Myanmar Investments International Limited Annual Report 2014

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FY2014 Annual Report · Myanmar Investments International Limited

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MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

22001144 AAnnnnuuaall RReeppoorrtt

Contents

Chairman’s Letter

Executive Directors’ Review

Board of Directors

Directors’ Report

Corporate Governance

Directors Remuneration Report

Statement of Directors’ Responsibilities

Report of the Directors

Independent Auditor’s Report

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

Notice of Annual General Meeting

Directors and Advisers

Page

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Overview

Myanmar Investments International Limited
is an AIM quoted investment company focussing
exclusively on investing in Myanmar.

Myanmar Update

(cid:1)(cid:1) Political and economic reform is continuing

(cid:1)(cid:1) Legal and banking reforms are underway

(cid:1)(cid:1) Myanmar is chairing ASEAN this year

(cid:1)(cid:1) A number of major overseas manufacturing and service companies

have started business in the past 12 months

(cid:1)(cid:1) Government initiatives to bring in foreign companies are progressing well:

•

Foreign mobile telecom operators have mobilised

• Auctions for on-shore and offshore oil and gas blocks were well received

•

Foreign banks and insurance companies have set up rep ofﬁces in readiness to
bid for licenses

Myanmar Investments International Limited Update

(cid:1)(cid:1) Established an ofﬁce in Yangon

(cid:1)(cid:1) Recruited a team of professional and support staff

(cid:1)(cid:1) Over 60 investment opportunities reviewed

(cid:1)(cid:1) Strong pipeline of investable opportunities

(cid:1)(cid:1) Acquired a 55% shareholding in Myanmar Finance International Limited,

a leading microﬁnance company

(cid:1)(cid:1) Plan to increase capital to fund further investments

Annual Report 2014

Chairman’s Letter

Dear fellow Shareholder,

Following the Company’s admission to trading on
AIM on 27 June 2013, I am pleased to present
Myanmar Investments’ inaugural annual report and
consolidated ﬁnancial statements for the period
ended 31 March 2014.

Strategy
Myanmar Investments was formed to provide a
conduit for investors to participate in the emerging
economy of Myanmar, a resource rich country the
size of France with oil, gas, minerals, arable land and
a long coastline. It is also an ancient kingdom with a
long tradition and history evidenced by a number of
world renowned historical sites.

We believe that as the country opens up after half a
century of isolation there will be many investment
opportunities as Myanmar catches up with its
neighbouring South East Asian countries.

investment objective
The Company’s primary
is to generate above average long-term capital
appreciation by investing (directly or indirectly) in a
diversiﬁed portfolio of businesses. While most will be
Myanmar companies we may also invest in non-
Myanmar companies that have a material exposure
to doing business with or in Myanmar.

The Company is targeting businesses operating in
sectors that the Directors believe have strong growth
potential and thereby, when developed, can be
expected to provide attractive yields, capital gains
or both.
In the early stages however most
opportunities are likely to be in a growth phase and
are not expected to provide dividends.

We do not have any sector preferences but instead
will focus on businesses that we believe will beneﬁt
from Myanmar’s re-emergence. Our portfolio will be
a mixture of long term “core” holdings as well as
some shorter term
(5 to 7 years) ﬁnancial
investments.

Since admission to AIM a number of steps have been
taken by the Company to achieve this goal. These
are detailed in the Executive Directors’ Report.

the long delayed reforms that are essential for its
development. Since the reformist President U Thein
Sein took ofﬁce three years ago there have been a
series of signiﬁcant steps to improve the country’s
economy and political transparency.

Some notable corporate moves have included the
mobile licence award in late June 2013 to Telenor of
Norway and Ooredoo of Qatar following an auction
that was praised as having been both competitive
and transparent. Ooredoo went live in August and
Telenor is expected to do the same shortly.

Similarly in March of this year the government
awarded exploration rights for 20 offshore oil and
gas blocks to a range of foreign companies. Again,
the process was deemed to be an open and
competitive one with the successful bidders
including western oil majors such as Chevron, Shell
and Total.

As a result of these “investor friendly” moves a
signiﬁcant number of multi-national companies such
as GE, Chevron, Caterpillar, Pepsi, Heineken, VISA,
MasterCard, British American Tobacco, Ford Motor
have all set up businesses in Myanmar.

In tandem, foreign banks and insurance companies
have set up representative ofﬁces in readiness to bid
for licenses.

Daiwa has also been awarded the contract to start a
Stock Exchange in Yangon which is slated to open in
late 2015.

Following the introduction of the Foreign Investment
Law in late 2012 the legal framework for FDI has
improved considerably. Further reforms to the Law
and to the Company Law are in the ofﬁng to further
streamline the legal process.

Following the decision taken in 2012 by its fellow
ASEAN members, Myanmar this year is chairing the
ASEAN economic bloc.

Coming on the heels of a well-received South East
Asian Games in Nay Pyi Taw, the country’s capital, in
December 2013 Myanmar is clearly being welcomed
back into the international community.

Country Update
During the period since the Company’s admission to
trading on the AIM market of the London Stock
Exchange on 27 June, 2013 (“Admission”) Myanmar
has continued to open up its economy and undertake

Financial performance
As at 31 March, 2014 the Group had not made any
investments. As such, the results for that period
represent the costs of Admission and the overheads
of running the business.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

I am pleased to note that the Executive Directors
have done an excellent job in keeping our costs to a
minimum.

Corporate Governance
As an AIM quoted company, Myanmar Investment
seeks to uphold the fundamental principles of good
corporate governance. The section of this report
headed “Corporate Governance” provides more
details on how the Board itself operates as well as
steps taken to ensure that its staff also adhere
to principles such as compliance with the UK’s
Anti-Bribery laws.

Annual General Meeting
This year’s Annual General Meeting will be held at
the Inwa Room, Level 3, Sule Shangri La Hotel,
Yangon, Myanmar at 2.00pm (Myanmar time) on
21 October 2014. Shareholders who cannot attend
the Annual General Meeting
in person are
encouraged to use their proxy votes. Shareholders
who hold their shares through CREST are able to
lodge their votes electronically.

Breakfast brieﬁng with HE President U Thein Sein
On 15 June 2013, two weeks after the Company’s
Admission, the Company was honoured to host a
private breakfast meeting
for His Excellency
President U Thein Sein of the Republic of the Union
of Myanmar in London. The breakfast was also
attended by ﬁve Union Ministers and two deputy
Union Ministers. Myanmar Investments invited a
cross section of senior representatives of British
industry.

Outlook
In August 2014 the Group acquired a 55%
shareholding in Myanmar Finance International
Limited. This is a joint venture company formed with
Myanmar Finance Company Limited, a highly ranked
provider of microﬁnance loans principally to small-
scale business operators in rural and urban areas of
Yangon and neighbouring Bago. This is an attractive
business in its own right and one that that could also
be a platform for signiﬁcantly expanded retail and
SME ﬁnancial services in the long term. We are
delighted to have been able to form this strategic
alliance with U Htet Nyi and his well-established
management team.

Whilst we have made just the one investment so far
this does not fully illustrate the progress we have
made in our ﬁrst year in Myanmar and I believe that
our progress in our second year will build on the
foundation we have established.

To this end we will, in accordance with the strategy
set out in the Company’s Admission document,
consider raising additional equity to fund further
investments.

Lastly I should like to thank the Executive Directors
and the staff of the Company for the progress they
have made in such a short time and anticipate that
the coming ﬁnancial year will see further milestones
achieved. But equally important I should like to
express my appreciation to you, the Company’s
shareholders, for your unwavering support.

William Knight
Chairman

23 September 2014

His Excellency President U Thein Sein on the ﬁrst day of his
ﬁrst state visit to the UK with the Company’s Managing Director,
Aung Htun

“Core

investments will be

those

operating

sectors

that

fundamentally

important

are

the

economy and will be held for the long

term. These

investments will be

managed with the view to generating

dividends and where appropriate

encouraged to list on a stock exchange.

The Company will generally expect to

continue to hold such investments for a

further period of time.”

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Executive Directors’ Review

Dear Shareholder,

It is our pleasure to provide this ﬁrst review of the
Company’s operations.

Myanmar
Myanmar is a complex country with a long and proud
history. It is also a rich and diverse country, both
geographically and ethnically. Myanmar will beneﬁt
from being strategically located at the crossroad of
three large trading blocs; ASEAN, China and India.

A visitor to Yangon today will ﬁnd it hard to believe
that sanctions were lifted only 2 years ago. At one
level there are signs of progress everywhere with
bustling shops, new restaurants, difﬁculties in
booking hotel rooms, new cars on the road (and
horrendous trafﬁc jams reminiscent of Thailand and
Indonesia in the early 90’s), billboards advertising the
arrival of two new mobile phone carriers, etc. Yet at
the same time, but unseen by tourists, the pace of
business remains frustratingly arcane. Although the
government has successfully promulgated new laws
that encourage business, practical implementation is
lagging.

Poor infrastructure has been a constraint. Power cuts
and water shortages, not to mention patchy internet
coverage,were regular occurrences. The ﬁnancial
services industry was almost non-existent (two years
ago one had to change foreign currency at unofﬁcial
rates through agents). Outside Yangon these issues
are more pronounced. Only 30% of the country has
access to electricity and the roads and rail network
need signiﬁcant upgrades.

For the average citizen although they are now seeing
tangible results of the democratic changes (freer
press, the right to demonstrate etc.) they need, and
are hoping to see, a better quality of life in particular
in education and healthcare as well as in their daily
conveniences such as foodstuffs, ﬁnancial services
and transportation.

This is exactly why we are here. We see these
obstacles as opportunities. It is the needs of the
common man that drives change and we see this
demand very clearly. Even in the short time since the
opening up, there is a wider range of products on
the shop shelves, a proliferation of independent
newspapers and periodicals, foreign credit cards can
increasingly be used, and there are ATM machines
where one can even use a foreign visa card to
withdraw money.

Any diverse country embarking on change will
encounter issues both domestic and international
and Myanmar is no different. We are mindful of the
international audience’s perception that Myanmar is
not moving fast enough to embrace western values
but we also see enlightened leaders grappling with
complex issues.

We believe that the opening up will continue
although the pace and trajectory may not always be
smooth or linear. But for the changes to be
permanent they must eventually beneﬁt all sections
of society.

portfolio of investments that will beneﬁt

“Our vision is to build a diversiﬁed
from Myanmar’s emergence. ”

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Executive Directors’ Review (continued)

Foreign direct investment is still predominantly into the
natural resources, infrastructure related and low end
manufacturing sectors. Labour intensive industries are
restarting and will provide employment in the short
term but limited added value. We believe that many
more companies are waiting for the operating
environment to improve before investing. This includes
at one end better transportation, electricity and water
supplies and logistics and at the other end a better
quality of life for their foreign employees, especially in
terms of housing, schooling and healthcare.

from a

lower base,

Myanmar, albeit
is now
outperforming its ASEAN peers. According to the IMF
in June 2014 Myanmar’s economic outlook is
favourable with real GDP growth expected to
accelerate slightly to 8.50% in ﬁscal year 2014/2015
from 8.25% in 2013/14 led by rising gas production
and investment. However we need to keep an eye on
the inﬂation ﬁgure which is stable at around 6%. The
current account deﬁcit is being ﬁnanced through
capital inﬂows and we expect that as the economy
expands and more capital goods are required the
situation will be exacerbated. The government will
need to accelerate export industries as well as tourism.

Domestically the ﬁscal deﬁcit is being kept at 5% of
GDP. Better revenue collection is a key priority.
Myanmar has limited international reserves but also
minimal foreign borrowings (which are mainly from
foreign governments and multilateral agencies).

Strategy
Our vision is to build a diversiﬁed portfolio of
investments that will beneﬁt from Myanmar’s
emergence.

Broadly, investments will be either “core” or
“ﬁnancial” investments.

Core investments will be those operating in sectors
that are fundamentally important to the economy
and will be held for the long term. These investments
will be managed with the view to generating
dividends and where appropriate encouraged to list
on a stock exchange. The Company will generally
expect to continue to hold such investments for a
further period of time.

Financial investments will be managed with the view
to an exit, typically, within 5 to 7 years.

In both categories we may acquire minority or
majority shareholdings and the investments could
range from start-up, expansion capital financing to
buyouts.

In essence our strategy is to build net asset value as
well as to generate dividends when it becomes
commercially appropriate. Over time this should
allow us to generate an attractive total return to
shareholders.

However, this will take time to build. At the time of
this report we will have just announced our ﬁrst
investment. While we believe this to be an attractive
long
is not necessarily
representative of how future investments will be
made both in terms of size, structure or industry.

investment,

term

The directors are also considering, once it becomes
appropriate, establishing a corporate ﬁnance
advisory subsidiary of the Company to take
advantage of opportunities that arise from the
Company’s investment activities. This would include
advising a) local companies on fund raisings as well
as b) both local and foreign companies on M&A
opportunities. Such a subsidiary would derive fee
income for the Group and also enable the Group to
take advantage of synergies between its core
investment business and its advisory business.

Operations Review
Since Admission the Company has moved to quickly
implement its investment policy.

In August 2013 we opened our ofﬁce in Yangon and
were joined by Tham Chee Chung as our Yangon
resident investment director.

Since then we have hired additional Myanmar
professional staff with a diverse
range of
backgrounds, some from within Yangon and others
who wanted to return to Myanmar to participate in
the country’s opening up.

We have built on the relationships that we had
already established before Admission and have
expanded our contacts both in the local and
expatriate community as well as within Government
and the regulators.

Since the year end we have made our ﬁrst
investment in Myanmar. On 26 August, 2014 the
Company’s wholly owned subsidiary, Myanmar
joint venture
Investments Limited, signed a
agreement (the “JVA”) with Myanmar Finance
Company Limited (“MFC”), a highly ranked provider
of microﬁnance loans principally to small-scale
business operators in rural and urban areas of
Yangon and neighbouring Bago in Myanmar.

Annual Report 2014

Executive Directors’ Review (continued)

The Directors believe the new joint venture, called
Myanmar Finance International Ltd. (“MFIL”), to be
the ﬁrst foreign microﬁnance joint venture in
Myanmar. MFIL has both a lending and deposit
taking licence, issued by the Myanmar government.

Under the terms of the JVA, MFC injected its existing
microﬁnance business into MFIL, which is jointly
managed by the two partners. Myanmar Investments
and MFC agreed to an initial phased contribution of
US$4.8 million in capital (Myanmar Investments’ total
contribution being US$2.75 million) with Myanmar
Investments owning 55 per cent. of the new
company and MFC holding the remaining 45 per
cent.

MFIL has taken over the branches in Yangon and
Bago and has plans to roll out branches in other cities
as well introduce additional ﬁnancial products. In the
long term the vision is to create a retail ﬁnancial
services platform.

The Directors believe that a well-run microﬁnance
business in a well-regulated environment represents
a socially responsible investment as well as an
attractive commercial opportunity as has been
demonstrated elsewhere in Southeast Asia where
strong microﬁnance companies become consumer
banks.

Following the investment in MFIL the Company has
substantially implemented its investing policy in
accordance with Rule 8 of the AIM Rules for
Companies.

Financial Review
As at 31 March 2014 the Company had liquid net
assets of US$4,615,189 which is sufﬁcient to cover its
working capital needs for the next 12 months and
enable it to make the investment in MFIL.

At Admission, the Company’s net asset value, after
commissions but before other Admission expenses,
was US$5,898,912 or US$0.93 per share.

The other costs of the Admission reduced this to
US$5,439,353 or US$0.86 per share.

As previously announced, net asset value as at
30 September 2013 was US$5,227,468, representing
US$0.82 per share and the reduction represented the
running costs in the period from Admission to
30 September 2013.

Net asset value as at 31 March 2014 was
US$4,647,214, representing US$0.73 per share, a
14.6% decrease from the net asset value post

Admission and represents the running costs for the
period since Admission. Barring unforeseen
circumstances, other than the planned compensation
adjustment for the Executive Directors described in
the Directors Remuneration Report, the Directors do
not expect the level of running costs to ﬂuctuate
signiﬁcantly in the foreseeable future.

Based on the above we do not recommend payment
of a dividend at this time.

Outlook
Over the last year we have seen over 60 investment
opportunities in a diverse range of sectors and sizes.
Within this process we have made signiﬁcant
progress in our ability to analyse and assess
investment opportunities and deal structures in the
context of what is presently realistically achievable
within Myanmar today. We have an exciting pipeline
of investment opportunities at present and this
includes opportunities where we are in negotiations
and evaluating investments in telecom infrastructure,
IT services, equipment rental and education.

As stated in our announcement on 26 August, 2014,
as a result of having made the investment in MFIL we
will be looking to raise additional equity to fund
further investments in line with the Company’s
its Admission
investing policy described
document.

Aung Htun
Managing Director

Michael Dean
Finance Director

23 September 2014

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Board of Directors

Christopher William Knight,
Independent Non-Executive Chairman

Mr Knight is an alternative asset investment specialist
who has spent almost his entire career with the
ﬁnancial development of growth companies in
developing economies with particular emphasis on
Asia. His early pioneering led to him winning a capital
goods export ﬁnance mandate for Myanmar in the
early 1980s and establishing the ﬁrst London listed
investment fund for Thailand in 1988 and the ﬁrst
investment fund for Vietnam in 1991. His experience
listing
involvement with a number of
covers
jurisdictions including AIM in his capacity as an
independent non-executive director.

He is a co-founder of Emerisque Brands, is Chairman
of JP Morgan Chinese Investment Trust Plc, China
Chaintek United Co Ltd and MCS Apparel (HK) Ltd.
He is also a director of Fidelity Asian Values Trust Plc,
Ceylon Guardian Investment Trust Plc, Smith-Tan Asia
Phoenix Fund Ltd and Homestrings Ltd.

Maung Aung Htun,
Managing Director

Mr. Htun is half Myanmar and an engineering
graduate from Imperial College. He brings 30 years
of hands-on experience of advising, starting, building
and managing companies.

Mr. Htun started at Kleinwort Benson in London
before founding, in 1987, Seamico Securities in
Thailand, a company he took public in 1995. In 1999
he founded Thai Strategic Capital, a Bangkok based
private equity
led
investments into, inter alia, B-Quik, Modern Asia
Environmental Holdings, and Wuttisak Clinic.

fund manager where he

Mr. Htun brings a wealth of experience and contacts
in a diverse range of industries and currently sits on
the boards of Draco PCB Plc, Wuttisak Clinic Inter
Group Ltd, and Nam Seng Insurance Plc., as well as
being a member of the investment committee of
Lakeshore Capital Partners. He is a director of the
Thai Private Equity & Venture Capital Association
which he co-founded in 1989.

Anthony Michael Dean, Finance Director

Mr. Dean has over 30 years of experience in the
ﬁnancial industry in investment banking, private
equity and accounting. Twenty-two of these years
have been spent in Hong Kong and Singapore. He
has held senior management positions with Credit
Lyonnais Securities Asia (“CLSA”), PPMV Asia (the

private equity arm of Prudential plc) and a further
eight years as chief ﬁnancial ofﬁcer for a global
shipping group.

Mr. Dean is a non-executive independent director of
Singapore main board listed Petra Foods Limited. He
is a Fellow of the Institute of Chartered Accountants
in England and Wales, an Associate of the Chartered
Institute of Taxation and a member of the Singapore
Institute of Directors.

Craig Robert Martin,
Independent Non-executive Director

Mr. Martin has 20 years of business building and
direct investment experience in emerging markets in
Southeast Asia. He has lived and worked in
Southeast Asia (with a focus on the Greater Mekong
region) since 1993, living in Cambodia (seven years),
Vietnam (ﬁve years) and Singapore (eight years), and
building businesses
in Myanmar, Thailand,
Cambodia, Vietnam and Laos and investing in many
sectors. His
telecoms,
agribusiness, building materials, education, media,
retail, real estate, manufacturing, ﬁnance, logistics,
transportation and infrastructure.

experience

covers

Mr. Martin has a Masters of Engineering from the
University of York, UK, and a MBA with Distinction
from INSEAD, and is a member of the Singapore
Institute of Directors. Mr. Martin is a Managing
Director of CapAsia, a Singapore headquartered
private equity
focusing on
investments in emerging markets.

fund manager,

Christopher David Appleton,
Independent Non-executive Director

Mr. Appleton has worked in ﬁnance since 1982 and
in Asia since 1984. Mr. Appleton worked in Japan as
equity analyst then equity sales and management.
Moving to Hong Kong in 1998 Mr. Appleton worked
for Salomon Smith Barney as Head of Asian Sales
before becoming Head of Asia for Fox-Pitt, Kelton
directly running all the equity functions, as well as
responsibility for capital markets and advisory.
During this time he also set up their Tokyo ofﬁce. In
2005 he founded Faye Capital as an advisory
business and in 2008 acquired a licence for third
party asset management. After closing Faye Capital
in 2010 Mr. Appleton brieﬂy worked at HSBC Private
Bank as Head of Investment Advisory. Since 2011 he
has been running his private assets.

Mr. Appleton was educated at Oxford University with
post graduate studies at Tokyo University.

“The Company’s primary objective is to

build capital value over the long term by

making investments in a diversiﬁed

portfolio of Myanmar businesses that

the Directors believe will beneﬁt from

Myanmar’s re-emergence. ”

Directors’ Report

The Directors present their annual report and
audited consolidated ﬁnancial statements of the
Group for the period ended 31 March 2014.

The Company

Myanmar Investments International Limited (the
“Company”) is a public company limited by shares
incorporated under the laws of the British Virgin
Islands. The Company was admitted to trading on
the AIM market of the London Stock Exchange
(“AIM”) on 27 June 2013.

The Group

As at 31 March 2014 the Company had established
a wholly owned subsidiary in Singapore, MIL
Management Pte Ltd which in turn had established
a wholly owned subsidiary
in Myanmar, MIL
Management Co., Ltd. These two companies are
responsible for the management of the Group’s
investments.
the Company has
established a second wholly owned subsidiary in
Singapore, Myanmar Investments Limited, to act as
the ﬁrst investment holding company.

In addition

The above named companies comprise the Myanmar
Investments Group (the “Group”).

Investment Policy

The Company’s investment policy was set out in its
Admission Document and is reproduced below in
full. There has been no change in its investment
policy since Admission.

Strategy

The Company’s primary objective is to build capital
value over the long term by making investments in a
diversiﬁed portfolio of Myanmar businesses that the
Directors believe will beneﬁt from Myanmar’s re-
emergence. In the ﬁrst couple of years it is likely that
the portfolio of the Company will be concentrated
as it seeks out new potential investments. However,
in time and subject to available opportunities the
Directors intend to diversify the portfolio.

The Company intends to be a proactive investor,
seeking to add value to the development of each
of its Investee Companies. As such, the Company
will usually, where permitted under Myanmar or
other applicable law, seek participation in the
management process through board representation
with a view to helping improve the performance
and growth of the Investee Company. The Company
may acquire majority or minority stakes in Investee
Companies.

Value may be added through advice on such matters
as capital structure and introductions to potential
foreign lenders, introductions to foreign markets,
access
technical partners, and
implementation of governance issues. If a Myanmar
stock exchange is established, Myanmar companies
may want to list but are likely to have limited
understanding of what is required.

foreign

Where appropriate the Company may seek to bring
in strategic investors who are capable of adding
operational value to the Investee Company.

Investment Categories
Investments will likely fall into two categories, core
investments and ﬁnancial investments:

Core investments
The Company intends that its core investments will
be in businesses which, in the Directors’ opinion:

•

are considered essential to the domestic
economy in Myanmar;

are businesses where there are
limited
opportunities, creating a medium term barrier
to entry; and/or

are capable of being built
franchises in Myanmar.

into

leading

For core investments, the Company will seek to help
the Investee Company enhance its return on equity
and, as soon as it is prudent, generate dividends.
When appropriate, the Investee Company will be
encouraged to list on a stock exchange although the
Group will generally expect to continue to hold its
investment for a further period of time.

It is expected that core investments will be held until
such time as the Directors believe that long term
growth rates have started to moderate. As such

Portfolio

The Company expects to build a diversiﬁed portfolio
however this will take some time and as a
consequence, particularly during the early life of the
Company,
investment portfolio will be
concentrated in a limited number of Investee
Companies.

its

There is no minimum or maximum number of
companies that the Company can invest in at any one
time. Similarly there are no sector limits nor minimum
or maximum exposure limits to any one company or
joint venture partner.

Geographical Diversity

The Company will primarily make investments in
companies, businesses or assets located in Myanmar.
This will include Myanmar businesses that are listed
on foreign stock exchanges but also foreign
companies that have a material exposure to doing
business with or in Myanmar.

Forms of Investment

The Company may employ all forms of permitted
investment mechanisms, utilising instruments and
structures
to allow
that might be suitable
participation in Investment Targets in a manner that
seeks to minimise risks and maximise rewards. The
Company may invest in equity, quasi-equity or debt
instruments, which may or may not represent
shareholding or management control. Investments
are likely to be made through special purpose
vehicles established speciﬁcally for each Investee
Company, or by way of legal joint ventures or
nominee or trust structures. In some circumstances
the Company may invest via contracts that grant an
economic interest in an asset.

Annual Report 2014

Directors’ Report (continued)

there will not be an expectation of a near term
disposal unless a compelling opportunity for full or
partial divestment arises.

Financial investments

The Company’s ﬁnancial investments are intended to
be ‘private equity style’ investments where the
Company sees potential for capital gains and
liquidity.

investments

Financial
therefore, unlike core
investments, are expected to be made only when
there is a realistic and credible exit plan. As such they
are likely to be disposed of within a ﬁve to seven year
time horizon, though this may be adjusted in
appropriate circumstances. Exits may be achieved
through listings, in Myanmar (if a Myanmar stock
exchange is set up) or on suitable overseas stock
exchanges, trade sales or share swaps.

It is expected, in the initial years, that the
Company’s investments will typically range between
US$5 million and US$25 million, although it may
consider larger or smaller investments. Investments
that are larger than the Company’s existing
resources are expected to be funded through
further equity
issues. Additionally where an
Investment Target is larger than the Company’s
appetite or does not fall within the Investment
Policy, the Group may seek to generate fee income
(for example placement and management fees and
carried
its
Cornerstone Investors (as defined in the Company’s
Admission Document) as well as other financial
investors. The Company has granted co-investment
rights to its Cornerstone Investors which are
described
its Admission
Document.

interests) through placements to

in more detail

Sanctions and Restrictions

The Company will comply with any sanctions and
restrictions imposed by the EU, the UK, the BVI and
Singapore. The Directors will also take
into
consideration other actions by jurisdictions relevant
to the business of the Company relating to
investment in and trade with Myanmar. Should there
be any addition to or re-imposition of sanctions or
restrictions at any time in the future, the Directors
will seek to ensure compliance with such regulations.
Further details of the risk of possible re-imposition
of sanctions and restrictions are set out in the Risk
Factors in Part V of this document.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Because Myanmar businesses are relatively small
their more developed Asian
compared
counterparts the Company’s investments are more
likely to be in the form of expansion capital than
buyouts and may also be in greenﬁeld businesses.

Funding of Investments
In order to ﬁnance future Investments, the Company
will issue further Ordinary Shares to raise capital as
investment opportunities become
and when
available. The Company may also consider issuing
Ordinary Shares as consideration for acquiring
Investments or the issue by the Company or one of
its subsidiaries of debt or hybrid ﬁnancial
instruments.

Borrowings
The Directors believe that an appropriate amount of
appropriately structured debt could enhance the
overall returns from the Company’s Investments.

It is the Directors’ present intention that any
borrowings taken on in support of an Investment
should ideally be raised at a subsidiary level on a
non-recourse basis. Where this is not available and
the Directors consider that the assumption of debt
will enhance the overall return from an investment
without giving rise to a disproportionate risk then the
Company may borrow directly or may provide
guarantees to its subsidiaries for such borrowings.
The Directors do not intend to take on borrowings
of more than 50 per cent. of the prevailing NAV of
the Company, though if the NAV were to decline this
benchmark might be breached.

The Company or its subsidiaries may also issue
hybrid ﬁnancial instruments and may borrow in any
currency that the Directors consider appropriate.

It is not expected that the Company will borrow to
fund its operating expenses.

Sectors
The Company does not plan to limit itself to any
speciﬁc sectors however, at this time, there are
certain sectors falling within its Investment Policy
which, given the large funding requirements typically
required, it would not currently look to focus on.
These sectors include large real estate development,
infrastructure development and exploration and
production of natural resources. However, the
Company would consider establishing sector speciﬁc
vehicles in the future possibly with suitable joint
venture partners to participate in such opportunities.

Whilst the Investment Policy is not sector speciﬁc, in
assessing which sectors the Company may invest in,
the following themes will be considered:

•

Regulatory framework: under present foreign
investment regulations there are limitations and
prohibitions imposed with regard to foreign
investment
in certain speciﬁed sectors.
However these regulations may be subject to
change and reﬁnement.

Ease of upgrading: the Directors believe that
there are many areas of the Myanmar economy
that can beneﬁt from practices and technology
that are commonplace in Western and other
Asian economies and without the need to
introduce advanced technology, and where
relatively easy to implement changes can have
a signiﬁcant improvement on efﬁciency and
proﬁtability. These might be in manufacturing
industries but also
in services such as
distribution and retailing.

Scalability: the Company will be looking at
sectors where there are opportunities for
signiﬁcant scalability given their potential, both
domestically as well as in export markets.

Barriers to entry: in some sectors being ﬁrst to
market may help secure key retail locations or
licences, giving rise to competitive advantages.

into
the Company will
Leverage:
consideration the availability of locally sourced
debt where that may be inﬂuenced by the
nature of the underlying business.

take

Investment Policy Review
The Directors will review the Investment Policy on an
annual basis and, subject to their review and in the
absence of unforeseen circumstances, the Company
intends to adhere to the Investment Policy for at
least three years following Admission.

Notwithstanding the above, should the Company
wish to make a material change to its Investment
Policy, which may be prompted, inter alia, by
in government policies or economic
changes
conditions which alter,
introduce
investment opportunities, the Company will seek
prior Shareholder consent at a general meeting.

reduce or

In the event of a breach of the Investment Policy or
any restrictions imposed on the Investment Policy, if
the Board considers the breach to be material,
notiﬁcation shall be made to a Regulatory
Information Service provider.

Annual Report 2014

Directors’ Report (continued)

Results and dividends
As at 31 March 2014 the Group had not made any
investments.

Since the year end it has however made the
investment in MFIL as described in more detail in the
Executive Directors’ Report. In addition it has
established a pipeline of potential investments that it
is actively developing and the Directors believe that,
barring unforeseen circumstances, the Group should
be able to consummate one or more investments
within the next ﬁnancial year.

At the time of Admission, the Group’s net asset
value, after commissions but before the other
Admission expenses, was US$5,898,912 or US$0.93
per share. The other costs of the Admission reduced
this to US$5,439,353 or US$0.86 per share.

Net asset value as at 31 March 2014 was
US$4,647,214, representing US$$0.73 per share, a
14.6% decrease from the net asset value post
Admission and represents the running costs in the
period from Admission to 31 March 2014.

The results for the year are set out in more detail in
the consolidated statement of comprehensive
income.

The Directors do not recommend the payment of a
dividend for the period ended 31 March 2014.

Review of the Company’s Business and
Future Outlook
The Chairman’s Letter and the Executive Directors’
Report provide further details as to the development
of the business in the period under review as well as
the future outlook.

Directors
The members of the Board are listed in the section
headed “Board of Directors”.

Aung Htun and Michael Dean served as Executive
Directors throughout the period under review.
William Knight, Craig Martin and Christopher
Appleton, all of whom are independent Non-
Executive Directors, also served throughout the
period under review.

In accordance with the Company’s Articles of
Association Michael Dean retires by rotation and
offers himself for re-election at the Company’s
Annual General Meeting.

The means by which the Board administers its
responsibilities is set out in more detail in the section
headed “Corporate Governance”.

Directors’ Shareholdings
There are no requirements in place pursuant to the
Company’s Articles of Association for the Directors
to own shares in the Company.

At the date of signing this report, the Directors’
interests in the equity of the Company were as follows:

Director

William Knight
Aung Htun
Michael Dean
Craig Martin
Christopher Appleton

Ordinary

Shares Warrants

Share
options

25,000
325,000
175,000
100,000
100,000

20,000
75,000 180,000
50,000 140,000
30,000
50,000
40,000
50,000

The Directors have entered into lock-in agreements
with the Company, Allenby Capital Limited and
Grant Thornton UK LLP in accordance with Rule 7 of
the AIM Rules for Companies. As it is now more than
12 months since the Company’s Admission, these
agreements provide that the Directors will not sell
any of their Ordinary Shares or Warrants other than
via an orderly market disposal conducted through
the Company’s broker Allenby Capital Limited.

Share Option Plan
The Company established its Share Option Plan as a
long term incentive scheme for its employees,
Directors and advisers built around the fundamental
principle of aligning their interests with those of the
Shareholders.

The Share Option Plan is designed to reward a
participant only if there is an appreciation in value of
the Company’s share price. The Share Option Plan is
administered by the Remuneration Committee.

The Share Option Plan provides that Share Options
available for granting by the Company shall
constitute a maximum of one-tenth of the number of
the total number of Ordinary Shares in issue on the
date preceding the date of grant (excluding shares
held by the Company as treasury shares and Founder
Shares). Following Admission there were 6,342,619
Ordinary Shares in issue and up to 584,261 Share
Options available for issue.

Any issue of Ordinary Shares by the Company will
enable the Remuneration Committee to grant further
Share Options which will be granted with an exercise
price set at a 10%. premium to the subscription price
paid by Shareholders for the issue of Ordinary Shares
that gave rise to the availability of each tranche of

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

the Share Options. However, the Share Options that
arose as a result of the Ordinary Shares issued in
connection with the Admission have an exercise
price of US$1.10.

Share Options can be exercised at any time after the
ﬁrst anniversary and any time up to the tenth
anniversary of the grant of the Share Options (as may
be determined by the Remuneration Committee in
its absolute discretion). Share Options will not be
admitted to trading on AIM but application will be
made for Ordinary Shares that are issued upon the
exercise of the Share Options to be admitted to
trading on AIM.

As at 31 March, 2014 the Company had 584,261
Share Options available for granting, of which
435,000 Share Options had been granted leaving a
further 149,261 Share Options available for granting.

Related Party Transactions
Other than the Directors compensation, details of
which are described in the section headed “Directors
remuneration”, the Group has not undertaken any
related party transactionsduring the period under
review.

Substantial Interests
As at 23 September, 2014, the following interests of
3% or more of the issued ordinary share capital had
been notiﬁed to the Group:

Name

LIM Asia Special Situations

Master Fund Limited

Crystal Consultancy Services

Limited

Pachira Holdings Limited
Presnow Limited
Red Oak Operations Limited
G.K. Goh Strategic Holdings

Pte. Ltd

Incagrove Limited
Value Regain Limited
Hansabay Pte Ltd
Schola Capital Limited
Nishit Kothari
Directors
Holders with less than 3%

Number
of Ordinary
Shares

Percentage
of Issued
Capital

620,000

9.78%

500,000
500,000
500,000
500,000

450,000
450,000
450,000
380,000
225,000
200,000
725,000
842,619

7.88%
7.88%
7.88%
7.88%

7.09%
7.09%
7.09%
5.99%
3.55%
3.15%
11.43%
13.29%

Total

6,342,619

100.00%

Going Concern
Based on the Group’s current expectations and
projected cash ﬂows, the Board believes that the
Group will be able to satisfy its working capital
requirements for at least the next twelve months.
The Board has therefore concluded that it is
appropriate to continue to adopt the going concern
basis in preparing the ﬁnancial statements.

Litigation
The Group is not engaged in any litigation or claim of
material importance, nor, so far as the Directors are
aware,
litigation or claim of material
importance pending or threatened against the
Group.

is any

Payment to Suppliers
The Group’s policy is to agree the terms of payment
with suppliers prior to engaging them; to ensure that
suppliers are made aware of the terms of payment;
and to abide by the terms of payment.

Transparency to Shareholders
The Company seeks to be open and transparent to
its Shareholders. In accordance with AIM rules the
Company will use the RNS of the London Stock
Exchange to announce signiﬁcant milestones. It has
also established a website that allows viewing of
published information. Additionally it has established
a periodic newsletter to highlight some of the
general issues faced by Myanmar.

All Shareholders are encouraged to attend the
Annual General Meeting and ask further questions.

Internal Controls
The Directors acknowledge their responsibility for
the Group’s system of internal control and for
reviewing its effectiveness. However, the system of
internal controls is designed to manage rather than
eliminate the risk of failure to achieve business
objectives and as such can only provide reasonable,
but not absolute, assurance against material
misstatement or loss.

The Board also considers the process for identifying,
evaluating and managing any signiﬁcant risks faced
by the Company.

The Audit Committee has reviewed the Group’s risk
management and internal control systems and
believes that the controls are satisfactory given the
size and nature of the Group.

Annual Report 2014

Directors’ Report (continued)

framework. The Group’s

Financial Risk Proﬁle
The Directors have overall responsibility for the
establishment and oversight of the Group’s risk
management
risk
management policies are established to set out its
overall business strategies, tolerance of risk and
general
risk management philosophy. Risk
management policies and systems are reviewed
regularly to reﬂect changes in market conditions and
the Group’s activities.

Prior to the Group making its ﬁrst investment, the
main risk which the Group faces is the credit risk of
the ﬁnancial
its US dollar
institution holding
denominated cash deposits.

Further details are given in the notes to the
consolidated ﬁnancial statements.

Company’s auditors for the purposes of their audit
and to establish that the auditors are aware of that
information. The Directors are not aware of any
relevant audit information of which the auditors are
unaware.

Auditors
BDO LLP were appointed as auditors to the Group
during the period and have expressed their
willingness to continue in ofﬁce and a resolution for
their re-appointment will be proposed at the
forthcoming Annual General Meeting.

On behalf of the Board of Directors

Disclosure of Information to Auditors
All of the Directors conﬁrm that they have taken all
the steps that they ought to have taken to make
themselves aware of any information needed by the

William Knight
Chairman

Aung Htun
Managing Director

23 September 2014

Annual Report 2014

Corporate Governance

The Company is committed to high standards of
corporate governance and has established a
framework which it believes is appropriate given its
size and Investment Policy.

As a BVI incorporated company, the UK Corporate
Governance Code does not formally apply to the
Company. Nonetheless, the Directors recognise that
it is in the best interests of the Company and its
Shareholders to apply its principles so far as they are
appropriate for a company of this size. The Directors
seek to comply with the recommendations on
corporate governance made by the Quoted
Companies Alliance in its ‘Corporate Governance
Code for Small and Mid-Size Quoted Companies
2013’ guide as far as is practicable, taking into
account
the Company’s size and stage of
development.

Board Responsibilities, composition and
Committees
The Board of Myanmar Investments comprises a well
balanced mix of professionals whose individual skill
sets and extensive experiences complement each
other to ensure that the Board has the requisite
resources to enable the Company to achieve its
strategic goals.

The Board is responsible for setting the strategy for
the Company and then ensuring that the Company
has the requisite wherewithal to achieve that
strategy. In this context the Board is also responsible
for managing the risks inherent in the strategy and
the implementation. It is incumbent on the Board to
maintain an open dialogue with the Company’s
shareholders through the RNS system of the London
Stock Exchange.

Out of a total of ﬁve directors, the board of directors
(the “Board”) comprises two executive directors and
three non-executive directors. There is a clear
separation of the role of the Managing Director and
the Chairman. The Board meets regularly and is
provided with timely updates and information from
the two Executive Directors. As and when there are
urgent commercial or other corporate matters, Board
meetings are convened to seek guidance from the
Board or to elicit a decision. All directors are
expected to act in good faith and to act in the
interests of the Company.

The Chairman oversees the Agenda for all the Board
Meetings liaising closely with the executive and non-
executive directors. The same applies for the
meetings of the various committees outlined below

and their respective chairmen. The Chairman is
speciﬁcally responsible for the Chairman's Report,
the governance statements in the Annual Report and
answerable to the shareholders on behalf of the
board for it. The Chairman is ultimately responsible
to shareholders for the ethos, and oversight of good
practice, of the executive management

The Board
Investment
is supported by the
Committee, the Audit Committee, the Remuneration
Committee and the Nominating and Corporate
Governance Committee. The committees have been
established with clear Terms of Reference and they
regularly review matters within their purview.

The Directors have access to the Company’s Nomad,
Broker, legal advisers, auditor, Company Secretary
and, should it prove necessary in the furtherance of
their duties, to independent professional advice at
the expense of the Group.

Unless in the event of an unexpected event, Board
and Committee meetings are scheduled well in
advance at a time and place that will enable the
Directors to participate. All members of the Board
are expected to attend each Board meeting and to
arrange their schedules accordingly, although non-
attendance is unavoidable in certain circumstances.

An agenda and supporting papers are circulated to
the Board and the relevant Committees well in
advance of the meeting. Directors may request any
agenda
items be added that they consider
appropriate for Board discussion. Additionally, each
Director is required to inform the Board of any
potential or actual conﬂicts of interest prior to Board
discussion.

During the period under review there were ﬁve
Board meetings and all directors attended all of
them.

During the period under review there were three
meetings of each of the Audit Committee, the
Remuneration Committee and the Nominating and
Corporate Governance Committee and all the
members of the various committees attended all of
their respective meetings.

Where appropriate administrative matters requiring
the Board’s approval are dealt with by way of
circulating resolutions in writing.

Directors’ and Ofﬁcers’ liability insurance cover is
maintained by the Company on behalf of the
Directors.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Investment Committee
The Investment Committee comprises Aung Htun,
Michael Dean and Craig Martin and is chaired by
Aung Htun. During the period under review there
were ﬁve meetings of the Investment Committee and
all the members of the committee attended all of
the meetings. The Investment Committee has
responsibility for, amongst other things, establishing
the Investment Policy, guiding Management in the
execution of this policy, monitoring the deal ﬂow and
investments in progress, supervising Management’s
management of Investments, and planning the
realisation of Investments. During the period under
review it assessed a number of speciﬁc investment
opportunities as well as reviewed and prioritised the
deal ﬂow of potential investment opportunities. It
has made recommendations to the Board regarding
making investments and is responsible for computing
the Company’s net asset value for the Board’s
consideration.

Audit Committee
The Audit Committee comprises Craig Martin and
William Knight and is chaired by Craig Martin. During
the period under review there were three meetings
of the Audit Committee and all the members of the
committee attended all of the meetings. The audit
committee has responsibility for, amongst other
things, the planning and review of the Company’s
annual report and accounts and half-yearly reports
and the involvement of the Company’s auditors in
that process. The committee focuses in particular on
compliance with legal requirements, accounting
standards and on ensuring that an effective system of
internal ﬁnancial control is maintained under the
Group’s underlying assets and liabilities as well as the
books and records. The ultimate responsibility for
reviewing and approval of the annual report and
accounts and the half-yearly reports remains with the
Board.

The Audit Committee also advises the Board on the
appointment of the external Auditors, reviews their
fees and the audit plan. It approves the external
Auditors’ terms of engagement, their remuneration
and any non-audit work.

Auditors without the presence of the executive
directors.

Auditor objectivity and independence is safeguarded
through limiting non-audit services to tax work.

responsible

there were

three meetings of

Remuneration Committee
The Remuneration Committee comprises William
Knight, Craig Martin and Christopher Appleton and
is chaired by William Knight. During the period under
review
the
Remuneration Committee and all the members of
the committee attended all of the meetings. The
for
Remuneration Committee
establishing a formal and transparent procedure for
developing policy on executive remuneration and to
set the remuneration packages of
individual
Directors. This includes agreeing with the Board the
framework for remuneration of the Managing
Director, all other executive Directors and such other
members of the executive management of the
Company as it is designated to consider. This
includes the administration of the Share Option Plan.
It is also responsible for determining the total
individual remuneration packages of each Director
including, where appropriate, bonuses, incentive
payments and allocation of Share Options. No
Director plays a part in any decision about his own
remuneration.

Nomination Committee
The Nomination and Corporate Governance
Committee
(“NCGC”) comprises Christopher
Appleton, William Knight, Craig Martin and Aung
Htun and is chaired by Christopher Appleton. During
the period under review there were three meetings
of the NCGC and all the members of the committee
attended all of the meetings. The NCGC is
responsible for assessing the performance of the
Board and the various committees and also
considering new or replacement appointments to
the Board or senior management. This committee is
also responsible for ensuring the Company’s
compliance with the AIM Rules for Companies as
well as other relevant corporate governance
standards.

The Audit Committee also meets the Group’s
Auditors and reviews reports from the Auditors
relating to accounts and internal control systems. The
Audit Committee meets with the Auditors as and
in
when the Audit Committee requires and,
conformity with good practice, has met with the

The NCGC formally assesses the effectiveness of the
Board, the balance of skills represented and the
composition and performance of
its various
committees. The NCGC concluded that the Board
has an appropriate balance of skills and experience in
relation to the activities of the Group.

The Takeover Code
As the Company was incorporated in the BVI, it is not
treated by the Panel on Takeovers and Mergers as
resident in the UK, the Channel Islands or the Isle of
Man and therefore it is not subject to the Takeover
Code. However, the Company has incorporated
certain provisions in its Articles of Association which
are broadly similar to those of Rules 4, 5, 6 and 9 of
the Takeover Code, further details of which are
contained in paragraph 4.20.2 of Part VI of this
document. It should however be noted that as the
Takeover Panel will have no role in the interpretation
of these provisions, Shareholders will not necessarily
be afforded the same level of protection as is
available to a company subject to the Takeover Code
which now has the effect of law for those companies
within its jurisdiction. The Directors have the right to
waive the application of these provisions.

On behalf of the Board of Directors

William Knight
Chairman

Aung Htun
Managing Director

23 September 2014

Annual Report 2014

Corporate Governance (continued)

considering

appointment

When
and
the
reappointment of Directors, the NCGC and the
Board consider whether the Board and
its
committees have the appropriate balance of skills,
experience, independence, knowledge and diversity
to enable them to discharge their respective duties
and responsibilities effectively.

The NCGC also established guidelines to determine
the independence of each of the Directors and
afﬁrmed that all the Directors were found to be
independent.

The Board currently comprises of ﬁve Directors. The
Board does not believe that it is currently in the best
interests of the Group to seek to appoint a new
Director, in addition to the current Directors, to
broaden the diversity of the Board.

Shareholders vote on the re-appointment of at least
one Director at each Annual General Meeting, with
every Director’s appointment being voted on by
Shareholders every three years.

During the period under review the NCGC ensured
that the new employee handbooks
included
adequate disclosure on such topics as share dealing,
anti-bribery legislation and whistle blowing and that
all employees and consultants were briefed on these.

The NCGC has direct access to the Company’s
Nomad and, in conformity with good practice, a non-
executive member of the committee has met with
the Nomad without the presence of the executive
directors during the period under review.

Share Dealing
The Company has adopted a share dealing code for
the Directors which is appropriate for a company
whose Ordinary Shares and Warrants are admitted
to trading on AIM and which is consistent with the
obligations set out in Rule 21 of the AIM Rules for
Companies relating to directors’ dealings
in
Ordinary Shares and Warrants. The Company takes
all reasonable steps to ensure compliance by the
Directors and the Group’s applicable employees
as well.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Directors Remuneration Report

Remuneration Policy
It is the Group’s policy to ensure that compensation
arrangements are appropriate and are fairly applied
across the Group.

the Share Option Scheme which

The Group’s long term incentive plan is embodied
within
is
fundamentally driven around the principle of aligning
interest with shareholders by pricing the options out
of the money and by making them vest over a
prolonged period.

Directors’ Remuneration
The Directors’ remuneration for the period ended
31 March 2014 was (all amounts in US dollars):

Director

Fees

Salaries

William Knight
Aung Htun1
Michael Dean1
Craig Martin
Christopher Appleton

22,829
–
–
19,023
19,023

–
75,982
56,986
–
–

60,875

132,968

Note 1 – Under the terms of their employment agreements Messrs
Htun and Dean were only to be paid 50% of their salaries until
such time as the Group makes its ﬁrst investment. See below for
further details.

The above remuneration was paid in accordance with
the agreements described in more detail below. No
additional sums were paid in the period to Directors
for work on behalf of the Company outside their
normal duties.

The Group’s Share Option Scheme is described in
the Directors Report.

There are no further cash payments or beneﬁts
provided to Directors.

The Group has entered
following
employment agreements and letters of appointment:

into

the

• On 21 June 2013, Aung Htun entered into an
employment agreement with the Company for
an initial term of two years, the terms of which
were conditional upon Admission. He agreed to
act as Managing Director of the Group for a
salary of US$200,000 pa with 50% of each
month’s salary being deferred until either the

Company has substantially implemented its
investing policy or the Shareholders agree to
extend the period for
implementing the
investment policy at the First Shareholder
Meeting. If neither of these events occurs, Mr.
Htun’s entitlement to the deferred element will
lapse without any compensation. If the deferred
element of salary becomes payable, a review of
Mr. Htun’s salary will immediately be conducted
by the remuneration committee to assess the
level it should be re-based at given the
prevailing market rate for an executive in similar
or related sector. After the initial two year
appointment the contract is terminable on six
months’ notice by either party.

• On 21 June 2013, Michael Dean entered into an
employment agreement with the Company for
an initial term of two years, the terms of which
were conditional upon Admission. He agreed to
act as Finance Director of the Group for a salary
of US$150,000 pa with a) 50% of each month’s
salary being deferred and b) a salary review to
be undertaken on the same terms as described
in Mr Htun’s contract above. After the initial two
year appointment the contract is terminable on
six months’ notice by either party.

•

Each of the Non-executive Directors of the
Company, William Knight, Craig Martin and
Christopher Appleton, have entered into a letter
of appointment with the Company under the
terms of which they each agreed to act as a non-
executive director of the Company. Each non-
executive director shall receive a fee of
US$25,000 per annum, save for William Knight
who is also appointed to act as chairman and
shall receive a fee of US$30,000 per annum.
Each non-executive Director’s appointment is
subject to retirement by rotation in accordance
with the Articles and is terminable by either
party on one month’s notice.

Following the investment in MFIL after the end of the
ﬁnancial year, the Company has substantially
implemented its investing policy in accordance with
Rule 8 of the AIM Rules for Companies. As a result
both Messrs Htun and Dean received the deferred
portion of their salaries and the Remuneration
Committee has commenced a review to determine
what should be the appropriate level of their
compensation going forward.

Annual Report 2014

Statement of Directors’ Responsibilities

accuracy at any time the ﬁnancial position of the
Company and ensure that the ﬁnancial statements
and the Directors’ Remuneration Report comply with
the BVI Business Companies Act, 2004. They also are
responsible for safeguarding the assets of the
Company and therefore for taking reasonable steps
for the prevention of fraud and other irregularities.

Under the applicable law and regulations the
Directors are also responsible for preparing a
Directors’ Report and Statement of Corporate
Governance that comply with that law and those
regulations.

accounts

on
are
The
www.myanmarinvestments.com which is maintained
by the Company. The Company is responsible for the
integrity of the website as far as it relates to the
Company.

published

Each of the Directors, whose names and functions
are listed in the Directors’ Report conﬁrms to the
best of his/her knowledge:

•

the ﬁnancial statements, which have been
prepared in accordance with IFRS give a true
and fair view of the assets, liabilities, ﬁnancial
position of the Company; and

the Directors’ Report includes a fair review of the
development and performance of the business
and the position of the Company, together with
a description of the principal risks and
uncertainties that it faces.

Legislation in the British Virgin Islands governing the
preparation and dissemination of ﬁnancial
statements may differ from legislation in other
jurisdictions.

For and on behalf of the Board of Directors

William Knight
Chairman

23 September 2014

The Directors are responsible for preparing the
Annual Report, the Directors’ Remuneration Report
and the ﬁnancial statements in accordance with
applicable law and regulations.

Company law requires the Directors to prepare
ﬁnancial statements for each ﬁnancial year. Under
that law the directors have elected to prepare the
ﬁnancial statements in accordance with International
Financial Reporting Standards (“IFRS”) as adopted
by the European Union.

the

information necessary

Under company law the Directors must not approve
the ﬁnancial statements unless they are satisﬁed that,
taken as a whole, the annual report and accounts
provide
the
shareholders to assess the Company’s performance,
business model and strategy and that they give a
true and fair view of the state of affairs of the
Company for that period. The directors are also
required
in
accordance with the AIM rules for Companies.

to prepare ﬁnancial statements

for

In preparing these ﬁnancial statements, the directors
are required to:

•

select suitable accounting policies and then
apply them consistently;

make judgments and accounting estimates that
are reasonable and prudent;

state whether they have been prepared in
accordance with IFRSs as adopted by the
European Union, subject to any material
departures disclosed and explained in the
ﬁnancial statements; and

prepare the ﬁnancial statements on the going
concern basis unless it is inappropriate to
presume that the company will continue in
business.

The Board conﬁrms that the annual report and
accounts taken as a whole are fair, balanced and
understandable and provide
information
necessary for shareholders to assess the performance
model and strategy of the Company. The Directors
are responsible for keeping proper accounting
records that are sufﬁcient to show and explain the
Company’s activities and disclose with reasonable

the

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd
(Company registration number: 1774652)

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

Annual Report 2014

Report of the Directors

The Directors of the Company present their report to the members together with the audited ﬁnancial
statements of Group for the ﬁnancial period from 17 May 2013 (date of incorporation) to 31 March 2014.

1. Directors
The Directors of the Company in ofﬁce at the date of this report are:

Christopher William Knight (Appointed on 17 May 2013)
Maung Aung Htun (Appointed on 17 May 2013)
Anthony Michael Dean (Appointed on 17 May 2013)
Craig Robert Martin (Appointed on 17 May 2013)
Christopher David Appleton (Appointed on 17 May 2013)

2. Arrangements to enable directors to acquire shares and debentures
Except as disclosed in the ﬁnancial statements, neither at the end of nor at any time during the ﬁnancial
period was the Company a party to any arrangement whose object is to enable the Directors of the Company
to acquire beneﬁts by means of the acquisition of shares in or debentures of the Company or any other body
corporate.

3. Directors’ interests in shares or debentures
The following directors, who held ofﬁce at the end of the ﬁnancial period, had interests in shares in the
Company (other than wholly-owned subsidiaries) as stated below:

Name of directors and companies in which interests are held

Company
Myanmar Investments International Limited

Number of ordinary shares
Christopher William Knight
Maung Aung Htun
Anthony Michael Dean
Craig Robert Martin
Christopher David Appleton

Number of warrants to subscribe for ordinary shares of the Company
Maung Aung Htun
Anthony Michael Dean
Craig Robert Martin
Christopher David Appleton

Shareholdings registered
in name of director
or nominee

At beginning of
ﬁnancial period
or date of
appointment,
if later

–
–
–
–
–

–
–
–
–

At end of
ﬁnancial
period

25,000
325,000
175,000
100,000
100,000

75,000
50,000
50,000
50,000

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

3. Directors’ interests in shares or debentures (continued)

Name of directors and companies in which interests are held

Company (continued)
Myanmar Investments International Limited
Number of share options to subscribe for ordinary shares of the Company
Christopher William Knight
Maung Aung Htun
Anthony Michael Dean
Craig Robert Martin
Christopher David Appleton

Shareholdings registered
in name of director
or nominee

At beginning of
ﬁnancial period
or date of
appointment,
if later

–
–
–
–
–

At end of
ﬁnancial
period

20,000
180,000
140,000
30,000
40,000

Signiﬁcant shareholdings
Except for the interests disclosed in this note, the Directors are not aware of any holding of ordinary shares
as at 31 March 2014 representing 3% or more of the issued share capital of the Company.

Name

LIM Asia Special Situations Master Fund Limited
Crystal Consultancy Services Limited
Pachira Holdings Limited
Presnow Limited
Red Oak Operations Limited
G.K. Goh Strategic Holdings Pte. Ltd
Incagrove Limited
Value Regain Limited
Hansabay Pte Ltd
Schola Capital Limited
Nishit Kothari

Number of
ordinary shares

Percentage of
total issued
capital

620,000
500,000
500,000
500,000
500,000
450,000
450,000
450,000
380,000
225,000
200,000

9.78%
7.88%
7.88%
7.88%
7.88%
7.09%
7.09%
7.09%
5.99%
3.55%
3.15%

4. Directors’ contractual beneﬁts
Except as disclosed in the ﬁnancial statements, since the date of incorporation, no director of the Company
has received or become entitled to receive a beneﬁt by reason of a contract made by the Company or a
related corporation with the director, or with a ﬁrm of which the director is a member, or with a company in
which the director has a substantial ﬁnancial interest.

Annual Report 2014

Report Of The Directors (continued)

Share Option Plan

5.
The Company has established a Share Option Plan (the “Plan”) for the employees, Directors and advisers of
the Group, as well as the employees, directors and advisers of its Investee Companies (“Participants”).

The Plan is administered by the Remuneration Committee whose members are:

• William Knight (Chairman)

•

Craig Robert Martin

Christopher David Appleton

The Plan in respect of unissued ordinary shares in the Company was adopted by the Company on 21 June
2013.

The Plan is designed to reward a Participant only if there is an appreciation in value of the Company’s share
price.

The Plan provides that share options granted by the Company under the terms of the Plan shall constitute a
maximum of one-tenth of the number of the total number of ordinary shares in issue on the date preceding
the date of grant.

Any issue of ordinary shares by the Company will enable the Remuneration Committee to grant further share
options which will be granted with an exercise price set at a 10 percent premium to the subscription price paid
by shareholders for the issue of ordinary shares that gave rise to the availability of each tranche of the share
options. However, the share options that arise as a result of the new ordinary shares being issued in connection
with admission have an exercise price of US$1.10.

Share options can be exercised at any time after the ﬁrst anniversary and before the tenth anniversary of the
grant (as may be determined by the remuneration committee in its absolute discretion) of the respective
share options.

Any share options which have not been allocated or which have not vested will not be eligible for conversion
into ordinary shares. Where a Participant ceases to be in the employment of or engaged by the Group entities
before their Share Options have fully vested, then in the case of a ‘good leaver’, the Remuneration Committee
shall determine in its absolute discretion whether any unvested share options shall continue to be retained
by the Participant or lapse without any claim against the Company. The Remuneration Committee has the
discretion to re-allocate the number of ordinary shares underlying the portion of any lapsed or unvested share
options to be the subject of further options granted under the Plan, subject to certain conditions.

During the ﬁnancial period, there were 584,261 share options available for issue. Of these 435,000 share
options were granted to Directors and an employee during the ﬁnancial period as follows:

Date of grant

27 June 2013
9 December 2013

Granted

Exercise price per share

Exercisable period

410,000
25,000

US$1.10
US$1.10

To 26 June 2023
To 8 December 2023

There were no shares issued during the ﬁnancial period by virtue of the exercise of options to take up unissued
shares of the Company or its subsidiaries.

There were 149,261 share options unallocated as at the end of the ﬁnancial period.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Share Option Plan (continued)

5.
No employee or employee of related corporations has received 5% or more of the total options available
under the Plan.

The information on Directors of the Company participating in the Plan is as follows:

Name of Director

Christopher William Knight
Maung Aung Htun
Anthony Michael Dean
Craig Robert Martin
Christopher David Appleton

Options granted
during the
ﬁnancial period

20,000
180,000
140,000
30,000
40,000

Aggregate
options granted
since
commencement
of the Plan to
the end of
ﬁnancial period

Aggregate
options
exercised since
commencement
of the Plan to
the end of
ﬁnancial period

Aggregate
options lapsed
since
commencement
of the Plan to
the end of
ﬁnancial period

20,000
180,000
140,000
30,000
40,000

–
–
–
–
–

Aggregate
options
outstanding as
at end of the
ﬁnancial year

20,000
180,000
140,000
30,000
40,000

6. Auditors
The auditors, BDO LLP, have expressed their willingness to accept reappointment.

On behalf of the Board of Directors

Anthony Michael Dean
Director

13 September, 2014

Maung Aung Htun
Director

Annual Report 2014

Statement by the Directors

In the opinion of the Board of Directors,

(a)

the accompanying consolidated statement of ﬁnancial position of the Group as at 31 March 2014,
consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash ﬂows together with notes thereon are drawn up in accordance with
International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the
Group as at 31 March 2014 and the results of the business, changes in equity and cash ﬂows of the
Group for the ﬁnancial period from 17 May 2013 (date of incorporation) to 31 March 2014; and

(b)

at the date of this statement, there are reasonable grounds to believe that the Company will be able to
pay its debts as and when they fall due.

On behalf of the Board of Directors

Anthony Michael Dean
Director

13 September, 2014

Maung Aung Htun
Director

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Independent Auditor’s Report

To the Members of Myanmar Investments International Limited

Report on the consolidated ﬁnancial statements
We have audited the accompanying consolidated ﬁnancial statements of Myanmar Investments International
Limited (“the Company”) and its subsidiaries (the “Group”) which comprise the consolidated statement of
ﬁnancial position of the Group as at 31 March 2014, the consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash ﬂows for the ﬁnancial period
from 17 May 2013 (date of incorporation) to 31 March 2014, and a summary of signiﬁcant accounting policies
and other explanatory information.

Management’s responsibility for the consolidated ﬁnancial statements
Management is responsible for the preparation of these consolidated ﬁnancial statements that give a true and
fair view in accordance with International Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of consolidated ﬁnancial statements that are
free from material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated ﬁnancial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated ﬁnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated ﬁnancial statements. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the consolidated ﬁnancial statements, whether due to
fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation of the consolidated ﬁnancial statements that give a true and fair view in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the consolidated ﬁnancial statements.

We believe that the audit evidence we have obtained is sufﬁcient and appropriate to provide a basis for our
audit opinion.

Opinion
In our opinion, the consolidated ﬁnancial statements of the Group are properly drawn up in accordance with
the International Financial Reporting Standards so as to give a true and fair view of the state of affairs of the
Group as at 31 March 2014 and of the results, changes in equity and cash ﬂows of the Group for the ﬁnancial
period from 17 May 2013 (date of incorporation) to 31 March 2014.

BDO LLP
Public Accountants and
Chartered Accountants

Singapore
13 September, 2014

Annual Report 2014

Consolidated Statement of Comprehensive Income

For the ﬁnancial period from 17 May 2013 (date of incorporation) to 31 March 2014

Revenue

Other item of income
Interest income

Items of expense
Employee beneﬁts expense
Depreciation expense
Other operating expenses
Finance costs

Loss before income tax

Income tax expense

Loss for the ﬁnancial period, representing

total comprehensive income for the ﬁnancial period

Loss per share (cents)
– Basic and diluted

Period from
17 May 2013 to
31 March 2014
US$

Note

–

3,413

(395,686)
(3,595)
(462,824)
(8,196)

(866,888)

–

(866,888)

(15.26)

4
9

The accompanying notes form an integral part of these consolidated ﬁnancial statements.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Consolidated Statement of Financial Position

As at 31 March 2014

ASSETS
Non-current assets
Plant and equipment

Current assets
Other receivables
Cash and bank balances

Total assets

EQUITY AND LIABILITIES
Equity
Share capital
Share option reserve
Accumulated losses

Total equity

LIABILITIES
Current liability
Other payables

Total equity and liabilities

Note

2014
US$

11
12

13
14

32,025

99,235
4,579,666

4,678,901

4,710,926

5,439,353
74,749
(866,888)

4,647,214

63,712

4,710,926

The accompanying notes form an integral part of these consolidated ﬁnancial statements.

Annual Report 2014

Consolidated Statement of Changes in Equity

For the ﬁnancial period from 17 May 2013 (date of incorporation) to 31 March 2014

Share Share option Accumulated
losses
reserve
capital
US$
US$
US$

Total
US$

Note

Issue of 1 subscriber’s shares at 17 May 2013

(date of incorporation)

Loss for the ﬁnancial period

Total comprehensive income
for the ﬁnancial period

–*

–

Contributions by and distributions to owners
Issue of shares
Share issue expenses

Total contributions by and distributions

to owners

13
13

6,184,793
(745,440)

5,439,353

–

–
–

–

Others
Grant of share options to employees

Total others

At 31 March 2014

* Share capital at date of incorporation is US$0.10.

–

74,749

5,439,353

74,749

(866,888) 4,647,214

–

–*

(866,888)

–
–

–

6,184,793
(745,440)

5,439,353

74,749

The accompanying notes form an integral part of these consolidated ﬁnancial statements.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Consolidated Statement of Cash Flows

For the ﬁnancial period from 17 May 2013 (date of incorporation) to 31 March 2014

Operating activities
Loss before income tax

Adjustments for:
Interest income
Depreciation of plant and equipment
Share-based payment expense

Operating cash ﬂows before working capital changes

Changes in working capital:

Increase in other receivables
Decrease in other payables

Cash used in operations

Interest received

Net cash ﬂows used in operating activities

Investing activity
Purchase of plant and equipment, representing cash ﬂows used in investing activity

Financing activities
Net proceeds from issuance of shares, representing cash ﬂows from ﬁnancing activity

Net change in cash and bank balances, representing cash and bank balances

at end of ﬁnancial period

Period from
17 May 2013
to
31 March 2014
US$

(866,888)

(3,413)
3,595
74,749

(791,957)

(99,235)
63,712

(827,480)
3,413

(824,067)

(35,620)

5,439,353

4,579,666

The accompanying notes form an integral part of these consolidated ﬁnancial statements.

Annual Report 2014

Notes to the Consolidated Financial Statements

For the ﬁnancial period from 17 May 2013 (date of incorporation) to 31 March 2014

These notes form an integral part of and should be read in conjunction with the consolidated ﬁnancial
statements.

1. General corporate information
Myanmar Investments International Limited (“the Company”) is a limited liability company incorporated on
17 May 2013 in the British Virgin Islands (“BVI”). The Company’s registered ofﬁce is at Jayla Place, Wickhams
Cay I, Road Town, Tortola, British Virgin Islands.

The Company’s ordinary shares and warrants are traded on the AIM market of the London Stock Exchange
under the ticker symbols MIL and MILW respectively. The Company can raise additional capital as described
in Note 13 to the consolidated ﬁnancial statements.

The Company has been established for the purpose of identifying and investing in, and disposing of,
businesses operating in or with business exposure to Myanmar. The Company will target businesses operating
in sectors that the Directors believe have strong growth potential and thereby can be expected to provide
attractive yields, capital gains or both.

The principal activities of the subsidiaries are disclosed in Note 10 to the consolidated ﬁnancial statements.

The consolidated ﬁnancial statements of the Company and its subsidiaries (the “Group”) for the ﬁnancial
period from 17 May 2013 (date of incorporation) to 31 March 2014 were approved by the Board of Directors
on 13 September, 2014.

1.1 Going concern

After due and careful enquiries, the Directors have a reasonable expectation that the Company has
adequate ﬁnancial resources to continue in operational existence for the foreseeable future.

Accordingly, the Directors have adopted the going concern basis in preparing the consolidated ﬁnancial
statements.

Summary of signiﬁcant accounting policies

2.
2.1 Basis of preparation of the consolidated ﬁnancial statements

The consolidated ﬁnancial statements, which are expressed in United States dollars, have been prepared
in accordance with International Financial Reporting Standards (“IFRS”) issued by the International
Accounting Standards Board (“IASB”) which comprise standards and interpretations approved by IASB
and International Financial Reporting Interpretations Committee (“IFRIC”).

The consolidated ﬁnancial statements have been prepared on an historical cost basis, except as disclosed
in the accounting policies below.

For the purpose of IFRS 8 Operating Segments, the Group has only one segment, being “Investments”.
No further operating segment ﬁnancial information is therefore disclosed.

The preparation of the consolidated ﬁnancial statements in conformity with IFRSs requires the
management to exercise judgement in the process of applying the Group’s and the Company’s
accounting policies and requires the use of accounting estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the
reporting period, and the reported amounts of revenue and expenses during the ﬁnancial year. Although
these estimates are based on the management’s best knowledge of historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances, actual results may ultimately differ from those estimates. The estimates and underlying
assumptions are reviewed on an ongoing basis.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Summary of signiﬁcant accounting policies (continued)

2.
2.1 Basis of preparation of the consolidated ﬁnancial statements (continued)

In the current ﬁnancial period, the Group has adopted all the new and revised IFRS and interpretations
that are relevant to its operations and effective for the current ﬁnancial period. The adoption of these
new/revised FRS and interpretations did not result in any substantial changes to the Group’s accounting
policies and has no material effect on the amounts reported for the current period.

Revisions to accounting estimates are recognised in the ﬁnancial year in which the estimate is revised if
the revision affects only that ﬁnancial year, or in the ﬁnancial year of the revision and future ﬁnancial years
if the revision affects both current and future ﬁnancial years.

Critical accounting judgements and key sources of estimation uncertainty used that are signiﬁcant to the
consolidated ﬁnancial statements are disclosed in Note 3 to the consolidated ﬁnancial statements.

New or amended standards and interpretations that have been issued but are not yet effective
The Group has not early adopted the following new or amended IFRSs that have been issued but are not
yet effective:

IFRS 9
IFRS 7, IFRS 9 and IAS 39

(Amendments)

Financial Instruments7
Hedge Accounting7

IFRS 10, IFRS 12 and IAS 27

Investment Entities1

(Amendments)

IFRS 11 (Amendments)
IFRS 14
IFRS 15
IAS 16 (Amendments)
IAS 19 (Amendments)
IAS 32 (Amendments)
IAS 36 (Amendments)
IAS 38 (Amendments)
IAS 39 (Amendments)
IFRIC 21
Improvements to IFRSs
Improvements to IFRSs

Accounting for Acquisitions of Interests in Joint Operations5
Regulatory Deferral Accounts5
Revenue from Contracts with Customers6
Clariﬁcation of Acceptable Methods of Depreciation and Amortisation5
Deﬁned Beneﬁt Plans: Employee Contributions2
Presentation – Offsetting Financial Assets and Financial Liabilities1
Recoverable Amount Disclosures for Non-ﬁnancial Assets1
Clariﬁcation of Acceptable Methods of Depreciation and Amortisation5
Novation of Derivatives and Continuation of Hedge Accounting1
Levies1
Annual Improvements 2010-2012 Cycle3
Annual Improvements 2011-2013 Cycle2

1 Effective for annual periods beginning on or after 1 January 2014
2 Effective for annual periods beginning on or after 1 July 2014
3 Effective for annual periods beginning, or transactions occurring, on or after 1 July 2014
4 Effective for annual periods beginning on or after 1 January 2015
5 Effective for annual periods beginning on or after 1 January 2016
6 Effective for annual periods beginning on or after 1 January 2017
7 Effective for annual periods beginning on or after 1 January 2018

The Directors have considered the above and are of the opinion that the above Standards and
Interpretations will have no material impact on the Group’s consolidated ﬁnancial statements, except as
discussed below.

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

Summary of signiﬁcant accounting policies (continued)

2.
2.1 Basis of preparation of the consolidated ﬁnancial statements (continued)

IFRS 10, IFRS 12 and IAS 27 (Amendments) – Investment Entities
The amendments apply to a particular class of businesses that qualify as investment entities. An
investment entity’s business purpose is to invest funds solely for returns from capital appreciation,
investment income or both. It evaluates the performance of its investments on a fair value basis.
Investment entities could include private equity organisations, venture capital organisations, pension
funds and investment funds.

The amendments provide an exception to the consolidation requirements in IFRS 10 Consolidated
Financial Statements and require investment entities to measure particular subsidiaries at fair value
through proﬁt or loss rather than to consolidate them. The amendments also set out the disclosure
requirements for investment entities. The amendments are applied retrospectively subject to certain
transitional provisions.

IFRS 15 – Revenue from Contracts with Customers
IFRS 15 establishes principles for reporting useful information to users of ﬁnancial statements about the
nature, amount, timing and uncertainty of revenue and cash ﬂows arising from an entity’s contracts with
customers. The core principle is that a company should recognise revenue to depict the transfer of
promised goods or services to the customer in an amount that reﬂects the consideration to which the
Company expects to be entitled in exchange for those goods or services. The amendments are applied
retrospectively subject to certain transitional provisions.

The Group is in the process of making an assessment of the potential impact of these new or amended
IFRSs.

2.2 Basis of consolidation

Where the Company has control over an investee, it is classiﬁed as a subsidiary. The Company controls
an investee if all three of the following elements are present: power over the investee, exposure to
variable returns from the investee, and the ability of the investor to use its power to affect those variable
returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in
any of these elements of control.

De-facto control exists in situations where the Company has the practical ability to direct the relevant
activities of the investee without holding the majority of the voting rights. In determining whether de-
facto control exists the Company considers all relevant facts and circumstances, including:

–

The size of the Company’s voting rights relative to both the size and dispersion of other parties who
hold voting rights

Substantive potential voting rights held by the Company and by other parties

Other contractual arrangements

Historic patterns in voting attendance.

The consolidated ﬁnancial statements present the results of the Company and its subsidiaries (“the
Group”) as if they formed a single entity. Intercompany transactions and balances between group
companies are therefore eliminated in full.

Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for
as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests
are adjusted to reﬂect the changes in their relative interests in the subsidiary. Any difference between
the amount by which the non-controlling interests are adjusted and the fair value of the consideration
paid or received is recognised directly in equity and attributed to owners of the parent.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Summary of signiﬁcant accounting policies (continued)

2.
2.2 Basis of consolidation (continued)

When the Group loses control of a subsidiary, the proﬁt or loss on disposal is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained
interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the
subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive
income in relation to the subsidiary are accounted for (i.e. reclassiﬁed to proﬁt or loss or transferred
directly to accumulated proﬁts) in the same manner as would be required if the relevant assets or
liabilities were disposed of. The fair value of any investments retained in the former subsidiary at the date
when control is lost is regarded as the fair value on initial recognition for subsequent accounting under
IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial
recognition of an investment in an associate or jointly controlled entity.

Acquisition under common control
Business combination arising from transfers of interest in entities that are under common control are
accounted for as if the acquisition had occurred at the beginning of the earliest comparative period
presented or, if later, at the date that common control was established. For this purpose, comparatives
are restated. The assets and liabilities acquired are recognised at the carrying amounts recognised
previously in the Group’s controlling shareholder’s ﬁnancial statements. The components of equity of the
acquired entities are added to the same components within the Group equity. Any difference between
the cash paid for the acquisition and share capital of acquiree is recognised directly to equity.

2.3 Subsidiaries

A subsidiary is any entity over which the Group has the power to govern the ﬁnancial and operating
policies generally accompanying a shareholding of more than one half of the voting rights. The existence
and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the Group.

Inter-company transactions, balances, income and expenses between group companies are eliminated.

Accounting policies of subsidiaries are changed where necessary to ensure consistency with the policies
adopted by the Group.

2.4 Revenue recognition
Interest income
Interest income is recognised on an accrual basis using the effective interest rate (“EIR”) method. EIR is
the rate that exactly discounts the estimated future cash payments or receipts over the expected life of
the ﬁnancial instrument or a shorter period, where appropriate, to the net carrying amount of the
ﬁnancial asset or liability.

2.5 Foreign currency translation

Transactions in currencies other than US dollars, which is the functional currency of all of the respective
Group entities, are recorded at the rate of exchange prevailing on the date of the transactions.

At the end of each reporting period, monetary assets and liabilities that are denominated in foreign
currencies are retranslated at the rate prevailing at the end of the reporting period.

Non-monetary items carried at fair value which are denominated in foreign currencies are translated at
the rates prevailing at the date when the fair value was determined. Foreign exchange gains and losses
arising on the settlement of monetary items, and on the retranslation of monetary items, are included
in net proﬁt or loss for the period, except for differences arising on the retranslation of non-monetary
items in respect of which gains and losses are recognised directly in equity in which cases, the exchange
differences are also recognised directly in equity.

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

Summary of signiﬁcant accounting policies (continued)

2.
2.6 Income tax

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on the taxable proﬁt for the year. Taxable proﬁt differs from net proﬁt
as reported in proﬁt or loss if it excludes items of income or expense that are taxable or deductible in
other years and it further excludes items that are never taxable or deductible. The Group’s liability for
current tax is calculated using tax rates that have been enacted or substantively enacted at the end of
the ﬁnancial year.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the
consolidated ﬁnancial statements and the corresponding tax bases used in the computation of taxable
proﬁt, and is accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable proﬁts will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the tax proﬁt nor the accounting proﬁt.

The carrying amount of deferred tax assets, if any, is reviewed at each balance sheet date and reduced
to the extent that it is no longer probable that sufﬁcient taxable proﬁts will be available to allow all or
part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is
settled or the asset is realised. Deferred tax is charged or credited in proﬁt or loss, except when it relates
to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

2.7 Plant and equipment

Plant and equipment are all stated at cost less accumulated depreciation and any impairment losses. Cost
includes expenditure that is directly attributable to the acquisition of the items.

The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset
to its working condition and location for its intended use. Expenditure incurred after the plant and
equipment have been put into operation, such as repairs and maintenance, is normally charged to proﬁt
or loss in the period in which it is incurred. In situations where it can be clearly demonstrated that the
expenditure has results in an increase in the future economic beneﬁts expected to be obtained from the
use of the plant and equipment, the expenditure is capitalised as an additional cost of that asset.

Disposals
The gain or loss arising from disposal of an asset is determined as the difference between the sales
proceeds and the carrying amount of the asset and is recognised in proﬁt or loss.

Depreciation
Depreciation is provided to write off the cost of plant and equipment, using the straight line method,
over their useful lives. The principal annual rates are as follows:

Ofﬁce equipment
Computer equipment
Furniture and ﬁttings

Years

3
3
3

The residual values, useful lives and depreciation method are reviewed at each ﬁnancial year-end to
ensure that the residual values, period of depreciation and depreciation method are consistent with
previous estimates and the expected pattern of consumption of the future economic beneﬁts embodied
in the items of plant and equipment.

Fully depreciated assets still in use are retained in the consolidated ﬁnancial statements.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Summary of signiﬁcant accounting policies (continued)

2.
2.8 Impairment of non-ﬁnancial assets

The carrying amounts of non-ﬁnancial assets are reviewed at the end of each reporting period to
determine whether there is any indication of impairment loss and whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. If any such indication exists,
or when annual impairment testing for an asset is required, the asset’s recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. A cash-generating unit is the smallest identiﬁable asset group that
generates cash ﬂows that largely are independent from other assets and groups of assets.

Impairment loss is recognised in proﬁt or loss, unless it reverses a previous revaluation, credited to other
comprehensive income, in which case it is charged to other comprehensive income up to the amount of
any previous revaluation.

The recoverable amount of an asset or cash-generating unit is the higher of a) its fair value less costs to
sell and b) its value in use. Recoverable amount is determined for individual assets, unless the asset does
not generate cash inﬂows that are largely independent of those from other assets or groups of assets.
If this is the case, the recoverable amount is determined for the cash-generating unit to which the assets
belong. The fair value less costs to sell is the amount obtainable from the sale of an asset or cash-
generating unit in an arm’s length transaction between knowledgeable, willing parties, less costs of
disposal. Value in use is the present value of estimated future cash ﬂows expected to be derived from
the continuing use of an asset and from its disposal at the end of its useful life, discounted at pre-tax rate
that reﬂects current market assessment of the time value of money and the risks speciﬁc to the asset or
cash-generating unit for which the future cash ﬂow estimates have not been adjusted.

An assessment is made at the end of each reporting period as to whether there is any indication that an
impairment loss recognised in prior periods for an asset may no longer exist or may have decreased. If
such indication exists, the recoverable amount is estimated. An impairment loss recognised in prior
periods is reversed only if there has been a change in the estimates used to determine the recoverable
amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset
is increased to its recoverable amount.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the
carrying amount that would have been determined, net of depreciation or amortisation, if no impairment
loss has been recognised. Reversals of impairment loss are recognised in proﬁt or loss unless the asset
is carried at revalued amount, in which case the reversal in excess of impairment loss recognised in proﬁt
or loss in prior periods is treated as a revaluation increase. After such a reversal, the depreciation or
amortisation is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual
value, on a systematic basis over its remaining useful life.

2.9 Financial assets

The Group classiﬁes its ﬁnancial assets as loans and receivables. The classiﬁcation depends on the
purpose of which the assets are acquired. The management determines the classiﬁcation of the ﬁnancial
assets at initial recognition and re-evaluates this designation at the end of the reporting period, where
allowed and appropriate.

(i) Loans and receivables
Loans and receivables are non-derivative ﬁnancial assets with ﬁxed or determinable payments that are
not quoted in an active market. Loans and receivables are classiﬁed within “Other receivables (excluding
prepayments)” and “Cash and bank balances” on the consolidated statement of ﬁnancial position.

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

Summary of signiﬁcant accounting policies (continued)

2.
2.9 Financial assets (continued)

Recognition and derecognition
Financial assets are recognised on the statements of ﬁnancial position when, and only when, the Group
becomes parties to the contractual provisions of the ﬁnancial instruments.

Regular way purchases and sales of ﬁnancial assets are recognised on trade-date, the date on which the
Group commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash ﬂows from the ﬁnancial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of
ownership.

On derecognition of a ﬁnancial asset, the difference between the carrying amount and the net
consideration proceeds is recognised in proﬁt or loss.

Initial and subsequent measurement
Financial assets are initially recognised at fair value plus directly attributable transaction costs.

After initial recognition, loans and receivables are carried at amortised cost using the effective interest
method, less impairment loss, if any.

The effective interest method is a method of calculating the amortised cost of a ﬁnancial instrument and
allocating the interest income or expense over the relevant period. The effective interest rate exactly
discounts estimated future cash receipts or payments (including all fees and points paid or received that
form an integral part of the effective interest rate, transaction costs and other premiums or discounts)
through the expected life of the ﬁnancial instrument, or where appropriate, a shorter period, to the net
carrying amount of the ﬁnancial instrument. Income and expense are recognised on an effective interest
basis for debt instruments other than those ﬁnancial instruments at fair value through proﬁt or loss.

Impairment
The Group assesses at the end of each reporting period whether there is objective evidence that a
ﬁnancial asset or a group of ﬁnancial assets is impaired.

(i)

Loans and receivables
An allowance for impairment loss of loans and receivables is recognised when there is objective
evidence that the Group will not be able to collect all amounts due according to the original terms
of the receivables. The amount of allowance is the difference between the asset’s carrying amount
and the present value of estimated future cash ﬂows, discounted at the original effective interest
rate. The carrying amount of the asset is reduced through the use of an allowance account. The
amount of the loss is recognised in proﬁt or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment loss was recognised, the previously
recognised impairment loss is reversed either directly or by adjusting an allowance account. Any
subsequent reversal of an impairment loss is recognised in proﬁt or loss, to the extent that the
carrying amount of the asset does not exceed its amortised cost at the reversal date.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Summary of signiﬁcant accounting policies (continued)

2.
2.10 Financial liabilities

Financial liabilities are classiﬁed as either ﬁnancial liabilities at fair value through proﬁt or loss or other
ﬁnancial liabilities.

Financial liabilities are classiﬁed as at fair value through proﬁt or loss if the ﬁnancial liability is either held
for trading or it is designated as such upon initial recognition. The Group has not designated any ﬁnancial
liabilities as at fair value through proﬁt or loss upon initial recognition.

The accounting policies adopted for other ﬁnancial liabilities are set out below:

(i) Other payables
Other payables are initially measured at fair value, net of transaction costs, and are subsequently
measured at amortised cost, where applicable, using the effective interest method.

Recognition and derecognition
Financial liabilities are recognised on the consolidated statement of ﬁnancial position when, and only
when, the Group becomes parties to the contractual provisions of the ﬁnancial instruments.

Financial liabilities are derecognised when the contractual obligation has been discharged or cancelled
or expired. On derecognition of a ﬁnancial liability, the difference between the carrying amount and the
consideration paid is recognised in proﬁt or loss.

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

2.11 Offsetting of ﬁnancial instruments

Financial assets and ﬁnancial liabilities are offset and the net amount reported in the statement of
ﬁnancial position if there is a currently enforceable legal right to offset the recognised amounts and
there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.12 Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less, and bank overdrafts.

2.13 Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities.

Ordinary shares are classiﬁed as equity and recognised at the fair value of the consideration received.

Incremental costs directly attributable to the issuance of new equity instruments are shown in equity as
a deduction from the proceeds.

2.14 Share-based payments

Where equity settled share options are awarded to employees, the fair value of the options at the date
of grant is charged to the consolidated statement of comprehensive income over the vesting period.
Non-market vesting conditions are taken into account by adjusting the number of equity instruments
expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of options that eventually vest. Non-vesting conditions and
market vesting conditions are factored into the fair value of the options granted. As long as all other
vesting conditions are satisﬁed, a charge is made irrespective of whether the market vesting conditions
are satisﬁed. The cumulative expense is not adjusted for failure to achieve a market vesting condition or
where a non-vesting condition is not satisﬁed.

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

Summary of signiﬁcant accounting policies (continued)

2.
2.14 Share-based payments (continued)

Where the terms and conditions of options are modiﬁed before they vest, the increase in the fair value
of the options, measured immediately before and after the modiﬁcation, is also charged to the
consolidated statement of comprehensive income over the remaining vesting period.

Where equity instruments are granted to persons other than employees, the consolidated statement of
comprehensive income is charged with the fair value of goods and services received.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and is designated as a replacement award on the date that is granted,
the cancelled and new awards are treated as if they were a modiﬁcation of the original award, as described
in the previous paragraph. All cancellation of equity-settled transaction awards are treated equally.

The diluted effect of outstanding options is reﬂected as additional share dilution in the computation of
loss per share.

Fair value is measured using the Black-Scholes option pricing model. The expected life used in the model
has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.

2.15 Operating leases

When the Group is the lessee of operating leases
Leases of assets in which a signiﬁcant portion of the risks and rewards of ownership are retained by the
lessor are classiﬁed as operating leases. Payments made under operating leases (net of any incentives
received from the lessor) are recognised in proﬁt or loss on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to be
made to the lessor by way of penalty is recognised as an expense in the ﬁnancial year in which
termination takes place.

2.16 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a
past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate
can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the end of the ﬁnancial year, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the cash ﬂows estimated to settle the
present obligation, its carrying amount is the present value of those cash ﬂows.

When some or all of the economic beneﬁts required to settle a provision are expected to be recovered
from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will
be received and the amount of the receivable can be measured reliably.

Changes in the estimated timing or amount of the expenditure or discount rate are recognised in proﬁt
or loss when the changes arise.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Summary of signiﬁcant accounting policies (continued)

2.
2.17 Contingent liabilities
A contingent liability is:

(a)

a possible obligation that arises from past events and whose existence will be conﬁrmed only by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the
control of the Group; or

(b)

a present obligation that arises from past events but is not recognised because:

(i)

it is not probable that an outﬂow of resources embodying economic beneﬁts will be required
to settle the obligation; or

(ii)

the amount of the obligation cannot be measured with sufﬁcient reliability.

Contingent liabilities are not recognised on the consolidated statement of ﬁnancial position of the Group.

Signiﬁcant accounting judgements and estimates

3.
The preparation of the Group’s consolidated ﬁnancial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and
the accompanying disclosures, and the disclosure of contingent liabilities at the reporting date. Uncertainty
about these assumptions and estimates could result in outcomes that could require a material adjustment to
the carrying amount of the asset or liability affected in the future periods.

3.1 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the following
judgements which have the most signiﬁcant effect on the amounts recognised in the consolidated
ﬁnancial statements:

(i)

Impairment of investment in subsidiaries

The Group follows the guidance of IAS 36 on determining whether an investment in subsidiary is
impaired. This determination requires signiﬁcant judgement. The Group evaluates, among other
factors, the duration and extent to which the fair value of an investment in subsidiary is less than
its cost and the ﬁnancial health of and near-term business outlook for the investment, including
factors such as industry and sector performance, changes in technology and operational and
ﬁnancing cash ﬂows.

(ii) Determination of functional currency

The Group measures foreign currency transactions in the functional currency of the Company. In
determining the functional currency of the entities within Group, judgement is required to
determine the currency that mainly inﬂuences sales price for services and of the country whose
competitive forces and regulations mainly determines the sales prices of its services. The functional
currency of the entities within Group is determined based on management’s assessment of the
economic environment in which the Group operates and its process of determining sales price.

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next ﬁnancial year, are described below. The Group based its assumptions
and estimates on parameters available when the consolidated ﬁnancial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change due to
market changes or circumstances arising beyond the control of the Group. Such changes are reﬂected
in the assumptions when they occur.

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

Signiﬁcant accounting judgements and estimates (continued)
Employee share option plan
The Group measures the cost of equity-settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. Estimating fair value for share-based
payment transactions requires determining the most appropriate valuation model, which is dependent
on the terms and conditions of the grant. This estimate also requires determining the most appropriate
inputs to the valuation model including expected life of the share option, volatility and dividend yield
and making assumptions about them. The assumptions and model for estimating fair value for share-
based payment transactions are set out in Note 14 to the consolidated ﬁnancial statements.

Employee beneﬁts expense

Salaries, wages, bonuses and other staff beneﬁts
Share option expenses

Period from
17 May 2013 to
31 March 2014
US$

320,937
74,749

395,686

The employee beneﬁts expense includes the remuneration of Directors as disclosed in Note 16 to the
consolidated ﬁnancial statements.

Finance costs

5.
Finance costs represent bank charges for the ﬁnancial period.

Loss before income tax

6.
In addition to the charges and credits disclosed elsewhere in the notes to theconsolidatedﬁnancial statements,
the above includes the following charges and credits:

Period from
17 May 2013 to
31 March 2014
US$

30,914
60,875
8,746
70,573
76,325
86,015

Auditor’s remuneration
Directors’ fee
Foreign exchange loss, net
Operating lease expenses
Professional fees
Travel and accommodation

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

Income tax

7.
As the Group has not derived any taxable income during the ﬁnancial period, no tax provision has been made.

A reconciliation of income tax applicable to loss before income tax at the statutory income tax rate of 25%
in Myanmar is as follows:

Loss before income tax

Income tax at the applicable tax rates
Effects of different income tax rates in other countries
Expenses not deductible for tax purposes

Income tax for the ﬁnancial period

Period from
17 May 2013 to
31 March 2014
US$

(866,888)

(216,722)
(751)
217,473

–

Loss per share

8.
Basic loss per share is calculated by dividing the loss for the ﬁnancial period attributable to owners of the
parent by the weighted average number of ordinary shares outstanding during the ﬁnancial period.

The following reﬂects the loss and share data used in the basic and diluted loss per share computation:

Loss for the ﬁnancial year attributable to owners of the Company (US$)
Weighted average number of ordinary shares during the ﬁnancial period

applicable to basic loss per share

Loss per share
Basic and diluted (cents)

2014

(866,888)

5,682,268

(15.26)

Diluted loss per share is the same as the basic loss per share because the potential ordinary shares to be
converted are anti-dilutive as the effect of the shares conversion would be to decrease the loss per share.

Plant and equipment

Group
Cost
Balance at date of incorporation
Additions

Balance at end of ﬁnancial period

Accumulated depreciation
Balance at date of incorporation
Depreciation for the ﬁnancial period

Balance at end of ﬁnancial period

Carrying amount
Balance at end of ﬁnancial period

Computer
equipment
US$

Ofﬁce
equipment
US$

Furniture
and ﬁttings
US$

Total
US$

–
6,405

6,405

–
566

566

–
1,418

1,418

–
158

158

–
27,797

27,797

–
2,871

2,871

–
35,620

35,620

–
3,595

3,595

5,839

1,260

24,926

32,025

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

Investment in subsidiaries

10.
Details of the investments in which the Group has a controlling interest are as follows:

Name of subsidiaries

Country of
incorporation

Principal activities

Myanmar Investments Limited(1)(3)

Singapore

Investment holding company

MIL Management Pte. Ltd.(1)(4)

Singapore

Held by MIL Management Pte. Ltd.
MIL Management Co., Ltd(2)

Myanmar

Provision of management
services to the Group

Proportion of
ownership
interest
2014
%

100

(1) Audited by BDO LLP, Singapore
(2) Audited by JF Group Audit Firm, Yangon, Myanmar
(3) This company was incorporated on 1 March 2013 and was owned by the Directors before it was transferred to the Company on

28 May 2013.

(4) This company was incorporated on 8 November 2012 as Myanmar Investments Pte Limited and was owned by two Directors, Anthony
Michael Dean and Craig Robert Martin. It was transferred to Myanmar Investments Limited on 13 May 2013. It changed its name to
Myanmar Investments (Singapore) Pte Limited on 20 May 2013. It subsequently changed its name to MIL Management Pte Ltd on
19 August 2013.

Incorporation of a subsidiary by MIL Management Pte.Ltd.
On 21 October 2013, MIL Management Pte. Ltd. incorporated a wholly-owned subsidiary in Myanmar, MIL
Management Co., Ltd, for a cash consideration amounting to US$50,000.

11. Other receivables

Other receivables
Deposits
Prepayments

Other receivables are denominated in the following currencies:

United States dollar
Myanmar kyat

2014
US$

4,683
17,096
77,456

99,235

2014
US$

82,801
16,434

99,235

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

12. Cash and bank balances
Cash and bank balances are denominated in the following currencies:

United States dollar
Singapore dollar
Myanmar kyat

13. Share capital

Issued and fully-paid share capital:
1 ordinary share at the date of incorporation
Issuance of 6,342,618 ordinary shares during the ﬁnancial period
Share issuance expenses

2014
US$

4,461,003
109,789
8,874

4,579,666

2014
US$

–*
6,184,793
(745,440)

5,439,353

* Share capital at date of incorporation is US$0.10.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share without restriction at meetings of the Company.

All ordinary shares rank equally with regard to the Company’s residual assets except for 500,000 ordinary
shares held by the Directors that were subscribed for prior to the Company’s Admission to the AIM market
of the London Stock Exchange at US$0.10 per share (the “Founders Shares”) on 17 May 2013. In recognition
of the difference between the subscription price paid for these Founder Shares and the Issue Price paid for
the other shares issued at the time of Admission, the Founders had agreed that should the Company be
liquidated following a vote of its shareholders as a result of the Company being unable to substantially
implement its Investing Policy then the Founders shall return a sum equal to 90 percent of the amount
otherwise receivable by each of them in respect of the Founders Shares and shall work with the Company’s
liquidator to distribute such monies amongst the remainder of the Shareholders in proportion to their
shareholdings. In the event that any part of such monies cannot be so distributed within six months of
completion of a liquidation then the net amount remaining will be donated to one or more children’s charities
in Myanmar.

On 21 May 2013, the Memorandum of Association of the Company was amended to allow the issue of an
unlimited number of Ordinary Shares.

On 28 May 2013, the Company allotted 499,999 Ordinary Shares to the Directors as Founder Shares at an
effective subscription price of US$0.10 each.

On 21 June 2013, the Company allotted 5,842,619 Ordinary Shares pursuant to the Placing and Subscription
undertaken as part of the Admission.

All the shares have been admitted to trading on AIM under the ticker MIL.

The new ordinary shares issued during the ﬁnancial period ranked pari passu in all respects with the existing
ordinary shares of the Company except as otherwise described above.

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

13. Share capital (continued)
Warrants
On 21 June 2013, the Company allotted 5,842,619 Warrants pursuant to the Placing and Subscription
undertaken as part of the Admission. The Company had agreed that for every Ordinary Share subscribed for
by a Subscriber or a Placee, such Subscriber or Placee would receive one Warrant at nil cost.

The Warrants entitle the holder to subscribe for an Ordinary share at an exercise price of US$0.75. The
Warrants may be exercised at any time from 21 June 2015 to the ﬁfth anniversary of the date of the Warrant
Instrument, being 21 June 2018.

All Warrants have been admitted to trading on AIM under the ticker MILW.

As at 31 March 2014, the outstanding number of Warrants is 5,842,619.

14. Share option reserve
Details of the Share Option Plan (the “Plan”)
As at 31 March 2014, there were 584,261 share options available for issue of which 435,000 have been
granted. These share options have an exercise price of US$1.10 per share.

The Plan allows for the total number of shares issuable under share options to constitute a maximum of one
tenth of the number of the total number of ordinary shares in issue (excluding shares held by the Company
as treasury shares and shares issued to the Founders prior to Admission).

Any future issuance of shares will give rise to the ability of the Remuneration Committee to award additional
share options. Such share options will be granted with an exercise price set at a 10 percent premium to the
subscription price paid by shareholders on the relevant issue of shares that gave rise to the availability of
each tranche of share options.

Share options can be exercised any time after the ﬁrst anniversary and before the tenth anniversary of the
grant (as may be determined by the Remuneration Committee in its absolute discretion) of the respective
share options.

Share options are not admitted to trading on AIM but application will be made for shares that are issued
upon the exercise of the share options to be admitted to trading on AIM.

The following share-based payment arrangement were in existence during the current ﬁnancial period:

Option series

27 June 2013
9 December 2013

Number of
share
options

Grant date

Expiry date

Exercise
price
(USD)

Fair value
at grant
date

410,000
25,000

27 June 2013
9 December 2013

26 June 2023
8 December 2023

1.10
1.10

153,487
19,015

Share options that are allocated to a Participant will be subject to a three year vesting period during which
the rights to the share options will be transferred to the Participant in three equal annual instalments provided,
save in certain circumstances, that they are still in employment with or engaged by the Company.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

14. Share option reserve (continued)
Fair value of share options granted in the ﬁnancial period
The weighted average fair value of the share options granted during the ﬁnancial period is US$0.397. Share
options were priced using Black-Scholes option pricing model. Where relevant, the expected life used in the
model has been adjusted based on management’s best estimate for the effects of non-transferability, exercise
restrictions (including the probability of meeting market conditions attached to the option), and behavioural
considerations. Expected volatility is based on historical share price volatility from the date of grant of the
share options.

The Black-Scholes option pricing model uses the following assumptions:

Grant date share price (US$)
Exercise price (US$)
Expected volatility
Option life
Risk-free annual interest rates

Option series

27 June
2013

9 December
2013

1.05
1.10
22.88%
10 years
2.46%

1.50
1.10
22.88%
10 years
2.82%

The Group recognised total expenses of US$74,749 related to equity-settled share-based payment
transactions during the ﬁnancial period.

Movement in share option during the ﬁnancial period
The following reconciles the share options outstanding at the date of incorporation and at the end of the
ﬁnancial period.

Balance at date of incorporation
Granted

Balance at end of ﬁnancial period

2014

Number

–
435,000

435,000

2014

Weighted
average
exercise
price
US$

–
1.10

1.10

No share options were exercised during the ﬁnancial period.

Share option outstanding at the end of the ﬁnancial period
The share options outstanding at the end of ﬁnancial period had a weighted average exercise price of US$1.10
and a weighted average contractual life of 9.27 years.

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

15. Other payables

Accruals

Other payables are denominated in the following currencies:

Singapore dollar
United States dollar
British pound
Myanmar kyat

2014
US$

63,712

2014
US$

43,587
7,716
6,595
5,814

63,712

16. Signiﬁcant related party disclosures
For the purposes of these consolidated ﬁnancial statements, parties are considered to be related to the Group
and the Company if the Group and the Company have the ability, directly or indirectly, to control the party
or exercise signiﬁcant inﬂuence over the party in making ﬁnancial and operating decisions, or vice versa, or
where the Group and the Company and the party are subject to common control or common signiﬁcant
inﬂuence. Related parties may be individuals or other entities.

Compensation of key management personnel
For period from 17 May 2013 (date of incorporation) to 31 March 2014, no emoluments were paid by the
Group to the Directors as an inducement to join or upon joining the Group or as compensation for loss of
ofﬁce.

The remuneration of Directors for the period from 17 May 2013 (date of incorporation) to 31 March 2014 are
as follows:

Executive directors
Maung Aung Htun
Anthony Michael Dean

Independent non-executive directors
Christopher William Knight
Craig Robert Martin
Christopher David Appleton

Directors’
fee
US$

Short term
employee
beneﬁts
US$

Share option
plan
US$

–
–

75,982
56,986

22,829
19,023
19,023

60,875

–
–
–

132,968

31,251
24,307

3,472
5,209
6,945

71,184

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

17. Commitments
Operating lease commitments – as lessee
The Group leases the Yangon ofﬁce and accommodation for Directors under non-cancellable operating leases.
The operating lease commitments are based on rental rates as speciﬁed in the lease agreements. The Group
has the options to renew certain agreements on the leased premises for another one year.

In accordance with prevailing market conditions in Yangon, lease payments are paid in advance.

Future minimum rentals payable under non-cancellable operating leases (excluding prepayment) at the
reporting date are as follows:

Within one ﬁnancial year
After one ﬁnancial year but within ﬁve ﬁnancial years

2014
US$

13,906
30,625

44,531

18. Dividends
The Directors of the Company do not recommend any dividend in respect of the ﬁnancial period from 17 May
2013 (date of incorporation) to 31 March 2014.

19. Financial risk management objectives and policies
The Group has risk management policies that systematically view the risks that could prevent it from achieving
its objectives. These policies are intended to manage risks identiﬁed in such a way that opportunities to
deliver the Group’s objectives are achieved. The Group’s risk management takes place in the context of day-
to-day operations and normal business processes such as strategic and business planning. The Directors have
identiﬁed each risk and are responsible for coordinating and continuously improving risk strategies, processes
and measures in accordance with the Group’s established business objectives.

The Group’s principal ﬁnancial instruments consist of other receivables, cash and bank balances and other
payables. The main risks arising from the Company’s ﬁnancial instruments and the policies for managing each
of these risks are summarised below.

19.1 Credit risk

Credit risk is the risk of loss associated with the counterparty’s inability to fulﬁl its obligations. The Group’s
credit risk is primarily attributable to other receivables and cash and bank balances with the maximum
exposure being the reported balance in the consolidated statement of ﬁnancial position. The Group has
a nominal level of debtors and as such the Company believes that the credit risk to these is minimal. The
Group holds available cash with licensed banks which have a strong history. The Group considers the
credit ratings of banks in which it holds funds in order to reduce exposure to credit risk.

19.2 Market risks

Foreign currency risks
The Group incurs foreign currency risk on transactions and balances that are denominated in currencies
other than its functional currency, the United States dollar. The currencies giving rise to this risk are the
Singapore dollar and Myanmar kyat. Exposure to foreign currency risk is monitored on an on-going basis
to ensure that the net exposure is at an acceptable level.

The Group monitors its foreign currency exchange risks closely and maintains funds in various currencies
to minimise currency exposure. Currency translation risk arises when commercial transactions, recognised
assets and liabilities and net investment in foreign operations are denominated in the currency that is not
the entity’s functional currency.

Annual Report 2014

Notes to the Consolidated Financial Statements (continued)

19. Financial risk management objectives and policies (Continued)
19.2 Market risks (continued)

Foreign currency risks (continued)
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary
liabilities at the end of the reporting period were as follows:

United States dollar
Singapore dollar
Myanmar kyat
British pound

Assets
2014
US$

4,543,804
109,789
25,308
–

4,678,901

Liabilities
2014
US$

7,716
43,587
5,814
6,595

63,712

Foreign currency sensitivity analysis
No sensitivity test was performed as the exposure to foreign currency risk is not signiﬁcant to the
consolidated ﬁnancial statements.

Interest rate risk
The Group does not have any signiﬁcant exposure to interest rate risk as the Group does not have any
signiﬁcant interest bearing liabilities and its interest earning assets are producing relatively low yields.

19.3 Liquidity risk

The Group is exposed to liquidity risk to the extent that it holds investments that it may not be able to
sell quickly at close to fair value.

The risk is managed by the Group by means of cash ﬂow planning to ensure that future cash requirements
are anticipated and, where ﬁnancial instruments have to be sold to meet these requirements, the process
is carried out in a controlled manner intended to minimise the liquidity risk involved.

As at 31 March 2014, the Group’s principal ﬁnancial instruments consist mainly of cash and bank balances.
As such the investments are highly liquid and capable of being realised at their fair value.

19.4 Fair value of ﬁnancial assets and ﬁnancial liabilities

The carrying amounts of the Group’s current ﬁnancial assets and ﬁnancial liabilities approximate their
respective fair values due to the short term maturity of these ﬁnancial instruments.

19.5 Capital management

The Group manages its capital to ensure that the Group is able to continue as going concern and to
maintain an optimal capital structure so as to maximise shareholders’ value.

The management constantly reviews the capital structure to ensure the Group is able to service any debt
obligations based on its operating cash ﬂows. At present the Group has taken on no debt obligations,
other than other payables, and therefore has no difﬁculties in settling its debts as they fall due.

Rule 8 of the AIM Rules for Companies, requires that within eighteen months from the date of admission
to the AIM market of the London Stock Exchange the Company is required to have “substantially
implemented its Investment Policy”.

By virtue of the investment in Myanmar Finance International Ltd. as described in more detail in Note
21, the Company has substantially implemented its investing policy in accordance with Rule 8 of the
AIM Rules for Companies.

The Group does not have any externally imposed capital requirements for the ﬁnancial period ended
31 March 2014.

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

20. Contingent liabilities
The service contracts for the two executive directors, Maung Aung Htun and Anthony Michael Dean, both
provide that 50 percent of their salary is to be deferred until either the Company has substantially
implemented its investing policy or the Shareholders agree to extend the period for implementing the
investment policy. If neither of these events occurs, their entitlement to this deferred element will lapse
without any compensation.

As at 31 March 2014, this deferred compensation amounting to US$132,968 has not been included in the
results for the ﬁnancial period. However, by virtue of the investment in Myanmar Finance International Ltd.,
as described in more detail in Note 21, the Company fulﬁlled this requirementand as such the Company will
recognise this liability in the ﬁnancial year to 31 March 2015.

As part of the Admission process, certain of the Company’s professional advisers agreed to defer receipt of
fees amounting to US$179,903. This is only payable at the earlier of a secondary fundraising or the passing
of a shareholder vote to continue the Company’s business should the “substantially invested” requirement
of the AIM market not be met within the time frame so speciﬁed. In the event that these events do not occur
then the obligation to make such payments will lapse. As such they have not been included in the results for
the period.

21. Subsequent event review
On 26 August, 2014 the Company’s wholly-owned subsidiary, Myanmar Investments Limited (“MIL”), signed
a joint venture agreement (“JVA”) with Myanmar Finance Company Limited (“MFC”) by which, the two parties
agreed to establish a Myanmar microﬁnance joint venture company, Myanmar Finance International Ltd.
(“MFIL”).

Under the terms of the JVA, MFC injected its existing microﬁnance business into the joint venture which is
jointly managed by MIL and MFC. The two partners agreed to a phased contribution of US$4.8 million in
capital (MIL’s share being US$2.75 million) with MIL owning 55 per cent of the new company and MFC holding
the remaining 45 per cent.

MFC is a well-established provider of microﬁnance loans to small-scale business operators in rural and urban
areas of Yangon and neighbouring Bago. It is believed to be the ﬁrst foreign microﬁnance joint venture in
Myanmar.

Following this investment, the Company has fulﬁlled the requirement to have “substantially implemented its
Investment Policy” in accordance with Rule 8 of the AIM Rules for Companies within the stipulated eighteen
months from the date of admission to the AIM market of the London Stock Exchange. As a consequence of
this:

•

the contingent liabilities with respect to its Executive Directors (as described in more detail in Note 20)
have crystallised and will be recognised and settled in the ﬁnancial year to 31 March, 2015; and

the remuneration committee will assess the levels of compensation that should be paid to the Executive
Directors to ensure they reﬂect the prevailing market rate for an executive in a similar or related sector.

22. Comparative ﬁgures
There are no comparative ﬁgures as this is the ﬁrst set of consolidated ﬁnancial statements prepared since the
date of incorporation of the Company on 17 May 2013.

Annual Report 2014

Notice of Annual General Meeting

Myanmar Investments International Limited
(Company Number 1774652)

Notice is hereby given that the 2014 Annual General Meeting of Myanmar Investments International Limited
(the “Company”) will be held at the Inwa Room, Level 3, Sule Shangri La Hotel, Yangon, Myanmar at 2.00pm
(Myanmar time) on 21 October, 2014 for the purpose of considering and if thought ﬁt, passing the following
resolutions:

Ordinary Resolutions
1.

To receive and adopt the Company’s annual accounts for the ﬁnancial year ended 31 March 2014
together with the last directors’ report and auditors’ report on those accounts.

To reappoint BDO LLP as the auditors of the Company at a remuneration to be determined by the
directors.

To reappoint Anthony Michael Dean as director who retires by rotation as required by Article 8.5 of the
Articles of Association of the Company.

Special Resolution
4.

In addition to any pre-existing authority under Regulation 2.17 of the Company’s Articles of Association
(the “Articles”), to authorise the Company to issue up to 634,262 ordinary shares or rights to subscribe
for, or to convert securities into, up to 634,262 ordinary shares wholly for cash where there is a discount
of more than 10 per cent. to the last published Net Asset Value, with such power expiring at the Annual
General Meeting of the Company in 2015, unless such authority is varied, revoked or renewed prior to
such date by a special resolution of the Company in general meeting, and the rights of pre-emption
pursuant to Regulation 2.16 of the Articles shall not apply to any such issue.

By Order of the Board

Appleby Corporate Services (BVI) Limited
Secretary

23 September 2014

Registered Ofﬁce:
Jayla Place
Wickhams Cay 1
Road Town
Tortola VG1110
British Virgin Islands

MMyyaannmmaarr IInnvveessttmmeennttss IInntteerrnnaattiioonnaall LLiimmiitteedd

NOTES
Resolutions 1-3 will be passed if approved by more than ﬁfty per cent. of the votes of those members entitled
to vote and voting on the resolutions. Resolution 4 will be passed if approved by more than seventy ﬁve per
cent. of the votes of those members entitled to vote and voting on the resolution.

A Member entitled to attend and vote at the above meeting is entitled to appoint a proxy or one or more
proxies to attend and, on a poll, vote in his place. A proxy need not be a member of the Company.

Forms of Direction from holders of depositary interests must be deposited at the ofﬁce of the Registrar,
Capita Asset Services, PXS1, 34 Beckenham Road, Beckenham, Kent BR3 4ZF, United Kingdom not later than
5.00 pm (UK time) Thursday 16 October 2014. Proxies from holders of ordinary shares must be received by
the Registrar not later than 5.00 pm (UK time) Friday 17 October 2014.

The Company, pursuant to regulation 41 of the Uncertiﬁcated Securities Regulations 2001, speciﬁes that only
those shareholders registered in the register of members of the Company by no later than 48 hours for the
time ﬁxed for the meeting shall be entitled to attend or vote at the meeting in respect of the number of
ordinary shares registered in their name at that time. Changes in entries on the relevant register of members
after such time and date shall be disregarded in determining the rights of any person to attend or vote at this
meeting.

Annual Report 2014

Directors and Advisers

Company data

Website: www.myanmarinvestments.com
Email: enquiries@myanmarinvestments.com
Listed on the AIM market of the London Stock Exchange:

Ticker symbol for the Ordinary Shares
Ticker symbol for the Warrants

MIL
MILW

The Company is incorporated in the British Virgin Islands with registration number 1774652

Directors

Christopher William Knight, Independent Non-executive Chairman
Maung Aung Htun, Managing Director
Anthony Michael Dean, Finance Director
Craig Robert Martin, Independent Non-executive Director
Christopher David Appleton, Independent Non-executive Director

Registered Ofﬁce

Jayla Place
Wickhams Cay I
Road Town
Tortola VG1110
British Virgin Islands

Nominated Adviser

Grant Thornton UK LLP
30 Finsbury Square
London EC2P 2YU
United Kingdom

Legal Advisers to the Company
(as to English Law)

Reed Smith LLP
The Broadgate Tower
20 Primrose Street
London EC2A 2RS
United Kingdom

Legal Advisers to the Company
(as to British Virgin Islands law)

Appleby
Jayla Place
Wickhams Cay I
Road Town
Tortola
British Virgin Islands

Independent Auditor

Myanmar Ofﬁce

Suite 11-B Pansodan Business Tower
123/133 Anawrahta Road
PO Box 817
Kyauktada Township
Yangon, Myanmar
Telephone: +95 1 391 804 to 7

Broker

Allenby Capital Limited
3 St. Helens Place
London EC3A 6AB
United Kingdom

Legal Advisers to the Company
(as to Myanmar Law)

DFDL Legal & Tax
134A Thanlwin Road
Golden Valley Ward (1)
Bahan Township
Yangon
Myanmar

Company Secretary

Appleby Corporate Services (BVI) Limited
Jayla Place
Wickhams Cay I
Road Town
Tortola
British Virgin Islands

BDO LLP
Public Accountants and Chartered Accountants
21 Merchant Road #05-01
Singapore 058267
Partner-in-charge: Adrian Lee Yu-Min
(Appointed since the ﬁnancial period ended 31 March 2014)

Registrars

Capita Registrars (Guernsey) Limited
Mont Crevelt House
Bulwer Avenue
St. Sampson
Guernsey GY2 4LH

Warrant Registrar

Capita Registrars Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom

Depository

Capita IRG Trustees Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom

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