ORIGO PARTNERS PLC
REPORT AND FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2021
CONTENTS
Page
I.
DIRECTORS’ REPORT
Chairman’s letter
1
Directors’ report
3
II.
INDEPENDENT AUDITOR’S REPORT
5
III.
AUDITED FINANCIAL STATEMENTS
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13
- 1 -
Chairman’s Letter
Dear Shareholders,
Over the last year, the Company has sold its remaining legacy assets and has made a cash distribution to shareholders. In
January, the Company sold its investment in Six Waves, a Hong Kong based gaming company, for about USD 2.2 million and in
March distributed USD 1.7 million to shareholders. Following an auction with a single bid, that of the controlling shareholder,
Origo sold its Moly World investment for USD 200,000. This past October, the Company sold its entire investment in Celadon
to the controlling shareholder for USD 50,000 following an auction in which no bids were received. Earlier this year, the
Company announced a delay in its plan to wind up the Company and return any remaining capital to shareholders and alluded
to a pending class action lawsuit that could benefit the Company. I would like now to report on what we know about that
lawsuit.
Well before this board’s involvement with the Company, about thirteen years ago, in 2009, the Company invested in R. M.
Williams (“RMW”), an Australian company with livestock and other farming operations in northern Australia. The Company
invested about $20 million in RMW’s equity and about $3.1 million in RMW’s debt. The primary business objective of RMW was
to raise cattle and other agricultural products in Australia and ship the cattle to Asia for sale. Beginning in June 2011 and in
response to a television program that raised concerns about animal welfare, the Australian Minister of Agriculture issued several
orders that effectively barred the export of live cattle to Indonesia. In 2013 RMW went insolvent. When RMW went insolvent,
RMW owed the Company about $8 million for the loans including accrued interest, and the Company owned about 24% of
RMW’s equity. RMW’s total debt at around that time included secured debt held by one of Australia’s large banks which may or
may not have been compromised in a settlement, the unsecured Origo debt and a small amount of other third-party debt, and
RMW had shareholder equity of about AUD $85 million. There were legal proceedings involving RMW and in or about 2019
RMW’s liquidation was completed and RMW was stricken from the Companies’ Register.
In 2014, Brett Cattle, an Australian cattle company, brought a claim against the Australian Minister of Agriculture, effectively
the Commonwealth of Australia, that essentially alleged that the Minister had exceeded his authority in issuing the order
barring live cattle exports to Indonesia and seeking damages. This claim was financed by an organization representing farmers
in Australia’s Northern Territory, “the Northern Farmers Fighting Fund” or the “NFFF” and prosecuted by one of Australia’s
leading law firms, the Minter Ellison firm. In June 2020, the Federal Court for Australia issued a long and complex judgment
ruling that the Minister in exceeding his authority had committed the tort of misfeasance in public office and that the
Commonwealth was liable for the damages that flowed from his wrongful conduct both to the plaintiff that brought the action
and to other businesses that were similarly situated and also suffered losses flowing from the Minister’s tortious conduct. In
October 2020 the Court ordered that the judgment be publicized to alert other possible class members. This past May, the
Company learned of this lawsuit from a locally based former shareholder in RMW.
The composition of the class has not yet been determined, but the class when constituted will be represented by Minter Ellison,
and the class action is being financed by the NFFF in return for 10 per cent of the gross recovery. The Commonwealth has no
appeals and has essentially conceded liability. So the issues appear to be whether RMW's damages are the kinds of damages
that qualify it for class membership and what is the quantum of those damages that properly flow from the Minister’s tortious
conduct. If the lawyers determine that RMW is eligible for membership in the class, RMW would join in excess of 200 other class
members eligible to share in total damages Minter Ellison has estimated at around AUD $1 billion. Given that the NFFF is
- 2 -
financing the litigation, there is not the usual issue of the costs of litigation. In terms of the timing of any payment, the judgment
is accruing interest at 8% per annum so for this reason and, we are told, local political considerations, the Commonwealth is
incentivized to wind the matter up sooner rather than later. That said, Minter Ellison have indicated that the whole process
could take up to three years (or even longer).
We had hoped that by now we would be able to quantify any possible recovery to determine whether it is worth Origo’s while
to participate in the lawsuit, i.e., whether the probable amount and timing of an award can be reasonably expected to offset
the Company’s running costs. Unfortunately we are still not in a position to do that but have been informed that a mediation
with the Commonwealth of Australia scheduled for 9 December will produce some clarity. Shareholders should note that there
is a wide range of possible outcomes both in terms of the amount of any recovery and the timing of its receipt. That range is
between zero and a large number that could reflect the amount Origo invested plus accrued interest. There are other
administrative issues as well including that RMW was liquidated and struck from the Australian Companies’ Register several
years ago (and so needs to be restored to the register with directors or liquidators appointed to run it and to determine
distributions to creditors and shareholders) and that the Company subsidiary that held this investment has also been liquidated.
Based on our review of the facts and various discussions we have had, we believe that nonetheless the claim is worth pursuing
because it could result in a substantial monetary recovery – at little or no out of pocket cost to the Company. Shareholders
should note that given the Company’s expense structure, it is unlikely that there will be further distributions without a recovery
from RMW.
We will provide further information as we acquire it.
Very truly yours,
Origo Partners Plc
John D. Chapman
Chairman
- 3 -
Directors’ Report
The Directors present their report together with the audited financial statements for the year ended 31 December 2021.
Results and dividends
The result of the Group for the year is set out on page 10 and shows a profit for the year of US$1,146,000 (2020: loss
US$1,257,000). No distributions were made during the current reporting period. During 2020, the Directors approved a capital
distribution of US$0.02947 to the holders of the Company's redeemable preference and US$0.00117 to the holders of the
Company's ordinary shares at US$0.00117 per ordinary share. The retained profit for the year of US$1,146,000 (2020: loss
US$1,257,000) has been transferred to reserves. Prior to the period end a distribution of US$1,700.000 was made as disclosed
in note 24.
Principal activities, review of business and future developments
On 20 November 2014, the Company’s Investing Policy changed from that of a closed-ended, permanent capital vehicle to that
of a realisation company with the mandate to return the net proceeds of realisations to shareholders over a four-year period.
However, investments will only be realised when the Independent Directors believe the terms are appropriate. A review of the
business of the Company is covered in the Chairman’s Letter.
Directors
At 31 December 2021:
Mr John Chapman
Mr Peter Philip Scales
Mr Hiroshi Funaki
Directors’ responsibilities in respect of the financial statements
The Directors are responsible for the preparation of the financial statements. The Directors have elected to prepare the financial
statements in accordance with applicable law and International Financial Reporting Standards as adopted by the European
Union. In preparing these financial statements, the Directors are required to:
(I)
select suitable accounting policies and then apply them on a consistent basis;
(II)
make judgments and estimates that are reasonable and prudent;
(III)
state whether International Financial Reporting Standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
(IV)
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
- 4 -
Directors’ Report
The Directors are responsible for keeping reliable accounting records which correctly explain the transactions of the Company,
and which enable the financial position of the Company to be determined with reasonable accuracy. They are also responsible
for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
Going concern
The Board has concluded that the Company is not considered to be a going concern and as a result of this the financial
statements for the year ended 31 December 2021 have been prepared on an orderly realisation basis. The share capital of the
Company has been reorganised so that the redemption of the Redeemable Preference Shares (previously Convertible
Preference Shares) will be settled with the proceeds of realisations as and when they occur.
Auditor and disclosure of information to auditor
As far as each Director is aware, there is no relevant audit information of which the Company’s auditor is unaware.
Financial statements are published on the Company’s website in accordance with legislation in the Isle of Man governing the
preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance
and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the
ongoing integrity of the financial statements contained therein.
Each of the Directors has taken all the steps they ought to have taken individually as a Director in order to make themselves
aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
Lubbock Fine LLP, who, being eligible, have expressed their willingness to continue in office in accordance with the Isle of Man
Companies Act 2006.
By Order of the Board
Philip Peter Scales
Date: 07 December 2022
- 5 -
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ORIGO PARTNERS PLC
(incorporated in the Isle of Man with limited liability)
OPINION
We have audited the financial statements of Origo Partners Plc (the 'Company') for the year ended 31 December 2021, which
comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity,
the Statement of Cash Flows, and the related notes, including a summary of significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial Reporting
Standards as adopted by the European Union.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the as at
31 December 2021 and of its financial performance and its cash flows for the year then ended in accordance with International
Financial Reporting Standards as adopted by the European Union
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
EMPHASIS OF MATTER – BASIS OF PREPARATION
As explained in Note 1.2, the directors do not consider the Company to be a Going Concern, and so consider that the financial
statements should be prepared on a basis other than that of going concern. As explained in note 1.2, no adjustments are
required to the financial statements as a result of preparing the financial statements on this basis.
OTHER INFORMATION
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
- 6 -
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ORIGO PARTNERS PLC
(incorporated in the Isle of Man with limited liability)
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we
have not identified material misstatements in the Strategic Report or the Director's Report. We have nothing to report in
respect of the following matters in relation to which section 6(2) of the Isle of Man Audit Act 2006 requires us to report to you
if, in our opinion:
x
adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
x
the financial statements are not in agreement with the accounting records and returns; or
x
certain disclosures of director's remuneration specified by law are not made; or
x
we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation and fair
presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as
adopted by the European Union, and for such internal control as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
The directors are also responsible for overseeing the Company’s financial reporting process. The audit committee of the
Company (the “Audit Committee”) assists the directors in discharging their responsibility in this regard.
AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with
laws and regulations, we considered the following:
x
Enquires of management, including obtaining and reviewing supporting documentation, concerning the Company's
policies and procedures relating to:
o
Identifying, evaluating and complying with laws and regulations and whether they were aware of any
instances of non-compliance
o
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected
or alleged fraud; and
o
the internal controls established to mitigate risks related to fraud or non-compliance of laws and
regulations; and
x
Discussions among the engagement team regarding how and where fraud might occur in the consolidated financial
statements and any potential indicators of fraud.
We also obtained an understanding of the legal and regulatory framework that the Company operates in, focusing on provisions
of those laws and regulations that had direct effect on the determination of material amounts and disclosures in the
consolidated financial statements. The key laws and regulations we considered in this context included the Isle of Man
Companies Act 2006 and International Financial Reporting Standards as adopted by the European Union.
- 7 -
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ORIGO PARTNERS PLC
(incorporated in the Isle of Man with limited liability)
AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with
laws and regulations, we considered the following:
x
Enquires of management, including obtaining and reviewing supporting documentation, concerning the Company's
policies and procedures relating to:
o
Identifying, evaluating and complying with laws and regulations and whether they were aware of any
instances of non-compliance
o
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected
or alleged fraud; and
o
the internal controls established to mitigate risks related to fraud or non-compliance of laws and
regulations; and
x
Discussions among the engagement team regarding how and where fraud might occur in the consolidated financial
statements and any potential indicators of fraud.
We also obtained an understanding of the legal and regulatory framework that the Company operates in, focusing on provisions
of those laws and regulations that had direct effect on the determination of material amounts and disclosures in the
consolidated financial statements. The key laws and regulations we considered in this context included the Isle of Man
Companies Act 2006 and International Financial Reporting Standards as adopted by the European Union.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements
but compliance with which may be fundamental to the Company's ability to operate or to avoid a material penalty. These
included employment law and health and safety regulations.
As a result of these procedures, we considered the opportunities and incentives that may exist within the Group for fraud. In
common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of
management override.
Our procedures to respond to risks identified included the following:
x
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as having a direct effect on the financial statements;
x
enquiring of management concerning actual and potential litigation and claims;
x
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of
material misstatement due to fraud;
x
reading minutes of meetings of the directors’ meetings;
x
reviewing the investment valuation approach taken by the directors;
x
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal
entries and other adjustments; assessing whether the judgments made in making accounting estimates are indicative
of a potential bias; and evaluating the rationale of any significant transactions that are unusual or outside the normal
course of the Group’s operations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to
a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we
will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the consolidated financial statements is located on the Financial
Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
- 8 -
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ORIGO PARTNERS PLC
(incorporated in the Isle of Man with limited liability)
USE OF OUR REPORT
This report is made solely to the Company's members, as a body. Our audit work has been undertaken so that we might state
to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Lubbock Fine LLP
Chartered Accountants & Statutory Auditors
3rd Floor Paternoster House
65 St Paul's Churchyard
London
2022
08 December 2022
- 9 -
Origo Partners Plc
Statement of comprehensive income
For the year ended 31 December 2021
2021
2020
Notes
US$'000
US$'000
Investment gain/loss:
2
Realised gains/losses on disposal of investments
3
22
Unrealised gains/losses on investments
1,868
(565)
1,871
(543)
Other income
-
20
Other administrative expenses
3
(722)
(725)
Share based payment
18
-
-
Foreign exchange loss
(3)
(7)
Net profit/(loss) before finance costs and taxation
1,146
(1,255)
Finance costs
5
-
(2)
Profit/(loss) before tax
1,146
(1,257)
Profit/(loss) after tax
1,146
(1,257)
Other comprehensive income
Other comprehensive income to be reclassified to profit or loss in
subsequent periods:
Exchange differences on translating foreign operations
-
-
Net other comprehensive income to be reclassified to profit
or loss in subsequent periods
-
-
Tax on other comprehensive income
-
-
Other comprehensive income net of tax
-
-
Total comprehensive profit/(loss) after tax
1,146
(1,257)
Basic gain/(loss) per ordinary share
7
0.08 cents
(0.07) cents
Diluted gain/(loss) per ordinary share
7
0.08 cents
(0.07) cents
Basic gain/(loss) per redeemable zero dividend preference share
7
6.12 cents
(6.71) cents
Diluted gain/(loss)
per redeemable zero dividend preference share
7
6.12 cents
(6.71) cents
The accompanying notes form an integral part of these financial statements.
- 10 -
Origo Partners Plc
Statement of financial position
At 31 December 2021
The financial statements were approved by the Board of Directors and authorised for issue. They were signed on its behalf by:
The accompanying notes form an integral part of these financial statements.
2021
2020
Assets
Notes
US$'000
US$'000
Current assets
Investments at fair value through profit or loss
8
2,432
842
Trade and other receivables
11
23
20
Cash and cash equivalents
12
1,194
1,651
3,649
2,513
Total assets
3,649
2,513
Current liabilities
Trade and other payables
13
160
170
Current tax liabilities
-
-
160
170
Non-current liabilities
Deferred income tax liability
6
-
-
-
-
Total liabilities
160
170
Net assets
3,489
2,343
Equity attributable to the owner
Issued capital
15
56
56
Share premium
149,994
149,994
Share-based payment reserve
5,048
5,048
Accumulated losses
(200,617)
(198,200)
Translation reserve
-
(1,457)
Other reserve
16
49,008
46,902
Total equity
3,489
2,343
Philip Peter Scales
Director
07 December 2022
- 11 -
Origo Partners Plc
Statement of changes in equity
For the year ended 31 December 2021
Attributable to equity holders of the Company
Issued capital
Share
premium
Share-
based
payment
reserve
Accumulated
losses
Translation
reserve
Other
reserve
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
At 31 December 2019
56
150,027
5,048
(200,216)
(1,379)
50,064
3,600
Adjustment
-
(33)
-
48
(15)
-
-
Loss for the year
-
-
-
(1,257)
-
-
-
Total comprehensive income/(loss)
-
-
-
(1,257)
-
-
(1,257)
Reclassification on disposal of
subsidiaries
-
-
-
3,225
(63)
(3,162)
-
At 31 December 2020
56
149,994
5,048
(198,200)
(1,457)
46,902
2,343
Reserve transfer
-
-
-
(3,563)
1,457
2,106
-
Profit for the year
-
-
-
1,146
-
-
-
Total comprehensive income/(loss)
-
-
-
1,146
-
-
1,146
At 31 December 2021
56
149,994
5,048
(200,617)
-
49,008
3,489
The following describes the nature and purpose of each reserve within equity:
Reserve
Description and purpose
Share premium
Amounts subscribed for share capital in excess of nominal value.
Share-based payment reserve
Equity created to recognise share-based payment expense.
Accumulated losses
Cumulative net gains and losses recognised in profit or loss.
Translation reserve
Equity created to recognise foreign currency translation differences.
Other reserve
Own shares acquired, EBT (as defined in Note 19) shares and capital redemption and
capitalisation of redeemable zero dividend preference shares (“RZDP”).
The accompanying notes form an integral part of these financial statements.
- 12 -
Origo Partners Plc
Statement of cash flows
For the year ended 31 December 2021
2021
2020
Notes
US$'000
US$'000
Profit / (Loss) before tax
1,146
(1,257)
Adjustments for:
Realised gains/losses on disposal of investments
2
(278)
(22)
Unrealised gains/losses on investments at FVTPL*
2
(1,593)
565
Foreign exchange gains
3
7
Operating loss before changes in working capital and provisions
(722)
(707)
Proceeds from disposals of investments at FVTPL*
8
282
24
Increase in trade and other receivables
(2)
14
Decrease in trade and other payables
(10)
(126)
Net cash inflow / (outflow) from operations
270
(795)
Investing activities
Cash removed on disposal of subsidiary
-
(2)
Net cash outflow from investing activities
-
(2)
Financing activities
Capital distribution
-
-
Net cash outflow from financing activities
-
-
Net decrease in cash and cash equivalents
(452)
(797)
Effect of exchange rate changes on cash and cash equivalents
(5)
(7)
Cash and cash equivalents at beginning of year
1,651
2,455
Cash and cash equivalents at end of year
12
1,194
1,651
* FVTPL refers to fair value through profit or loss
The accompanying notes form an integral part of these financial statements.
- 13 -
Notes to the financial statements
1
Accounting policies
1.1
Corporate information
The Company is a limited liability company incorporated and domiciled in the Isle of Man whose shares were previously
publicly traded on the Alternative Investment Market (“AIM”) of the London Stock Exchange. The registered office is
located at 55 Athol Street, Douglas, Isle of Man IM1 1LA. The principal activity of the Company is that of an Investment
vehicle. The Company currently holds investments in companies including unquoted interests, and illiquid publicly traded
equity interests, based or principally active in China and Mongolia. On 20 November 2014, the Company’s shareholders
voted to amend the Company’s investing policy to that of a realisation vehicle.
1.2
Basis of preparation
The Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted
by the United Kingdom (“IFRS”). These comprise standards and interpretations approved by the International Accounting
Standards Board (“IASB”), together with interpretations of the International Accounting Standards and Standing
Interpretations Committee approved by the International Accounting Standards Committee that remain in effect, to the
extent that IFRS have been adopted by the United Kingdom.
Due to the company not being a parent at the year end, these are the single entity financial statements of Origo Partners
plc as prepared under IAS27.
Going concern
The Board has concluded that the Company is not considered to be a going concern and as a result of this the financial
statements for the year ended 31 December 2021 have been prepared on a basis other than that of going concern as the
Company is in the process of realising its final investments and the Board intends to wind up the Company once this has
taken place. There was no impact to the financial information as result of changing to this basis.
It is believed that the current carrying value of assets is equal to their recoverable amount and all liabilities have been
provided for.
The financial statements do not include any provision for the future costs of except to the extent that such costs were
committed at the end of the reporting period.
The comparative information is for the year from 1 January 2020 to 31 December 2020.
1.3
Functional and presentation currency
The financial statements are presented in United States dollars, which is also the company’s functional currency.
1.4 Use of judgments and estimates
In preparing these financial statements, management has made judgments and estimates that affect the application of
the Company’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised
prospectively.
The following is a list of accounting policies which cover areas that the Directors consider require estimates and
judgments which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities
within the next financial year:
- 14 -
1
Accounting policies (continued)
1.4
Use of judgments and estimates (continued)
(a)
Fair value of unquoted equity instruments
The Directors have estimated the value of each of its unquoted equity instruments by using their judgment to select the
most appropriate valuation methodology for each investment based on the recommendations of the International Private
Equity and Venture Capital Valuation Guidelines (the “Guidelines”). For more information on estimation, refer to Note 9.
Valuation methodologies mainly include multiples, discounted cash flow, industry valuation benchmarks, available
market prices and so on, which may apply individually or in combination. Key assumptions and judgments of each
methodology concerning the future and other key sources of estimation uncertainty will have a significant risk of causing
a material adjustment to the fair value of the instruments within the next financial year.
(b)
Assessment of the Company as investment entity
Entities that meet the definition of an investment entity within IFRS 10 are required to account for most investments in
controlled entities as held at fair value through profit or loss. Subsidiaries that provide investment related services or
engage in permitted investment related activities with investees continue to be consolidated unless they are also
investment entities. The directors have concluded that the Company meets the definition of an investment entity.
(c)
Assessment of the subsidiaries as investment entities
The Company has disposed or liquidated the remaining subsidiaries during the current year. Prior to derecognition, the
Company controlled the voting rights and ownership interests in its subsidiaries as stated in Note 9 for which the countries
of incorporation for those subsidiaries are included in the same note.
Per IFRS 10, there is a requirement for the Board to assess whether each subsidiary is itself an investment entity. The
Board has performed the assessments and has concluded that the subsidiaries stated in Note 9 are not operating
subsidiaries of the Group for the reasons below:
(I)
The subsidiaries do not provide services to the Company (including administrative services to the Board of the
Company, buying / selling securities as well as managing the portfolios on a fair value basis); and
(II)
The subsidiaries are not remunerated for these services.
(III) Each subsidiary is itself not deemed to be an investment entity investing solely for capital appreciation and
investment income.
(d)
Share-based payments
The Company has applied the requirements of IFRS 2 “Share-based payments” in these consolidated financial statements.
The Company issued share options, which are equity-settled share-based payments, to an ex-director, certain ex-
employees and to its advisors for services provided in respect of the admission of the Company to trading on the AIM of
the London Stock Exchange. Equity-settled share-based payments to directors and employees are measured at the fair
value of equity instruments awarded at the date of grant. Equity-settled share-based payments to non-employees are
measured at the fair value of goods or services rendered at the date when the goods or services are received. Where equity
investments are granted subject to vesting conditions, equity-settled share-based payments are expensed to the profit
or loss on a straight-line basis over the vesting period, based on the Company’s estimate of the number of shares that will
eventually vest. Fair value is measured by use of the Binominal option pricing model.
- 15 -
1 Accounting policies (continued)
1.4
Use of judgments and estimates (continued)
When estimating the value of the share options, the upper share rights and contingent share awards, significant
assumptions such as the expected life of the share options and the upper share rights, and expected volatility of the shares
have been applied based on management’s best estimates.
1.5
Summary of significant accounting policies
The accounting policies which follow set out those policies which apply in preparing the Financial Statements for the
period 1 January 2021 to 31 December 2021.
Standards and amendments effective for the period beginning 1 January 2021 or later
There were no new standards or interpretations effective and adopted for the first time for the year beginning on or after
1 January 2021 that had a significant effect on the Company’s financial statements.
Standards, interpretations and amendments to published standards not yet effective
The Company has not early applied the following new and amendments to IFRSs that have been issued but are not yet
effective
i)
Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as Current or Non-
current and Amendments to IAS 1: Classification of Liabilities as Current or Non-current –Deferral of Effective
Date – effective 1 January 2023
ii)
Amendments to IFRS 3: Business Combinations – Reference to the Conceptual Framework – effective 1 January
2022
iii) Amendments to IAS 16: Property, Plant and Equipment – effective 1 January 2022
iv) Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets – effective 1 January 2022
v)
Annual Improvements to IFRS Standards 2018-2020 Cycle – 1 January 2022
vi) The Directors anticipate that the application of all new and amendments to IFRSs will have no material impact
on the future results of the Company in the foreseeable future.
Financial instruments
Recognition and initial measurement
The Company initially recognises financial assets and financial liabilities at fair value through profit or loss (“FVTPL”) on
the trade date, which is the date on which the Company becomes a party to the contractual provisions of the instrument.
Other financial assets and financial liabilities are recognised on the date on which they are originated.
A financial asset or financial liability is measured initially at fair value plus, for an item not at FVTPL, transaction costs that
are directly attributable to its acquisition or issue.
Classification and subsequent measurement
Classification of financial assets
On initial recognition, the Company classifies financial assets as measured at amortised cost or FVTPL.
A financial asset is measured at amortised cost if it meets both the following conditions and is not designated as at FVTPL.
- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payment of principal and interest (“SPPI”).
All other financial assets of the Fund are measured at FVTPL.
- 16 -
1
Accounting policies (continued)
1.5
Summary of significant accounting policies (continued)
Financial instruments (continued)
Reclassifications
Financial assets are not reclassified subsequent to their initial recognition unless the Company were to change its business
model for managing financial assets, in which case all affected financial assets would be reclassified on the first day of the
first reporting period following the change in the business model. All assets and liabilities have been reclassified to current
as the business model of the Company has changed to that of realisation of its assets.
Subsequent measurement of financial assets
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including foreign exchange gains and losses,
are recognised in the statement of comprehensive income.
Equity investments and derivative financial instruments are included in this category.
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. Interest income is
recognised in ‘interest income calculated using the effective interest method’, foreign exchange gains and losses are
recognised in ‘net foreign exchange loss’ and impairment is recognised in ‘impairment losses on financial instruments’ in
the statement of comprehensive income. Any gain or loss on derecognition is also recognised in profit or loss.
Cash and cash equivalents, receivables and balances due from brokers are included in this category.
Financial liabilities – Classification, subsequent measurement and gains and losses
Financial liabilities are classified as measured at amortised cost or FVTPL.
A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such
on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any
interest expense, are recognised in profit or loss.
- 17 -
1
Accounting policies (continued)
1.5
Summary of significant accounting policies (continued)
Financial instruments (continued)
Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss.
Financial liabilities at amortised cost:
(b) This includes trade and other payables.
Redeemable zero dividend preference shares:
On initial recognition, redeemable zero dividend preference shares are recognised at the fair value, which are determined
using the prevailing market interest of similar non-convertible debts, net of issue costs incurred. In subsequent periods,
redeemable zero dividend preference shares are carried at amortised cost using the effective interest method.
Amortised cost measurement
The ‘amortised cost’ of a financial asset or financial liability is the amount at which the financial asset or financial liability
is measured on initial recognition minus the principal repayments, plus or minus the cumulative amortisation using the
effective interest method of any difference between that initial amount and the maturity amount and, for financial assets,
adjusted for any loss allowance.
Equity instrument
Financial instruments shall reclassify a financial liability as equity from the date when there is no existence of a contractual
obligation to deliver cash or another financial asset by the issuer. The equity instruments are recorded at the fair value of
the equity instruments issued. The difference between the carrying amount of the financial liability extinguished and the
fair value of the equity instruments issued shall be recognised in profit or loss. The equity instruments issued shall be
recognised initially and measured at the date the financial liability is extinguished.
Foreign currencies
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the statement of comprehensive income.
Non-monetary financial assets and liabilities that are carried at historic cost are translated using the exchange rate as at
the date of initial transactions and are not re-measured. Translation differences on non-monetary financial assets and
liabilities, such as equities held at fair value through profit or loss, are recognised in profit or loss as part of the fair value
gain or loss.
Cash and bank and borrowings
Cash and bank is defined as cash in hand, demand deposits, time deposit and short-term, highly liquid investments that
are readily convertible into known amounts of cash. They are subject to an insignificant risk of changes in value, and have
a short maturity, generally less than three months, less bank overdrafts which are repayable on demand and form an
integral part of the Company’s cash management. For the purpose of the statement of financial position, cash and bank
balances comprise cash on hand and at banks, including term deposits, which are not restricted as to use.
- 18 -
1
Accounting policies (continued)
1.5
Summary of significant accounting policies (continued)
Share-based payments
Ex employees (including former senior executives) of the Company received remuneration in the form of share-based
payment transactions (i.e. share options), whereby employees render services as consideration for equity instruments
(“equity-settled transactions”). Certain ex director, executives and key employees of the Company were granted share
appreciation rights (including upper share rights and contingent share awards), which can only be settled in cash (“cash-
settled transactions”). Advisors received equity-settled options in relation to the Company’s admission to trading on the
AIM of the London Stock Exchange.
The cost of these options with ex employees are measured by reference to the fair value of the equity instruments
awarded at the date of grant, whereas those with non-employees are measured at the fair value of goods or services
received at the date when the goods or services have been received. The fair value is determined by using binominal tree
model, further details of which are given in Note 18.
Equity-settled transactions
The cost of equity-settled transactions (share options) is recognised, together with a corresponding increase in equity,
over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
ex employees become fully entitled to the award (the “vesting date”). The cumulative expense recognised for equity-
settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has
expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. Movements in the
liability (other than cash payments) are recognised in profit or loss.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market or non-vesting condition, which are treated as vesting irrespective of whether or not the market condition is
satisfied, provided that all other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.
Cash-settled transactions
The cost of cash-settled transactions (upper share rights and contingent share awards) is measured initially at fair value
at the grant date using binominal tree model, further details of which are given in Note 17. This fair value is expensed over
the period until the vesting date with recognition of a corresponding liability. The liability is remeasured to fair value at
each reporting date up to and including the settlement date, with changes in fair value recognised in expense.
Taxes
Current Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted
or substantively enacted at the reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of
comprehensive income. Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the liability method on temporary differences at the reporting date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
- 19 -
1
Accounting policies (continued)
1.5
Summary of significant accounting policies (continued)
Taxes (continued)
Deferred tax liabilities are recognised for all taxable temporary differences, except:
i.
where the deferred tax liability arises from goodwill or the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
ii.
in respect of taxable temporary differences associated with investments in subsidiaries and associates where
the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible
temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
(a)
where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
(b)
in respect of deductible temporary differences associated with investments in subsidiaries and associates,
deferred tax assets are recognised only to the extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be available against which the temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Income taxes are recognised in the profit or loss or directly in equity except when a tax exemption has been granted.
Investment income/loss
Investment income/loss derived from the investment activities is equivalent to “revenue” for the purposes of IAS 1.
Investment income/loss is analysed into the following components:
(c) Realised gains/losses on the disposal of investments are the difference between the fair value of the consideration
received less any directly attributable costs, on the sale of equity and the repayment of loans and receivables, and
its carrying value at the start of the accounting period.
(d) Unrealised gains/losses on the revaluation of investments are the movement in the carrying value of investments
measured at fair value between the start and end of the accounting period and the impairment of amortised cost
loans.
- 20 -
1
Accounting policies (continued)
1.5
Summary of significant accounting policies (continued)
Provisions and contingent liabilities
Provisions are recognised for liabilities of uncertain timing or amount when the Group has a legal or constructive
obligation arising as a result of a past event, which will probably result in an outflow of economic benefits that can be
reasonably estimated.
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably,
the obligation is disclosed as a contingent liability, unless the probability of an outflow of economic benefits is remote.
Possible obligations, the existence of which will only be confirmed by the occurrence or non-occurrence of one or more
future events, are also disclosed as contingent liabilities unless the probability of an outflow of economic benefits is
remote.
2
Investment loss
2021
US$'000
2020
US$'000
Realised gains/losses on disposal of investments
278
22
- Investments at FVTPL
278
24
- Subsidiary
-
(2)
Unrealised gains/losses on investments
-
- Investments at FVTPL
1,593
(565)
Total
1,871
(543)
3
Other administrative expenses
2021
US$'000
2020
US$'000
Recurring expenses:
- Directors fees
(215)
(210)
- Audit fees
(26)
(35)
- Other
(481)
(532)
Non-recurring expenses*
-
52
Total
(722)
(725)
* Non-recurring expenses include professional fees of an ad-hoc nature and previous advisor fees. In 2020 expenses totalling
US$52k previously recognised have been written back.
- 21 -
4
Directors’ remuneration
2021
US$'000
2020
US$'000
Directors' emoluments
215
210
215
210
Directors’ remuneration for the year 2021 is as follows:
Name
2021
US$'000
2020
US$'000
Mr. Hiroshi Funaki
75
75
Mr. Philip Peter Scales
60
55
Mr. John Chapman
80
80
215
210
5
Finance costs
2021
US$'000
2020
US$'000
Bank charges
(-)
(2)
(-)
(2)
6
Income tax
As the Company is not in receipt of income from Manx land, certain related business or property and does not hold a Manx
banking licence, it is taxed at the standard rate of 0% on the Isle of Man. The Company is resident for tax purposes in the
Isle of Man and subject to corporate income tax at the standard rate of 0% and as such no provision for tax in the Isle of
Man has been made.
2021
US$'000
2020
US$'000
Current tax
Current year
-
-
Deferred tax
Deferred income tax
-
-
Total income tax credit in the consolidated statement of comprehensive income
-
-
The income tax for the year can be reconciled per the consolidated statement of comprehensive income as follows:
2021
US$'000
2020
US$'000
Profit/(loss) before tax
1,146
(1,257)
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Deferred tax
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-
Total income tax credit in the consolidated statement of comprehensive income
-
-
- 22 -
6
Income tax (continued)
Deferred income tax liability:
2021
US$'000
2020
US$'000
Deferred income tax liability
-
-
Total deferred income tax liability
-
-
7
Loss per share (“LPS”)
Numerator
2021
US$'000
2020
US$'000
Profit/(loss) for the year attributable to ordinary shareholders of the company
as used in the calculation of basic loss per share
229
(251)
Profit/(loss) for the year attributable to redeemable zero dividend preference
shareholders of the company as used in the calculation of basic loss per share
917
(1,006)
Profit/(loss) for the year attributable to ordinary shareholders of the company
as used in the calculation of diluted loss per share
229
(251)
Profit/(loss) for the year attributable to redeemable zero dividend preference
shareholders of the company as used in the calculation of diluted profit/(loss)
per share
917
(1,006)
Denominator
2021
Number of
Shares
2020
Number of
shares
Weighted average number of ordinary shares for basic LPS
351,035,389
351,035,389
Effect of dilution*:
Share options
-
-
Weighted average number of ordinary shares adjusted for the effect of dilution
351,035,389
351,035,389
Weighted average number of redeemable zero dividend preference shares for
basic EPS before and after adjusted for the effect of dilution
14,991,781
14,991,781
Basic EPS of ordinary shares
0.08 cents
(0.07) cents
Diluted EPS of ordinary shares
0.08 cents
(0.07) cents
Basic EPS of redeemable zero dividend preference shares
6.12 cents
(6.71) cents
Diluted EPS of redeemable zero dividend preference shares
6.12 cents
(6.71) cents
* Diluted profit/(loss) per share for the years ended 31 December 2021 and 31 December 2020 is the same as the basic
loss per share, as the Company’s outstanding share options and convertible zero dividend preference shares had an
anti-dilutive effect on the basic loss per share for the years ended 31 December 2021 and 31 December 2020.
- 23 -
8
Investments at fair value through profit or loss
As at 31 December 2021
The shares held in China Rice and Unipower are all convertible preference shares whilst the remaining investments held
in the other entities are all ordinary equity shares. The 'proportion of ownership interest' represents the percentage of
the shares held by the Company in all share classes.
As at 31 December 2020
The shares held in China Rice and Unipower are all convertible preference shares whilst the remaining investments held
in the other entities are all ordinary equity shares. The 'proportion of ownership interest' represents the percentage of
the shares held by the Company in all share classes.
Notes
a.
These investments are associates of the Company measured at fair value through profit or loss.
In accordance with IFRS 13 “Fair Value Measurement”, investments recognised at fair value are required to be analysed
between those whose fair value is based on:
(I) Quoted prices in active markets for identical assets or liabilities (Level 1);
(II) Those involving inputs other than quoted prices included in level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices) (Level 2); and
(III)Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level
3).
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level
input that is significant to the fair value measurement as a whole) at the end of each reporting period. There have been
no transfers between levels during the year of 2021.
Name
Country of
incorporation
Fair value
hierarchy
level
Proportion of
ownership
interest
Cost
US$’000
Fair value
US$’000
Celadon Mining Ltd
British Virgin Islands
3
8.9%
13,069
50
Six Waves Inc
British Virgin Islands
3
1.1%
240
2,182
Unipower (Note a)
Cayman Islands
3
16.5%
4,301
-
China Rice (Note a)
British Virgin Islands
3
32.1%
13,000
-
Moly World Ltd (Note a)
British Virgin Islands
3
20.0%
10,000
200
2,432
Name
Country of
incorporation
Fair value
hierarchy
level
Proportion of
ownership
interest
Cost
US$’000
Fair value
US$’000
Celadon Mining Ltd
British Virgin Islands
3
8.9%
13,069
564
Six Waves Inc
British Virgin Islands
3
1.1%
240
-
Gobi Coal & Energy Ltd
British Virgin Islands
3
7.5%
14,960
275
Fram Exploration AS
Norway
3
0.6%
1,223
-
Staur Aqua AS
Norway
3
9.2%
719
-
Unipower (Note a)
Cayman Islands
3
16.5%
4,301
-
China Rice (Note a)
British Virgin Islands
3
32.1%
13,000
-
Moly World Ltd (Note a)
British Virgin Islands
3
20.0%
10,000
-
Other quoted investments
1
593
3
842
- 24 -
8
Investments at fair value through profit or loss (continued)
The following table provides an analysis of investments carried at fair value by level of fair value hierarchy:
31 December 2021
2021
Level 1
Level 2
Level 3
Total
US$’000
US$’000
US$’000
US$’000
Investments at fair value through profit or loss
x
Listed equity investments
-
-
-
-
x
Unlisted equity investments
-
-
2,432
2,432
-
-
2,432
2,432
31 December 2020
2020
Level 1
Level 2
Level 3
Total
US$’000
US$’000
US$’000
US$’000
Investments at fair value through profit or loss
x
Listed equity investments
3
-
-
3
x
Unlisted equity investments
-
-
839
839
3
-
839
842
Changes in investments at fair value through profit or loss based on Level 3:
2021
US$’000
2020
US$’000
Opening balance
839
1,404
Proceeds from disposals of investments
(275)
(24)
Realised gain/(losses) on disposals of investments
275
24
Movement in unrealised losses on investments
- In profit or loss
1,593
(565)
Closing balance
2,432
839
Description of significant unobservable inputs to valuation:
As at 31 December 2021
Valuation technique
Significant
unobservable inputs
Range
Six Waves Inc
Consensus pricing
method
Offered quote and
post year end sale
Nil
Moly World Ltd
Consensus pricing
method
Offered quote and
post year end sale
Nil
Celadon Mining Ltd
Multiples method
Discount for lack of
marketability
4%
Six Waves Inc and Moly World Ltd have been valued in the financial statements at the sales proceeds agreed in their sale
shortly after the end of the period as disclosed in note 23.
Celadon Mining Limited was previously valued at US$1,132,000 as at 31 December 2019 using a multiples based approach
which was supported by a sale agreement. When the sale agreement failed to materialise the Directors have chosen to
write the value of the asset down. It is currently held at 4% of this latest NAV (2019) at US$50,000.
- 25 -
8
Investments at fair value through profit or loss (continued)
As at 31 December 2020
Valuation technique
Significant
unobservable inputs
Range
Celadon Mining Ltd
Multiples method
Discount for lack of
marketability
80%
Gobi Coal & Energy Ltd
Consensus pricing
method
Offered quote
US$275,348
9
Investments in subsidiaries
The Company liquidated its remaining subsidiary, Origo Resource Partners Ltd, during the year. Prior to derecognition
the Company controlled 100% of the voting and ownership rights of Origo Resource Partners Ltd, a company
incorporated in Guernsey.
10
Loans
The Group has entered into convertible credit agreements and has the right to convert the outstanding principal balance
of relevant loans into borrower’s shares according to certain conversion conditions, and loan agreements with certain
investee companies as set forth in the table below.
As at 31 December 2021:
Loan
rates
Loan
principal
Loans
due
within
one year
Loans
due after
one year
Fair value
Borrower
%
US$'000
US$'000
US$'000
US$'000
Convertible credit agreements*
Staur Aqua AS
0-15
3,848
-
-
-
-
-
-
The convertible loan issued to Staur Aqua was fully impaired in 2018.
As at 31 December 2020:
Loan
rates
Loan
principal
Loans
due
within
one year
Loans
due after
one year
Fair value
Borrower
%
US$'000
US$'000
US$'000
US$'000
Convertible credit agreements*
Staur Aqua AS
0-15
3,848
-
-
-
-
-
-
*
Loans in relation to convertible credit agreements are measured at fair value. Loans in relation to loan agreements
are measured at amortised cost using the effective interest rate method less any identified impairment losses.
- 26 -
11
Trade and other receivables
2021
US$'000
2020
US$'000
Other debtors
-
-
Prepayments
23
20
Total
23
20
12
Cash and cash equivalents
2021
US$'000
2020
US$'000
Current account
1,194
1,651
Total cash and cash equivalents
1,194
1,651
13
Trade and other payables
2021
US$'000
2020
US$'000
Trade payables
-
-
Other payables
160
170
Total
160
170
14
Redeemable / convertible zero dividend preference shares
Number of
shares
Liability
component
Equity
component
Other
reserve
US$'000
US$'000
US$'000
Balance at 1 January 2020
57,000,000
-
-
49,008
-
-
-
Balance at 31 December 2020
57,000,000
-
-
49,008
Balance at 31 December 2021
57,000,000
-
-
49,008
In September 2017, the Company restructured the terms of its existing convertible zero dividend preference shares, where
the conversion feature has been removed, which were revised as redeemable zero dividend preference shares. The
principal terms of restructure includes: i) removal of redemption of at least 12 million convertible zero dividend preference
shares and/or maturity date; ii) reset of the accreted principal amount per preference shares to US$1.0526 each; iii) no
rate of return on the outstanding amount will begin to accrete until 1 January 2018 and, iv) in respect of each preference
share still in issue on 1 January 2018, its principal amount of US$1.0526 shall be subject to the accretion of a rate of return
equal to 4 per cent per annum from (and including) 1 January 2018 to (and including) the date on which such amount is
redeemed, with such return accruing on a simple and not compound basis. Due to the revised terms, the convertible zero
dividend preference shares were regarded as an extinguishment and redeemable zero dividend preference shares were
therefore recognised.
On 27 September 2017, the rights attaching to the redeemable zero dividend preference shares and the ordinary shares
changed so that they rank alongside each other, and the redeemable zero dividend preference shareholders receive
distributions when ordinary shareholders do. Post 27 September 2017, the redeemable zero dividend preference shares
are accounted for as an equity instrument in accordance with the accounting policies disclosed in Note 1.5.
All future distributions to ordinary and redeemable zero dividend preference shareholders are on the following basis (pro
rata within the respective classes of shares):
Ьin respect of the first US$15 million of distributions, 80 percent (i.e. US$12 million) to the redeemable zero dividend
preference shareholders and 20 percent (i.e. US$3 million) to the ordinary shareholders;
- 27 -
14
Redeemable / convertible zero dividend preference shares (continued)
Ьin respect of distributions in excess of the first US$15 million: until such time as all redeemable zero dividend preference
shares have been redeemed in full, 44 percent to the redeemable zero dividend preference shareholders and 56 percent
to the ordinary shareholders; thereafter, 100 percent to the ordinary shareholders.
The redeemable zero dividend preference shares are now subject to the distribution in accordance with articles 4.10 to
4.12 of the Articles. In summary, the distributions will be made, at such reasonable time as the Board shall decide, when:
a) the Company has available funds, which is the aggregate amount of the Company’s net cash less working capital
requirements for the following 12 months and;
b) the Company would be able to comply with the solvency test under the Companies Act 2006 (“Solvency Test”)
immediately after distribution.
15
Issued capital
2021
2020
Authorised
Number of shares
£'000
Number of shares
£'000
Ordinary shares of £ 0.0001 each
500,000,000
50
500,000,000
50
Issued and fully paid
Number of shares US$'000
Number of shares
US$'000
Ordinary shares of £ 0.0001 each
At beginning and end of the year
358,746,814
56
358,746,814
56
Redeemable zero dividend preference shares of no
par value (note 16)
At 1 January
57,000,000
-
57,000,000
-
-
-
-
-
At 31 December
57,000,000
-
57,000,000
-
16
Other reserve
This mainly comprised 57,000,000 (US$49,008,000) redeemable zero dividend preference shares at no par value
capitalised in September 2017 (see note 14).
17
Financial instruments - Risk management
The Company are exposed through their operations to one or more of the following risks:
-
Fair value risk
-
Cash flow interest rate risk
-
Currency risk
-
Liquidity risk
-
Concentration risk
-
Price risk
The policy for managing these risks is set by the board. The policy for each of the above risks is described in more detail
below:
Fair value risk
The Group’s financial assets are predominantly investments in unquoted companies, and the fair value of each investment
depends upon a combination of market factors and the performance of the underlying asset. The Company does not
hedge the market risk inherent in the portfolio but manages asset performance risk on an asset-specific basis by
continuously monitoring each asset’s performance and charging the change of each asset’s fair value to the statement of
comprehensive income as necessary.
- 28 -
17
Financial instruments - Risk management (continued)
Cash flow interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates is relatively small
as the Company’s outstanding debt is fixed rate. Meanwhile, the interest income is not material in the context of the total
portfolio return as a whole.
Currency risk
Some of the Company’s assets, liabilities, income and expenses are effectively denominated in currencies other than US
Dollars (the Company’s presentation and functional currency). Fluctuations in the exchanges rates between these
currencies and US Dollars will have an effect on the reported value of those items.
The following table demonstrates the sensitivity of the Company’s profit before tax due to a change in the fair value of
monetary assets and liabilities resulting from a reasonably possible change in the US dollar, with all other variables held
constant.
Appreciation/
(depreciation) in US$
Effect on loss before tax
US$'000
Effect on net asset value
US$'000
2021
+10%
9
9
-10%
(9)
(9)
2020
+10%
-
-
-10%
-
-
The assumed movement for currency rate sensitivity analysis is based on the currently observable market environment.
The Company’s assets and liabilities that are effectively denominated in currencies other than the functional currency, US
Dollars, are:
2021
GBP
US$'000
NOK
US$'000
RMB
US$'000
HKD
US$'000
CAD
US$'000
ZAR
US$'000
Total
US$'000
Cash and bank balances
3
-
-
-
-
-
3
Investments at FVTPL*
-
-
-
-
-
-
-
Loans
-
-
-
-
-
-
-
Trade and other receivables
-
-
-
-
-
-
-
Total Assets
3
-
-
-
-
-
3
Trade and other payables
-
-
-
-
-
-
-
Financial guarantee contracts
-
-
-
-
-
-
-
Provision
-
-
-
-
-
-
-
Total Liabilities
-
-
-
-
-
-
-
2020
GBP
US$'000
NOK
US$'000
RMB
US$'000
HKD
US$'000
CAD
US$'000
ZAR
US$'000
Total
US$'000
Cash and bank balances
93
-
-
-
-
-
93
Investments at FVTPL*
-
-
-
-
-
-
-
Loans
-
-
-
-
-
-
-
Trade and other receivables
-
-
-
-
-
-
-
Total Assets
93
-
-
-
-
-
93
Trade and other payables
-
-
-
-
-
-
-
Financial guarantee contracts
-
-
-
-
-
-
-
Provision
-
-
-
-
-
-
-
Total Liabilities
-
-
-
-
-
-
-
- 29 -
17
Financial instruments - Risk management (continued)
Liquidity risk
The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the remaining
period at the end of reporting period to the contractual maturity date or, if earlier, the expected date on which the
financial liabilities will be settled. The amounts in the table are the contractual undiscounted cash flows.
Liabilities
31 December 2021
Carrying
amount
Less than
1 month
1-3 months
3-12
months
over 12
months
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Other payables
160
160
-
-
-
160
Upper share rights
/contingent share awards
-
-
-
-
-
-
Short-term borrowing
-
-
-
-
-
-
Total
160
160
-
-
-
160
Liquidity risk (continued)
Liabilities
31 December 2020
Carrying
amount
Less than
1 month
1-3 months
3-12
months
over 12
months
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Other payables
170
170
-
-
-
170
Upper share rights
/contingent share awards
-
-
-
-
-
-
Short-term borrowing
-
-
-
-
-
-
Total
170
170
-
-
-
170
Concentration risk
The main concentration risk for Origo is that the largest investments are concentrated in China for the amount of
US$2,232,000 (2020: US$567,000), 92% (2020: 67%) out of the total portfolio value of US$2,432,000 (2020: US$842,000).
Price risk
Price risk may affect the value of listed and unlisted investments as a result of changes in market prices (other than arising
from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer or factors
affecting all instruments traded in the market.
As the majority of financial instruments are carried at fair value, with fair value changes recognised in the consolidated
statement of comprehensive income, all changes in market conditions will directly affect reported portfolio returns.
Price risk is managed by constructing a diversified portfolio of instruments traded on various markets and hedging where
appropriate.
- 30 -
17
Financial instruments - Risk management (continued)
The following table details the sensitivity to a 10% variation in equity prices. The sensitivity analysis includes all equity
investments held at fair value through profit or loss and adjusts their valuation at the year-end for a 10% change in value.
2021
US$'000
2020
US$'000
Increase in price
243
84
Decrease in price
(243)
(84)
The sensitivity to equity and fund investments has not increased during the year due to net investments and investment
portfolio loss in the year.
18
Share-based payments
The Group has a number of share schemes that allow an ex-director, certain ex-employees and its advisors to acquire
shares in the Company, as detailed in Note 1.4(d).
The total cost recognised in the consolidated statement of comprehensive income is shown below:
2021
US$'000
2020
US$'000
Equity-settled option
-
-
Upper share rights/contingent share awards
-
-
Total
-
-
The following table illustrates the number (“No.”) and weighted average exercise prices (“WAEP”) of, and movements in,
share options during the years ended 31 December 2021 and 31 December 2020.
2021
2021
2020
2020
No.
WAEP
No.
WAEP
Outstanding at 1 January
9,500,000
31.00p
9,500,000
31.00p
Granted during the year
-
-
-
-
Forfeited during the year
-
-
-
-
Exercised during the year
-
-
-
-
Expired during the year
-
-
-
-
Outstanding at 31 December
9,500,000
31.00p
9,500,000
31.00p
Exercisable at 31 December
9,500,000
31.00p
9,500,000
31.00p
The weighted average remaining contractual life for the share options outstanding as at 31 December 2021 was 0.09 years
(31 December 2020: 1.08 years).
Outstanding options include 9,500,000 equity-settled options granted on 2 February 2012 respectively to certain directors
and employees of the Company. The Company did not enter into any share-based transactions with parties other than
employees during the years from 2007 to 2018, except as described above.
During the years 2020 and 2021, there were no options granted, forfeited or exercised.
- 31 -
18
Share-based payments (continued)
The following table illustrates the number (“No.”) and weighted average exercise prices (“WAEP”) of, and movements in
upper share rights and contingent share awards during the years ended 31 December 2021 and 31 December 2020.
2021
2021
2020
2020
No.
WAEP
No.
WAEP
Outstanding at 1 January
2,993,358
9.48p
2,993,358
9.48p
Granted during the year
-
-
-
-
Forfeited during the year
-
-
-
-
Exercised during the year
-
-
-
-
Expired during the year
-
-
-
-
Outstanding at the end of the year
2,993,358
9.48p
2,993,358
9.48p
Exercisable at the end of the year
2,993,358
9.48p
2,993,358
9.48p
On 20 July 2012, 870,000 of contingent share awards were granted to certain directors, executives and key employees
under the Company’s JSOS, which vested 197 days from the date of grant. The contractual life of each contingent share
award granted is 10 years.
On 30 December 2014, 2,123,358 of share awards were granted to certain key employees under the Company’s JSOS,
which vested immediately at the date of grant. The contractual life of each share offer granted is 10 years.
The carrying amount of the liability relating to the upper share rights and the contingent share award as at 31 December
2021 is US$nil (2020: US$nil) and the credit expense recognised as share-based payments during the year is US$nil (2020:
US$nil).
19
Related party transactions
Identification of related parties
The Company has a related party relationship with its subsidiaries, associates and key management personnel. The
Company receives and pays certain debtors and creditors on behalf of its subsidiaries and the amounts are recharged to
the entities. Transactions between the Company and its subsidiaries have been eliminated on consolidation.
Transactions with key management personnel
The Company’s key management personnel are the non-executive directors as identified in the director’s report.
The following balances were included in trade and other payables and were outstanding in respect of Directors
remuneration at the year end.
2021
2020
US$'000
US$'000
Amounts due to related parties
Key management personnel:
Hiroshi Funaki
-
-
Philip Peter Scales
-
(15)
John Chapman
(80)
(80)
20
Capital management
The primary objectives of the Company’s capital management are to safeguard the Company’s ability to maintain healthy
capital ratios in order to support its business and maximise shareholders’ value.
The Company manages and makes appropriate adjustments to its capital structure on an ongoing basis in light of changes
in economic conditions and the risk characteristic of the underlying assets. To maintain or adjust the capital structure, the
Company may adjust dividend payments to shareholders, return capital to shareholders and/or issue new shares. The
Company is not subject to any externally imposed capital requirements. No changes were made in the processes during
the years ended 31 December 2021 and 31 December 2020.
- 32 -
20
Capital management (continued)
The Company monitors capital using a gearing ratio, which is net debt divided by capital plus net debt. Net debt includes
total liabilities less cash and bank balances. Capital includes equity attributable to equity holders of the parent company.
The gearing ratios as at the reporting dates were as follows:
2021
2020
US$’000
US$’000
Total liabilities
160
170
Less: Cash and bank balances
(1,194)
(1,651)
Net debt
(1,034)
(1,481)
Equity attributable to equity holders of the company
3,489
2,343
Capital
3,489
2,343
Capital and net debt
2,455
862
Gearing ratio
(42%)
(172%)
21
Summary of financial assets and financial liabilities by category
2021
2020
US$’000
US$’000
Financial assets
Cash
1,194
1,651
Financial assets at amortised cost
23
20
Fair value through profit or loss – designated
2,432
842
3,649
2,513
Financial liabilities
Financial liabilities measured at amortised cost
160
170
Financial guarantee contracts
-
-
160
170
22
Commitments and contingencies
There were no material contracted commitments or contingent assets or liabilities at 31 December 2021 (31 December
2020: none) that have not been disclosed in the financial statements.
- 33 -
23
Subsequent events
Celadon Mining Limited
On 24 October 2022 Origo sold the Celadon investment for $50,000 to Asia Shipping logistics and payment was received
on 25 October 2022.
Six Waves Inc
On 27 January 2022 the Company announced the sale of its entire investment in Six Waves Inc for US$2,182,543. The
investment had previously been carried at nil.
Moly World Limited
On 2 February 2022 the Company announced the sale of its entire investment in Moly World Limited for US$200,000.
The investment had previously been carried at nil.
Distribution
On 2 February 2022 the Company announced the return of capital of US$1,700,000 with payment made on 22 March
2022. In accordance with the Articles of Association, eighty per cent of the amount was distributed to holders of the
Company’s redeemable preference shares.
Listing
On 11 April 2022, the Company’s Nomad Arden Partners announced that it would no longer be providing Nomad services
following a change in ownership at Arden. The implications of this were that on 28 April 2022 Origos’s ordinary and
redeemable preference shares were suspended from trading on the AIM. Following determination by the Board that the
financial implications of appointing a new Nominated advisor were not in the best interest of the company, the admission
of Origo’s shares to AIM was cancelled on 30 May 2022.
- 34 -
Origo Partners Plc
Directors, Advisors and Other Information
Directors
John Chapman, Non-Executive Chairman
Hiroshi Funaki, Non-Executive Director
Philip Peter Scales, Non-Executive Director
Country of incorporation
Isle of Man
Company number
005681V
Auditor
Lubbock Fine LLP
Paternoster House
65 St Paul’s Churchyard
London EC4M 8AB
UK legal advisers
Travers Smith LLP
10 Snow Hill,
London EC1A 2AL