REG - Myanmar Investments - Financial Report for the period to 31 March 2023
12/06/2023 07:00
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RNS Number : 3209C Myanmar Investments Intl Ltd 12 June 2023
This announcement contains inside
information
12 June 2023
Myanmar Investments International Limited
Audited financial results for the financial period from 1 October 2021 to 31
March 2023
Myanmar Investments International Limited [AIM: MIL] ("MIL" or the "Company"),
the Myanmar focused investment company, today announces its audited financial
results for the financial period from 1 October 2021 to 31 March 2023.
Copies of the Company's annual report and accounts will be sent to
shareholders shortly and will also be available to download from the Company's
website on www.myanmarinvestments.com/financial-reports.
Highlight
During the financial period our net asset value ("NAV") has decreased by 66.0
per cent and was US$8.7 million as at 31 March 2023, equivalent to US$ 0.23
per share.
Myanmar
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
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 have prepared
a proposal to de-list the Company and this will be despatched to Shareholders
in due course for their consideration. If Shareholders approve it the annual
cost savings will be considerable and will help to reduce the Company's cash
burn rate.
Business review
The Company has invested in two businesses:
AP Towers Holdings Pte. Ltd ("AP Towers") / Apollo Towers
· The Company has invested US$21 million in Apollo Towers.
· The share exchange with AP Towers was completed in January 2020. Under
the share exchange, the Company transferred 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 31 March 2023, Apollo Towers and Pan Asia Towers together had an
aggregated portfolio of 3,234 towers, 6,706 tenants and a co-location ratio
(also known as "Lease-up-Rate" or "LUR") of 2.07x which is stable relative to
30 September 2021.
· Based on AP Towers actual results for the 6 months ended 31 March 2023,
AP Towers annualised adjusted "run rate" revenue has decreased to US$91.4
million. This represents a decline of 10.8 per cent compared with the
numbers as of 30 September 2021. The annualised adjusted "run rate" EBITDA
has decreased to US$76.2 million. This represents a decline of 11.3 per cent
compared with the numbers as of 30 September 2021.
· 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$379.8 million as at the end of March 2023, a
decrease of US$ 16.4 million since 30 September 2021.
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.
· The impact from both the Covid-19 pandemic and the political crisis in
Myanmar has severely affected all microfinance companies. Not only has the
level of non-performing loans in the sector risen sharply but more critically
the source of funds from foreign development finance institutions has all but
dried up.
· Against this deteriorating background, over the last two years MFIL has
pro-actively reduced its loan book, negotiated to repay all its foreign and
local debts and materially reduced its operating expenses.
· As at 31 March 2023, MFIL's gross loan book was MMK11.05 billion, a
reduction from MMK16.5 billion at the beginning of this financial period
(MMK14.0 billion at 31 March 2022 and MMK12.85 billion at 30 September 2022)
with its Portfolio at Risk over 30 days ratio ("PAR 30+") at 38.4 per cent.
· MFIL has agreed a debt repayment plan with all its lenders. For foreign
lenders, this will lead to a significant haircut in liabilities that will
crystalize as soon as all foreign lenders receive their agreed repayments.
Regulatory approval has been received and the company will soon start
processing the remittances.
· The offer for 100 per cent of MFIL from Thitikorn Plc, a Thai finance
company, has been extended to the end of August 2023 and is subject to, inter
alia, local regulatory approval.
·
Financial review
During the past 18 months our net asset value ("NAV") has decreased by 66.0
per cent and was US$8.7 million as at 31 March 2023. This was driven mainly
by the decrease in the assessed value of our investments in AP Towers (down
US$14.8 million to US$7.5 million) and in MFIL (down US$1.1 million to US$0.4
million).
During the financial period we achieved to reduce our operating "run rate"
costs further down to now US$0.4 million per annum.
Henrik Bodenstab, Chairman of MIL, "The past 18 months have presented a
challenging environment for the Company, due to the combined impact of the
Covid-19 pandemic and the political turbulence since February 2021. These
factors have substantially reduced the Company's NAV, a situation that we've
conveyed to our shareholders in our interim financial reports as of
31 March 2022 and 30 September 2022. Nonetheless, APT's results have
stabilised, and we anticipate that the completion of MFIL's restructuring in
2024 will establish a solid basis for the rejuvenation of its business
operations. Last but not least our operating costs have been reduced over the
last 18 months. These costs are set to decrease even further, contingent upon
shareholders' approval of the proposal to withdraw the Company's shares from
trading on AIM. Even with the recent setbacks, we remain steadfast in our
commitment to pursue an effective course for the company's future, with the
primary goal of optimising value for our shareholders."
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
Jay Edwin
Managing Director CFO
Myanmar Investments International Limited +95 (0) 1 387 947 Myanmar Investments International Limited +95 (0) 1 387 947
nickparis@myanmarinvestments.com jayedwin@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
CHAIRMEN'S LETTER
Dear fellow shareholder
MYANMAR
The political crisis in Myanmar is settling into a prolonged conflict. A
general election in 2023, if held, will hint as to the medium-term prospect
for the country.
Whatever happens next, the Myanmar people are resourceful and resilient. For
over 70 years they have stoically survived repeated political crises.
At one level, there appears to be little change since our last report. The
military continues to take aggressive action in the north, northeast and west
of the country against pro-democracy and ethnic groups and is effectively not
in control of a large part of the country, while in the urban areas life has
returned to a level of normalcy.
The regime has started laying the groundwork for elections, planned for 2023,
by passing a new party registration law and updating the voter list. However,
with most of the country engulfed in anti-military activities; most citizens
opposed to the exercise; and western governments indicating that the result is
unlikely to be accepted, any regime-initiated vote will be contentious and may
not bring peace.
When an election date is finally announced, there could be an escalation in
violence, especially in the urban areas.
Strategically, the regime has begun to court international observers. In
November 2022, the SAC granted amnesty to over 5,000 prisoners. Among those
released was a small group of NLD politicians and a few high-profile
foreigners. In May 2023, 2,153 more were released and 31 death sentences
commuted following a visit from Ban Ki Moon, the former Secretary General of
the United Nations. These moves are believed to be part of a choreographed
relaxation to blunt international criticism and pave the way for a general
election. Should an election take place, even if it is not necessarily
internationally accepted, it could, like the 2010 election (which was also
initially widely condemned), herald the beginning of a change. Whether or not
this is the "off ramp" that allows the military to de-escalate will largely
depend on who the military nominates as the next president.
In the year to September 2022, Myanmar's economy was weighed down by both
external global weakness and by domestic instability. Inflation, which peaked
at 16 per cent, stretched household income and hampered access to food. In
spite of this, growth recovered to 2 per cent.
Since then, the economy has shown signs of further stabilization, and modest
levels of growth will persist, with the World Bank forecasting GDP growth of 3
per cent for the year ending September 2023. Although this still means that
GDP per capita will be 13 per cent lower than in 2019.
Over the coming year, modest growth is expected in the services sector as
inflationary pressure eases, but domestic consumption will remain weak.
Industrial sector growth is forecast to slow as garment and food processing
industries face slower export demand but with input prices softening the
agriculture sector could rebound.
A bright spot is a noticeable increase in domestic tourism, but western
tourist arrivals are still well below pre-pandemic level.
The currency has also stabilized at an unofficial rate of MMK2,850 to US$1.0
but remains weaker than the official central bank reference rate of MMK2,100
to US$1.0. However, the actual availability of foreign currencies in the
banking system is limited and the central bank continues to severely restrict
foreign remittances. As the current account deficit, currently minus 1.8 per
cent of GDP, continues to widen it is unlikely that the currency will
appreciate any time soon.
These modest signs of stabilization have increased optimism, and this is
reflected in the rise in the Manufacturing PMI to 57.4, clocking three
straight months of expansion and a 28 per cent increase compared to our last
report as of 30 September 2022 when it was 44.6.
However, this positive news must be tempered by the continuing high level of
inflation of around 10 per cent and a severe crisis in the supply of
electricity and fuel. Most parts of the country face daily power shortages and
regular scheduled power cuts. Although electricity is made available to
factories, since April, Yangon residents have faced over 8 hours of
electricity cuts every day. The cost of fuel as well as the lack of supply has
made it more difficult for households and small shops to run generators and
has increased travelling expenses and travel times as fewer buses are running.
A UNDP report in February 2023 indicated that a quarter of the people living
in eight of Yangon's poorest townships have often not had any income for the
last 12 months. This is forcing people to adopt coping strategies that
threaten their health and wellbeing, including cutting down on how much they
eat and consuming less nutritious food, selling assets, such as vehicles, and
forgoing medical treatment. This is exacerbated by a chronically weak
healthcare system crippled by medical staff who protested against the coup and
are now being targeted by the military and forced out of the formal system.
For foreign businesses or local companies that have international
transactions, FATF's blacklisting of Myanmar in October 2022 is beginning to
have an impact, with many banks experiencing difficulties with US$
remittances. This is exacerbating the shortage of hard currency in Myanmar and
forcing companies and individuals to revert to relying on the informal Hundi
system for remittance.
In summary, there is now a level of weary stability at a lower level of
economic activity with the population stoically bearing the brunt of the
conflict with grim determination to survive. An election in 2023 would
determine how long this continues.
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 have issued interim accounts for the
periods from 1 October 2021 to 31 March 2022 and from 1 April 2022 to 30
September 2022 which were both published within 3 months of the period end.
Therefore, this full audited set of financial statements comprises the
financial period from 1 October 2021 to 31 March 2023.
CHANGE IN STRATEGY AND POSSIBLE CANCELLATION OF ADMISSION OF THE COMPANY'S SHARES FROM AIM
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 salability 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 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 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 two 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 yet been closed. On 18 April 2023, the parties signed an
extension of the binding offer until 31 August 2023.
· 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 most of our staff costs from the operation as of
31 March 2020. The core cash-based overheads for the 12-month period from 1
April 2022 to 31 March 2023 are 24.3 per cent lower than for the financial
period from 1 October 2020 to 30 September 2021 (excluding transaction costs
and costs for preparation of de-listing the Company from the London Stock
Exchange).
We are now holding approximately US$0.9 million of cash. We also intend to
streamline our operations further when we sell MFIL 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.
The Directors have concluded that due to the low level of trading in MIL
Shares, the ongoing cost of being admitted to trading on AIM outweigh the
benefits. We have incurred costs of US$113,000 in this accounting period
preparing a proposal to cancel admission of the Company's shares from trading
on AIM and a circular will be dispatched to Shareholders in due course for
their consideration. If Shareholders approve the resolutions proposed in the
circular, the annual cost savings will be considerable and will help to reduce
the Company's cash burn rate.
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 those set out in 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
9 June
2023
9 June 2023
EXECUTIVE DIRECTOR'S REVIEW
Business Review
During the past 18 months our net asset value ("NAV") has decreased by 66.0
per cent and was US$8.7 million as at 31 March 2023. This change is mainly
attributable to the decrease in the assessed value of the Company's
investments in AP Towers (down US$14.7 million to US$7.5 million) and MFIL
(down US$1.1 million to US$0.4 million) and the operating expenses for the
reporting period (US$ 1.0 million).
During the past 18 months our core operating expenses were significantly
reduced to US$0.8 million compared with US$1.1 million (excluding transaction
costs and the costs for preparing for the cancellation of admission of the
Company's shares from AIM) for the comparable 18-month period 1 April 2020 to
30 September 2021.
Overall, both AP Towers and MFIL were disrupted by the impact of Covid-19 and
the takeover of the military on 1 February 2021 but the consequences for MFIL
were more serious:
AP Towers:
· the Company transferred 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 networks of towers in Myanmar.
· Based on AP Towers' actual results for the 6 months ended 31 March
2023, AP Towers annualised adjusted "run rate" revenue decreased to US$91.4
million. This represents a decline of 10.8 per cent compared with the numbers
as of 30 September 2021. The annualised adjusted "run rate" EBITDA has
decreased to US$76.2 million. This represents a decline of 11.3 per cent
compared with the numbers as of 30 September 2021; and
MFIL:
· Against the deteriorating background due to Covid-19 and the
political instability, over the last two years MFIL has pro-actively reduced
its loan book, negotiated to repay all of its foreign and local debts and
materially reduced its operating expenses. As at year end, Portfolio at Risk
over 30 days ("PAR 30+") was 38.4 per cent.
· In 2024, MFIL will be debt free and operating at a lower cost base.
It will be a strong, albeit small, and profitable operation that has no
liabilities.
· The offer for 100 per cent of MFIL from Thitikorn Plc, a Thai finance
company, has been extended to the end of August 2023 and is subject to, inter
alia, local regulatory approval.
· As soon as logistically practical, further discussions with the
purchaser will be necessary to establish a timeline to close the sale of MFIL.
It has been 38 months since the transaction was negotiated and much has
changed in the country. It may be necessary to amend the transaction terms.
In both 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 31 March 2023 to be US$8.7 million, a decrease of 66.0 per
cent compared with the Group's NAV as at 30 September 2021. This represents
US$0.23 per share, based on the number of shares in issue at the period-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 period.
As at 31 March 2023 the Group's NAV consisted of:
· an investment in AP Towers, the telecommunication tower business, of
US$7.5 million, excluding the non-controlling interests, determined using a
comparable EBITDA multiple methodology;
· an investment in MFIL, the microfinance business, of US$0.4 million,
determined using a price to book value methodology; and
· cash and other net assets of US$0.8 million.
AP TOWERS
As at 30 September 2021, 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, to be worth
US$29.7 million, using a comparable EBITDA multiple methodology.
Applying the same methodology that we used as at 30 September 2021 with
updated trading and comparable data, the value of this investment as at 31
March 2023 would be US$10.0 million, a decrease of US$19.7 million.
This valuation of AP Towers represents an unrealised loss of US$10.8 million
over the cost of the investment and an IRR since the initial investment in
July 2015 of -9.1 per cent.
MFIL
As at 30 September 2021, the Directors had assessed the value of the Group's
investment in MFIL to be US$2.0 million using the price to book value
methodology.
Applying the same methodology that we used as at 30 September 2021 the
Directors have assessed the value of this investment as at 31 March 2023 to be
US$0.5 million, a decrease of US$1.5 million.
This value of MFIL represents a loss of US$2.2 million over the cost of the
investment and an IRR since the initial investment in April 2014 of -21.4 per
cent.
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;
· potential broader international sanctions.
Given the uncertainties and risks in Myanmar the Directors have decided to
apply a valuation discount of 25 per cent on the company's entire portfolio as
at 31 March 2023 which is the same rate applied as at 30 September 2021.
This valuation discount is reviewed regularly.
The impact on MIL's carrying value of the investments after applying the
valuation discount are:
AP Towers:
This discount reduces the value of this investment as at 31 March 2023 to
US$7.5 million, which is US$14.8 million lower than at September 2021. This
valuation of AP Towers represents a loss of US$13.3 million over the cost of
the investment and an IRR since the initial investment in July 2015 of -12.5
per cent.
MFIL:
This discount reduces the value of this investment as at 31 March 2023 to
US$0.4 million, which is US$1.1 million lower than at September 2021. This
valuation of MFIL represents a loss of US$2.3 million over the cost of the
investment and an IRR since the initial investment in April 2014 of -24.8 per
cent.
SUMMARY OF NAV
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 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 financial period from 1 October 2021 to 31 March 2023, the Group's
audited loss after tax attributable to the shareholders of the Company was
US$16.9 million. The Group's audited loss after tax attributable to the
shareholders of the Company for the financial year to 30 September 2021 was
US$7.8 million.
This is a significant deterioration on the last period's result. The loss per
share is US cents 44.29 compared with a loss per share of US cents 20.49 for
the year to 30 September 2021 and primarily relates to adjusting the
valuation of the investments down.
We are steadily reducing our overheads whilst we try to exit from our two
remaining investments. As part of the cost reduction process, we had closed
our office in Yangon and removed most of our 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 transaction costs and expenses
for the cancellation of admission to trading on AIM project) based on the
6-month period from 1 October 2022 to 31 March 2023 is US$0.4 million.
Based on the 6-month period from 1 April 2021 to 30 September 2021 this amount
was US$0.7 million.
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$14.8 million;
· 'Fair value loss on investment at fair value through profit or loss'
for the investment in MFIL of US$1.1 million.
DIVIDENDS
Based on the above the Directors do not recommend the payment of a dividend at
this time.
WORKING CAPITAL
Based as of the date of this report, the Group has adequate financial
resources to cover its working capital needs for the next 12 months. However,
by the end of that period our cash balance will be significantly reduced, and
the Group would need to raise further finance in order to continue its
operations.
NICK PARIS
Managing Director
9 June 2023
STATEMENTS FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
Note Financial Financial
period from year ended
1 October 2021 30 September
to 31 March 2021
2023
US$ US$
Other item of income
Interest income - 476
Items of expense
Employee benefits expense 4 (254,750) (198,500)
Other operating expenses (710,202) (495,663)
Finance costs 5 (7,911) (6,827)
Fair value loss on investment at fair value through profit or loss 9 (22,180,000) (9,100,000)
Write down to fair value less cost to sell on non-current asset held for sale 13 (1,125,000) (1,052,467)
Loss before income tax 6 (24,277,863) (10,852,981)
Income tax expense 7 (8,095) (120)
Loss for the financial period/year (24,285,958) (10,853,101)
Loss attributable to:
Owners of the parent (16,878,128) (7,806,703)
Non-controlling interests 10 (7,407,830) (3,046,398)
(24,285,958) (10,853,101)
Loss per share (cents)
- Basic and diluted 8 (44.29) (20.49)
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
Note 31 March 30 September
2023 2021
US$ US$
ASSETS
Non-current assets
Equity instrument at fair value through profit or loss 9 11,220,000 33,400,000
Total non-current assets 11,220,000 33,400,000
Current assets
Other receivables 11 112,675 117,989
Cash and bank balances 12 878,606 1,807,634
991,281 1,925,623
Non-current asset classified as held for sale 13 375,000 1,500,000
Total current assets 1,366,281 3,425,623
Total assets 12,586,281 36,825,623
EQUITY AND LIABILITIES
Equity
Share capital 14 40,569,059 40,569,059
Share option reserve 15 1,358,913 1,358,913
Accumulated losses (33,108,312) (16,230,184)
Foreign exchange reserve (76,560) (76,560)
Equity attributable to owners of the parent 8,743,100 25,621,228
Non-controlling interests 10 3,481,339 10,889,169
Total equity 12,224,439 36,510,397
LIABILITIES
Current liabilities
Other payables 16 361,842 297,512
Income tax payable - 17,714
Total current liabilities 361,842 315,226
Total equity and liabilities 12,586,281 36,825,623
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
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$
31 March 2023
At 1 October 2021 40,569,059 1,358,913 (76,560) (16,230,184) 25,621,228 10,889,169 36,510,397
Loss for the financial period, representing total comprehensive loss for the - - - (16,878,128) (16,878,128) (7,407,830) (24,285,958)
financial period
At 31 March 2023 40,569,059 1,358,913 (76,560) (33,108,312) 8,743,100 3,481,339 12,224,439
30 September 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
The accompanying notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
Note Financial Financial
period from year ended
1 October 2021 30 September
to 31 March 2021
2023
US$ US$
Operating activities
Loss before income tax (24,277,863) (10,852,981)
Adjustments for:
Interest income - (476)
Finance costs 5 7,911 6,827
Fair value loss on investment at fair value through profit or loss 9 22,180,000 9,100,000
Write down to fair value less cost to sell on non-current asset held for 13 1,125,000 1,052,467
sale
Operating cash flows before working capital changes (964,952) (694,163)
Changes in working capital:
Other receivables 5,314 150,845
Other payables 64,330 (6,541)
Cash used in operations (895,308) (549,859)
Interest received - 476
Finance costs paid 5 (7,911) (6,827)
Income tax paid (25,809) (321)
Net cash flows used in operating activities (929,028) (556,531)
Financing activities
Decrease in short-term deposits pledged - 35,943
Net cash flows generated from financing activities - 35,943
Net change in cash and cash equivalents (929,028) (520,588)
Cash and cash equivalents at beginning of the financial period/year 1,795,951 2,316,539
Cash and cash equivalents at the end of financial period/year 12 866,923 1,795,951
The accompanying notes form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
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 are traded on the AIM market of the London Stock
Exchange under the ticker symbols MIL.
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. During the current
financial period, the Directors have concluded that due to the low level of
trading in the Company's shares, the costs of their listing on the London
Stock Exchange outweigh the benefits. Directors have prepared a proposal to
de-list the Company and such proposal will be despatched to shareholders in
due course for their consideration.
The principal activities of the subsidiaries are disclosed in Note 10 to the
financial statements.
The Group and the Company changed its financial year end from 30 September to
31 March as the Group's investee company in Myanmar changed its financial year
end from 30 September to 31 March to be in line with the directives issued by
the Myanmar Internal Revenue Department on the changes of taxable period.
The current financial period covered a period of 18 months from 1 October 2021
to 31 March 2023 while the comparative financial year ended 30 September 2021
covers a period of 12 months from 1 October 2020 to 30 September 2021 and
therefore the financial statements for period from 1 October 2021 to 31 March
2023 and for financial year ended 30 September 2021 are not comparable.
1.1 Going concern
The Group incurred loss after tax of US$24,285,958 (30 September 2021:
US$10,853,101) during the current financial period. The Directors have
assessed that the Group has adequate financial resources to continue in
operational existence for at least 12 months from the date of the financial
statements. The Directors' considerations in making this assessment, amongst
others, include:
a) The Group's current assets exceeded its current liabilities by
US$1,004,439;
b) The Group currently has cash balance of US$878,606;
c) The Directors have carried out a detailed review of the cash flow
forecast of the Group for 18 months from 31 March 2023. The cash flow forecast
has been prepared with consideration of the expected cash outflow arising from
future expenses based on latest known information. Factors relevant for the
Directors' consideration include, amongst others, expected cost reduction from
running operations of the Company as well as cost savings resulting from
potential de-listing of the Company.
Accordingly, the Directors are of the opinion that no material uncertainty
exists and the going concern basis is appropriate in the preparation of the
Group's financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
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 PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
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 13), 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 20 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 and consider the sale to be highly probable. As such,
directors are of the view that the continuous classification of the Group's
investment in MFIL as non-current asset held for sale is appropriate as at 31
March 2023.
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 determined the appropriate valuation techniques and inputs for fair
value measurements being the enterprise value ("EV") over earning before,
interest, tax, depreciation and amortisation ("EBITDA") ("EV/EBITDA")
multiple, adjusted with a valuation discount.
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 valuation specialist to perform the
valuation. The valuation of the unquoted investment is categorised into Level
3 (30 September 2021: Level 3) of the fair value hierarchy. The Board of
Directors works closely with the qualified internal valuation specialist to
establish the appropriate valuation techniques and inputs to the model.
The details of 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 9 to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
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 2.8 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 13 to the financial statements and relevant market conditions. The
details of the measurement of non-current asset held for sale are disclosed in
Note 13 to the financial statements.
4. Employee benefits expense
Financial Financial
period from year ended
1 October 2021 30 September
to 31 March 2021
2023
US$ US$
Salaries, wages and other staff benefits 254,750 198,500
254,750 198,500
The employee benefits expense includes the remuneration of Directors as
disclosed in Note 17 to the financial statements.
5. Finance costs
Finance costs represent bank charges for the financial period/year.
6. Loss 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
period from year ended
1 October 2021 30 September
to 31 March 2021
2023
US$ US$
Auditor's remuneration 82,670 51,607
Consultants' fees 212,918 191,472
Short term leases 6,256 2,730
Professional fees 276,802 147,428
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
7. Income tax expense
Financial Financial
period from year ended
1 October 2021 30 September
to 31 March 2021
2023
US$ US$
Current income tax
- current financial period/year 8,095 120
8,095 120
A reconciliation of income tax applicable to loss before income tax at the
statutory income tax rate of 22% (30 September 2021: 25%) in Myanmar is as
follows:
Financial Financial
period from year ended
1 October 2021 30 September
to 31 March 2021
2023
US$ US$
Loss before income tax (24,277,863) (10,852,981)
(24,277,863) (10,852,981)
Income tax at the applicable tax rates (5,341,129) (2,713,245)
Effects of different income tax rates in other countries 58,908 (95)
Expenses not deductible for tax 5,290,316 2,713,539
Income tax exemption - (81)
Income tax for the financial period/year 8,095 120
8. Loss per share
Basic loss per share is calculated by dividing the loss for the financial
year/period attributable to owners of the parent by the weighted average
number of ordinary shares outstanding during the financial period/year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
8. Loss per share (Continued)
The following reflects the profit or loss and share data used in the basic and
diluted loss per share computation:
Financial Financial
period from year ended
1 October 2021 30 September
to 31 March 2021
2023
US$ US$
Loss for the financial period/year
attributable to owners of the Company (US$) (16,878,128) (7,806,703)
Weighted average number of ordinary shares during
the financial period/year applicable to basic
loss per share 38,108,451 38,108,451
Loss per share
Basic and diluted (cents) (44.29) (20.49)
Diluted loss per share is the same as the basic loss per share for financial
period from 1 October 2021 to 31 March 2023 and financial year ended 30
September 2021 because the potential ordinary shares to be converted arising
from share options are anti-dilutive.
9. Equity instrument at fair value through profit or loss
31 March 30 September
2023 2021
US$ US$
Investment in unquoted equity instrument, at fair value 11,220,000 33,400,000
The Group, through its 66.67% subsidiary, MIL 4 Limited ("MIL 4") invested in
a 6.2% (30 September 2021: 6.2%) equity interest in unquoted share capital of
AP Towers Holdings Pte. Ltd. ("AP Towers").
Movement in the investment in unquoted equity instrument is as follows:
31 March 30 September
2023 2021
US$ US$
Balance at beginning of financial period/year 33,400,000 42,500,000
Fair value loss during the financial period/year (22,180,000) (9,100,000)
Balance at end of financial period/year 11,220,000 33,400,000
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
9. Equity instrument at fair value through profit or loss
(Continued)
Management engaged their internal valuation specialists to perform a valuation
on the investment. The valuation of the unquoted investment is categorised
into Level 3 (30 September 2021: 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:
31 March 2023
Financial asset Valuation Significant Inter-relationship between key unobservable inputs
technique used unobservable inputs and fair value
Unquoted equity investment - AP Towers Market Approach - Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") Increase EBITDA will increase the fair value of the financial asset.
of US$76.2million
Increase EV/EBITDA multiple will increase the fair value of the financial
- Enterprise Value ("EV") per EBITDA multiple of 7.8x asset.
- Valuation discount of 25%* Increase in valuation discount will decrease the fair value of the financial
asset
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 Market Approach - Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA") Increase EBITDA will increase the fair value of the financial asset.
of US$85.9million
Increase EV/EBITDA multiple will increase the fair value of the financial
- Enterprise Value ("EV") per EBITDA multiple of 12.7x asset.
- Valuation discount of 25%* Increase in valuation discount will decrease the fair value of the financial
asset
* Due to political uncertainty and COVID-19 pandemic in Myanmar during
current and previous financial years, management is of the view that an
additional 25% discount should be applied to the Group's investments in
Myanmar.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
10. Investment in subsidiaries
Details of the subsidiaries are as follows:
Name of subsidiaries Country of incorporation/ principal place of business Principal activities Proportion of Proportion of
ownership interest ownership interest
held by the Group held by non-control interests
31 March 30 September 2021 31 March 30 September 2021
2023 2023
% % % %
Myanmar Investments Limited((2)) Singapore Investment holding company 100 100 - -
MIL Management Pte. Ltd.((2)) Singapore Provision of management services to the Group 100 100 - -
MIL 4 Limited((1)) British Virgin Investment holding company 66.67 66.67 33.33 33.33
Islands
Held by MIL Management Pte. Ltd.
MIL Management Co., Ltd((3)) Myanmar Provision of management services to the Group - 100 - -
((1)) Audited by BDO LLP, Singapore.
((2)) Not audited for consolidation purpose
((3)) The liquidation of the company was completed in July 2022.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
10. Investment in subsidiaries (Continued)
Non-controlling interests
The summarised financial information before intra-group eliminations of the
subsidiary that has material non-controlling interests as at the end of each
reporting period is as follows:
MIL 4 Limited
31 March 30 September
2023 2021
US$ US$
Assets and liabilities
Non-current assets 11,220,000 33,400,000
Current assets 3,240 923
Current liabilities (779,228) (733,422)
Net assets 10,444,012 32,667,501
Accumulated non-controlling interests 3,481,339 10,889,169
MIL 4 Limited
31 March 30 September
2023 2021
US$ US$
Revenue -
Other loss (22,180,000) (9,100,000)
Administrative expenses (43,489) (39,193)
Loss and total comprehensive loss for the financial period/year (22,223,489) (9,139,193)
Loss and total comprehensive loss allocated to non-controlling interests (7,407,830) (3,046,398)
Operating cash flows before working capital changes (43,489) (39,193)
Working capital changes 43,489 39,193
Net cash used in operating activities - -
Net change in cash and cash equivalents - -
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
11. Other receivables
31 March 30 September
2023 2021
US$ US$
Other receivables 73,877 60,102
Prepayments 38,798 57,887
Total 112,675 117,989
Less:
Prepayments (38,798) (57,887)
Add:
Cash and bank balances (Note 12) 878,606 1,807,634
Financial assets at amortised costs 952,483 1,867,737
Other receivables are denominated in United States dollar.
12. Cash and bank balances
31 March 30 September
2023 2021
US$ US$
Cash and bank balances 866,923 1,795,951
Short-term deposit 11,683 11,683
878,606 1,807,634
The short-term deposit bears interest rate of ranging from 0% to 3.6% (30
September 2021: 0% to 1.4%) per annum, has a tenure of approximately 12 months
(30 September 2021: 12 months) and is pledged to bank to secure credit
facilities.
Cash and bank balances and short-term deposits are denominated in the
following currencies:
31 March 30 September
2023 2021
US$ US$
United States dollar 761,354 1,676,445
Singapore dollar 117,252 128,168
Myanmar kyat - 3,021
878,606 1,807,634
For the purpose of the statement of cash flows, cash and cash equivalents
comprise the following at the end of the financial period/year:
31 March 30 September
2023 2021
US$ US$
Cash and bank balances 878,606 1,807,634
Less: short-term deposits pledged (11,683) (11,683)
866,923 1,795,951
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
13. Non-current asset classified as held for sale
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 Public Company Limited ("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 political uncertainty and Covid-19 pandemic in Myanmar, the sale could
not be completed in time. Therefore, the BO has been extended for several
times and the latest extension was signed on 18 April 2023 which extended the
expiry of BO to 31 August 2023.
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.
As the result of the ongoing transaction to sell the Group's 37.5% (30
September 2021: 37.5%) equity interest in MFIL, 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 and consider the sale to be highly probable. As such,
directors are of the view that the continuous classification of the Group's
investment in MFIL as non-current asset held for sale is appropriate as at 31
March 2023.
Movements of assets in non-current asset classified as held-for-sale were as
follows:
31 March 30 September
2023 2021
US$ US$
Investment in joint venture - 37.5% equity interest in Myanmar Finance
International Limited
Beginning of the financial period/year 1,500,000 2,552,467
Less: Write down to fair value less cost to sell (1,125,000) (1,052,467)
End of the financial period/year 375,000 1,500,000
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.
Directors estimate the fair value less cost to sell at US$375,000 based on 2
times the audited book value of MFIL at 31 March 2023, adjusted for a
valuation discount of 25% due to political uncertainty and 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$1,125,000
(30 September 2021: 1,052,467) was recognised in profit or loss for the
current financial year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
14. Share capital
31 March 30 September
2023 2021
US$ US$
Issued and fully-paid share capital:
Ordinary shares at the beginning of the financial period/year 40,569,059 40,569,059
31 March 2023 30 September 2021
Ordinary Warrants Ordinary Warrants
shares shares
Equity Instruments in issue
At the beginning of the financial period/year 38,108,451 13,573,901 38,097,037 14,128,387
Exercised during the year - - - (554,486)
Lapsed during the period - (13,573,901) - -
Issuance during the financial year - - 11,414 -
At the end of the financial period/year 38,108,451 - 38,108,451 13,573,901
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 period, no warrants were exercised and all unexercised
warrants were expired.
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 terms of the 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 were previously traded on AIM under the ticker MILW.
As the warrant instrument expired on 31 December 2021, all unexercised
warrants expired on that date and trading on AIM was cancelled on 4 January
2022.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
15. 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 31 March 2023, there were 3,622,740 (30 September 2021: 3,622,740) share
options available for issue under the Plan of which 2,590,527 (30 September
2021: 2,590,527) had been granted. These granted share options have a weighted
average exercise price of US$1.214 (30 September 2021: US$1.214) per share and
a weighted average contractual life of 10 years (30 September 2021: 10 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 PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
15. Share option reserve (Continued)
Details of the Share Option Plan (the "Plan") (Continued)
The following share-based payment arrangements were in existence during the
current financial period:
Option series Number Grant date Expiry date Exercise Fair value
of share options 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 period.
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$) 1.265 1.100 1.155 1.265
Expected volatility 22.47% 22.25% 22.25% 22.25%
Option life 10 years 10 years 10 years 10 years
Risk-free annual interest rates 1.46% 1.76% 1.76% 1.76%
The Group recognised a net expense of US$Nil (30 September 2021: US$Nil)
related to equity-settled share-based payment transactions during the
financial period.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
15. Share option reserve (Continued)
Movement in share option during the financial period
The following reconciles the share options outstanding and exercisable at the
start of the period/year and at the end of the period.
31 March 2023 30 September 2021
Number Weighted average exercise Number Weighted average exercise
price price
US$ US$
Balance at beginning and end of financial period/year 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 period
31 March 30 September
2023 2021
US$ US$
Balance at beginning and end of financial period/year 1,358,913 1,358,913
16. Other payables
31 March 30 September
2023 2021
US$ US$
Accruals 166,165 106,961
Other payables 195,677 190,551
Financial liabilities at amortised cost 361,842 297,512
Other payables are denominated in the following currencies:
31 March 30 September
2023 2021
US$ US$
Singapore dollar 46,007 52,018
United States dollar 242,246 243,524
British pound 66,980 1,970
Euro 6,609 -
361,842 297,512
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
17. 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 period/year were as follows:
Directors' Short term Share Total
fee employee option
benefits plan
US$ US$ US$ US$
Financial period ended 31 March 2023
Executive directors
Maung Aung Htun - 116,000 - 116,000
Nicholas John Paris - 90,000 - 90,000
Non-executive directors
Henrik Onne Bodenstab 26,250 - - 26,250
Rudolf Gildemeister 22,500 - - 22,500
48,750 206,000 - 254,750
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
18. Dividends
The Directors of the Company do not recommend any dividend in respect of the
financial period ended 31 March 2023 (30 September 2021: Nil).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH 2023
19. Financial risk management objectives and policies
The Group's Financial risk management objectives and policies have not changed
in the past financial period and can be found on the website
www.myanmarinvestments.com.
20. 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 18 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"). But MFIL has gone
through a debt repayment plan with all its lenders and will be debt free in
2024. The purchaser has therefore agreed to extend the offer to August 2023
(Note 13). 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 the telecommunication sector has also
suffered due to the outbreak of COVID-19 and the political crisis since 1
February 2021 but much less than the microfinance industry. 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. Also the availability of US$ has become a challenge. 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.
21. Authorisation of financial statements
The financial statements of the Group for the financial period from 1 October
2021 to 31 March 2023 were approved by the Board of Directors on 9 June 2023.
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