.
· We are in the process of selling our investment in Myanmar Finance
International Limited ("MFIL"). On 1 April 2020 we announced that we have
accepted an offer to sell our shareholding in MFIL to a Thai based company
subject to the purchaser's AGM approving the purchase, lender's consent, and
Myanmar regulatory approval. The minimum consideration for this transaction
will be calculated based on a pre-agreed formula of 2 times the audited book
value of MFIL at closing once these conditions have been satisfied. Subsequent
to that announcement, the purchaser's AGM on 23 April 2020 approved the
transaction and the lenders to MFIL have given their consent. However, due to
the outbreak of COVID-19 and the change of government on 1 February 2021 the
transaction has not been closed yet. On 26 April 2021, the purchaser's
shareholders approved a one-year extension for closing the transaction.
· We have continued to streamline our operations and as a result
reduced our overheads. As part of the cost reduction process, we closed our
office in Yangon and removed staff costs from the operation as of 31 March
2020. The core cash-based overheads for the 12-month period from 1 October
2020 to 30 September 2021 are 38.7 per cent lower than for the 12-month period
from 1 October 2019 to 30 September 2020 (excluding one-off expenses for
closing the office in Yangon).
We are now holding around US$1.8 million of cash and when the sale of MFIL
completes we will seek to return surplus capital to our shareholders. We also
intend to streamline our operations further as by then we will only have one
investment left. Due to the political situation, it is unclear how fast our
investments can be monetized. Therefore, the Directors are considering the
option of cancelling the admission to trading of the ordinary shares of
Myanmar Investments International Limited from the AIM market of the London
Stock Exchange which would save a substantial amount of money. Any
cancellation would require shareholder consent of 75% of those voting at a
general meeting.
We will keep our shareholders informed about the outcome of the analysis.
CORPORATE GOVERNANCE
The Company seeks to uphold the fundamental principles of good corporate
governance and has adopted the Quoted Companies Alliance 2018 Corporate
Governance Code. The Chairman's Statement on Corporate Governance provides
greater detail on how the Board itself operates as well as the steps taken to
ensure that its staff adhere to principles such as compliance with the UK
anti-bribery legislation.
On behalf of the Board, we should like to take this opportunity to thank a
number of our key stakeholders: our remaining staff for their professionalism
and commitment; our business partners for all of their advice and
contributions; and our shareholders for their continued support.
HENRIK
BODENSTAB AUNG
HTUN
Chairman
Deputy Chairman
29 November
2021
29 November 2021
EXECUTIVE DIRECTOR'S REVIEW
Business Review
During the past 12 months our net asset value ("NAV") has decreased by 27.5
per cent and was US$25.6 million as at 30 September 2021. This change is
mainly attributable to the decrease in the assessed value of the Company's
investments in AP Towers (down US$ 6.1 million to US$22.3 million) and MFIL
(down US$2.9 million to US$1.5 million) and the operating expenses for the
reporting period (US$ 0.7 million).
During the past 12 months our operating expenses were significantly reduced to
US$0.7 million compared with US$1.1 million (excluding one off expenses for
the closing of the office in Yangon) for the same period in the previous year.
Overall, AP Towers performed well but MFIL was disrupted in Myanmar from the
impact of Covid-19 and the takeover of the military on 1 February 2021:
· AP Towers: the Company swapped its interest in Apollo Towers for an
interest in AP Towers in January 2020. The share exchange effectively brought
Apollo Towers and Pan Asia Towers, another ITC under the common ownership of
AP Towers which now manages one of the largest network of towers in Myanmar;
and
· MFIL: the company has actively been reducing its loan book and where
necessary helping clients to restructure their loans while increasing its
holding of safe and liquid assets. It has also agreed a one-year standstill
with all of its lenders. Documentation is now being signed.
· As at year end Portfolio at Risk over 30 days ("PAR 30+") was 14.2
percent.
· As soon as logistically practical further discussions with the
purchaser will be necessary to establish a timeline to closing the sale of
MFIL. It has been 20 months since the transaction was negotiated and much has
changed in the country. It may be necessary to amend the transaction terms.
In all cases, Myanmar Investments' team have worked closely with these
businesses to provide strategic advice as well as hands-on local knowledge.
Financial Review
NET ASSET VALUE
The Directors assess the Group's NAV attributable to the shareholders of the
Company as at 30 September 2021 to be US$25.6 million, a decrease of 27.5 per
cent compared with the Group's NAV as at 30 September 2020. This represents
US$0.67 per share, based on the number of shares in issue at the year-end.
This change principally reflects the net changes in the Directors' assessment
of the values of the Company's investments, described in more detail below,
less the Group's running costs for the year.
As at 30 September 2021 the Group's NAV consisted of:
· an investment in AP Towers, the telecommunication tower business, of
US$22.3 million, excluding the non-controlling interests, determined using a
comparable EBITDA multiple methodology;
· an investment in MFIL, the microfinance business, of US$1.5 million,
determined using a price to book value methodology; and
· cash and other net assets of US$1.8 million.
AP TOWERS
As at 30 September 2020 the Directors had assessed that the Company's
attributable shareholding in AP Towers, excluding the non-controlling
interests attributable to the minority shareholders of MIL 4, was worth
US$28.3 million as at that date, using a comparable EBITDA multiple
methodology.
Applying the same methodology that we used as at 30 September 2020 with
updated trading and comparable data, the value of this investment would be
US$29.7 million, an increase of US$1.4 million compared with the valuation as
at 30 September 2020.
This value of AP Towers represents an unrealised gain of US$8.9 million over
the cost of the investment and an IRR since the initial investment in July
2015 of 5.9 per cent.
MFIL
As at 30 September 2020 the Directors had assessed the value of the Group's
investment in MFIL to be US$4.4 million using the price to book value
methodology.
Applying the same methodology that we used as at 30 September 2020 the
Directors have assessed the value of this investment to be US$2.0 million
which is US$2.4 million lower compared with 30 September 2020.
This value of MFIL represents a loss of US$0.7 million over the cost of the
investment.
Valuation discount
The change of government has increased the uncertainties and risks of
investing in Myanmar which is compounded by the current paucity of
information. These risks could include, but are not limited to:
· reduced investor interest in a trade sale of assets or in an IPO;
· increased domestic regulatory uncertainties;
· a material and sustained decline in economic activity impacting
investment and consumer demand;
· severe reduction in liquidity in the financial system;
· a volatile foreign exchange rate;
· prolonged political crisis paralyzing the country's administrative
capacity;
· increases in the number of demonstrations, strikes and violence;
· enhanced COVID-19 risks;
· potential broader international sanctions.
Given the uncertainties and risks in Myanmar the Directors have decided to
apply a valuation discount of 25% on the company's entire portfolio as at 30
September 2021 which compares to the 30% discount that they applied as at 31
March 2021. This change reflects signs of stabilization in the country and its
economy and will be reviewed regularly.
The impact on MIL's carrying value of the investments after applying the
discount are:
AP Towers:
This discount reduces the value of this investment to US$22.3 million, which
is US$6.07 million lower than at September 2020.
This valuation of AP Towers represents a profit of US$1.5 million over the
cost of the investment and an IRR since the initial investment in July 2015 of
1.1%.
MFIL:
This discount reduces the value of this investment to US$1.5 million, which is
US$2.9 million lower than at September 2020.
This valuation of MFIL represents a loss of US$1.2 million over the cost of
the investment.
SUMMARY OF NAV
Contrary to the past, the NAV attributable to the shareholders of the Company
in the attached audited financial statements does not differ from the NAV
determined by the Directors as the investment in MFIL has been classified as a
"non-current asset classified as held for sale" which requires the valuation
of MFIL at "fair value" and not at "at equity". In accordance with the Group's
Valuation Policy the Directors' valuation for MFIL is determined by reference
to the International Private Equity and Venture Capital Guidelines.
FINANCIAL RESULTS
For the year to 30 September 2021 the Group's audited loss after tax
attributable to the shareholders of the Company was US$7.8 million. The
Group's audited profit after tax attributable to the shareholders of the
Company for the 18-month financial period to 30 September 2020 was
US$1.6 million.
This is a significant deterioration on the last period result. The loss per
share is US cents 20.49 compared with a profit per share of US cents 4.24 for
the 18-month period to 30 September 2020 and primarily relates to adjusting
the valuation of the investments down.
But we are on track with the reduction of our overheads. As part of the cost
reduction process, we had closed our office in Yangon and removed staff costs
from the operation as of 31 March 2020. The annualised core cash-based
overheads (including the costs of being a quoted company but excluding
discretionary compensation, share option expenses and transaction costs) for
the 6-month period from 1 April 2020 to 30 September 2020 were US$0.7 million
and this is what we have achieved during this year.
Outside of our overheads the most significant items were:
· Our share of the 'fair value loss on investment at fair value through
profit or loss' for the investment in AP Towers of US$6.07 million;
· 'Fair value loss on investment at fair value through profit or loss'
for the investment in MFIL of US$1.05 million.
DIVIDENDS
Based on the above the Directors do not recommend payment of a dividend at
this time.
WORKING CAPITAL
Based as of the date of this report the Group has adequate financial resources
to cover its working capital needs for the next 12 months.
NICK PARIS
Managing Director
29 November 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
Note Financial Financial
ended period from
30 September 1 April 2019
2021 to
30 September
2020
US$ US$
Revenue - -
Other item of income
Finance income 4 476 491
Gain on disposal of a joint venture 10 - 361,248
Fair value (loss)/gain on investment at fair value through profit or loss 11 (9,100,000) 6,500,000
Items of expense
Employee benefits expense 5 (198,500) (898,323)
Depreciation expense 12 - (20,719)
Other operating expenses (495,663) (1,325,262)
Finance costs 6 (6,827) (13,857)
Share of results of joint ventures, net of tax 10 - (926,004)
Write down to fair value less cost to sell on non-current asset held for sale 16 (1,052,467) -
(Loss)/profit before income tax 7 (10,852,981) 3,677,574
Income tax expense 8 (120) (1,306)
(Loss)/profit for the financial year/period (10,853,101) 3,676,268
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange gain arising on translation of foreign
operations 10 - 399,314
Other comprehensive income for the financial year/period, net of tax - 399,314
Total comprehensive (loss)/income for the financial year/period (10,853,101) 4,075,582
(Loss)/Profit attributable to:
Owners of the parent (7,806,703) 1,616,159
Non-controlling interests 13 (3,046,398) 2,060,109
(10,853,101) 3,676,268
Total comprehensive (loss)/income attributable to:
Owners of the parent (7,806,703) 2,015,473
Non-controlling interests 13 (3,046,398) 2,060,109
(10,853,101) 4,075,582
(Loss)/Earnings per share (cents)
- Basic and diluted 9 (20.49) 4.24
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2021
Note 30 September 30 September
2021 2020
US$ US$
ASSETS
Non-current assets
Investments in joint ventures 10 - -
Equity instrument at fair value through profit or loss 11 33,400,000 42,500,000
Plant and equipment 12 - -
Total non-current assets 33,400,000 42,500,000
Current assets
Other receivables 14 117,989 268,834
Cash and bank balances 15 1,807,634 2,364,166
1,925,623 2,633,000
Non-current asset classified as held for sale 16 1,500,000 2,552,467
Total current assets 3,425,623 5,185,467
Total assets 36,825,623 47,685,467
EQUITY AND LIABILITIES
Equity
Share capital 17 40,569,059 40,569,059
Share option reserve 18 1,358,913 1,358,913
Accumulated losses (16,230,184) (8,423,481)
Foreign exchange reserve (76,560) (76,560)
Equity attributable to owners of the parent 25,621,228 33,427,931
Non-controlling interests 13 10,889,169 13,935,567
Total equity 36,510,397 47,363,498
LIABILITIES
Current liabilities
Other payables 19 297,512 304,053
Income tax payable 17,714 17,916
Total current liabilities 315,226 321,969
Total equity and liabilities 36,825,623 47,685,467
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
Note Share Share Foreign Accumulated Equity Non- Total
capital
option exchange losses attributable controlling
reserve
reserve to owners of interests
the parent
US$ US$ US$ US$ US$ US$ US$
2021
At 1 October 2020 40,569,059 1,358,913 (76,560) (8,423,481) 33,427,931 13,935,567 47,363,498
Loss for the financial year, representing total comprehensive loss for the - - - (7,806,703) (7,806,703) (3,046,398) (10,853,101)
financial year
At 30 September 2021 40,569,059 1,358,913 (76,560) (16,230,184) 25,621,228 10,889,169 36,510,397
2020
At 1 April 2019 40,569,059 1,337,005 (475,874) (10,039,640) 31,390,550 11,875,458 43,266,008
Profit for the financial period - - - 1,616,159 1,616,159 2,060,109 3,676,268
Exchange gain arising on translation of foreign operations 10 - - 399,314 - 399,314 - 399,314
Total comprehensive income for the financial period - - 399,314 1,616,159 2,015,473 2,060,109 4,075,582
Share options expense 18 - 21,908 - - 21,908 - 21,908
Total transactions with owners in their capacity as owners - 21,908 - - 21,908 - 21,908
At 30 September 2020 40,569,059 1,358,913 (76,560) (8,423,481) 33,427,931 13,935,567 47,363,498
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
Note Financial Financial
ended period from
30 September 1 April 2019
2021 to
30 September
2020
US$ US$
Operating activities
(Loss)/profit before income tax (10,852,981) 3,677,574
Adjustments for:
Interest income 4 (476) (491)
Finance costs 6 6,827 13,857
Depreciation of plant and equipment 12 - 20,719
Gain on disposal of a joint venture 10 - (361,248)
Fixed assets written off 7 - 17,384
Fair value loss/(gain) on investment at fair value through 11 9,100,000 (6,500,000)
profit or loss
Write down to fair value less cost to sell on non-current 16 1,052,467 -
asset held for sale
Share options expense 18 - 21,908
Share of results of joint ventures, net of tax 10 - 926,004
Operating cash flows before working capital changes (694,163) (2,184,293)
Changes in working capital:
Other receivables 150,845 (90,059)
Other payables (6,541) (68,357)
Cash used in operations (549,859) (2,342,709)
Interest received 4 476 491
Finance costs paid 6 (6,827) (13,857)
Income tax paid (321) (280)
Net cash flows used in operating activities (556,531) (2,356,355)
Investing activities
Proceeds from disposal of investments 10 - 1,000,000
Net cash flows generated from investing activities - 1,000,000
Financing activities
Decrease/(increase) in short-term deposits pledged 35,943 (216)
Net cash flows generated from/(used in) financing activities 35,943 (216)
Net change in cash and cash equivalents (520,588) (1,356,571)
Cash and cash equivalents at beginning of the financial year/period 2,316,539 3,673,110
Cash and cash equivalents at the end of financial year/period 15 1,795,951 2,316,539
The accompanying notes form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
1. General corporate information
Myanmar Investments International Limited ("the Company") is a limited
liability company incorporated and domiciled in the British Virgin Islands
("BVI"). The Company's registered office is at Jayla Place, Wickhams Cay I,
Road Town, Tortola, British Virgin Islands.
The Company's ordinary shares and warrants are traded on the AIM market of the
London Stock Exchange under the ticker symbols MIL and MILW respectively.
The Company was established for the purpose of identifying and investing in,
and disposing of, businesses operating in or with business exposure to
Myanmar. The Company's focus was to target businesses operating in sectors
that the Directors believed had strong growth potential and thereby could be
expected to provide attractive yields, capital gains or both. At the Annual
General Meeting held on 24 October 2019, the Company's shareholders approved a
resolution to begin an orderly disposal of the Company's investments and in
due course look to return surplus capital to shareholders.
The principal activities of the subsidiaries are disclosed in Note 13 to the
financial statements.
In the previous financial year, the Group and the Company changed its
reporting period end from 31 March to 30 September such that the previous
reporting period covered a period of 18 months, and therefore the financial
statements are not comparable.
1.1 Going concern
The Group incurred loss after tax of US$10,853,101 during the current
financial year. The Directors have a reasonable expectation that the Group has
adequate financial resources to continue in operational existence for the
foreseeable future as the Group's current assets exceeded its current
liabilities by US$3,110,397. This expectation is based on a review of the
Group's existing financial resources, its present and expected future
commitments in terms of its overheads and running costs; and its commitments
to its existing investments. Accordingly, the Directors have adopted the going
concern basis in preparing the Group's financial statements.
2. Summary of significant accounting policies
The Company's significant accounting judgements and estimates used in the
preparation of these financial statements are available in the full audited
financial statements, a copy of which can be found on the Company's website at
www.myanmarinvestments.com.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
3. Significant accounting judgements and estimates
The preparation of the Group's financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities and the accompanying disclosures,
and the disclosure of contingent liabilities at the reporting date.
Uncertainty about these assumptions and estimates could result in outcomes
that could require a material adjustment to the carrying amount of the asset
or liability affected in the future periods.
3.1 Critical judgements made in applying the entity's accounting
policies
The following is the critical judgement that management has made in the
process of applying the Group's accounting policies and which have a
significant effect on the amounts recognised in the consolidated financial
statements:
(i) Extension of period required to complete a sale of the
non-current asset held for sale
As the result of the ongoing transaction to sell the Group's 37.5% equity
interest in Myanmar Finance International Ltd. ("MFIL") (Note 10), the entire
carrying amount of the Group's investment in MFIL has been reclassified as
non-current asset held for sale since the prior financial period. However, due
to certain events and circumstances beyond the Group's control in Myanmar as
disclosed in Note 23 to the financial statements, the sale could not be
completed within one year. The Group remains committed to its plan to sell its
investment in MFIL. As such, management is of the view that the continuous
classification of its investment in MFIL as non-current asset held for sale is
appropriate as at 30 September 2021.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its assumptions
and estimates on parameters available when the financial statements were
prepared. Existing circumstances and assumptions about future developments,
however, may change due to market changes or circumstances arising beyond the
control of the Group. Such changes are reflected in the assumptions when they
occur.
(i) Fair value of unquoted equity instrument at fair value through
profit or loss
The Group's equity instrument at fair value through profit or loss are
measured at fair value for financial reporting purposes. The Board of
Directors of the Company has set up an Investment Committee to determine the
appropriate valuation techniques and inputs for fair value measurements being
the EV/EBITDA multiple.
In estimating the fair value of an asset or a liability, the Group uses
market-observable data to the extent it is available. Where Level 1 inputs are
not available, the Group engages internal qualified valuers to perform the
valuation. The valuation of the unquoted investment is categorised into Level
3 (2020: Level 3) of the fair value hierarchy. The Investment Committee works
closely with the qualified internal valuers to establish the appropriate
valuation techniques and inputs to the model. The Investment Committee reports
its findings to the Board of Directors of the Company on a periodic basis to
explain the cause of fluctuations in the fair value of the assets and
liabilities.
Information about the valuation techniques and inputs used in determining the
fair value of the unquoted equity instrument at fair value through profit or
loss are disclosed in Note 11 to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
3. Significant accounting judgements and estimates (Continued)
3.2 Key sources of estimation uncertainty (Continued)
(ii) Measurement of non-current asset held for sale
The Group follows the accounting policies set out in Note 2.9 and measures the
non-current asset held for sale at lower of the carrying amount and fair value
less cost to sell. In determining the fair value less cost to sell, the
Company considers the terms and conditions of the Binding Offer as disclosed
in Note 10 to the financial statements. The details of non-current asset held
for sale are disclosed in Note 16 to the financial statements.
4. Finance income
Financial Financial
year ended period from
30 September 1 April 2019 to
2021 30 September
2020
US$ US$
Interest income 476 491
5. Employee benefits expense
Financial Financial
year ended period from
30 September 1 April 2019 to
2021 30 September
2020
US$ US$
Salaries, wages and other staff benefits 198,500 826,415
Bonuses - 50,000
Share options expense (Note 18) - 21,908
198,500 898,323
The employee benefits expense includes the remuneration of Directors as
disclosed in Note 20 to the financial statements.
6. Finance costs
Finance costs represent bank charges for the financial year/period.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
7. (Loss)/profit before income tax
In addition to the charges and credits disclosed elsewhere in the notes to the
financial statements, the above includes the following charges:
Financial Financial
year ended period from
30 September 1 April 2019 to
2021 30 September
2020
US$ US$
Auditor's remuneration 51,607 103,397
Consultants' fees 191,472 218,999
Fixed assets written off - 17,384
Short term leases 2,730 84,206
Professional fees 147,428 599,324
Travel and accommodation - 54,572
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
8. Income tax expense
Financial Financial
year ended period from
30 September 1 April 2019 to
2021 30 September
2020
US$ US$
Current income tax
- current financial year/period 120 3,703
- over-provision in prior financial year/period - (2,397)
120 1,306
A reconciliation of income tax applicable to (loss)/profit before income tax
at the statutory income tax rate of 25% (2020: 25%) in Myanmar is as follows:
Financial Financial
year ended period from
30 September 1 April 2019 to
2021 30 September
2020
US$ US$
(Loss)/profit before income tax (10,852,981) 3,677,574
Share of results of joint venture, net of tax (Note 10) - 926,004
(10,852,981) 4,603,578
Income tax at the applicable tax rates (2,713,245) 1,150,895
Effects of different income tax rates in other countries (95) (587)
Over-provision in prior financial year - (2,397)
Income not subject to tax - (1,545,082)
Expenses not deductible for tax 2,713,539 399,482
Income tax exemption (81) (1,005)
Income tax for the financial year/period 120 1,306
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
9. (Loss)/earnings per share
Basic (loss)/earnings per share is calculated by dividing the profit or loss
for the financial year/period attributable to owners of the parent by the
weighted average number of ordinary shares outstanding during the financial
year/period.
The following reflects the profit or loss and share data used in the basic and
diluted (loss)/earnings per share computation:
Financial Financial
year ended period from
30 September 1 April 2019 to
2021 30 September
2020
US$ US$
(Loss)/profit for the financial year/period
attributable to owners of the Company (US$) (7,806,703) 1,616,159
Weighted average number of ordinary shares during
the financial year/period applicable to basic profit
or loss per share 38,108,451 38,097,037
(Loss)/earnings per share
Basic and diluted (cents) (20.49) 4.24
Diluted (loss)/earnings per share is the same as the basic (loss)/earnings per
share for financial year ended 30 September 2021 and financial period ended 30
September 2020 because the potential ordinary shares to be converted arising
from share options and warrants are anti-dilutive.
10. Investments in joint ventures
30 September
2020
US$
Investments in joint ventures
Unquoted equity investments, at cost 4,815,000
Share of post-acquisition results of joint venture, net of tax (1,547,221)
Share of post-acquisition foreign currency translation reserve (76,560)
3,191,219
Disposal of joint venture during the financial period (638,752)
Reclassified to non-current asset held-for-sale (2,552,467)
-
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
10. Investments in joint ventures (Continued)
30 September
2020
US$
Movement during the period
Balance at beginning of financial period 3,717,909
Share of results of joint ventures, net of tax (926,004)
Share of foreign currency translation reserve 399,314
Disposal of joint venture during the financial period (638,752)
Reclassified to non-current asset held-for-sale (2,552,467)
Balance at end of financial period -
Myanmar Finance International Ltd.
The Group, through its wholly-owned subsidiary Myanmar Investment Limited
("MIL"), holds 37.5% equity interest in a joint venture Myanmar Finance
International Ltd ("MFIL"), a company incorporated in Myanmar, within
principal activity of provision of microfinance loans.
On 26 February 2020, MIL together with each of the other shareholders of MFIL,
received a Binding Offer ("BO") to sell the entire share capital of MFIL to
Thitikorn Plc ("TK") (the "Purchaser"), a consumer finance company
incorporated in Thailand and listed on the Stock Exchange of Thailand.
The original BO was executed on 17 March 2020 with the intention of agreeing
and executing the Sale and Purchase Agreement ("SPA") within a month. However,
due to the outbreak of Covid-19, the regulatory approval could not be obtained
in time. Therefore, the BO has been extended for several times and the latest
extension was signed on 22 November 2021 which extended the expiry of BO to 28
February 2022.
In accordance with the BO, the minimum consideration for this transaction will
be calculated based on a pre-agreed formula of 2 times the book value of MFIL
at closing once conditions above have been satisfied.
As the result of the ongoing transaction above, the entire carrying amount of
the Group's investment in MFIL has been reclassified as non-current asset held
for sale in prior year and continued being classified as non-current held for
sale in current year (Note 16).
Medicare International Health and Beauty Pte. Ltd. and its subsidiary ("MIHB
Group")
On 28 November 2019, the Group disposed its entire investment in MIHB Group
for US$1,000,000. For the period from 1 April 2019 to 28 November 2019 (date
of disposal), the Group recorded share of losses from its investment in MIHB
Group amounting to US$576,305. The carrying amount of the Group's investment
in MIHB Group as at the date of disposal was US$638,752. As a result, the
Group recognised a gain on disposal of US$361,248 during the previous
financial period.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
11. Equity instrument at fair value through profit or loss
30 September 30 September
2021 2020
US$ US$
Investment in unquoted equity instrument, at fair value 33,400,000 42,500,000
The Group, through its 66.67% subsidiary, MIL 4 Limited ("MIL 4") invested in
a 6.2% (2020:6.2%) equity interest in unquoted share capital of AP Towers
Holdings Pte. Ltd. ("AP Towers").
On 23 January 2020, MIL 4 exchanged its then existing investment in Apollo
Towers holdings Limited ("Apollo Tower") for shares in AP Towers which owns
Pan Asia Majestic Eagle Limited ("Pan Asia Towers"), another Myanmar
independent tower company. Under the share swap, MIL 4 has exchanged its
existing 13.7 per cent shareholding in Apollo Towers for a shareholding of 6.2
per cent in AP Towers. The share swap effectively brings Apollo Towers and Pan
Asia Towers under common ownership of AP Towers.
Movement in the investment in unquoted equity instrument is as follows:
30 September 30 September
2021 2020
US$ US$
Balance at beginning of financial year/period 42,500,000 36,000,000
Fair value (loss)/gain during the financial year/period (9,100,000) 6,500,000
Balance at end of financial year/period 33,400,000 42,500,000
The Group intends to hold these investments for long-term appreciation in
value as well as strategic investment purposes.
Management engaged their internal valuation specialists to perform a valuation
on the investment. The valuation of the unquoted investment is categorised
into Level 3 (2020: Level 3) of the fair value hierarchy. The information on
the significant unobservable inputs and the inter-relationship between key
unobservable inputs and fair value are as follows:
30 September 2021
Financial asset Valuation Significant Inter-relationship between key unobservable inputs
technique used unobservable inputs and fair value
Unquoted equity investment - AP Towers Comparable Company Analysis - Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") Increase EBITDA and EV/EBITDA multiple will increase the fair value of the
of US$85.9million financial asset.
- Enterprise Value ("EV") per EBITDA multiple of 12.7x Increase in valuation discount will decrease the fair value of the financial
asset
- Valuation discount of 25%*
* Due to uncertain political environment and ongoing COVID-19 pandemic in
Myanmar during current financial year, management is of the view that an
additional 25% discount should be applied to the Group's investments in
Myanmar.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
11. Equity instrument at fair value through profit or loss (Continued)
30 September 2020
Financial assets Valuation Significant Inter-relationship between key unobservable inputs
technique used unobservable inputs and fair value
Unquoted equity investments Comparable company analysis - Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") Increase EBITDA and EV/EBITDA multiple will increase the fair value of the
of US$83.4million financial asset.
- Enterprise Value ("EV") per EBITDA multiple of 13.1x
12. Plant and equipment
Computer equipment Office equipment Furniture Total
and fittings
US$ US$ US$ US$
2020
Cost
Balance at 1 April 2019 10,852 1,118 56,469 68,439
Written off (10,852) (1,118) (56,469) (68,439)
Balance at 30 September 2020 - - - -
Accumulated depreciation
Balance at 1 April 2019 6,865 1,118 22,353 30,336
Depreciation for the financial period 2,326 - 18,393 20,719
Written off (9,191) (1,118) (40,746) (51,055)
Balance at 30 September 2020 - - - -
Carrying amount
Balance at 30 September 2020 and 30 September 2021 - - - -
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
13. Investment in subsidiaries
Details of the subsidiaries are as follows:
Name of subsidiaries Country of incorporation/ Principal activities Proportion of Proportion of
ownership interest
ownership interest held by non-control interests
principal place of business
held by the Group
2021 2020 2021 2020
% % % %
Myanmar Investments Limited((1)) Singapore Investment holding company 100 100 - -
MIL Management Pte. Ltd.((1)) Singapore Provision of management services to the Group 100 100 - -
MIL 4 Limited((1)) British Investment holding company 66.67 66.67 33.33 33.33
Virgin
Islands
Held by MIL Management Pte. Ltd.
MIL Management Co., Ltd((2)) Myanmar Provision of management services to the Group 100 100 - -
((1) )Audited by BDO LLP, Singapore.
((2)) In the process of striking off.
Non-controlling interests
The summarised financial information before intra-group elimination of the
subsidiary that has material non-controlling interests as at the end of each
reporting period is as follows:
MIL 4 Limited
30 September 30 September
2021 2020
US$ US$
Assets and liabilities
Non-current assets 33,400,000 42,500,000
Current assets 923 71,067
Current liabilities (733,422) (764,373)
Net assets 32,667,501 41,806,694
Accumulated non-controlling interests 10,889,169 13,935,567
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
13. Investment in subsidiaries (Continued)
MIL 4 Limited
30 September 30 September
2021 2020
US$ US$
Revenue - -
Other (loss)/income (9,100,000) 6,500,000
Administrative expenses (39,193) (319,673)
(Loss)/profit and total comprehensive (loss)/income for the financial (9,139,193) 6,180,327
year/period
(Loss)/profit and total comprehensive (loss)/income allocated to (3,046,398) 2,060,109
non-controlling interests
Operating cash flows before working capital changes (39,193) (319,673)
Working capital changes 39,193 319,673
Net cash used in operating activities - -
Net change in cash and cash equivalents - -
14. Other receivables
30 September 30 September
2021 2020
US$ US$
Other receivables 60,103 211,962
Deposits - 9,061
Prepayments 57,887 47,811
117,990 268,834
15. Cash and bank balances
30 September 30 September
2021 2020
US$ US$
Cash and bank balances 1,795,951 2,316,539
Short-term deposit 11,683 47,627
1,807,634 2,364,166
The short-term deposit bears interest rate of ranging from 0% to 1.4% (2020:
0.95% to 1.40%) per annum, has a tenure of approximately 12 months (2020: 12
months) and is pledged to bank to secure credit facilities.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
15. Cash and bank balances (Continued)
Cash and bank balances and short-term deposits are denominated in the
following currencies:
30 September 30 September
2021 2020
US$ US$
United States dollar 1,676,445 2,232,114
Singapore dollar 128,168 129,031
Myanmar kyat 3,021 3,021
1,807,634 2,364,166
For the purpose of the statement of cash flows, cash and cash equivalents
comprise the following at the end of the financial year/period:
30 September 30 September
2021 2020
US$ US$
Cash and bank balances 1,807,634 2,364,166
Less: short-term deposits pledged (11,683) (47,627)
1,795,951 2,316,539
16. Non-current asset classified as held for sale
As the result of the ongoing transaction to sell the Group's 37.5%
(2020:37.5%) equity interest in MFIL (Note 10), the entire carrying amount of
the Group's investment in MFIL has been reclassified as non-current asset held
for sale as at 30 September 2020. However, due to certain events and
circumstances beyond the Group's control in Myanmar, the sale could not be
completed within one year. The Group remains committed to its plan to sell its
investment in MFIL. As such, the Group continued classifying its investment in
MFIL as non-current asset held for sale is appropriate as at 30 September
2021.
Details of assets in non-current asset classified as held-for-sale were as
follows:
30 September 30 September
2021 2020
US$ US$
Investment in joint venture - 37.5% equity interest in Myanmar Finance 2,552,467 2,552,467
International Limited
Less: Write down to fair value less cost to sell (1,052,467) -
1,500,000 2,552,467
Non-current assets classified as held for sale are measured at the lower of
the asset's previous carrying amount and fair value less costs to sell.
Management estimates the fair value less cost to sell at US$1,500,000 based on
2 times the audited book value of MFIL at 30 September 2021, adjusted for a
valuation discount of 25% due to uncertain political environment and ongoing
COVID-19 pandemic in Myanmar during current financial year. The valuation of
the non-current asset held for sale is categorised into Level 3 of the fair
value hierarchy. Therefore, the carrying amount of the non-current asset held
for sale was written down to its fair value less cost to sell. Accordingly,
write down of US$1,052,467 was recognised in profit or loss for the current
financial year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
17. Share capital
30 September 30 September
2021 2020
US$ US$
Issued and fully-paid share capital:
Ordinary shares at the beginning of the financial year/period 40,569,059 40,569,059
2021 2020
Equity Instruments in issue Ordinary Warrants Ordinary Warrants
shares shares
At the beginning of the financial year/period 38,097,037 14,128,387 38,097,037 14,128,387
Exercise during the year - (554,486) - -
Issuance during the financial year 11,414 - - -
At the end of the financial year/period 38,108,451 13,573,901 38,097,037 14,128,387
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share without restriction
at meetings of the Company.
During the financial year, 554,486 warrants were exercise via a cashless
conversion and resulting in issuance of 11,414 new ordinary shares. The new
ordinary shares ranked pari passu in all respects with the existing ordinary
shares of the Company and listed in the London Stock Exchange.
All the shares have been admitted to trading on AIM under the ticker MIL.
Warrants
No new warrants were issued during the period.
On 16 September 2016, the Company allotted 811,368 warrants pursuant to the
Fourth Subscription. The Company had agreed that for every four Ordinary
Shares subscribed for by a subscriber they would receive one warrant at nil
cost.
The warrants entitle the holder to subscribe for an Ordinary share at an
exercise price of US$0.75. The warrants may be exercised during each 15
Business Day period commencing on the first day of each Quarter during the
Subscription Period (from 21 June 2015 to 21 June 2018).
On 22 May 2018, the Company amended the existing warrants to extend the
exercise period for warrants that remained outstanding at 21 June 2018:
a) the exercise period for the warrants was extended such that the
warrants can be exercised until 31 December 2021, but at a higher exercise
price of US$0.90; and
b) in the extended period, warrant holders will have the option to
exercise their warrants on a cashless basis in certain circumstances.
All warrants have been admitted to trading on AIM under the ticker MILW.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
18. Share option reserve
Details of the Share Option Plan (the "Plan")
The Plan allows for the total number of shares issuable under share options to
constitute a maximum of one tenth of the number of the total number of
ordinary shares in issue (excluding shares held by the Company as treasury
shares and shares issued to the Founders prior to Admission).
Any future issuance of shares will give rise to the ability of the
Remuneration Committee to award additional share options. Such share options
will be granted with an exercise price set at a 10 percent premium to the
subscription price paid by shareholders on the relevant issue of shares that
gave rise to the availability of each tranche of share options.
Share options can be exercised any time after the first anniversary and before
the tenth anniversary of the grant (as may be determined by the Remuneration
Committee in its absolute discretion) of the respective share options.
Share options are not admitted to trading on AIM but application will be made
for shares that are issued upon the exercise of the share options to be
admitted to trading on AIM.
As at 30 September 2021, there were 3,622,740 (2020: 3,622,740) share options
available for issue under the Plan of which 2,590,527 (2020: 2,590,527) had
been granted. These granted share options have a weighted average exercise
price of US$1.214 (2020: US$1.214) per share and a weighted average
contractual life of 5 years (2020: 5 years).
The 3,622,740 share options available were created under the following series:
Series/Date Occasion Number Exercise
price
(USD)
Series 1/June 2013 Admission Placing and Subscription 584,261 1.100
Series 2/ December 2014 Second Subscription 361,700 1.155
Series 3/ July 2015 Third Subscription 1,734,121 1.265
Series 4/ September 2016 Fourth Subscription 324,546 1.430
Series 5/ June 2017 Fifth Subscription 618,112 1.298
3,622,740
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
18. Share option reserve (Continued)
The following share-based payment arrangements were in existence during the
current financial year/period:
Option series Number of share options Grant date Expiry date Exercise Fair value
price at grant
(USD) date
Series 1 410,000 27 June 2013 26 June 2023 1.100 153,487
Series 1 25,000 9 December 2013 8 December 2023 1.100 19,015
Series 1 132,261 25 September 2014 24 September 2024 1.100 62,937
Series 2 23,500 2 June 2015 1 June 2025 1.155 14,365
Series 1 10,200 15 January 2016 14 January 2026 1.100 6,235
Series 2 331,700 15 January 2016 14 January 2026 1.155 193,562
Series 3 921,600 15 January 2016 14 January 2026 1.265 490,120
Series 3 180,000 28 June 2016 27 June 2026 1.265 125,863
Series 1 2,267 19 October 2016 18 October 2026 1.100 1,363
Series 2 2,000 19 October 2016 18 October 2026 1.155 1,149
Series 3 551,999 19 October 2016 18 October 2026 1.265 289,752
2,590,527 1,357,848
Share options that are allocated to a Participant are subject to a three-year
vesting period during which the rights to the share options will be
transferred to the Participant in three equal annual instalments provided,
save in certain circumstances, that they are still in employment with or
engaged by the Company.
Fair value of share options granted in the financial year
No share options were granted during the financial year.
Share options were priced using Black-Scholes option pricing model. Where
relevant, the expected life used in the model was adjusted based on
management's best estimate for the effects of non-transferability, exercise
restrictions (including the probability of meeting market conditions attached
to the option), and behavioural considerations. Expected volatility was based
on historical share price volatility from the date of grant of the share
options.
The Black-Scholes option pricing model uses the following assumptions:
Grant date
28 June 19 October 19 October 19 October
2016 2016 2016 2016
Grant date share price (US$) 1.628 1.388 1.388 1.388
Exercise price (US$) 1.265 1.100 1.155 1.265
Expected volatility 22.47% 22.25% 22.25% 22.25%
Option life 10 years 10 years 10 years 10 years
Risk-free annual interest rates 1.46% 1.76% 1.76% 1.76%
The Group recognised a net expense of Nil (2020: US$21,908) related to
equity-settled share-based payment transactions during the financial
year/period.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
18. Share option reserve (Continued)
Movement in share option during the financial year/period
The following reconciles the share options outstanding at the start of the
year/period and at the end of the year/period.
2021 2020
Number Weighted average exercise Number Weighted average exercise
price price
US$ US$
Balance at beginning and end of financial year/period 2,590,527 1.213 2,590,527 1.213
No share options were exercised during the financial year/period.
Movement in share option reserve during the financial year/period
30 September 30 September
2021 2020
US$ US$
Balance at start of the financial year/period 1,358,913 1,337,005
Share options expense - 21,908
Balance at end of financial year/period 1,358,913 1,358,913
19. Other payables
30 September 30 September
2021 2020
US$ US$
Accruals 106,961 113,294
Other payables 190,551 190,759
297,512 304,053
Other payables are denominated in the following currencies:
30 September 30 September
2021 2020
US$ US$
Singapore dollar 52,018 58,793
United States dollar 243,524 224,553
British pound 1,970 3,119
Euro - 11,199
Myanmar Kyat - 6,389
297,512 304,05
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
20. Significant related party disclosures
For the purposes of these financial statements, parties are considered to be
related to the Group and the Company if the Group and the Company have the
ability, directly or indirectly, to control the party or exercise significant
influence over the party in making financial and operating decisions, or vice
versa, or where the Group and the Company and the party are subject to common
control or common significant influence. Related parties may be individuals or
other entities. During the current financial period, in addition to the
information disclosed elsewhere in these financial statements, there was no
other significant transactions with related parties.
Compensation of key management personnel
During the current financial year, no emoluments were paid by the Group to the
Directors as an inducement to join or upon joining the Group or as
compensation for loss of office.
The remuneration of Directors for the financial year/period were as follows:
Directors' Short term Share Total
fee employee option
benefits plan
US$ US$ US$ US$
Financial year ended 30 September 2021
Executive directors
Maung Aung Htun - 86,000 - 86,000
Nicholas John Paris - 80,000 - 80,000
Non-executive directors
Henrik Onne Bodenstab 17,500 - - 17,500
Rudolf Gildemeister 15,000 - - 15,000
32,500 166,000 - 198,500
Financial period from 1 April 2019 to 30 September 2020
Executive directors
Maung Aung Htun - 192,823 5,115 197,938
Anthony Michael Dean - 267,209 5,115 272,324
Craig Robert Martin - 26,333 1,201 27,534
Nicholas John Paris 10,000 73,333 - 83,333
Non-executive directors
Christopher William Knight 24,789 - 1,201 25,990
Henrik Onne Bodenstab 22,793 - 1,136 23,929
Rudolf Gildemeister 13,167 - - 13,167
70,749 559,698 13,768 644,215
21. Dividends
The Directors of the Company do not recommend any dividend in respect of the
financial year ended 30 September 2021 (2020: Nil).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2021
22. Financial risk management objectives and policies
The Group's Financial risk management objectives and policies have not changed
in the past year and can be found on the website at
www.myanmarinvestments.com.
23. Impact of COVID-19 and political crisis in Myanmar
The Coronavirus (COVID-19) outbreak and the political crisis after the change
of government on 1 February 2021 have created a high level of uncertainty to
economic prospects.
The situation continues to evolve with significant level of uncertainty and
the Group has seen an impact on its own operation.
Regarding its investees it can be said that the last 9 months have been
difficult for the microfinance industry. A surge in COVID cases in June 2021
led to shortages of medical supplies and the country going into a hard
lockdown. The "stay at home" directive severely reduced economic activity and
mobility. The political crisis since 1 February 2021 has further impacted
business sentiment and activity. Bank transfers and withdrawals have been
restricted and USD has been hard to source. The impact of the lockdown and
civil disobedience movement has made it complicated to complete the formality
of the sale of Myanmar Finance International Ltd ("MFIL"). The purchaser has
therefore agreed to extend the offer to early 2022 (Note 10). The Group
intends to complete the sale as soon as it is practical.
Regarding the Group's other investment in AP Towers Holdings Pte. Ltd. ("AP
Towers"), it is to be noted that contrary to other industries, the
telecommunication sector has not suffered greatly due to the outbreak of
COVID-19. But the Myanmar telecommunication tower sector, following a period
of rapid growth, has continued to slow in the last 18 months in terms of both
new towers and new co-locations. Mobile network services in Myanmar have been
significantly disrupted since February 2021, primarily as a result of the
suspension and restriction of data services imposed by the regulator. Whilst
the operating environment has been very challenging, AP Towers has been able
to continue to provide a reliable service with high up times, thereby
contributing the continued availability of mobile phone services to the
population of Myanmar.
24. Authorisation of financial statements
The financial statements of the Group for the financial year ended 30
September 2021 were approved by the Board of Directors on
Notes to Editors
Myanmar Investments International Limited (AIM: MIL) was the first
Myanmar-focused investment company to be admitted to trading on the AIM market
of the London Stock Exchange. MIL was established in 2013 with the intention
of building long-term shareholder value by proactively investing in a
diversified portfolio of Myanmar businesses that will benefit from the
country's re-emergence and ongoing economic development. The Company is led by
an experienced and entrepreneurial team who between them have considerable
industrial, corporate and financial management experience. At the Annual
General Meeting on 24 October 2019, the Company's shareholders approved a
change in the investment policy of the Company to now seek to harvest the
Company's investments over time.
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