ZAI Capital Group S.A. Société Anonyme

Transcription

1 Société Anonyme Interim condensed consolidated financial statements for the half-year ended 31 January 2016 Registered number R.C.S. Luxembourg B Avenue Pasteur, L-2311, Luxembourg

2 Contents Page Directors and other information 1 Management report 2 6 Interim condensed consolidated statement of profit and loss and other comprehensive income 7 Interim condensed consolidated statement of financial position 8 Interim condensed consolidated statement of changes in equity 9 Interim condensed consolidated statement of cash flows 10 Notes to the interim condensed consolidated financial statements 11 15

3 Directors and other information Directors Registered office Ray James Zimmerman (UK), James Joseph Mullins (Scotland) Ms. Consuelo Nardon (Luxembourg) Resigned 10 September 2015 Mr. Geert Kruizinga (Luxembourg) Resigned 10 September 2015 Ka Ming Wong (Hong Kong) Resigned 26 October 2015 Fuzay ( Kenny ) Song (Greece) Appointed 27 October Avenue Pasteur L-2311, Luxembourg 1

4 Interim Management report The Directors present the interim report and accounts of ZAI Capital Group S.A. for the half year ended 31 January These unaudited financial statements are not the company s statutory financial statements. They have not been audited or reviewed by auditors. 1. BUSINESS REVIEW AND RESULTS A. The Company The Company was incorporated in Luxembourg as a public limited liability company (société anonyme) with unlimited duration on 13 May 2013 under the name "ZAI Capital Group S.A. The Company is registered with the Luxembourg trade and companies register under number B The Company's purpose is the creation, holding, development and realization of a portfolio, consisting of participations and interests and rights of any kind and of any other form of investment in entities in the Grand Duchy of Luxembourg and in foreign entities, whether such entities exist or are to be created, especially by way of subscription, acquisition by purchase, sale or exchange of securities or rights of any kind whatsoever, such as equity instruments, debt instruments, patents and licenses, as well as the administration management, development and control of such portfolio. The Company may further grant any form of security for the performance of any obligations of the Company or of any entity in which it holds a direct or indirect interest or right of any kind or in which the Company has invested in any other manner or which forms part of the same group of entities as the Company and lend funds or otherwise assist any entity in which it holds a direct or indirect interest or right of any kind or in which the Company has invested in any other manner or which forms part of the same group of companies as the Company. The Company may borrow and raise funds in any form and may issue any kind of notes, bonds and debentures and generally issue any debt, equity and/or hybrid securities in accordance with Luxembourg law. The Company may carry out any commercial, industrial, financial, real estate or intellectual property activities which it may deem useful in accomplishment of these purposes. The Company plans to invest in or acquire (through merger, share exchange, share purchase, asset acquisition, reorganization or similar transaction), hold and actively manage Investment Banking companies specialized in servicing small-to-medium sized businesses ( SMC ). The Company has a plan to invest in such companies worldwide, with a view to creating a unique ensemble of similar yet complementary businesses that will collectively create a firm with global distribution capability specifically dedicated to the SMC sector. The Company will achieve this by targeting companies where it can either exercise management control or have an active role in the governance and strategic management of such businesses. B. Significant event and business review During the period the company suffered a setback with regards to our US operations. The Company previously acquired a 24.9% interest in a U.S. Broker Dealer previously names Zeus Securities, and subsequently renamed ZAI Capital (U.S.) LLC. Our agreement with the previous owners allowed us to acquire the balance of the shares in the Company, subject to certain conditions. Unfortunately we have now 2

5 Interim Management report (continued) had a dispute with the Vendor, who has refused to tender the balance of the shares at the agreed price. We have passed the matter over to our US legal advisers for appropriate action. During the period, we made an investment in and loan to a new business, backing a management team specialised in the secondary trading of securities, mostly on the London Capital Markets. We hope this activity, named ZAI Capital Markets, will allow us to leverage, and make the most of our investment in the online share trading platform. Importantly, this team develops and offers clients investment and trading ideas in large cap securities. This will give us the ability to offer investment products other than small caps to those investors interested in using the trading platform. We believe this additional service offer could be quite synergistic, and value enhancing. The investment is not large, with our exposure limited to less than GBP100k. In the Hong Kong market, given the experience we have had in attempting to acquire existing broker dealers (which has not been a great success) the Company has now decided to make an application to the SFC directly to obtain a license. We plan to start the application process in Q1-Q2 of the upcoming financial year. C. Financial overview The Group continues to be in the startup stage and will remain so until the acquisitions of potential targets are completed. Thus, the Group currently has no operating revenue. For the half-year ended 31 January 2016, the Company incurred administrative expenses of EUR 74,384. These costs are primarily related to the administrative expenses, the regulatory and stock exchange fees. The Company s net loss was EUR 79,045 or an equivalent loss per share of EUR The Company s assets primarily consist of EUR 617,802 related to the loans granted to ZAI Wealth Management limited, ZAI Global Limited and ZAI Corporate Finance Limited and cash and cash equivalents of EUR 168,266. The Company s liabilities consist of EUR 165,987 related primarily to vendor payables for professional fees and amounts owed to Directors EUR 307,036. The Company s total net equity was EUR 701,471 at 31 January The Company had cash and cash equivalents totalling EUR 168,266 as at 31 January Taxes Since there was no profit in the half-year ended 31 January 2016, the Company has paid only statutory required minimum tax. D. Current developments The current developments of the business are covered in B. Significant event and business review, above. 2. RISK MANAGEMENT A. Risks and uncertainties Considering the limited activity of the Company, the principal risks and uncertainties relate to the financing of its operating costs. The Company is exposed to the following risks: 3

6 Interim Management report (continued) Market risks: The Company operates in a highly competitive market and the increased competition may result in a decline in its market share and lower profit margins The business of the companies the Company will invest in is largely dependent on global economic conditions, and the global economic outlook remains uncertain The target companies are dependent on the market environment The Company manages market risk by staying informed of market developments and changes likely to affect the Company s business. When market conditions change, Management attempt to take corrective action. Operational risks: The Company is a recently formed company incorporated under Luxembourg law with no operating history and no revenues, and investors have limited basis on which to evaluate the Company s ability to achieve its business objective The Company is subject to foreign exchange risks The target companies may be unable to identify suitable candidates for an IPO and subsequent placement of shares The target companies may be unable to place the shares of its IPO candidates The target companies may lose their permits, approvals, licenses and accreditations necessary for the business The business accreditation of the target companies could be withdrawn The Company, and the target companies could be subject to changes in regulation or legislation The business of the target companies could be subject to high regulatory compliance requirements such as the requirement for FCA authorization The Company s business could be impacted by regulations on shareholdings and shareholders rights in regulated companies The Company, and the target companies could have insufficient capitalization to meet their applicable regulatory requirements The Company, and the target companies could lose their key people The future success of the Company, and the target companies depends on the successful recruitment and retention of qualified personnel The Company, and the target companies are dependent on availability of capital The business of the target companies could be impacted by nonpayment by clients resulting in operating losses The business of the target companies could be subject to volatility of project based business The target companies could fail to accomplish strategic targets The Company s board of directors is not experienced in complying with Luxembourg legal requirements, and the Company has not yet implemented a comprehensive corporate compliance system. The Company and the target companies may be involved in disputes and litigation The Company and the target companies may have insufficient insurance coverage The Company and the target companies may fail to obtain proprietary investments in securities The Company and the target companies could be subject to computer and software or telecommunications outage in key systems The Company and the target companies could suffer a loss of reputation due to non-performance or non-compliance with applicable regulatory or transparency standards by clients The Company and the target companies could be subject to employee misconduct The Company and the target companies could suffer from poor performance of important external service providers The Company manages operational risk by executing a sound strategy, as set out in the Prospectus, and 4

7 Interim Management report (continued) executing the strategy with corresponding operational decisions which it considers to be appropriate. 3. CORPORATE GOVERNANCE 3.1 Corporate governance code to which the Company is subject to: The Group has adopted the X (Ten) Principles of Corporate Governance of the Luxembourg Stock Exchange, published in May In addition, the Group engages the team of advisers, including Baker and Mackenzie to ensure corporate governance and adherence to the local legislation at all times. The Company also follows the Remuneration Committee Charter adopted by the Board of Directors of ZAI Capital Group S.A. on 20 November The Remuneration Committee is chaired by Mr. Song. The Company has not yet adopted any employee share scheme. 3.2 Shares: The Company's approved and issued share capital totals EUR 94,632 consisting of 251,709,199 shares without a nominal value. Apart from Mr. Ray J. Zimmerman, who currently holds more than more than 10% direct and indirect shares of the Company, the Company does not have any other significant direct and indirect shareholdings (above 10%) nor shareholders with any special control rights. There are no restriction on voting rights, such as limitations of the voting rights of holders of a given percentage or number of votes, deadlines for exercising voting rights, or systems whereby, with the Company's cooperation, the financial rights attaching to the shares are separate from the possession of shares. The Company doesn t have any restrictions on the transfer of shares, such as limitations on the holding of shares or the need to obtain the approval of the Company or other holders of shares, without prejudice of art 46 of the Directive 2001/34/EC. The Company is not aware of any agreements between shareholders which are known to the Company and may result in restrictions of transfer of shares and/or voting rights within the meaning of Directive 2004/109/EC (Transparency Directive). The Company does not have any shares, which are not admitted to trading on a regulated market in a Member State or in treasury. 3.3 Directors and their interests The shareholders of the Company are mainly resident the Euro area Member States. Following the IPO, Mr. Ray J. Zimmerman directly holds 80,000,006 shares, and is one of 4 named beneficiaries of the Allmagel Trust, which holds 100,000,000 shares. Mr. Mullins holds 2,500,000 shares in the Company. There were no director s dealings in the Company s shares in the period. 4. SUBSEQUENT EVENTS To the best of the Director s knowledge, there have been no other material subsequent events. 5

8 Interim Management report (continued) 5. Accounting records The directors believe that they have complied with the requirements with regard to the keeping of proper books of account by engaging accounting personnel with the appropriate expertise and by providing adequate resources to the financial function. 6. Responsibility Statement The Directors confirm that to the best extent of their knowledge: i) The unaudited interim management accounts, which have been prepared in accordance with applicable Luxembourg law and International Financial Reporting Standards (IFRS) as adopted for use in the European Union, give a true and fair view of the assets, liabilities, and financial position of the Company as required by the law dated 11 January 2008 on transparency requirements for issues of securities, as amended; ii) The interim management report contained herein includes a fair review of the important events that have occurred during the half-year to 31 January 2016 and the principal risks and uncertainties for the remaining 6 months of the year. On behalf of the board Ray James Zimmerman Director A Date: 31 March

9 Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the half-year ended 31 January 2016 For the 6 months ended 31 January 2016 For the 6 months ended 31 January 2015 Notes EUR EUR Administrative expenses 3 (74,384) (25,342) Operating loss (74,384) (25,342) Financial income Net foreign exchange loss (1,615) (8,188) Loss before tax (75,242) (33,467) Income tax expense 8 (3,803) (3,311) Loss for the period (79,045) (36,778) Total comprehensive loss for the period, net of tax (79,045) (36,778) Earnings per share Basic and diluted earnings per share 4 (EUR ) (EUR ) The accompanying notes are an integral part of these Interim Condensed financial statements. 7

10 Interim Condensed Consolidated Statement of Financial Position As at 31 January 2016 As at 31 January 2016 As at 31 July 2015 Assets Notes EUR EUR Long-term assets Investments 413, , , ,423 Current assets Other receivables 8,245 5,695 Amounts owed by related parties 617, ,766 Cash and cash equivalents 5 168, ,539 Total assets 1,207, ,423 Equity and liabilities Equity Issued capital 6 94,632 94,632 Share premium 6 1,333,100 1,333,100 Retained earnings (727,267) (648,222) Foreign currency translation reserve 1,006 1,006 Total equity 701, ,516 Current liabilities Trade and other payables 7 165,987 92,808 Amounts owed to related parties 339,931 91,099 Total liabilities 505, ,907 Total equity and liabilities 1,207, ,423 The accompanying notes are an integral part of these Interim Condensed financial statements. 8

11 Interim Condensed Consolidated Statement of Changes in Equity For the half-year ended 31 January 2016 Issued Capital Share premium Foreign currency translation reserve Retained earnings Total EUR EUR EUR EUR EUR At 31 July ,632 1,333,100 1,006 (648,222) 780,516 Loss for the half-year (79,045) (79,045) At 31 January ,632 1,333,100 1,006 (727,267) 701,471 The accompanying notes are an integral part of these Interim Condensed financial statements. 9

12 Interim Condensed Consolidated Statement of Cash Flows For the half-year ended 31 January 2016 For the half-year ended 31 January 2016 For the half-year ended 31 January 2015 EUR EUR Operating activities Loss before tax (74,384) (25,342) Adjustments to reconcile profit before tax to net cash flows: Net foreign exchange losses (1,615) (8,188) Increase in prepayments and other receivables (2,550) (5,928) Increase/(reduction) in trade and other payables 73,179 (104,171) Increase in amounts owed by related parties (387,036) (162,415) Increase in amounts owed to related parties 248,832 - (143,574) (306,044) Interest received Income tax paid (3,803) (3,311) Net cash flows used in operating activities (146,620) (309,292) Investment activities Investments made (62,653) - Net cash flows from investing activities (62,653) - Financing activities Issue of capital and share premium - 321,300 Transaction costs on issue of shares - (12,592) Net cash flows from financing activities - 308,708 Net increase in cash and cash equivalents (209,273) (584) Cash and cash equivalents at the beginning of the period 377, ,139 Cash and cash equivalents as at 31 January 168, ,555 The accompanying notes are an integral part of these Interim Condensed financial statements. 10

13 Notes to the Interim Condensed Consolidated Financial Statements For the half-year ended 31 January General information ZAI Capital Group S.A. (the Company ) was incorporated on 13 May 2013 (date of incorporation) and organised under the laws of Luxembourg as a Société Anonyme. The Company number with the Registre de Commerce is B The Company is formed for an unlimited duration. The financial year of the Company starts on the 1 August each year and ends on the 31 July next year. The first financial year of the Company started on 13 May 2013 (incorporation date) and ended on 31 July These interim accounts cover the period from 1 August 2015 to 31 January On 1 May 2014, the Company entered into an agreement entitled the Offer to Purchase the Entire Issued Share Capital of ZAI Stockbrokers Limited (the Agreement ) with Mr. Ray J. Zimmerman, whereby the Company has acquired 100% of the existing issued common shares of ZAI Stockbrokers Limited (the Subsidiary ) for a consideration of one pound sterling only. The purpose of this agreement was to allow the company to obtain an operating bank account in the United Kingdom, which is exceedingly difficult for a Luxembourg registered company. ZAI Stockbrokers Limited is a private limited company organized under the laws of England and Wales. The registration number ZAI Stockbrokers Limited is and registered address Staple Court, 11 Staple Inn, London, WC1V 7QH, United Kingdom. The Company together with the Subsidiary is referred to herein as the Group. The Group has been incorporated for the purpose of acquiring (through merger, share exchange, share purchase, asset acquisition, reorganization or similar transaction), holding and actively managing Investment Banking companies specialized in servicing small-to-medium sized companies ( SMCs ). The Group has a plan to invest in such companies worldwide, with a view to creating a unique ensemble of similar yet complementary businesses that will collectively create a firm with global distribution capability specifically dedicated to the SMC sector. The Group will achieve this by targeting companies where it can either exercise management control or have an active role in the governance and strategic management of such companies. 11

14 Notes to the Interim Condensed Consolidated Financial Statements For the half-year ended 31 January Significant accounting policies Basis of preparation STATEMENT OF COMPLIANCE The interim condensed consolidated financial statements for the half-year ended 31 January 2016 have been prepared in accordance with Luxembourg law and are in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting, as adopted by the European Union. The comparatives used in the Report were for the half-year ended 31 January BASIS OF MEASUREMENT The financial statements are prepared on the historical cost basis. USE OF ESTIMATES AND JUDGEMENTS The preparation of the financial statements in conformity with IFRSs, as adopted by the EU, requires management to make judgments, estimates and assumptions that may affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. GOING CONCERN These interim condensed consolidated financial statements have been prepared under the going concern convention. The Board of Directors is confident that, after making enquiries and on the basis of current cash flow projections and expected available financing, it has a reasonable expectation that the Company will have adequate resources to continue in operational existence for the foreseeable future. FUNCTIONAL AND PRESENTATION CURRENCY The financial statements are presented in Euro (EUR), which is the Company s functional currency. Functional currency is the currency of the primary economic environment in which the entity operates. 12

15 Notes to the Interim Condensed Consolidated Financial Statements For the half-year ended 31 January 2016 The issued share capital of the Company is denominated in EUR and expected transactions are anticipated to be denominated in EUR. The Directors of the Company believe that EUR most faithfully represents the economic effects of the underlying transactions, events and conditions. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the exchange rate prevailing at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Foreign exchange gains and losses arising from translation are included in the consolidated statement of profit or loss and other comprehensive income. 3. Administrative expenses For the half-year ended 31 January 2016 EUR Administration fees 2,404 Auditor s fees 27,028 Bank fees 1,792 31, Earnings per share Basic earnings per share amounts are calculated by dividing the net loss for the period by the weighted average number of ordinary shares outstanding. The following table reflects the results and share data used in the basic and diluted earnings per share computations: For the half-year ended 31 January 2016 EUR Net loss of the Group (79,045) Weighted average number of ordinary shares 251,709,199 Earnings / (loss) per share (0.0003) 13

16 Notes to the Interim Condensed Consolidated Financial Statements For the half-year ended 31 January Cash and cash equivalents The cash and cash equivalents are comprised as follows: 31 January 2016 EUR Cash at bank 168, ,266 Cash and cash equivalents include an amount of EUR 100,215 held with ZAI Worldwide Ltd. 6. Share capital and reserves 31 January 2016 Ordinary shares issued and fully paid No. of shares At 31 January 2015, 31 July 2015 and 31 January ,709,199 At the date of incorporation, the Company had a share capital of EUR 31,000 divided into 3,100,000 shares with a nominal value of EUR (a) On 6 November 2013, the sole shareholder of the Company resolved to increase the share capital by an amount of EUR 60,000 so as to raise it from its amount at incorporation of EUR 31,000 to EUR 91,000 by the issue of 6,000,000 new shares with a nominal value of EUR It was also resolved to reorganize the share capital of the Company by converting all the shares of the Company into shares without nominal value. It was further resolved to split the 9,100,000 shares into 234,444,315 shares without nominal value and to reduce the share capital by an amount of EUR 1,911 and to allocate this amount to the share premium account of the Company. (b) On 28 November 2013, the Company has amended its article of incorporation to reflect the aggregate gross proceed received from the IPO and allocated the aggregate gross proceed of EUR 1,458,738, between the share capital and share premium account of the Company. Therefore, the Company increased its share capital by an amount of EUR 5,543 from an amount of EUR 89,089 to the amount of EUR 94,632 by the issuance of 14,587,384 new shares without nominal value, and allocated the remaining amount of gross proceed to the share premium account of the Company amounting to EUR 1,453,

17 Notes to the Interim Condensed Consolidated Financial Statements For the half year ended 31 January 2016 (c) On 17 December 2014 The Company has issued 2,677,500 shares, which were placed in the private placement with gross proceeds amounting to EUR 321,300 allocated to the share premium account. As a consequence of the above, the share capital of the Company as at 31 January 2016 amounts to EUR 94,632 divided into 251,709,199 shares without nominal value. The authorised share capital of the Company is fixed at EUR 999,994, Trade and other payables The trade and other payable are comprised as follows: 31 January 2016 EUR Trade payables 165,987 At 31 January ,987 Terms and conditions of the above financial liabilities are: Trade payables are non-interest bearing and are normally settled on 60-day terms 8. Taxation The tax charge for the half-year ended 31 January 2016 can be broken down as follows: For the half-year ended 31 January 2016 EUR Current tax 3,803 Deferred tax --- Income tax expense 3, Staff There are no employees in the Company. 15