Jade Road Investments Limited
Annual Report 2023
1
Contents
Page
Company Information ...................................................................................................... 3
Company Description ....................................................................................................... 4
Chairman’s Statement ...................................................................................................... 6
Biographies of Directors and Senior Management .......................................................... 9
Directors’ Report ............................................................................................................ 11
Corporate Governance Statement ................................................................................. 17
Independent Auditor’s Report to the Members of Jade Road Investments Limited ..... 28
Consolidated Statement of Comprehensive Income...................................................... 36
Consolidated Statement of Changes in Equity ............................................................... 37
Consolidated Statement of Financial Position…………………………………………………………….38
Consolidated Cash Flow Statement ................................................................................ 39
Notes to the Financial Statements ................................................................................. 40
2
Company Information
Directors
Mr. John Croft
– Executive Chairman
Hugh Viscount Trenchard
– Non-executive Director
Dr. Lee George Lam
– Non-executive Director
Mr. Stuart Crocker
– Non-executive Director
Investment Manager
Heirloom Investment Management LLC
Burj Khalifa, Unit 3605
Dubai, UAE
Key Personnel of Investment Manager
Heirloom Investment Management
Geoff Dover
Chief Investment Officer
Registered Office
Commence House, Wickhams Cay 1
PO Box 3140
Road Town, Tortola
British Virgin Islands VG1110
Company Secretary
Conyers Trust Company (BVI) Limited
Commence House, Wickhams Cay 1
PO Box 3140
Road Town, Tortola,
British Virgin Islands VG1110
Limited, Woodbourne Hall PO Box 3162 Road
Town, Tortola, British Virgin Islands
Depositary Interest Registrars
Computer Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZY
Registered Agent
Conyers Trust Company (BVI) Limited
Commence House, Wickhams Cay 1
PO Box 3140
Road Town, Tortola
British Virgin Islands VG1110
Nominated Adviser
WH Ireland Limited
24 Martin Lane
London EC4R 0DR
Broker
Hybridan LLP
1 Poultry,
London
EC2R 8EJ
Auditors
PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
Principal Place of Business
20/F, Infinitus Plaza
199 Des Voeux Road Central, Hong Kong
Website
www.jaderoadinvestments.com
Registrars
Computershare
Investor Services
(BVI)
Stock Code
AIM: JADE
Frankfurt: 1CP1
3
Company Description
Jade Road Investments Limited (“Jade Road” or the “Company”) was previously focused on
providing growth capital and financing to emerging and established Small and Medium
Enterprises (“SMEs”) worldwide. However the Company recently disposed of its entire asset
portfolio and is now seeking to raise new capital to invest in and/or acquire a business via a
Reverse Take Over (RTO).
Our common stock is publicly traded on the Alternative Investment Market (“AIM”) market
of the London Stock Exchange, under the ticker symbol “JADE”.
Investing Policy
1)
The Company has an indefinite life, is sector agnostic and is targeting assets
in any class which will produce income returns, with a secondary focus on
capital gains over time for its Shareholders.
2)
The Company will seek the best risk-adjusted returns globally, with a
preference for investments governed by legal systems that the Company
understands and believes to be reliable.
3)
The Company may invest directly into listed securities, over-the-counter
traded securities, currencies, companies,
real assets, contractual
obligations, or commodities ("Direct Financings").
4)
The Company may provide financing to entities, becoming a lender to, or a
limited partner or shareholder of, an affiliated or third party which itself has
a strategy to invest in underlying listed securities, over-the-counter traded
securities, currencies, companies, real assets, contractual obligations or
commodities ("Indirect Financings").
5)
The Company shall ensure that at the time of entering into a Direct
Financing, it shall represent not more than 30% of the Company's net asset
value immediately following the relevant transaction. There is no limit on
the number of investments the Company may take.
6)
The Company shall ensure that at the time of entering into an Indirect
Financing, no underlying asset of the indirectly financed entity shall
represent more than 30% of the Company's net asset value immediately
following the relevant transaction.
7)
There is no restriction on the duration the Company will hold any
investment nor any restriction on the time for the Company to make its
investments in such assets.
4
8)
The Company will pursue a predominantly passive management strategy.
However, on a case by case basis, it may consider securing additional
governance rights such as observer or board appointments where the
situation or asset dictates such additional oversight.
9)
The Company may utilise gearing when appropriate. The Company will
continue to exercise prudence in determining whether prevailing market
conditions and investor expectations warrant the utilisation of any leverage
over its portfolio.
10)
The Company will consider issuing its own shares as consideration for
interests in other companies but such cross holdings will be limited to 20
per cent. of the Company's issued shares in aggregate from time to time.
5
Chairman’s Statement
In the second half of 2023 your Board took the decision to restructure the Company by
disposing of all of its legacy Asian assets and transferring them to a separate privately held
company Eastern Champion Limited (SPV) whose shareholders would be a mirror of the
shareholders in JADE, whereby shareholders in JADE would receive an equivalent number
of shares in the SPV.
The main reason for taking this action is that the Company’s share price has never remotely
reflected the full value of the assets, and therefore the benefit of them remaining part of a
publicly quoted company became minimal. The other key benefit of moving the assets to the
SPV is that the costs of managing the assets has been radically reduced which in turn will
increase the net proceeds from asset sales. Details of all aspects of the transfer were provided
in the Shareholder Circular dated 8 April 2024
https://www.londonstockexchange.com/news-article/JADE/posting-of-circular-and-notice-
of-agm/16413017
An important element of the restructuring is that the Company’s debt of $3.6m represented
by the Corporate Bond has also been transferred to the SPV. Additionally, debt amounting
to US$670k owing to the Company’s former Investment Manager Harmony Capital has also
been transferred to the SPV.
Shareholders and Bondholders voted in favour of the above restructuring on May 1, 2024
and over December 2023 respectively.
In April 2024, prior to completion of the restructuring, the Company announced the sale of
Future Metal Holdings Ltd. the largest asset by value in the Company’s portfolio to a local
Chinese buyer. The gross sale proceeds amounting to the equivalent of approximately US$
5.5m have been lodged with the Company’s Chinese lawyers in escrow pending completion
6
of a number of formalities required to obtain approval for the proceeds to be remitted
offshore. The net proceeds are anticipated to be sufficient to repay the Corporate Bonds in
full, whilst the timing to complete this process remains uncertain. Sale proceeds from this
transaction will accrue to the SPV following the restructuring.
Following the restructuring outlined above, JADE effectively becomes a shell company in
search of a potential acquisition via a Reverse Take Over (RTO) or an alternative investment
platform with new principals.
Discussions are ongoing with a number of potential acquisition targets. Further details of any
such putative transactions will be provided in due course.
I would like to take this opportunity to thank the Company’s Shareholders and Bondholders
for their support in achieving this successful restructuring which provides an opportunity for
the Company to pursue a different and hopefully more value enhancing future.
John Croft
28 June 2024
Chairman of the Board
7
Portfolio at 31 December 2023
Principal assets
Fook Lam Moon Holdings
Effective
interest
%
-
Instrument type
Valuation at 31
Credit income
Credit investment
Equity investment/
Fair value
Transfer to
Valuation at
December 2022
US$ million
US$ million
other movement
adjustment US$
investments
31 December
US$ million
US$ million
million
available for sale
2023
US$ million
Convertible Bond
-
0.5
Future Metal Holdings Limited
84.8
Structured Equity
5.3
0.6
Redeemable convertible
preference shares
Convertible Bond
Secured Loan Notes
Equity
Meize Energy Industrial Holdings
Ltd
DocDoc Pte Ltd
Infinity Capital Group
Infinity TNP
Project Nicklaus
Heirloom Investment Fund and
Heirloom Litigation Funding
Investments available for sale
Corporate debt
Other liabilities
Cash
6.3
-
-
40
-
-
-
8.8
2.8
1.4
-
1.8
-
-
(3.9)
(1.4)
0.3
-
0.2
0.3
-
-
-
-
-
-
-
(0.5)
-
(1.6)
(4.3)
-
-
-
-
-
-
(8.8)
(3.0)
(1.7)
-
-
-
-
-
-
-
-
(0.1)
(1.7)
0.8
(0.3)
-
-
-
-
-
0.1
0.4
(0.2)
-
-
-
-
-
-
-
-
-
-
-
0.5
4.3
(3.8)
(1.0)
0.1
0.1
-
-
-
-
-
-
4.3
-
-
-
-
Total Net Asset Value
15.1
1.6
0.8
(0.1)
(17.3)
8
Biographies of Directors and Senior Management
Board of Directors
Mr. John Croft, Executive Chairman
John Croft is an experienced Chairman, non-executive Director and executive with a
successful international career in the technology and financial services sectors.
He is also a non-executive Director at Aura Renewable Acquisitions PLC and Golden Rock
Global PLC, both Special Acquisitions Companies (SPACs) quoted on the Standard List of
the London Stock Exchange and is also a non-executive Director at Brazilian Nickel PLC. He
has previously held senior Director level positions in Racal Electronics and NCR Corporation,
following an early career in banking with HSBC and Citibank.
Hugh Viscount Trenchard, Non-executive Director
Viscount Trenchard began his career as an investment banker at Kleinwort Benson in 1973.
He has more than 40 years' experience of Japanese business, including 12 years as a resident
of Japan. He ran Kleinwort Benson's East Asian operations for 15 years and was later Head of
Japanese Investment Banking for Robert Fleming & Co. Limited, before working with Mizuho
International plc from 2007 to 2014. He served as a Senior Adviser for Japan and Korea to
Prudential Financial, Inc. from 2002 to 2008. Lord Trenchard is a member of the House of
Lords and a Vice-Chairman of the British-Japanese Parliamentary Group.
Mr. Charles Stuart Crocker, Non-executive Director
In 1975 Stuart graduated from the Royal Military Academy Sandhurst and served for ten years
in the United Kingdom, Northern Ireland and Germany. His second career began in 1985 in
Private Banking, primarily with Merrill Lynch and HSBC in London, Geneva, and Dubai.
Latterly he was CEO HSBC Private Bank UAE and Oman, and he was concurrently the SEO
for HSBC in the Dubai International Financial Centre (DIFC). He was finally the Global Head
Private Banking Group for Abu Dhabi Islamic Bank.
During his career Stuart has accumulated multiple banking and finance qualifications and has
studied at Manchester Business School, Insead and Duke. Stuart retired from banking in
2013 and has subsequently held Non-Executive Chairman, NED, and Trustee appointments in
public and private companies and charities across a variety of industry sectors. He was
admitted into the Freedom of the City of London in 2006 as a “Citizen and International
Banker of London” and was “progressed” as a Liveryman of the Worshipful Company of
9
International Bankers in June 2022.
Dr. Lee George Lam, Non-executive Director
Dr. Lam is Chair of the United Nations Economic and Social Commission for Asia and the
Pacific (UN ESCAP) Sustainable Business Network (ESBN), Vice Chairman of Pacific Basin
Economic Council (PBEC), Chairman of the Permanent Commission on Economic and
Financial Issues of the World Union of Small and Medium Enterprises (WUSME), and a
member of the Belt and Road and Greater Bay Area Committee of the Hong Kong Trade
Development Council. A former member of the Hong Kong Bar, Dr. Lam is a Solicitor of the
High Court of Hong Kong, an Accredited Mediator of the Centre for Effective Dispute
Resolution (CEDR), a Fellow of Certified Management Accountants (CMA) Australia, the
Hong Kong Institute of Arbitrators and the Hong Kong Institute of Directors, an Honorary
Fellow of Certified Public Accountants (CPA) Australia, the Hong Kong Institute of Facility
Management and the University of Hong Kong School of Professional and Continuing
Education, an International Affiliate of the Hong Kong Institute of Certified Public
Accountants, and a Distinguished Fellow of the Hong Kong Innovative Technology
Development Association.
Key Personnel of the Investment Manager, Heirloom Investment Management
LLC
Mr. Geoff Dover is the founder and President of Heirloom Family Office, and the President
and Chief Investment Officer of Heirloom Investment Management LLC, a regulated
investment management firm that offers other family offices the opportunity to co-invest in
investments made by Heirloom Family Office. He has over 25 years' experience of
fundamentals-based investment expertise across asset classes with a particular expertise in
originating, evaluating, structuring and executing on unique alternative investments.
10
Directors’ Report
The Board (the “Board”) of Directors (the “Directors”) are pleased to present their report on
the affairs of the Company and its subsidiaries (collectively referred to as the “Group”),
together with the audited financial statements for the year ended 31 December 2023.
PRINCIPAL ACTIVITIES
The Company was incorporated with limited liability under the laws of the British Virgin
Islands (“BVI”). The Company’s shares were admitted to the AIM Market of the London
Stock Exchange on 19 October 2009 and on the Quotation Board of the Open Market of the
Frankfurt Stock Exchange on 6 December 2012. The company, along with its subsidiaries, act
as an investment group. Since the year end, the legacy assets have been transferred to an
independent third party company and the investments in Heirloom funds have been repaid.
RESULTS AND DIVIDENDS
The Company recorded a loss before taxation of US$17.7 million (2022: loss US$52.9 million).
The loss reflects fair value decrease on assets in the portfolio of US$17.3 million (2022:
decrease US$47.4 million), net finance cost of US$0.03 million (2022: net finance income of
US$0.8 million) and total operating expenses of US$1.5 million (2022: US$1.8 million). The
decrease in the fair value of the assets is due to the revaluation of the assets to the value at
which they have been transferred to an independent third party on 1 May 2024.
The Directors are not recommending the payment of a dividend for the year.
REVIEW OF THE BUSINESS
The Group’s audited net asset value as at 31 December 2023 stood at US$0.1 million (2022:
US$15.1 million) equivalent to US$0.00 per share (2022: US$0.13), excluding the effect of
treasury shares held by the Group.
The principal investment assets held by the Company at the year-end, together with their
valuations are set out in the Chairman’s statement.
EVENTS AFTER THE REPORTING PERIOD
The significant events after the reporting period are set out in Note 18 of the financial
statements, none of which impact on the results and net assets reported in these financial
statements.
11
DIRECTORS AND DIRECTORS’ INTERESTS
The Directors who served during the year and up to the date of this report were as follows:
Mr. John Croft
Hugh Viscount Trenchard
Dr. Lee George Lam
Mr. Stuart Crocker
Mr. John Batchelor (resigned Mar 2023)
John Batchelor, Non-Executive Director, has resigned from the Board of Jade Road
Investments on 24 March 2023.
With the exception of the related party transactions stated in Note 16 to the Financial
Statements, there were no other significant contracts, other than Directors’ contracts of service,
in which any Director had a material interest. The Directors who held office as at 31 December
2023 had the following beneficial interests in the shares of the Company and Group companies
as follows:
Number of ordinary shares of no par value as at 31 December
Mr. John Croft
Hugh Viscount
Trenchard
Dr. Lee George Lam
Mr. Stuart Crocker
Direct
130,463
60,634
101,057
80,845
2023
Indirect
10,733
-
-
-
Direct
130,463
60,634
101,057
80,845
2022
Indirect
10,733
-
-
-
Number of warrants over ordinary shares of no par value as at 31 December
Mr. John Croft
Hugh Viscount Trenchard
Dr. Lee George Lam
Mr. Stuart Crocker
Mr. John Batchelor
Direct
800,000
400,000
400,000
-
-
2023
Indirect
-
-
-
-
-
Direct
877,346
457,634
496,057
76,845
-
2022
Indirect
-
-
-
-
-
12
SUBSTANTIAL SHAREHOLDINGS IN THE COMPANY
As far as the Directors are aware at 26 June 2024, the following persons were interested in 3%
or more of the issued share capital of the Company:
Shareholder
Heirloom Group
- Heirloom SPV 2022 II
- Ocorian
Singapore
Trust
Company Pte Ltd as Trustee of
Fidelis Fund
Number of
ordinary shares
191,712,713
156,303,842
21,135,665
Percentage of
issued share capital
54.66%
44.57%
6.08%
- Heirloom
Investment
7,785,192
Management LLC
- Heirloom Fixed Return Fund
- Geoff Dover
Elypsis Solutions Limited
Infinity Capital Group Limited
First Equity Limited
4,883,570
1,404,444
55,225,127
16,179,310
10,000,000
2.22%
1.39%
0.40%
15.75%
4.61%
2.85%
Heirloom SPV 2022 II, Heirloom Investment Management LLC, Ocorian Singapore Trust
Company Pte Ltd as Trustee of Fidelis Fund, Heirloom Fixed Return Fund and Geoff
Dover are under one controlling group – Heirloom Group. The total shareholdings of Heirloom
Group are 54.66%.
FINANCIAL INSTRUMENTS
The Group’s use of financial instruments is described in Note 9 and Note 15.
FINANCIAL RISK MANAGEMENT OBJECTIVES
Management has adopted certain policies on financial risk management with the objective of
ensuring that appropriate funding strategies are adopted to meet the Group’s short-term and
long-term funding requirements, taking into consideration the cost of funding, gearing levels,
and cash flow projections. The policies are also set to ensure that appropriate strategies are
adopted to manage related interest and currency risk funding and to ensure that credit risks on
receivables are properly managed. In addition, Note 14 to the financial statements include the
Group’s objectives, policies, and processes for managing its capital, its financial risk
management objectives, details of its financial instruments and its exposures to credit risk,
interest rate risk, liquidity risk, price risk, and currency risk.
POLICY AND PRACTICE ON PAYMENT OF CREDITORS
The Group seeks to maintain good terms with all of its trading partners. In particular, it is the
Group’s policy to agree appropriate terms and conditions for its transactions with suppliers
and, provided the supplier has complied with its obligations, to abide by the terms of payment
agreed
13
SHARE CAPITAL
The Company has a single class of shares which is divided into ordinary shares of no par value.
At 31 December 2023, the number of ordinary shares in issue was 358,193,134, of which
7,480,000 were held in treasury by the group. Details of movements in the issued share capital
during the year are set out in Note 14 to the financial statements.
DIRECTORS’ INDEMNITY
The Company’s Articles of Association provide, subject to the provisions of BVI legislation,
an indemnity for Directors and officers of the Company in respect of liabilities they may incur
in the discharge of their duties or in the exercise of their powers, including any liabilities
relating to the defence of any proceedings brought against them which relate to anything done
or omitted, or alleged to have been done or omitted, by them as officers or employees of the
Company.
Appropriate directors’ and officers’ liability insurance cover is in place in respect of all of the
Directors.
EMPLOYEE INFORMATION
As at 31 December 2023, the Group had Nil (2022: Nil) employees excluding Directors.
CHARITABLE DONATIONS
The Group didn’t make any charitable donations during the year (2022: Nil).
GOING CONCERN
Notwithstanding the operating loss of US$17.7Mn and operating cash outflows of
USD$1.7Mn for the year ended 31 December 2023 and net current assets of $0.05Mn at year-
end, the group has prepared the financial statements under the going concern. Following the
recent transfer of assets the Company is seeking to acquire a business via a Reverse Take Over
(RTO). The Company will need to raise interim capital to advance discussions for an RTO.
The Company also continues to manage a small number of creditors. The Company is
confident that it will be able to raise the interim capital required, and is in advanced discussions
with a number of parties with respect to this. In addition, the company has also received a
letter of support from its largest shareholder Heirloom in regard to the Company’s fundraising
plans. However, were the company to not obtain this funding in the short term, and Heirloom
unable to financially support the company in the foreseeable future, then the company would
not be able to meet its liabilities as they fall due. Were the company not to be considered a
going concern, there would be no material impact on these financial statements as all
significant items are already held at their fair value. Accordingly, the financial statements have
been prepared on a going concern basis and do not include any adjustments that would result
if the group was unable to continue as a going concern.
14
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and Financial Statements in
accordance with applicable laws and regulations.
Company Law requires the Directors to prepare financial statements for each financial year.
Under that law the Directors have prepared the Group financial statements in conformity with
EU-adopted International Financial Reporting Standards. Under Company Law the directors
must not approve the financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and the profit and loss of the Group for that period.
In preparing the financial statements the Directors are required to:
•
Select suitable accounting policies and then apply them consistently.
• Make judgements and accounting estimates that are reasonable and prudent;
•
Ensure statements are in conformity with EU-adopted International Financial Reporting
Standards; and
•
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the Group’s transactions and disclose with reasonable accuracy at any time
the financial position of the Group and enable them to ensure that the Group financial
statements comply with EU-adopted International Financial Reporting Standards. They are
also responsible for safeguarding the assets of the Group and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
The
Financial
Statements
are
published
on
the
Group’s
website
https://jaderoadinvestments.com. The work carried out by the Auditor does not involve
consideration of the maintenance and integrity of this website and accordingly, the Auditor
accepts no responsibility for any changes that have occurred to the financial statements since
they were initially presented on the website. Visitors to the website need to be aware that
legislation in the United Kingdom covering the preparation and dissemination of the financial
statements may differ from legislation in their jurisdiction.
The company is compliant with AIM Rule 26 with regard to the company website.
15
AUDITOR INFORMATION
The Directors who held office at the date of approval of the Directors’ Report confirm that, so
far as they are each aware, there is no relevant audit information of which the Group’s Auditor
is unaware; and each Director has taken all the steps that he ought to have taken as a director
to make himself aware of any relevant audit information and to establish that the Group’s
Auditor is aware of that information.
On behalf of the Board
John Croft
28 June 2024
Chairman of the Board
16
Corporate Governance Statement
THE BOARD
The Board of Jade Road Investments Limited, in accordance with the AIM Rules, adopted an
appropriate corporate governance code. It has decided to apply the Quoted Companies
Alliance Corporate Governance Code (the QCA Code). The QCA Code is a pragmatic and
practical corporate governance tool which adopts a proportionate, principles-based approach
which the Board believes will enable the explanation of how the Company applies the QCA
Code and its overall corporate governance arrangements. The QCA Code is constructed
around 10 broad principles which are set out below together with an explanation of how the
Company complies with each principle, and where it does not do so, an explanation for that.
As suggested by the QCA, our Chairman, John Croft makes the following statement in relation
to corporate governance:
“As Chairman of the Company, I lead our Board of Directors and have primary responsibility
for ensuring that the Company meets the standards of corporate governance expected of an
AIM investment company of our size. Our over-arching role as a Board is to monitor the
Company’s progress with its investing policy and to ensure that it is being properly pursued.
In pursuing that strategy, our second key focus is to supervise, manage and objectively assess
the performance of our Investment Manager, Heirloom Investment Management LLC. Given
there is no executive team in the Company and no other employees, this relationship is
critically important in terms of delivering value to our shareholders.
We set out below how we as a Board seek to apply the QCA Code, bearing in mind the
particular nature of the Company and its business. Being an investment company means we
are naturally focused on investment strategy and deploying our cash resources in the most
efficient way to produce returns for shareholders in the medium to long term, balancing the
potential risks and rewards of each investment which our Investment Manager proposes. We
have a rigorous investment process including third-party legal, commercial, and financial due
diligence, site visits, management meetings, and independent valuations where relevant. The
output of this work is consolidated and presented to the Board by the Investment Manager in
high-quality investment presentations which are reviewed and discussed at length at
investment board meetings. We are not a large corporate with multiple stakeholders and, as
noted above, our Board is primarily non-executive as at the year end. We, therefore, intend to
take a pragmatic approach to governance structures and processes and whilst retaining a high-
performance culture at Board level, adopt policies and procedures which we think are
appropriate to an investment company on AIM.”
17
The Board, the Investment Manager and Board Committees
The Board is responsible for reviewing and approving the Company’s Investing Policy and
for monitoring the performance of Heirloom Investment Management LLC in the
performance of its obligations under the Services Agreement. The Company holds board
meetings as required and not less than four times annually. The Board has constituted
committees with responsibility for overseeing audit, remuneration, valuation and investment
matters.
The Board has constituted the following Committees:
The Remuneration Committee constituted by Hugh Viscount Trenchard and Dr Lee George
Lam.
The Remuneration Committee reviews the scale and structure of the Directors’ remuneration
and the terms of their service or employment contracts, including warrant schemes and other
bonus arrangements. The remuneration and terms and conditions of the non-executive
Directors are set by the entire Board, with Directors absenting themselves, at the appropriate
time, from discussions on matters directly reflecting their remuneration.
The Investment Committee constituted by John Croft, Hugh Viscount Trenchard, Dr Lee
George Lam, and Stuart Crocker.
The Investment Committee has the primary authority to develop the Company’s investment
objectives and corporate policies on investing. It reviews and approves investment
opportunities presented by the Company’s Investment Manager. The Committee will at all
times be constituted by all the Company’s directors.
The Audit Committee constituted by John Croft and Stuart Crocker.
The Audit Committee appoints and determines the terms of engagement of the Group’s
auditors and will determine, in consultation with the auditors, the scope of the audit. The Audit
Committee monitors the independence of the Group’s auditor, and the appropriateness of any
non-audit services. The Audit Committee receives and reviews reports from management and
the Group’s auditors relating to the interim and annual accounts and the accounting and
internal control systems in use throughout the Group. The Audit Committee has unrestricted
access to the Group’s auditors. The Audit Committee makes recommendations to the Board.
18
The Valuation Committee constituted by Hugh Viscount Trenchard and Dr. Lee George
Lam.
The Valuation Committee is responsible for reviewing the valuation process for all
investments, including the application of appropriate valuation standards, based on the input
of the Company’s Investment Manager and on the Company’s Valuation Policy which was
formally adopted in 2020. Its members are sourced from independent directors of the Board.
It retains the authority to engage with independent 3rd parties at any time with respect to
valuation matters. The Committee comprises a minimum of two members, currently Stuart
Crocker and John Croft, and reports directly to the Board.
DELIVER GROWTH
Principle 1 Establish a strategy and business model which promote long-term value for
shareholders
Principle
The Board must be able to express a shared view of the Company’s purpose, business model
and strategy. It should go beyond the simple description of products and corporate structures
and set out how the company intends to deliver shareholder value in the medium to long term.
It should demonstrate that the delivery of long term growth is underpinned by a clear set of
values aimed at protecting the company from unnecessary risk and securing its long-term
future.
Compliance
The Company provides equity and credit funding to companies, principally in the Pan-Asian
region or with a connection to Asia. It will do this through investing in direct financings, pre-
IPO investments, growth private equity, event driven special situations, opportunistic special
situations, and indirect financing.
The Company is sector agnostic in its investment activities.
New investments will be managed actively, including through appropriate investor protections
which will be negotiated on each transaction as appropriate and relevant.
The Company will consider using debt
to
finance
transactions on a case-by-case
basis and may assume debt on its own balance sheet when appropriate to enhance returns to
Shareholders and/or to bridge the financing needs of its investment pipeline.
The Company has completed its disposal programme post year end for its “legacy” assets.
19
The Board, in collaboration with the Investment Manager, maintains a vigilant watch over
the current investment climate and macro-economic conditions worldwide.
These factors have the potential to impact and, at times, pose challenges to the Company's
strategic execution. This includes considerations of regulatory and governmental policy
changes that may arise, requiring the Company to adapt and navigate accordingly.
Principle 2 Seek to understand and meet shareholder needs and expectations
Principle
Directors must develop a good understanding of the needs and expectations of all elements of
the Company’s shareholder base. The Board must manage shareholders’ expectations and
should seek to understand the motivations behind shareholder voting decisions.
Compliance
The Board is aware of the need to protect the interests of minority shareholders and the
balancing of these interests with those of the majority shareholder. The Board also considers
the terms of the relationship agreement the Company has entered with its largest shareholder
and, where necessary, will enforce any relevant terms.
The Company holds regular investor events in London, Hong Kong and Dubai, where the
Chairman, other members of the Board and the Investment Manager update attendees on key
developments in the portfolio. All shareholders are invited to attend these events. The
Chairman is principally responsible for shareholder liaison.
The Company regularly updates the market via its RNS news feed of any disclosable matters
and where appropriate, also uses social media platforms to engage with a wider audience.
The Company publishes all relevant materials, according to QCA definitions, on its website.
This includes annual reports and shareholder circulars.
Principle 3 Take into account wider stakeholder and social responsibilities and their
implications for long-term success
Principle
Long-term success relies upon good relations with a range of different stakeholder groups both
internal (workforce) and external (suppliers, customers, regulators, and others). The Board
needs to identify the Company’s stakeholders and understand their needs, interests, and
expectations.
20
Where matters that relate to the Company’s impact on society, the communities within which
it operates or the environment have the potential to affect the company’s ability to deliver
shareholder value over the medium to long term, then those matters must be integrated into
the Company’s strategy and business model.
Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit,
consider and act on feedback from all stakeholder groups.
Compliance
The balance of economic value to the Group and social impact is carefully considered, not
only throughout the due diligence for any potential investments but also ongoing monitoring
by of periodical site visits for the invested projects, with the maintenance of high
environmental standards is a key priority. The Board is conscious of its responsibilities in
relation to society, particularly in a developing economy such as China.
The key resources for the Company are principally the Investment Manager and the
Company’s advisory team, including its nominated adviser, brokers, solicitors, and auditors.
The Investment Manager and therefore the Company rely on a network of intermediaries to
originate investment deal flow. The Board speaks to the advisory team on a regular basis and
takes feedback from it throughout the year. In particular, it seeks advice in relation to
compliance with the AIM Rules and their impact on its investments from the nominated
adviser and solicitors and from the auditors in relation to accounting matters including net
asset value and the annual audit.
Principle 4 Embed effective risk management, considering both opportunities and
threats, throughout the organisation
Principle
The Board needs to ensure that the Company’s risk management framework identifies and
addresses all relevant risks in order to execute and deliver strategy; companies need to consider
their extended business, including the Company’s supply chain, from key suppliers to end-
customer.
Setting strategy includes determining the extent of exposure to the identified risks that the
company is able to bear and willing to take (risk tolerance and risk appetite).
21
Compliance
Effective risk management in relation to the Company’s portfolio is key to the Board’s
assessment of the Investment Manager’s performance. Measuring risk in each investment case,
in terms of both how it can be mitigated and the potential upside of taking on such risk are
critical elements of the analysis produced by the Investment Manager and reviewed by the
Board on each proposed investment. Similarly, in conducting the managed disposal
programme, the Board is focused on achieving the best possible value for the assets being
disposed of. At the same time, the Board assesses the risk of maintaining those positions with
the potential for further value to be eroded at the same time as it requires additional time to be
spent by the Board and by the Investment Manager.
MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK
Principle 5 Maintain the Board as a well-functioning, balanced team led by the
Chairman
Principle
The Board members have a collective responsibility to promote the interests of the company
and are collectively responsible for defining corporate governance arrangements. Ultimate
responsibility for the quality of, and approach to, corporate governance lies with the Chairman.
The Board (and any committees) should be provided with high-quality information in a timely
manner to facilitate proper assessment of the matters requiring a decision or insight.
The Board should have an appropriate balance between Executive and Non-Executive
Directors and should have at least two independent Non-Executive Directors. Independence
is a board judgement.
The Board should be supported by committees (e.g., audit, remuneration) that have the
necessary skills and knowledge to discharge their duties and responsibilities effectively.
Directors must commit the time necessary to fulfil their roles.
22
Compliance
The Board consists of the Executive Chairman and three Non-Executive Directors.
The Executive Chairman has been involved with the Company since its predecessor company,
China Private Equity Investment Holdings Limited was admitted to AIM in 2009. Viscount
Trenchard, Dr. Lee George Lam, Mr. Stuart Crocker, and Mr. John Batchelor were all
appointed to the Board in 2017 or later. These four individuals serve as Non-Executive
Directors and are regarded as independent members. However, it is important to note that as
of March 2023, Mr. John Batchelor has departed from the Board.
Each Non-Executive Director is engaged on a 12-month contract with three months’ notice on
either side and is required to commit to a minimum of two days per calendar month.
The Executive Chairman’s roles and responsibilities include but are not limited to engaging
potential clients across Jade Road’s domain in the APAC region, initiating and agreeing Terms
of Engagement with clients, providing the lead consultancy services to clients and support the
business development of the Company, liaising with the Company’s NOMAD and other
advisors in London, and being the main contact between the Board and the Investment
Manager, approving public announcements, engaging with Shareholders, Investors and other
Stakeholders to promote the Company and its business objectives.
As explained above, the Board receives detailed investment papers from the Investment
Manager in relation to any asset which is either recommended for investment or disposal,
including an executive summary of the due diligence findings, results of site visits and
management meetings (including an assessment of the investee company’s management team),
key financial metrics, key risk factors, the potential returns available, security for the
investment and the type of instrument to be used.
Principle 6 Ensure that between them the directors have the necessary up-to-date
experience, skills, and capabilities.
Principle
The Board must have an appropriate balance of sector, financial and public markets skills and
experience, as well as an appropriate balance of personal qualities and capabilities. The Board
should understand and challenge its own diversity, including gender balance, as part of its
composition.
23
The Board should not be dominated by one person or a group of people. Strong personal bonds
can be important but can also divide a board.
As companies evolve, the mix of skills and experience required on the board will change, and
board composition will need to evolve to reflect this change.
Compliance
Directors who have been appointed to the Company have been chosen because of the skills
and experience they offer. The identity of each Director and his full biographical details are
provided on the website, which include each Director’s relevant experience, skills, personal
qualities, and capabilities. The current team of Directors offer a mix of investment, quoted
company, sector and geographical expertise and exposure.
The Board has not taken any specific external advice on a specific matter, other than in the
normal course of business as an AIM-quoted company and in pursuit of the investment policy.
There are no internal advisors to the Board. The Directors rely on the Company’s advisory
team to keep their skills up to date and through attending market updates and other seminars
provided by the advisory team, the London Stock Exchange plc, and other intermediaries.
The Investment Manager is the key external adviser to the Board.
Principle 7 Evaluate Board performance based on clear and relevant objectives, seeking
continuous improvement
Principle
The Board should regularly review the effectiveness of its performance as a unit, as well as
that of its committees and the individual Board members.
The Board performance review may be carried out internally or, ideally, externally facilitated
from time to time. The review should identify development or mentoring needs of individual
directors or the wider senior management team.
It is healthy for membership of the Board to be periodically refreshed. Succession planning is
a vital task for Boards. No member of the Board should become indispensable.
24
Compliance
The Board consists predominantly of Non-Executive Directors, the Company having no
employees. In this regard, Board performance and oversight lies predominantly with the
Chairman and other stakeholders, particularly shareholders. In early 2020, it was determined
by the Remuneration Committee that John Croft be designated as Executive Chairman to align
with his time commitment and contribution to the Company’s affairs.
Events are held with shareholders where feedback on the Company’s progress is sought on a
regular basis, and this interaction provides valuable input on Board performance. Advice is
also sought on Board composition on an ongoing basis from the Company’s NOMAD.
The composition of the Board is reviewed regularly, and changes made where appropriate. As
the Company recently disposed of its entire asset portfolio and is now seeking to raise new
capital to invest in and/or a business via a RTO, the Company may look to broaden its skills
and experience base by the appointment of additional Directors and/or advisors in due course.
The Board does not carry out a formal review process.
Principle 8 Promote a corporate culture that is based on ethical values and behaviours
Principle
The Board should embody and promote a corporate culture that is based on sound ethical
values and behaviours and use it as an asset and source of competitive advantage.
The policy set by the Board should be visible in the actions and decisions of the chief executive
and management team. Corporate values should guide the objectives and strategy of the
company.
The culture should be visible in every aspect of the business, including recruitment,
nominations, training, and engagement. The performance and reward system should endorse
the desired ethical behaviours across all levels of the company.
Compliance
The Board is focused on investment returns for its shareholders and will at all times seek to
make ethical investments, but this is not an investment focus or determinant for an asset being
included in the portfolio. As discussed above, given the Company is an investment company
with no employees or other internal stakeholders, the Board does not drive a corporate culture
within the business.
25
Principle 9 Maintain governance structures and processes that are fit for purpose and
support good decision-making by the Board
Principle
The Company should maintain governance structures and processes in line with its corporate
culture and appropriate to its:
- size and complexity; and
- capacity, appetite, and tolerance for risk. The governance structures should evolve over time
in parallel with the company’s objectives, strategy, and business model to reflect the
development of the company.
Compliance
This section provides full disclosure on the Company’s corporate governance. There are no
immediate plans to make any changes to the governance processes and framework which are
described in the commentary above.
The Chairman has overall responsibility for shareholder liaison.
There are no specific matters reserved for the Board.
BUILD TRUST
Principle 10 Communicate how the company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders
Principle
A healthy dialogue should exist between the Board and all of its stakeholders, including
shareholders, to enable all interested parties to come to informed decisions about the Company.
In particular, appropriate communication and reporting structures should exist between the
Board and all constituent parts of its shareholder base. This will assist:
- the communication of shareholders’ views to the Board; and
- shareholders’ understanding of the unique circumstances and constraints faced by the
Company.
26
Compliance
The Board attaches great importance to providing shareholders with clear and transparent
information on the Group’s activities, strategy, and financial position. Details of all
shareholder communications are provided on the Company’s website, including historical
annual reports and governance-related material together with notices of all general meetings
for the last five years. The Company discloses outcomes of all general meeting votes.
The Company has appointed a professional Financial Public Relations firm with an office in
London to advise on its communications strategy and to assist in the drafting and distribution
of regular news and regulatory announcements. Regular announcements are made regarding
the Company’s investment portfolio as well as other relevant market and regional news.
The Company lists contact details on its website and on all announcements released via RNS,
should shareholders wish to communicate with the Board.
27
Independent Auditor’s Report to the Members of Jade Road Investments
Limited
We have audited the financial statements of Jade Road Investments Limited (the ‘group’) for
the year ended 31 December 2023 which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the
financial statements, including significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
• give a true and fair view of the state of the group’s affairs as at 31 December 2023 and
of its loss for the year then ended; and
• have been properly prepared in accordance with IFRSs as adopted by the European
Union.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial statements section of our report. We
are independent of the group in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2(c) in the financial statements, which indicates that the group is
reliant on securing further financing alongside the realisation of the carrying value of
investments to meet working capital needs as they fall due. Whilst management is confident
that they can secure funding based on advance discussions with investors, there is no
guarantee that such funding would be secured within the required timelines. As stated in Note
2(c), these events or conditions, indicate that a material uncertainty exists that may cast
significant doubt on the group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s ability to continue to adopt the going
28
concern basis of accounting included:
•
•
reviewing management’s assessment of going concern and discussing with
management the future strategic plans of the group and sources of funding that are
expected to be available, as well as plans for cash preservation;
reviewing management-prepared cash flow forecasts up to Dec 2025, including
checking the mathematical accuracy, and assessing their reasonableness through
reference to current year actual financial information;
• obtaining corroborative evidence for, and providing appropriate challenge to, the key
assumptions and inputs used in the cashflow forecast; and
•
reviewing the adequacy and completeness of disclosures surrounding going concern in
the financial statements.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Our application of materiality
For the purposes of determining whether the financial statements are free from material
misstatement, we define materiality as a magnitude of misstatement, including omission, that
makes it probable that the economic decisions of a reasonably knowledgeable person, relying
on the financial statements, would be changed, or influenced. We have also considered those
misstatements including omissions that would be material by nature and would impact the
economic decisions of a reasonably knowledgeable person based our understanding of the
business, industry and complexity involved.
We apply the concept of materiality both in planning and throughout the course of our audit,
and in evaluating the effect of misstatements. Materiality is used to determine the financial
statements areas that are included within the scope of our audit and the extent of sample sizes
during the audit.
We also determine a level of performance materiality which we use to assess the extent of
testing needed to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality for the financial statements as
a whole.
In determining materiality and performance materiality, we considered the following factors:
the change in the level of judgement required in respect of the key accounting estimates;
• our cumulative knowledge of the group and its environment;
•
• significant transactions during the year;
•
•
the level of misstatements identified in prior periods
the stability in key management personnel; and
29
Materiality for the financial statements as a whole was set at $63,200 (2022: $422,000) based
on the draft financial statements. We set the materiality threshold at 1.5% of total asset for the
group in line with the prior year. The benchmark used is the one which we determined, in our
professional judgment, to be the principal benchmark within the financial statements relevant
to shareholders in assessing financial performance of the group as the principal activity is to
invest in quoted and unquoted financial assets for capital appreciation.
Performance materiality for the financial statements was set at $47,400 (2022: $253,200)
being 75% (2022: 60%) of the materiality for the financial statements as a whole. This
threshold was considered appropriate in light of the current size and level of complexity of the
group, and our assessment of inherent risk.
We agreed to report to those charged with governance all corrected and uncorrected
misstatements we identified through our audit with a value higher than $3,160 (2022: $21,100)
for the group. We also agreed to report any other audit misstatements below that threshold that
we believe warranted reporting on qualitative grounds.
Due to audit adjustments, the materiality benchmark set at the planning stage of the audit has
increased significantly. As all the audit adjustments and significant transactions have been
tested using lower materiality, the risk of material misstatement based on the planning
materiality has not increased. We therefore believe that the materiality determined at the
planning stage is still applicable as the audit evidence we have obtained through audit
procedures is sufficient and appropriate to provide a basis for our opinion.
Our approach to the audit
Our audit was risk based and was designed to focus our efforts on the areas at greatest risk of
material misstatement, as well as aspects subject to significant management judgement or
greatest complexity, risk and size. In designing our audit, we determined materiality, as above,
and assessed the risk of material misstatement in the financial statements. We tailored the
scope of our audit to ensure that we performed sufficient work to be able to give an opinion
on the financial statements, having regard to the structure of the group.
The group includes the listed parent company, Jade Road Investments Limited (‘Jade BVI’),
and its subsidiary, Jade Road Investments (HK) Limited (‘Jade HK’).
The scope of our audit was based on the materiality and significance of component operations.
Each component was assessed as to whether they were significant to the group on the basis of
size and risk. The parent company was identified as a significant component due to its size
and identified risks.
Due to Jade BVI being a significant component of the group, we performed a full scope audit
on the parent company as part of the group audit. The work on this significant component of
the group was performed by us as group auditor. Jade HK is a non-significant component of
30
the group and we performed analytical review procedures over the financial information of
this component only.
In designing our audit approach, we considered those areas which were deemed to involve
significant judgement by the directors, such as the key audit matters relating to the fair
valuation of unquoted financial assets and assets held for sale. Other judgemental areas were
the consideration of future events that are inherently uncertain impacting going concern. We
also addressed the risk of management override of controls, including evaluating whether there
was evidence of bias by the directors that represented a risk of material misstatement due to
fraud.
The group’s key accounting function is based in both Hong Kong and the United Kingdom
and our audit was performed by our team in London with regular contact maintained with
group management throughout.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters. In addition to the
matter described in the Material uncertainty related to going concern section, we have
determined the matters described below to be the key audit matters to be communicated in our
report.
We have determined the matters described below to be the key audit matters to be
communicated in our report
Key Audit Matter
How our scope addressed this matter
Fair value unquoted financial assets and
Our work in this area included:
assets held for sale (Notes 9 and 11)
The
financial
statements
include
investments in unquoted financial assets at
fair value through profit and loss amounting
to $500k and assets held for sale amounting
to $4,290k.
The unquoted investments are held in a
private fund.
• Understanding the process adopted by
management in relation to valuation of
investments and assets held for sale;
• Reviewing documentation in respect of
the ownership of investments and assets
held for sale;
• Reviewing management’s assessment and
accounting for assets held for sale;
31
Due to a change in the Group’s investment
• Obtaining direct Net Asset Value (NAV)
strategy, the Group decided to divest its
statements from the investee funds;
legacy assets. The transaction to dispose of
the assets was consummated post year end
and the assets were classified as being held
for sale at the year end.
• Challenging key
assumptions
in
management’s valuation models used to
determine fair value and/or recoverable
amount, including sensitivity of valuations
All of these investments and assets held for
to changes in assumptions and inputs;
sale are measured at fair value based on
Level 3 inputs.
• Reviewing purchase and sale/potential
sale transactions used for fair valuation
The valuation of investments and assets held
determination
to
ensure
that
such
for sale requires the exercise of considerable
transactions are at arm’s length;
judgement and use of estimates which
increases
the
risk
that valuation and
presentation may be misstated, and therefore
has been determined to be a Key Audit
Matter.
• Considering any subsequent events or
developments
that may
impact
the
valuation or classification of the assets held
for sale; and
• Reviewing
the
classification
of
investments, disclosure and presentation of
assets held for sale and valuation inputs
within the financial statements
Other information
The other information comprises the information included in the annual report, other than the
financial statements and our auditor’s report thereon. The directors are responsible for the
other information. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. In connection with our audit of the financial
statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement
of the other information. If, based on the work we have performed, we conclude that there is
a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
32
Responsibilities of directors
As explained more fully in the Statement of directors’ responsibilities, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud is detailed below:
• We obtained an understanding of the group and the sector in which it operates to
identify laws and regulations that could reasonably be expected to have a direct effect
on the financial statements. We obtained our understanding in this regard through
discussions with management, industry research, application of cumulative audit
knowledge and experience of the sector. We also selected a specific audit team with
experience of auditing entities facing similar audit and business risks.
• We determined the principal laws and regulations relevant to the group in this regard
to be those arising from:
- AIM rules;
- General Data Protection Regulations;
- Anti-Bribery Act;
- Anti Money Laundering Regulations; and
- Local tax laws and regulations.
The audit team remained alert to instances of non-compliance with laws and
regulations throughout the audit.
33
• We designed our audit procedures to ensure the audit team considered whether there
were any indications of non-compliance by the group with those laws and regulations.
These procedures included, but were not limited to:
- Making enquiries of management;
- Reviewing Board meeting minutes;
- Reviewing the nature of legal professional fees;
- Reviewing Regulatory News Service announcements.
• We also identified the risks of material misstatement of the financial statements due to
fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud
arising from management override of controls and revenue recognition, inappropriate
application of the going concern assessment in the financial statements and
management bias in determining key accounting estimates and judgements used in
relation to the fair valuation of unquoted financial assets and assets held for sale. We
addressed this by challenging the estimates/judgements made by management when
auditing these significant accounting estimates/judgements (refer to the key audit
matter and going concern sections above).
• As in all of our audits, we addressed the risk of fraud arising from management
override of controls by performing audit procedures, which included, but were not
limited to testing of journals, reviewing key accounting judgements for evidence of
bias (refer to the key audit matter and going concern sections above) and evaluating
the business rationale of any significant transactions that are unusual or outside the
normal course of business.
• Our review of non-compliance with laws and regulations incorporated the listed parent
company. The risk of actual or suspected non-compliance was not sufficiently
significant to our audit to result in our response being identified as a key audit matter.
Because of the inherent limitations of an audit, there is a risk that we will not detect all
irregularities, including those leading to a material misstatement in the financial statements or
non-compliance with regulation. This risk increases the more that compliance with a law or
regulation is removed from the events and transactions reflected in the financial statements,
as we will be less likely to become aware of instances of non-compliance. The risk is also
greater regarding irregularities occurring due to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located
on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
34
Use of our report
This report is made solely to the company’s members, as a body, in accordance with our
engagement letter dated 2 May 2024. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone, other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Nicholas Joel (Engagement Partner)
For and on behalf of PKF Littlejohn LLP
Registered Auditor
28 June 2024
15 Westferry Circus
Canary Wharf
London E14 4HD
35
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
Notes
2023
US$’000
2022
US$’000
Income from unquoted financial assets
Finance income from loans
Realised (losses) / gains
Gross portfolio income
Fair value changes on financial assets at fair value
through profit or loss
Investment provisions
Net portfolio loss
Management fees
Incentive fees
Administrative expenses
Operating loss
Finance expense
Loss before taxation
Taxation
1,090
545
(1)
1,174
1,359
300
1,634
2,833
(17,295)
-
(47,409)
(6,003)
(15,661)
(50,579)
(350)
43
(1,171)
(1,200)
158
(763)
(17,139)
(52,384)
(577)
(520)
(17,716)
(52,904)
-
-
3
4
3
16
5
6
8
Total comprehensive loss for the year
(17,716)
(52,904)
Loss per share
Basic and diluted loss per share
17
(5.94) cents
(45.89) cents
The results reflected above relate to continuing operations.
The accompanying notes on pages 40 to 59 are an integral part of these financial statements.
36
Consolidated Statement of Changes in Equity
For the year ended 31 December 2023
Treasury
share
reserve
US$’000 US$’000
Share
capital
Share
based
payment
reserve
US$’000
Accumulated
losses
US$’000
Total
US$’000
Group balance at 1 January 2022
148,903
(615)
2,936
(83,196)
68,028
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
-
-
-
-
-
-
(52,904)
-
(52,904)
-
(52,904)
(52,904)
148,903
(615)
2,936
(136,100)
15,124
Group balance at 31 December
2022 and 1 January 2023
Loss for the year
Other comprehensive income
Total comprehensive loss for the
year
-
-
-
-
-
-
Issue of shares net of issue costs
2,783
-
Repurchase of shares
-
(139)
-
-
-
-
-
(17,716)
(17,716)
(17,716)
(17,716)
-
-
2,783
(139)
Group balance at 31 December
2023
151,686
(754)
2,936
(153,816)
52
The following describes the nature and purpose of each reserve within owners’ equity.
Share capital
Amount subscribed for share capital at no par value
Treasury share reserve
Cost of the Company’s shares re-purchased and held by the Group
Share based payment reserve
The share-based payment reserve represents amounts in previous and the
current periods, relating to share-based payment transactions granted as
options/warrants and under the Group’s share option scheme (Note 15)
Accumulated losses
Represents the cumulative net gains and losses recognised in the statement
of comprehensive income
The accompanying notes on pages 40 to 59 are an integral part of these financial statements.
37
Consolidated Statement of Financial Position
As at 31 December 2023
2023
2022
Notes
US$’000
US$’000
Current Assets
Unquoted financial assets at fair value through
profit or loss
Other receivables at fair value through profit
or loss
Investments held for sale
Cash and cash equivalents
9
10
11
Total assets
Current Liabilities
Other payables and accruals
Loans & borrowings
Total liabilities
Net assets
Equity and reserves
Share capital
Treasury share reserve
Share based payment reserve
Accumulated losses
12
13
14
14
Total equity and reserves attributable to
owners of the parent
500
18,227
19
4,290
77
1,769
-
321
4,886
20,317
991
3,843
4,834
1,334
3,859
5,193
52
15,124
151,686
(754)
2,936
(153,816)
148,903
(615)
2,936
(136,100)
52
15,124
The financial statements were approved by the Board of Directors and authorised for issue on
28 June 2024 and signed on its behalf by:
John Croft
Executive Chairman
The accompanying notes on pages 40 to 59 are an integral part of these financial statements.
38
Consolidated Cash Flow Statement
For the year ended 31 December 2023
Cash flows from operating activities
Loss before taxation
(17,716)
(52,904)
2023
US$’000
2022
US$’000
Adjustments for:
Finance income
Finance expense
Foreign exchange
Fair value changes on unquoted financial assets at fair value
through profit or loss
Fair value changes on loans and receivables at fair value
through profit or loss
Realised gain on investments
Decrease in other receivables
(Decrease)/increase in other payables and accruals
(545)
577
47
13,938
2,236
-
13
(323)
(1,359)
520
83
47,074
5,059
(300)
28
325
Net cash used in operating activities
(1,773)
(1,477)
Cash flows from investing activities
Sale proceeds of unquoted financial assets at fair value through
profit or loss
Purchase of unquoted financial assets at fair value
Net cash used in investing activities
Cash flows from financing activities
Issue of shares net of issue costs
Purchase of treasury shares
Payment of interest
Net cash generated from/(used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents and net debt at the beginning of the
year
Foreign exchange on cash balances
Cash and cash equivalents and net debt at the end of the
year
250
(750)
(500)
2,763
(139)
(594)
2,030
(243)
321
(1)
77
1,200
-
1,200
-
-
(228)
(228)
(505)
848
(22)
321
The accompanying notes on pages 40 to 59 are an integral part of these financial statement
39
JADE ROAD INVESTMENTS LTD
Notes to the Financial Statements
For the year ended 31 December 2023
1. GENERAL INFORMATION
The Company is a limited (by shares) company incorporated in the British Virgin Islands (“BVI”) under
the BVI Business Companies Act 2004 on 18 January 2008. The address of the registered office is
Commerce House, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, British Virgin Islands VG1110
and its principal place of business is c/o Harmony Capital, 20/F, Infinitus Plaza, 199 Des Voeux Road
Central, Hong Kong.
The Company is the holding company of a group of companies comprising a subsidiary, Jade Road
Investments (HK) Limited. The address of the registered office and its principal place of business is c/o
Harmony Capital, --20/F, Infinitus Plaza, 199 Des Voeux Road Central, Hong Kong and a number of wholly
owned special purpose vehicles (“SPV”) each of which holds investments.
The Company is quoted on the AIM Market of the London Stock Exchange (code: JADE) and the Quotation
Board of the Open Market of the Frankfurt Stock Exchange (code: 1CP1).
The Company is targeting delivery of income and capital gain from a diversified mix of pan-Asian
investments in the Small- and Medium-Sized Enterprise (“SME”) sector.
The Groups investment policy is stated in pages 4-5 of the annual report.
2. ACCOUNTING POLICIES
a) Basis of Preparation
The principal accounting policies adopted in the preparation of the financial statements are set out
below.
The Group’s financial statements have been prepared in accordance with International Financial
Reporting Standards (IFRSs and IFRIC interpretations) as adopted by the EU. The financial statements
have been prepared under the historical cost convention. Financial instruments are measured at fair
value at the end of each reporting period.
Historical cost is generally based on the fair value of the consideration given in exchange for goods
and services.
Fair Value Measurements:
Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date under current market conditions.
The fair value of investments is first based on quoted prices, where available. Where quoted prices are
not available, the fair value is estimated using consistent valuation techniques across periods of
measurement.
The Group’s private credit and equity investments are recorded at fair value or at amounts whose
carrying values approximate fair value. Net gains and losses, including any interest or dividend income,
are recognised in its profit or loss statement.
In accordance with IFRS 13, fair value measurements are categorised into Level I, II or III based on
the degree to which the inputs to the fair value measurements are observable and the significance of
the inputs to the fair value measurement in its entirety. These are described as follows:
Level I Fair value measurements are those derived from quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level II Fair value measurements are those derived from inputs other than quoted prices included
within Level I that are observable for the assets or liability, either directly or indirectly.
Level III Fair value measurements are those derived from inputs that are not based on observable
market data.
40
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
b) Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
(other than structured entities) controlled by the Company. Control is achieved where the Company:
▪
▪
▪
has the power over the investee;
is expected, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls a subsidiary if facts and circumstances indicate
that there are changes to one or more of the three elements of control listed above.
The Company holds investments through a number of unlisted wholly owned special purpose vehicles
(“SPVs”). The directors have considered the definition of an investment entity in IFRS10 and the
associated application guidance and consider that the Company meets that definition. Consequently,
the Group’s investments in SPVs and the underlying investments are accounted for at fair value
through profit and loss and the SPVs are not consolidated as subsidiaries. Please see Note 4(o) Critical
accounting estimates and judgements for description of fair value methodology.
Consolidation of a subsidiary other than those held for investment purposes begins when the Company
obtains control over the subsidiary and ceases when the Company loses control of the subsidiary.
Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included
in the consolidated statement of profit or loss and other comprehensive income from the date the
Company gains control until the date when the Company ceases to control the subsidiary.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated
statement of comprehensive income from the effective date of acquisition and up to the effective date
of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Associates are those entities in which the Group has significant influence, but not control, over the
financial and operating activities.
Investments that are held as part of the Group’s investment portfolio are carried in the balance sheet
at fair value even though the Group may have significant influence over those companies. This
treatment is permitted by IAS 28 – Investment in Associates, which requires investment held by
venture organisations to be excluded from its scope where those investments are designated, upon
initial recognition, as at fair value through profit or loss and accounted for in accordance with IFRS 9,
with changes in fair value recognised in the statement of comprehensive income in the period of
change. The Group has no interests in associates through which it carries on its business.
c) Going Concern
Notwithstanding the operating loss of US$17.7Mn and operating cash outflows of USD$1.7Mn for
the year ended 31 December 2023 and net current assets of $0.05Mn at year-end, the group has
prepared the financial statements under the going concern.
Following the recent transfer of assets the Company is seeking to acquire a business
via a Reverse Take Over (RTO). The Company will need to raise interim capital to
advance discussions for an RTO. The Company also continues to manage a small
number of creditors. The Company is confident that it will be able to raise the interim capital
required, and is in advanced discussions with a number of parties with respect to this. In addition, the
company has also received a letter of support from its largest shareholder Heirloom in regard to the
Company’s fundraising plans. However, were the company to not obtain this funding in the short term,
and Heirloom unable to financially support the company in the foreseeable future, then the company
would not be able to meet its liabilities as they fall due. Were the company not to be considered a
going concern, there would be no material impact on these financial statements as all significant items
are already held at their fair value.
41
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
Accordingly, the financial statements have been prepared on a going concern basis and do not include
any adjustments that would result if the group was unable to continue as a going concern.
d) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
senior management and Board members. The senior management and Board members, who are
responsible for allocating resources and assessing performance of the operating segments, have been
identified as the senior management and Board members that make strategic decisions. The Group is
principally engaged in investment business, the Directors consider there is only one business activity
significant enough for disclosure. This activity consists of entities which operate in two geographical
locations, i.e., BVI and Hong Kong.
e) Revenue Recognition
Revenue is recognised when it is probable that the economic benefits will flow to the Group and when
the revenue and costs, if applicable, can be measured reliably and on the following basis:
▪ Dividend income is recognised when the Company’s right to receive payment is established.
▪
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that asset’s net carrying amount.
▪ Fair value changes on financial assets represents the overall changes in net assets from the
investment portfolio net of deal-related costs.
Other income comprised management recharges from the parent company to its subsidiary which are
eliminated on consolidation.
f)
Impairment of Non-Financial Assets
At each balance sheet date, the Group reviews internal and external sources of information to
determine whether its fixtures, fittings and equipment and investment in subsidiaries have suffered an
impairment loss or impairment loss previously recognised no longer exists or may be reduced. If any
such indication exists, the recoverable amount of the asset is estimated, based on the higher of its fair
value less costs to sell and value in use. Where it is not possible to estimate the recoverable amount of
an individual asset, the Group estimates the recoverable amount of the smallest group of assets that
generates cash flows independently (i.e., cash-generating unit).
If the recoverable amount of an asset or a cash-generating unit is estimated to be less than its carrying
amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount.
Impairment losses are recognised as an expense immediately.
A reversal of impairment loss is limited to the carrying amount of the asset or cash-generating unit
that would have been determined had no impairment loss been recognised in prior years. Reversal of
impairment loss is recognised as income immediately.
g) Financial Instruments
Financial assets and financial liabilities are recognised on the balance sheet when a group entity
becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities
are initially measured at fair value. Financial assets at fair value through profit or loss includes loans
and receivables.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities at fair value through profit or
loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in profit or loss.
42
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost or fair
value through profit or loss. The classification of financial assets at initial recognition depends on the
financial asset’s contractual cash flow characteristics and the Group’s business model for managing
them.
Unquoted Financial Assets:
Classification
The Group classifies its unquoted financial assets as financial assets at fair value through profit or loss.
These financial assets are designated by the directors as at fair value through profit or loss at inception.
Financial assets designated as at fair value through profit or loss at inception are those that are managed
as part of an investment portfolio and their performance evaluated on a fair value basis in accordance
with the Group’s Investment Strategy.
Recognition/Derecognition
Regular-way purchases and sales of investments are recognised on the trade date – the date on which
the Group commits to purchase or sell the investment.
A fair value through profit or loss asset is derecognised when the Group loses control over the
contractual rights that comprise that asset. This occurs when rights are realised, expire or are
surrendered and the rights to receive cash flows from the investments have expired or the Group has
transferred substantially all risks and rewards of ownership. Realised gains and losses on fair value
through profit or loss assets sold are calculated as the difference between the sales proceeds and cost.
Fair value through profit or loss assets that are derecognised and corresponding receivables from the
buyer for the payment are recognised as of the date the Group has transacted an unconditional disposal
of the assets.
Measurement
Financial assets at fair value through profit or loss are initially recognised at fair value. Transaction
costs are expensed through the profit or loss. Subsequent to initial recognition, all financial assets at
fair value through profit or loss are measured at fair value in accordance with the Group’s valuation
policy, as the Group’s business is to invest in financial assets with a view to profiting from their total
return in the form of capital growth and income. Gains and losses arising from changes in the fair
value of the financial assets at fair value through profit or loss are presented in the period in which
they arise. For more information on valuation principles applied, please see section 4(o) Critical
Accounting Estimates.
Quoted Financial Assets:
The fair values of financial assets with standard terms and conditions and traded on active liquid
markets are determined with reference to quoted market bid prices and are classified as current assets.
Purchases and sales of quoted investments are recognised on the trade date where a contract of sale
exists whose terms require delivery within a time frame determined by the relevant market.
In the opinion of the Directors, cash flows arising from transactions in equity investments represent
cash flows from investing activities.
Allowance for Expected Credit Losses:
An allowance for ECLs may be established for amounts due from credit contracts within Loans and
Receivables where evidence of credit deterioration is observed. In order to assess credit deterioration,
the Group considers reasonable and supportable information that is relevant and available without
undue cost or effort. This includes both quantitative and qualitative information and analysis, based
on its historical experience and informed credit assessment, that includes forward-looking information.
The main factors considered include material financial deterioration of the borrower, breach of
contract such as default or delinquency in interest or principal repayments, probability that a borrower
will enter bankruptcy or financial re-organisation and material decline in the value of the underlying
applicable security. ECL allowances are distinguished from Likely Credit Loss (“LCL”) allowances
based on the expectation of a loss. An LCL reserve is established when a loss is both probable and the
amount is known.
ECLs are a probability-weighted estimate of lifetime credit losses. Under the ECL model, the Group
43
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
calculates the allowance for credit losses by considering on a discounted basis the cash shortfalls it
would incur in various default scenarios for prescribed future periods and multiplying the shortfalls
by the probability of each scenario occurring. The allowance is the sum of these probability weighted
outcomes. Credit losses are measured as the present value of all cash shortfalls (i.e., the difference
between the cash flows due to the entity in accordance with the contract and the cash flows that the
Group expects to receive) with a discount factor applied.
Cash and Cash Equivalents:
For the purpose of the cash flow statement, cash equivalents represent short-term highly liquid
investments which are readily convertible into known amounts of cash, and which are subject to an
insignificant risk of change in value, net of bank overdrafts.
Financial Liabilities
The Group’s financial liabilities include other payables and accruals and amounts due to related parties.
All financial liabilities except for derivatives are recognised initially at their fair value and
subsequently measured at amortised cost, using effective interest method, unless the effect of
discounting would be insignificant, in which case they are stated at cost.
Equity Instruments
Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.
h)
i)
Investment in Subsidiaries
Investments in subsidiaries are stated at cost less provision for any impairment in value. Under IFRS
10, where the parent company is qualified as an investment entity, the subsidiaries have been
deconsolidated from the Group financial statements.
Taxation
The charge for current income tax is based on the results for the period as adjusted for items that are
non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet
date between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. However, if the deferred tax arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither the
accounting profit nor taxable profit or loss, it is not accounted for.
The deferred tax liabilities and assets are measured at the tax rates that are expected to apply to the
period when the asset is recovered or the liability is settled, based on tax rates and tax laws that have
been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised to
the extent that it is probable that future taxable profit will be available against which the deductible
temporary differences, tax losses and credits can be recognised.
j) Dividends
Dividends payable are recorded in the financial statements in the period in which they meet the IAS
32 definition of having been declared.
k) Share Based Payments
The Group has applied the requirements of IFRS 2 “Share Based Payments”. The Group issues share
options/warrants as an incentive to certain key management and staff (including Directors) and its
Investment Manager. The fair value of options/warrants granted to Directors, management personnel,
employees and Investment Manager under the Company’s share option/warrant scheme is recognised
as an expense with a corresponding credit to the share-based payment reserve. The fair value is
measured at grant date and spread over the period during which the awards vest. The fair value is
measured using the Black Scholes Option pricing model.
The Group, on special occasions as determined by the Directors, may issue options/warrants to key
consultants, advisers and suppliers in payment or part payment for services or supplies provided to the
Group. The fair value of options/warrants granted is recognised as an expense with a corresponding
credit to the share-based payment reserve. The fair value is measured at grant date and spread over the
period during which the options/warrants vest. The fair value is measured at the fair value of receivable
44
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
services or supplies.
The options/warrants issued by the Group are subject to both market-based and non-market based
vesting conditions.
Non-market vesting conditions are not taken into account when estimating the fair value of awards as
at grant date; such conditions are taken into account through adjusting the equity instruments that are
expected to vest.
The proceeds received, net of any attributable transaction costs, are credited to share capital when
options/warrants are converted into ordinary shares.
l) Earnings Per Share
The Group calculates both basic and diluted earnings per share in accordance with IAS 33 “Earnings
per Share”. Under IAS 33, basic earnings per share is computed using the weighted average number
of shares outstanding during the period. Diluted earnings per share is computed using the weighted
average number of shares during the period plus the period dilutive effect of options outstanding during
the period. Potential ordinary shares are only treated as dilutive if their conversion to shares would
decrease earnings per share or increase loss per share from continuing operations.
m) Share Issue Expenses
Share issue expenses are written off against the share capital account arising on the issue of share
capital.
n) Critical Accounting Estimates and Judgements
Preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about carrying values of
assets and liabilities that are not readily apparent from other sources.
In particular, significant areas of estimation, uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the Financial
Statements are in the following areas:
Assessment of accounting treatment under IFRS 10, IFRS 12, and IAS 27 - Investment entities
The directors have concluded that the Company meets the definition of an Investment Entity because
the Company:
obtains funds from one or more investors for the purpose of providing those investor(s) with
commits to its investor(s) that its business purpose is to invest funds solely for returns from
a.
investment management services;
b.
capital appreciation, investment income, or both; and
c.
basis.
measures and evaluates the performance of substantially all of its investments on a fair value
The investment objective of the Company is to produce returns from capital growth and to pay
shareholders a dividend. The Group has multiple unrelated investors and indirectly holds multiple
investments. Investment positions are in the form of structured loans or equity instruments in private
companies operating which is valued on a fair value basis.
As a result, the unlisted open-ended investments, also referred to as SPVs, and in which the Company
invests in are not consolidated in the Group financial statements.
Assessment of Accounting Treatment under IAS 28 - Investment in Associates
The Group has taken advantage of the exemption under IAS28 Investments in Associates whereby
IAS 28’s requirements do not apply to investments in associates held by venture capital organisations.
This exemption is conditional on the investments being designated as at fair value through profit and
loss or being classified as held for trading upon initial recognition. Such investments are measured at
fair value with changes in fair value being recognised in the statement of comprehensive income.
45
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
Valuation of Investments
The Group’s investment portfolio includes a number of investments in the form of structured loans or
equity instruments in private companies operating in emerging markets. In the second half of 2023,
the Board took the decision to restructure the Company by disposing of all of its legacy Asian assets,
the loan note, and the payable to the Company’s previous Investment Manager Harmony Capital
Investors Limited, and transferring them to a separate privately held company whose shareholders
would be a mirror of the shareholders in JADE.
As the legacy assets are transferred for no consideration, the US$3.62m loan notes plus the value of
the payable to Harmony Capital Investors Limited US$670k are considered to represent the fair value
of the Legacy Assets to be transferred between Jade and the SPV. Therefore, the Board has decided
to write down the fair value of the Legacy Assets equal to the liabilities transferred to the SPV.
o) Foreign currency translation
– Functional and Presentation Currency
Both the functional and presentational currency of the Group’s entities are the United States
Dollar. The financial statements are presented in United States Dollars and rounded to the nearest
thousand dollars, except when otherwise indicated.
Transactions in foreign currencies are converted into the functional currency on initial
recognition, using the exchange rates approximating those ruling at the transaction dates.
Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling
as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed
when the values were determined. All exchange differences are recognised in profit or loss.
p) Assets held for sale
During the year, the Group reached an agreement to dispose of legacy assets held by the Group.
These assets, along with the convertible loan note issued by the Group, will be transferred to an
independent third party for nil consideration. The agreement was signed on 29 December 2023,
however conditions required for the sale completed had not all been met at this date, and therefore
it cannot be considered an adjusting event for the purposes of IAS 10 Events after the reporting
period. However, as the sale was highly probably and a buyer for the assets had already been
agreed, these assets meet the criteria to be considered assets held for sale under IFRS 5 Non-
current Assets Held for Sale and Discontinued Operations.
The assets held for sale are being transferred at nil consideration. However, the convertible loan
notes issued by the Group are also being transferred. Therefore, the value of the loan notes is
considered to represent the fair value of the legacy assets, and therefore the assets are impaired
to this value.
New Standards, Amendments to Standards or Interpretations adopted in these financial statements:
No standards, amendments or interpretations which became effective from 1 January 2023 had an impact on the
Group Financial Statements.
Standards, amendments and interpretations to existing standards that are not yet effective and have not been
early adopted by the Company in the 31 December 2023 financial statements
Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as Current of Non-
current 1 January 2024
Amendments to IAS 1 Presentation of Financial Statements: Non-current
Liabilities with Covenants 1 January 2024
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) 1 January 2024
The Directors do not expect that their adoption will have a material impact on the financial statements of the
company in future years. The Directors continue to monitor the impact of future changes to the reporting
requirements but do not believe the proposed changes will significantly impact the financial statements.
46
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
3.
SEGMENT INFORMATION
The operating segment has been determined and reviewed by the senior management and Board members to be
used to make strategic decisions. The senior management and Board members consider there to be a single
business segment, being that of investing activity. The reportable operating segment derives its revenue
primarily from structured equity and debt investment in several companies and unquoted investments.:
4. FAIR VALUE CHANGES ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR
LOSS
Unquoted Financial Assets
Income through profit or loss
Equity fair value adjustments:
– Meize/ Swift Wealth
– FMHL
– ICG
– Infinity TNP
– DocDoc
– Other
Realised Gain
Expected credit loss provision:
– ICG
– FMHL
Foreign exchange on unquoted financial
assets at fair value through profit or loss
Total fair value changes on unquoted financial
assets at fair value through profit or loss
2023
US$’000
1,090
2022
US$’000
1,174
(8,801)
(1,538)
(1,659)
-
(3,016)
(15)
(15,029)
-
-
-
2
1,500
(45,146)
-
(3,650)
(47,296)
300
(363)
(581)
(8)
(13,937)
(46,774)
Loans & Receivables financial assets
Income through profit or loss
US$’000
545
2023
2022
US$’000
1,359
Fair value adjustments:
– FMHL (loan principal)
– FMHL (Accrued interest)
– CJRE (Project Nichlaus)
Expected credit loss provision:
– FLMHL (Accrued interest)
– HKMH (Loan principal)
Foreign exchange on Loans & Receivables
at fair value through profit or loss
Total fair value changes on Loans &
Receivables at fair value through profit or
loss
Expected Credit Loss Provision
Balance at 1 January
ECL charged (utilitised) to profit or loss
Balance at 31 December
47
-
(532)
(1,736)
-
-
(83)
-
-
-
(1,359)
(3,700)
(22)
(1,723)
(3,805)
6,038
(6,038)
-
35
6,003
6,038
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
The impact of foreign exchange on the investments in the portfolio is as follows:
FMHL
Foreign exchange on unquoted financial
assets at fair value through profit or loss
CJRE
Foreign exchange on loans and receivables
Cash
2023
US$’000
2022
US$’000
2
2
(44)
(44)
(1)
(8)
(8)
(83)
(83)
(22)
Foreign exchange on portfolio
(43)
(113)
5. OPERATING LOSS
Operating loss is stated after charging expenses:
Investment Manager fee
Investment Manager incentive fee
Fees to the Group’s auditor for audit of the
Company and its subsidiaries
Directors’ remuneration
Professional fees
Business travel expenses
Bank charges
Foreign exchange
Other expenses
2023
US$’000
350
(43)
2022
US$’000
1,200
(158)
51
321
727
19
11
-
67
53
260
414
4
9
1
22
The Investment Manager’s incentive fee is only payable in any given year depending on the performance
of the Company’s net asset value. The charge above is a result of warrants owed (not yet issued) revalued
to their prevailing share price at 31 December 2023. (Also see Note 16).
6. NET FINANCE INCOME
Interest from financial assets measured at fair
value through profit and loss
Finance income
Interest payable on debt
Finance cost
Net finance income
2023
US$’000
2022
US$’000
545
545
1,359
1,359
(577)
(520)
(577)
(520)
(32)
839
Finance income in the year is from the Convertible Bond issued by FLMH which has been fully provided
against.
48
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
7. DIRECTORS’ REMUNERATION
Short term employment benefits
John Croft
Hugh Trenchard
Lee George Lam
Stuart Crocker
2023C
US$
167,000
44,795
46,000
63,000
2022
US$
120,755
44,223
45,971
49,112
320,795
260,061
Directors’ remuneration includes all applicable social security payments. There was no pension cost
incurred during 2023 (2022:US$ Nil).
There are no employees within the group other than the Directors (2022: Nil)
8. TAXATION
The Group companies are incorporated in the BVI and Hong Kong. Not subject to any income tax in the
BVI. The company does not engage in any business activities or generate income in Hong Kong; therefore
it is not subject to taxation in Hong Kong.
9. UNQUOTED FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
2023
Unquoted
financial assets
US$’000
2023
Loans and
receivables
US$’000
2022
Unquoted
financial assets
US$’000
2022
Loans and
receivables
US$’000
Balance as at 1 January
18,227
1,769
66,202
5,556
Additions
750
-
-
Reclassification
Fair value changes through profit or loss
Transferred to held for sale
Disposal
Realised gain
ECL
Finance income on loans
Balance as at 31 December
-
(13,937)
(4,290)
(250)
-
-
-
500
-
(2,314)
-
-
-
-
545
-
-
(46,131)
-
(1,200)
300
(944)
-
18,227
-
-
(87)
-
-
-
(5,059)
1,359
1,769
The Group values its investments at fair value through profit or loss, as prescribed by the investment methodology
adopted by the Board which is summarised in Note 2(o) Critical accounting estimates and judgements, for non-
legacy assets.
49
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
SPVs
The unlisted open-ended investments below are defined as SPVs and are reported at the fair value of their
underlying investments described above at 31 December 2023.
Name of SPV
Country of
Incorporation
Lead Winner Limited
Dynamite Win Limited
Future Metal Holdings Limited
Swift Wealth Investments Limited
Ultimate Prosperity Limited
TNP Asia Limited
Eastern Champion Limited
BVI
BVI
BVI
BVI
BVI
BVI
BVI
Percentage owned
2022
2023
Principal activities
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Investment Holdings
Investment Holdings
Investment Holdings
Investment Holdings
Investment Holdings
Investment Holdings
Investment Holdings
Further details of financial assets are set out in Note 15, and investment valuation methodologies are set out in
Note 2(o) Critical accounting estimates and judgements.
10. LOANS AND OTHER RECEIVABLES AT FAIR VALUE THROUGH PROFIT OR LOSS
Other receivables
FLMHL
Loan principal
Accrued PIK interest
Accrued interest payable in cash
Fair Value Adjustments – Principal
Fair Value Adjustments – Accrued Interest
Gross loans receivable
HKMH
Loan principal
Fair Value Adjustments – Principal
Gross loans receivable
2023
US$’000
2022
US$’000
19
19
2023
US$’000
-
532
-
-
(532)
-
-
-
-
1,769
1,769
2022
US$’000
26,500
2,248
3,070
(26,500)
(5,318)
-
3,700
(3,700)
-
As at 31 December 2022, Loans represent the Convertible Bond issued by Fook Lam Moon Holdings plus
accrued Paid-in-Kind (“PIK”) and cash interest. This balance is included within the legacy assets that will be
transferred post year-end and, as described in note 9, the value of this asset is considered to be zero. The remaining
balance represents prepayments.
50
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
11. ASSETS HELD FOR SALE
Opening balance
Transferred from unquoted investments at fair value
through profit or loss (Future Metal Holdings Limited)
Assets available for sale
2023
US$’000
2022
US$’000
-
4,290
4,290
-
-
-
The assets held for sale represent the legacy assets of the group. The assets and the basis of their valuation is
described in Note 2(n).
12. OTHER PAYABLES AND ACCRUALS
Accounts payable
Accruals
Other payables and accruals
13. LOANS AND BORROWINGS
Corporate debt
Loans and borrowings
The movement in loans and borrowings is as follows
Opening balance
Borrowing costs amortised
Interest expense accrued
Payment of interest liability
Closing balance
2023
US$’000
2022
US$’000
794
197
991
1,254
80
1,334
2023
US$’000
2022
US$’000
3,843
3,843
3,859
3,859
2023
US$’000
2022
US$’000
3,859
-
577
(594)
3,843
3,568
52
467
(228)
3,859
51
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
i. Terms and conditions of the outstanding debt is as follows:
Secured loan notes
Currency
Interest
rate
Year of
maturity
US$
17%
2024
The corporate debt US$3.8 million are proceeds from loan notes issued to a family office investor, with a related
debenture which constitutes a fixed over the assets and undertakings of the Company. Capitalised debt issue costs
have been fully amortised.
In December 2022 the Company agreed an extended maturity of the loan notes issued to 31 December 2023 and
an increased interest rate of 15% from December 2022. The interest rate payable on the principal amount of the
loan notes ranged between 16%-18% per annum as US$1.8m or more of the principal amount remained
outstanding. This bond will be transferred as part of the ‘Legacy Asset’ transfer after the year end.
ii. Reconciliation of movements of liabilities & equity to cashflows arising from financing activities
Loans &
borrowings
US$’000
Share capital/
premium
US$’000
Treasury
reserve
US$’000
Opening balance at 1 January 2023
3,859
148,903
Changes from cashflows
Issue of shares
Purchase of treasury shares
Payment of interest
Total changes from financing cashflows
Other changes:
Issue of shares to settle liability
Interest expense
Total other changes to liabilities
-
(594)
(594)
-
577
(17)
Closing balance at 31 December 2023
3,843
2,763
-
2,763
20
-
2,783
15,666
(615)
-
(139)
-
(139)
-
-
(139)
(754)
Loans &
borrowings
US$’000
Share capital/
premium
US$’000
Treasury
reserve
US$’000
Opening balance at 1 January 2022
3,568
148,903
(615)
Changes from cashflows
Payment of interest
Total changes from financing cashflows
Other changes:
Interest expense
Total other changes to liabilities
(228)
(228)
519
519
-
-
-
-
-
-
-
-
Closing balance at 31 December 2022
3,859
148,903
(615)
For non-cash movement on account of investing activities refer note 4.
52
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
14. SHARE CAPITAL AND TREASURY SHARE RESERVE
Issued share capital excluding treasury shares at 31
December 2022
Number of shares
Share capital
Amount
US$’000
115,277,869
148,288
Issued share capital excluding treasury shares at 31
December 2023
350,713,130
150,922
Consisting of:
Authorised, called-up and fully paid ordinary shares of no
par value each at 31 December 2023
Authorised, called-up and fully paid ordinary shares of no
par value held as treasury shares by the Company at 31
December 2023
358,193,134
151,686
(7,480,004)
(754)
15. FINANCIAL INSTRUMENTS
Financial Risk Management Objectives and Policies
Management has adopted certain policies on financial risk management with the objective of ensuring that:
(i)
appropriate funding strategies are adopted to meet the Company’s and Group’s short-term and long-
term funding requirements taking into consideration the cost of funding, gearing levels, and cash
flow projections;
(ii)
appropriate strategies are also adopted to manage related interest and currency risk funding; and
(iii)
credit risks on receivables are properly managed.
Financial instruments by category
The accounting policies for financial instruments have been applied to the line items below:
Financial assets
Unquoted financial assets at fair value through P&L
Other receivables at fair value through P&L
Cash and cash equivalents at amortised cost
Financial assets
Financial liabilities
Other payables and accruals at amortised cost
Corporate debt at amortised cost
Financial liabilities
53
2023
US$’000
2022
US$’000
500
-
77
577
18,227
1,738
321
20,286
2023
US$’000
2022
US$’000
991
3,843
1,334
3,859
4,834
5,193
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
The Company has agreed an extended maturity of the loan notes issued to 31 December 2023. Capitalised debt
issue costs have been fully amortised. All other financial liabilities are due within 12 months.
Financial assets at fair value through profit or loss
The following table provides an analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1, 2, or 3 based on the degree to which the fair value is observable
as described in Note 2(a) Basis of preparation:
Level 3
Unquoted financial assets at fair value through profit or loss
(Note 9)
Other receivables at fair value through the profit or loss (Note 9)
2023
US$’000
2022
US$’000
500
-
500
18,227
1,769
19,996
There were no transfers between levels in the current period. Carrying values of all financial assets and
liabilities (not measured at fair value through profit or loss) are approximate to their fair values.
54
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
Significant unobservable inputs used in measuring fair value – Level 3
Fair value at 31 Dec 2023
US$’000
Description
Fair value
Valuation
hierarchy
technique
Relationship
Significant
of
unobservable
unobservable
input(s)
inputs to fair
value
Heirloom
Investment Fund
$250
SPC
Heirloom
Litigation
Funding
$250
Level 3
asset
Net
value of fund
Not applicable Not applicable
The above table sets out information about significant unobservable inputs used at 31 December 2023 in
measuring material financial instruments categorised as Level 3 in the fair value hierarchy.
Credit Risk
The Group’s credit risk is primarily attributable to other receivables. Management has a credit policy in place
and the exposure to credit risks are monitored on an ongoing basis.
The Group’s maximum exposure to credit risk is represented by the total financial assets held by the Group.
Interest Rate Risks
The Group currently operates with positive cash and cash equivalents as a result of issuing share capital and
corporate debt in anticipation of future funding requirements.
The Group has a US$10 million debt facility with a private family office investor, under which the Company has
issued US$3.6 million loan notes, with an associated fixed interest rate of 15.0% and a maturity date of 31
December 2023. The interest rate payable on the principal amount of the loan notes ranged between 16%-18%
per annum as US$1.8m or more of the principal amount remained outstanding. As the interest rate has been fixed
for the term of the facility, there is no interest rate risk associated with the instruments.
Liquidity Risk
The Group manages its liquidity requirements by the use of both short-term and long-term cash flow forecasts.
The Group’s policy to ensure facilities are available as required is to issue equity share capital and/or loan notes
in accordance with long-term cash flow forecasts.
The Group’s financial liabilities are primarily operational costs and debt instruments. All operational costs are
due for payment in accordance with agreed settlement terms with professional firms, and all are due within one
year. Debt principal and related interest are due for settlement in December 2023.
Market (Price and valuation) Risk
The Group’s investment portfolio is susceptible to risk arising from uncertainties about future values of the
investment securities, either in relation to market prices (for quoted securities) or fair values (for unquoted
securities). This risk is that the fair value or future cash flows will fluctuate because of changes in market prices
or valuations, whether those changes are caused by factors specific to the individual investment or financial
55
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
instrument or its holder or factors affecting all similar financial instruments or investments traded in the market.
The Group’s investment committee provides the Board of Directors with investment recommendations that are
consistent with the Group’s objectives. The investment committee recommendations are carefully reviewed by
the Board of Directors before the investment decisions are implemented.
During the year under review, the Group did not hedge against movements in the value of its investments. A 10%
increase/decrease in the fair value of investments would result in a US$0.05m (2022: US$2m) increase/ decrease
in the net asset value.
While investments in companies whose business operations are based in China may offer the opportunity for
significant capital gains, such investments also involve a degree of business and financial risk, in particular for
unquoted investment.
Generally, the Group prepares to hold the unquoted investments for a middle to long term time frame, in particular,
if admission to trading on a stock exchange is considered likely in the future. Sales of securities in unquoted
investments may result in a discount to the book value at the time of future disposal.
Currency Risks
Management considers that foreign currency exposure is not significant to the Group and as such, there is no
hedging of foreign currencies.
Capital Management
The Group’s financial strategy is to utilise its resources to further grow the Group’s portfolio. The Group keeps
investors and the market informed of its progress with its portfolio through regular announcements and raises
additional equity finance at appropriate times when market conditions allow.
The Company regularly reviews and manages its capital structure for the portfolio companies to maintain a
balance between the higher shareholder returns that might be possible with certain levels of borrowings for the
portfolio and the advantages and security afforded by a sound capital position, and makes adjustments to the
capital structure of the portfolio in the light of changes in economic conditions.
The capital structure of the Company and the Group consists of cash and cash equivalents, loans and equity
comprising issued capital and reserves.
15. SHARE BASED PAYMENTS
15.1 Ownership-Based Compensation Scheme for Senior Management
The Group has an ownership-based compensation scheme for senior management of the Group. In accordance
with the provisions of the plan, senior management may be granted warrants to purchase ordinary shares. Each
warrant converts into one ordinary share of Jade Road Investments Limited on exercise. No amounts are paid or
payable by the recipient of the warrants. The warrants carry neither rights to dividends nor voting rights. Warrants
may be exercised at any time from the date of vesting to the date of their expiry.
At 31 December 2023, there were 1,600,000 (2022: 1,907,882) warrants outstanding, issued to the Company’s
Directors in previous periods in respect of services provided to the Group. 1,600,000 warrants have an exercise
price of US$1.21 per share, equivalent to £1.00 at 31 December 2022. The warrants will expire in 2027, 10 years
after the date of grant.
In the event that a Director’s appointment is terminated for any reason, then in such circumstances each Director's
subscription rights shall, to the extent he/she has not been issued or exercised either (i) prior to the date of
termination (Date of Termination); or (ii) within the period of 60 days immediately following the Date of
Termination, be immediately cancelled.
15.2 Equity Compensation Scheme for Harmony Capital Investors Limited (the “Investment Manager”)
The Group has an equity compensation scheme for Investment Manager of the Group. In accordance with the
56
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
provision of the scheme, the Investment Manager is granted warrants to subscribe for 20 million (before share
consolidation undertaken by the Company on 20 September 2017) ordinary shares, which is to be issued in five
equal tranches. No amounts are paid or payable by the recipient of the warrants. The warrants carry neither rights
to dividends nor voting rights. Warrants may be exercised at any time from the date of vesting to the date of their
expiry. Any equity compensation shares issued to or acquired by Investment Manager are subject to an orderly
market period, which is 12 months after each date of issue. During each orderly market period, the Investment
Manager undertakes to the Company and the broker not to effect a disposal of the relevant shares unless the
Investment Manager gives written notice to do so.
All warrants are equity-settled, the only conditions for all warrants granted is that the warrants holder remains in
the office when the warrant is exercised.
The number of warrants due to the Investment Manager to subscribe for ordinary shares in respect of services
provided to the Group were recalculated pursuant to paragraph 2 of Section 2 of the warrant instruction to reflect
the share consolidation undertaken by the Company on 20 September 2017. The warrants have an exercise price
of US$1.21 per share, equivalent to £0.89 at 31 December 2022. The warrants will expire 10 years after the date
of grant. In total Harmony Capital Investors Limited owns 8,000,000 warrants as at 31 December 2023 (2022:
8,000,000).
During the year, the Company issued 11,004,064 warrants to bond holders, shareholders and underwriters at an
exercise price ranging from 0.75p-1.1p with an expiry of 3 years.
2023
2022
Number
of options
Number of
warrants
Weighted
average
exercise
price US$
Number
of options
Number of
warrants
Weighted
average
exercise
price US$
-
17,567,663
0.84
- 17,567,663
0.84
-
-
-
-
-
-
11,004,063
(7,967,663)
-
-
0.01
0.80
-
-
-
-
-
-
-
-
-
-
-
-
-
20,604,063
0.55
- 17,567,663
0.84
-
20,604,063
0.55
- 17,567,663
0.84
Balance at beginning of the
financial year
Issuance during the financial
year
-Investment manager
-Directors
-Shareholders
Expired during the financial
year
Balance at end of financial
year
Exercisable at end of financial
year
The weighted-average remaining contractual life of outstanding warrants at 31 December 2023 was 3 years and
2 months (2022: 3 years and 3 months). During the year there has been a credit of $ Nil m (2022: $0.2m) relating
to share-based compensation of the Investment Manager.
15.3 Equity-Settled Share-Based Payment for Investment Manager as Incentive Fee
57
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
Investment Manager is entitled to receive an incentive fee from the Company in the event that the audited net
asset value for each year is (1) equal to or greater than the audited net asset value for the last year in relation to
which an incentive fee became payable ("High Water Mark"); and (2) in excess of 105% of the audited net
asset value as at the last calendar year end ("the Hurdle"). Subject to the High Water Mark and Hurdle being
excessed in respect of any calendar year, the incentive fee will be equal to 20% of the difference between the
current year end NAV and the previous year end NAV. 50% of the incentive fee shall be paid in cash and the
remaining 50% of the incentive fee shall be paid by ordinary shares.
The remaining 50% of incentive fee ("Equity Compensation Amount") shall be satisfied by the Company
issuing to Investment Manager such number of ordinary shares as have a Fair Market Value which in aggregate
is equal to the Equity Compensation Amount. The Fair Market Value is the closing Volume Weighted Average
Price (“VWAP”) for the ordinary shares trading on AIM for the ninety prior trading days as at the relevant
calculation period year end, i.e., 31 December 2017. The shares issued to or acquired as incentive fee by
Investment Manager is subject to an orderly market period, which is 12 months after each date of issue. During
each orderly market period, Investment Manager undertakes to the Company and the broker not to effect a
disposal of the relevant shares unless the Investment Manager gives written notice to do so.
No incentive fee was accrued in 2023 (2022: $0.0m).
16. RELATED PARTY TRANSACTIONS
During the year, the Company and the Group entered into the following transactions with related parties and
connected parties under existing contracts:
Notes
(i)
2023
US$’000
2022
US$’000
321
26
47
350
(43)
745
16
75
260
-
-
1,200
(158)
1,234
-
-
Remuneration payable to Directors (see Note 7)
Re-imbursement of expenses to directors
Heirloom Investment Management LLC*
Administration Fee
Harmony Capital Investors Ltd**
Management Fee
Incentive Fee
Amount due to
Harmony Capital Investors Limited
Heirloom Investment Management LLC
Directors
issued
*9,964,952 shares were
to Heirloom
Investment Management LLC for underwriting fees
netted of with share capital
**2,179,011 shares were issued to Harmony Capital
Investors Ltd to settle prior year incentive fees
17. LOSS PER SHARE
The calculation of the basic and diluted loss per share attributable to the ordinary equity holders of the
Company is based on the following:
Numerator
Basic/Diluted:
Net loss
Denominator
58
2023
US$’000
(17,716)
2022
US$’000
(52,904)
No. of shares
'000
No. of shares
'000
JADE ROAD INVESTMENTS LTD
NOTES TO THE FINANCIAL STATEMENTS, continued
For to the year ended 31 December 2023
Basic/Diluted:
Weighted average shares
298,477
115,278
Loss per share:
Basic/Diluted
(5.94) cents
(45.89) cents
Treasury shares issued by the company totalling 7,480,004 as at the reporting date, have been excluded from the
weighted average shares calculation.
18. EVENTS AFTER THE REPORTING PERIOD
On 1 May 2024 the transfer of the ‘Legacy Assets’ consisting of the holdings in DocDoc Pte Limited, Future
Metal Holdings Limited, Meize Energy Industrial Holdings Limited, Infinity Capital Group Infinity TNP, Project
Nicklaus and Fook Lam Moon Holdings was approved by the shareholders at the annual general meeting. The
corporate bond issued by the Group was also transferred. All assets and liabilities have been transferred to an
independent third party company which is not owned or controlled by the Group. The Group received no
consideration in return for the transfer. As the transfer had been substantially agreed at the year-end date, the
assets had been included within assets held for sale.
59