TIDMMCJ
RNS Number : 6855N
Majestic Corporation PLC
06 June 2022
Majestic Corporation Plc
06 June 2022
Annual results for the year ended 31 December 2021
-- Revenue up by 8% to US$29.7m (2020: US$27.5m)
-- Profit before tax up by 103% to US$853,754 (2020: US$419,390)
-- Cash balance as at 31(st) December US$2.47m (2020: US$2.35m)
Peter Lai, Chairman and Chief Executive Office of the Company,
commented:
"Not only did we deliver another year of excellent results, but
we also further advanced and solidified growth plans with all our
partners putting us in a better position to succeed in the
future"
For further information please contact:
Majestic Corporation Plc
Chairman and Chief Executive Officer
Peter Lai Tel: +852 9726 2890
Chief Financial Officer
Joe Lee Tel: +44 (0) 7539 103 502
Guild Financial Advisory Limited (Corporate Advisor)
Ross Andrews Tel: +44 (0)797 3839767
Chairman and Chief Executive Officer's statement
I have great pleasure in presenting the results for Majestic
Corporation Limited ("Majestic" -or "the Company") for the year
ended 31 December 2021. Majestic is the wholly owned subsidiary of
Majestic Corporation Plc (together the Group), which was
incorporated on 10 December 2021.
Majestic continues to be a leading non-ferrous metal and
precious metals recycler with partnership ventures operating in
eight countries and growing. It is through these key partnerships
and our network, that we work to increase our presence across all
countries to improve global sustainability as well as increase the
value to our shareholders.
At our core, we are urban miners, working alongside suppliers
and consumers committed to closing the loop on recycling to achieve
a more sustainable and green future.
Our capital allocation has been focused on two main areas -
investing in partnerships to secure long-term contracts and
investing in equipment to recover greater yields from our
inventories and technology in procuring inventory at the right
price.
Ever since China implemented the National Sword policy, in
January 2018, banning the importation of certain types of metals
and imposed national tariffs between the United States, Europe and
China, our team has shifted and broadened our customer base as well
as strengthening our partnerships across the globe.
Highlights
Following the listing of Majestic Corporation Plc on AQSE in
March, I see clear opportunities for the Group and I am delighted
to announce a new facility in Deeside, UK which is expected to be
fully operational in 2022. This move fits into our long-term
strategic objectives of deepening partnerships and expanding our
presence in our current markets.
Financial Highlights
The year-end marks the first trading results following the
successful listing of the company to the AQSE exchange in March
2022.
2021 has been an excellent year for Majestic and I am pleased to
report yet another year of strong operational and financial
results. Revenue up from US$27.5m to US$29.7m, largely driven by
improvements in market prices for materials and the strengthening
of key partnerships within our network.
Not only did we deliver another year of excellent results, but
we also further advanced and solidified growth plans with all our
partners putting us in a better position to succeed in the future.
The Company has retained a strong cash position at year end with
cash at bank increasing to US$2.5m (2020: US$2.3m).
Underlying earnings before tax of US$853k was up 103% (2020:
US$419k). Net Profit after Tax of US$735k was up 97%
(2020:US$374k). For year ended 31 December 2021, the company has
decided not to pay a dividend.
_______________________________
Peter Lai
Chairman and Chief Executive Officer
01 June 2022
About Majestic
The business has been established for over 20 years and it
rebranded its name to Majestic Corporation Limited in 2018. They
are an emerging leader in the precious metals and non- ferrous
metals recycling. Working with suppliers globally, Majestic plays
an integral role in the circular economy by making resources
available for future use.
Majestic is admitted to trading on the AQSE Growth Market of the
Aquis Stock Exchange.
For further information please visit: www.majestic-corp.com
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2021
(Expressed in United States Dollar)
Notes 2021 2020
Turnover 5 29,661,683 27,482,363
Cost of goods sold (28,183,275) (26,230,343)
------------ ------------
Gross Profit 1,478,408 1,252,020
Other income 5 164,838 (155,531)
Administrative expenses (668,455) (564,236)
Finance costs 6 (121,037) (112,863)
------------ ------------
Profit from operation and
before taxation 7 853,754 419,390
Taxation 10 (118,307) (45,839)
------------ ------------
Profit for
the year 735,447 373,551
Other comprehensive income - -
for the year
------------
Total comprehensive income
for the year 735,447 373,551
------------ ------------
The accompanying Accounting Policies and Explanatory Notes form
an integral part of, and should be read in conjunction with, these
financial statements.
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
(Expressed in United States Dollar)
Notes 2021 2020
CURRENT ASSETS
Inventories 11 6,118,375 5,917,953
Trade receivables 12 1,282,190 812,079
Prepayments, deposits and other
receivables 2,043,368 753,982
Amounts due from related companies 13 1,533,245 -
Cash in bank and on
hand 2,467,428 2,347,117
---------- ---------
13,444,606 9,831,131
---------- ---------
CURRENT LIABILITIES
Trade payables 14 1,354,152 2,059,387
Deposits received 347,600 288,453
Accruals and other
payables 38,242 64,101
Amounts due to related companies 15 1,971,093 -
Import
loans 16 3,469,272 1,957,853
Tax payable 131,716 64,253
---------- ---------
7,312,075 4,434,047
---------- ---------
NET CURRENT ASSETS 6,132,531 5,397,084
---------- ---------
NET ASSETS 6,132,531 5,397,084
---------- ---------
CAPITAL AND RESERVE
Share capital 17 1 1
Capital reserve 4,767,431 4,767,431
Retained profits 1,365,099 629,652
---------- ---------
6,132,530 5,397,084
---------- ---------
The accompanying Accounting Policies and Explanatory Notes form
an integral part of, and should be read in conjunction with, these
financial statements.
The financial statements of Majestic Corporation Limited have
been approved by the Board of Directors and authorised for issue on
31 May 2022.
Signed on its behalf by:
Lai Yu Pok Peter
Director
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2021
(Expressed in United States Dollar)
Share Capital Retained
capital reserve profits Total
Balance as at 1 January
2020 1 - 256,101 256,102
Profit for the year - - 373,551 373,551
Transfer to capital
reserve - 4,767,431 - 4,767,431
------- --------- --------- ---------
Balance as at 31 December
2020 1 4,767,431 629,652 5,397,084
------- --------- --------- ---------
Balance as at 1 January
2021 1 4,767,431 629,652 5,397,084
Profit for the year - - 735,447 735,447
------- --------- --------- ---------
Balance as at 31 December
2021 1 4,767,431 1,365,099 6,132,531
------- --------- --------- ---------
The accompanying Accounting Policies and Explanatory Notes form
an integral part of, and should be read in conjunction with, these
consolidated financial statements.
STATEMENT OF CASH FLOW
FOR THE YEARED 31 DECEMBER 2021
(Expressed in United States Dollar)
2021 2020
OPERATING ACTIVITIES
Profit for the year 735,447 373,551
Adjustment:
Cost of gold sold 28,183,275 26,230,343
Finance costs 121,037 112,863
Operating profit before working capital
changes 29,039,759 26,716,757
Changes in working capital
Purchase of inventories (28,383,697) (27,081,466)
Increase in trade and other receivables (3,292,742) (307,606)
Increase/(decrease) in trade and other
payables 1,366,609 (2,665,167)
NET CASH USED TO OPERATING ACTIVITIES (1,270,071) (3,337,482)
------------- -------------
INVESTING ACTIVITIES
NET CASH USED TO INVESTING ACTIVITIES - -
FINANCING ACTIVITIES
Payment of finance costs (121,037) (112,863)
Withdrawal/(repayment) of import loans 1,511,419 (558,818)
Fund injected to capital reserve - 4,767,431
NET CASH GENERATED FROM FINANCING ACTIVITIES 1,390,382 4,095,750
------------- -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 120,311 758,268
------------- -------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR 2,347,117 1,588,849
CASH AND CASH EQUIVALENTS AT OF YEAR 2,467,428 2,347,117
------------- -------------
The accompanying Accounting Policies and Explanatory Notes form
an integral part of, and should be read in conjunction with, these
consolidated financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 DECEMBER 2021
(Expressed in United States Dollar)
1. GENERAL
The Company is a private limited company incorporated and
domiciled in Hong Kong.
The address of its registered office and the principal place of
business are located at Unit 1203, 12/F, CC Wu Building, 302-308
Hennessy Road, Wan Chai, Hong Kong. The Company was engaged in
information technology assets management and recovery including
processing, re-sales and recycling of metal scrap materials during
the year .
The financial statements are presented in United States Dollars
.
2. STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board ("IASB") and Hong Kong
Companies Ordinance (Cap. 622). The financial statements have been
prepared on a going concern basis.
3. ADOPTION OF NEW AND REVISED STANDARDS
In 2021, the Company has initially applied the new and revised
IFRSs issued by the IASB that are first effective for accounting
periods beginning on or after 1 January 2021 and are relevant to
the Company's financial statements, including:
IFRS 4, IFRS 7, IFRS 9,
IFRS 16 and IAS 39 Interest Rate Benchmark Reform - Phase 2
(amendments)
IFRS 16 Covid-19-Related Rent Concessions (amendments)
The application of the new and revised IFRSs has no material
effects on the Company's financial performance and positions.
4. PRINCIPAL ACCOUNTING POLICIES
The principal accounting policies adopted are set out below.
a. Basis of accounting
The financial statements have been prepared under the historical
cost basis.
b. Revenue recognition
Revenue from the sales of goods is recognised when control of
the goods has transferred, being when the goods have been shipped
to the customer's specific location. Follow delivery, the customer
has full discretion over the usage of the goods, has the primary
responsibility when onselling the goods and bears the risks in
relation to the goods. A receivable is recognised by the Company
when the goods are delivered to the customers as this represents
the point in time at which the right to consideration becomes
unconditional, as only the passage of time is required before
payment is due.
Interest income is recognised as other income as it accrues
using the effective interest method .
c. Borrowing costs
Borrowing costs are recognised as an expense in the period in
which they are incurred.
d. Cash and cash equivalents
Cash and cash equivalents include demand deposits and other
short-term highly liquid investments with original maturities of
three months or less.
e. Trade and other receivables
Trade and other receivables are stated at estimated realisable
value after each debt has been considered individually. Where the
payment of a debt becomes doubtful a provision is made and charged
to the income statement.
f. Trade and other payables
Trade and other payables are recognised initially at the
transaction price and subsequently measured at amortised cost using
the effective interest method.
g. Translation of foreign currency
Foreign currency transactions during the period are translated
into United States Dollars at the exchange rates ruling at the
transaction dates. Monetary assets and liabilities denominated in
foreign currencies are translated into United States Dollars at the
market rates of exchange ruling at the reporting date. Exchange
gains and losses on foreign currency translation are dealt with in
the statement of income and retained earnings.
h. Taxation
Income tax expense represents current tax expense. The income
tax payable represents the amounts expected to be paid to the tax
authority, using the tax rates that have been enacted or
substantively enacted by the balance sheet date. Deferred tax is
not provided.
i. Inventories
Inventories are stated at the lower of cost and net realisable
value. In arriving at net realisable value an allowance has been
made for deterioration and obsolescence.
j. Leases
Leases are classified as operating leases and the rentals
receivable or payable under these leases are credited or charged to
the statement of income and retained earnings on a straight line
basis over the duration of the leases.
k. Employee benefits
Salaries, annual bonuses, paid annual leave, contributions to
defined contribution plans and the cost of non-monetary benefits
are accrued in the period in which the associated services are
rendered by employees. Where payment or settlement is deferred and
the effect would be material, these amounts are stated at their
present values.
Termination benefits are recognized when, and only when, the
Group demonstrably commits itself to terminate employment or to
provide benefits as a result of voluntary redundancy by having a
detailed formal plan which is without realistic possibility of
withdrawal.
l. Government grants
Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving
immediate financial support to the Group with no future related
costs are recognised in profit or loss in the period in which they
become receivable.
m. Related parties
For the purposes of these financial statements, related party
includes a person and entity as defined below :
(a) A person, or a close member of that person's family, is related to the Group if that person:
i. has control or joint control over the Group;
ii. has significant influence over the Group; or
iii. is a member of the key management personnel of the Group or the Group's parent.
(b) An entity is related to the Group if any of the following conditions applies:
i. The entity and the Group are members of the same group (which
means that each parent, subsidiary and fellow subsidiary is related
to the others).
ii. One entity is an associate or joint venture of the other
entity (or an associate or joint venture of a member of a group of
which the other entity is a member).
iii. Both entities are joint ventures of the same third party.
iv. One entity is a joint venture of a third entity and the
other entity is an associate of the third entity.
v. The entity is a post-employment benefit plan for the benefit
of employees of either the Group or an entity related to the
Group.
vi. The entity is controlled or jointly controlled by a person identified in (a).
vii. A person identified in (a)(i) has significant influence
over the entity or is a member of the key management personnel of
the entity (or of a parent of the entity).
viii. The entity, or any member of a group of which it is a
part, provides key management personnel services to the Group or to
the Group's parent.
Close members of the family of a person are those family members
who may be expected to influence, or be influenced by, that person
in their dealings with the entity.
5. TURNOVER AND OTHER INCOME
Turnover represents the amounts received and receivables for
goods sold to the customers. Turnover and other income recognised
during the year are as follows:
2021 2020
Turnover
Sales income 29,661,683 27,482,363
Other income
Interest income 383 4,868
Government subsidies - 32,177
Exchange gain/(loss) 164,455 (192,576)
---------- ----------
164,838 (155,531)
---------- ----------
4. FINANCE COSTS
2021 2020
Interest on the import loan 45,007 52,394
Arrangement fees on the import loan 76,028 60,469
Interest on the bank overdraft 2 -
------- -------
121,037 112,863
------- -------
5. PROFIT FROM OPERATION AND BEFORE TAXAION
Profit from operation and before taxation have been arrived at
after charging/(crediting):
2021 2020
Audit and other professional fees 12,857 10,215
Bad debt written off - 43,260
Stock loss 83,687 -
Cost of goods sold 28,183,275 26,230,343
6. DIRECTOR'S REMUNERATIONS
Director's remunerations disclosed pursuant to section 383(1) of
the Hong Kong Company Ordinance (Cap.622) is as follows:
2021 2020
Fees - -
Other emoluments 79,734 82,740
------ ------
79,734 82,740
------ ------
7. STAFF COST
2021 2020
Salary 137,016 161,697
Mandatory provident fund 6,185 7,266
------- -------
143,201 168,963
------- -------
8. TAXATION
Hong Kong profits tax has been provided at the rate of 8.25% on
the assessable profits up to HK$2 million and 16.5% on any part of
assessable profits over HK$2 million during the year. For the year
of assessment 2021/22, 100% of tax payable would be waived, subject
to a ceiling of HK$10,000.
Taxation is reconciled to profit before taxation in the
statement of profit or loss and other comprehensive income as
follows:
2021 2020
Profit before taxation 853,754 419,390
Notional tax on profit before taxation,
calculated at the
rates applicable to profits 140,869 69,199
Tax effect of tax reduction due to
implementation of
two-tiered rates (21,214) (21,268)
Tax effect of tax rebate (1,285) (1,289)
Tax effect of non-taxable income
for tax purpose (63) (803)
--------- ---------
118,307 45,839
--------- ---------
9. INVENTORIES
Inventories comprise entirely of stock in trade.
2021 2020
Inventory in warehouse 2,481,953 2,314,118
Inventory in transit 3,636,422 3,603,835
---------- ----------
6,118,375 5,917,953
---------- ----------
10. TRADE RECEIVABLES
The ageing analysis of the trade receivables, based on invoice
dates, is as follows:
2021 2020
Within one month 1,280,970 812,079
1-3 months 1,220 -
Over 3 months - -
--------- -------
1,282,190 812,079
--------- -------
Trade receivables disclosed above include amounts which are past
due at the end of the reporting period against which the Company
has not recognised an allowance for doubtful receivables because
there has not been a significant change in credit quality and the
amounts are recovered subsequent to the reporting date. The Company
does not hold any collateral or other credit enhancements over
these balances nor does it have a legal right of offset against any
amounts owed by the Company to the counterparty.
11. AMOUNTS DUE FROM RELATED COMPANIES
Amounts due from related companies of the company disclosed
pursuant to section 383(1)(d) of the Hong Kong Companies Ordinance
(Cap. 622) and 622G15(3)(b) of Companies (Disclosure of Information
about Benefits of Directors) Regulation (Cap. 622) are as
follows:
Maximum amount
outstanding during
Name of companies 2021 2020 the year
Konbatas Corporation
Limited 183,308 - 183,308
Majestic Corporation
PLC 139,599 - 139,599
Majestic Global Corporation 1,210,338 - ,210,338
--------- ----
1,533,245 -
--------- ----
The amounts are unsecured, interest free and receivable on
demand.
12. TRADE PAYABLES
The ageing analysis of the trade payables, based on invoice
dates, is as follows:
2021 2020
Within one month 472,974 1,202,822
1-3 months 813,090 787,837
Over 3 months 68,088 68,728
--------- ---------
1,354,152 2,059,387
--------- ---------
13. AMOUNTS DUE TO RELATED COMPANIES
Maximum amount
outstanding during
Name of companies 2021 2020 the year
MC Asset Malaysia Sdn.
Bhd. 1,942,084 - 1,942,084
TeleCycle Europe Limited 29,009 - 29,009
--------- ----
1,971,093 -
--------- ----
The amounts are unsecured, interest free and repayable on
demand.
14. IMPORT LOANS
The Company has obtained credit facilities from its bankers as
secured by guarantees of the director and a related company
together with fixed deposit of the Company. The loans are interest
bearing at LIBOR+1.45% and repayable in 120 days from the drawdown
date which has multiple repayment dates. During the year, the
company has drawn a new facility under the SME Financing Guarantee
Scheme of HKMC Insurance Limited. It is secured by guarantees of
the director, a related company and HKMC Insurance Limited. It is
interest bearing at LIBOR+2.5% and repayable in 180 days from the
drawdown date which has multiple repayment dates.
15. SHARE CAPITAL
2021 2020
Issued and fully paid
1 ordinary share at HK$1 1 1
---- ----
Capital management
The Company's primary objectives when managing capital are to
safeguard the Company's ability to continue as a going concern, so
that it can continue to provide returns to shareholder. The Company
defines "capital" as including all components of equity.
The Company ' s capital structure is regularly reviewed and
managed with due regard to the capital management practices of the
Company. In order to maintain or adjust the capital structure, the
Company monitors capital by regularly reviewing debts to capital
ratio, being the measure of the Company's ability to pay off all
debts that reflects financial health and liquidity position.
Adjustments are made to the capital structure in light of changes
in economic conditions affecting the Company, to the extent that
these do not conflict with the director ' s fiduciary duties
towards the Company.
The Company was not subject to externally imposed capital
requirements during the year and at 31 December 2021.
16. LEASE COMMITMENTS
The Company had the following total future minimum lease
payments payable under non-cancellable operating leases:
2021 2020
- not later than
one year 21,666 37,141
- later than one year
and not later than five
years - 21,666
------ ------
21,666 58,807
------ ------
17. MATERIAL RELATED PARTY TRANSACTIONS
In addition to the transactions and balances detailed elsewhere
in these financial statements, the Company had the following
material transactions with related parties:
Name of related party Nature of transactions 2021 2020
MC Asset Malaysia Sdn.
Bhd. Tolling fee 1,835,000 1,716,000
18. FINANCIAL RISK MANAGEMENT
Exposure to credit, liquidity, interest rate, foreign currency
and equity price risks arises in the normal course of the Company's
business. The Company's exposure to these risks and the financial
risk management policies and practices used by the Company to
manage these risks are described below.
a. Credit risk
In order to minimise credit risk, credit approvals and
monitoring procedures are in place to ensure that follow-up action
is taken to recover overdue debts .
b. Liquidity risk
Ultimate responsibility for liquidity risk management rests with
the board of directors, which has established an appropriate
liquidity risk management framework for management of the Company's
short, medium and long-term funding and liquidity management
requirements. The Company manages liquidity risk by maintaining
adequate reserves, banking facilities and reserve borrowing
facilities, by continuously monitoring forecast and actual cash
flows, and by matching the maturity profiles of financial assets
and liabilities .
c. Interest rate risk
The Company draws import loans to maintain stable cashflow. The
loans are interest bearing at LIBOR+1.45% and LIBOR+2.5%. 5% is the
sensitivity rate used when reporting interest rate risk internally
to key management personnel and represents management's assessment
of the reasonably possible change in interest rates. The Company's
sensitivity to a 5% increase and decrease in LIBOR is as
follow:
2021 2020
5% increase effect on profit
for the year (279) (636)
5% decrease effect on profit
for the year 279 636
d. Foreign currency risk
The Company undertakes most of the transactions denominated in
United States Dollar with few transactions denominated in Euro. 5%
is the sensitivity rate used when reporting foreign currency risk
internally to key management personnel and represents management's
assessment of the reasonably possible change in foreign exchange
rates. The Company's sensitivity to a 5% increase and decrease in
Euro against United States Dollar is as follow :
2021 2020
5% increase effect on profit
for the year (164,111) (57,328)
5% decrease effect on profit
for the year 164,111 57,328
19. COVID-19 SUBSEQUENT EVENT
The outbreak of the coronavirus (COVID-19) since early January
2020 has had a significant impact on the economy and social
well-being worldwide. The year ended 31 December 2021 was impacted
although the management do not consider the impact to be
significant. The management of the Company maintains a positive and
strong cash position to deal with all its liabilities when they
fall due. The management will pay close attention to the
development of the COVID-19 outbreak and evaluate its impact on the
financial position and operating results of the Company.
20. APPROVAL OF FINANCIAL STATEMENTS
These financial statements were authorised for issue by the
Company's director on 31 May 2022.
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