Myanmar Investments International Limited
Annual Report 2021

Plain-text annual report

A N N U A L R E P O R T 2 0 2 1 MYANMAR INVESTMENTS In June 2013 Myanmar Investments International Limited became the first Myanmar focused company to be quoted on the AIM market of the London Stock Exchange. Our vision was to build a diversified portfolio of businesses which would benefit from Myanmar’s emergence from military rule. But it became clear that the pace of change had been slow. The Directors therefore suggested in the Company’s 2019 AGM to amend the existing investment strategy of the Company to start planning for an orderly disposal of our three investments with a view to ultimately winding up the Company. The AGM voted in favour of this proposal on 24 October 2019. Since then, the Directors have taken action to implement this new strategy: • We sold our investment in Medicare International Health & Beauty (“Medicare”) for US$1 million to our main joint venture partner in November 2019. The transaction was completed in December 2019. • We are in the process of selling our investment in Myanmar Finance International Limited (“MFIL”). • We have continued to streamline our operations and as a result reduced our overheads. As part of the cost reduction process, we closed our office in Yangon and removed staff costs from the operation as of 31 March 2020. • The investment in Apollo Towers Holdings Limited (“Apollo Towers”), which was exchanged into shares in AP Towers Holdings Pte Ltd (“AP Towers”) will most likely continue to be held until such time as our investment partners are able to create an exit opportunity. CONTENTS 2 Chairmen’s Letter 5 Executive Director’s Review 8 Business Review 12 Board of Directors 14 Directors’ Report 29 Directors’ Report on Remuneration Issues 30 Statement of Directors’ Responsibilities 31 Key Audit Matters 32 Financial Contents 19 Chairman’s Statement on Corporate Governance 68 Notice of Annual General Meeting The Myanmar Kyat exchange rate was MMK1,982 to US$1.00 as at 30 September 2021 References to “today” are to 29 November 2021 being the date of printing of this document The Company is currently invested in two businesses: AP Towers Holdings Pte Ltd (“AP Towers”) / Apollo Towers Holdings Limited (“Apollo Towers”) • • The Company had invested US$21 million in Apollo Towers. The share exchange with AP Towers was completed in January 2020. Under the share exchange, the Company swapped its indirect interest of 9.1 per cent of Apollo Towers for an indirect interest of 4.1 per cent of AP Towers. The share exchange effectively brought Apollo Towers and Pan Asia Towers, another Myanmar independent tower company, under the common ownership of AP Towers. • AP Towers has a portfolio of 3,254 towers hosting 6,669 tenants and a co-location ratio (“Lease-up-Rate” or “LUR”) of 2.05x which is unchanged since 30 September 2020. • Based on AP Towers actual results for the 6 months ended 30 September 2021, AP Towers annualised adjusted “run rate” revenue has decreased to US$102.5 million. This represents a decline of 1.9 per cent over the same period last year. The annualised adjusted “run rate” EBITDA has increased to US$85.9 million. This represents an increase of 3.0 per cent over the same period last year. • Going forward, AP Towers will, when market conditions allow, be looking to increase the number of tenancies either from new “Build to Suit” towers or from adding co-locations to its existing towers. Myanmar Finance International Limited (“MFIL”) • The Company invested US$2.7 million for a 37.5 per cent shareholding. • MFIL is one of Myanmar’s leading microfinance companies. MFIL focuses on urban and semi- rural lending in Yangon, Bago, Ayeyarwady and Mon State. • Covid and the political turmoil has severely impacted the Myanmar economy and has affected borrowers. The Portfolio at Risk over 30 days ratio (“PAR 30+”) has risen to 14 per cent. • MFIL has been restructuring its balance sheet with agreements reached with all lenders to extend their loan maturities by 12 months. All formal extension agreements are expected to be signed around the end of November 2021. • MFIL has cash of MMK8 billion and had reduced its loan book to MMK16.5 billion. • The Company is in the process of selling this investment. On 1 April 2020, the Company announced that it had accepted an offer to sell its shareholding in MFIL and on 23 April 2020 the purchaser’s AGM approved the purchase subject to completion of certain conditions precedent including a closing audit, lenders’ consents, and Myanmar regulatory approval. Subsequent to that announcement, and because of logistical problems in completing the conditions precedent, the purchaser’s AGM on 26 April 2021 approved a one-year extension of their agreement to purchase MFIL. 1 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMEN’S LETTER Dear fellow shareholder MYANMAR: COVID-19 AND POLITICAL TURMOIL Myanmar is a resource rich and strategically located country with substantial economic potential but one that has consistently proven to be difficult to invest in. In 2020 Myanmar was affected by the global Covid-19 pandemic which, although the number of cases were minimal, led to two lockdowns and border restrictions. During this period there was also an election that returned Daw Aung San Suu Kyi’s party, the National League for Democracy (“NLD”), to power with an increased majority. However, on 1 February 2021 before the new government could be sworn in, the military took over and promised a new election within 2 years. Since then, there has been continuous resistance across the country. The new military installed government, the Special Administrative Council (“SAC”), has not been recognized by most countries but neither has the National Unity Government (“NUG”) established by a group of former members of parliament been accredited, although some countries such as South Korea have allowed NUG to open an Information Office. In the early days public dissatisfaction was shown through demonstrations across the country. These were often met with force by the army, known as the Tatmadaw. Large demonstrations morphed into a Civil Disobedience Movement campaign (“CDM”) that included strikes by bank staff, civil servants and teachers that paralysed the country. Eight months later flash mobs still take place and, at different levels, CDM is still on-going. The political conflict has also turned violent with frequent clashes between the Tatmadaw, and many of the Ethnic Armed Organizations (“EAOs”). Numerous locally formed People’s Defence Forces (“PDF”), akin to militia groups, have also sprung up to resist the SAC or to protect their community. In cities such as Yangon or Mandalay PDFs tend to use assassinations and bombings. While in the rural areas there has been an upsurge in armed conflicts with the EAOs particularly in the northwest (Chin State, Sagaing and Magway regions) and southeast (Kayah State). To date neither ASEAN nor the international community have been able to broker a resolution to this situation. In June 2021, compounding the political crisis, there was a surge in Covid-19 cases which overwhelmed a fragile medical infrastructure that was understaffed from CDM. Inevitably, the ongoing political crisis and a third wave of Covid-19 materially impacted an economy that had already been weakened by the pandemic in 2020. According to the World Bank Myanmar’s economy is expected to have contracted by around 18 per cent in fiscal year 2021 (Myanmar’s fiscal year is to 30 September). An 18 per cent contraction, coming on 2 “ The last twelve months have been difficult with violence, poverty level, inflation and unemployment rising but, at least in the cities, there are tentative signs that the economy is beginning to stabilize at a much lower level of economic activity. ” top of weak growth in fiscal year 2020, would mean that the country’s economy is around 30 per cent smaller than it would have been in the absence of Covid-19 and the military takeover of February 2021. Despite interventions from the central bank, liquidity in the financial system has dried up and commercial banks are restricting transfers and withdrawals. By September 2021 the Myanmar Kyat had nearly halved against the US Dollar although it has partially recovered in recent weeks. The weaker currency is feeding through to higher import prices. In August 2021 the World Food Programme reported a 68 per cent increase in the price of fuel, 40 per cent for cooking oil and 16 per cent for rice. United Nations Development Programme (“UNDP”) has forecast that almost half of the population, in the worst- case scenario, risks falling into poverty by 2022 doubling the pre Covid-19 level and reversing all economic gains made since 2005. All sectors have been affected. Construction activities have slowed or stopped, farm input costs have risen sharply while importers do not have access to US Dollars and are now unable to open letters of credit at foreign banks. Foreign companies have either adopted a wait- and-see approach while reducing expatriate staff or have announced that they are withdrawing. Notable exits include Telenor, British American Tobacco, Amata and Adani Ports. Economic contraction and a weaker Kyat are fuelling inflation, unemployment and the poverty rate. Covid precaution has closed the borders with Thailand and China. In the past there were as many as 4 million migrant Myanmar workers in Thailand that would send money home but in 2020 an estimated 30 per cent temporarily went home to avoid infection and are now unable to return to work. MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMEN’S LETTER As a result of this change, we need to alter the Articles of Association of the Company (the “Articles”) to delete the maximum time period of 15 months between AGMs. We do urge all Shareholders to approve this resolution which will help us to produce the next financial statements without breaching the terms of our Articles. CHANGE IN STRATEGY AND POSSIBLE DELISTING FROM LONDON STOCK EXCHANGE (“LSE”) At the Annual General Meeting (“AGM”) in 2019 shareholders approved a resolution to amend the investment objective and policies of the Company as follows: “The Company will seek to realise the Company’s investments in an orderly manner, such realisations to be effected at such times, on such terms and in such manner as the Directors (in their absolute discretion) may determine. Following such realisations, the Company will make periodic returns of surplus capital to Shareholders on such terms and in such manner as the Directors (in their absolute discretion) may determine. The Company shall not make any new investments in projects to which it is not already committed. However, this will not preclude the Directors (in their absolute discretion) from: (a) authorising the expenditure of such capital as is necessary to: (i) complete arrangements pertaining to the Company’s existing investments; or (ii) carry out any activities that the Directors (in their absolute discretion) deem appropriate to ensure the sale ability of any existing investment; or (b) entering into any contract or other arrangement with any third party to realise all or any part of the Company’s existing investments. Following the disposal of all of the Company’s existing investments, the Directors intend to put a winding up proposal to the Shareholders.” Important steps have been made to implement this new strategy: • We sold our investment in Medicare International Health & Beauty (“Medicare”) for US$1 million to our main joint venture partner in November 2019. The transaction was completed in December 2019. This represented a loss of US$1.1 million on the cost of the investment which largely reflected our share of the operating losses from opening a chain of new stores in Myanmar. It is unclear how the political situation will playout. The SAC appears to be digging in for the long term and continues to prosecute senior NLD leaders and protesters while ignoring ASEAN and international appeals. However, it does not appear able to fully control the country and continues to suffer from widespread attacks by EAOs and PDFs that are being formed across the country. On the other hand, the opposition National Unity Government continues to organize international opposition to the coup while trying to influence local administration and soldiers to defect. However, it has a limited budget and does not have a permanent infrastructure that can govern. Therefore, neither side appears able to deliver a knockout blow and a stalemate has developed. The last twelve months have been difficult with violence, poverty level, inflation and unemployment rising but, at least in the cities, there are tentative signs that the economy is beginning to stabilize at a much lower level of economic activity. Anecdotally traffic jams are back despite of higher fuel prices and smart restaurants are busy again. Myanmar people are resilient and resourceful having endured multiple periods of harsh military rule over the last 50 years. Businesses are adapting and reverting to the old cash economy ways of doing business. People still need to eat, to try to build their business, to borrow and make phone calls. A “new normal” way of life is settling in. Against this background MIL will continue to actively manage its investments while seeking an orderly exit from them as soon as the opportunity to do so arises. In the meantime, the MIL Directors are considering a range of cost cutting measures to conserve the Company’s cash balances including the possibility of cancelling the admission of trading of MIL’s ordinary shares from the AIM market of the London Stock Exchange. They intend to consult with MIL Shareholders on these measures and on an appropriate method by which to return surplus capital to Shareholders. REPORTING PERIOD The State Administration Council (SAC) announced in August 2021 that Myanmar’s fiscal year will be re- changed from 1 April to 31 March starting from the 2022 – 2023 financial year. Our investee companies (MFIL and AP Towers) have decided to change their fiscal years accordingly and the Board has decided to follow this decision. Therefore, we will issue interim accounts for the periods from 1 October 2021 to 31 March 2022 and from 1 April 2022 to 30 September 2022 which will both be published within 3 months of the period end. Our next full audited set of financial statements will therefore be on 31 March 2023 which will comprise the 18-month period from 1 October 2021 to 31 March 2023 which will be published within 3 months of the period end. 3 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021 CHAIRMEN’S LETTER • We are in the process of selling our investment in Myanmar Finance International Limited (“MFIL”). On 1 April 2020 we announced that we have accepted an offer to sell our shareholding in MFIL to a Thai based company subject to the purchaser’s AGM approving the purchase, lender’s consent, and Myanmar regulatory approval. The minimum consideration for this transaction will be calculated based on a pre-agreed formula of 2 times the audited book value of MFIL at closing once these conditions have been satisfied. Subsequent to that announcement, the purchaser’s AGM on 23 April 2020 approved the transaction and the lenders to MFIL have given their consent. However, due to the outbreak of Covid-19 and the change of government on 1 February 2021 the transaction has not been closed yet. On 26 April 2021, the purchaser’s shareholders approved a one-year extension for closing the transaction. • We have continued to streamline our operations and as a result reduced our overheads. As part of the cost reduction process, we closed our office in Yangon and removed staff costs from the operation as of 31 March 2020. The core cash-based overheads for the 12-month period from 1 October 2020 to 30 September 2021 are 38.7 per cent lower than for the 12-month period from 1 October 2019 to 30 September 2020 (excluding one-off expenses for closing the office in Yangon). We are now holding around US$1.8 million of cash and when the sale of MFIL completes we will seek to return surplus capital to our shareholders. We also intend to streamline our operations further as by then we will only have one investment left. Due to the political situation, it is unclear how fast our investments can be monetized. Therefore, the Directors are considering the option of cancelling the admission to trading of the ordinary shares of Myanmar Investments International Limited from the AIM market of the London Stock Exchange which would save a substantial amount of money. Any cancellation would require shareholder consent of 75% of those voting at a general meeting. We will keep our shareholders informed about the outcome of the analysis. CORPORATE GOVERNANCE The Company seeks to uphold the fundamental principles of good corporate governance and has adopted the Quoted Companies Alliance 2018 Corporate Governance Code. The Chairman’s Statement on Corporate Governance provides greater detail on how the Board itself operates as well as the steps taken to ensure that its staff adhere to principles such as compliance with the UK anti-bribery legislation. On behalf of the Board, we should like to take this opportunity to thank a number of our key stakeholders: our remaining staff for their professionalism and commitment; our business partners for all of their advice and contributions; and our shareholders for their continued support. HENRIK BODENSTAB Chairman 29 November 2021 AUNG HTUN Deputy Chairman 29 November 2021 4 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021Business Review During the past 12 months our net asset value (“NAV”) has decreased by 27.5 per cent and was US$25.6 million as at 30 September 2021. This change is mainly attributable to the decrease in the assessed value of the Company’s investments in AP Towers (down US$6.1 million to US$22.3 million) and MFIL (down US$2.9 million to US$1.5 million) and the operating expenses for the reporting period (US$0.7 million). During the past 12 months our operating expenses were significantly reduced to US$0.7 million compared with US$1.1 million (excluding one off expenses for the closing of the office in Yangon) for the same period in the previous year. Overall, AP Towers performed well but MFIL was disrupted in Myanmar from the impact of Covid-19 and the takeover of the military on 1 February 2021: • AP Towers: the Company swapped its interest in Apollo Towers for an interest in AP Towers in January 2020. The share exchange effectively brought Apollo Towers and Pan Asia Towers, another ITC under the common ownership of AP Towers which now manages one of the largest network of towers in Myanmar; and • MFIL: the company has actively been reducing its loan book and where necessary helping clients to restructure their loans while increasing its holding of safe and liquid assets. It has also agreed a one-year standstill with all of its lenders. Documentation is now being signed. • As at year end Portfolio at Risk over 30 days (“PAR 30+”) was 14.2 per cent. • As soon as logistically practical further discussions with the purchaser will be necessary to establish a timeline to closing the sale of MFIL. It has been 20 months since the transaction was negotiated and much has changed in the country. It may be necessary to amend the transaction terms. In all cases, Myanmar Investments’ team have worked closely with these businesses to provide strategic advice as well as hands-on local knowledge. EXECUTIVE DIRECTOR’S REVIEW “ Overall, AP Towers performed well but MFIL was disrupted in Myanmar from the impact of Covid-19 and the takeover of the military on 1 February 2021. ” Financial Review the shareholders of NET ASSET VALUE The Directors assess the Group’s NAV attributable to the Company as at 30 September 2021 to be US$25.6 million, a decrease of 27.5 per cent compared with the Group’s NAV as at 30 September 2020. This represents US$0.67 per share, based on the number of shares in issue at the year-end. This change principally reflects the net changes in the Directors’ assessment of the values of the Company’s investments, described in more detail below, less the Group’s running costs for the year. As at 30 September 2020 the Group’s NAV consisted of: • • • an investment in AP Towers, the telecommunication tower business, of US$22.3 million, excluding the non-controlling interests, determined using a comparable EBITDA multiple methodology; an investment in MFIL, the microfinance business, of US$1.5 million, determined using a price to book value methodology; and cash and other net assets of US$1.8 million. 5 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021EXECUTIVE DIRECTOR’S REVIEW AP TOWERS As at 30 September 2020 the Directors had assessed that the Company’s attributable shareholding in AP Towers, excluding the non-controlling interests attributable to the minority shareholders of MIL 4, was worth US$28.3 million as at that date, using a comparable EBITDA multiple methodology. Given the uncertainties and risks in Myanmar the Directors have decided to apply a valuation discount of 25% on the company’s entire portfolio as at 30 September 2021 which compares to the 30% discount that they applied as at 31 March 2021. This change reflects signs of stabilization in the country and its economy and will be reviewed regularly. Applying the same methodology that we used as at 30 September 2020 with updated trading and comparable data, the value of this investment would be US$29.7 million, an increase of US$1.4 million compared with the valuation as at 30 September 2020. This value of AP Towers represents an unrealised gain of US$8.9 million over the cost of the investment and an IRR since the initial investment in July 2015 of 5.9 per cent. The impact on MIL’s carrying value of the investments after applying the discount are: AP TOWERS This discount reduces the value of this investment to US$22.3 million, which is US$6.07 million lower than at September 2020. This valuation of AP Towers represents a profit of US$1.5 million over the cost of the investment and an IRR since the initial investment in July 2015 of 1.1%. MFIL As at 30 September 2020 the Directors had assessed the value of the Group’s investment in MFIL to be US$4.4 million using the price to book value methodology. MFIL This discount reduces the value of this investment to US$1.5 million, which is US$2.9 million lower than at September 2020. This valuation of MFIL represents a loss of US$1.2 million over the cost of the investment. SUMMARY OF NAV Contrary to the past, the NAV attributable to the shareholders of the Company in the attached audited financial statements does not differ from the NAV determined by the Directors as the investment in MFIL has been classified as a “non-current asset classified as held for sale” which requires the valuation of MFIL at “fair value” and not at “at equity”. In accordance with the Group’s Valuation Policy the Directors’ valuation for MFIL is determined by reference to the International Private Equity and Venture Capital Guidelines. Applying the same methodology that we used as at 30 September 2020 the Directors have assessed the value of this investment to be US$2.0 million which is US$2.4 million lower compared with 30 September 2020. This value of MFIL represents a loss of US$0.7 million over the cost of the investment. VALUATION DISCOUNT The change of government has increased the uncertainties and risks of investing in Myanmar which is compounded by the current paucity of information. These risks could include, but are not limited to: • • • • • • • • • reduced investor interest in a trade sale of assets or in an IPO; increased domestic regulatory uncertainties; a material and sustained decline in economic activity impacting investment and consumer demand; severe reduction in liquidity in the financial system; a volatile foreign exchange rate; prolonged political crisis paralyzing the country’s administrative capacity; increases in the number of demonstrations, strikes and violence; enhanced Covid-19 risks; potential broader international sanctions. 6 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021EXECUTIVE DIRECTOR’S REVIEW FINANCIAL RESULTS For the year to 30 September 2021 the Group’s audited loss after tax attributable to the shareholders of the Company was US$7.8 million. The Group’s audited profit after tax attributable to the shareholders of the Company for the 18-month financial period to 30 September 2020 was US$1.6 million. DIVIDENDS Based on the above the Directors do not recommend payment of a dividend at this time. WORKING CAPITAL Based as of the date of this report the Group has adequate financial resources to cover its working capital needs for the next 12 months. This is a significant deterioration on the last period result. The loss per share is US cents 20.49 compared with a profit per share of US cents 4.24 for the 18-month period to 30 September 2020 and primarily relates to adjusting the valuation of the investments down. NICK PARIS Managing Director 29 November 2021 But we are on track with the reduction of our overheads. As part of the cost reduction process, we had closed our office in Yangon and removed staff costs from the operation as of 31 March 2020. The annualised core cash- based overheads (including the costs of being a quoted company but excluding discretionary compensation, share option expenses and transaction costs) for the 6-month period from 1 April 2020 to 30 September 2020 were US$0.7 million and this is what we have achieved during this year. Outside of our overheads the most significant items were: • Our share of the ‘fair value loss on investment at fair value through profit or loss’ for the investment in AP Towers of US$6.07 million; ‘Fair value loss on investment at fair value through profit or loss’ for the investment in MFIL of US$1.05 million. • 7 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021 BUSINESS REVIEW AP TOWERS HOLDINGS PTE LTD (“AP TOWERS”) / APOLLO TOWERS HOLDINGS LIMITED (“APOLLO TOWERS”) BACKGROUND AP Towers is one of the largest Independent Tower Company (“ITC”) in Myanmar. The Company swapped its interest in Apollo Towers for an interest in AP Towers in January 2020. Under this share exchange, MIL’s 66.6 per cent subsidiary, MIL 4 Limited (“MIL4”), exchanged its existing 13.7 per cent shareholding in Apollo Towers for a shareholding of 6.2 per cent in AP Towers, of which 4.1 per cent is attributable to MIL. The share exchange effectively brought Apollo Towers and Pan Asia Towers, another Myanmar ITC, under the common ownership of AP Towers which now manages one of the largest network of towers in Myanmar. Apollo Towers and Pan Asia Towers provide tower and power services to all of Myanmar’s major mobile network operators (“MNOs”). MIL initially invested in Apollo Towers in July 2015 when it led a consortium of investors that invested US$30 million for a 14.2 per cent shareholding. A representative of MIL4 sits on the board of AP Towers and contributes to the strategy and growth of the company. 8 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021BUSINESS REVIEW AP TOWERS HOLDINGS PTE LTD (“AP TOWERS”) / APOLLO TOWERS HOLDINGS LIMITED (“APOLLO TOWERS”) Update • The Myanmar telecoms sector has grown rapidly since 2015. Myanmar’s mobile penetration rate is estimated to be as high as 107 per cent though this is based on SIM cards and not unique subscribers. Coupled with this is the prevalence of data enabled devices. Smartphones are estimated to account for approximately 80 per cent of the mobile phones in use in the country and data demand drives the need for connectivity. Connectivity requires an extensive network of telecom towers with reliable power. Myanmar currently has 20,000 towers, of which 11,000 are owned by ITCs. • Apollo Towers and Pan Asian Towers have both built strong reputations in the market for their valuable site locations, operational excellence and strong customer focus. AP Towers leverages the best practices of both companies in providing a full suite of services that are commercially attractive to the customers of both businesses. • The Myanmar telecom tower sector, following a period of rapid growth, has continued to slow in the last 18 months in terms of both new towers and new co-locations. • Mobile network services in Myanmar have been significantly disrupted since February 2021, primarily as a result of the suspension and restriction of data services imposed by the regulator. AP Towers and other tower and power providers have faced increasing challenges in maintaining the up time of the power services as movement of key suppliers and personnel has been restricted. AP Towers has maintained the safety and security of its staff, whilst continuing to deliver high quality services to all of its customers. Whilst the operating environment has been very challenging, AP Towers has been able to continue to provide a reliable service with high up times, thereby contributing to the continued availability of mobile phone services to the population of Myanmar. • Contrary to other industries, the telecoms sector has not suffered greatly due to the outbreak of Covid-19. • As at 30 September 2021, AP Towers had an aggregated portfolio of 3,254 towers, 6,669 tenants and a co-location ratio (“Lease-up-Rate” or “LUR”) of 2.05x which is unchanged since 30 September 2020. • Based on AP Towers actual results for the 6 months ended 30 September 2021, AP Towers annualised adjusted “run rate” revenue has decreased to US$102.5 million. This represents a decline of 1.9 per cent over the same period last year. The annualised adjusted “run rate” EBITDA has increased to US$85.9 million. This represents an increase of 3.0 per cent over the same period last year. • Going forward, AP Towers will, when market conditions allow, be looking to increase the number of tenancies either from new “Build to Suit” towers or from adding co-locations to its existing towers. • AP Towers’ net debt was US$396.2 million as at the end of September 2021, a decrease of US$20.6 million since 31 March 2021 and a decrease of US$33.1 million since 30 September 2020. 9 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021BUSINESS REVIEW MYANMAR FINANCE INTERNATIONAL LIMITED (“MFIL”) BACKGROUND MFIL is one of the leading microfinance operators in Myanmar. Through 15 main branches and 3 sub- branches it provides loans of between US$150 and US$5,000 to individuals and small-scale business operators in rural and semi-urban areas in Yangon, Bago, Ayeyarwady and Mon. In October 2020 MFIL was granted a license to operate in the Mandalay region. MFIL was established as a microfinance joint venture in September 2014 by MIL and Myanmar Finance Company Limited (“MFC”). In November 2015, the Norwegian Investment Fund for Developing Countries (“Norfund”), the Norwegian development finance institution, also became a shareholder such that the shareholdings today are MIL 37.5 per cent, MFC 37.5 per cent and Norfund 25 per cent, with a total paid up capital of over US$7 million. MIL’s total investment cost to date is US$2.7 million. MFIL is a well-established microfinance company that has a positive impact on the lives and economic well-being of its clients. A representative of MIL sits on the board of MFIL and works closely with the management and shareholders on strategic and restructuring issues. 10 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021BUSINESS REVIEW MYANMAR FINANCE INTERNATIONAL LIMITED (“MFIL”) Update • The last 9 months have been difficult for the microfinance industry in Myanmar. A surge in Covid-19 cases in June 2021 led to shortages of medical supplies and the country going into a hard lockdown. The “stay at home” directive severely reduced economic activity and mobility. The political crisis since 1 February 2021 has further impacted business sentiment and activity. More crucially, it has led to a severe liquidity crisis in the financial system. Bank transfers and withdrawals have been restricted and US dollars has been hard to source. • All sectors have been affected by Covid-19 and the political turmoil. Approximately 90 per cent of MFIL’s borrowers are sole traders or small businesses and they are directly impacted by the deteriorating economy. Around 10 per cent of the loan book has been lent to civil servants, of which a third are teachers. This has traditionally been a safe, low risk niche, with minimal bad debt. However, many teachers are now unable to repay or have been dismissed and MFIL is seeing bad debt in traditionally safe segments. Since February 2021 MFIL has primarily been focusing on loan collections. Consequently, its loan book has decreased since 31 March 2021 from MMK21.7 billion to MMK16.5 billion at year end while the number of clients has reduced to 45,000. For now, the number of branches is being maintained. • MFIL has found that most of its clients have a strong will to repay but they have a reduced ability to pay in full. Consequently, the collection rate has dropped to around half of the scheduled repayments with many clients struggling to repay something each month. Rescheduling and restructuring has been underway to reset their monthly repayment amounts at an affordable level. • As at September 2021 MFIL’s Portfolio at Risk over 30 days ratio (“PAR 30+”) was 14.2 per cent. • • To reflect the new normal, MFIL has reduced operating expenses including staff reductions and pay cuts by around 25 per cent. The reduction in the loan book has increased the company’s current cash position to MMK8 billion. This liquidity comes at a cost as the average cost of debt is 16 per cent per annum while bank deposit yields are minimal. • At the time of this report MFIL has agreed a one-year extension with all of its lenders and will repay 25 per cent of its borrowings to reduce its funding expenses. Formal execution of these extensions is expected around the end of November 2021. This stability will allow it to reactivate lending to clients. • While there does not appear to be an imminent resolution to the political crisis there does appear to be a level of normality returning to Myanmar and a lower level of economic activity restarting. • The impact of the lockdown and political crisis has made it complicated to fulfil the conditions precedent in the sale and purchase agreement for the sale of MFIL. The purchaser has therefore agreed to extend their offer to early 2022 and we have also extended their exclusivity period. We intend to complete the sale as soon as it is practical to conduct the closing audit on MFIL and seek regulatory approval. 11 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021BOARD OF DIRECTORS HENRIK ONNE BODENSTAB MAUNG AUNG HTUN Independent Non-Executive Chairman Deputy Chairman Over the past 20 years Mr Bodenstab has gained broad international experience by living and working extensively in Asia, the US and Europe. He started his professional career in 1992 in Asia, at the Wünsche Group of Companies, a diversified group of companies focussing on international trade and shipping. In 1996, he joined the Boston Consulting Group in Hamburg, Germany. In 1998 he co-founded OneClip, a direct marketing and advertising company in New York, which he led until 2002. Mr Bodenstab re-joined the Wünsche Group in 2002 as a managing partner. In 2014, Mr Bodenstab became a partner at Trilantic Europe, a Pan-European private equity firm with a focus on mid-market transactions in healthcare, consumer, automotive, industrials and business services. Mr Bodenstab is on the Advisory Board of Prettl SWH GmbH, a member of the board of Oberberg Group and a Director of Hansabay Pte Ltd in Singapore. He holds a BA in Economics and Political Science from the University of Michigan and an MBA from the Harvard Business School. Mr Htun is half Myanmar and is an engineering graduate from Imperial College. He brings over 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 fund manager where he led investments into, among others, B-Quik, Modern Asia Environmental Holdings and Wuttisak Clinic. Mr Htun brings a wealth of experience and contacts in a diverse range of industries and currently sits on the board of Nam Seng Insurance Plc., as well as being a member of the investment committee of Lakeshore Capital Partners. Mr Htun has also been appointed by Myanmar’s State Counsellor to the committee to review the restructuring of the Yangon Electricity Supply Company and is Chairman of the Advisory Board of the Swiss Government funded Centre for Vocational Training. With effect from 1 June 2018, Mr Htun became Deputy Chairman of Myanmar Investments, having been Managing Director since the Company’s admission to AIM in 2013. 12 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021BOARD OF DIRECTORS RUDOLF GILDEMEISTER NICHOLAS JOHN PARIS Independent Non-executive Director Managing Director Mr Gildemeister was appointed to the Board of Directors on 1 November 2019 and is co- founder and Managing Partner of All Myanmar Advisors, a Myanmar focused corporate finance and strategy advisory boutique. He has over 20 years’ leadership experience in successfully building, growing and restructuring businesses across industries, mostly in Asia. Before working in Myanmar, he was Managing Director and Asia-Pacific lead of CS Solution Partners for Credit Suisse, based in Hong Kong. He started his career at Nestlé where he held various brand management and business development functions in Hong Kong and South-East Asia, which included establishing Nestlé’s sales and marketing activities in Myanmar. Mr Gildemeister is on the Harvard Business School Global Advisory Board and a Director of several private companies in Hong Kong and Myanmar. He holds a BSc in Economics from Bristol University and an MBA from the Harvard Business School. Over the past 30 years, Mr Paris has gained extensive experience as a stockbroker and fund manager with a particular emphasis on closed end funds and hedge funds. He has held senior positions with institutions such as American Express Asset Management, Credit Lyonnais Securities Asia, Santander Securities and Baring Securities. In addition, he was a Portfolio Manager within the LIM Advisors Group. One of whose clients is a substantial shareholder in the Company having invested at the Company’s launch and which is also a co-investor in AP Towers through its shareholding in the Company’s subsidiary, MIL4. Mr Paris is a Fellow of The Institute of Chartered Accountants in England & Wales and holds a Bachelor of Science with Honours in Agricultural Economics from the University of Newcastle-Upon-Tyne. Mr Paris was appointed to the Board on 27 December 2018 and he changed his role from Non-independent Non-executive Director to become the Managing Director of the Company on 1 November 2019. 13 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021The Directors present their annual report and audited consolidated financial statements of the Group for the financial year ended 30 September 2021. 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 The Group’s investments are managed through two companies: a wholly owned subsidiary in Singapore, MIL Management Pte Ltd, and its own wholly owned subsidiary in Myanmar, MIL Management Co., Ltd. As of 30 September 2021, the Company held: • • a 66.7 per cent shareholding in MIL 4 Limited (“MIL4”) a BVI company which in turn holds a 6.2 per cent shareholding in AP Towers Holdings Pte Ltd (“AP Towers”) a Singapore incorporated telecom tower company; and a 100 per cent shareholding in Myanmar Investments Limited (“MIL”) a Singapore company which in turn holds a 37.5 per cent shareholding in Myanmar Finance International Limited (“MFIL”), a Myanmar incorporated microfinance joint venture company. The above companies highlighted in bold type comprise the Myanmar Investments International Limited Group (the “Group”). As the Company closed its office in Yangon as at 31 March 2020, the process of voluntary liquidation of the management company in Myanmar, MIL Management Co., Ltd., has been initiated. Fund raisings During the year to 30 September 2021 no ordinary shares were issued. 554,486 warrants were cashlessly converted into 11,414 ordinary shares as at 31 December 2020. Investment Policy At the Company’s Annual General Meeting (AGM) held at The British Club, Yangon, Myanmar on 24 October 2019 the shareholders approved a resolution to amend the investment objective and policies of the Company as set out below: “The Company will seek to realise the Company’s investments in an orderly manner, such realisations to be effected at such times, on such terms and in such manner as the Directors (in their absolute discretion) may determine. Following such realisations, the Company will make periodic returns of surplus capital to Shareholders on such terms and in such manner as the Directors (in their absolute discretion) may determine. The Company shall not make any new investments in projects to which it is not already committed. However, this will not preclude the Directors (in their absolute discretion) from: (a) authorizing the expenditure of such capital as is necessary to: (i) complete arrangements pertaining to the Company’s existing investments; or (ii) carry out any activities that the Directors (in their absolute discretion) deem appropriate to ensure the sale ability of any existing investment; or (b) entering into any contract or other arrangement with any third party to realise all or any part of the Company’s existing investments. Following the disposal of all of the Company’s existing investments, the Directors intend to put a winding up proposal to the Shareholders.” The Directors proposed that the Investment Policy of the Company be amended to enable the return of capital to shareholders with the ultimate aim to wind up the Company in due course. In the event that capital is returned to the shareholders, in accordance with the warrant instrument the Board will exercise its discretion, with the advice of the Company’s auditors, to determine the adjustment that should be made to the number of Ordinary Shares that could be subscribed for or the subscription price for those shares as a consequence of the reduction in capital. It should however be noted that the final exercise date for all of the outstanding warrants is 31 December 2021 and that any unexercised warrants will lapse after that date. 14 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021DIRECTORS’REPORTResults and dividends The Directors assess the Group’s net asset value attributable to the shareholders of the Company as at 30 September 2021 to be US$25.6 million (30 September 2020: US$35.3million), a 27.5 per cent decrease over the year. NAV per share as of 30 September 2021 was US$0.67 per share (30 September 2020: US$0.93 per share) based on the shares in issue at that time. This change is mainly attributable to the decrease in the assessed value of the Company’s investments in AP Towers (down US$6.07 million to US$22.3 million) and MFIL (down US$2.9 million to US$1.5 million) and the operating expenses for the year (US$0.7 million). For the year to 30 September 2021 the Group’s audited loss after tax attributable to the shareholders of the Company was US$7.8 million. The Group’s audited profit after tax attributable to the shareholders of the Company for the 18-month financial period to 30 September 2020 was US$1.6 million. The results for the year are set out in more detail in the Executive Director’s Review and in the consolidated statement of comprehensive income. The Directors do not recommend the payment of a dividend for the financial year ended 30 September 2021. Review of the Company’s Business and Future Outlook The Chairmen’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, especially the proposal to undertake an orderly disposal of the Company’s investments and to return surplus capital to shareholders. Ultimately the Directors expect to put a winding up proposal to Shareholders. Directors The members of the Board are listed in the section headed “Board of Directors”. During the financial year under review: • Henrik Bodenstab served as independent Non-Executive Chairman; • Aung Htun served as Deputy Chairman; • Rudolf Gildemeister served as an independent Non-Executive Director; • Nicholas Paris served as Managing Director. In accordance with the Company’s articles of association, Henrik Bodenstab 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 are set out in detail in the Chairman’s Statement on 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 was as follows: Director Henrik Bodenstab Aung Htun Rudolf Gildemeister Nicholas Paris 1 Ordinary Shares 585,849 677,000 - - Warrants 181,159 123,000 - - Share Options 35,000 899,626 - - 1 1. Nicholas Paris is a director of and he was a portfolio manager with LIM Advisors (London) Limited. One of the funds managed by LIM Advisors, LIM Asia Special Situations Master Fund Limited, is a substantial shareholder in the Company and its interests are disclosed in the Directors Report under “Substantial Interests” below. 15 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021DIRECTORS’REPORTShare Option Plan On its admission to trading on AIM, the Company established a 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 our shareholders. It was envisaged that it would be used for five years and then re-assessed. As a result of that re- assessment during the financial year in 2018 the Board decided that no further options would be granted, though the existing options will remain in place. Until 10 November 2020 the Share Option Plan was administered by the Remuneration Committee. It is now administered by the Board of Directors. The Share Option Plan provides that share options available for grant by the Company shall constitute a maximum of one-tenth 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). Any issue of ordinary shares by the Company enabled the Remuneration Committee to grant further share options which were granted with an exercise price set at a 10 per cent premium to the subscription price paid by shareholders for the issue of ordinary shares that gave rise to each tranche of the share options. However, the share options that arose as a result of the ordinary shares issued in connection with Admission had an exercise price of US$1.10. Share options can be exercised at any time after the first anniversary and any time up to the tenth anniversary of the grant of the share options (as may be determined by the Board of Directors (since 10 November 2020) in its absolute discretion). Share options will not be admitted to trading on AIM but application will be made for ordinary shares that are issued upon the exercise of the share options to be admitted to trading on AIM. Share Options Granted Series Series 1 Series 2 Series 3 Series 4 Series 5 Placing Exercise Admission December 2014 July 2015 September 2016 June 2017 Number of share options available Options granted as at 30 September 2021 Exercise price (US$) 584,261 361,700 1,734,121 324,546 618,112 3,622,740 579,728 357,200 1,653,599 - - 2,590,527 1.100 1.155 1.265 1.430 1.298 In conjunction with the introduction of the Carried Interest Plan (as further detailed below), the Board has cancelled the balance of 1,032,213 unissued options. Carried Interest Plan As noted above the Company put in place the Carried Interest Plan to be the Company’s long-term incentive scheme and no further grants of share options will be made under the original Share Option Plan. As a long-term incentive scheme for its employees, Directors and advisers, it is built around the fundamental principle of aligning interests with those of our shareholders. The Carried Interest Plan was adopted by the Remuneration Committee and the Board on 17 September 2018. Under the Carried Interest Plan, beneficiaries will receive a portion of the “excess profits” made from the final realisation of an investment. In computing the excess profits: • • The starting value for MFIL and Apollo Towers was the Directors’ appraised NAV of those investments as at 31 March 2017, adjusted for any later capital injections, to reflect the fact that no share option grants have been made since November 2016. A hurdle rate of 10 per cent, compounded annually, will be applied before calculating any excess profits. The Carried Interest Plan will receive 10 per cent of any resultant excess profit and this will be allocated between the beneficiaries as determined by the points allocated by the Board of Directors (as the Remuneration Committee was dissolved on 10 November 2020 in order to streamline operations). 16 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021DIRECTORS’REPORT Insurance The Group maintains appropriate insurance including D&O insurance in respect of its Directors and officers. Related Party Transactions Other than the Directors’ compensation, details of which are described in the section headed “Directors’ Report on Remuneration Issues”, the Group has not undertaken any related party transactions during the year under review. Substantial Interests At the date of signing this report, the following interests of 3 per cent or more of the issued ordinary share capital had been notified to the Group: Name LIM Asia Special Situations Master Fund Limited Metage Funds Limited Probus Opportunities SA SICAV-FIS – Mekong Fund Red Oak Operations Limited Chasophie Group Limited Alpha Investments Asia FCP-SIF Fund Finanzverwaltungs GbR Langen II Alam Investments Limited Number of Ordinary Shares Percentage of Issued Capital 7,718,665 3,252,693 2,118,644 2,105,569 1,601,086 1,449,475 1,443,051 1,147,874 20.3% 8.5% 5.6% 5.5% 4.2% 3.8% 3.8% 3.0% Going Concern Based on the Group’s current resources 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, is any litigation or claim of material importance pending or threatened against the Group. Business Integrity The Directors place great emphasis on business integrity in all aspects of the Group’s operations. Whilst conforming to appropriate regulations this emphasis goes further and is embodied in the Group’s culture. Specifically, the Group’s business integrity culture seeks to ensure compliance with a broad range of ethical considerations, not all of which are financial in nature. These include: • • • • • • • • • • Sanctions; Financial Action Task Force (“FATF”) recommendations; Anti-Money laundering; Countering the Financing of Terrorism; Anti-Bribery procedures; Whistleblowing procedures; Politically Exposed Persons; Confidentiality; Share Dealing; and Social and environmental considerations. In furtherance of these aims all staff receive training in all of these areas. 17 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021DIRECTORS’REPORT Additionally, the Group conducts a risk-focussed approach to all its business dealings with third parties. This will include conducting appropriate enquiries as to the background and sources of funding of significant counterparties including potential new shareholders (where a new equity issue is involved), potential Investee Companies and potential staff. This may involve retaining third party research and assessment functions. 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. All Shareholders are encouraged to attend the virtual Annual General Meeting and ask further questions ahead of the meeting which will be answered in the Annual General Meeting. 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 confirms that it 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. Financial Risk Profile The Directors have overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s 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. Further details on financial risk management objectives and policies are given in the notes to the consolidated financial statements. 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 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 Henrik Bodenstab Chairman 29 November 2021 Nick Paris Managing Director 29 November 2021 18 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021DIRECTORS’REPORT Dear Shareholders Since March 2018, in compliance with the change in the AIM Rules for Companies, the Company has adopted the Quoted Companies Alliance (“QCA”) 2018 Corporate Governance Code as it believes it to be a well-established corporate governance framework grounded in international best practices which is appropriate for the Company given its size and Investment Policy. The QCA 2018 Corporate Governance Code sets out ten principles of corporate governance: Companies need to deliver growth in long-term shareholder value. This requires an efficient, effective and dynamic management framework and should be accompanied by good communication which helps to promote confidence and trust. Deliver growth 1. Establish a strategy and business model which promotes long-term value for shareholders 2. Seek to understand and meet shareholder needs and expectations 3. Take into account wider stakeholder and social responsibilities and their implications for long-term success 4. Embed effective risk management, considering both opportunities and threats, throughout the organisation Maintain a dynamic management framework 5. Maintain the board as a well-functioning, balanced team led by the Chairman 6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities 7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement 8. Promote a corporate culture that is based on ethical values and behaviours 9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the board Build trust 10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders I address each of the QCA 2018 Corporate Governance Code’s ten principles of corporate governance in turn below. 1. Establish a strategy and business model which promote long-term value for shareholders At the Company’s Annual General Meeting (AGM) held at The British Club, Yangon, Myanmar on 24 October 2019 the shareholders approved a resolution to amend the investment objective and policies of the Company as set out below: “The Company will seek to realise the Company’s investments in an orderly manner, such realisations to be effected at such times, on such terms and in such manner as the Directors (in their absolute discretion) may determine. Following such realisations, the Company will make periodic returns of surplus capital to Shareholders on such terms and in such manner as the Directors (in their absolute discretion) may determine. The Company shall not make any new investments in projects to which it is not already committed. However, this will not preclude the Directors (in their absolute discretion) from: (a) authorising the expenditure of such capital as is necessary to: (i) complete arrangements pertaining to the Company’s existing investments; or (ii) carry out any activities that the Directors (in their absolute discretion) deem appropriate to ensure the sale ability of any existing investment; or (b) entering into any contract or other arrangement with any third party to realise all or any part of the Company’s existing investments. Following the disposal of all of the Company’s existing investments, the Directors intend to put a winding up proposal to the Shareholders.” 19 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCE The Company’s strategy until 24 October 2019 was to establish a business development and investment platform that seeks to make sensible investments in Myanmar, to capitalise on the growth opportunities there. In essence the Company was seeking to make capital gains and/or derive income from investments in Myanmar. 2. Seek to understand and meet shareholder needs and expectations The Company was established for a very specific purpose and this purpose has been clearly communicated to potential shareholders, initially through the Admission Document, a copy of which is on the Company’s website. In addition, the Company’s website, in compliance with AIM Rule 26, contains a detailed description of the Company and its business. Since Admission, the Board has sought to maintain an open dialogue with the Company’s shareholders through: • • • • • • • its Annual General meeting; the Regulatory News Service (“RNS”) system of the London Stock Exchange; periodic mailing and press releases; its website myanmarinvestments.com; meetings with shareholders in the major financial cities in which its shareholders are based; the Company’s investor forums which have been held in Yangon; and maintaining an active social media communications platform through LinkedIn (over 1,500 followers), Twitter (over 2,000 followers) and Facebook (over 5,000 followers). Due to the Shareholders’ resolution on 24. October 2019, the Company has now terminated its social media presence. In addition, the Company responds promptly to any requests for information from shareholders and potential investors, within the limits of ensuring that unpublished price sensitive information is disclosed only via the appropriate regulatory channels. The Company believes it has been successful in maintaining an open and transparent dialogue with its shareholders, especially given its relatively small size and limited personnel. In terms of communication, shareholders and potential investors can use the dedicated email address enquiries@ myanmarinvestments.com or directly contact Michael Rudolf, the CFO on michaelrudolf@myanmarinvestments.com. or Henrik Bodenstab (Chairman) Aung Htun (Deputy Chairman) Nick Paris (Managing Director) henrik@bodenstab.de aunghtun@myanmarinvestments.com nickparis@myanmarinvestments.com 3. Take into account wider stakeholder and social responsibilities and their implications for long-term success The Board sought to take into account the views of other stakeholders, other than the shareholders, in the execution of the Company’s Investment Policy. Other stakeholders that the Board sought to engage with include: • Employees – the Company sought to provide a rewarding career for its staff in a caring and encouraging environment that enables each individual to maximise their potential. As illustrations of this, but by no means an exhaustive summary: o the Company provided extensive training for its staff, including on the job training that was supplemented by more formal training courses that are run in-house or by external trainers, including on-line training schemes; o the Company considered itself to be ‘gender blind’ in its approach to its employees: it did not take gender into account when recruiting, promoting, training or remunerating its employees. There has never been an instance of a gender pay gap in its remuneration of its staff; and 20 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCE o all new joiners were required to confirm they are familiar with the Employee Handbook, including the sections on: - non-discrimination (“employees are not to engage in any practice or behaviour which discriminates against another person on the grounds of their age, sex, race, religion or physical attributes. Similarly, the Company will not tolerate aggressive or bullying behaviour within the workplace”); and - ethics, including understanding the Company’s policy on bribery, confidentiality and its Share Dealing Code. • Partners – the Company sought to be a reliable and supportive business partner to each of its co-investors, looking to add value wherever possible and to work together to maximise the value of each business. In this context ‘value’ may not just be financial value but also the value that the businesses bring to their own employees, sub-contractors, customers and local communities. For example, working with our joint venture partners to ensure that the lending practices of MFIL adhere to the highest ethical standards, or working with Apollo Towers (now known as AP Towers) to ensure that child labour is not used by any of its sub-contractors. • Community – the Company’s two investments all have significant positive benefits for the communities in which they operate: o AP Towers provides essential infrastructure on which the country’s telecommunication network depends. Myanmar people can now readily communicate and access information and this not only brings education and enrichment to their lives but also supports their and the country’s economic advancement; o MFIL provides much needed access to financing for people wishing to start and develop their simple micro- businesses. This is an area that Myanmar, like many emerging economies, desperately needs (the Company is in the process of selling this investment); and • Society – where appropriate the Company has supported local charitable causes. During the devastating floods of 2015 it donated to the Red Cross to assist in its effort in alleviating the damage done by the storms. Our 2018 calendar featured a different local charity each month. The Company made a modest donation to each and provided the contact details so that others might be able to also support them if they felt so moved. 4. Embed effective risk management, considering both opportunities and threats, throughout the organisation The Board is responsible for managing the risks inherent in the Company’s strategy and the implementation of that strategy. To ensure that appropriate resources are focussed on the key risk areas the Board maintains the Audit Committee whose members comprise of independent Directors. Audit Committee During the financial period under review the following served on the Audit Committee: Henrik Bodenstab and Rudolf Gildemeister (who became Chairman from 18 August 2020). During the period under review there were three meetings of the Audit Committee and all 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 Audit Committee also has oversight of the Company’s cash flow projections. 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 over 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. 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 when the Audit Committee requires and, in conformity with good practice, meets the Auditors without the presence of the executive directors. Auditor objectivity and independence is safeguarded through limiting non-audit services to tax work. 21 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCE Share Dealing The Company has adopted a share dealing code to comply with the EU Market Abuse Regulation (“MAR”) that 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 revised share dealing code was approved by the Board on 3 July 2016. The Company takes all reasonable steps to ensure compliance by the Directors and the Group’s applicable employees. The Takeover Code As the Company was incorporated in the BVI, it is not treated as being resident in the UK, the Channel Islands or the Isle of Man by the UK Panel on Takeovers and Mergers and therefore it is not subject to the UK Takeover Code. However, the Company has incorporated certain provisions into its articles of association which are broadly similar to those of Rules 4, 5, 6 and 9 of the Takeover Code. 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. Additionally, the Directors have the right to waive the application of these provisions. Financial Action Task Force (“FATF”) The Company’s operations manual is drafted to ensure the policies and procedures associated with its operations and investments are compliant with FATF requirements. On 24 June 2016, Myanmar was recognised by the FATF as having made significant progress in addressing its strategic anti-money laundering/counter terrorist financing deficiencies earlier identified by the FATF and included in its action plan. As a result, Myanmar was no longer subject to monitoring by the FATF. In September 2018, Myanmar completed its MER (mutual evaluation report). Since then, Myanmar has proactively made progress on a number of its MER recommended actions to improve technical compliance and effectiveness. On 21 February 2020, the FATF put Myanmar on its list of jurisdictions under increased monitoring (grey list). Myanmar made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime. The Asia/Pacific Group on Money Laundering (“APG”) issued a 2nd follow-up report (reporting date 1 May 2021). According to this report Myanmar has made some good progress to address the deficiencies identified in the MER. However, moderate deficiencies remain. Myanmar will remain in enhanced (expedited) follow-up and will continue to report back to the APG on progress to strengthen its implementation of AML/CFT measures. Myanmar’s next progress report is due 1 February 2022. 5. Maintain the Board as a well-functioning, balanced team led by the Chairman The Board seeks to ensure that it is comprised of 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. If resources permitted, the Board would consider the inclusion of other members with diverse backgrounds to provide a broader range of skill sets, perspectives and experiences. The Board is responsible for setting Company strategy and then ensuring that the Company has the requisite wherewithal to achieve that strategy. Out of a total of four directors, the Board comprises of one executive director (Nick Paris as the Managing Director), one non-executive non-independent director (Aung Htun) and two non-executive independent directors (Henrik Bodenstab and Rudolf Gildemeister). There is a clear separation of the roles of the Managing Director and the Chairman. The Board meets regularly and is provided with timely updates and information from the Executive Director. 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 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 and the Chairman’s Statement on Corporate Governance in the Annual Report, and answerable to the shareholders on behalf of the Board for them. The Chairman is ultimately responsible to shareholders for the ethos, and oversight of good practice, of the executive management. 22 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCEThe Board was supported by the Investment Committee, the Audit Committee, the Remuneration Committee and the Nomination and Corporate Governance Committee until 10 November 2020 when all bar the Audit Committee were dissolved by the Board in order to streamline operations. Since Admission, these committees had been established with clear terms of reference and they regularly reviewed matters within their purview. The Directors have access to the Company’s nominated adviser (“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 there is 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 occasionally unavoidable. 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. Directors’ and Officers’ liability insurance cover is maintained by the Company on behalf of the Directors. Number of meetings and Directors’ attendance During the year under review there were three appropriately timed meetings of the Audit Committee. During the year under review there was one meeting of the Investment Committee (members were: Henrik Bodenstab (Chairman), Aung Htun and Rudolf Gildemeister) until it was dissolved on 10 November 2020. During the year under review there were in total seven Board meetings; two of these Board meetings dealt with the tasks of the Investment Committee, there were no Board meetings that dealt with the tasks of the Remuneration Committee and the Nomination and Corporate Governance Committee (“NCGC”) as there were no issues to be discussed. All the members of the Audit Committee and all Board members attended all of their respective meetings except for one Board meeting that was missed by Rudolf Gildemeister. 23 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCE6. Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities The following is a summary of the relevant experiences, skills and personal qualities and capabilities that each director brings to the Board. It should be read in conjunction with their biographies above. Maung Aung Htun, Non-Independent Deputy Chairman Mr Htun has worked in Thailand for over 30 years during which time he founded, and was Managing Director of, Seamico Securities, a leading investment banking and broking company which went public in 1995. He has also led, or is an investment committee member of, various Thai focussed private equity investment operations which have exposed him to a variety of industrial sectors. In these roles he has built up a wide network of senior corporate executives, entrepreneurs and investor contacts, many of which have shown interest in Myanmar. Mr Htun has a long experience of involvement in governance and management of publicly listed companies. In addition to Seamico Securities, he founded and was on the board of Siam Selective Growth Trust Plc. (a London Stock exchange listed investment trust managed by Seamico) and has sat on the boards of various Stock Exchange of Thailand listed companies as a non-executive director as well as an audit committee member. In addition to commercial interests in Myanmar he has been appointed by Myanmar’s State Counsellor to the committee to review the restructuring of the Yangon Electricity Supply Company. Through these various roles Aung Htun brings financial, governance, management and investment experience as well as a wide network of relationships in both Myanmar and Thailand which is a key investor in, and trading partner of, Myanmar. He attends seminars and training courses in both Bangkok and Yangon on pertinent subjects. Henrik Onne Bodenstab, Independent Non-Executive Chairman Mr Bodenstab has over 25 years of relevant professional experiences which he brings to the Company in his role as an Independent Non-executive Director and Chairman of the Board. During his tenure at the Boston Consulting Group Mr Bodenstab had extensive engagements in various industries, which covered broad strategic, as well as operational challenges. This allowed him to gain very relevant experiences in effectively and systematically approaching new industries and companies. After his time as a consultant Mr Bodenstab worked in executive operational roles both in companies he founded as well as larger established entities. During this time Mr Bodenstab gained expertise in many of the industries that Myanmar Investments is actively engaged in. He also worked extensively throughout Asia gaining first-hand experiences of the challenges and opportunities of newly developing markets. Since 2014 Mr Bodenstab has been a partner in a private equity company. He has had extensive experience both of executing a number of investments for the funds it manages and of being engaged in multiple processes on the buy and sell side. This has equipped Mr Bodenstab to provide in-depth advice on the due-diligence processes, financing and funding rounds, development of investments to maximise returns for shareholders, as well as the development of corporate governance protocols appropriate for an institutional investor. Overall Mr Bodenstab brings many years of expertise in strategic, operational and financial matters which are of great benefit to the Company. After Mr Knight’s retirement as a Director and Chairman on 18 August 2020 the Board of Directors elected Mr Bodenstab to be the new Chairman of the Company. 24 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCERudolf Gildemeister, Independent Non-executive Director Mr Gildemeister was appointed to the Board of Directors on 1 November 2019 and is co-founder and Managing Partner of All Myanmar Advisors, a Myanmar focused corporate finance and strategy advisory boutique. He has over 20 years’ leadership experience in successfully building, growing and restructuring businesses across industries, mostly in Asia. Before working in Myanmar, he was Managing Director and Asia-Pacific lead of CS Solution Partners for Credit Suisse, based in Hong Kong. He started his career at Nestlé where he held various brand management and business development functions in Hong Kong and South-East Asia, which included establishing Nestlé’s sales and marketing activities in Myanmar. Mr Gildemeister is on the Harvard Business School Global Advisory Board and a Director of several private companies in Hong Kong and Myanmar. He holds a BSc in Economics from Bristol University and an MBA from the Harvard Business School. Nicholas John Paris, Managing Director Mr Paris has specialised in the launch and ongoing trading of closed end Investment funds since he joined Baring Securities in 1994 and throughout his career on the sell-side and the buy-side of the investment markets and he has had a particular focus on funds that were invested in Asia. Also, throughout his career he has focussed on the corporate governance rights of shareholders in closed end funds and both of these skill sets are of relevance to the Company and its shareholders as it navigates the winding down of its portfolio and ultimately of the Company. In addition, he was a Portfolio Manager within the LIM Advisors Group one of whose clients is a substantial shareholder in the Company having invested at the Company’s launch and which is also a co-investor in AP Towers through its shareholding in the Company’s subsidiary, MIL4. Mr Paris is also a Chartered Accountant in England and Wales and a Chartered Alternative Investment Analyst and is able to apply the skills and knowledge gained from these qualifications for the benefit of the Company. Mr Paris changed his role from Non-independent Non-executive Director to become the Managing Director of the Company on 1 November 2019. Collectively the Board believes it has the necessary skill sets to discharge its responsibilities. The Board draws on specialist legal advice in the UK, Singapore and Myanmar if the need arises and can bring in specialist due diligence advisers when assessing the risks inherent in a given investment situation. These might cover commercial, financial or legal due diligence as well as seeking advice on such matters as insurance or IT aspects. The Remuneration Committee (until 10 November 2020) has retained the services of external advisers to assist it in the formulation of compensation arrangements for the Executive Directors. The NCGC (until 10 November 2020) has retained the services of external advisers to assist it in establishing protocols to ensure that the Company’s business is conducted so as to comply with the FATF requirements. 25 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCE7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement Since Admission, the Board has sought to ensure that the Board itself was “fit for purpose” and at the same time has adhered to a level of corporate governance appropriate for a London-listed company operating in an emerging economy. Nomination and Corporate Governance Committee As a consequence of the fact that the Board consists of only four Directors after the retirement of William Knight, who left the Board on 18 August 2020, the Board decided on 10 November 2020 to dissolve this committee. The Board of Directors is now directly responsible for ensuring the Company’s compliance with the AIM Rules for Companies as well as other relevant corporate governance standards. The Chairman of the Board has affirmed that the Board is adequately staffed to discharge its duties and the Committee Chairman of the Audit Committee had confirmed that his committee is adequately staffed to discharge its duties. When considering the appointment and reappointment of Directors, the Board considers whether the Board and the Audit Committee have the appropriate balance of skills, experience, independence, knowledge and diversity to enable them to discharge their respective duties and responsibilities effectively. The Board also determines, on an annual basis, the independence of each of both independent Directors. This requires a statement by each Director to affirm that there are no situations that could compromise their independence. Each other director then also has to affirm that they believe that Director to be independent. The process is done for both independent directors. To date both independent directors have been affirmed as being independent. 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. The Board has direct access to the Company’s Nomad and, in conformity with good practice, non-executive members of the Board had the ability to meet with the Nomad without the presence of the executive directors during the year under review. The Board has direct access to the Company’s statutory auditor and, in conformity with good practice, the members of the Audit Committee have the ability to meet with the statutory auditor without the presence of the executive directors. 8. Promote a corporate culture that is based on ethical values and behaviours The Company’s corporate culture is a blend of its vision, its values, its people and its practices. Our vision was to build a diversified but focused stable of businesses that will benefit from Myanmar’s emergence. Our values are established by the Board and in particular the Executive Director. These are conveyed to our staff and other the stakeholders through our business practices. As noted above, the Company sets great store by ensuring that not only are its own operations conducted ethically but also the businesses of its investee companies must be run on similar lines. In this regard the evaluation of both our staff and our investee companies includes an assessment of ethical behaviour. Any new investment opportunity was subject to our own proprietary “Business Integrity” assessment before we proceeded with it. The Board ensures that during the year it interacts with all of our staff and all of our business partners to ensure that there is a consistency in their feedback on the values and corporate culture that we aspire to. 26 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCE 9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board The Board is responsible for managing the Company in pursuing its clearly stated divestment strategy. The day-to-day running of the Company is the responsibility of the Executive Director who is well versed in managing investments of the type done by the Company as well as the responsibilities of a listed company. The Managing Director in particular is responsible for the overall control and management of the Group, the development and implementation of the Group’s investing and business strategies, for managing the Group’s investments and management of shareholder relations. He is also responsible for the overall control and management of the finance and accounting functions of the Group, including the development of adequate internal controls, the maintenance of the Group’s HR and IT systems, and for compliance with the Company’s obligations as a BVI company and an AIM listed company. He is supported regarding these tasks by the CFO. As a consequence of the fact that the Board consists of only four Directors after the retirement of William Knight, who left the Board on 18 August 2020, the Board decided on 10 November 2020 to dissolve the Investment, Remuneration and the Nomination and Corporate Governance Committee and to take over their tasks. The Board has kept the Audit Committee as a separate sub-committee and the work of the Audit Committee is described in Section 4 above. Remuneration Committee The committee was dissolved on 10 November 2020. The Remuneration Committee was responsible for establishing a formal and transparent procedure for developing policy on executive remuneration and to set the remuneration packages of individual Directors. This included agreeing with the Board the framework for remuneration of the Managing Director and such other members of the executive management of the Company as it is designated to consider. This included the administration of the Share Option Plan and the Carried Interest Plan and the allocation of the benefits from those schemes amongst the Board and management team. It was also responsible for determining the total individual remuneration packages of each Director including, where appropriate, bonuses, incentive payments and allocation of share options and Carried Interest Plan points. Even after the dissolution of the Remuneration Committee it is still clear policy that no Director plays a part in any decision about his own remuneration. The Directors’ Report on Remuneration Issues (after the Remuneration Committee was dissolved on 10 November 2020) for the year is included within this Annual Report. 27 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCE10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders During the year under review, the Company has been applying the QCA Corporate Governance Code. There were no instances where there was a breach or a departure from the principles of the QCA Corporate Governance Code. It is my belief that this report, taken together with the rest of the Annual Report, should provide the reader with a clear understanding of: • • • • • • • the Company’s strategy; the inherent risks in executing that strategy; the risk management processes taken to minimise risks and maximise returns; the allocation of duties between the Board, its Audit Committee and the Executive Director; our efforts to conduct an open dialogue with our shareholders; the engagement of the Company with other stakeholders; and the promotion and preservation of our Corporate culture. Should anyone have any further questions or suggestions on how we might reasonably improve our performance in this regard then I would heartily encourage them to contact either myself (henrik@bodenstab.de) or the Executive Director at his email address listed above in Section 2. Yours faithfully Henrik Bodenstab Chairman of the Board 29 November 2021 28 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021CHAIRMAN’S STATEMENTON CORPORATE GOVERNANCEDIRECTORS’ REPORT ON REMUNERATION ISSUES Remuneration Policy The Remuneration Committee was responsible for determining the Remuneration Policy of the Company until 10 November 2020 when it was dissolved by the Board of Directors which now manages this area directly. It is the Group’s policy to ensure that compensation arrangements are appropriate and are fairly applied across the Group. The Group’s long-term incentive plan was initially embodied within the Share Option Plan. With effect from 17 September 2018 this has been supplemented by the Carried Interest Plan. Details of both the Share Option Plan and the Carried Interest Plan are provided in the Directors Report section of this annual report. Both of them are fundamentally driven around the principle of aligning interests with our shareholders. The Group’s Share Option Plan and Carried Interest Plan are described in the Directors’ Report. Directors’ Remuneration The Directors’ remuneration of the financial year ended 30 September 2021 and the financial period ended 30 September 2020 respectively was (all amounts in US Dollars): Director Directors’ fees Short term employee benefits [2] Directors’ fees Short term employee benefits [1,2] 2021 2020 Henrik Bodenstab (Chairman) 17,500 Aung Htun Rudolf Gildemeister 15,000 Nicholas Paris Michael Dean William Knight Craig Martin 86,000 80,000 22,793 13,167 10,000 24,789 32,500 166,000 70,749 192,823 73,333 267,209 26,333 559,698 1. 2. The short-term employee benefits also include rental expenses paid for the Directors’ accommodation. The short-term employee benefits for 2020 include bonuses totalling US$50,000. No bonuses were paid for 2021. On 10 November 2020 the Remuneration Committee was dissolved, and its tasks were taken over by the Board of Directors. Therefore, the remuneration of the Executive Directors is now determined by the Board. The remuneration of the Non-Executive Directors is also determined by the Board, but no director may vote on his own compensation arrangements. No additional sums were paid in the year to Directors for work on behalf of the Company outside their normal duties. There were no further cash payments or benefits provided to Directors. 29 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021 STATEMENT OF DIRECTORS’ RESPONSIBILITIES 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 in the British Virgin Islands (“BVI”) 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. Under BVI 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 information necessary for 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 to prepare financial statements in accordance with the AIM Rules for Companies. 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 IFRS 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 the information necessary for Shareholders to assess the performance, business 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 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. The accounts are published on our website 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. Each of the Directors, whose names and functions are listed in the Directors’ Report confirms to the best of his 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 Henrik Bodenstab Chairman of the Board 29 November 2021 30 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021 KEY AUDIT MATTERS During the year, the Audit Committee (“AC”) received semi-annually, financial statements together with supporting analyses and papers prepared by management. These were reviewed in detail and the AC considered, with input from the independent auditors, the appropriateness of the critical accounting estimates and judgments made in preparing the annual financial statements. In particular, the AC reviewed the following matter which it considers to be the sole “key audit matter” during its review of the annual financial statements for the financial year ended 30 September 2021. Valuation of Equity instrument at fair value through profit or loss Refer to Notes 3.2 and 11 of the financial statements. As at 30 September 2021 the Group held an equity instrument at fair value through profit or loss, being its investment in AP Towers and this is reflected at its fair value as at that date. The AC considered the fair value for AP Towers. In doing this the AC reviewed: • • • • the Board’s evaluations (as the Investment Committee was dissolved on 10 November 2020 to streamline operations) and the Board’s approval of the same; suitable valuation methodologies; comparable market-based valuation data and benchmarks; the basis for key assumptions applied by management principally the run rate EBITDA and comparable EV/ EBITDA multiples. The AC discussed these with the MIL management team and is satisfied that these are appropriate. The AC concurred with the fair value of AP Towers as determined by the MIL management team and the Investment Committee. The AC also reviewed the adequacy of the disclosures in respect of this investment in Notes 3.2 and 11. The independent auditor’s description of the key audit matter is included in the section “Independent Auditor’s Report”. Other than the key audit matter described above, the AC reviewed the consolidated financial statements of the Group for the financial year ended 30 September 2021, as well as the Independent Auditor’s Report thereon prior to their submission to the Board of Directors for approval. 31 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021 REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS 33 36 39 40 41 42 43 68 71 Directors’ Statement 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 32 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2021DIRECTORS’ STATEMENT The Directors of Myanmar Investments International Limited (the “Company”) present their statement to the members together with the audited fi nancial statements of the Company and its subsidiaries (the “Group”) for the fi nancial year ended 30 September 2021. 1. Opinion of the Directors In the opinion of the Board of Directors, (a) the fi nancial statements of the Group together with notes thereon are properly drawn up in accordance with International Financial Reporting Standards so as to give a true and fair view of the consolidated fi nancial position of the Group as at 30 September 2021 and consolidated fi nancial performance, consolidated changes in equity and consolidated cash fl ows of the Group for the fi nancial year ended 30 September 2021; and (b) at the date of this statement, there are reasonable grounds to believe that the Group and the Company will be able to pay its debts as and when they fall due. 2. Directors The Directors of the Company in offi ce at the date of this statement are: Maung Aung Htun Henrik Onne Bodenstab Nicholas John Paris Rudolf Gildemeister 3. Arrangements to enable directors to acquire shares and debentures Except as disclosed in paragraphs 4 and 5 below, neither at the end of, nor at any time during, the fi nancial period was the Company a party to any arrangement whose object was to enable the Directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate. 4. Directors’ interests in shares or debentures The following directors, who held offi ce at the end of the fi nancial 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 Maung Aung Htun Henrik Onne Bodenstab Number of warrants to subscribe for ordinary shares of the Company Maung Aung Htun Henrik Onne Bodenstab Number of share options to subscribe for ordinary shares of the Company Maung Aung Htun Henrik Onne Bodenstab Shareholdings registered in name of director or nominee At 30 September 2021 At 1 October 2020 677,000 585,849 123,000 181,159 899,626 35,000 677,000 585,849 123,000 181,159 899,626 35,000 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 33 DIRECTORS’ STATEMENT 5. Share option plan 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 was administered by the Remuneration Committee (until 10 November 2020) whose members during that period were:   Henrik Onne Bodenstab Nicholas John Paris From 10 November 2020 the Board of Directors took over the responsibilities of the Remuneration Committee. 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 per cent 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 arose as a result of the new ordinary shares being issued in connection with the Company’s Admission to the AIM market of the London Stock Exchange in June 2013 have an exercise price of US$1.10. Share options can be exercised at any time after the fi rst 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. At the end of the fi nancial period, there were 3,622,740 share options available for issue of which 2,590,527 have been issued. The Directors do not intend to issue any further share options. There were no new share options granted to Directors and employees during the fi nancial period. There were no shares issued during the fi nancial period by virtue of the exercise of options to take up unissued shares of the Company or its subsidiaries. The information on Directors of the Company participating in the Plan is as follows: Aggregate options granted since commencement of the Plan to the end of fi nancial period Aggregate options exercised since commencement of the Plan to the end of fi nancial period Aggregate options lapsed since commencement of the Plan to the end of fi nancial period Options granted during the fi nancial period Aggregate options outstanding as at end of the fi nancial period Name of Director Maung Aung Htun Henrik Onne Bodenstab – – 899,626 35,000 – – – – 899,626 35,000 34 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 DIRECTORS’ STATEMENT 6. Independent auditor The independent auditor, BDO LLP, has expressed its willingness to accept re-appointment. On behalf of the Board of Directors Nicholas John Paris Director 29 November 2021 Maung Aung Htun Director MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 35 INDEPENDENT AUDITOR’S REPORT To the Members of Myanmar Investments International Limited Report on the Audit of the Financial Statements Opinion We have audited the fi nancial statements of Myanmar Investments International Limited (the “Company”) and its subsidiaries (the “Group”), which comprise:    the consolidated statement of fi nancial position of the Group as at 30 September 2021; the consolidated statement of comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash fl ows of the Group for the financial year ended 30 September 2021; and notes to the financial statements, including a summary of signifi cant accounting policies. Basis for Opinion In our opinion, the accompanying consolidated fi nancial statements of the Group are properly drawn up in accordance with International Financial Reporting Standards (“IFRSs”) so as to give a true and fair view of the consolidated fi nancial position of the Group as at 30 September 2021, and of the consolidated fi nancial performance, consolidated changes in equity and consolidated cash fl ows of the Group for the fi nancial year ended 30 September 2021. We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfi lled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our opinion. Key Audit Matter Key audit matters are those matters that, in our professional judgment, were of most signifi cance in our audit of the fi nancial statements of the current period. These matters were addressed in the context of our audit of the fi nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. KEY AUDIT MATTER AUDIT RESPONSE 1 Valuation of Equity Instrument at Fair Value through Profi t or Loss The investment in equity instrument at fair value through profi t or loss (“FVTPL”) represents a 6.2% equity interest in AP Towers Holdings Pte. Ltd. (“AP Towers”). AP Towers owns and operates a telecommunication tower business in Myanmar. As at 30 September 2021, the carrying amount of the Group’s investment in equity instrument at FVTPL was US$33.4million, which represented 88.2% of the total assets of the Group. A market-based valuation methodology is used in the valuation of AP Towers. We focused on this area as a key audit matter as a considerable amount of judgment is involved in determining the fair value of the equity instrument at FVTPL, taking into account that the fair value was measured using signifi cant unobservable inputs (Level 3) such as enterprise value (“EV”) over earning before, interest, tax, depreciation and amortisation (“EBITDA”) (“EV/EBITDA”) multiplier of comparable companies and valuation discount. Refer to Notes 3.2 and 11 to the fi nancial statements. 36 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 Our procedures on the valuation of the equity instruments at FVTPL included, amongst others, the following:   Discussed with management the assumptions used in the valuation process; Evaluated and analysed reasonableness of the EBITDA of AP Towers used by comparing to the latest available audited fi nancial statements of AP Towers;  With the assistance of our internal valuation specialist, assessed and evaluated the methodology used in the valuation and the reasonableness of the EV/EBITDA multiplier and valuation discount used; and  Assessed the adequacy of the disclosure in the fi nancial statements with respect to the valuation of the investment. INDEPENDENT AUDITOR’S REPORT To the Members of Myanmar Investments International Limited Other Information Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the fi nancial statements and our auditor’s report thereon. Our opinion on the fi nancial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the fi nancial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the fi nancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of Management and Directors for the Financial Statements Management is responsible for the preparation of fi nancial statements that give a true and fair view in accordance with IFRSs, and for devising and maintaining a system of internal accounting controls suffi cient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair fi nancial statements and to maintain accountability of assets. In preparing the fi nancial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The directors are responsible for overseeing the fi nancial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the fi nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to infl uence the economic decisions of users taken on the basis of these fi nancial statements. As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:    Identify and assess the risks of material misstatement of the fi nancial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suffi cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Group’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 37 INDEPENDENT AUDITOR’S REPORT To the Members of Myanmar Investments International Limited Auditor’s Responsibilities for the Audit of the Financial Statements (Continued)    Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the fi nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the fi nancial statements, including the disclosures, and whether the fi nancial statements represent the underlying transactions and events in a manner that achieves fair presentation. Obtain suffi cient appropriate audit evidence regarding the fi nancial information of the entities or business activities within the Group to express an opinion on the consolidated fi nancial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and signifi cant audit fi ndings, including any signifi cant defi ciencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most signifi cance in the audit of the fi nancial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefi ts of such communication. The engagement partner on the audit resulting in this independent auditor’s report is Ng Kian Hui. BDO LLP Public Accountants and Chartered Accountants Singapore 29 November 2021 38 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Financial Year ended 30 September 2021 Revenue Other item of income Finance income Gain on disposal of a joint venture Fair value (loss)/gain on investment at fair value through profi t or loss Items of expense Employee benefi ts expense Depreciation expense Other operating expenses Finance costs Share of results of joint ventures, net of tax Write down to fair value less cost to sell on non-current asset held for sale (Loss)/profi t before income tax Income tax expense (Loss)/profi t for the fi nancial year/period Other comprehensive income: Items that may be reclassifi ed subsequently to profi t or loss: Exchange gain arising on translation of foreign operations Other comprehensive income for the fi nancial year/period, net of tax Total comprehensive (loss)/income for the fi nancial year/period (Loss)/Profi t attributable to: Owners of the parent Non-controlling interests Total comprehensive (loss)/income attributable to: Owners of the parent Non-controlling interests (Loss)/Earnings per share (cents) - Basic and diluted Financial year ended 30 September 2021 US$ Note Financial period from 1 April 2019 to 30 September 2020 US$ – – 476 – (9,100,000) 491 361,248 6,500,000 (198,500) – (495,663) (6,827) – (1,052,467) (10,852,981) (120) (10,853,101) – – (10,853,101) (7,806,703) (3,046,398) (10,853,101) (7,806,703) (3,046,398) (10,853,101) (898,323) (20,719) (1,325,262) (13,857) (926,004) – 3,677,574 (1,306) 3,676,268 399,314 399,314 4,075,582 1,616,159 2,060,109 3,676,268 2,015,473 2,060,109 4,075,582 (20.49) 4.24 4 10 11 5 12 6 10 16 7 8 10 13 13 9 The accompanying notes form an integral part of these fi nancial statements. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 39 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 September 2021 ASSETS Non-current assets Investments in joint ventures Equity instrument at fair value through profi t or loss Plant and equipment Total non-current assets Current assets Other receivables Cash and bank balances Non-current asset classifi ed as held for sale Total current assets Total assets EQUITY AND LIABILITIES Equity Share capital Share option reserve Accumulated losses Foreign exchange reserve Equity attributable to owners of the parent Non-controlling interests Total equity LIABILITIES Current liabilities Other payables Income tax payable Total current liabilities Total equity and liabilities Note 30 September 2021 US$ 30 September 2020 US$ 10 11 12 14 15 16 17 18 13 19 – 33,400,000 – 33,400,000 – 42,500,000 – 42,500,000 117,989 1,807,634 1,925,623 1,500,000 3,425,623 268,834 2,364,166 2,633,000 2,552,467 5,185,467 36,825,623 47,685,467 40,569,059 1,358,913 (16,230,184) (76,560) 25,621,228 10,889,169 36,510,397 40,569,059 1,358,913 (8,423,481) (76,560) 33,427,931 13,935,567 47,363,498 297,512 17,714 315,226 304,053 17,916 321,969 36,825,623 47,685,467 The accompanying notes form an integral part of these fi nancial statements. 40 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Financial Year ended 30 September 2021 l a t o T $ S U $ S U $ S U $ S U s t s e r e t n i t n e r a p e h t f o s e s s o l $ S U e v r e s e r g n i l l o r t n o c s r e n w o o t l d e t a u m u c c A e g n a h c x e - n o N y t i u q E l e b a t u b i r t t a i n g e r o F $ S U e r a h S n o i t p o e v r e s e r $ S U e r a h S l a t i p a c e t o N 8 9 4 3 6 3 , , 7 4 7 6 5 , 5 3 9 , 3 1 , 1 3 9 7 2 4 3 3 , ) 1 8 4 , 3 2 4 , 8 ( ) 0 6 5 , 6 7 ( 3 1 9 , 8 5 3 , 1 9 5 0 , 9 6 5 , 0 4 ) , 1 0 1 3 5 8 0 1 , ( ) , 8 9 3 6 4 0 3 , ( ) 3 0 7 , 6 0 8 7 , ( ) , 3 0 7 6 0 8 , 7 ( – – – 7 9 3 , 0 1 5 6 3 , 9 6 1 , 9 8 8 , 0 1 , 8 2 2 1 2 6 , 5 2 8 0 0 , 6 6 2 3 4 , 8 5 4 , 5 7 8 , 1 1 , 0 5 5 0 9 3 , 1 3 ) 4 8 1 , 0 3 2 , 6 1 ( ) 0 4 6 , 9 3 0 , 0 1 ( ) 0 6 5 , 6 7 ( 3 1 9 , 8 5 3 , 1 9 5 0 , 9 6 5 , 0 4 ) 4 7 8 , 5 7 4 ( 5 0 0 , 7 3 3 , 1 9 5 0 , 9 6 5 , 0 4 , 8 6 2 6 7 6 3 , , 9 0 1 0 6 0 2 , , 9 5 1 6 1 6 1 , 9 5 1 , 6 1 6 , 1 – 4 1 3 , 9 9 3 – 4 1 3 , 9 9 3 – 4 1 3 , 9 9 3 , 2 8 5 5 7 0 4 , 8 0 9 , 1 2 8 0 9 , 1 2 8 9 4 , 3 6 3 , 7 4 – – 8 0 9 , 1 2 8 0 9 , 1 2 – – – – , 9 0 1 0 6 0 2 , 3 7 4 , 5 1 0 , 2 9 5 1 , 6 1 6 , 1 4 1 3 , 9 9 3 – – – 8 0 9 , 1 2 8 0 9 , 1 2 – – – – – , 7 6 5 5 3 9 3 1 , 1 3 9 7 2 4 , , 3 3 ) 1 8 4 , 3 2 4 , 8 ( ) 0 6 5 , 6 7 ( 3 1 9 , 8 5 3 , 1 9 5 0 , 9 6 5 , 0 4 g n i t n e s e r p e r , r a e y l i a c n a n fi e h t r o f s s o L e h t r o f s s o l i e v s n e h e r p m o c l a t o t 1 2 0 2 r e b m e t p e S 0 3 t A r a e y l i a c n a n fi 0 2 0 2 r e b o t c O 1 t A 1 2 0 2 0 1 8 1 f o l n o i t a s n a r t n o i g n s i r a i n a g e g n a h c x E s n o i t a r e p o i n g e r o f e h t r o f e m o c n i i e v s n e h e r p m o c l a t o T d o i r e p l i a c n a n fi e h t r o f t fi o r P d o i r e p l i a c n a n fi r i e h t n i s r e n w o h t i w s n o i t c a s n a r t l a t o T e s n e p x e s n o i t p o e r a h S s r e n w o s a y t i c a p a c 0 2 0 2 r e b m e t p e S 0 3 t A 9 1 0 2 l i r p A 1 t A 0 2 0 2 . s t n e m e t a t s l i a c n a n fi e s e h t f o t r a p l a r g e t n i n a m r o f i s e t o n g n y n a p m o c c a e h T MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 41 CONSOLIDATED STATEMENT OF CASH FLOWS For the Financial Year ended 30 September 2021 Operating activities (Loss)/profi t before income tax Adjustments for: Interest income Finance costs Depreciation of plant and equipment Gain on disposal of a joint venture Fixed assets written off Fair value loss/(gain) on investment at fair value through profi t or loss Write down to fair value less cost to sell on non-current asset held for sale Share options expense Share of results of joint ventures, net of tax Operating cash fl ows before working capital changes Changes in working capital: Other receivables Other payables Cash used in operations Interest received Finance costs paid Income tax paid Net cash fl ows used in operating activities Investing activities Proceeds from disposal of investments Net cash fl ows generated from investing activities Financing activities Decrease/(increase) in short-term deposits pledged Net cash fl ows generated from/(used in) fi nancing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of the fi nancial year/period Cash and cash equivalents at the end of fi nancial year/period Financial year ended 30 September 2021 US$ Note Financial period from 1 April 2019 to 30 September 2020 US$ (10,852,981) 3,677,574 4 6 12 10 7 11 16 18 10 4 6 10 15 (476) 6,827 – – – 9,100,000 1,052,467 – – (694,163) 150,845 (6,541) (549,859) 476 (6,827) (321) (556,531) (491) 13,857 20,719 (361,248) 17,384 (6,500,000) – 21,908 926,004 (2,184,293) (90,059) (68,357) (2,342,709) 491 (13,857) (280) (2,356,355) – – 1,000,000 1,000,000 35,943 35,943 (520,588) 2,316,539 1,795,951 (216) (216) (1,356,571) 3,673,110 2,316,539 The accompanying notes form an integral part of these fi nancial statements. 42 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 1. General corporate information Myanmar Investments International Limited (“the Company”) is a limited liability company incorporated and domiciled in the British Virgin Islands (“BVI”). The Company’s registered offi ce is at Jayla Place, Wickhams Cay I, Road Town, Tortola, British Virgin Islands. The Company’s ordinary shares and warrants are traded on the AIM market of the London Stock Exchange under the ticker symbols MIL and MILW respectively. The Company was established for the purpose of identifying and investing in, and disposing of, businesses operating in or with business exposure to Myanmar. The Company’s focus was to target businesses operating in sectors that the Directors believed had strong growth potential and thereby could be expected to provide attractive yields, capital gains or both. At the Annual General Meeting held on 24 October 2019, the Company’s shareholders approved a resolution to begin an orderly disposal of the Company’s investments and in due course look to return surplus capital to shareholders. The principal activities of the subsidiaries are disclosed in Note 13 to the fi nancial statements. In the previous fi nancial year, the Group and the Company changed its reporting period end from 31 March to 30 September such that the previous reporting period covered a period of 18 months, and therefore the fi nancial statements are not comparable. 1.1 Going concern The Group incurred loss after tax of US$10,853,101 during the current fi nancial year. The Directors have a reasonable expectation that the Group has adequate fi nancial resources to continue in operational existence for the foreseeable future as the Group’s current assets exceeded its current liabilities by US$3,110,397. This expectation is based on a review of the Group’s existing fi nancial resources, its present and expected future commitments in terms of its overheads and running costs; and its commitments to its existing investments. Accordingly, the Directors have adopted the going concern basis in preparing the Group’s fi nancial statements. 2. Summary of signifi cant accounting policies 2.1 Basis of preparation of the fi nancial statements The fi nancial statements, which are expressed in United States dollars, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) which comprise standards and interpretations approved by IASB and International Financial Reporting Interpretations Committee (“IFRIC”). The fi nancial statements have been prepared on an historical cost basis, except as disclosed in the accounting policies below. The individual fi nancial statements of each entity in the Group are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The fi nancial statements of the Group are presented in United States dollar (“US$”), which is the functional currency of the Company and the presentation currency for the fi nancial statements of the Group. For the purpose of IFRS 8 Operating Segments, the Group has only one segment, being “Investments” which comprise investments in joint ventures and equity instrument at fair value through profi t or loss as disclosed in Notes 10 and 11 to the fi nancial statements respectively. No further operating segment fi nancial information is therefore disclosed. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 43 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 2. Summary of signifi cant accounting policies (Continued) 2.1 Basis of preparation of the fi nancial statements (Continued) The preparation of the fi nancial statements in conformity with IFRS requires the management to exercise judgement in the process of applying the Group’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 fi nancial year/period, and the reported amounts of revenue and expenses during the fi nancial year/period. 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. Revisions to accounting estimates are recognised in the fi nancial year/period in which the estimate is revised if the revision affects only that fi nancial year/period, or in the fi nancial year/period of the revision and future fi nancial years if the revision affects both current and future fi nancial year/periods. Critical accounting judgements and key sources of estimation uncertainty used that are signifi cant to the fi nancial statements are disclosed in Note 3 to the fi nancial statements. Changes in accounting policies New standards, amendments and interpretations effective from 1 October 2020 The standards, amendments to standards, and interpretations, issued by IASB that will apply for the fi rst time by the Group are not expected to impact the Group as they are either not relevant to the Group’s business activities or require accounting which is consistent with the Group’s current accounting policies. New standards, amendments and interpretations issued but not yet effective There are a number of standards, amendments to standards, and interpretations, which have been issued by IASB that are effective in future accounting periods and the Group has not decided to early adopt. The Group does not expect any of these standards upon adoption will have a material impact to the Group. 2.2 Basis of consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. Subsidiaries are entities over which the Group has control. The Group controls an investee if the Group has power over the investee, exposure to variable returns from its involvement with the investee, and the ability 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. Subsidiaries are consolidated from the date on which the Group obtains control over the investee and cease from consolidation when the control is lost. Control is reassessed whenever the facts and circumstances indicate that they may be a change in the elements of control. All intra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides an impairment indicator of the transferred asset. The fi nancial statements of the subsidiaries are prepared for the same reporting period as that of the Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the Group. 44 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 2. Summary of signifi cant accounting policies (Continued) 2.2 Basis of consolidation (Continued) Non-controlling interests Non-controlling interests represents the equity in subsidiaries which is not attributable directly or indirectly to the equity owners of the parent. They are shown separately in the consolidated statements of comprehensive income, consolidated statement of changes in equity and consolidated statement of fi nancial position. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a defi cit balance. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions (i.e. transactions with owners). The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to refl ect 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. When the Group loses control of a subsidiary, it derecognises the assets and liabilities of the subsidiary and any non-controlling interest. The profi t 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. reclassifi ed to profi t or loss or transferred directly to retained earnings) 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 IFRS 9 or, when applicable, the cost on initial recognition of an investment in an associate or joint venture. 2.3 Joint arrangements The Group is a party to a joint arrangement when there is a contractual arrangement that confers joint control over the relevant activities of the arrangement to the Group and at least one other party. Joint control is assessed under the same principles as control over subsidiaries (Note 2.2). The Group classifi es its interests in joint arrangements as either: - - Joint ventures : where the Group has rights to only the net assets of the joint arrangement. Joint operations : where the Group has both the rights to assets and obligations for the liabilities of the joint arrangement. In assessing the classifi cation of interests in joint arrangements, the Group considers: - - - - The structure of the joint arrangement. The legal form of joint arrangements structured through a separate vehicle. The contractual terms of the joint arrangement agreement. Any other facts and circumstances (including any other contractual arrangements). The Group’s interest in joint ventures are accounted for using the equity method. Under the equity method, the investments in joint ventures are carried in the consolidated statement of fi nancial position at cost plus post-acquisition changes in the Group’s share in net assets of the joint ventures. The share of results of the joint ventures are recognised in profi t or loss. Where there have been a change recognised directly to equity of the joint ventures, the Group recognises its share of such changes. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the joint ventures. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 45 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 2. Summary of signifi cant accounting policies (Continued) 2.3 Joint arrangements (Continued) The Group’s share of results and reserves of a joint venture acquired or disposed of are included in the fi nancial statements from the date of acquisition up to the date of disposal or cessation of joint control over the relevant activities of the arrangements. 2.4 Revenue recognition Interest income Interest income is recognised on an accruals 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 fi nancial instrument or a shorter period, where appropriate, to the net carrying amount of the fi nancial asset or liability. 2.5 Foreign currency translation In preparing the fi nancial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing as of the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profi t or loss for the period. Exchange differences arising on the retranslation of non- monetary items carried at fair value are included in profi t 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. For such non-monetary items, any exchange component of that gain or loss is also recognised directly in equity. For the purpose of presenting consolidated fi nancial statements, the assets and liabilities of the Group’s foreign operations (including comparatives) are expressed in United States dollars using exchange rates prevailing at the end of the fi nancial year/period. Share of results of joint venture, net of tax (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fl uctuated signifi cantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, are recognised initially in other comprehensive income and accumulated in the Group’s foreign exchange reserve. 2.6 Income tax Income tax expense comprise current tax expense and deferred tax expense. Current income tax Current income tax expense is the amount of income tax payable in respect of the taxable profi t for a period. Current income tax liabilities for the current and prior periods shall be measured at the amount expected to be paid to the taxation authorities, using the tax rates and interpretation to applicable tax laws in the countries where the Group operates, that have been enacted or substantively enacted by the end of the reporting period. Management evaluates its income tax provisions on periodical basis. Current income tax expenses are recognised in profi t or loss, except to the extent that the tax relates to items recognised outside profi t or loss, either in other comprehensive income or directly in equity. 46 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 2. Summary of signifi cant accounting policies (Continued) 2.6 Income tax (Continued) Deferred tax Deferred tax is recognised on all temporary differences between the carrying amounts of assets and liabilities in the fi nancial statements and the corresponding tax bases of asset and liabilities, except when the temporary difference arises from the initial recognition of goodwill or other assets and liabilities that is not a business combination and affects neither the accounting profi t nor taxable profi t. Deferred tax liabilities are recognised for all taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profi t will be available against which the temporary difference can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that suffi cient taxable profi ts will be available to allow all or part of the deferred tax asset to be utilised. Deferred tax assets and liabilities are measured using the tax rates expected to apply for the period when the asset is realised or the liability is settled, based on tax rate and tax law that have been enacted or substantially enacted by the end of reporting period. The measurement of deferred tax refl ects the tax consequences that would follow from the manner in which the Group expects to recover or settle its assets and liabilities, except for investment properties at fair value which are presumed to be recovered through sale. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis. Deferred tax is recognised in profi t or loss, except when it relates to items recognised outside profi t or loss, in which case the tax is also recognised either in other comprehensive income or directly in equity, or where it arises from the initial accounting for a business combination. Deferred tax arising from a business combination, is taken into account in calculating goodwill on acquisition. 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 profi t or loss in the period in which it is incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefi ts expected to be obtained from the use of the plant and equipment, the expenditure is capitalised as an additional cost of that asset. Subsequent expenditure on an item of plant and equipment is added to the carrying amount of the item if it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost can be measured reliably. All other costs of servicing are recognised in profi t or loss when incurred. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 47 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 2. Summary of signifi cant accounting policies (Continued) 2.7 Plant and equipment (Continued) Disposals An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are expected from its use or disposal. 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 profi t 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: Offi ce equipment Computer equipment Furniture and fi ttings Years 3 3 3 The residual values, useful lives and depreciation method are reviewed at each fi nancial year/period-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 benefi ts embodied in the items of plant and equipment. Fully depreciated assets still in use are retained in the fi nancial statements. 2.8 Impairment of non-fi nancial assets At the end of each reporting period, the Group reviews the carrying amounts of its non-fi nancial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised whenever the carrying amount of the asset or its cash-generating unit exceeds its recoverable amount. A cash-generating unit is the smallest identifi able asset company that generates cash fl ows that are largely independent from other assets and company. Impairment loss is recognised in profi t or loss unless it reverses a previous revaluation, credited in equity, in which case it is charged to equity. The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profi t or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profi t or loss. 48 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 2. Summary of signifi cant accounting policies (Continued) 2.9 Non-current assets held-for-sale Non-current assets are classifi ed as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classifi cation. Non-current assets classifi ed as held for sale are measured at the lower of the asset’s previous carrying amount and fair value less costs to sell. The assets are not depreciated or amortised while classifi ed as held for sale. Any impairment loss on initial classifi cation and subsequent measurement is recognised as an expense. Any subsequent increase in fair value less costs to sell (not exceeding the accumulated impairment loss that has been previously recognised) is recognised in profi t or loss. 2.10 Financial Instruments The Group recognises a fi nancial asset or a fi nancial liability in its statement of fi nancial position when, and only when, the Group becomes party to the contractual provisions of the instrument. Financial assets The Group classifi es its fi nancial assets into one category, at amortised cost, depending on the Group’s business model for managing the fi nancial assets as well as the contractual terms of the cash fl ows of the fi nancial asset. The Group shall reclassify its affected fi nancial assets when and only when the Group changes its business model for managing these fi nancial assets. The Group’s accounting policy for fi nancial assets at amortised cost is as follows: Amortised cost These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of fi nancial assets where the objective is to hold these assets in order to collect contractual cash fl ows and the contractual cash fl ows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment. Interest income from these fi nancial assets is included in interest income using the effective interest rate method. Impairment provisions for other receivables and cash and cash equivalents are recognised based on a forward looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether at each reporting date, there has been a signifi cant increase in credit risk since initial recognition of the fi nancial asset. For those where the credit risk has not increased signifi cantly since initial recognition of the fi nancial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased signifi cantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised. The Group’s financial assets measured at amortised cost comprise other receivables (excluding prepayments) and cash and cash at bank in the consolidated statement of fi nancial position. Equity instruments at fair value through profi t or loss (“FVTPL”) For equity instruments that are either held for trading or irrevocable election to measure the fair value changes through other comprehensive income has not been made, the fair value changes are recognised in profi t or loss. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 49 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 2. Summary of signifi cant accounting policies (Continued) 2.10 Financial Instruments (Continued) Financial assets (Continued) Derecognition of fi nancial assets The Group derecognises a fi nancial asset only when the contractual rights to the cash fl ows from the asset expire, or it transfers the fi nancial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition, any difference between the carrying amount and the sum of proceeds received and amounts previously recognised in other comprehensive income is recognised in profi t or loss. Financial liabilities and equity instruments Financial liabilities 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. Financial liabilities are recognised on the statement of fi nancial position when, and only when, the Group becomes parties to the contractual provisions of the fi nancial instruments. Derecognition of fi nancial liabilities The Group derecognises fi nancial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount and the consideration paid is recognised in profi t or loss. 2.11 Cash and bank balances Cash and bank balances in the consolidated statement of fi nancial position comprise cash on hand, bank balances and short term deposits. For the purposes of the consolidated statement cash fl ows cash and cash equivalents exclude pledged short-term deposits. 2.12 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 satisfi ed, a charge is made irrespective of whether the market vesting conditions are satisfi ed. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non-vesting condition is not satisfi ed. Where the terms and conditions of options are modifi ed before they vest, the increase in the fair value of the options, measured immediately before and after the modifi cation, 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. 50 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 2. Summary of signifi cant accounting policies (Continued) 2.12 Share-based payments (Continued) 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 modifi cation of the original award, as described in the previous paragraph. All cancellation of equity-settled transaction awards are treated equally. 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. 3. Signifi cant accounting judgements and estimates The preparation of the Group’s fi nancial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities at the reporting date. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods. 3.1 Critical judgements made in applying the entity’s accounting policies The following is the critical judgement that management has made in the process of applying the Group’s accounting policies and which have a signifi cant effect on the amounts recognised in the consolidated fi nancial statements: (I) Extension of period required to complete a sale of the non-current asset held for sale As the result of the ongoing transaction to sell the Group’s 37.5% equity interest in Myanmar Finance International Ltd. (“MFIL”) (Note 10), the entire carrying amount of the Group’s investment in MFIL has been reclassifi ed as non-current asset held for sale since the prior fi nancial period. However, due to certain events and circumstances beyond the Group’s control in Myanmar as disclosed in Note 23 to the fi nancial statements, the sale could not be completed within one year. The Group remains committed to its plan to sell its investment in MFIL. As such, management is of the view that the continuous classifi cation of its investment in MFIL as non-current asset held for sale is appropriate as at 30 September 2021. 3.2 Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year, are described below. The Group based its assumptions and estimates on parameters available when the fi nancial 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 refl ected in the assumptions when they occur. (I) Fair value of unquoted equity instrument at fair value through profi t or loss The Group’s equity instrument at fair value through profi t or loss are measured at fair value for fi nancial reporting purposes. The Board of Directors of the Company has set up an Investment Committee to determine the appropriate valuation techniques and inputs for fair value measurements being the EV/EBITDA multiple. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 51 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 3. Signifi cant accounting judgements and estimates (Continued) 3.2 Key sources of estimation uncertainty (Continued) (I) Fair value of unquoted equity instrument at fair value through profi t or loss (Continued) In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Group engages internal qualifi ed valuers to perform the valuation. The valuation of the unquoted investment is categorised into Level 3 (2020: Level 3) of the fair value hierarchy. The Investment Committee works closely with the qualifi ed internal valuers to establish the appropriate valuation techniques and inputs to the model. The Investment Committee reports its fi ndings to the Board of Directors of the Company on a periodic basis to explain the cause of fl uctuations in the fair value of the assets and liabilities. Information about the valuation techniques and inputs used in determining the fair value of the unquoted equity instrument at fair value through profi t or loss are disclosed in Note 11 to the fi nancial statements. (ii) Measurement of non-current asset held for sale The Group follows the accounting policies set out in Note 2.9 and measures the non-current asset held for sale at lower of the carrying amount and fair value less cost to sell. In determining the fair value less cost to sell, the Company considers the terms and conditions of the Binding Offer as disclosed in Note 10 to the fi nancial statements. The details of non-current asset held for sale are disclosed in Note 16 to the fi nancial statements. 4. Finance income Interest income 5. Employee benefi ts expense Salaries, wages and other staff benefi ts Bonuses Share options expense (Note 18) Financial year ended 30 September 2021 US$ Financial period from 1 April 2019 to 30 September 2020 US$ 476 491 Financial year ended 30 September 2021 US$ Financial period from 1 April 2019 to 30 September 2020 US$ 198,500 – – 198,500 826,415 50,000 21,908 898,323 The employee benefi ts expense includes the remuneration of Directors as disclosed in Note 20 to the fi nancial statements. 6. Finance costs Finance costs represent bank charges for the fi nancial year/period. 52 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 7. (Loss)/profi t before income tax In addition to the charges and credits disclosed elsewhere in the notes to the fi nancial statements, the above includes the following charges: Auditor’s remuneration Consultants’ fees Fixed assets written off Short term leases Professional fees Travel and accommodation 8. Income tax expense Current income tax - current fi nancial year/period - over-provision in prior fi nancial year/period Financial year ended 30 September 2021 US$ Financial period from 1 April 2019 to 30 September 2020 US$ 51,607 191,472 – 2,730 147,428 – 103,397 218,999 17,384 84,206 599,324 54,572 Financial year ended 30 September 2021 US$ Financial period from 1 April 2019 to 30 September 2020 US$ 120 – 120 3,703 (2,397) 1,306 A reconciliation of income tax applicable to (loss)/profi t before income tax at the statutory income tax rate of 25% (2020: 25%) in Myanmar is as follows: (Loss)/profi t before income tax Share of results of joint venture, net of tax (Note 10) Income tax at the applicable tax rates Effects of different income tax rates in other countries Over-provision in prior fi nancial year Income not subject to tax Expenses not deductible for tax Income tax exemption Income tax for the fi nancial year/period Financial year ended 30 September 2021 US$ Financial period from 1 April 2019 to 30 September 2020 US$ (10,852,981) – (10,852,981) (2,713,245) (95) – – 2,713,539 (81) 120 3,677,574 926,004 4,603,578 1,150,895 (587) (2,397) (1,545,082) 399,482 (1,005) 1,306 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 53 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 9. (Loss)/earnings per share Basic (loss)/earnings per share is calculated by dividing the profi t or loss for the fi nancial year/period attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the fi nancial year/ period. The following refl ects the profi t or loss and share data used in the basic and diluted (loss)/earnings per share computation: (Loss)/profi t for the fi nancial year/period attributable to owners of the Company (US$) Weighted average number of ordinary shares during the fi nancial year/period applicable to basic profi t or loss per share (Loss)/earnings per share Basic and diluted (cents) Financial year ended 30 September 2021 US$ Financial period from 1 April 2019 to 30 September 2020 US$ (7,806,703) 1,616,159 38,108,451 38,097,037 (20.49) 4.24 Diluted (loss)/earnings per share is the same as the basic (loss)/earnings per share for fi nancial year ended 30 September 2021 and fi nancial period ended 30 September 2020 because the potential ordinary shares to be converted arising from share options and warrants are anti-dilutive. 10. Investments in joint ventures Investments in joint ventures Unquoted equity investments, at cost Share of post-acquisition results of joint venture, net of tax Share of post-acquisition foreign currency translation reserve Disposal of joint venture during the fi nancial period Reclassifi ed to non-current asset held-for-sale Movement during the period Balance at beginning of fi nancial period Share of results of joint ventures, net of tax Share of foreign currency translation reserve Disposal of joint venture during the fi nancial period Reclassifi ed to non-current asset held-for-sale Balance at end of fi nancial period 54 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 30 September 2020 US$ 4,815,000 (1,547,221) (76,560) 3,191,219 (638,752) (2,552,467) – 30 September 2020 US$ 3,717,909 (926,004) 399,314 (638,752) (2,552,467) – NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 10. Investments in joint ventures (Continued) Myanmar Finance International Ltd. The Group, through its wholly-owned subsidiary Myanmar Investment Limited (“MIL”), holds 37.5% equity interest in a joint venture Myanmar Finance International Ltd (“MFIL”), a company incorporated in Myanmar, within principal activity of provision of microfi nance loans. On 26 February 2020, MIL together with each of the other shareholders of MFIL, received a Binding Offer (“BO”) to sell the entire share capital of MFIL to Thitikorn Plc (“TK”) (the “Purchaser”), a consumer fi nance company incorporated in Thailand and listed on the Stock Exchange of Thailand. The original BO was executed on 17 March 2020 with the intention of agreeing and executing the Sale and Purchase Agreement (“SPA”) within a month. However, due to the outbreak of Covid-19, the regulatory approval could not be obtained in time. Therefore, the BO has been extended for several times and the latest extension was signed on 22 November 2021 which extended the expiry of BO to 28 February 2022. In accordance with the BO, the minimum consideration for this transaction will be calculated based on a pre- agreed formula of 2 times the book value of MFIL at closing once conditions above have been satisfi ed. As the result of the ongoing transaction above, the entire carrying amount of the Group’s investment in MFIL has been reclassifi ed as non-current asset held for sale in prior year and continued being classifi ed as non-current held for sale in current year (Note 16). Medicare International Health and Beauty Pte. Ltd. and its subsidiary (“MIHB Group”) On 28 November 2019, the Group disposed its entire investment in MIHB Group for US$1,000,000. For the period from 1 April 2019 to 28 November 2019 (date of disposal), the Group recorded share of losses from its investment in MIHB Group amounting to US$576,305. The carrying amount of the Group’s investment in MIHB Group as at the date of disposal was US$638,752. As a result, the Group recognised a gain on disposal of US$361,248 during the previous fi nancial period. 11. Equity instrument at fair value through profi t or loss 30 September 2021 US$ 30 September 2020 US$ Investment in unquoted equity instrument, at fair value 33,400,000 42,500,000 The Group, through its 66.67% subsidiary, MIL 4 Limited (“MIL 4”) invested in a 6.2% (2020:6.2%) equity interest in unquoted share capital of AP Towers Holdings Pte. Ltd. (“AP Towers”). On 23 January 2020, MIL 4 exchanged its then existing investment in Apollo Towers holdings Limited (“Apollo Tower”) for shares in AP Towers which owns Pan Asia Majestic Eagle Limited (“Pan Asia Towers”), another Myanmar independent tower company. Under the share swap, MIL 4 has exchanged its existing 13.7 per cent shareholding in Apollo Towers for a shareholding of 6.2 per cent in AP Towers. The share swap effectively brings Apollo Towers and Pan Asia Towers under common ownership of AP Towers. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 55 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 11. Equity instrument at fair value through profi t or loss (Continued) Movement in the investment in unquoted equity instrument is as follows: Balance at beginning of fi nancial year/period Fair value (loss)/gain during the fi nancial year/period Balance at end of fi nancial year/period 30 September 2021 US$ 30 September 2020 US$ 42,500,000 (9,100,000) 33,400,000 36,000,000 6,500,000 42,500,000 The Group intends to hold these investments for long-term appreciation in value as well as strategic investment purposes. Management engaged their internal valuation specialists to perform a valuation on the investment. The valuation of the unquoted investment is categorised into Level 3 (2020: Level 3) of the fair value hierarchy. The information on the signifi cant unobservable inputs and the inter-relationship between key unobservable inputs and fair value are as follows: 30 September 2021 Financial asset Valuation technique used Signifi cant unobservable inputs Unquoted equity investment – AP Towers Comparable Company Analysis - Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) of US$85.9million - Enterprise Value (“EV”) per EBITDA multiple of 12.7x - Valuation discount of 25%* Inter-relationship between key unobservable inputs and fair value Increase EBITDA and EV/ EBITDA multiple will increase the fair value of the fi nancial asset. Increase in valuation discount will decrease the fair value of the fi nancial asset * Due to uncertain political environment and ongoing COVID-19 pandemic in Myanmar during current fi nancial year, management is of the view that an additional 25% discount should be applied to the Group’s investments in Myanmar. 30 September 2020 Financial asset Unquoted equity investments Valuation technique used Signifi cant unobservable inputs Comparable company analysis - Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) of US$83.4million - Enterprise Value (“EV”) per EBITDA multiple of 13.1x Inter-relationship between key unobservable inputs and fair value Increase EBITDA and EV/ EBITDA multiple will increase the fair value of the fi nancial asset. 56 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 Computer equipment US$ Offi ce equipment US$ Furniture and fi ttings US$ 10,852 (10,852) – 6,865 2,326 (9,191) – 1,118 (1,118) – 1,118 – (1,118) – 56,469 (56,469) – 22,353 18,393 (40,746) – Total US$ 68,439 (68,439) – 30,336 20,719 (51,055) – – – – – 12. Plant and equipment 2020 Cost Balance at 1 April 2019 Written off Balance at 30 September 2020 Accumulated depreciation Balance at 1 April 2019 Depreciation for the fi nancial period Written off Balance at 30 September 2020 Carrying amount Balance at 30 September 2020 and 30 September 2021 13. Investment in subsidiaries Details of the subsidiaries are as follows: Name of subsidiaries Country of incorporation/ principal place of business Principal activities Myanmar Investments Limited(1) Singapore MIL Management Pte. Ltd.(1) Singapore MIL 4 Limited(1) Held by MIL Management Pte. Ltd. MIL Management Co., Ltd(2) British Virgin Islands Myanmar (1) (2) Audited by BDO LLP, Singapore. In the process of striking off. Proportion of ownership interest held by the Group Proportion of ownership interest held by non–control interests 2021 % 2020 % 2021 % 2020 % 100 100 100 100 – – – – 66.67 66.67 33.33 33.33 Investment holding company Provision of management services to the Group Investment holding company Provision of management services to the Group 100 100 – – MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 57 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 13. Investment in subsidiaries (Continued) Non-controlling interests The summarised fi nancial information before intra-group elimination of the subsidiary that has material non- controlling interests as at the end of each reporting period is as follows: Assets and liabilities Non-current assets Current assets Current liabilities Net assets Accumulated non-controlling interests Revenue Other (loss)/income Administrative expenses (Loss)/profi t and total comprehensive (loss)/income for the fi nancial year/period (Loss)/profi t and total comprehensive (loss)/income allocated to non-controlling interests Operating cash fl ows before working capital changes Working capital changes Net cash used in operating activities Net change in cash and cash equivalents 14. Other receivables Other receivables Deposits Prepayments MIL 4 Limited 30 September 2021 US$ 30 September 2020 US$ 33,400,000 923 (733,422) 32,667,501 42,500,000 71,067 (764,373) 41,806,694 10,889,169 13,935,567 – (9,100,000) (39,193) – 6,500,000 (319,673) (9,139,193) 6,180,327 (3,046,398) 2,060,109 (39,193) 39,193 – – (319,673) 319,673 – – 30 September 2021 US$ 30 September 2020 US$ 60,103 – 57,887 117,990 211,962 9,061 47,811 268,834 58 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 15. Cash and bank balances Cash and bank balances Short-term deposit NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 30 September 2021 US$ 30 September 2020 US$ 1,795,951 11,683 1,807,634 2,316,539 47,627 2,364,166 The short-term deposit bears interest rate of ranging from 0% to 1.4% (2020: 0.95% to 1.40%) per annum, has a tenure of approximately 12 months (2020: 12 months) and is pledged to bank to secure credit facilities. Cash and bank balances and short-term deposits are denominated in the following currencies: United States dollar Singapore dollar Myanmar kyat 30 September 2021 US$ 30 September 2020 US$ 1,676,445 128,168 3,021 1,807,634 2,232,114 129,031 3,021 2,364,166 For the purpose of the statement of cash fl ows, cash and cash equivalents comprise the following at the end of the fi nancial year/period: Cash and bank balances Less: short-term deposits pledged 16. Non-current asset classifi ed as held for sale 30 September 2021 US$ 30 September 2020 US$ 1,807,634 (11,683) 1,795,951 2,364,166 (47,627) 2,316,539 As the result of the ongoing transaction to sell the Group’s 37.5% (2020:37.5%) equity interest in MFIL (Note 10), the entire carrying amount of the Group’s investment in MFIL has been reclassifi ed as non-current asset held for sale as at 30 September 2020. However, due to certain events and circumstances beyond the Group’s control in Myanmar, the sale could not be completed within one year. The Group remains committed to its plan to sell its investment in MFIL. As such, the Group continued classifying its investment in MFIL as non-current asset held for sale is appropriate as at 30 September 2021. Details of assets in non-current asset classifi ed as held-for-sale were as follows: Investment in joint venture – 37.5% equity interest in Myanmar Finance International Limited Less: Write down to fair value less cost to sell 30 September 2021 US$ 30 September 2020 US$ 2,552,467 (1,052,467) 1,500,000 2,552,467 – 2,552,467 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 59 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 16. Non-current asset classifi ed as held for sale (Continued) Non-current assets classifi ed as held for sale are measured at the lower of the asset’s previous carrying amount and fair value less costs to sell. Management estimates the fair value less cost to sell at US$1,500,000 based on 2 times the audited book value of MFIL at 30 September 2021, adjusted for a valuation discount of 25% due to uncertain political environment and ongoing COVID-19 pandemic in Myanmar during current fi nancial year. The valuation of the non-current asset held for sale is categorised into Level 3 of the fair value hierarchy. Therefore, the carrying amount of the non-current asset held for sale was written down to its fair value less cost to sell. Accordingly, write down of US$1,052,467 was recognised in profi t or loss for the current fi nancial year. 17. Share capital Issued and fully-paid share capital: Ordinary shares at the beginning of the fi nancial year/period Equity Instruments in issue At the beginning of the fi nancial year/period Exercise during the year Issuance during the fi nancial year At the end of the fi nancial year/period 2021 Ordinary shares 38,097,037 – 11,414 38,108,451 Warrants 14,128,387 (554,486) – 13,573,901 30 September 2021 US$ 30 September 2020 US$ 40,569,059 40,569,059 2020 Ordinary shares 38,097,037 – – 38,097,037 Warrants 14,128,387 – – 14,128,387 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share without restriction at meetings of the Company. During the fi nancial year, 554,486 warrants were exercise via a cashless conversion and resulting in issuance of 11,414 new ordinary shares. The new ordinary shares ranked pari passu in all respects with the existing ordinary shares of the Company and listed in the London Stock Exchange. All the shares have been admitted to trading on AIM under the ticker MIL. Warrants No new warrants were issued during the period. On 16 September 2016, the Company allotted 811,368 warrants pursuant to the Fourth Subscription. The Company had agreed that for every four Ordinary Shares subscribed for by a subscriber they would receive one warrant at nil cost. The warrants entitle the holder to subscribe for an Ordinary share at an exercise price of US$0.75. The warrants may be exercised during each 15 Business Day period commencing on the fi rst day of each Quarter during the Subscription Period (from 21 June 2015 to 21 June 2018). 60 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 17. Share capital (Continued) Warrants (Continued) On 22 May 2018, the Company amended the existing warrants to extend the exercise period for warrants that remained outstanding at 21 June 2018: a) b) the exercise period for the warrants was extended such that the warrants can be exercised until 31 December 2021, but at a higher exercise price of US$0.90; and in the extended period, warrant holders will have the option to exercise their warrants on a cashless basis in certain circumstances. All warrants have been admitted to trading on AIM under the ticker MILW. 18. Share option reserve Details of the Share Option Plan (the “Plan”) The Plan allows for the total number of shares issuable under share options to constitute a maximum of one tenth of the number of the total number of ordinary shares in issue (excluding shares held by the Company as treasury shares and shares issued to the Founders prior to Admission). Any future issuance of shares will give rise to the ability of the Remuneration Committee to award additional share options. Such share options will be granted with an exercise price set at a 10 per cent 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 fi rst anniversary and before the tenth anniversary of the grant (as may be determined by the Remuneration Committee in its absolute discretion) of the respective share options. Share options are not admitted to trading on AIM but application will be made for shares that are issued upon the exercise of the share options to be admitted to trading on AIM. As at 30 September 2021, there were 3,622,740 (2020: 3,622,740) share options available for issue under the Plan of which 2,590,527 (2020: 2,590,527) had been granted. These granted share options have a weighted average exercise price of US$1.214 (2020: US$1.214) per share and a weighted average contractual life of 5 years (2020: 5 years). The 3,622,740 share options available were created under the following series: Series/Date Occasion Series 1/June 2013 Series 2/ December 2014 Series 3/ July 2015 Series 4/ September 2016 Series 5/ June 2017 Admission Placing and Subscription Second Subscription Third Subscription Fourth Subscription Fifth Subscription Exercise price (USD) 1.100 1.155 1.265 1.430 1.298 Number 584,261 361,700 1,734,121 324,546 618,112 3,622,740 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 61 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 18. Share option reserve (Continued) The following share-based payment arrangements were in existence during the current fi nancial year/period: Option series share options Grant date Expiry date Number of Series 1 Series 1 Series 1 Series 2 Series 1 Series 2 Series 3 Series 3 Series 1 Series 2 Series 3 410,000 25,000 132,261 23,500 10,200 331,700 921,600 180,000 2,267 2,000 551,999 2,590,527 27 June 2013 9 December 2013 25 September 2014 2 June 2015 15 January 2016 15 January 2016 15 January 2016 28 June 2016 19 October 2016 19 October 2016 19 October 2016 26 June 2023 8 December 2023 24 September 2024 1 June 2025 14 January 2026 14 January 2026 14 January 2026 27 June 2026 18 October 2026 18 October 2026 18 October 2026 Exercise price (USD) 1.100 1.100 1.100 1.155 1.100 1.155 1.265 1.265 1.100 1.155 1.265 Fair value at grant date 153,487 19,015 62,937 14,365 6,235 193,562 490,120 125,863 1,363 1,149 289,752 1,357,848 Share options that are allocated to a Participant are subject to a three-year vesting period during which the rights to the share options will be transferred to the Participant in three equal annual instalments provided, save in certain circumstances, that they are still in employment with or engaged by the Company. Fair value of share options granted in the fi nancial year No share options were granted during the fi nancial year. Share options were priced using Black-Scholes option pricing model. Where relevant, the expected life used in the model was adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioural considerations. Expected volatility was based on historical share price volatility from the date of grant of the share options. The Black-Scholes option pricing model uses the following assumptions: Grant date share price (US$) Exercise price (US$) Expected volatility Option life Risk-free annual interest rates 28 June 2016 1.628 1.265 22.47% 10 years 1.46% Grant date 19 October 2016 19 October 2016 19 October 2016 1.388 1.100 22.25% 10 years 1.76% 1.388 1.155 22.25% 10 years 1.76% 1.388 1.265 22.25% 10 years 1.76% The Group recognised a net expense of Nil (2020: US$21,908) related to equity-settled share-based payment transactions during the fi nancial year/period. 62 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 18. Share option reserve (Continued) Movement in share option during the fi nancial year/period The following reconciles the share options outstanding at the start of the year/period and at the end of the year/ period. 2021 2020 Number Weighted average exercise price US$ Number Weighted average exercise price US$ Balance at beginning and end of fi nancial year/period 2,590,527 1.213 2,590,527 1.213 No share options were exercised during the fi nancial year/period. Movement in share option reserve during the fi nancial year/period Balance at start of the fi nancial year/period Share options expense Balance at end of fi nancial year/period 19. Other payables Accruals Other payables Other payables are denominated in the following currencies: Singapore dollar United States dollar British pound Euro Myanmar Kyat 30 September 2021 US$ 30 September 2020 US$ 1,358,913 – 1,358,913 1,337,005 21,908 1,358,913 30 September 2021 US$ 30 September 2020 US$ 106,961 190,551 297,512 113,294 190,759 304,053 30 September 2021 US$ 30 September 2020 US$ 52,018 243,524 1,970 – – 297,512 58,793 224,553 3,119 11,199 6,389 304,053 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 63 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 20. Signifi cant related party disclosures For the purposes of these fi nancial 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 signifi cant infl uence over the party in making fi nancial and operating decisions, or vice versa, or where the Group and the Company and the party are subject to common control or common signifi cant infl uence. Related parties may be individuals or other entities. During the current fi nancial period, in addition to the information disclosed elsewhere in these fi nancial statements, there was no other signifi cant transactions with related parties. Compensation of key management personnel During the current fi nancial year, no emoluments were paid by the Group to the Directors as an inducement to join or upon joining the Group or as compensation for loss of offi ce. The remuneration of Directors for the fi nancial year/period were as follows: Financial year ended 30 September 2021 Executive directors Maung Aung Htun Nicholas John Paris Non-executive directors Henrik Onne Bodenstab Rudolf Gildemeister Financial period from 1 April 2019 to 30 September 2020 Executive directors Maung Aung Htun Anthony Michael Dean Craig Robert Martin Nicholas John Paris Non-executive directors Christopher William Knight Henrik Onne Bodenstab Rudolf Gildemeister Directors’ fee US$ Short term employee benefi ts US$ Share option plan US$ – – 17,500 15,000 32,500 – – – 10,000 24,789 22,793 13,167 70,749 86,000 80,000 – – 166,000 192,823 267,209 26,333 73,333 – – – 559,698 – – – – – 5,115 5,115 1,201 – 1,201 1,136 – 13,768 Total US$ 86,000 80,000 17,500 15,000 198,500 197,938 272,324 27,534 83,333 25,990 23,929 13,167 644,215 21. Dividends The Directors of the Company do not recommend any dividend in respect of the fi nancial year ended 30 September 2021 (2020: Nil). 64 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 22. Financial risk management objectives and policies The Group has risk management policies that systematically manage the risks that could prevent it from achieving its objectives. These policies are intended to manage risks identifi ed 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 and are kept under review by the Directors. The Directors have identifi ed 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 fi nancial instruments consist of equity instrument at fair value through profi t or loss, other receivables (excluding prepayments), cash and cash equivalents and other payables. The main risks arising from the Group’s fi nancial instruments and the policies for managing each of these risks are summarised below. 22.1 Credit risk Credit risk is the risk of loss associated with the counterparty’s inability to fulfi l its obligations. The Group’s credit risk is primarily attributable to other receivables and cash and cash equivalents with the maximum exposure being the reported balance in the statement of fi nancial position. The Group has a nominal level of debtors and as such the Group believes that the credit risk to these is minimal. The Group holds available cash with a licensed established bank assigned with investment grade ratings of generally at least A-1+ by international credit-rating agencies. The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to credit risk. At the reporting date, the Group did not expect any credit losses from non-performance by these counterparties. 22.2 Market risks Foreign currency risk 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, the United States dollar. The main currencies giving rise to this risk are the Singapore Dollar, Euro, Myanmar Kyat and British Pound. 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. 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: Singapore Dollar Euro Myanmar Kyat British Pound Assets Liabilities 2021 US$ 128,168 – 3,021 – 131,189 2020 US$ 129,031 – 3,021 – 132,052 2021 US$ 52,018 – – 1,970 53,988 2020 US$ 58,793 11,199 6,389 3,119 79,500 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 65 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 22. Financial risk management objectives and policies (Continued) 22.2 Market risks (Continued) Foreign currency sensitivity analysis No sensitivity analysis was performed as the exposure to foreign currency risk is not signifi cant to the fi nancial statements. Interest rate risk The Group does not have any signifi cant exposure to interest rate risk as the Group does not have any signifi cant interest-bearing liabilities and its interest earning assets are producing relatively low yields. 22.3 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 fl ow planning to ensure that future cash requirements are anticipated and, where fi nancial 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. The Group’s exposure to liquidity risk is represented by its other payables, which are payable within one year from the reporting date. 22.4 Fair value of fi nancial assets and fi nancial liabilities The carrying amounts of the Group’s fi nancial assets and fi nancial liabilities approximate their respective fair values due to the short-term maturity of these fi nancial instruments except as disclosed in Note 11 to the fi nancial statements. 22.5 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. Management regards total equity attributable to owners of the parent as capital. The management constantly reviews the capital structure to ensure the Group is able to service any debt obligations and contracted overheads based on its operating cash fl ows. At present the Group has taken on no debt obligations, other than other payables, and therefore has no diffi culties in settling its debts as they fall due. The Group is not subjected to any externally imposed capital requirements for the fi nancial year ended 30 September 2021 and fi nancial period from 1 April 2019 to 30 September 2020. 66 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTES TO THE FINANCIAL STATEMENTS For the Financial Year ended 30 September 2021 23. Impact of COVID-19 and political crisis in Myanmar The Coronavirus (COVID-19) outbreak and the political crisis after the change of government on 1 February 2021 have created a high level of uncertainty to economic prospects. The situation continues to evolve with signifi cant level of uncertainty and the Group has seen an impact on its own operation. Regarding its investees it can be said that the last 9 months have been diffi cult for the microfi nance industry. A surge in COVID cases in June 2021 led to shortages of medical supplies and the country going into a hard lockdown. The “stay at home” directive severely reduced economic activity and mobility. The political crisis since 1 February 2021 has further impacted business sentiment and activity. Bank transfers and withdrawals have been restricted and USD has been hard to source. The impact of the lockdown and civil disobedience movement has made it complicated to complete the formality of the sale of Myanmar Finance International Ltd (“MFIL”). The purchaser has therefore agreed to extend the offer to early 2022 (Note 10). The Group intends to complete the sale as soon as it is practical. Regarding the Group’s other investment in AP Towers Holdings Pte. Ltd. (“AP Towers”), it is to be noted that contrary to other industries, the telecommunication sector has not suffered greatly due to the outbreak of COVID-19. But the Myanmar telecommunication tower sector, following a period of rapid growth, has continued to slow in the last 18 months in terms of both new towers and new co-locations. Mobile network services in Myanmar have been signifi cantly disrupted since February 2021, primarily as a result of the suspension and restriction of data services imposed by the regulator. Whilst the operating environment has been very challenging, AP Towers has been able to continue to provide a reliable service with high up times, thereby contributing the continued availability of mobile phone services to the population of Myanmar. 24. Authorisation of fi nancial statements The fi nancial statements of the Group for the fi nancial year ended 30 September 2021 were approved by the Board of Directors on 29 November 2021. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 67 NOTICE OF ANNUAL GENERAL MEETING Myanmar Investments International Limited (Company Number 1774652) THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to what action you should take, you are recommended to seek your own fi nancial advice from your stockbroker or other independent adviser. If you have recently sold or transferred all of your shares in Myanmar Investments International Limited, please forward this document, together with the accompanying documents, as soon as possible either to the purchaser or transferee or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares. Due to current restrictions on the way in which we all conduct business and in particular on public gatherings related to the Covid-19 outbreak and the restrictions in travelling to Myanmar, the Directors have decided to facilitate holding the AGM remotely, while still endeavouring to create a forum for the conduct of the formal business set out in the notice of the Annual General Meeting and providing an opportunity for shareholders to raise questions of the Directors. As such, notice is hereby given that the 2021 Annual General Meeting of Myanmar Investments International Limited (the “Company”) will be held as a virtual meeting at 2.30 p.m. (Myanmar time) on 11  March  2022 for the purpose of considering and if thought fi t, passing the resolutions below (the “AGM”). The Company will offer shareholders the option to participate in the meeting remotely via a Zoom conference call that can be accessed from any computer with internet access. This facility will be used to respond to questions and for the formal business as set out in the notice of the AGM to be conducted. Questions should be submitted via email to ‘enquiries@myanmarinvestments.com’ before 1 March 2022. Any questions submitted will be answered during the AGM. Shareholders will not be able to ask additional questions during the meeting. Shareholders will not be able to vote at the meeting if they attend via the Zoom conference call. The Board therefore encourages shareholders to submit proxy forms and to appoint the Chairman of the meeting as their proxy with their voting instructions. As such, please fi ll in the proxy form sent to you with this document and return it to our registrars as soon as possible. They must receive it by 8am (UK time) 9 March 2022. (or, in circumstances where the AGM is adjourned to a date later than 48 hours after the time specifi ed for the AGM, 48 hours before the time of the adjourned meeting, excluding any UK non-working days). Members who want to attend the virtual AGM by Zoom conference have to mark this on the proxy form and are requested to provide an email address which the company can use to circulate the dial in information for the Zoom conference. Ordinary Resolutions Each of the following resolutions will be proposed as an ordinary resolution: 1. 2. 3. 4. To receive and adopt the Company’s annual accounts for the fi nancial year ended 30  September 2021 together with the directors’ report and auditors’ report on those accounts. To reappoint BDO LLP as the auditors of the Company to hold offi ce from the conclusion of the AGM to the conclusion of the next meeting at which the annual accounts are laid before the Company. To authorise the directors to determine the remuneration of BDO LLP as auditors of the Company. To reappoint Henrik Bodenstab, who retires by rotation as required by Article 8.5 of the Articles of Association of the Company, as a non-executive director of the Company. 68 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 NOTICE OF ANNUAL GENERAL MEETING Myanmar Investments International Limited (Company Number 1774652) 5. To delete Article 7.22 of the Articles of Association of the Company and to replace it with the following new article 7.22: “Subject to the provisions of the Act, the Company shall in each year hold a meeting of shareholders as its Annual General Meeting in addition to any other meetings in that year.” By Order of the Board OCORIAN Corporate Services (BVI) Limited Secretary 29 November 2021 Registered Offi ce: Jayla Place Wickhams Cay 1 Road Town Tortola VG1110 British Virgin Islands MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 69 NOTICE OF ANNUAL GENERAL MEETING Myanmar Investments International Limited (Company Number 1774652) NOTES 1. 2. 3. 4. 5. 6. 7. 8. 9. Resolutions 1 to 5 will be passed if approved by more than fi fty per cent of the votes of those members entitled to vote and voting on the resolutions. Due to restrictions related to the Covid-19 outbreak, the meeting will be held remotely via a Zoom conference call. If you wish to use this facility, please note your intention on the proxy form and you will be provided with the necessary dial in details in due course. Please note that shareholders will not be able to use this facility to actively participate in the meeting by voting on the resolutions or asking questions. All proxy appointments should be received by no later than 8am (UK time) 9 March 2022. CREST members are strongly recommended to vote electronically through the CREST electronic proxy appointment service as your vote will automatically be counted. Shareholders are encouraged to submit any question that you would like to be answered at the meeting by emailing such questions to enquiries@myanmarinvestments.com, so that it is received by no later than 12 midnight on 28 February 2022. The Company will endeavour to respond to all questions received from shareholders at the AGM or within seven days following the AGM. Voting at the meeting will be conducted by means of a poll on all resolutions, with each shareholder having one vote for each share held, thereby allowing all those proxy votes submitted and received prior to the meeting to be counted. The form of proxy must be signed by the appointor or his attorney duly authorised in writing. In the case of joint holders, the signature of only one of the joint holders is required on the form of proxy. If the appointor is a corporation, the form of proxy should be signed on its behalf by an attorney or duly authorised offi cer or executed as a deed or executed under common seal. Forms of Direction from holders of depositary interests must be deposited at the offi ce of the Depositary, Link Market Services Trustees Limited, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, United Kingdom not later than 8am (UK time) 8 March 2022. For holders of ordinary shares, to appoint a proxy you may use the form of proxy enclosed with this notice of AGM. Please carefully read the instructions on how to complete the form of proxy. To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certifi ed or offi ce copy of the same, must be deposited by 8am (UK time) 9 March 2022. with the Company’s registrars, Link Group,, PXS1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, United Kingdom. The Company, pursuant to regulation 41 of the Uncertifi cated Securities Regulations 2001, specifi es that only those shareholders registered in the register of members of the Company by close of business on 9 March 2022., or, if the meeting is adjourned, 48 hours before the time fi xed for the adjourned meeting (excluding any part of a day that is not a business day), 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. As at the close of business on the date immediately preceding this notice the Company’s issued share capital comprised 38,108,451 ordinary shares. Each ordinary share carried the right to one vote at the AGM and, therefore, the total number of voting rights in the Company as at the close of business immediately preceding this notice is 38,108,451. 10. CREST members who wish to appoint the Chairman of the AGM through the CREST Electronic Proxy Appointment Service may do so for the AGM and any adjournment(s) thereof by following the procedures described in the CREST manual. All messages relating to the appointment of a proxy or an instruction to a previously-appointed proxy, which are to be transmitted through CREST, must be received by Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, United Kingdom (Crest ID RA10) no later than 8am (UK time) 9 March 2022, or, if the meeting is adjourned, 48 hours before the time fi xed for the adjourned meeting (excluding any part of a day that is not a business day). Members can only cast their votes by appointing the Chairman of the AGM to act as their proxy. If a shareholder appoints someone else as their proxy, that proxy will not be able to attend the AGM in person or cast the shareholder’s vote. 11. In order to revoke a proxy instruction, you will need to inform the Company by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to the Registrars, in the case of a member which is a company, the revocation notice must be executed in accordance with note 4 above. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certifi ed copy of such power or authority) must be included with the revocation notice must be received by Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, United Kingdom not less than 48 hours (excluding any part of a day that is not a business day) before the time fi xed for the holding of the AGM or any adjourned meeting. If you attempt to revoke your proxy appointment but the revocation is received after the time specifi ed then, subject to the paragraph directly below, your proxy appointment will remain valid. 70 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 DIRECTORS AND ADVISERS Company data Website: Email: Listed on the AIM market of the London Stock Exchange: www.myanmarinvestments.com enquiries@myanmarinvestments.com Ticker symbol for the Ordinary Shares MIL The Company is incorporated in the British Virgin Islands with registration number 1774652 Directors Henrik Onne Bodenstab, Independent Non-Executive Chairman Maung Aung Htun, Deputy Chairman Rudolf Gildemeister, Independent Non-Executive Director Nicholas John Paris, Managing Director Myanmar Offi ce Offi ce@36th No. 129, 36th Street, Middle block, Words 3, Kyauktada Township Yangon, Myanmar Telephone: +95 1 387 947 Broker fi nnCap Ltd 60 New Broad Street London EC2M 1JJ 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 OCORIAN Corporate Services (BVI) Limited Jayla Place Wickhams Cay I Road Town Tortola British Virgin Islands Registrars Link Market Services (Guernsey) Limited Mont Crevelt House Bulwer Avenue St. Sampson Guernsey GY2 4LH Registered Offi ce Jayla Place Wickhams Cay I Road Town Tortola VG1110 British Virgin Islands Nominated Adviser Grant Thornton UK LLP 30 Finsbury Square London EC2A 1AG 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 TownTortola British Virgin Islands Independent Auditor BDO LLP Public Accountants and Chartered Accountants 600 North Bridge Road #23-01 Parkview Square Singapore 188778 Partner-in-charge: Ng Kian Hui (Appointed since the fi nancial period ended 30th September 2021) Depository Link Market Services Trustees Limited 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL United Kingdom MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2021 71 

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