YUJIN INTERNATIONAL LTD.

Transcription

1 ANNUAL REPORT 2015

2 And its subsidiary companies REPORT AND NON-STATUTORY FINANCIAL STATEMENTS FOR THE YEAR ENDED

3 HIGHLIGHTS As at 14 March 2016, the High Court of the Republic of Singapore has sanctioned the proposed scheme to restructure the business of the Company and its subsidiaries of which the Order of Court being effective and binding upon all members of the Company (the Restructuring ). This was presented to and approved by shareholders at an EGM on 15 January As at 30 March 2016, the Company had divested all its subsidiaries pursuant to the extraordinary general meeting held on 15 January 2016 with no operating business. The financial report reflects the status of the Group prior to the Restructuring, among which: o the consolidated net revenue for financial year ending December 2015 was USD 9.1 million (2014: USD 7.2 million); o the consolidated profit before tax amounted to USD1.9 million (2014: -USD148.9K); and o net Tangible Assets of USD4.2 million (2014: USD7.3 mil). The Directors do not recommend a dividend be paid for the year ended 31 December On 30 March 2016, the Company was categorised as an AIM Rule 15 cash shell, whereby the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14.

4 CONTENTS Corporate Information 2 Chairman s Statement 4 Directors Profile 5 Report of the Director s 6 Statement of Directors Responsibilities 9 Independent Auditor s Report 10 Consolidated Statement of Financ ial Position 12 Consolidated Statement of Comprehensive Income 13 Consolidated Statement of Changes in Equity 14 Consolidated Statement of Cash Flows 15 Notes To The Non-Statutory Financial Statements 16 Shareholdings Top 20 56

5 CORPORATE INFORMATION Directors Keen Whye LEE, Non-Executive Chairman Captain Chin Chye LIEW, Joint Managing Director Captain Joseph Siew Chiong TING, Joint Managing Director Tobias Joseph RAYMOND, Non-Executive Director Company Secretary Ms Lathika Devi Amma D/O K R Pillay Registered Office 400 Orchard Road, #20-05 Orchard Towers Singapore Audit committee Tobias Joseph RAYMOND (Chairman) Keen Whye LEE Remuneration Committee Keen Whye LEE (Chairman) Tobias Joseph RAYMOND Head Office and Principal place of business 400 Orchard Road, #20-05 Orchard Towers Singapore Nominated Adviser and Broker Cantor Fitzgerald Europe One Churchill Place London E14 5RB 2

6 CORPORATE INFORMATION Non-statutory Auditor to the Company Crowe Clark Whitehill LLP St Bride s House 10 Salisbury Square London EC4Y 8EH UK Statutory Auditors to the Company CSI & Co. PAC. 10 Anson Road #12-15 International Plaza Singapore Share Registrar Computershare Investor Services (Jersey) Limited Queensway House Hilgrove Street St Helier Jersey JE1 1ES Depositary Computershare Investor Services Plc PO Box 82 The Pavilions Bridgewater Road Bristol BS13 8AE 3

7 CHAIRMAN S STATEMENT Yujin announces herewith its audited non-statutory annual results in respect of the year ended 31 December 2015 for the purpose of reporting to its shareholders. As at 14 March 2016, the High Court of the Republic of Singapore has sanctioned the proposed scheme to restructure the business of the Company and its subsidiaries of which the Order of Court being effective and binding upon all members of the Company (the Restructuring ). This was presented to and approved by shareholders at an EGM on 15 January Further details are provided in note 2 (b) to the financial statements. As at 30 March 2016, the Company has divested all its subsidiaries pursuant to the extraordinary general meeting held on 15 January 2016 and has no operating business. The financial report reflects the status of the Group prior to the Restructuring, among which: the consolidated net revenue for the financial year ending December 2015 was USD 9.1 million (2014: USD 7.2 million). the consolidated profit before tax amounted to USD1.9 million (2014: -USD148.9K); and net Tangible Assets of USD4.2 million (2014: USD7.3 mil). The Directors do not recommend a dividend be paid for the year ended 31 December With the Restructuring, the Company was categorised as an AIM Rule 15 cash shell on 30 March 2016, whereby the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14. Further details on the expected timetable and the notice of AGM will be despatched to Shareholders in due course. Lee Keen Whye Chairman Yujin International Ltd 27 April

8 DIRECTORS PROFILE Keen Whye LEE, Non-Executive Chairman Mr. Lee was appointed as a Non-Executive Director in Mr. Lee is currently the Managing Director of Strategic Alliance Capital Pte Ltd, a venture capital and investment management advisory company. Prior to this, Mr. Lee was the founder and Managing Director of Rothschild Ventures Asia Pte Ltd, a member of the N M Rothschild & Sons global merchant banking group, from 1990 to He was also instrumental in launching Arrow Asia Ventures Ltd, a SGD62.2 million (USD42 million) venture capital fund for investments in South East Asia and Asia Pacific Capital GBR, a DM20 million regional development capital fund. Before founding Rothschild Ventures Asia, he was Associate Director of Kay Hian James Capel Pte Ltd, which he joined in 1987 as Head of Research for Singapore and Malaysia. Between 1985 and 1987, Mr. Lee was based in California working with venture capital companies seeking investments in emerging growth companies. Prior to that, he was an Investment Manager with the Government of Singapore Investment Corporation. Mr. Lee currently has board level positions with several SGX-ST listed companies, including Santak Holdings Limited, Vard Holdings Limited and Ntegrator International Ltd. Mr. Lee holds a Master s degree in Business Administration from Harvard Business School and a Bachelor s degree in Business Administration from the University of Singapore. Captain Chin Chye LIEW, Joint Managing Director Captain Liew is Joint Managing Director of Yujin. A Qualified Master Mariner (Class 1) with over 34 years of experience in the shipping and logistics industry (encompassing the petrochemical trade, bunker trading, ship chartering and ship management), Captain Liew guides the Group in its business and strategic development. Prior to joining Yujin, Captain Liew was the Group General Manager of Singapore Shipping Corporation Limited, a company listed on the Singapore Stock Exchange, where he oversaw the shipping and logistic businesses. He has acquired extensive business and networking knowledge of the regional shipping business especially in the tanker operations. Captain Liew is a Member of the Chartered Institute of Logistics and Transport. Captain Joseph Siew Chiong TING, Joint Managing Director Captain Joseph Ting is Joint Managing Director of Yujin. A Qualified Master Mariner (Class 1) with over 25 years of shipping experience, Captain Ting s specialty is in the operational area, focusing on efficiency and operational excellence. Prior to joining Yujin, Captain Ting was the Deputy General Manager of Singapore Shipping Corporation Limited, where he was responsible for the Company s ship agency and management business. Captain Ting is a Chartered Member of the Institute of Chartered Shipbrokers (UK) and a Chartered Member of the Chartered Institute of Logistics and Transport. Tobias Joseph RAYMOND, Non-Executive Director Mr. Raymond was appointed as a Non-Executive Director in February Mr. Raymond has 26 years of experience in all aspects of the capital markets. He began his career in corporate finance at Smith Barney, Harris Upham & Co., Inc. in New York. Mr. Raymond relocated to London in 1992 to work as a market maker in financial derivatives products and established futures arbitrage and proprietary trading programmes for an international trading firm. Mr. Raymond began advising on alternative asset investments in 1997, founding Access Equity Management Limited in Mr. Raymond holds an MBA in finance from UCLA, a J.D. from the University of California, Hastings College of the Law and is a member of the New York and California Bar Associations. 5

9 DIRECTORS REPORT We are pleased to submit this annual report to the members of the Company together with the audited non-statutory financial statements for the year ended 31 December Directors The directors in office at the date of this report are as follows: Lee Keen Whye Joseph Ting Siew Chiong Liew Chin Chye Tobias Joseph Raymond Directors interests Particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants and share options in the Company and in related corporations (other than wholly-owned subsidiaries) are as follows: Name of Directors and Corporations in which interests are held Holdings at beginning of the year Holdings at end of the year Lee Keen Whye Yujin International Ltd. - ordinary shares - interests held deemed interests 808, ,000 Joseph Ting Siew Chiong Yujin International Ltd. - ordinary shares - interests held deemed interests 5,395,002 5,395,002 Liew Chin Chye Yujin International Ltd. - ordinary shares - interests held deemed interests 5,395,002 5,395,002 Tobias Joseph Raymond Yujin International Ltd. - ordinary shares - interests held deemed interests - - 6

10 DIRECTORS REPORT Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year. Neither at the end of nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in note 16 to the non-statutory financial statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member, or with a Company in which he has a substantial financial interest. Share options There were no unissued shares of the Company or its subsidiaries under options granted by the Company or its subsidiaries as at the end of the financial year. Audit Committee The members of the Audit Committee during the year and at the date of this report are: Tobias Joseph Raymond (Chairman), non-executive director Lee Keen Whye, non-executive director The Audit Committee has held three meetings since the last directors report. In performing its functions, the Audit Committee met with the Company s external auditor to discuss the scope of their work, the results of their examination and evaluation of the Company s internal accounting control system. The Audit Committee also reviewed the following: assistance provided by the Company s officers to the external auditor; quarterly financial information and annual financial statements of the Group and the Company prior to their submission to the directors of the Company for adoption; and interested person transactions. The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditor and reviews the level of audit and non-audit fees. The Audit Committee is satisfied with the independence and objectivity of the external auditor and has recommended to the Board of Directors that the non-statutory auditor be nominated for reappointment as auditor at the forthcoming Annual General Meeting of the Company. 7

11 DIRECTORS REPORT Auditor Crowe Clark Whitehill LLP was appointed non-statutory auditor of the Company by the directors for the purpose of the audit of the Company s non-statutory consolidated financial statements. Statement of disclosure to non-statutory auditor Each of the persons who are directors at the time when this Directors report is approved has confirmed that: - so far as that director is aware, there is no relevant audit information which the Group and Company s non-statutory auditor are unaware, and - that director has taken all the steps that ought to have been taken as a director in order to be aware and any information needed by the Group and Company s non-statutory auditor in connection with preparing their report and to establish that the company s auditor are aware of that information. Going concern These non-statutory financial statements are prepared on a going concern basis which the directors believe to be appropriate for the reasons given below and also in note 2(b) to the non-statutory financial statements. In support of this assumption, the Directors have prepared detailed budgets and cash flow projections based on continuing operations and the Group s currently available cash and cash projected to be generated from its operations. Those budgets and cash flow projections include future estimated cash flows generated from operating activities from the ongoing Group trade as well as, where and if required, other source of funding such as those generated from investing or financing activities. These budgets and cash flow projections have been reviewed and approved by the Board of Directors. On behalf of the Board of Directors, Joseph Ting Siew Chiong Director Liew Chin Chye Director 27 April

12 STATEMENT OF DIRECTORS RESPONSIBILITIES In respect of these non-statutory financial statements the directors have agreed they are responsible for preparing the annual report and the non-statutory financial statements. The directors are required to prepare non-statutory financial statements for the Group and Company in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ( IASB ) (together - IFRS ). International Accounting Standard 1 requires that financial statements present fairly for each financial year the Group and Company s financial position, financial performance and cash flows. This requires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting Standards Board s Framework for the Preparation and Presentation of Financial Statements. In virtually all circumstances, a fair representation will be achieved by compliance with all IFRS. Directors are also required to: - select suitable accounting policies and then apply them consistently; - present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; and - provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group and Company s financial position and financial performance. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Group and the Company. They are also responsible for safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. In the opinion of the directors, the non-statutory financial statements set out on pages 13 to 55 are drawn up so as to give a true and fair view of the state of affairs of the Group and the Company as at 31 December 2015, and of the results, the changes in equity and cash flows of the Group and the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Group and the Company will be able to pay their debts as and when they fall due. On behalf of the Board of Directors, Joseph Ting Siew Chiong Director Liew Chin Chye Director Singapore 27 April

13 INDEPENDENT AUDITOR S REPORT Independent Auditor s Report to the Members of Yujin International Limited We have audited the consolidated non-statutory financial statements ( the non-statutory financial statements ) of Yujin International Limited for the year ended 31 December 2015 which comprise the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and related notes. The financial reporting framework that has been applied in their preparation is International Financial Reporting Standards as issued by the International Accounting Standards Boards (IFRSs). 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 auditor's 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. Respective responsibilities of directors and auditor As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the non-statutory financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the non-statutory financial statements in accordance with International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors. Scope of the audit of the non-statutory financial statements An audit involves obtaining evidence about the amounts and disclosures in the non-statutory financial statements sufficient to give reasonable assurance that the non-statutory financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the non-statutory financial statements. We read all the financial and non-financial information in the Chairman s statement and Directors Report and to identify material inconsistencies with the audited non-statutory financial statements and to identify any information that is apparently misstated based on, or materially inconsistent with, the knowledge acquired by us during the course of our audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. 10

14 INDEPENDENT AUDITOR S REPORT Opinion on non-statutory financial statements In our opinion, the non-statutory financial statements: give a true and fair view of the state of the consolidated affairs as at 31 December 2015 and of its consolidated loss for the year then ended; and have been properly prepared in accordance with IFRSs. Crowe Clark Whitehill LLP Chartered Accountants St Bride s House 10 Salisbury Square London EC4Y 8EH 27 April 2016 Note: The maintenance and integrity of the Yujin International Limited website is the responsibility of the directors. The work carried out by the auditor does not involve consideration of these matters and, accordingly, the auditor accepts no responsibility for any changes that may have occurred to the nonstatutory financial statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 11

15 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT Note ASSETS USD USD Non-current assets Property, plant and equipment 5 7,611,433 11,529,025 Deferred tax ,611,433 11,529,025 Current assets Trade and other receivables 6 677, ,349 Cash and cash equivalents 7 694, ,748 1,371,631 1,139,097 Total assets 8,983,064 12,668,122 EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital 8 3,317,897 3,317,897 Retained earnings 8 1,026,738 (717,267) Currency translation reserve (527,372) 1,938,491 Revaluation reserve 747,394 3,003,083 4,564,657 7,542,204 Non-controlling interests (403,094) (260,197) Total equity 4,161,563 7,282,007 Non-current liabilities Term loan (secured) 9 301,562 1,006,562 Deferred tax 11 1,071,825 1,476,853 1,373,387 2,483,415 Current liabilities Trade and other payables 12 1,814,939 1,444,948 Amount payable from a related company , ,105 Amount payable to directors ,732 - Term loan (secured) 9 705, ,000 Provisions 10 41,854 60,158 Income tax payable ,492 3,448,114 2,902,703 Total liabilities 4,821,501 5,386,118 Total equity and liabilities 8,983,064 12,668,125 The financial statements were approved by the Board and authorised for issue on 27 Apr 2016 and were signed on its behalf by Joseph Ting Siew Chiong Director Liew Chin Chye Director The accompanying notes form an integral part of the financial statements. 12

16 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED Note USD USD Revenue 14 5,910,510 6,345,912 Other income 14 3,156, ,739 9,067,299 7,241,651 Costs and expenses Cost of sales 3,874,510 3,981,561 Depreciation 5 906,411 1,089,676 Directors' fees 16 84,330 97,989 Directors' salary , ,451 Staff costs , ,335 Other operating expenses , ,233 (6,670,861) (7,350,245) Profit from operations 2,396,438 (108,594) Non-operating expenses Impairment loss on property, plant and equipment 5 (1,029,319) - Finance costs 18 (60,563) (40,273) Profit / (Loss) before tax 18 1,306,556 (148,867) Income tax income/(expense) ,028 67,921 PROFIT /(LOSS) FOR THE YEAR 1,711,584 (80,946) Other comprehensive loss Foreign currency translation differences for subsidiaries (798,585) (665,519) Revaluation of property, plant and equipment 5 (2,366,165) 1,369,263 Disposal of subsidiaries (1,667,278) - Other comprehensive income for the year, net of tax (4,832,028) 703,744 TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR (3,120,444) 622,798 Attributable to : Equity holders of the company (2,977,547) 377,181 Non-controlling interests (142,897) 245,617 Total comprehensive income / (loss) for the year (3,120,444) 622,798 Attributable to : Equity holders of the company 1,744,005 (216,087) Non-controlling interests (32,421) 135,141 Loss for the year 1,711,584 (80,946) Earnings per share Basic (in USD) (0.007) Diluted (in USD) (0.007) The accompanying notes form an integral part of the financial statements. 13

17 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED Consolidated Statement of Changes in Equity Share Translation Revaluation Retained Total attributable to equity holders Noncontrolling Total capital reserve reserve earnings of the Company interests equity USD USD USD USD USD USD USD Balance at 31 December ,317,897 2,604,010 1,744,296 (501,180) 7,165,023 (505,814) 6,659,209 Total comprehensive income/(loss) for the year Profit/(Loss) for the year (216,087) (216,087) 135,141 (80,946) Other comprehensive income : Revaluation of property, plant and equiptment - - 1,258,787-1,258, ,476 1,369,263 Currency translation differences - (665,519) - - (665,519) - (665,519) Total comprehensive income/(loss) - (665,519) 1,258,787 (216,087) 377, , ,798 Balance at 31 December ,317,897 1,938,491 3,003,083 (717,267) 7,542,204 (260,197) 7,282,007 Total comprehensive income/(loss) for the year Profit / (Loss) for the year ,744,005 1,744,005 (32,421) 1,711,584 Other comprehensive income : - Revaluation of property, plant and equiptment - - (2,255,689) - (2,255,689) (110,476) (2,366,165) Currency translation differences - (798,585) - - (798,585) - (798,585) Total comprehensive income/(loss) - (798,585) (2,255,689) 1,744,005 (1,310,269) (142,897) (1,453,166) Effect on disposal of subsidiaries - (1,667,278) - - (1,667,278) - (1,667,278) Balance at 31 December ,317,897 (527,372) 747,394 1,026,738 4,564,657 (403,094) 4,161,563 The accompanying notes form an integral part of the financial statements. 14

18 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED Note USD USD Cash flows from operating activities Loss before taxation 1,306,556 (148,867) Adjustments for: Bank loan interest 60,563 40,273 Bad debts written off 54,618 50,000 Provision for impairment loss on receivable (trade) 6 16,010 34,419 Impairment loss on property, plant and equipment 5 1,029,319 - Depreciation 5 906,411 1,089,676 Loss on disposal of property, plant and equipment 5 (1,447,683) - 619,238 1,214,368 Operating profit before working capital changes 1,925,794 1,065,501 Decrease in trade and other receivables 77, ,060 Decrease in trade and other payables (659,676) (1,073,829) Provisions (18,304) (20,658) (600,725) (749,427) Cash generated from operations 1,325, ,074 Income tax paid 13 (497,722) (28,621) Net cash flows from operating activities 827, ,453 Cash flows from investing activities Purchase of property, plant and equipment 5 (385,783) (1,862) Proceeds from disposal of property, plant and equipment - - Net cash flows from/(used in) investing activities (385,783) (1,862) Cash flows from financing activities Payment of term loan interest (27,074) (40,273) Payment of term loan financing (705,000) (705,000) Advance from directors 395,732 Advance from related party 299,095 - Amount payable to a related company 24,393 52,612 Net cash flows used in financing activities (12,854) (692,661) Net increase in cash and cash equivalents 428,710 (407,070) Cash and cash equivalents at beginning of year 7 313, ,195 Effect of exchange rate changes (48,293) (23,377) Cash and cash equivalents at end of year 7 694, ,748 The accompanying notes form an integral part of the financial statements 15

19 These notes form an integral part of the non-statutory financial statements. The non-statutory financial statements were authorised for issue by the Board of Directors on 27 April General information Yujin International Ltd (the Company ) is a company incorporated in Singapore. The address of the Company s registered office is 400 Orchard Road #20-05 Orchard Towers Singapore The non-statutory financial statements of the Company as at and for the year ended 31 December 2015 comprise the Company and its subsidiaries (together referred to as the Group and individually as Group entities ). The Company is primarily involved in the business of ship owners, shippers, shipping agents, ship chandlers, ship management services. The principal activities of the subsidiaries are stated in note 4 to the financial statements. 2. Basis of preparation (a) Statement of compliance The non-statutory financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS). The consolidated financial statements have been prepared on the historical cost basis except as otherwise described in the accounting policies below. (b) Going concern The non-statutory financial statements have been prepared on the going concern basis of accounting which assumes adequate financial resources will be available to the Group for a period of at least twelve months from the date of approval of these non-statutory financial statements. In support of this assumption, the Directors have prepared detailed budgets and cash flow projections based on continuing operations and the Group s currently available cash and cash projected to be generated from its operations. Those budgets and cash flow projections include future estimated cash flows generated from operating activities from the ongoing Group trade as well as, where and if required, other source of funding such as those generated from investing or financing activities. These budgets and cash flow projections have been reviewed and approved by the Board of Directors. On 2 December 2015 the Company announced a proposed scheme to restructure the business and distribute all its subsidiaries to shareholders. This scheme was approved by shareholders on 15 January 2016 and as of 30 March 2016, the Company had distributed all its subsidiaries. The non-statutory financial statements for the year ended 31 December 2015 represent those of the whole group as of that date and the performance of the subsidiaries has not been shown as discontinued. This presentation reflects management s assessment that the Group s operations did not meet the definition of a disposal group held for distribution as defined in IFRS 5 Non Current Assets Held for Sale and Discontinued Operations at 31 December 2015 as the operations were not available for immediate distribution at that time. Subsequent to year end, and following shareholder approval, all of the operations of the Company s subsidiaries became discontinued operations and materially all of the group s assets and liabilities became classified as held for distribution to owners. 16

20 2. Basis of preparation (continued) (b) Going concern (continued) Following the distribution to owners of the group s subsidiaries, the Company s principal activity is that of an investment company. The company has sought and obtained financial support to support the working capital requirements of the company to enable it to pursue its investment strategy, including its operating expenses as an investment company. (c) (d) Functional and presentation currency These non-statutory financial statements are presented in United States dollar ( USD ), while the Company s functional currency is Singapore dollar ( SGD ). Use of estimates and judgements The preparation of the consolidated non-statutory financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of 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 accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes: Note 5 - Useful life of depreciable assets The charge in respect of periodic depreciation is derived after determining an estimate of an asset s expected useful life and the expected residual value at the end of its life. Increasing an asset s expected life or its residual value would result in a reduced depreciation charge in the consolidated income statement. The useful lives and residual values of the Group s assets are determined by management at the time the asset is acquired and reviewed annually for appropriateness. The lives are based on historical experience with similar assets as well as anticipation of future events which may impact their life such as changes in technology. Historically changes in useful lives and residual values have not resulted in material changes to the Group s depreciation charge. Note 18 - Utilisation of Group tax relief and tax losses The Group s tax charge on ordinary activities is the sum of the total current and deferred tax charges. The calculation of the Group s total tax charge necessarily involves a degree of estimation and judgement in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process. The final resolution of some of these items may give rise to material profits, losses and/or cash flows. 17

21 2. Basis of preparation (continued) (d) Use of estimates and judgements (continued) Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the non-statutory financial statements are included in the following notes: Note 5 - Valuation of property, plant and equipment Property, plant and equipment represent a significant proportion of the asset base of the Group s total assets. Therefore the estimates and assumptions made to determine their carrying value and related depreciation are critical to the Group s financial position and performance. Management reviews the carrying value of its property, plant and equipment at each balance sheet date, which includes the undertaking of a third party valuation by an independent, professional valuer, who has the necessary expertise to value both bunker and regional tankers. Note 6 - Impairment of trade and other receivables Management reviews its loans and receivables for objective evidence of impairment at least quarterly. Significant financial difficulties of the debtor, the probability that the debtor will enter bankruptcy, and default or significant delay in payments are considered objective evidence that a receivable is impaired. In determining this, management makes judgement as to whether there is observable data including that there has been a significant change in the payment ability of the debtor, or whether there have been significant changes with adverse effect in the technological, market, economic or legal environment in which the debtor operates in. (e) Adoption of Standards Standards issued but not effective and improvements to IFRS s which become effective at certain later dates are listed below. The Group reasonably expects these standards and interpretations to be applicable at a future date when they become effective. - IAS 16 and IAS 38 Amendments- Clarification of Acceptable Methods of Depreciation and Amortisation - IFRS 11 Amendments to Accounting for Acquisitions of Interest in Joint Operations - IFRS 14 Regulatory Deferral Accounts - IFRS 15 Revenue from Contracts with Customers - IFRS 16 Leases - Amendment to IFRS 1 Government Loans - Investment Entities (Amendments to IFRS 10, IFRS 12 and IFRS 27) - IFRIC 21 Levies - IAS 36 Amendments Recoverable amounts, Disclosures for non-financial assets. It is not anticipated that the adoption of these standards and interpretation in future periods will have a material impact on the financial statements when they come into effect. 18

22 3. Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these non-statutory financial statements, and have been applied consistently by Group entities. Certain comparative amounts have been reclassified to confirm with the current year s presentation. (a) Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Associates are those entities in which the Group has significant influence, but not control, over the financial and operating activities. Investments that are held as part of the Group s investment portfolio are carried in the balance sheet at fair value even though the Group may have significant influence over those companies. This treatment is permitted by IAS 28 Investment in Associates, which requires investment held by venture organisations to be excluded from its scope where those investments are designated, upon initial recognition, as at fair value through profit or loss and accounted for in accordance with IAS 39, with changes in fair value recognised in the statement of comprehensive income in the period of change. The Group has no interests in associates through which it carries on its business. Profit or loss and each component of OCI are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. (b) Foreign currency (i) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year. 19

23 3. Significant accounting policies (continued) (b) Foreign currency (continued) (i) Foreign currency transactions (continued) Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical costs are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments, a financial liability designated as hedge of the net investment in a foreign operation that is effective, or qualifying cash flow hedges, which are recognised in other comprehensive income. (ii) Group companies The assets and liabilities of Group entities that have a functional currency different from the presentation currency, excluding goodwill and fair value adjustments arising on acquisition, are translated to United States dollar at exchange rates at the end of the reporting period. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to United States dollar at exchange rates at the dates of transactions. Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1 January 2005 are treated as assets and liabilities of the foreign operation and translated at the closing rate. For an acquisition prior to 1 January 2005, the exchange rates at the date of acquisition were used. Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency translation reserve (translation reserve) in equity. However, if the operation is a non-wholly-owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining significant control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation. These are recognised in other comprehensive income, and are presented in the translation reserve in equity. (c) Financial instruments (i) Non-derivative financial assets The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. 20

24 3. Significant accounting policies (continued) (c) Financial instruments (continued) (i) Non-derivative financial assets (continued) The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of the ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Financial instruments are usually categorised as (i) financial assets at fair value through profit and loss, (ii) held-to-maturity financial assets, (iii) loans and receivables, and (iv) available-for-sale financial assets. During the year, the Group has classified non-derivative financial assets in the following category: Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. Loans and receivables comprise cash and cash equivalents, trade and other receivables and amount receivable from a related company. Cash and cash equivalents Cash and cash equivalents comprise cash balances and fixed deposits. For the purpose of the statement of cash flows, pledged deposits are excluded whilst bank overdrafts that are repayable on demand and that form an integral part of the Group s cash management are included in cash and cash equivalents. Available-for sale financial assets Available-for sale financial assets are non-derivative financial assets that are designated as available for sale or are not classified in any of the above categories of financial assets. Available-for-sale financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognised in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognised, the gain or loss accumulated in equity is reclassified to profit or loss. 21

25 3. Significant accounting policies (continued) (c) Financial instruments (continued) (i) Non-derivative financial assets (continued) Available-for-sale financial assets comprise equity securities and debt securities. (ii) Non-derivative financial liabilities The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability to when its contractual obligations are discharged, cancelled or have expired. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group classifies non-derivative financial liabilities into the other financial liabilities category. Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest method. Other financial liabilities comprise loans and borrowings, bank overdrafts, trade and other payables, an amount payable to a related company and loans from related parties. Bank overdrafts that are repayable on demand and form an integral part of the Group s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. (iii) Share capital Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. 22

26 3. Significant accounting policies (continued) (d) Property, plant and equipment (i) Recognition and measurement Items of property, plant and equipment were initially measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets include the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and is recognised net within other income/other expenses in profit or loss. When revalued assets are sold, any related amount included in the revaluation reserve is transferred to retained earnings. Vessels are measured at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the end of the reporting period. Any revaluation increase arising on the revaluation of the vessel is recognised in other comprehensive income and accumulated in equity under revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of vessel is charged to profit or loss to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of the vessel. 23

27 3. Significant accounting policies (continued) (c) Property, plant and equipment (continued) (i) Recognition and measurement (continued) The accumulated depreciation is eliminated and the net revalued amount is treated as the new gross carrying amount. The cost of vessels under construction represents all costs attributable to bringing the constructed asset to its working condition and getting it ready for its intended use. The accumulated costs will be reclassified to the appropriate property, plant and equipment account when the vessel is completed. No depreciation charge is provided for equipment under construction until the asset is used in operations. Borrowing costs directly attributable to the construction of the vessels is added to the cost of the vessels until such time as the vessel is ready for use. All other borrowing costs are recognized in the statement of comprehensive income in the period which they relate. (ii) Subsequent costs Vessels, which form the major part of the Group s operating property, plant and equipment, are required to be inspected for operational worthiness every five years with an interim inspection at approximately 30 months into the five yearly inspections. All costs associated with such dry docking costs, including operational equipment are depreciated over 30 months (that is between each dry docking). When significant dry docking costs recur prior to the expiry of the depreciated period, the remaining costs of the previous dry docking are written off in the month of the subsequent dry docking. Changes in the expected level of usage could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Company, and its cost can be measured reliably. The carrying amount of the replaced component is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. (iii) Depreciation Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately. Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. 24