TIDMMIL
RNS Number : 3209C
Myanmar Investments Intl Ltd
12 June 2023
This announcement contains inside information 12 June 2023
Myanmar Investments International Limited
Audited financial results for the financial period from 1
October 2021 to 31 March 2023
Myanmar Investments International Limited [AIM: MIL] ("MIL" or
the "Company"), the Myanmar focused investment company, today
announces its audited financial results for the financial period
from 1 October 2021 to 31 March 2023.
Copies of the Company's annual report and accounts will be sent
to shareholders shortly and will also be available to download from
the Company's website on
www.myanmarinvestments.com/financial-reports.
Highlight
During the financial period our net asset value ("NAV") has
decreased by 66.0 per cent and was US$8.7 million as at 31 March
2023, equivalent to US$ 0.23 per share.
Myanmar
Please find a detailed report about the situation in Myanmar in
the "Chairmen's Letter".
Future Strategy
In late 2018, the Directors felt that the investment environment
in Myanmar is unlikely to generate an appropriate risk adjusted
return commensurate with an investment in a frontier economy.
Accordingly, the Directors thought that it was appropriate to start
planning for an orderly disposal of our three investments with a
view to ultimately winding up the Company.
At the Company's AGM, held in Yangon on 24 October 2019, the
shareholders approved a resolution to amend the Company's
Investment Policy such that the Board can:
-- undertake an orderly disposal of its investments; and
-- return surplus capital to shareholders.
Since then, the Directors have taken the following action to
implement this strategy:
-- We sold our investment in Medicare International Health &
Beauty ("Medicare") for US$1 million to our main joint venture
partner in November 2019. The transaction was completed in December
2019.
-- We are in the process of selling our investment in Myanmar
Finance International Limited ("MFIL") .
-- We have continued to streamline our operations and as a
result reduced our overheads. As part of the cost reduction
process, we have prepared a proposal to de-list the Company and
this will be despatched to Shareholders in due course for their
consideration. If Shareholders approve it the annual cost savings
will be considerable and will help to reduce the Company's cash
burn rate.
Business review
The Company has invested in two businesses:
AP Towers Holdings Pte. Ltd ("AP Towers") / Apollo Towers
-- The Company has invested US$21 million in Apollo Towers.
-- The share exchange with AP Towers was completed in January
2020. Under the share exchange, the Company transferred its
indirect interest of 9.1 per cent of Apollo Towers for an indirect
interest of 4.1 per cent of AP Towers. The share exchange
effectively brought Apollo Towers and Pan Asia Towers, another
Myanmar independent tower company, under the common ownership of AP
Towers.
-- As at 31 March 2023, Apollo Towers and Pan Asia Towers
together had an aggregated portfolio of 3,234 towers, 6,706 tenants
and a co-location ratio (also known as "Lease-up-Rate" or "LUR") of
2.07x which is stable relative to 30 September 2021.
-- Based on AP Towers actual results for the 6 months ended 31
March 2023, AP Towers annualised adjusted "run rate" revenue has
decreased to US$91.4 million. This represents a decline of 10.8 per
cent compared with the numbers as of 30 September 2021. The
annualised adjusted "run rate" EBITDA has decreased to US$76.2
million. This represents a decline of 11.3 per cent compared with
the numbers as of 30 September 2021.
-- Going forward, AP Towers will, when market conditions allow,
be looking to increase the number of tenancies either from new
"Build to Suit" towers or from adding co-locations to its existing
towers.
-- AP Towers' net debt was US$379.8 million as at the end of
March 2023, a decrease of US$ 16.4 million since 30 September
2021.
Myanmar Finance International Limited ("MFIL")
-- MIL has invested US$2.7 million for a 37.5 per cent shareholding.
-- It is one of Myanmar's leading microfinance companies.
-- The impact from both the Covid-19 pandemic and the political
crisis in Myanmar has severely affected all microfinance companies.
Not only has the level of non-performing loans in the sector risen
sharply but more critically the source of funds from foreign
development finance institutions has all but dried up.
-- Against this deteriorating background, over the last two
years MFIL has pro-actively reduced its loan book, negotiated to
repay all its foreign and local debts and materially reduced it s
operating expenses.
-- As at 31 March 2023, MFIL's gross loan book was MMK11.05
billion, a reduction from MMK16.5 billion at the beginning of this
financial period (MMK14.0 billion at 31 March 2022 and MMK12.85
billion at 30 September 2022) with its Portfolio at Risk over 30
days ratio ("PAR 30+") at 38.4 per cent.
-- MFIL has agreed a debt repayment plan with all its lenders.
For foreign lenders, this will lead to a significant haircut in
liabilities that will crystalize as soon as all foreign lenders
receive their agreed repayments. Regulatory approval has been
received and the company will soon start processing the
remittances.
-- The offer for 100 per cent of MFIL from Thitikorn Plc, a Thai
finance company, has been extended to the end of August 2023 and is
subject to, inter alia, local regulatory approval.
--
Financial review
During the past 18 months our net asset value ("NAV") has
decreased by 66.0 per cent and was US$8.7 million as at 31 March
2023. This was driven mainly by the decrease in the assessed value
of our investments in AP Towers (down US$14.8 million to US$7.5
million) and in MFIL (down US$1.1 million to US$0.4 million).
During the financial period we achieved to reduce our operating
"run rate" costs further down to now US$0.4 million per annum.
Henrik Bodenstab, Chairman of MIL, "The past 18 months have
presented a challenging environment for the Company, due to the
combined impact of the Covid-19 pandemic and the political
turbulence since February 2021. These factors have substantially
reduced the Company's NAV, a situation that we've conveyed to our
shareholders in our interim financial reports as of 31 March 2022
and 30 September 2022. Nonetheless, APT's results have stabilised,
and we anticipate that the completion of MFIL's restructuring in
2024 will establish a solid basis for the rejuvenation of its
business operations. Last but not least our operating costs have
been reduced over the last 18 months. These costs are set to
decrease even further, contingent upon shareholders' approval of
the proposal to withdraw the Company's shares from trading on AIM.
Even with the recent setbacks, we remain steadfast in our
commitment to pursue an effective course for the company's future,
with the primary goal of optimising value for our
shareholders."
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information please contact:
Nick Paris Jay Edwin
Managing Director CFO
Myanmar Investments International Myanmar Investments International
Limited +95 (0) 1 387 947 Limited +95 (0) 1 387 947
nickparis@myanmarinvestments.com jayedwin@myanmarinvestments.com
Nominated Adviser Broker
Philip Secrett / George Grainger William Marle
Grant Thornton UK LLP finnCap Ltd
+44 (0) 20 7383 5100 +44 (0) 20 7220 0500
For more information about MIL, please visit
www.myanmarinvestments.com
CHAIRMEN'S LETTER
Dear fellow shareholder
MYANMAR
The political crisis in Myanmar is settling into a prolonged
conflict. A general election in 2023, if held, will hint as to the
medium-term prospect for the country.
Whatever happens next, the Myanmar people are resourceful and
resilient. For over 70 years they have stoically survived repeated
political crises.
At one level, there appears to be little change since our last
report. The military continues to take aggressive action in the
north, northeast and west of the country against pro-democracy and
ethnic groups and is effectively not in control of a large part of
the country, while in the urban areas life has returned to a level
of normalcy.
The regime has started laying the groundwork for elections,
planned for 2023, by passing a new party registration law and
updating the voter list. However, with most of the country engulfed
in anti-military activities; most citizens opposed to the exercise;
and western governments indicating that the result is unlikely to
be accepted, any regime-initiated vote will be contentious and may
not bring peace.
When an election date is finally announced, there could be an
escalation in violence, especially in the urban areas.
Strategically, the regime has begun to court international
observers. In November 2022, the SAC granted amnesty to over 5,000
prisoners. Among those released was a small group of NLD
politicians and a few high-profile foreigners. In May 2023, 2,153
more were released and 31 death sentences commuted following a
visit from Ban Ki Moon, the former Secretary General of the United
Nations. These moves are believed to be part of a choreographed
relaxation to blunt international criticism and pave the way for a
general election. Should an election take place, even if it is not
necessarily internationally accepted, it could, like the 2010
election (which was also initially widely condemned), herald the
beginning of a change. Whether or not this is the "off ramp" that
allows the military to de-escalate will largely depend on who the
military nominates as the next president.
In the year to September 2022, Myanmar's economy was weighed
down by both external global weakness and by domestic instability.
Inflation, which peaked at 16 per cent, stretched household income
and hampered access to food. In spite of this, growth recovered to
2 per cent.
Since then, the economy has shown signs of further
stabilization, and modest levels of growth will persist, with the
World Bank forecasting GDP growth of 3 per cent for the year ending
September 2023. Although this still means that GDP per capita will
be 13 per cent lower than in 2019.
Over the coming year, modest growth is expected in the services
sector as inflationary pressure eases, but domestic consumption
will remain weak. Industrial sector growth is forecast to slow as
garment and food processing industries face slower export demand
but with input prices softening the agriculture sector could
rebound.
A bright spot is a noticeable increase in domestic tourism, but
western tourist arrivals are still well below pre-pandemic
level.
The currency has also stabilized at an unofficial rate of
MMK2,850 to US$1.0 but remains weaker than the official central
bank reference rate of MMK2,100 to US$1.0. However, the actual
availability of foreign currencies in the banking system is limited
and the central bank continues to severely restrict foreign
remittances. As the current account deficit, currently minus 1.8
per cent of GDP, continues to widen it is unlikely that the
currency will appreciate any time soon.
These modest signs of stabilization have increased optimism, and
this is reflected in the rise in the Manufacturing PMI to 57.4,
clocking three straight months of expansion and a 28 per cent
increase compared to our last report as of 30 September 2022 when
it was 44.6.
However, this positive news must be tempered by the continuing
high level of inflation of around 10 per cent and a severe crisis
in the supply of electricity and fuel. Most parts of the country
face daily power shortages and regular scheduled power cuts.
Although electricity is made available to factories, since April,
Yangon residents have faced over 8 hours of electricity cuts every
day. The cost of fuel as well as the lack of supply has made it
more difficult for households and small shops to run generators and
has increased travelling expenses and travel times as fewer buses
are running.
A UNDP report in February 2023 indicated that a quarter of the
people living in eight of Yangon 's poorest townships have often
not had any income for the last 12 months. This is forcing people
to adopt coping strategies that threaten their health and
wellbeing, including cutting down on how much they eat and
consuming less nutritious food, selling assets, such as vehicles,
and forgoing medical treatment. This is exacerbated by a
chronically weak healthcare system crippled by medical staff who
protested against the coup and are now being targeted by the
military and forced out of the formal system.
For foreign businesses or local companies that have
international transactions, FATF's blacklisting of Myanmar in
October 2022 is beginning to have an impact, with many banks
experiencing difficulties with US$ remittances. This is
exacerbating the shortage of hard currency in Myanmar and forcing
companies and individuals to revert to relying on the informal
Hundi system for remittance.
In summary, there is now a level of weary stability at a lower
level of economic activity with the population stoically bearing
the brunt of the conflict with grim determination to survive. An
election in 2023 would determine how long this continues.
REPORTING PERIOD
The State Administration Council (SAC) announced in August 2021
that Myanmar's fiscal year will be re-changed from 1 April to 31
March starting from the 2022 - 2023 financial year. Our investee
companies (MFIL and AP Towers) have decided to change their fiscal
years accordingly and the Board has decided to follow this
decision. Therefore, we have issued interim accounts for the
periods from 1 October 2021 to 31 March 2022 and from 1 April 2022
to 30 September 2022 which were both published within 3 months of
the period end. Therefore, this full audited set of financial
statements comprises the financial period from 1 October 2021 to 31
March 2023.
CHANGE IN STRATEGY AND POSSIBLE CANCELLATION OF ADMISSION OF THE
COMPANY'S SHARES FROM AIM
At the Annual General Meeting (" AGM ") in 2019 shareholders
approved a resolution to amend the investment objective and
policies of the Company as follows:
"The Company will seek to realise the Company's investments in
an orderly manner, such realisations to be effected at such times,
on such terms and in such manner as the Directors (in their
absolute discretion) may determine.
Following such realisations, the Company will make periodic
returns of surplus capital to Shareholders on such terms and in
such manner as the Directors (in their absolute discretion) may
determine.
The Company shall not make any new investments in projects to
which it is not already committed. However, this will not preclude
the Directors (in their absolute discretion) from:
(a) authorising the expenditure of such capital as is necessary
to: (i) complete arrangements pertaining to the Company's existing
investments; or (ii) carry out any activities that the Directors
(in their absolute discretion) deem appropriate to ensure the
salability of any existing investment; or (b) entering into any
contract or other arrangement with any third party to realise all
or any part of the Company's existing investments.
Following the disposal of all of the Company's existing
investments, the Directors intend to put a winding up proposal to
the Shareholders."
Important steps have been made to implement this strategy:
-- We sold our investment in Medicare International Health &
Beauty ("Medicare") for US$1 million to our main joint venture
partner in November 2019. The transaction was completed in December
2019. This represented a loss of US$1.1 million on the cost of the
investment which largely reflected our share of the operating
losses from opening a chain of new stores in Myanmar.
-- We are in the process of selling our investment in Myanmar
Finance International Limited ("MFIL") . On 1 April 2020, we
announced that we accepted an offer to sell our shareholding in
MFIL to a Thai based company subject to the purchaser's AGM
approving the purchase, lender's consent, and Myanmar regulatory
approval. The minimum consideration for this transaction will be
calculated based on a pre-agreed formula of two times the audited
book value of MFIL at closing once these conditions have been
satisfied. Subsequent to that announcement, the purchaser's AGM on
23 April 2020 approved the transaction and the lenders to MFIL have
given their consent. However, due to the outbreak of Covid-19 and
the change of government on 1 February 2021, the transaction has
not yet been closed. On 18 April 2023, the parties signed an
extension of the binding offer until 31 August 2023.
-- We have continued to streamline our operations and as a
result, reduced our overheads. As part of the cost reduction
process, we closed our office in Yangon and removed most of our
staff costs from the operation as of 31 March 2020. The core
cash-based overheads for the 12-month period from 1 April 2022 to
31 March 2023 are 24.3 per cent lower than for the financial period
from 1 October 2020 to 30 September 2021 (excluding transaction
costs and costs for preparation of de-listing the Company from the
London Stock Exchange).
We are now holding approximately US$0.9 million of cash. We also
intend to streamline our operations further when we sell MFIL as by
then we will only have one investment left. Due to the political
situation, it is unclear how fast our investments can be
monetized.
The Directors have concluded that due to the low level of
trading in MIL Shares, the ongoing cost of being admitted to
trading on AIM outweigh the benefits. We have incurred costs of
US$113,000 in this accounting period preparing a proposal to cancel
admission of the Company's shares from trading on AIM and a
circular will be dispatched to Shareholders in due course for their
consideration. If Shareholders approve the resolutions proposed in
the circular, the annual cost savings will be considerable and will
help to reduce the Company's cash burn rate.
CORPORATE GOVERNANCE
The Company seeks to uphold the fundamental principles of good
corporate governance and has adopted the Quoted Companies Alliance
2018 Corporate Governance Code. The Chairman's Statement on
Corporate Governance provides greater detail on how the Board
itself operates as well as the steps taken to ensure that its staff
adhere to principles such as those set out in the UK anti-bribery
legislation.
On behalf of the Board, we should like to take this opportunity
to thank a number of our key stakeholders: our remaining staff for
their professionalism and commitment; our business partners for all
of their advice and contributions; and our shareholders for their
continued support.
HENRIK BODENSTAB AUNG HTUN
Chairman Deputy Chairman
9 June 2023 9 June 2023
EXECUTIVE DIRECTOR'S REVIEW
Business Review
During the past 18 months our net asset value ("NAV") has
decreased by 66.0 per cent and was US$8.7 million as at 31 March
2023. This change is mainly attributable to the decrease in the
assessed value of the Company's investments in AP Towers (down
US$14.7 million to US$7.5 million) and MFIL (down US$1.1 million to
US$0.4 million) and the operating expenses for the reporting period
(US$ 1.0 million).
During the past 18 months our core operating expenses were
significantly reduced to US$0.8 million compared with US$1.1
million (excluding transaction costs and the costs for preparing
for the cancellation of admission of the Company's shares from AIM)
for the comparable 18-month period 1 April 2020 to 30 September
2021.
Overall, both AP Towers and MFIL were disrupted by the impact of
Covid-19 and the takeover of the military on 1 February 2021 but
the consequences for MFIL were more serious:
AP Towers:
-- the Company transferred its interest in Apollo Towers for an
interest in AP Towers in January 2020. The share exchange
effectively brought Apollo Towers and Pan Asia Towers, another ITC,
under the common ownership of AP Towers which now manages one of
the largest networks of towers in Myanmar.
-- Based on AP Towers' actual results for the 6 months ended 31
March 2023, AP Towers annualised adjusted "run rate" revenue
decreased to US$91.4 million. This represents a decline of 10.8 per
cent compared with the numbers as of 30 September 2021. The
annualised adjusted "run rate" EBITDA has decreased to US$76.2
million. This represents a decline of 11.3 per cent compared with
the numbers as of 30 September 2021 ; and
MFIL:
-- Against the deteriorating background due to Covid-19 and the
political instability, over the last two years MFIL has
pro-actively reduced its loan book, negotiated to repay all of its
foreign and local debts and materially reduced its operating
expenses. As at year end, Portfolio at Risk over 30 days ("PAR
30+") was 38.4 per cent.
-- In 2024, MFIL will be debt free and operating at a lower cost
base. It will be a strong, albeit small, and profitable operation
that has no liabilities.
-- The offer for 100 per cent of MFIL from Thitikorn Plc, a Thai
finance company, has been extended to the end of August 2023 and is
subject to, inter alia, local regulatory approval.
-- As soon as logistically practical, further discussions with
the purchaser will be necessary to establish a timeline to close
the sale of MFIL. It has been 38 months since the transaction was
negotiated and much has changed in the country. It may be necessary
to amend the transaction terms.
In both cases, Myanmar Investments' team have worked closely
with these businesses to provide strategic advice as well as
hands-on local knowledge.
Financial Review
NET ASSET VALUE
The Directors assess the Group's NAV attributable to the
shareholders of the Company as at 31 March 2023 to be US$8.7
million, a decrease of 66.0 per cent compared with the Group's NAV
as at 30 September 2021. This represents US$0.23 per share, based
on the number of shares in issue at the period-end. This change
principally reflects the net changes in the Directors' assessment
of the values of the Company's investments, described in more
detail below, less the Group's running costs for the period.
As at 31 March 2023 the Group's NAV consisted of:
-- an investment in AP Towers, the telecommunication tower
business, of US$7.5 million, excluding the non-controlling
interests, determined using a comparable EBITDA multiple
methodology;
-- an investment in MFIL, the microfinance business, of US$0.4
million, determined using a price to book value methodology;
and
-- cash and other net assets of US$0.8 million.
AP TOWERS
As at 30 September 2021, the Directors had assessed that the
Company's attributable shareholding in AP Towers , excluding the
non-controlling interests attributable to the minority shareholders
of MIL 4, to be worth US$29.7 million, using a comparable EBITDA
multiple methodology .
Applying the same methodology that we used as at 30 September
2021 with updated trading and comparable data, the value of this
investment as at 31 March 2023 would be US$10.0 million, a decrease
of US$19.7 million.
This valuation of AP Towers represents an unrealised loss of US
$10.8 million over the cost of the investment and an IRR since the
initial investment in July 2015 of -9.1 per cent.
MFIL
As at 30 September 2021, the Directors had assessed the value of
the Group's investment in MFIL to be US$2.0 million using the price
to book value methodology.
Applying the same methodology that we used as at 30 September
2021 the Directors have assessed the value of this investment as at
31 March 2023 to be US$0.5 million, a decrease of US$1.5
million.
This value of MFIL represents a loss of US $2.2 million over the
cost of the investment and an IRR since the initial investment in
April 2014 of -21.4 per cent .
Valuation discount
The change of government has increased the uncertainties and
risks of investing in Myanmar which is compounded by the current
paucity of information. These risks could include, but are not
limited to:
-- reduced investor interest in a trade sale of assets or in an IPO;
-- increased domestic regulatory uncertainties;
-- a material and sustained decline in economic activity
impacting investment and consumer demand;
-- severe reduction in liquidity in the financial system;
-- a volatile foreign exchange rate;
-- prolonged political crisis paralyzing the country's administrative capacity;
-- increases in the number of demonstrations, strikes and violence;
-- potential broader international sanctions.
Given the uncertainties and risks in Myanmar the Directors have
decided to apply a valuation discount of 25 per cent on the
company's entire portfolio as at 31 March 2023 which is the same
rate applied as at 30 September 2021. This valuation discount is
reviewed regularly.
The impact on MIL's carrying value of the investments after
applying the valuation discount are:
AP Towers:
This discount reduces the value of this investment as at 31
March 2023 to US$7.5 million, which is US$14.8 million lower than
at September 2021. This valuation of AP Towers represents a loss of
US$13.3 million over the cost of the investment and an IRR since
the initial investment in July 2015 of -12.5 per cent.
MFIL:
This discount reduces the value of this investment as at 31
March 2023 to US$0.4 million, which is US$1.1 million lower than at
September 2021. This valuation of MFIL represents a loss of US$2.3
million over the cost of the investment and an IRR since the
initial investment in April 2014 of -24.8 per cent.
SUMMARY OF NAV
The NAV attributable to the shareholders of the Company in the
attached audited financial statements does not differ from the NAV
determined by the Directors as the investment in MFIL has been
classified as a "non-current asset classified as held for sale"
which requires the valuation of MFIL at "fair value" and not "at
equity". In accordance with the Group's Valuation Policy, the
Directors' valuation for MFIL is determined by reference to the
International Private Equity and Venture Capital Guidelines.
FINANCIAL RESULTS
For the financial period from 1 October 2021 to 31 March 2023,
the Group's audited loss after tax attributable to the shareholders
of the Company was US$16.9 million. The Group's audited loss after
tax attributable to the shareholders of the Company for the
financial year to 30 September 2021 was US$7.8 million.
This is a significant deterioration on the last period's result.
The loss per share is US cents 44.29 compared with a loss per share
of US cents 20.49 for the year to 30 September 2021 and primarily
relates to adjusting the valuation of the investments down.
We are steadily reducing our overheads whilst we try to exit
from our two remaining investments. As part of the cost reduction
process, we had closed our office in Yangon and removed most of our
staff costs from the operation as of 31 March 2020. The annualised
core cash-based overheads (including the costs of being a quoted
company but excluding transaction costs and expenses for the
cancellation of admission to trading on AIM project) based on the
6-month period from 1 October 2022 to 31 March 2023 is US$0.4
million. Based on the 6-month period from 1 April 2021 to 30
September 2021 this amount was US$0.7 million.
Outside of our overheads the most significant items were:
-- Our share of the 'fair value loss on investment at fair value
through profit or loss' for the investment in AP Towers of US$14.8
million;
-- 'Fair value loss on investment at fair value through profit
or loss' for the investment in MFIL of US$1.1 million.
DIVIDS
Based on the above the Directors do not recommend the payment of
a dividend at this time.
WORKING CAPITAL
Based as of the date of this report, the Group has adequate
financial resources to cover its working capital needs for the next
12 months. However, by the end of that period our cash balance will
be significantly reduced, and the Group would need to raise further
finance in order to continue its operations.
NICK PARIS
Managing Director
9 June 2023
STATEMENTS FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31
MARCH 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
Financial
period from
1 October Financial
2021 year ended
to 31 March 30 September
Note 2023 2021
US$ US$
Other item of income
Interest income - 476
Items of expense
Employee benefits expense 4 (254,750) (198,500)
Other operating expenses (710,202) (495,663)
Finance costs 5 (7,911) (6,827)
Fair value loss on investment at fair
value through profit or loss 9 (22,180,000) (9,100,000)
Write down to fair value less cost
to sell on non-current asset held
for sale 13 (1,125,000) (1,052,467)
Loss before income tax 6 (24,277,863) (10,852,981)
Income tax expense 7 (8,095) (120)
Loss for the financial period/year (24,285,958) (10,853,101)
============ =============
Loss attributable to:
Owners of the parent (16,878,128) (7,806,703)
Non-controlling interests 10 (7,407,830) (3,046,398)
(24,285,958) (10,853,101)
============ =============
Loss per share (cents)
* Basic and diluted 8 (44.29) (20.49)
============ =============
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
31 March 30 September
Note 2023 2021
US$ US$
ASSETS
Non-current assets
Equity instrument at fair value through
profit or loss 9 11,220,000 33,400,000
Total non-current assets 11,220,000 33,400,000
------------ ------------
Current assets
Other receivables 11 112,675 117,989
Cash and bank balances 12 878,606 1,807,634
------------ ------------
991,281 1,925,623
Non-current asset classified as held
for sale 13 375,000 1,500,000
------------ ------------
Total current assets 1,366,281 3,425,623
------------ ------------
Total assets 12,586,281 36,825,623
============ ============
EQUITY AND LIABILITIES
Equity
Share capital 14 40,569,059 40,569,059
Share option reserve 15 1,358,913 1,358,913
Accumulated losses (33,108,312) (16,230,184)
Foreign exchange reserve (76,560) (76,560)
Equity attributable to owners of
the parent 8,743,100 25,621,228
Non-controlling interests 10 3,481,339 10,889,169
------------ ------------
Total equity 12,224,439 36,510,397
------------ ------------
LIABILITIES
Current liabilities
Other payables 16 361,842 297,512
Income tax payable - 17,714
------------ ------------
Total current liabilities 361,842 315,226
Total equity and liabilities 12,586,281 36,825,623
============ ============
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
Equity
attributable
Share Foreign to owners Non-
Share option exchange Accumulated of controlling
capital reserve reserve losses the parent interests Total
US$ US$ US$ US$ US$ US$ US$
31 March 2023
At 1 October 2021 40,569,059 1,358,913 (76,560) (16,230,184) 25,621,228 10,889,169 36,510,397
Loss for the financial
period,
representing total
comprehensive
loss for the financial
period - - - (16,878,128) (16,878,128) (7,407,830) (24,285,958)
At 31 March 2023 40,569,059 1,358,913 (76,560) (33,108,312) 8,743,100 3,481,339 12,224,439
========== ========= ========= ============ ============= ============ ============
30 September 2021
At 1 October 2020 40,569,059 1,358,913 (76,560) (8,423,481) 33,427,931 13,935,567 47,363,498
Loss for the financial
year,
representing total
comprehensive
loss for the financial
year - - - (7,806,703) (7,806,703) (3,046,398) (10,853,101)
At 30 September 2021 40,569,059 1,358,913 (76,560) (16,230,184) 25,621,228 10,889,169 36,510,397
========== ========= ========= ============ ============= ============ ============
The accompanying notes form an integral part of these financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
Financial
period from
1 October Financial
2021 year ended
to 31 March 30 September
Note 2023 2021
US$ US$
Operating activities
Loss before income tax (24,277,863) (10,852,981)
Adjustments for:
Interest income - (476)
Finance costs 5 7,911 6,827
Fair value loss on investment at
fair value through profit or loss 9 22,180,000 9,100,000
Write down to fair value less cost
to sell on non-current asset held
for sale 13 1,125,000 1,052,467
Operating cash flows before working
capital changes (964,952) (694,163)
Changes in working capital:
Other receivables 5,314 150,845
Other payables 64,330 (6,541)
Cash used in operations (895,308) (549,859)
Interest received - 476
Finance costs paid 5 (7,911) (6,827)
Income tax paid (25,809) (321)
Net cash flows used in operating activities (929,028) (556,531)
------------ -------------
Financing activities
Decrease in short-term deposits pledged - 35,943
Net cash flows generated from financing
activities - 35,943
Net change in cash and cash equivalents (929,028) (520,588)
Cash and cash equivalents at beginning
of the financial period/year 1,795,951 2,316,539
Cash and cash equivalents at the end
of financial period/year 12 866,923 1,795,951
============ =============
The accompanying notes form an integral part of these financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
1. General corporate information
Myanmar Investments International Limited ("the Company") is a
limited liability company incorporated and domiciled in the British
Virgin Islands ("BVI"). The Company's registered office is at Jayla
Place, Wickhams Cay I, Road Town, Tortola, British Virgin
Islands.
The Company's ordinary shares are traded on the AIM market of
the London Stock Exchange under the ticker symbols MIL.
The Company was established for the purpose of identifying and
investing in, and disposing of, businesses operating in or with
business exposure to Myanmar. The Company's focus was to target
businesses operating in sectors that the Directors believed had
strong growth potential and thereby could be expected to provide
attractive yields, capital gains or both. At the Annual General
Meeting held on 24 October 2019, the Company's shareholders
approved a resolution to begin an orderly disposal of the Company's
investments and in due course look to return surplus capital to
shareholders. During the current financial period, the Directors
have concluded that due to the low level of trading in the
Company's shares, the costs of their listing on the London Stock
Exchange outweigh the benefits. Directors have prepared a proposal
to de-list the Company and such proposal will be despatched to
shareholders in due course for their consideration.
The principal activities of the subsidiaries are disclosed in
Note 10 to the financial statements.
The Group and the Company changed its financial year end from 30
September to 31 March as the Group's investee company in Myanmar
changed its financial year end from 30 September to 31 March to be
in line with the directives issued by the Myanmar Internal Revenue
Department on the changes of taxable period.
The current financial period covered a period of 18 months from
1 October 2021 to 31 March 2023 while the comparative financial
year ended 30 September 2021 covers a period of 12 months from 1
October 2020 to 30 September 2021 and therefore the financial
statements for period from 1 October 2021 to 31 March 2023 and for
financial year ended 30 September 2021 are not comparable.
1.1 Going concern
The Group incurred loss after tax of US$24,285,958 (30 September
2021: US$10,853,101) during the current financial period. The
Directors have assessed that the Group has adequate financial
resources to continue in operational existence for at least 12
months from the date of the financial statements. The Directors'
considerations in making this assessment, amongst others,
include:
a) The Group's current assets exceeded its current liabilities by US$1,004,439;
b) The Group currently has cash balance of US$878,606;
c) The Directors have carried out a detailed review of the cash
flow forecast of the Group for 18 months from 31 March 2023. The
cash flow forecast has been prepared with consideration of the
expected cash outflow arising from future expenses based on latest
known information. Factors relevant for the Directors'
consideration include, amongst others, expected cost reduction from
running operations of the Company as well as cost savings resulting
from potential de-listing of the Company.
Accordingly, the Directors are of the opinion that no material
uncertainty exists and the going concern basis is appropriate in
the preparation of the Group's financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
2. Summary of significant accounting policies
The Company's significant accounting judgements and estimates
used in the preparation of these financial statements are available
in the full audited financial statements, a copy of which can be
found on the Company's website at www.myanmarinvestments.com.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
3. Significant accounting judgements and estimates
The preparation of the Group's financial statements requires
management to make judgements, estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and
liabilities and the accompanying disclosures, and the disclosure of
contingent liabilities at the reporting date. Uncertainty about
these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amount of the asset
or liability affected in the future periods.
3.1 Critical judgements made in applying the entity's accounting policies
The following is the critical judgement that management has made
in the process of applying the Group's accounting policies and
which have a significant effect on the amounts recognised in the
consolidated financial statements:
(i) Extension of period required to complete a sale of the non-current asset held for sale
As the result of the ongoing transaction to sell the Group's
37.5% equity interest in Myanmar Finance International Ltd.
("MFIL") (Note 13), the entire carrying amount of the Group's
investment in MFIL has been reclassified as non-current asset held
for sale since the prior financial period. However, due to certain
events and circumstances beyond the Group's control in Myanmar as
disclosed in Note 20 to the financial statements, the sale could
not be completed within one year. The Group remains committed to
its plan to sell its investment in MFIL and consider the sale to be
highly probable. As such, directors are of the view that the
continuous classification of the Group's investment in MFIL as
non-current asset held for sale is appropriate as at 31 March
2023.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year,
are described below. The Group based its assumptions and estimates
on parameters available when the financial statements were
prepared. Existing circumstances and assumptions about future
developments, however, may change due to market changes or
circumstances arising beyond the control of the Group. Such changes
are reflected in the assumptions when they occur.
(i) Fair value of unquoted equity instrument at fair value through profit or loss
The Group's equity instrument at fair value through profit or
loss are measured at fair value for financial reporting purposes.
The Board of Directors determined the appropriate valuation
techniques and inputs for fair value measurements being the
enterprise value ("EV") over earning before, interest, tax,
depreciation and amortisation ("EBITDA") ("EV/EBITDA") multiple,
adjusted with a valuation discount.
In estimating the fair value of an asset or a liability, the
Group uses market-observable data to the extent it is available.
Where Level 1 inputs are not available, the Group engages internal
valuation specialist to perform the valuation. The valuation of the
unquoted investment is categorised into Level 3 (30 September 2021:
Level 3) of the fair value hierarchy. The Board of Directors works
closely with the qualified internal valuation specialist to
establish the appropriate valuation techniques and inputs to the
model.
The details of the valuation techniques and inputs used in
determining the fair value of the unquoted equity instrument at
fair value through profit or loss are disclosed in Note 9 to the
financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
3. Significant accounting judgements and estimates (Continued)
3.2 Key sources of estimation uncertainty (Continued)
(ii) Measurement of non-current asset held for sale
The Group follows the accounting policies set out in Note 2.8
and measures the non-current asset held for sale at lower of the
carrying amount and fair value less cost to sell. In determining
the fair value less cost to sell, the Company considers the terms
and conditions of the Binding Offer as disclosed in Note 13 to the
financial statements and relevant market conditions. The details of
the measurement of non-current asset held for sale are disclosed in
Note 13 to the financial statements.
4. Employee benefits expense
Financial
period from
1 October Financial
2021 year ended
to 31 March 30 September
2023 2021
US$ US$
Salaries, wages and other staff benefits 254,750 198,500
254,750 198,500
============ =============
The employee benefits expense includes the remuneration of
Directors as disclosed in Note 17 to the financial statements.
5. Finance costs
Finance costs represent bank charges for the financial
period/year.
6. Loss before income tax
In addition to the charges and credits disclosed elsewhere in
the notes to the financial statements, the above includes the
following charges:
Financial
period from
1 October Financial
2021 year ended
to 31 March 30 September
2023 2021
US$ US$
Auditor's remuneration 82,670 51,607
Consultants' fees 212,918 191,472
Short term leases 6,256 2,730
Professional fees 276,802 147,428
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
7. Income tax expense
Financial
period from
1 October Financial
2021 year ended
to 31 March 30 September
2023 2021
US$ US$
Current income tax
* current financial period/ year 8,095 120
8,095 120
============ =============
A reconciliation of income tax applicable to loss before income
tax at the statutory income tax rate of 22% (30 September 2021:
25%) in Myanmar is as follows:
Financial
period from
1 October Financial
2021 year ended
to 31 March 30 September
2023 2021
US$ US$
Loss before income tax (24,277,863) (10,852,981)
------------ -------------
(24,277,863) (10,852,981)
============ =============
Income tax at the applicable tax rates (5,341,129) (2,713,245)
Effects of different income tax rates
in other countries 58,908 (95)
Expenses not deductible for tax 5,290,316 2,713,539
Income tax exemption - (81)
------------ -------------
Income tax for the financial period/year 8,095 120
============ =============
8. Loss per share
Basic loss per share is calculated by dividing the loss for the
financial year/period attributable to owners of the parent by the
weighted average number of ordinary shares outstanding during the
financial period/year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
8. Loss per share (Continued)
The following reflects the profit or loss and share data used in
the basic and diluted loss per share computation:
Financial
period from
1 October Financial
2021 year ended
to 31 March 30 September
2023 2021
US$ US$
Loss for the financial period/year
attributable to owners of the Company
(US$) (16,878,128) (7,806,703)
Weighted average number of ordinary shares
during
the financial period/year applicable
to basic
loss per share 38,108,451 38,108,451
Loss per share
Basic and diluted (cents) (44.29) (20.49)
============ =============
Diluted loss per share is the same as the basic loss per share
for financial period from 1 October 2021 to 31 March 2023 and
financial year ended 30 September 2021 because the potential
ordinary shares to be converted arising from share options are
anti-dilutive.
9. Equity instrument at fair value through profit or loss
31 March 30 September
2023 2021
US$ US$
Investment in unquoted equity instrument,
at fair value 11,220,000 33,400,000
========== ============
The Group, through its 66.67% subsidiary, MIL 4 Limited ("MIL
4") invested in a 6.2% (30 September 2021: 6.2%) equity interest in
unquoted share capital of AP Towers Holdings Pte. Ltd. ("AP
Towers").
Movement in the investment in unquoted equity instrument is as
follows:
31 March 30 September
2023 2021
US$ US$
Balance at beginning of financial period/year 33,400,000 42,500,000
Fair value loss during the financial period/year (22,180,000) (9,100,000)
Balance at end of financial period/year 11,220,000 33,400,000
============ ============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
9. Equity instrument at fair value through profit or loss (Continued)
Management engaged their internal valuation specialists to
perform a valuation on the investment. The valuation of the
unquoted investment is categorised into Level 3 (30 September 2021:
Level 3) of the fair value hierarchy. The information on the
significant unobservable inputs and the inter-relationship between
key unobservable inputs and fair value are as follows:
31 March 2023
Inter-relationship
between key
Valuation unobservable
Financial technique Significant inputs
asset used unobservable inputs and fair value
Unquoted Market Increase EBITDA
equity Approach * Earnings Before Interest, Tax, Depreciation and will increase
investment Amortisation ("EBITDA") of US$76.2million the fair value
- AP of the financial
Towers asset.
* Enterprise Value ("EV") per EBITDA multiple of 7.8x Increase
EV/EBITDA
multiple will
increase the
* Valuation discount of 25%* fair
value of the
financial
asset.
Increase in
valuation
discount will
decrease the
fair
value of the
financial
asset
30 September 2021
Inter-relationship
between key
Valuation unobservable
Financial technique Significant inputs
asset used unobservable inputs and fair value
Unquoted Market Approach Increase EBITDA
equity * Earnings Before Interest, Tax, Depreciation and will increase
investment Amortisation ("EBITDA") of US$85.9million the fair value
- AP of the financial
Towers asset.
* Enterprise Value ("EV") per EBITDA multiple of 12.7x Increase EV/EBITDA
multiple will
increase the fair
value of the
* Valuation discount of 25%* financial
asset.
Increase in
valuation
discount will
decrease the fair
value of the
financial
asset
* Due to political uncertainty and COVID-19 pandemic in Myanmar
during current and previous financial years, management is of the
view that an additional 25% discount should be applied to the
Group's investments in Myanmar.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
10. Investment in subsidiaries
Details of the subsidiaries are as follows:
Country of Proportion of
incorporation/ Proportion of ownership interest
Name of principal ownership interest held by non-control
subsidiaries place of business Principal activities held by the Group interests
31 March 30 September 31 March 30 September
2023 2021 2023 2021
% % % %
Myanmar
Investments Investment holding
Limited(2) Singapore company 100 100 - -
Provision of
management
MIL Management services to the
Pte. Ltd.(2) Singapore Group 100 100 - -
MIL 4 British Virgin Investment holding
Limited(1) Islands company 66.67 66.67 33.33 33.33
Held by MIL
Management
Pte. Ltd.
Provision of
management
MIL Management services to the
Co., Ltd(3) Myanmar Group - 100 - -
(1) Audited by BDO LLP, Singapore.
(2) Not audited for consolidation purpose
(3) The liquidation of the company was completed in July
2022.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
10. Investment in subsidiaries (Continued)
Non-controlling interests
The summarised financial information before intra-group
eliminations of the subsidiary that has material non-controlling
interests as at the end of each reporting period is as follows:
MIL 4 Limited
31 March 30 September
2023 2021
US$ US$
Assets and liabilities
Non-current assets 11,220,000 33,400,000
Current assets 3,240 923
Current liabilities (779,228) (733,422)
Net assets 10,444,012 32,667,501
=========== =============
Accumulated non-controlling interests 3,481,339 10,889,169
=========== =============
MIL 4 Limited
31 March 30 September
2023 2021
US$ US$
Revenue -
Other loss (22,180,000) (9,100,000)
Administrative expenses (43,489) (39,193)
------------ ------------
Loss and total comprehensive loss for
the financial period/year (22,223,489) (9,139,193)
Loss and total comprehensive loss allocated
to non-controlling interests (7,407,830) (3,046,398)
============ ============
Operating cash flows before working capital
changes (43,489) (39,193)
Working capital changes 43,489 39,193
------------ ------------
Net cash used in operating activities - -
------------ ------------
Net change in cash and cash equivalents - -
============ ============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
11. Other receivables
31 March 30 September
2023 2021
US$ US$
Other receivables 73,877 60,102
Prepayments 38,798 57,887
-------- ------------
Total 112,675 117,989
Less:
Prepayments (38,798) (57,887)
Add:
Cash and bank balances (Note 12) 878,606 1,807,634
-------- ------------
Financial assets at amortised costs 952,483 1,867,737
======== ============
Other receivables are denominated in United States dollar.
12. Cash and bank balances
31 March 30 September
2023 2021
US$ US$
Cash and bank balances 866,923 1,795,951
Short-term deposit 11,683 11,683
-------- ------------
878,606 1,807,634
======== ============
The short-term deposit bears interest rate of ranging from 0% to
3.6% (30 September 2021: 0% to 1.4%) per annum, has a tenure of
approximately 12 months (30 September 2021: 12 months) and is
pledged to bank to secure credit facilities.
Cash and bank balances and short-term deposits are denominated
in the following currencies:
31 March 30 September
2023 2021
US$ US$
United States dollar 761,354 1,676,445
Singapore dollar 117,252 128,168
Myanmar kyat - 3,021
-------- ------------
878,606 1,807,634
======== ============
For the purpose of the statement of cash flows, cash and cash
equivalents comprise the following at the end of the financial
period/year:
31 March 30 September
2023 2021
US$ US$
Cash and bank balances 878,606 1,807,634
Less: short-term deposits pledged (11,683) (11,683)
-------- ------------
866,923 1,795,951
======== ============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
13. Non-current asset classified as held for sale
Myanmar Finance International Ltd.
The Group, through its wholly-owned subsidiary Myanmar
Investment Limited ("MIL"), holds 37.5% equity interest in a joint
venture Myanmar Finance International Ltd ("MFIL"), a company
incorporated in Myanmar, within principal activity of provision of
microfinance loans.
On 26 February 2020, MIL together with each of the other
shareholders of MFIL, received a Binding Offer ("BO") to sell the
entire share capital of MFIL to Thitikorn Public Company Limited
("TK") (the "Purchaser"), a consumer finance company incorporated
in Thailand and listed on the Stock Exchange of Thailand.
The original BO was executed on 17 March 2020 with the intention
of agreeing and executing the Sale and Purchase Agreement ("SPA")
within a month. However, due to political uncertainty and Covid-19
pandemic in Myanmar, the sale could not be completed in time.
Therefore, the BO has been extended for several times and the
latest extension was signed on 18 April 2023 which extended the
expiry of BO to 31 August 2023.
In accordance with the BO, the minimum consideration for this
transaction will be calculated based on a pre-agreed formula of 2
times the book value of MFIL at closing.
As the result of the ongoing transaction to sell the Group's
37.5% (30 September 2021: 37.5%) equity interest in MFIL, the
entire carrying amount of the Group's investment in MFIL has been
reclassified as non-current asset held for sale as at 30 September
2020. However, due to certain events and circumstances beyond the
Group's control in Myanmar, the sale could not be completed within
one year. The Group remains committed to its plan to sell its
investment in MFIL and consider the sale to be highly probable . As
such, directors are of the view that the continuous classification
of the Group's investment in MFIL as non-current asset held for
sale is appropriate as at 31 March 2023.
Movements of assets in non-current asset classified as
held-for-sale were as follows:
31 March 30 September
2023 2021
US$ US$
Investment in joint venture - 37.5% equity
interest in Myanmar Finance International
Limited
Beginning of the financial period/year 1,500,000 2,552,467
Less: Write down to fair value less cost
to sell (1,125,000) (1,052,467)
----------- ------------
End of the financial period/year 375,000 1,500,000
=========== ============
Non-current assets classified as held for sale are measured at
the lower of the asset's previous carrying amount and fair value
less costs to sell. Directors estimate the fair value less cost to
sell at US$375,000 based on 2 times the audited book value of MFIL
at 31 March 2023, adjusted for a valuation discount of 25% due to
political uncertainty and COVID-19 pandemic in Myanmar during
current financial year. The valuation of the non-current asset held
for sale is categorised into Level 3 of the fair value hierarchy.
Therefore, the carrying amount of the non-current asset held for
sale was written down to its fair value less cost to sell.
Accordingly, write down of US$1,125,000
(30 September 2021: 1,052,467) was recognised in profit or loss
for the current financial year.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
14. Share capital
31 March 30 September
2023 2021
US$ US$
Issued and fully-paid share capital:
Ordinary shares at the beginning of the financial
period/year 40,569,059 40,569,059
========== ============
31 March 2023 30 September 2021
Ordinary Ordinary
shares Warrants shares Warrants
Equity Instruments in issue
At the beginning of the
financial period/year 38,108,451 13,573,901 38,097,037 14,128,387
Exercised during the year - - - (554,486)
Lapsed during the period - (13,573,901) - -
Issuance during the financial
year - - 11,414 -
------------ ------------- --------------- --------------
At the end of the financial
period/year 38,108,451 - 38,108,451 13,573,901
============ ============= =============== ==============
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share without restriction at meetings of the Company.
During the financial period, no warrants were exercised and all
unexercised warrants were expired.
All the shares have been admitted to trading on AIM under the
ticker MIL.
Warrants
No new warrants were issued during the period.
On 16 September 2016, the Company allotted 811,368 warrants
pursuant to the Fourth Subscription. The Company had agreed that
for every four Ordinary Shares subscribed for by a subscriber they
would receive one warrant at nil cost.
The warrants entitle the holder to subscribe for an Ordinary
share at an exercise price of US$0.75. The warrants may be
exercised during each 15 Business Day period commencing on the
first day of each Quarter during the Subscription Period (from 21
June 2015 to 21 June 2018).
On 22 May 2018, the Company amended the terms of the warrants to
extend the exercise period for warrants that remained outstanding
at 21 June 2018:
a) the exercise period for the warrants was extended such that
the warrants can be exercised until 31 December 2021, but at a
higher exercise price of US$0.90; and
b) in the extended period, warrant holders will have the option
to exercise their warrants on a cashless basis in certain
circumstances.
All warrants were previously traded on AIM under the ticker
MILW.
As the warrant instrument expired on 31 December 2021, all
unexercised warrants expired on that date and trading on AIM was
cancelled on 4 January 2022.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
15. Share option reserve
Details of the Share Option Plan (the "Plan")
The Plan allows for the total number of shares issuable under
share options to constitute a maximum of one tenth of the number of
the total number of ordinary shares in issue (excluding shares held
by the Company as treasury shares and shares issued to the Founders
prior to Admission).
Any future issuance of shares will give rise to the ability of
the Remuneration Committee to award additional share options. Such
share options will be granted with an exercise price set at a 10
percent premium to the subscription price paid by shareholders on
the relevant issue of shares that gave rise to the availability of
each tranche of share options.
Share options can be exercised any time after the first
anniversary and before the tenth anniversary of the grant (as may
be determined by the Remuneration Committee in its absolute
discretion) of the respective share options.
Share options are not admitted to trading on AIM but application
will be made for shares that are issued upon the exercise of the
share options to be admitted to trading on AIM.
As at 31 March 2023, there were 3,622,740 (30 September 2021:
3,622,740) share options available for issue under the Plan of
which 2,590,527 (30 September 2021: 2,590,527) had been granted.
These granted share options have a weighted average exercise price
of US$1.214 (30 September 2021: US$1.214) per share and a weighted
average contractual life of 10 years (30 September 2021: 10
years).
The 3,622,740 share options available were created under the
following series:
Exercise
price
Series/Date Occasion Number (USD)
Admission Placing and
Series 1/June 2013 Subscription 584,261 1.100
Series 2/ December
2014 Second Subscription 361,700 1.155
Series 3/ July 2015 Third Subscription 1,734,121 1.265
Series 4/ September
2016 Fourth Subscription 324,546 1.430
Series 5/ June 2017 Fifth Subscription 618,112 1.298
------------------
3,622,740
==================
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
15. Share option reserve (Continued)
Details of the Share Option Plan (the "Plan") (Continued)
The following share-based payment arrangements were in existence
during the current financial period:
Number Exercise Fair value
of share price at grant
Option series options Grant date Expiry date (USD) date
Series 1 410,000 27 June 2013 26 June 2023 1.100 153,487
Series 1 25,000 9 December 2013 8 December 2023 1.100 19,015
25 September 24 September
Series 1 132,261 2014 2024 1.100 62,937
Series 2 23,500 2 June 2015 1 June 2025 1.155 14,365
Series 1 10,200 15 January 2016 14 January 2026 1.100 6,235
Series 2 331,700 15 January 2016 14 January 2026 1.155 193,562
Series 3 921,600 15 January 2016 14 January 2026 1.265 490,120
Series 3 180,000 28 June 2016 27 June 2026 1.265 125,863
Series 1 2,267 19 October 2016 18 October 2026 1.100 1,363
Series 2 2,000 19 October 2016 18 October 2026 1.155 1,149
Series 3 551,999 19 October 2016 18 October 2026 1.265 289,752
----------- -----------
2,590,527 1,357,848
=========== ===========
Share options that are allocated to a Participant are subject to
a three-year vesting period during which the rights to the share
options will be transferred to the Participant in three equal
annual instalments provided, save in certain circumstances, that
they are still in employment with or engaged by the Company.
Fair value of share options granted in the financial year
No share options were granted during the financial period.
Share options were priced using Black-Scholes option pricing
model. Where relevant, the expected life used in the model was
adjusted based on management's best estimate for the effects of
non-transferability, exercise restrictions (including the
probability of meeting market conditions attached to the option),
and behavioural considerations. Expected volatility was based on
historical share price volatility from the date of grant of the
share options.
The Black-Scholes option pricing model uses the following
assumptions:
Grant date
28 June 19 October 19 October 19 October
2016 2016 2016 2016
-------- ---------- ---------- ----------
Grant date share price
(US$) 1.628 1.388 1.388 1.388
Exercise price (US$) 1.265 1.100 1.155 1.265
Expected volatility 22.47% 22.25% 22.25% 22.25%
Option life 10 years 10 years 10 years 10 years
Risk-free annual interest
rates 1.46% 1.76% 1.76% 1.76%
The Group recognised a net expense of US$Nil (30 September 2021:
US$Nil) related to equity-settled share-based payment transactions
during the financial period.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
15. Share option reserve (Continued)
Movement in share option during the financial period
The following reconciles the share options outstanding and
exercisable at the start of the period/year and at the end of the
period.
31 March 2023 30 September 2021
Weighted Weighted
average exercise average exercise
Number price Number price
US$ US$
Balance at beginning and
end of financial period/year 2,590,527 1.213 2,590,527 1.213
========= =========
No share options were exercised during the financial
year/period.
Movement in share option reserve during the financial period
31 March 30 September
2023 2021
US$ US$
Balance at beginning and end of financial
period/year 1,358,913 1,358,913
========= ============
16. Other payables
31 March 30 September
2023 2021
US$ US$
Accruals 166,165 106,961
Other payables 195,677 190,551
-------- ------------
Financial liabilities at amortised cost 361,842 297,512
======== ============
Other payables are denominated in the following currencies:
31 March 30 September
2023 2021
US$ US$
Singapore dollar 46,007 52,018
United States dollar 242,246 243,524
British pound 66,980 1,970
Euro 6,609 -
361,842 297,512
======== ============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
17. Significant related party disclosures
For the purposes of these financial statements, parties are
considered to be related to the Group and the Company if the Group
and the Company have the ability, directly or indirectly, to
control the party or exercise significant influence over the party
in making financial and operating decisions, or vice versa, or
where the Group and the Company and the party are subject to common
control or common significant influence. Related parties may be
individuals or other entities. During the current financial period,
in addition to the information disclosed elsewhere in these
financial statements, there was no other significant transactions
with related parties.
Compensation of key management personnel
During the current financial year, no emoluments were paid by
the Group to the Directors as an inducement to join or upon joining
the Group or as compensation for loss of office.
The remuneration of Directors for the financial period/year were
as follows:
Short
term Share
Directors' employee option
fee benefits plan Total
US$ US$ US$ US$
Financial period ended 31 March
2023
Executive directors
Maung Aung Htun - 116,000 - 116,000
Nicholas John Paris - 90,000 - 90,000
Non-executive directors
Henrik Onne Bodenstab 26,250 - - 26,250
Rudolf Gildemeister 22,500 - - 22,500
----------
48,750 206,000 - 254,750
========== ========= ======= =======
Financial year ended 30 September
2021
Executive directors
Maung Aung Htun - 86,000 - 86,000
Nicholas John Paris - 80,000 - 80,000
Non-executive directors
Henrik Onne Bodenstab 17,500 - - 17,500
Rudolf Gildemeister 15,000 - - 15,000
----------
32,500 166,000 - 198,500
========== ========= ======= =======
18. Dividends
The Directors of the Company do not recommend any dividend in
respect of the financial period ended 31 March 2023 (30 September
2021: Nil).
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 1 OCTOBER 2021 TO 31 MARCH
2023
19. Financial risk management objectives and policies
The Group's Financial risk management objectives and policies
have not changed in the past financial period and can be found on
the website www.myanmarinvestments.com.
20. Impact of COVID-19 and political crisis in Myanmar
The Coronavirus (COVID-19) outbreak and the political crisis
after the change of government on
1 February 2021 have created a high level of uncertainty to
economic prospects.
The situation continues to evolve with significant level of
uncertainty and the Group has seen an impact on its own
operation.
Regarding its investees it can be said that the last 18 months
have been difficult for the microfinance industry. A surge in COVID
cases in June 2021 led to shortages of medical supplies and the
country going into a hard lockdown. The "stay at home" directive
severely reduced economic activity and mobility. The political
crisis since 1 February 2021 has further impacted business
sentiment and activity. Bank transfers and withdrawals have been
restricted and USD has been hard to source. The impact of the
lockdown and civil disobedience movement has made it complicated to
complete the formality of the sale of Myanmar Finance International
Ltd ("MFIL"). But MFIL has gone through a debt repayment plan with
all its lenders and will be debt free in 2024. The purchaser has
therefore agreed to extend the offer to August 2023 (Note 13). The
Group intends to complete the sale as soon as it is practical.
Regarding the Group's other investment in AP Towers Holdings
Pte. Ltd. ("AP Towers"), it is to be noted that the
telecommunication sector has also suffered due to the outbreak of
COVID-19 and the political crisis since 1 February 2021 but much
less than the microfinance industry. The Myanmar telecommunication
tower sector, following a period of rapid growth, has continued to
slow in the last 18 months in terms of both new towers and new
co-locations. Also the availability of US$ has become a challenge.
Mobile network services in Myanmar have been significantly
disrupted since February 2021, primarily as a result of the
suspension and restriction of data services imposed by the
regulator. Whilst the operating environment has been very
challenging, AP Towers has been able to continue to provide a
reliable service with high up times, thereby contributing the
continued availability of mobile phone services to the population
of Myanmar.
21. Authorisation of financial statements
The financial statements of the Group for the financial period
from 1 October 2021 to 31 March 2023 were approved by the Board of
Directors on 9 June 2023.
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END
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