Myanmar Investments International Limited
Annual Report 2023

Plain-text annual report

Annual Report 2023 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. However, 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. The onset of the COVID Pandemic in early 2020 and the instauration of a state of emergency under military rule in February 2021 have delayed and complicated progress. Since then, the Directors have taken action to implement this strategy: • • • • We sold our investment in Medicare International Health & Beauty (“Medicare”) for US$1 million to our main joint venture partner in November 2019. The transaction was completed in December 2019. We are in the process of selling our investment in Myanmar Finance International Limited (“MFIL”). We have continued to streamline our operations and as a result reduced our overheads. As part of the cost reduction process, we have prepared a proposal to de-list the Company and this will be despatched to Shareholders in due course for their consideration. If Shareholders approve it, the annual cost savings will be considerable and will help to reduce the Company’s cash burn rate. The investment in Apollo Towers, which was exchanged for shares in 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 20 Chairman’s Statement on Corporate Governance 29 Directors’ Report on Remuneration Issues 30 Statement of Directors’ Responsibilities 31 Key Audit Matters 32 Financial Contents Notice of Annual General Meeting The Myanmar Kyat official exchange rate was MMK2,100 to US$1.0 as at 31 March 2023 References to “today” are to 9 June 2023 being the date of printing of this document The Company is currently invested in two businesses: AP Towers / Apollo Towers • The Company invested US$21 million in Apollo Towers. • • • • The share exchange with AP Towers was completed in January 2020. Under the share exchange, the Company transferred its indirect interest of 9.1 per cent of Apollo Towers for an indirect interest of 4.1 per cent of AP Towers. The share exchange effectively brought Apollo Towers and Pan Asia Towers, another Myanmar independent tower company, under the common ownership of AP Towers. AP Towers has a portfolio of 3,234 towers hosting 6,706 tenants and a co-location ratio (also known as “Lease- up-Rate” or “LUR”) of 2.07x which is stable relative to 30 September 2021. Based on AP Towers actual results for the 6 months ended 31 March 2023, AP Towers annualised adjusted “run rate” revenue has decreased to US$91.4 million. This represents a decline of 10.8 per cent compared with the numbers as of 30 September 2021. The annualised adjusted “run rate” EBITDA has decreased to US$76.2million. This represents a decline of 11.3 per cent compared with the numbers as of 30 September 2021. Going forward, AP Towers will, when market conditions allow, be looking to increase the number of tenancies either from new “Build to Suit” towers or from adding co-locations to its existing towers. 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. The impact from both the Covid-19 pandemic and the political crisis in Myanmar has severely affected all microfinance companies. Not only has the level of non-performing loans in the sector risen sharply but more critically the source of funds from foreign development finance institutions has all but dried up. Against this deteriorating background, over the last two years MFIL has pro-actively reduced its loan book, negotiated to repay all its foreign and local debts and materially reduced its operating expenses. As at 31 March 2023, MFIL’s gross loan book was MMK11.05 billion, a reduction from MMK16.5 billion at the beginning of this financial period (MMK14.0 billion at 31 March 2022 and MMK12.85 billion at 30 September 2022) with its Portfolio at Risk over 30 days ratio (“PAR 30+”) at 38.4 per cent. MFIL has agreed a debt repayment plan with all its lenders. For foreign lenders, this will lead to a significant haircut in liabilities that will crystalize as soon as all foreign lenders receive their agreed repayments. Regulatory approval has been received and the company will soon start processing the remittances. The offer for 100 per cent of MFIL from Thitikorn Plc, a Thai finance company, has been extended to the end of August 2023 and is subject to, inter alia, local regulatory approval. 1 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023CHAIRMEN’S LETTER Even with the recent setbacks, we remain steadfast in our commitment to pursue an effective course for the company’s future, with the primary goal of optimising value for our shareholders. Dear fellow shareholder MYANMAR The political crisis in Myanmar is settling into a prolonged conflict. A general election in 2023, if held, will hint as to the medium-term prospect for the country. Whatever happens next, the Myanmar people are resourceful and resilient. For over 70 years they have stoically survived repeated political crises. At one level, there appears to be little change since our last report. The military continues to take aggressive action in the north, northeast and west of the country against pro-democracy and ethnic groups and is effectively not in control of a large part of the country, while in the urban areas life has returned to a level of normalcy. The regime has started laying the groundwork for elections, planned for 2023, by passing a new party registration law and updating the voter list. However, with most of the country engulfed in anti-military activities; most citizens opposed to the exercise; and western governments indicating that the result is unlikely to be accepted, any regime-initiated vote will be contentious and may not bring peace. When an election date is finally announced, there could be an escalation in violence, especially in the urban areas. Strategically, the regime has begun to court international observers. In November 2022, the SAC granted amnesty to over 5,000 prisoners. Among those released was a small group of NLD politicians and a few high-profile foreigners. In May 2023, 2,153 more were released and 31 death sentences commuted following a visit from Ban Ki Moon, the former Secretary General of the United Nations. These moves are believed to be part of a choreographed relaxation to blunt international criticism and pave the way for a general election. Should an election take place, even if it is not necessarily internationally accepted, it could, like the 2010 election (which was also initially widely condemned), herald the beginning of a change. Whether or not this is the “off ramp” that allows the military to de- escalate will largely depend on who the military nominates as the next president. In the year to September 2022, Myanmar’s economy was weighed down by both external global weakness and by domestic instability. Inflation, which peaked at 16 per cent, stretched household income and hampered access to food. In spite of this, growth recovered to 2 per cent. Since then, the economy has shown signs of further stabilization, and modest levels of growth will persist, with the World Bank forecasting GDP growth of 3 per cent for the year ending September 2023. Although this still means that GDP per capita will be 13 per cent lower than in 2019. Over the coming year, modest growth is expected in the services sector as inflationary pressure eases, but domestic consumption will remain weak. Industrial sector growth is forecast to slow as garment and food processing industries face slower export demand but with input prices softening the agriculture sector could rebound. 2 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023A bright spot is a noticeable increase in domestic tourism, but western tourist arrivals are still well below pre- pandemic level. The currency has also stabilized at an unofficial rate of MMK2,850 to US$1.0 but remains weaker than the official central bank reference rate of MMK2,100 to US$1.0. However, the actual availability of foreign currencies in the banking system is limited and the central bank continues to severely restrict foreign remittances. As the current account deficit, currently minus 1.8 per cent of GDP, continues to widen it is unlikely that the currency will appreciate any time soon. These modest signs of stabilization have increased optimism, and this is reflected in the rise in the Manufacturing PMI to 57.4, clocking three straight months of expansion and a 28 per cent increase compared to our last report as of 30 September 2022 when it was 44.6. However, this positive news must be tempered by the continuing high level of inflation of around 10 per cent and a severe crisis in the supply of electricity and fuel. Most parts of the country face daily power shortages and regular scheduled power cuts. Although electricity is made available to factories, since April, Yangon residents have faced over 8 hours of electricity cuts every day. The cost of fuel as well as the lack of supply has made it more difficult for households and small shops to run generators and has increased travelling expenses and travel times as fewer buses are running. A UNDP report in February 2023 indicated that a quarter of the people living in eight of Yangon’s poorest townships have often not had any income for the last 12 months. This is forcing people to adopt coping strategies that threaten their health and wellbeing, including cutting down on how much they eat and consuming less nutritious food, selling assets, such as vehicles, and forgoing medical treatment. This is exacerbated by a chronically weak healthcare system crippled by medical staff who protested against the coup and are now being targeted by the military and forced out of the formal system. For foreign businesses or local companies that have international transactions, FATF’s blacklisting of Myanmar in October 2022 is beginning to have an impact, with many banks experiencing difficulties with US$ remittances. This is exacerbating the shortage of hard currency in Myanmar and forcing companies and individuals to revert to relying on the informal Hundi system for remittance. In summary, there is now a level of weary stability at a lower level of economic activity with the population stoically bearing the brunt of the conflict with grim determination to survive. An election in 2023 would determine how long this continues. CHAIRMEN’S LETTER REPORTING PERIOD The State Administration Council (SAC) announced in August 2021 that Myanmar’s fiscal year will be re- changed from 1 April to 31 March starting from the 2022 – 2023 financial year. Our investee companies (MFIL and AP Towers) have decided to change their fiscal years accordingly and the Board has decided to follow this decision. Therefore, we have issued interim accounts for the periods from 1 October 2021 to 31 March 2022 and from 1 April 2022 to 30 September 2022 which were both published within 3 months of the period end. Therefore, this full audited set of financial statements comprises the financial period from 1 October 2021 to 31 March 2023. CHANGE IN STRATEGY AND POSSIBLE CANCELLATION OF ADMISSION OF THE COMPANY’S SHARES FROM AIM At the Annual General Meeting (“AGM”) in 2019 shareholders approved a resolution to amend the investment objective and policies of the Company as follows: “The Company will seek to realise the Company’s investments in an orderly manner, such realisations to be effected at such times, on such terms and in such manner as the Directors (in their absolute discretion) may determine. Following such realisations, the Company will make periodic returns of surplus capital to Shareholders on such terms and in such manner as the Directors (in their absolute discretion) may determine. The Company shall not make any new investments in projects to which it is not already committed. However, this will not preclude the Directors (in their absolute discretion) from: (a) authorising the expenditure of such capital as is necessary to: (i) complete arrangements pertaining to the Company’s existing investments; or (ii) carry out any activities that the Directors (in their absolute discretion) deem appropriate to ensure the salability of any existing investment; or (b) entering into any contract or other arrangement with any third party to realise all or any part of the Company’s existing investments. Following the disposal of all of the Company’s existing investments, the Directors intend to put a winding up proposal to the Shareholders.” 3 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023CHAIRMEN’S LETTER Important steps have been made to implement this strategy: • • • We sold our investment in Medicare International Health & Beauty (“Medicare”) for US$1 million to our main joint venture partner in November 2019. The transaction was completed in December 2019. This represented a loss of US$1.1 million on the cost of the investment which largely reflected our share of the operating losses from opening a chain of new stores in Myanmar. We are in the process of selling our investment in Myanmar Finance International Limited (“MFIL”). On 1 April 2020, we announced that we accepted an offer to sell our shareholding in MFIL to a Thai based company subject to the purchaser’s AGM approving the purchase, lender’s consent, and Myanmar regulatory approval. The minimum consideration for this transaction will be calculated based on a pre-agreed formula of two times the audited book value of MFIL at closing once these conditions have been satisfied. Subsequent to that announcement, the purchaser’s AGM on 23 April 2020 approved the transaction and the lenders to MFIL have given their consent. However, due to the outbreak of Covid-19 and the change of government on 1 February 2021, the transaction has not yet been closed. On 18 April 2023, the parties signed an extension of the binding offer until 31 August 2023. We have continued to streamline our operations and as a result, reduced our overheads. As part of the cost reduction process, we closed our office in Yangon and removed most of our staff costs from the operation as of 31 March 2020. The core cash- based overheads for the 12-month period from 1 April 2022 to 31 March 2023 are 24.3 per cent lower than for the financial period from 1 October 2020 to 30 September 2021 (excluding transaction costs and costs for preparation of de-listing the Company from the London Stock Exchange). We are now holding approximately US$0.9 million of cash. We also intend to streamline our operations further when we sell MFIL as by then we will only have one investment left. Due to the political situation, it is unclear how fast our investments can be monetized. The Directors have concluded that due to the low level of trading in MIL Shares, the ongoing cost of being admitted to trading on AIM outweigh the benefits. We have incurred costs of US$113,000 in this accounting period preparing a proposal to cancel admission of the Company’s shares from trading on AIM and a circular will be dispatched to Shareholders in due course for their consideration. If Shareholders approve the resolutions proposed in the circular, the annual cost savings will be considerable and will help to reduce the Company’s cash burn rate. CORPORATE GOVERNANCE The Company seeks to uphold the fundamental principles of good corporate governance and has adopted the Quoted Companies Alliance 2018 Corporate Governance Code. The Chairman’s Statement on Corporate Governance provides greater detail on how the Board itself operates as well as the steps taken to ensure that its staff adhere to principles such as those set out in the UK anti-bribery legislation. On behalf of the Board, we should like to take this opportunity to thank a number of our key stakeholders: our remaining staff for their professionalism and commitment; our business partners for all of their advice and contributions; and our shareholders for their continued support. HENRIK BODENSTAB Chairman 9 June 2023 AUNG HTUN Deputy Chairman 9 June 2023 4 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023EXECUTIVE DIRECTOR’S REVIEW APT’s results have stabilised, and we anticipate that the completion of MFIL’s restructuring in 2024 will establish a solid basis for the rejuvenation of its business operations. Our operating costs have been reduced over the last 18 months. Business Review During the past 18 months our net asset value (“NAV”) has decreased by 66.0 per cent and was US$8.7 million as at 31 March 2023. This change is mainly attributable to the decrease in the assessed value of the Company’s investments in AP Towers (down US$14.7 million to US$7.5 million) and MFIL (down US$1.1 million to US$0.4 million) and the operating expenses for the reporting period (US$ 1.0 million). During the past 18 months our core operating expenses were significantly reduced to US$0.8 million compared with US$1.1 million (excluding transaction costs and the costs for preparing for the cancellation of admission of the Company’s shares from AIM) for the comparable 18-month period 1 April 2020 to 30 September 2021. Overall, both AP Towers and MFIL were disrupted by the impact of Covid-19 and the takeover of the military on 1 February 2021 but the consequences for MFIL were more serious: AP Towers: • • the Company transferred its interest in Apollo Towers for an interest in AP Towers in January 2020. The share exchange effectively brought Apollo Towers and Pan Asia Towers, another ITC, under the common ownership of AP Towers which now manages one of the largest networks of towers in Myanmar. Based on AP Towers’ actual results for the 6 months ended 31 March 2023, AP Towers annualised adjusted “run rate” revenue decreased to US$91.4 million. This represents a decline of 10.8 per cent compared with the numbers as of 30 September 2021. The annualised adjusted “run rate” EBITDA has decreased to US$76.2 million. This represents a decline of 11.3 per cent compared with the numbers as of 30 September 2021; and MFIL: • • • • Against the deteriorating background due to Covid-19 and the political instability, over the last two years MFIL has pro-actively reduced its loan book, negotiated to repay all of its foreign and local debts and materially reduced its operating expenses. As at year end, Portfolio at Risk over 30 days (“PAR 30+”) was 38.4 per cent. In 2024, MFIL will be debt free and operating at a lower cost base. It will be a strong, albeit small, and profitable operation that has no liabilities. The offer for 100 per cent of MFIL from Thitikorn Plc, a Thai finance company, has been extended to the end of August 2023 and is subject to, inter alia, local regulatory approval. As soon as logistically practical, further discussions with the purchaser will be necessary to establish a timeline to close the sale of MFIL. It has been 38 months since the transaction was negotiated and much has changed in the country. It may be necessary to amend the transaction terms. In both cases, Myanmar Investments’ team have worked closely with these businesses to provide strategic advice as well as hands-on local knowledge. Financial Review NET ASSET VALUE The Directors assess the Group’s NAV attributable to the shareholders of the Company as at 31 March 2023 to be US$8.7 million, a decrease of 66.0 per cent compared with the Group’s NAV as at 30 September 2021. This represents US$0.23 per share, based on the number of shares in issue at the period-end. This change principally reflects the net changes in the Directors’ assessment of the values of the Company’s investments, described in more detail below, less the Group’s running costs for the period. 5 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023EXECUTIVE DIRECTOR’S REVIEW As at 31 March 2023 the Group’s NAV consisted of: Valuation discount • • an investment in AP Towers, the telecommunication tower business, of US$7.5 million, excluding the non-controlling interests, determined using a comparable EBITDA multiple methodology; an investment in MFIL, the microfinance business, of US$0.4 million, determined using a price to book value methodology; and • cash and other net assets of US$0.8 million. AP TOWERS As at 30 September 2021, the Directors had assessed that the Company’s attributable shareholding in AP Towers, excluding the non-controlling interests attributable to the minority shareholders of MIL 4, to be worth US$29.7 million, using a comparable EBITDA multiple methodology. Applying the same methodology that we used as at 30 September 2021 with updated trading and comparable data, the value of this investment as at 31 March 2023 would be US$10.0 million, a decrease of US$19.7 million. This valuation of AP Towers represents an unrealised loss of US$10.8 million over the cost of the investment and an IRR since the initial investment in July 2015 of -9.1 per cent. MFIL As at 30 September 2021, the Directors had assessed the value of the Group’s investment in MFIL to be US$2.0 million using the price to book value methodology. Applying the same methodology that we used as at 30 September 2021 the Directors have assessed the value of this investment as at 31 March 2023 to be US$0.5 million, a decrease of US$1.5 million. This value of MFIL represents a loss of US$2.2 million over the cost of the investment and an IRR since the initial investment in April 2014 of -21.4 per cent. The change of government has increased the uncertainties and risks of investing in Myanmar which is compounded by the current paucity of information. These risks could include, but are not limited to: • • • • • • • • reduced investor interest in a trade sale of assets or in an IPO; increased domestic regulatory uncertainties; a material and sustained decline in economic activity impacting investment and consumer demand; severe reduction in liquidity in the financial system; a volatile foreign exchange rate; prolonged political crisis paralyzing the country’s administrative capacity; increases in the number of demonstrations, strikes and violence; potential broader international sanctions. Given the uncertainties and risks in Myanmar the Directors have decided to apply a valuation discount of 25 per cent on the company’s entire portfolio as at 31 March 2023 which is the same rate applied as at 30 September 2021. This valuation discount is reviewed regularly. The impact on MIL’s carrying value of the investments after applying the valuation discount are: AP Towers: This discount reduces the value of this investment as at 31 March 2023 to US$7.5 million, which is US$14.8 million lower than at September 2021. This valuation of AP Towers represents a loss of US$13.3 million over the cost of the investment and an IRR since the initial investment in July 2015 of -12.5 per cent. MFIL: This discount reduces the value of this investment as at 31 March 2023 to US$0.4 million, which is US$1.1 million lower than at September 2021. This valuation of MFIL represents a loss of US$2.3 million over the cost of the investment and an IRR since the initial investment in April 2014 of -24.8 per cent. 6 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023SUMMARY OF NAV The NAV attributable to the shareholders of the Company in the attached audited financial statements does not differ from the NAV determined by the Directors as the investment in MFIL has been classified as a “non- current asset classified as held for sale” which requires the valuation of MFIL at “fair value” and not “at equity”. In accordance with the Group’s Valuation Policy, the Directors’ valuation for MFIL is determined by reference to the International Private Equity and Venture Capital Guidelines. Outside of our overheads the most significant items were: • • Our share of the ‘fair value loss on investment at fair value through profit or loss’ for the investment in AP Towers of US$14.8 million; ‘Fair value loss on investment at fair value through profit or loss’ for the investment in MFIL of US$1.1 million. DIVIDENDS Based on the above the Directors do not recommend the payment of a dividend at this time. WORKING CAPITAL Based as of the date of this report, the Group has adequate financial resources to cover its working capital needs for the next 12 months. However, by the end of that period our cash balance will be significantly reduced, and the Group would need to raise further finance in order to continue its operations. NICK PARIS Managing Director 9 June 2023 FINANCIAL RESULTS For the financial period from 1 October 2021 to 31 March 2023, the Group’s audited loss after tax attributable to the shareholders of the Company was US$16.9 million. The Group’s audited loss after tax attributable to the shareholders of the Company for the financial year to 30 September 2021 was US$7.8 million. This is a significant deterioration on the last period’s result. The loss per share is US cents 44.29 compared with a loss per share of US cents 20.49 for the year to 30 September 2021 and primarily relates to adjusting the valuation of the investments down. We are steadily reducing our overheads whilst we try to exit from our two remaining investments. As part of the cost reduction process, we had closed our office in Yangon and removed most of our staff costs from the operation as of 31 March 2020. The annualised core cash- based overheads (including the costs of being a quoted company but excluding transaction costs and expenses for the cancellation of admission to trading on AIM project) based on the 6-month period from 1 October 2022 to 31 March 2023 is US$0.4 million. Based on the 6-month period from 1 April 2021 to 30 September 2021 this amount was US$0.7 million. 7 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 transferred 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 2023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 36 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. to US$ has become increasingly Access challenging over the last 12 months. The Company is working with its customers, lenders and the regulator to manage this situation. As at 31 March 2023, AP Towers had an aggregated portfolio of 3,234 towers, 6,706 tenants and a co-location ratio (also known as “Lease-up- Rate” or “LUR”) of 2.07x which is stable relative to 30 September 2021. Based on AP Towers actual results for the 6 months ended 31 March 2023, AP Towers annualised adjusted “run rate” revenue has decreased to US$91.4 million. This represents a decline of 10.8 per cent compared with the numbers as of 30 September 2021. The annualised adjusted “run rate” EBITDA has decrease to US$76.2 million. This represents a decline of 11.3 per cent compared with the numbers as of 30 September 2021. Going forward, AP Towers will, when market conditions allow, be looking to increase the number of tenancies either from new “Build to Suit” towers or from adding co-locations to its existing towers. AP Towers’ net debt was US$379.8 million as at the end of March 2023, a decrease of US$ 16.4 million since 30 September 2021. 9 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023BUSINESS REVIEW MYANMAR FINANCE INTERNATIONAL LIMITED (“MFIL”) BACKGROUND MFIL is a well-established microfinance company that has a positive impact on the lives and economic well-being of its clients. MFIL was established as a microfinance joint venture in September 2014 between MIL and Myanmar Finance Company Limited (“MFCL”) to build on MFCL’s original microfinance operation. 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, MFCL 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. 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 2023Update • • • • The impact from both the Covid-19 pandemic and the political crisis in Myanmar has severely affected all microfinance companies. Not only has the level of non-performing loans in the sector risen sharply but more critically the source of funds from foreign development finance institutions has all but dried up. According to a UNDP report in February 2023, a quarter of the people living in eight of Yangon’s poorest townships have often not had any income in the last 12 months. MFIL’s borrowers have not been immune to the continuing economic and political crisis, but most continue to demonstrate a strong willingness to repay even though they have significantly reduced capability. Against this deteriorating background, over the last two years MFIL has pro-actively reduced its loan book, negotiated to repay all its foreign and local debts and materially reduced its operating expenses. As at 31 March 2023, MFIL’s gross loan book was MMK11.05 billion a reduction from MMK16.5 billion at the beginning of this financial period (MMK14.0 billion at 31 March 2022 and MMK12.85 billion at 30 September 2022) with it’s Portfolio at Risk over 30 days ratio (“PAR 30+”) at 38.4 per cent. • • • • • • • Approximately a third of the loan book is fully performing, 40 per cent partially performing with most clients paying partially or regularly but not on schedule, and 30 per cent nonperforming and fully provisioned. Demand for loans remains high and competition is moderate as all microfinance companies grapple with legacy bad / underperforming loans and lack of new funding. More positively, we are now seeing that new loans given over that last 6 months are performing in line with pre pandemic ratios. Anecdotal comments from other microfinance companies also confirms this trend. The company has shifted towards servicing small traders and SME clients who now form 75 per cent of the good loan book. As part of this pivot MFI is revising its lending process and has reduced branches from 18 to 10 with a plan to reduce this further by year end. This will mean that MFIL will be focusing on building a business based on a smaller number of sustainable clients and with a larger number of legacy clients being phased out or written off over time. MFIL has agreed a debt repayment plan with all its lenders. For foreign lenders this will lead to a significant haircut in liabilities that will crystalize as soon as all foreign lenders receive their agreed repayments. Regulatory approval has been received and the company will soon start processing the remittances. For domestic lenders MFIL will have fully repaid all outstanding debts by the end of 2023. Once repayments to foreign lenders is complete, MFIL expects its shareholders funds to increase in line with the MMK3.3 billion haircut prior to any additional loan loss provisions that may be made. In 2024, MFIL will then be debt free and operating at a lower cost base. It will be a strong, albeit small, and profitable operation that has no liabilities. This is a firm foundation on which to start to rebuild the business. The offer for 100 per cent of MFIL from Thitikorn Plc, a Thai finance company, has been extended to the end of August 2023 and is subject to, inter alia, local regulatory approval. 11 MYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023 BOARD OF DIRECTORS Henrik Onne Bodenstab Independent Non-Executive Chairman Over the past 25 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. Maung Aung Htun Deputy Chairman 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 Syn Pitarn Holdings, 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 2023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 AMA Strategic Pte Ltd, a regional corporate finance and strategy advisory boutique with offices in Singapore and Yangon. 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 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 2023The Directors present their annual report and audited consolidated financial statements of the Group for the financial period from 1 October 2021 to 31 March 2023. 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 a wholly owned subsidiary in Singapore, MIL Management Pte Ltd. Its own wholly owned subsidiary in Myanmar, MIL Management Co., Ltd. was liquidated in July 2022. As of 31 March 2023, 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., had been initiated in 2020 and was completed in July 2022. Fund raisings During the financial period from 1 October 2021 to 31 March 2023, no ordinary shares were issued. The warrant instrument expired on 31 December 2021. All unexercised warrants lapsed after that date and admission of the remaining warrants to trading on AIM was cancelled on 4 January 2022. 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 saleability 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.” 14 DIRECTORS’REPORTMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 warrant instrument expired on 31 December 2021 and all unexercised warrants lapsed after that date. Results and dividends The Directors assess the Group’s net asset value attributable to the shareholders of the Company as at 31 March 2023 to be US$8.7 million (30 September 2021: US$25.6 million), a 66.0 per cent decrease over the financial period. NAV per share as of 31 March 2023 was US$0.23 per share (30 September 2021: US$0.67 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$14.8 million to US$7.5 million) and MFIL (down US$1.1 million to US$0.4 million) and the operating expenses for the financial period (US$1.0 million). For the financial period from 1 October 2021 to 31 March 2023, the Group’s audited loss after tax attributable to the shareholders of the Company was US$16.9 million. The Group’s audited loss after tax attributable to the shareholders of the Company for the financial year to 30 September 2021 was US$7.8 million. The results for the financial period from 1 October 2021 to 31 March 2023 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 period from 1 October 2021 to 31 March 2023. 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 period 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, Aung Htun 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. 15 DIRECTORS’REPORTMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023Directors’ Shareholdings There are no requirements in place pursuant to the Company’s articles of association for the Directors to own shares in the Company. At the date of signing this report, the Directors’ interests in the equity of the Company were as follows: Director Ordinary Shares Share Options Henrik Bodenstab Aung Htun Rudolf Gildemeister Nicholas Paris1 585,849 677,000 - - 35,000 899,626 - - 1. Nicholas Paris was an unpaid director until 8 April 2023 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. 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$1.10. Share options can be exercised at any time after the first anniversary and any time up to the tenth anniversary of the grant of the share options (as may be determined by the Board of Directors (since 10 November 2020) in its absolute discretion). Share options will not be admitted to trading on AIM but application will be made for ordinary shares that are issued upon the exercise of the share options to be admitted to trading on AIM. Share Options Granted Series Placing Exercise Series 1 Series 2 Series 3 Series 4 Series 5 Admission December 2014 July 2015 September 2016 June 2017 16 Number of share options available Options granted as at 31 March 2023 Exercise price (US$) 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 DIRECTORS’REPORTMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023 In conjunction with the introduction of the Carried Interest Plan (as further detailed below), the Board has cancelled the bal- ance 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 benefi- ciaries 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). 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 Remu- neration Issues”, the Group has not undertaken any related party transactions during the financial period 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% 17 DIRECTORS’REPORTMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 litiga- tion 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. 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 po- tential 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 meet- ing 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. 18 DIRECTORS’REPORTMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 of- fice 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 9 June 2023 Nick Paris Managing Director 9 June 2023 19 DIRECTORS’REPORTMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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. 2. 3. 4. Establish a strategy and business model which promotes long-term value for shareholders Seek to understand and meet shareholder needs and expectations Take into account wider stakeholder and social responsibilities and their implications for long-term success Embed effective risk management, considering both opportunities and threats, throughout the organisation Maintain a dynamic management framework 5. 6. 7. 8. 9. Maintain the board as a well-functioning, balanced team led by the Chairman Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities Evaluate board performance based on clear and relevant objectives, seeking continuous improvement Promote a corporate culture that is based on ethical values and behaviours 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 20 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023(in their absolute discretion) deem appropriate to ensure the saleability 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 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; and meetings with shareholders in the major financial cities in which its shareholders are based; 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. terms of communication, shareholders and potential In ‘enquiries@myanmarinvestments.com’. investors can use the dedicated email address or Henrik Bodenstab (Chairman) Aung Htun (Deputy Chairman) Nick Paris (Managing Director) henrik@bodenstab.de aunghtun@myanmarinvestments.com nickparis@myanmarinvestments.com 21 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023 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; 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 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. o o • 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; 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 o 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. 22 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 two meetings of the Audit Committee and all members of the committee attended all 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. 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 is 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 in- vestments 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. 23 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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. On 21 October 2023, the FATF placed Myanmar in the category of “High Risk Jurisdictions Subject to a Call for Action” (blacklist), due to its failure to implement its action plan that expired in September 2021. Blacklisting calls for enhanced due diligence proportionate to the risk arising from Myanmar to be observed by members and all other jurisdictions while entering a business transaction with Myanmar. In light of this, it is pertinent to note that Myanmar, even though blacklisted, has not been placed in the “List of Jurisdic- tions Subject to a FATF Call on its Members and other Jurisdictions to Apply Countermeasures”, alongside Iran and North Korea. 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. 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. 24 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023Number of meetings and Directors’ attendance During the period under review there were two appropriately timed meetings of the Audit Committee. During the financial period under review there were in total eleven Board meetings; five of these Board meetings dealt with the tasks of the Investment Committee and in one Board meeting the Directors dealt with the tasks of the Remuneration Committee. There were no Board meetings that dealt with the tasks of 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 and two Board meetings that were missed by Henrik Bodenstab. 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 firm. 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. 25 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 AMA Strategic Pte Ltd, a regional corporate finance and strategy advisory boutique with offices in Singapore and Yangon. 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. 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. 26 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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. At each Annual General Meeting one-third of the Directors (if their number is not a multiple of three, the number nearest to but not more than one-third) will retire. The Directors to retire in every year are those subject to retirement by rotation who have been longest in office since their last re-election or appointment. As between persons who became or were last re-elected Directors on the same day, those to retire are determined by lot. Retiring Directors are eligible for re-election by shareholders. 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. 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. 27 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 financial period is included within this Annual Report. 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 9 June 2023 28 CHAIRMAN’S STATEMENT ON CORPORATE GOVERNANCEMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 for the financial period from 1 October 2021 to 31 March 2023 and the financial year ended 30 September 2021 respectively was (all amounts in US$): Director Directors’ fees Short term employee benefits Directors’ fees Short term employee benefits 2023 2021 Henrik Bodenstab (Chairman) Aung Htun Rudolf Gildemeister Nicholas Paris 26,250 - 22,500 - 48,750 - 116,000 - 90,000 206,000 17,500 - 15,000 - 32,500 - 86,000 - 80,000 166,000 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 DIRECTORS’ REPORT ON REMUNERATION ISSUESMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023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 9 June 2023 30 STATEMENT OF DIRECTORS’ RESPONSIBILITIESMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023During the year, the Audit Committee (“AC”) received semi-annually, financial statements together with supporting analy- ses and papers prepared by management. These were reviewed in detail and the AC considered, with input from the in- dependent auditors, the appropriateness of the critical accounting estimates and judgments made in preparing the annual financial statements. In particular, the AC reviewed the following matters which it considers to be the “key audit matters” during its review of the financial statements for the financial period from 1 October 2021 to 31 March 2023. Valuation of Equity instrument at fair value through profit or loss Refer to Notes 3.2 and 9 of the financial statements. As at 31 March 2023, 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 Com- mittee. The AC also reviewed the adequacy of the disclosures in respect of this investment in Notes 3.2 and 9. Going concern Refer to Notes 1.1 and 19.3 of the financial statements. As at 31 March 2023, the Group held approximately US$0.9 million in cash. The AC considered if the Company holds adequate financial resources to cover its working capital needs for the next 12 months and if the going concern basis for the preparation of the financial statements is appropriate. In doing this the AC reviewed: • • the Board’s detailed cash flow forecast for the next 18 months from 31 March 2023; factors that the Board considered for the preparation of the cash flow forecast as proposed cost reductions and potential de-listing of the Company. The AC discussed the cash flow forecast and all relevant assumptions with the MIL management team and is satisfied that these are appropriate. The AC concurred with the opinion of the MIL management team that the Group has sufficient financial resources to cover its working capital needs for the next 12 months and that the going concern basis is appropriate in the preparation of the Group’s financial statements. The independent auditor’s description of the key audit matters is included in the section “Independent Auditor’s Report”. Other than the key audit matters described above, the AC reviewed the consolidated financial statements of the Group for the financial period from 1 October 2021 to 31 March 2023, as well as the Independent Auditor’s Report thereon prior to their submission to the Board of Directors for approval. 31 KEY AUDIT MATTERSMYANMAR INVESTMENTS INTERNATIONAL LIMITEDANNUAL REPORT 2023REPORT OF THE DIRECTORS AND FINANCIAL STATEMENTS 33 36 39 40 41 42 43 66 68 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 LIMITED ANNUAL REPORT 2023 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 period from 1 October 2021 to 31 March 2023. 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 31 March 2023 and consolidated fi nancial performance, consolidated changes in equity and consolidated cash fl ows of the Group for the fi nancial period from 1 October 2021 to 31 March 2023; 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. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 33 DIRECTORS’ STATEMENT 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 5. Share option plan Shareholdings registered in name of director or nominee At 1 October 2021 At 31 March 2023 677,000 585,849 123,000 181,159 677,000 585,849 – – 899,626 35,000 899,626 35,000 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 Board (the Remuneration Committee was dissolved on 10 November 2020) to grant further share options which will be granted with an exercise price set at a 10 percent premium to the subscription price paid by shareholders for the issue of ordinary shares that gave rise to the availability of each tranche of the share options. However, the share options that 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. 34 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 DIRECTORS’ STATEMENT 5. Share option plan (Continued) 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 Aggregate options outstanding as at end of the fi nancial period Options granted during the fi nancial period – – 899,626 35,000 – – – – 899,626 35,000 Name of Director Maung Aung Htun Henrik Onne Bodenstab 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 9 June 2023 Maung Aung Htun Director MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 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”) as set out from page 39 to 65, which comprise:    the consolidated statement of fi nancial position of the Group as at 31 March 2023; the consolidated statement of comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash fl ows of the Group for the fi nancial period from 1 October 2021 to 31 March 2023; 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 31 March 2023, and of the consolidated fi nancial performance, consolidated changes in equity and consolidated cash fl ows of the Group for the fi nancial period from 1 October 2021 to 31 March 2023. 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 31 March 2023, the carrying amount of the Group’s investment in equity instrument at FVTPL was US$11.2million, which represented 89.1% 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(i) and 9 to the fi nancial statements. 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 the specialist, assessed and evaluated methodology used in the valuation and the reasonableness of the EV/EBITDA multiplier and valuation discount used, and performed an independent assessment to cross-check the appropriateness of the resulting valuation; and  Assessed the adequacy of the disclosure in the fi nancial statements with respect to the valuation of the investment. 36 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 INDEPENDENT AUDITOR’S REPORT To the Members of Myanmar Investments International Limited KEY AUDIT MATTER 2 Going Concern AUDIT RESPONSE As disclosed in Note 1.1 to the fi nancial statements, the Group incurred loss after tax of US$24,285,958 during the current fi nancial period. The Directors have assessed that the Group has adequate financial resources to continue in operational existence for at least 12 months from the date of the fi nancial statements. We focused on going concern as a key audit matter due to the judgments required in the going concern assessment and the effect on our audit strategy, considering the factors including the expected cost reduction and outcome of the potential de-listing of the Company. Our procedures included, amongst others, the following:     Discussed with management and obtained an understanding of the Group’s objectives and strategies; and management’s process of conducting its going concern assessment; Evaluated and analysed reasonableness of underlying data used to make the assessment; Conducted stress tests on the key factors considered by the management; and Assessed the adequacy of the disclosures in the fi nancial statements. Refer to Note 1.1 and 19.3 to the fi nancial statements. 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. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 37 INDEPENDENT AUDITOR’S REPORT To the Members of Myanmar Investments International Limited 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. 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 Liang Hongzhou. BDO LLP Public Accountants and Chartered Accountants Singapore 9 June 2023 38 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the Financial Period from 1 October 2021 to 31 March 2023 Other item of income Interest income Items of expense Employee benefi ts expense Other operating expenses Finance costs Fair value loss 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 Loss before income tax Income tax expense Loss for the fi nancial period/year Loss attributable to: Owners of the parent Non-controlling interests Loss per share (cents) - Basic and diluted Financial period from 1 October 2021 to 31 March 2023 US$ Financial year ended 30 September 2021 US$ Note – 476 (254,750) (710,202) (7,911) (22,180,000) (1,125,000) (24,277,863) (8,095) (24,285,958) (198,500) (495,663) (6,827) (9,100,000) (1,052,467) (10,852,981) (120) (10,853,101) (16,878,128) (7,407,830) (24,285,958) (7,806,703) (3,046,398) (10,853,101) (44.29) (20.49) 4 5 9 13 6 7 10 8 The accompanying notes form an integral part of these fi nancial statements. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 39 CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 March 2023 ASSETS Non-current assets Equity instrument at fair value through profi t or loss 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 31 March 2023 US$ 30 September 2021 US$ 9 11 12 13 14 15 10 16 11,220,000 11,220,000 33,400,000 33,400,000 112,675 878,606 991,281 375,000 1,366,281 117,989 1,807,634 1,925,623 1,500,000 3,425,623 12,586,281 36,825,623 40,569,059 1,358,913 (33,108,312) (76,560) 8,743,100 3,481,339 12,224,439 40,569,059 1,358,913 (16,230,184) (76,560) 25,621,228 10,889,169 36,510,397 361,842 – 361,842 297,512 17,714 315,226 12,586,281 36,825,623 The accompanying notes form an integral part of these fi nancial statements. 40 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 ) 8 5 9 5 8 2 , , 4 2 ( ) 0 3 8 , 7 0 4 , 7 ( ) 8 2 1 , 8 7 8 6 1 , ( ) 8 2 1 , 8 7 8 , 6 1 ( – – – l a t o T $ S U 7 9 3 , 0 1 5 , 6 3 $ S U - n o N s t s e r e t n i g n i l l o r t n o c 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 f o 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 i t p o e r a h S $ S U t n e r a p e h t $ S U s e s s o l $ S U e v r e s e r $ S U e v r e s e r $ S U l a t i p a c e r a h S , 9 6 1 9 8 8 0 1 , 8 2 2 , 1 2 6 , 5 2 ) 4 8 1 , 0 3 2 , 6 1 ( ) 0 6 5 , 6 7 ( 3 1 9 , 8 5 3 , 1 9 5 0 , 9 6 5 , 0 4 i e v s n e h e r p m o c l a t o t g n i t n e s e r p e r d o i r e p l i a c n a n fi e h t r o f s s o l , d o i r e p l i a c n a n fi e h t r o f s s o L 1 2 0 2 r e b o t c O 1 t A 3 2 0 2 h c r a M 1 3 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the Financial Period from 1 October 2021 to 31 March 2023 , 9 3 4 4 2 2 2 1 , 9 3 3 1 8 4 , , 3 0 0 1 , 3 4 7 8 , ) 2 1 3 , 8 0 1 , 3 3 ( ) 0 6 5 , 6 7 ( 3 1 9 , 8 5 3 , 1 9 5 0 , 9 6 5 , 0 4 3 2 0 2 h c r a M 1 3 t A ) 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 ( – – – 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 i e v s n e h e r p m o c l a t o t 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 , r a e y l i a c n a n fi e h t r o f s s o L 1 2 0 2 r e b m e t p e S 0 3 0 2 0 2 r e b o t c O 1 t A , 7 9 3 0 1 5 6 3 , 9 6 1 9 8 8 , , 0 1 8 2 2 , 1 2 6 5 2 , ) 4 8 1 , 0 3 2 , 6 1 ( ) 0 6 5 , 6 7 ( 3 1 9 , 8 5 3 , 1 9 5 0 , 9 6 5 , 0 4 1 2 0 2 r e b m e t p e S 0 3 t A . 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 2023 41 CONSOLIDATED STATEMENT OF CASH FLOWS For the Financial Period from 1 October 2021 to 31 March 2023 Operating activities Loss before income tax Adjustments for: Interest income Finance costs Fair value loss 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 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 Financing activities Decrease in short-term deposits pledged Net cash fl ows generated from fi nancing activities Net change in cash and cash equivalents Cash and cash equivalents at beginning of the fi nancial period/year Cash and cash equivalents at the end of fi nancial period/year Financial period from 1 October 2021 to 31 March 2023 US$ Financial year ended 30 September 2021 US$ Note (24,277,863) (10,852,981) 5 9 13 5 12 – 7,911 22,180,000 1,125,000 (964,952) 5,314 64,330 (895,308) – (7,911) (25,809) (929,028) – – (929,028) 1,795,951 866,923 (476) 6,827 9,100,000 1,052,467 (694,163) 150,845 (6,541) (549,859) 476 (6,827) (321) (556,531) 35,943 35,943 (520,588) 2,316,539 1,795,951 The accompanying notes form an integral part of these fi nancial statements. 42 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 1. General corporate information Myanmar Investments International Limited (“the Company”) is a limited liability company incorporated and domiciled in the British Virgin Islands (“BVI”). The Company’s registered offi ce is at Jayla Place, Wickhams Cay I, Road Town, Tortola, British Virgin Islands. The Company’s ordinary shares are traded on the AIM market of the London Stock Exchange under the ticker symbols MIL. The Company was established for the purpose of identifying and investing in, and disposing of, businesses operating in or with business exposure to Myanmar. The Company’s focus was to target businesses operating in sectors that the Directors believed had strong growth potential and thereby could be expected to provide attractive yields, capital gains or both. At the Annual General Meeting held on 24 October 2019, the Company’s shareholders approved a resolution to begin an orderly disposal of the Company’s investments and in due course look to return surplus capital to shareholders. During the current fi nancial period, the Directors have concluded that due to the low level of trading in the Company’s shares, the costs of their listing on the London Stock Exchange outweigh the benefi ts. Directors have prepared a proposal to de-list the Company and such proposal will be despatched to shareholders in due course for their consideration. The principal activities of the subsidiaries are disclosed in Note 10 to the fi nancial statements. The Group and the Company changed its fi nancial year end from 30 September to 31 March as the Group’s investee company in Myanmar changed its fi nancial year end from 30 September to 31 March to be in line with the directives issued by the Myanmar Internal Revenue Department on the changes of taxable period. The current fi nancial period covered a period of 18 months from 1 October 2021 to 31 March 2023 while the comparative fi nancial year ended 30 September 2021 covers a period of 12 months from 1 October 2020 to 30 September 2021 and therefore the fi nancial statements for period from 1 October 2021 to 31 March 2023 and for fi nancial year ended 30 September 2021 are not comparable. 1.1 Going concern The Group incurred loss after tax of US$24,285,958 (30 September 2021: US$10,853,101) during the current fi nancial period. The Directors have assessed that the Group has adequate fi nancial resources to continue in operational existence for at least 12 months from the date of the fi nancial statements. The Directors’ considerations in making this assessment, amongst others, include: a) b) c) The Group’s current assets exceeded its current liabilities by US$1,004,439; The Group currently has cash balance of US$878,606; The Directors have carried out a detailed review of the cash fl ow forecast of the Group for 18 months from 31 March 2023. The cash fl ow forecast has been prepared with consideration of the expected cash outfl ow arising from future expenses based on latest known information. Factors relevant for the Directors’ consideration include, amongst others, expected cost reduction from running operations of the Company as well as cost savings resulting from potential de-listing of the Company. Accordingly, the Directors are of the opinion that no material uncertainty exists and the going concern basis is appropriate in the preparation of the Group’s fi nancial statements. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 43 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 2. Summary of signifi cant accounting policies 2.1 Basis of preparation of the fi nancial statements The fi nancial statements, which are expressed in United States dollars, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) which comprise standards and interpretations approved by IASB and International Financial Reporting Interpretations Committee (“IFRIC”). The fi nancial statements have been prepared on an historical cost basis, except as disclosed in the accounting policies below. The individual fi nancial statements of each entity in the Group are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The fi nancial statements of the Group are presented in United States dollar (“US$”), 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 equity instrument at fair value through profi t or loss and non-current asset classifi ed as held for sale as disclosed in Notes 9 and 13 to the fi nancial statements respectively. No further operating segment fi nancial information is therefore disclosed. 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 period/year, and the reported amounts of revenue and expenses during the fi nancial period/year. Although these estimates are based on the management’s best knowledge of historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, actual results may ultimately differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the fi nancial period/year in which the estimate is revised if the revision affects only that fi nancial period/year, or in the fi nancial period/year of the revision and future fi nancial years if the revision affects both current and future fi nancial periods/years. 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 2021 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. 44 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 2. Summary of signifi cant accounting policies (Continued) 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. 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. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 45 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 2. Summary of signifi cant accounting policies (Continued) 2.3 Joint arrangements (Continued) 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. 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 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 period/year. 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. On disposal of a foreign operation, the accumulated foreign exchange reserve relating to that operation is reclassifi ed to profi t or loss. 46 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 2. Summary of signifi cant accounting policies (Continued) 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. 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. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 47 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 2. Summary of signifi cant accounting policies (Continued) 2.7 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. 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. 2.8 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. 2.9 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 of the categories below, 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: 48 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 2. Summary of signifi cant accounting policies (Continued) 2.9 Financial Instruments (Continued) Financial assets (Continued) 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. 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. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 49 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 2. Summary of signifi cant accounting policies (Continued) 2.10 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. 2.11 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. 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: 50 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 3. Signifi cant accounting judgements and estimates (Continued) 3.1 Critical judgements made in applying the entity’s accounting policies (Continued) (i) Extension of period required to complete a sale of the non-current asset held for sale As the result of the ongoing transaction to sell the Group’s 37.5% equity interest in Myanmar Finance International Ltd. (“MFIL”) (Note 13), the entire carrying amount of the Group’s investment in MFIL has been 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 20 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 and consider the sale to be highly probable. As such, directors are of the view that the continuous classifi cation of the Group’s investment in MFIL as non-current asset held for sale is appropriate as at 31 March 2023. 3.2 Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a 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 determined the appropriate valuation techniques and inputs for fair value measurements being the enterprise value (“EV”) over earning before, interest, tax, depreciation and amortisation (“EBITDA”) (“EV/EBITDA”) multiple, adjusted with a valuation discount. In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Group engages internal valuation specialist to perform the valuation. The valuation of the unquoted investment is categorised into Level 3 (30 September 2021: Level 3) of the fair value hierarchy. The Board of Directors works closely with the qualified internal valuation specialist to establish the appropriate valuation techniques and inputs to the model. The details of the valuation techniques and inputs used in determining the fair value of the unquoted equity instrument at fair value through profi t or loss are disclosed in Note 9 to the fi nancial statements. (ii) Measurement of non-current asset held for sale The Group follows the accounting policies set out in Note 2.8 and measures the non-current asset held for sale at lower of the carrying amount and fair value less cost to sell. In determining the fair value less cost to sell, the Company considers the terms and conditions of the Binding Offer as disclosed in Note 13 to the fi nancial statements and relevant market conditions. The details of the measurement of non-current asset held for sale are disclosed in Note 13 to the fi nancial statements. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 51 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 4. Employee benefi ts expense Salaries, wages and other staff benefi ts Financial period from 1 October 2021 to 31 March 2023 US$ Financial year ended 30 September 2021 US$ 254,750 254,750 198,500 198,500 The employee benefi ts expense includes the remuneration of Directors as disclosed in Note 17 to the fi nancial statements. 5. Finance costs Finance costs represent bank charges for the fi nancial period/year. 6. Loss 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: Financial period from 1 October 2021 to 31 March 2023 US$ Financial year ended 30 September 2021 US$ 82,670 212,918 6,256 276,802 51,607 191,472 2,730 147,428 Financial period from 1 October 2021 to 31 March 2023 US$ Financial year ended 30 September 2021 US$ 8,095 8,095 120 120 Auditor’s remuneration Consultants’ fees Short term leases Professional fees 7. Income tax expense Current income tax - current fi nancial period/year 52 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 7. Income tax expense (Continued) A reconciliation of income tax applicable to loss before income tax at the statutory income tax rate of 22% (30 September 2021: 25%) in Myanmar is as follows: Loss before income tax Income tax at the applicable tax rates Effects of different income tax rates in other countries Expenses not deductible for tax Income tax exemption Income tax for the fi nancial period/year 8. Loss per share Financial period from 1 October 2021 to 31 March 2023 US$ Financial year ended 30 September 2021 US$ (24,277,863) (24,277,863) (10,852,981) (10,852,981) (5,341,129) 58,908 5,290,316 – 8,095 (2,713,245) (95) 2,713,539 (81) 120 Basic loss per share is calculated by dividing the 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 period/year. The following refl ects the profi t or loss and share data used in the basic and diluted loss per share computation: Loss for the fi nancial period/year attributable to owners of the Company (US$) Weighted average number of ordinary shares during the fi nancial period/year Financial period from 1 October 2021 to 31 March 2023 US$ Financial year ended 30 September 2021 US$ (16,878,128) (7,806,703) applicable to basic loss per share 38,108,451 38,108,451 Loss per share Basic and diluted (cents) (44.29) (20.49) Diluted loss per share is the same as the basic loss per share for fi nancial period from 1 October 2021 to 31 March 2023 and fi nancial year ended 30 September 2021 because the potential ordinary shares to be converted arising from share options are anti-dilutive. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 53 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 9. Equity instrument at fair value through profi t or loss 31 March 2023 US$ 30 September 2021 US$ Investment in unquoted equity instrument, at fair value 11,220,000 33,400,000 The Group, through its 66.67% subsidiary, MIL 4 Limited (“MIL 4”) invested in a 6.2% (30 September 2021: 6.2%) equity interest in unquoted share capital of AP Towers Holdings Pte. Ltd. (“AP Towers”). Movement in the investment in unquoted equity instrument is as follows: Balance at beginning of fi nancial period/year Fair value loss during the fi nancial period/year Balance at end of fi nancial period/year 31 March 2023 US$ 30 September 2021 US$ 33,400,000 (22,180,000) 11,220,000 42,500,000 (9,100,000) 33,400,000 Management engaged their internal valuation specialists to perform a valuation on the investment. The valuation of the unquoted investment is categorised into Level 3 (30 September 2021: Level 3) of the fair value hierarchy. The information on the signifi cant unobservable inputs and the inter-relationship between key unobservable inputs and fair value are as follows: 31 March 2023 Financial asset Unquoted equity investment – AP Towers Valuation technique used Signifi cant unobservable inputs Inter-relationship between key unobservable inputs and fair value Market Approach - Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) of US$76.2million Increase EBITDA will increase the fair value of the fi nancial asset. - Enterprise Value (“EV”) per EBITDA multiple of 7.8x - Valuation discount of 25%* Increase 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 54 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 9. Equity instrument at fair value through profi t or loss (Continued) 30 September 2021 Financial asset Unquoted equity investment – AP Towers Valuation technique used Signifi cant unobservable inputs Inter-relationship between key unobservable inputs and fair value Market Approach - Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) of US$85.9million Increase EBITDA will increase the fair value of the fi nancial asset. - Enterprise Value (“EV”) per EBITDA multiple of 12.7x - Valuation discount of 25%* Increase 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 political uncertainty and COVID-19 pandemic in Myanmar during current and previous fi nancial years, management is of the view that an additional 25% discount should be applied to the Group’s investments in Myanmar. 10. 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(2) Singapore MIL Management Pte. Ltd.(2) Singapore Investment holding company Provision of management services to the Group Proportion of ownership interest held by the Group 31 March 2023 % 30 September 2021 % Proportion of ownership interest held by non-control interests 31 March 2023 % 30 September 2021 % 100 100 100 100 – – – – MIL 4 Limited(1) British Virgin Islands Investment holding company 66.67 66.67 33.33 33.33 Held by MIL Management Pte. Ltd. MIL Management Co., Ltd(3) Myanmar Provision of management services to the Group – 100 – – (1) (2) (3) Audited by BDO LLP, Singapore. Not audited for consolidation purpose The liquidation of the company was completed in July 2022. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 55 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 10. Investment in subsidiaries (Continued) Non-controlling interests The summarised financial information before intra-group eliminations of the subsidiary that has material non-controlling interests as at the end of each reporting period is as follows: Assets and liabilities Non-current assets Current assets Current liabilities Net assets Accumulated non-controlling interests Revenue Other loss Administrative expenses Loss and total comprehensive loss for the fi nancial period/year MIL 4 Limited 31 March 2023 US$ 30 September 2021 US$ 11,220,000 3,240 (779,228) 10,444,012 33,400,000 923 (733,422) 32,667,501 3,481,339 10,889,169 MIL 4 Limited 31 March 2023 US$ 30 September 2021 US$ (22,180,000) (43,489) (22,223,489) – (9,100,000) (39,193) (9,139,193) Loss and total comprehensive loss allocated to non-controlling interests (7,407,830) (3,046,398) Operating cash fl ows before working capital changes Working capital changes Net cash used in operating activities Net change in cash and cash equivalents 11. Other receivables Other receivables Prepayments Total Less: Prepayments Add: Cash and bank balances (Note 12) Financial assets at amortised costs Other receivables are denominated in United States dollar. 56 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 (43,489) 43,489 – – (39,193) 39,193 – – 31 March 2023 US$ 30 September 2021 US$ 73,877 38,798 112,675 60,102 57,887 117,989 (38,798) (57,887) 878,606 952,483 1,807,634 1,867,737 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 31 March 2023 US$ 30 September 2021 US$ 866,923 11,683 878,606 1,795,951 11,683 1,807,634 12. Cash and bank balances Cash and bank balances Short-term deposit The short-term deposit bears interest rate of ranging from 0% to 3.6% (30 September 2021: 0% to 1.4%) per annum, has a tenure of approximately 12 months (30 September 2021: 12 months) and is pledged to bank to secure credit facilities. Cash and bank balances and short-term deposits are denominated in the following currencies: United States dollar Singapore dollar Myanmar kyat 31 March 2023 US$ 30 September 2021 US$ 761,354 117,252 – 878,606 1,676,445 128,168 3,021 1,807,634 For the purpose of the statement of cash fl ows, cash and cash equivalents comprise the following at the end of the fi nancial period/year: Cash and bank balances Less: short-term deposits pledged 13. Non-current asset classifi ed as held for sale Myanmar Finance International Ltd. 31 March 2023 US$ 30 September 2021 US$ 878,606 (11,683) 866,923 1,807,634 (11,683) 1,795,951 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 Public Company Limited (“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 political uncertainty and Covid-19 pandemic in Myanmar, the sale could not be completed in time. Therefore, the BO has been extended for several times and the latest extension was signed on 18 April 2023 which extended the expiry of BO to 31 August 2023. In accordance with the BO, the minimum consideration for this transaction will be calculated based on a pre-agreed formula of 2 times the book value of MFIL at closing. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 57 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 13. Non-current asset classifi ed as held for sale (Continued) As the result of the ongoing transaction to sell the Group’s 37.5% (30 September 2021: 37.5%) equity interest in MFIL, the entire carrying amount of the Group’s investment in MFIL has been 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 and consider the sale to be highly probable. As such, directors are of the view that the continuous classifi cation of the Group’s investment in MFIL as non-current asset held for sale is appropriate as at 31 March 2023. Movements of assets in non-current asset classifi ed as held-for-sale were as follows: Investment in joint venture – 37.5% equity interest in Myanmar Finance International Limited Beginning of the fi nancial period/year Less: Write down to fair value less cost to sell End of the fi nancial period/year 31 March 2023 US$ 30 September 2021 US$ 1,500,000 (1,125,000) 375,000 2,552,467 (1,052,467) 1,500,000 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. Directors estimate the fair value less cost to sell at US$375,000 based on 2 times the audited book value of MFIL at 31 March 2023, adjusted for a valuation discount of 25% due to political uncertainty and COVID-19 pandemic in Myanmar during current 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$1,125,000 (30 September 2021: 1,052,467) was recognised in profi t or loss for the current fi nancial year. 14. Share capital Issued and fully-paid share capital: Ordinary shares at the beginning of the fi nancial period/year 31 March 2023 US$ 30 September 2021 US$ 40,569,059 40,569,059 31 March 2023 30 September 2021 Ordinary shares Warrants Ordinary shares Warrants Equity Instruments in issue At the beginning of the fi nancial period/ year Exercised during the year Lapsed during the period Issuance during the fi nancial year At the end of the fi nancial period/year 38,108,451 – – – 38,108,451 13,573,901 – (13,573,901) – – 38,097,037 – – 11,414 38,108,451 14,128,387 (554,486) – – 13,573,901 The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share without restriction at meetings of the Company. During the fi nancial period, no warrants were exercised and all unexercised warrants were expired. All the shares have been admitted to trading on AIM under the ticker MIL. 58 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 14. Share capital (Continued) 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). On 22 May 2018, the Company amended the terms of the warrants to extend the exercise period for warrants that remained outstanding at 21 June 2018: a) 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 were previously traded on AIM under the ticker MILW. As the warrant instrument expired on 31  December 2021, all unexercised warrants expired on that date and trading on AIM was cancelled on 4 January 2022. 15. Share option reserve Details of the Share Option Plan (the “Plan”) The Plan allows for the total number of shares issuable under share options to constitute a maximum of one tenth of the number of the total number of ordinary shares in issue (excluding shares held by the Company as treasury shares and shares issued to the Founders prior to Admission). Any future issuance of shares will give rise to the ability of the Remuneration Committee to award additional share options. Such share options will be granted with an exercise price set at a 10 percent premium to the subscription price paid by shareholders on the relevant issue of shares that gave rise to the availability of each tranche of share options. Share options can be exercised any time after the 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 31 March 2023, there were 3,622,740 (30 September 2021: 3,622,740) share options available for issue under the Plan of which 2,590,527 (30 September 2021: 2,590,527) had been granted. These granted share options have a weighted average exercise price of US$1.214 (30 September 2021: US$1.214) per share and a weighted average contractual life of 10 years (30 September 2021: 10 years). MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 59 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 15. Share option reserve (Continued) Details of the Share Option Plan (the “Plan”) (Continued) The 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 The following share-based payment arrangements were in existence during the current fi nancial period: Option series Series 1 Series 1 Series 1 Series 2 Series 1 Series 2 Series 3 Series 3 Series 1 Series 2 Series 3 Number of share options Grant date Expiry date Exercise price (USD) Fair value at grant date 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 1.100 1.100 1.100 1.155 1.100 1.155 1.265 1.265 1.100 1.155 1.265 153,487 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 period. Share options were priced using Black-Scholes option pricing model. Where relevant, the expected life used in the model was adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions (including the probability of meeting market conditions attached to the option), and behavioural considerations. Expected volatility was based on historical share price volatility from the date of grant of the share options. 60 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 15. Share option reserve (Continued) Fair value of share options granted in the fi nancial year (Continued) The Black-Scholes option pricing model uses the following assumptions: Grant date share price (US$) Exercise price (US$) Expected volatility Option life Risk-free annual interest rates Grant date 28 June 2016 19 October 2016 19 October 2016 19 October 2016 1.628 1.265 22.47% 10 years 1.46% 1.388 1.100 22.25% 10 years 1.76% 1.388 1.155 22.25% 10 years 1.76% 1.388 1.265 22.25% 10 years 1.76% The Group recognised a net expense of US$Nil (30 September 2021: US$Nil) related to equity-settled share-based payment transactions during the fi nancial period. Movement in share option during the fi nancial period The following reconciles the share options outstanding and exercisable at the start of the period/year and at the end of the period. 31 March 2023 30 September 2021 Number Weighted average exercise price US$ Number Weighted average exercise price US$ Balance at beginning and end of fi nancial period/year 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 period Balance at beginning and end of fi nancial period/year 1,358,913 1,358,913 31 March 2023 US$ 30 September 2021 US$ 16. Other payables Accruals Other payables Financial liabilities at amortised cost 31 March 2023 US$ 30 September 2021 US$ 166,165 195,677 361,842 106,961 190,551 297,512 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 61 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 16. Other payables (Continued) Other payables are denominated in the following currencies: Singapore dollar United States dollar British pound Euro 17. Signifi cant related party disclosures 31 March 2023 US$ 30 September 2021 US$ 46,007 242,246 66,980 6,609 361,842 52,018 243,524 1,970 – 297,512 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 period/year were as follows: Financial period ended 31 March 2023 Executive directors Maung Aung Htun Nicholas John Paris Non-executive directors Henrik Onne Bodenstab Rudolf Gildemeister Financial year ended 30 September 2021 Executive directors Maung Aung Htun Nicholas John Paris Non-executive directors Henrik Onne Bodenstab Rudolf Gildemeister Directors’ fee US$ Short term employee benefi ts US$ Share option plan US$ – – 26,250 22,500 48,750 – – 17,500 15,000 32,500 116,000 90,000 – – 206,000 86,000 80,000 – – 166,000 – – – – – – – – – – Total US$ 116,000 90,000 26,250 22,500 254,750 86,000 80,000 17,500 15,000 198,500 62 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 18. Dividends The Directors of the Company do not recommend any dividend in respect of the fi nancial period ended 31 March 2023 (30 September 2021: Nil). 19. 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. 19.1 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. 19.2 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 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 British pound Assets Liabilities 31 March 2023 US$ 30 September 2021 US$ 31 March 2023 US$ 30 September 2021 US$ 117,252 – 117, 252 128,168 – 128,168 46,007 48,380 94,387 52,018 1,970 53,988 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 63 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 19. Financial risk management objectives and policies (Continued) 19.2 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. 19.3 Liquidity risk The Group is exposed to liquidity risk to the extent that it holds investments that it may not be able to sell quickly at close to fair value. The risk is managed by the Group by means of cash 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. In managing the liquidity risk, the Directors have also conducted a detailed review of the cash fl ow forecast of the Group for 18 months from 31 March 2023 as disclosed in Note 1.1 to the fi nancial statements. 19.4 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 9 to the fi nancial statements. 19.5 Capital management The Group manages its capital to ensure that the Group is able to continue as going concern and to maintain an optimal capital structure so as to maximise shareholders’ value. 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 period from 1 October 2021 to 31 March 2023 and fi nancial year ended 30 September 2021. 64 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 NOTES TO THE FINANCIAL STATEMENTS For the Financial Period from 1 October 2021 to 31 March 2023 20. Impact of COVID-19 and political crisis in Myanmar The Coronavirus (COVID-19) outbreak and the political crisis after the change of government on 1 February 2021 have created a high level of uncertainty to economic prospects. The situation continues to evolve with 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 18 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”). But MFIL has gone through a debt repayment plan with all its lenders and will be debt free in 2024. The purchaser has therefore agreed to extend the offer to August 2023 (Note 13). The Group intends to complete the sale as soon as it is practical. Regarding the Group’s other investment in AP Towers Holdings Pte. Ltd. (“AP Towers”), it is to be noted that the telecommunication sector has also suffered due to the outbreak of COVID-19 and the political crisis since 1 February 2021 but much less than the microfi nance industry. The Myanmar telecommunication tower sector, following a period of rapid growth, has continued to slow in the last 18 months in terms of both new towers and new co-locations. Also the availability of US$ has become a challenge. Mobile network services in Myanmar have been 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. 21. Authorisation of fi nancial statements The fi nancial statements of the Group for the fi nancial period from 1 October 2021 to 31 March 2023 were approved by the Board of Directors on 9 June 2023. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 65 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 the restrictions in which we all conducted business and in particular on public gatherings related to the Covid-19 outbreak during the past 3 years and the restrictions in travelling to Myanmar, the AGMs were held as virtual meetings. It turned out that this has been a very effi cient and convenient way for shareholders to attend the AGM. Therefore, the Directors have decided to facilitate holding also this year’s 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 2023 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 4  August  2023 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 29 July 2023. 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) 2  August  2023. (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 financial period from 1  October  2021 to 31 March 2023 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 Aung Htun, 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. Ocorian Corporate Services (BVI) Limited Secretary 9 June 2023 Registered Offi ce: Jayla Place Wickhams Cay 1 Road Town Tortola VG1110 British Virgin Islands 66 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 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 4 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. 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) 2 August 2023. 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 July 2023. 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) 1 August 2023. 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) 2 August 2023 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 2 August 2023, 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) 2 August 2023, 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. MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 67 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 One Bartholomew Close London EC1A 7BL 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 Town Tortola 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: Liang Hongzhou (Appointed since the fi nancial period from 1 October 2021 to 31 March 2022) Depository Link Market Services Trustees Limited 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL United Kingdom 68 MYANMAR INVESTMENTS INTERNATIONAL LIMITED ANNUAL REPORT 2023 

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