Replacement for Final Results

RNS Number : 0069R

Jade Road Investments Limited

01 July 2022

 

1 July 2022

RNS

JADE ROAD INVESTMENTS LIMITED

("Jade Road" or the "Company")

Correction: Final Results

Further to the announcement made on 30 June 2022 the following correction has been made to the Financial Highlights:

The Net Asset Value per share is US$0.58 (GBP0.5) for 2021 and US$0.92 (GBP0.67) for 2020.

All other details remain unchanged.

Financial Highlights

	2021	2020	Change
Net Asset Value	US$68.0m (GBP55.8m)	US$106.4m(GBP78.0m)	-36.1%
Gross Portfolio Income	US$2.5m (GBP2m)	US$2.5m (GBP1.8m)	-
Net Portfolio Income	US$-35.6m (GBP-29.2m)	US$6.7m (GBP4.9m)	-623%
Net Profit / Loss	US$-38.4m (GBP-31.5m)	US$1.6m (GBP1.2m)	-2469%
Year-end cash	US$0.8m (GBP0.6m)	US$3.7m (GBP2.7m)	-78.4%
Net Asset Value per share	US$0.58 (GBP0.5)	US$0.92 (GBP0.67)	-36.9%

Operational Highlights

-  Jade's largest legacy asset (85% effective holding) in China is Future Metal Holdings Limited (FMHL), the largest magnesium dolomite quarry in Shanxi Province. According to the Observatory of Economic Complexity (MIT Media Lab) between December 2020 and December 2021, China's dolomite exports increased by 135% or US$3.86m to US$6.73m from US$2.87m. China also charges the highest price for dolomite at around US$30 per tonne. In addition to providing dolomite for aggregate, FMHL is poised to sell its higher value products once local supply chains recover

-  In June 2021, Meize's state-of-the-art Jiangsu offshore blade plant completed an expansion and commenced operations to meet rising demand and is operating at full capacity, producing internationally certified blades for both onshore and offshore wind turbines.

-   In July 2021, the Company announced its expanded strategy to invest in Asian High Growth Companies via equity in listed companies and/or pre-IPO investments with a focus in Technology, including Healthtech, Medtech and Fintech.

Post Period End Activity

-  On the 22^nd of June, Jade Road announced ( RNS Number: 7646P) it has successfully negotiated a   partial divestment in   Meize Energy Industries Holdings Limited   ("Meize"), currently the third-largest holding in the Company's portfolio (7.7% of NAV as at announcement). The company has entered into a share purchase agreement ("SPA") for 112,500 shares of the Series B Preferred Equity in Meize for consideration of USD1.2 million (the "Transaction Price").  The Transaction Price implies a valuation of USD10.0 million for the Company's investment in Meize, which indicates a 22.0% premium to the carrying value as at the 30^th of June 2021 (USD8.2 million)

John Croft, Chairman of Jade Road Investments, commented:

'Unfortunately, the pandemic situation in China throughout 2021 worsened with major cities and provinces placed under lockdown measures, including cross-province and cross-border travel bans, as part of the government's zero-Covid strategy.

Meanwhile, in Hong Kong (HKSAR), many restaurants were forced to close permanently in the face of multiple lockdowns. In Japan, tourism ground to a complete halt.

In the face of these unprecedented headwinds, major impairments across the asset portfolio have unfortunately become unavoidable.

I am pleased to report that whilst talks remain protracted due to China's zero-Covid stance, positive developments have been achieved. On that note, I was delighted that we were recently (post balance sheet) able to announce the partial disposal of our holding in Meize Energy Industries (Meize). Our original investment represented a 7.2% stake in Meize. Post this partial sale generating US$ 1.2m in cash, Jade's residual holding will amount to 6.3% of the equity.

Jade Road is set to pivot away from China and focus on the broader Asian SME subsector, which is showing greater resilience than larger companies in terms of recovery.

In Southeast Asia, SMEs are expected to further embrace sustainability, doubling down on digitalisation, accelerating automation and scaling up, as they navigate a post-pandemic recovery.

Therefore, Jade Road's core strategy remains: to build a base of income generating assets that covers overheads, management fees and finance costs, with a growing surplus to fund dividends.'

FOR FURTHER INFORMATION, PLEASE CONTACT:

Jade Road Investment Limited	[phone]
John Croft
Lionsgate Communications - Communications Adviser	[phone]
Jonathan Charles
Hybridian LLP - Corporate Broker	[phone]
Claire Noyce
WH Ireland Limited - Nominated Adviser	[phone]
James Joyce
Andrew de Andrade

About Jade Road Investments Limited

Jade Road Investments Limited (Jade Road) is quoted on the AIM Market of the London Stock Exchange and is committed to providing shareholders with attractive uncorrelated, risk adjusted long-term returns from a combination of realising sustainable capital growth and delivering dividend income.

The Company is focused on providing growth capital and financing to emerging and established Small and Medium Enterprises (SME) sector throughout Asia, well diversified by national geographies, instruments and asset classes. This vital segment of the economy is underserved by the traditional banking industry for regulatory and structural reasons.

The Company's investment manager, Harmony Capital, seeks to capitalise on its team's established investment expertise and broad networks across Asia. Through rigorous diligence and disciplined risk management, Harmony Capital is dedicated to delivering attractive income and capital growth for shareholders with significant downside protection through selectively investing in assets and proactively managing them.

Harmony Capital is predominately sourcing private opportunities and continues to create a strong pipeline of attractive income generating assets from potential investments in growth sectors across Asia, including healthcare, fintech, hospitality, IT and property. 

For further information, please visit the Company's website at  https://jaderoadinvestments.com  and follow the Company on Twitter (@JadeRoadInvest).

Chairman's Statement 2021

The pandemic-ravaged economies of China and Southeast Asia, compounded by heavy-handed Covid-19 curbs, continued to severely disrupt local supply chains and dampen demand, making major impairments across the Jade Road asset portfolio unavoidable.

Overview

In my statement in the 2021 interim results, I noted that the asset portfolio had managed to avoid any major impairments. Unfortunately, the pandemic situation in China throughout 2021 worsened with major cities and provinces placed under lockdown measures, including cross-province and cross-border travel bans, as part of the government's zero-Covid strategy.

More recently China's largest city Shanghai was locked down for two whole months delivering a serious blow to the country's economy and thereby undermining its chances of achieving the targeted 5.5% GDP growth rate for 2022.

Meanwhile, in Hong Kong (HKSAR), many restaurants were forced to close permanently in the face of multiple lockdowns. Prior to the 2019 protests and then the arrival of Covid-19 in the territory, 29 million mainland Chinese would visit Hong Kong annually, providing a major contribution to the territory's economy, spending heavily in the retail, property and hospitality sectors. This source of income was almost completely cut off.

In Japan, tourism ground to a complete halt.

In the face of these unprecedented headwinds, major impairments across the asset portfolio have unfortunately become unavoidable.

I believe a prudent valuation approach is required and consequently, in December 2021, the Company reported that it was likely to make a full provision against its US$26.5 million convertible bond in the Hong Kong-based, Michelin star restaurant company Fook Lam Moon Holdings. Events since then have unfortunately done nothing to change our assessment and the 2021 results presented do include the anticipated full provision.

Net Asset Value (NAV) for the year ended 31st December 2021 decreased to US$68.0 million, down 36.1% from US$106.4 million the previous year.

I have also stated that Jade Road's investment manager Harmony Capital was busy driving phase two of a three-phase investment strategy focused on exits, restructuring our legacy assets and seeking investments in smaller fast growing companies at IPO or pre-IPO stages.

I am pleased to report that whilst talks remain protracted due to China's zero-Covid stance, positive developments have been achieved. On that note, I was delighted that we were recently (post balance sheet) able to announce the partial disposal of our holding in Meize Energy Industries (Meize). Our original investment represented a 7.2% stake in Meize. Post this partial sale generating US$ 1.2 million in cash, JADE's residual holding will amount to 6.3% of the equity.

As is painfully obvious, exiting private equity positions held in Chinese companies requires patience as well as persistence, but as demonstrated by this announcement exits can be achieved, and in this case, at a premium to the value of the asset held in our books. Whilst having no direct connection with other privately held Chinese assets in our portfolio, it does provide clear evidence that these assets have real value and that in time realisations can be made delivering cash returns into the company.

Key Developments

Jade Road's investment manager has been hard at work pivoting away from its legacy assets in China as exit talks continue unabated.

Jade Road's largest legacy asset (85% effective holding) in China is Future Metal Holdings Limited (FMHL), the largest magnesium dolomite quarry in Shanxi Province. According to the Observatory of Economic Complexity (MIT Media Lab) between December 2020 and December 2021, China's dolomite exports increased by 135% or US$3.86 million to US$6.73 million from US$2.87 million. In addition to providing dolomite for aggregate, FMHL is poised to sell its higher value products once local supply chains recover.

Meanwhile, Meize the onshore and offshore wind turbine blade manufacturer, is showing exceptional resilience. As previously reported, Meize has maintained a full order book from its clients in 2021 due to exceptionally strong market demand.

In June 2021, Meize's state-of-the-art Jiangsu offshore blade plant completed an expansion and commenced operations to meet rising demand and is operating at full capacity.

As John Adams, second President of the United States, eloquently put it: "Every problem is an opportunity in disguise."

In July 2021, the Company announced its expanded strategy to invest in Asian High Growth Companies via equity in listed companies and/or pre-IPO investments with a focus in Technology, including Healthtech, Medtech and Fintech.

The total allocation under this expanded investment focus will not be greater than 10% of Jade Road's present NAV (currently US$68.0 million) and not greater than 20% once the NAV exceeds US$150m. Investments in each company will not exceed 5% of the total allocation, in order to mitigate risk through diversification.

With many high growth start-ups staying private longer, Jade Road is uniquely poised to eliminate the barriers to investing in these start-ups and potentially provide its investors with high returns.

ESG Policy

I am pleased to report that Environmental, Social, and Governance ("ESG") principles play an integral role in Jade Road's investment process.

Harmony Capital, Jade Road's Investment Manager, is a reporting member of the UN PRI (United Nations Principles for Responsible Investment) and its investment process has been redesigned to comply with best-in-class, ESG-focused private investment practices.

I believe that through the provision of expansion capital to assist companies in their growth, Jade Road can target attractive returns for stakeholders as well as be a steward of betterment in the ecosystems and communities within which these portfolio companies operate.

Outlook

China's economy is forecast to recover at a slower rate than previous years as it tackles a far more transmissible virus variant, weaker growth and a central government less willing to continue its high levels of financial support.

Jade Road is set to pivot away from China and focus on the broader Asian SME subsector, which is showing greater resilience than larger companies in terms of recovery.

In Southeast Asia, SMEs are expected to further embrace sustainability, doubling down on digitalisation, accelerating automation and scaling up, as they navigate a post-pandemic recovery.

Therefore, Jade Road's core strategy remains: to build a base of income generating assets that covers overheads, management fees and finance costs, with a growing surplus to fund dividends.

By targeting the broad Asian SME subsector, I believe Jade Road can access an immense market in which it can leverage both its capital, and its investment manager's direct relevant experience.

In a market in which Asian SMEs are increasingly starved of capital, Jade Road continues to see opportunities to negotiate and invest in structured instruments. Its preference for income-generating assets puts an emphasis on credit instruments such as secured debt or non-mandatory convertible bonds when structuring investments.

As the world emerges from the challenges of COVID, we face new inflationary and geopolitical headwinds that are affecting businesses globally.

With this background, your Board's primary focus is to generate income through disposals whilst actively reviewing opportunities to acquire income generating assets for the portfolio as capital markets eventually return to growth.

John Croft

29^th June 2022

Chairman of the Board

Portfolio at 31 December 2021

Principal assets	Effective interest %	Instrument type	Valuation at 31 December 2020 US$ million	Credit income US$ million	Credit investment US$ million	Cash receipts US$ million	Equity investment/ other movement US$ million	Fair value adjustment US$ million	Provision US$ million	Valuation at 31 December 2021 US$ million
Fook Lam Moon Holdings	-	Convertible Bond	28.4	1.3	-	-	-	(29.7)	-	-
Future Metal Holdings Limited	84.8	Structured Equity	50.4	0.6	-	-	-	(0.6)	-	50.4
Meize Energy Industrial Holdings Ltd	7.9	Redeemable convertible preference shares	8.2	-	-	-	-	-	-	8.2
DocDoc Pte Ltd	-	Convertible Bond	2.4	0.2	-	-	-	-	-	2.6
Infinity Capital Group	-	Secured Loan Notes	2.3	0.4	-	-	-	(1.3)	-	1.4
Infinity TNP	40	Equity	7.3	-	-	-	-	(3.7)	-	3.6
GCCF & Other investments	-		8.7	-	-	(0.4)	-	(2.7)	-	5.6
Corporate debt	-		(3.5)	-	-	-	(0.1)	-	-	(3.6)
Other liabilities	-		(1.5)	-	-	-	0.5	-	-	(1.0)
Cash			3.7	-	-	0.4	(3.3)	-	-	0.8
Total N et Asset Value			106.4	2.5	-	-	(2.9)	(38.0)	-	68.0

Portfolio Overview

Future Metal Holdings Limited

Our largest asset by value is the dolomite quarry project ("Quarry") in China, Future Metal Holdings Limited ("FMHL"), which was previously known as Hong Kong Mining Holdings. The Company has an 85% shareholding in FMHL.

In M arch 2021, the Quarry engaged a new contractor to support operations. We believe that the new contractor has both the experience to efficiently operate the Quarry and the local network to sell the Quarry's products to downstream customers.

In 2021, the price of magnesium skyrocketed and reached a record high in the last decade. It increased substantially from around RMB15K (USD2.2K) per tonne in Q1 2021 to above RMB50K (USD7.4K) per tonne towards the end of 2021, representing a 233.3% increase. The local team has reached out to smelters in the local region to try to establish sales channels for the dolomite products in smelting use.

Including loan disbursements provided by the Company to FMHL and its subsidiaries and accrued PIK interest, the estimated fair value of the Company's investment is US$50.4 million as of 31 December 2021 (31 December 2020 US$50.4 million).

Fook Lam Moon

The Company holds a convertible bond of US$26.5 million ("Convertible Bond") in Fook Lam Moon Holdings("FLMH"), which is a shareholder of a Hong Kong-based restaurant group Fook Lam Moon ("FLM"). The Convertible Bond has a maturity of 5 years and pays a coupon of 5.0% per annum (3.0% paid in cash with the remainder rolled up with the principal amount outstanding).

FLM's business was impacted by the COVID-19 pandemic, as did its peers' in the food and beverage industry in Hong Kong in 2021. The regulations imposed by the local government severely limited inbound tourism, particularly from Mainland China, and local consumption

In late 2021, the Company became aware that the underlying group structure of FLM may have changed such that FLMH is no longer the 71% owned controlling shareholder in the Hong Kong based restaurant group.

The Company is actively working to secure more information to clearly understand what potential impact this ownership change may have on the value attributed to the Convertible Bond and the level of any new ownership in the Restaurant Group.

In order to be prudent, the Company has decided to apply a 100% provision against this investment. As of 31 December 2021, the carrying value of the Convertible Bond was written off to be US$0.0 million (2020: US$28.4 million).

Infinity TNP

Tellus Niseko ceased operation in 2021 due to reduction in local tourists. The local team has been closely monitoring the local condition and shall resume business once tourism recovers.

In order to be prudent, the Company has decided to apply a 50% provision against this investment. As of 31 December 2021, the carrying value of its investment was US$3.6 million (2020: US$7.3 million).

Infinity Capital Group ("ICG")

Ultimate Prosperity Limited, a 100% owned subsidiary of the Company incorporated in the British Virgin Islands, holds a Secured Loan to ICG.

In 2021, as the COVID-19 pandemic continues to impact Japan and the Hokkaido region, ICG has been working closely with the local management to monitor the domestic property market and the local market's response to the pandemic, including construction project planning and potential movements in property prices.

ICG provided the Company with a detailed proposal to deliver several undertakings at the end of 2021, including payment schedule, credit enhancement, etc. The Company is closely monitoring the development and shall utilise its best effort to protect its interest.

In order to be prudent, the Company has decided to apply a 50% provision against this investment. As of 31 December 2021, the carrying value of the Secured Loan was US$1.4 million taking into account the current face value of the instrument and cash interest receivable, less an Expected Credit Loss ("ECL") provision against aged cash interest receivables.

The Company also received shares of Ultima United Limited (Listed on ASX), having a fair value of US$0.5 million as at year end, as additional security for the outstanding cash interest receivable. These shares are to be returned on receipt of the outstanding interest. These shares are not reflected in the financial statements of the Company as they do not meet the definition of a financial asset under IFRS 9.

Meize Energy Industries Holdings Limited ("Meize")

Swift Wealth Investments Limited, a 100% (2020: 100%) owned subsidiary of the Company incorporated in the British Virgin Islands, holds a 7.2% stake in Meize through a redeemable preference share structure.

Meize is a privately owned company that designs and manufactures blades for both onshore and offshore wind turbines.

In early 2021, Meize commenced the expansion of its factory in Jiangsu Province, to meet the growing demand for its products. The expansion was completed in mid-2021 and the Jiangsu Plant was operating at full capacity, due to the strong demand from the offshore wind market.

In August 2021, JADE issued a divestment proposal to Meize requesting a full or partial exit. JADE is currently in discussions with Meize regarding the details of the divestment.

As of 31 December 2021, the Company's interest in Meize had a fair value of US$8.2 million (2020: US$8.2 million) based on a Discounted Cash Flow analysis. The carrying amount represents a discount of over 50% to the full redemption value of the Company's investment.

DocDoc Pte Ltd. ("DocDoc")

DocDoc is a Singapore-headquartered online network of over 23,000 doctors, 600 clinics, and 100 hospitals serving a wide array of specialties. It uses artificial intelligence, cutting-edge clinical informatics, and proprietary data to connect patients to doctors which fit their needs at an affordable price.

In 2021, DocDoc pivoted its business model to become a "Neo Insurer" and attempts to partner with insurance companies to enhance their policy offerings. DocDoc is working to offer fully-digitised insurance products to consumers or businesses, exclusively through digital channels, with end-to-end digital service delivery. These offerings will include quoting, binding, issuing of policies, documentation, proof of insurance, electronic billing, payment and real time policy management all digitally.

As of 31 December 2021, the carrying value of the Convertible Bond was US$2.6 million (2020: US$2.4 million). An annual coupon of 8% (4.0% cash and 4% Payment-in-Kind was converted to 8% Payment-in- Kind .

Greater China Credit Fund LP (the "GCCF")

In 2021, JADE has been trying to obtain the latest statement for GCCF through its fund administrator. However, all efforts of the fund administrator to obtain it from Adamas Asset Management ("AAM") have been unsuccessful. As far as we know, the fund is under liquidation. All the management of the fund is unable to provide any information to us. We have to put down the valuation and apply a 100% provision against this investment. As of 31 December 2021, the Company's interest in GCCF has an allocated fair value of US$0.0 million (2020: US$2.8 million).

Biographies of Directors and Senior Management

Board of Directors

Mr. John Croft, Executive Chairman

John Croft is an experienced Chairman, non-executive Director and executive with a successful international career in the technology and financial services sectors.

He is also a non-executive Director at Aura Renewable Acquisitions PLC and Golden Rock Global PLC, both Special Acquisitions Companies (SPACs) quoted on the Standard List of the London Stock Exchange and is also a non-executive Director at Brazilian Nickel PLC.

He has previously held senior Director level positions in Racal Electronics and NCR Corporation, following an early career in banking with HSBC and Citibank.

Hugh Viscount Trenchard, Non-executive Director

Viscount Trenchard began his career as an investment banker at Kleinwort Benson in 1973. He has more than 40 years' experience of Japanese business, including 12 years as a resident of Japan. He ran Kleinwort Benson's East Asian operations for 15 years and was later Head of Japanese Investment Banking for Robert Fleming & Co. Limited, before working with Mizuho International plc from 2007 to 2014. He served as a Senior Adviser for Japan and Korea to Prudential Financial, Inc. from 2002 to 2008. Lord Trenchard is a member of the House of Lords and a Vice-Chairman of the British-Japanese Parliamentary Group.

Mr. Charles Stuart Crocker, Non-executive Director

Stuart Crocker served eleven years in the British Army before starting a banking career primarily with Merrill Lynch and HSBC, in Europe and the Middle East. Latterly he became the CEO HSBC Private Bank UAE and Oman, and the Global Head Private Banking Group at Abu Dhabi Islamic Bank. Stuart has been a member of the Worshipful Company of International Bankers, and a Freeman of the City of London, since 2006 and became a Fellow of the Institute of Directors (FIoD) in 2022.

Since 1994 Stuart has been a Director and then Trustee at St Martin-in-the-Fields in London. He was a founding investor and the first Non-Executive Chairman of a renewable forestry company, which is now one of the largest forestry operations in West Africa having planted over 20 million trees.

Stuart is a founder advisor and shareholder in a multi-award winning FinTech company in the Middle East. In 2020 he was the Interim-Chairman of an advanced technology company for ensuring the safety, security and efficiency of people and assets in some of the world's most difficult places, supporting client operations in 35 countries.

In December 2021 Stuart became Chairman of an exclusive distributor of clean, ethical beauty brands for women and men. Current distribution is across the GCC through retail, pharmaceutical, professional channels and e-commerce.

Stuart was honoured to be invested as a Knight of The Order of St. George (KStG) at Rochester Cathedral in May 2022. The Order is a non-profit charity registered in England and has had special consultative status as an NGO at the UN Economic and Social Council since 2015.

Dr. Lee George Lam, Non-executive Director

Dr. Lam is Chairman of the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) Sustainable Business Network (ESBN), Vice Chairman of Pacific Basin Economic Council (PBEC), Chairman of the Permanent Commission on Economic and Financial Issues of the World Union of Small and Medium Enterprises (WUSME), and a member of the Hong Kong Trade Development Council (HKTDC) Belt and Road and Greater Bay Area Committee.  A former member of the Hong Kong Bar, Dr. Lam is a Solicitor of the High Court of Hong Kong, an Accredited Mediator of the Centre for Effective Dispute Resolution (CEDR), a Fellow of Certified Management Accountants (CMA) Australia, the Hong Kong Institute of Arbitrators, the Hong Kong Institute of Directors and the Institute of Corporate Directors Malaysia (ICDM), an Honorary Fellow of Certified Public Accountants (CPA) Australia, the Hong Kong Institute of Facility Management and the University of Hong Kong School of Professional and Continuing Education, and a Distinguished Fellow of the Hong Kong Innovation and Technology Development Alliance.

Mr. John Batchelor, Non-executive Director

Mr. Batchelor is a Senior Managing Director with FTI Consulting and was formerly Co-Lead of Asia and Head of the Corporate Finance & Restructuring segment in Asia. He has more than 25 years of experience in restructuring, corporate recovery, and transaction advisory. Prior to FTI Consulting, Mr. Batchelor was an executive director of Ferrier Hodgson.

Key Personnel of the Investment Manager, Harmony Capital

Mr. Suresh Withana is the Co-Founder and Managing Partner of Harmony Capital Investors Limited. Prior to founding Harmony Capital Investors Limited ("HCIL"), he was most recently Global Head of Special Situations and Co-Head of Asia at Tikehau Capital, the listed investment management company with over €29 billion in assets. Previously, he was the Co-Founder and Chief Investment Officer at Harmony Capital Partners, an affiliate of HCIL, which managed a fund focused on Asian special situations investments. Prior to that, he was a Director of the Global Special Situations Group at Mizuho International Plc in London and a Vice President in the Investment Banking Group at Merrill Lynch International (London). In total, he has accumulated 25 years of experience, including over 18 years of special situations investing primarily focused on Asia.

Directors' Report

The Board (the "Board") of Directors (the "Directors") are pleased to present their report on the affairs of the Company and its subsidiaries (collectively referred to as the "Group"), together with the audited financial statements for the year ended 31 December 2021.

PRINCIPAL ACTIVITIES

The Company was incorporated with limited liability under the laws of the British Virgin Islands ("BVI"). The Company's shares were admitted to the AIM Market of the London Stock Exchange on 19 October 2009 and on the Quotation Board of the Open Market of the Frankfurt Stock Exchange on 6 December 2012.

RESULTS AND DIVIDENDS

The Company recorded a loss before taxation of US$38.4 million (2020: profit US$1.6 million).

The loss reflects fair value decrease on assets in the portfolio of US$37.7 million (2020: increase US$5.9 million), net finance income of US$0.8 million (2020: US$0.9 million) and total operating expenses of US$1.5 million (2020: US$5.2 million). The fair value decrease on assets included in the period includes income from investments of US$1.2 million (2020: US$1.1 million) and a fair value adjustment upon valuation of portfolio assets at the period end of US$38.2 million (2020: US$4.8 million).

The Directors are not recommending the payment of a dividend for the year.

REVIEW OF THE BUSINESS

The Group's audited net asset value as at 31 December 2021 stood at US$68.0 million (2020: US$106.4 million) equivalent to US$0.58 per share (2020: US$0.92), excluding the effect of treasury shares held by the Group.

The principal investment assets held by the Company at the year-end, together with their valuations are set out in the Chairman's statement.

EVENTS AFTER THE REPORTING PERIOD

The significant events after the reporting period are set out in Note 19 of the financial statements, none of which impact on the results and net assets reported in these financial statements.

DIRECTORS AND DIRECTORS' INTERESTS

The Directors who served during the year and up to the date of this report were as follows:

Mr. John Croft

Hugh Viscount Trenchard

Dr. Lee George Lam

Mr. Stuart Crocker

Mr. John Batchelor

The Directors retiring by rotation are Stuart Crocker and Hugh Viscount Trenchard, who, being eligible, offer themselves for re-election at the Company's forthcoming annual general meeting.

With the exception of the related party transactions stated in Note 17 to the Financial Statements, there were no other significant contracts, other than Directors' contracts of service, in which any Director had a material interest. The Directors who held office as at 31 December 2021 had no beneficial interests in any of the shares of the Company and Group companies other than as follows: 

Number of ordinary shares of no par value as at 31 December

	2021				2020
	Direct		Indirect		Direct	Indirect
Mr. John Croft		130,463		10,733	118,463	10,733
Hugh Viscount Trenchard	60,634		-		60,634	-
Dr. Lee George Lam	101,057		-		101,057	-
Mr. Stuart Crocker	80,845		-		80,845	-
Mr. John Batchelor	-		-		-	-

Number of warrants over ordinary shares of no par value as at 31 December

	2021		2020
	Direct	Indirect	Direct	Indirect
Mr. John Croft	877,346	-	877,346	-
Hugh Viscount Trenchard	457,634	-	457,634	-
Dr. Lee George Lam	496,057	-	496,057	-
Mr. Stuart Crocker	76,845	-	76,845	-
Mr. John Batchelor	-	-	-	-

SUBSTANTIAL SHAREHOLDINGS IN THE COMPANY

As far as the Directors are aware at the date of signing, the following persons are interested in 3% or more of the issued share capital of the Company:

Shareholder	Number of ordinary shares	Percentage of issued share capital
Elypsis Solutions Limited	55,225,127	47.9%
Infinity Capital Group	16,179,310	14.0%
Heirloom Investment Management LLC	10,068,676	8.7%
Harmony Capital Investors Limited	6,059,306	5.3%
Barry Lau	4,561,400	4.0%

The percentage of shares not in public hands (as defined in the AIM Rules for Companies) is 79.9%.

The Directors have not been made aware of any other beneficial shareholdings of 3% or more of the issued share capital of the Company as of the date of this report.

FINANCIAL INSTRUMENTS

The Group's use of financial instruments is described in Note 9 and Note 15.

FINANCIAL RISK MANAGEMENT OBJECTIVES

Management has adopted certain policies on financial risk management with the objective of ensuring that appropriate funding strategies are adopted to meet the Group's short-term and long-term funding requirements, taking into consideration the cost of funding, gearing levels, and cash flow projections. The policies are also set to ensure that appropriate strategies are adopted to manage related interest and currency risk funding and to ensure that credit risks on receivables are properly managed. In addition, Note 15 to the financial statements include the Group's objectives, policies, and processes for managing its capital, its financial risk management objectives, details of its financial instruments and its exposures to credit risk, interest rate risk, liquidity risk, price risk, and currency risk.

POLICY AND PRACTICE ON PAYMENT OF CREDITORS

The Group seeks to maintain good terms with all of its trading partners. In particular, it is the Group's policy to agree appropriate terms and conditions for its transactions with suppliers and, provided the supplier has complied with its obligations, to abide by the terms of payment agreed.

SHARE CAPITAL

The Company has a single class of shares which is divided into ordinary shares of no par value.

At 31 December 2021, the number of ordinary shares in issue was 117,925,673, of which 2,647,804 were held in treasury by the group. Details of movements in the issued share capital during the year are set out in Note 14 to the financial statements.

DIRECTORS' INDEMNITY

The Company's Articles of Association provide, subject to the provisions of BVI legislation, an indemnity for Directors and officers of the Company in respect of liabilities they may incur in the discharge of their duties or in the exercise of their powers, including any liabilities relating to the defence of any proceedings brought against them which relate to anything done or omitted, or alleged to have been done or omitted, by them as officers or employees of the Company.

Appropriate directors' and officers' liability insurance cover is in place in respect of all of the Directors.

EMPLOYEE INFORMATION

As at 31 December 2021, the Group had Nil (2020: Nil) employees excluding Directors.

CHARITABLE DONATIONS

The Group has not made any charitable donations during the year (2020: Nil).

GOING CONCERN

The financial statements are required to be prepared on the going concern basis unless it is inappropriate to do so. The Directors, having considered "Going Concern and Liquidity Risk: Guidance for Directors of UK Companies" issued by The Financial Reporting Council in 2016, consider the going concern basis of preparation to be appropriate in preparing the financial statements.

The key conclusions are summarised below:

§ The Group realises and applies its investment resources in accordance with its available liquidity.

§ The Group held cash and cash equivalents of US$0.8 million at 31 December 2021 and had debt of US$3.6 million.

In considering the appropriateness of this basis of preparation, the Directors have reviewed the Group's working capital forecasts for a minimum of 12 months from the date of the approval of this financial information. Following this assessment, the Directors have reasonable expectation that the Group has adequate resources to continue for the foreseeable future and that carrying values of intangible assets are supported. Thus, they continue to adopt the going concern basis of accounting in preparing this financial information.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors are responsible for preparing the Directors' Report, and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group Financial Statements for each financial year. The Directors are required by the AIM Rules of the London Stock Exchange to prepare Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as endorsed by European Union and have elected under company law to prepare the Financial Statements in accordance with IFRS.

Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the loss of the Group for that period.

In preparing the Group Financial Statements, the Directors are required to:

1.  select suitable accounting policies and then apply them consistently;

2.  make judgements and accounting estimates that are reasonable and prudent;

3.  state whether they have been prepared in accordance with IFRS; and

4.  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Jade Road Investments Limited website.

AUDITORS

A resolution to re-appoint PKF Littlejohn LLP as the Company's auditors will be proposed at the Annual General Meeting.

On behalf of the Board

John Croft

29^th June 2022

Chairman of the Board

Corporate Governance Statement

THE BOARD

The Board of Jade Road Investments Limited, in accordance with the AIM Rules, adopted an appropriate corporate governance code. It has decided to apply the Quoted Companies Alliance Corporate Governance Code (the QCA Code). The QCA Code is a pragmatic and practical corporate governance tool which adopts a proportionate, principles-based approach which the Board believes will enable the explanation of how the Company applies the QCA Code and its overall corporate governance arrangements. The QCA Code is constructed around 10 broad principles which are set out below together with an explanation of how the Company complies with each principle, and where it does not do so, an explanation for that. 

As suggested by the QCA, our Chairman, John Croft makes the following statement in relation to corporate governance:

"As Chairman of the Company, I lead our Board of Directors and have primary responsibility for ensuring that the Company meets the standards of corporate governance expected of an AIM investment company of our size. Our over-arching role as a Board is to monitor the Company's progress with its investing policy and to ensure that it is being properly pursued. In pursuing that strategy, our second key focus is to supervise, manage and objectively assess the performance of our Investment Manager, Harmony Capital Investors Limited. Given there is no executive team in the Company and no other employees, this relationship is critically important in terms of delivering value to our shareholders. 

We set out below how we as a Board seek to apply the QCA Code, bearing in mind the particular nature of the Company and its business. Being an investment company means we are naturally focused on investment strategy and deploying our cash resources in the most efficient way to produce returns for shareholders in the medium to long term, balancing the potential risks and rewards of each investment which our Investment Manager proposes. We have a rigorous investment process including third-party legal, commercial, and financial due diligence, site visits, management meetings, and independent valuations where relevant. The output of this work is consolidated and presented to the Board by the Investment Manager in high-quality investment presentations which are reviewed and discussed at length at investment board meetings. We are not a large corporate with multiple stakeholders and, as noted above, our Board is primarily non-executive as at the year end. We, therefore, intend to take a pragmatic approach to governance structures and processes and whilst retaining a high-performance culture at Board level, adopt policies and procedures which we think are appropriate to an investment company on AIM."

The Board, the Investment Manager and Board Committees

The Board is responsible for reviewing and approving the Company's Investing Policy and for monitoring the performance of Harmony Capital Investors Limited in the performance of its obligations under the Services Agreement. The Company holds board meetings as required and not less than four times annually. The Board has constituted committees with responsibility for overseeing audit, remuneration, valuation and investment matters.

The Board has constituted the following Committees:

The Remuneration Committee constituted by Hugh Viscount Trenchard and Dr Lee George Lam.

The Remuneration Committee reviews the scale and structure of the Directors' remuneration and the terms of their service or employment contracts, including warrant schemes and other bonus arrangements. The remuneration and terms and conditions of the non-executive Directors are set by the entire Board, with Directors absenting themselves, at the appropriate time, from discussions on matters directly reflecting their remuneration.

The Investment Committee constituted by John Croft, Hugh Viscount Trenchard, Dr Lee George Lam, Stuart Crocker and John Batchelor.

The Investment Committee has the primary authority to develop the Company's investment objectives and corporate policies on investing. It reviews and approves investment opportunities presented by the Company's Investment Manager. The Committee will at all times be constituted by all the Company's directors.

The Audit Committee constituted by John Croft and Stuart Crocker.

The Audit Committee appoints and determines the terms of engagement of the Group's auditors and will determine, in consultation with the auditors, the scope of the audit. The Audit Committee monitors the independence of the Group's auditor, and the appropriateness of any non-audit services. The Audit Committee receives and reviews reports from management and the Group's auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. The Audit Committee has unrestricted access to the Group's auditors. The Audit Committee makes recommendations to the Board.

The Valuation Committee constituted by Hugh Viscount Trenchard and Dr. Lee George Lam.

The Valuation Committee is responsible for reviewing the valuation process for all investments, including the application of appropriate valuation standards, based on the input of the Company's Investment Manager and on the Company's Valuation Policy which was formally adopted in 2020. Its members are sourced from independent directors of the Board. It retains the authority to engage with independent 3^rd parties at any time with respect to valuation matters. The Committee comprises a minimum of two members and reports directly to the Board.

DELIVER GROWTH

Principle 1 Establish a strategy and business model which promote long-term value for shareholders

Principle

The Board must be able to express a shared view of the Company's purpose, business model and strategy. It should go beyond the simple description of products and corporate structures and set out how the company intends to deliver shareholder value in the medium to long term. It should demonstrate that the delivery of long term growth is underpinned by a clear set of values aimed at protecting the company from unnecessary risk and securing its long-term future.

Compliance

The Company provides equity and credit funding to companies, principally in the Pan-Asian region or with a connection to Asia. It will do this through investing in direct financings, pre-IPO investments, growth private equity, event driven special situations, opportunistic special situations, and indirect financing.

The Company is sector agnostic in its investment activities.

New investments will be managed actively, including through appropriate investor protections which will be negotiated on each transaction as appropriate and relevant.

The Company will  consider  using debt to finance transactions on a case-by-case basis and may assume debt on its own balance sheet when appropriate to enhance returns to Shareholders and/or to bridge the financing needs of its investment pipeline.

The Company is in the process of a disposal programme for its "legacy" assets, please refer to the latest RNS published on 22nd of June 2022. We are actively seeking the buyers for the other assets.

The Board, together with the Investment Manager, continually monitors the prevailing investment climate and macro-economic conditions affecting the Asian region and other macro factors which will influence and, in some cases, hinder the ability of the Company to execute its strategy, for example, regulatory and governmental policy changes.

Principle 2 Seek to understand and meet shareholder needs and expectations

Principle

Directors must develop a good understanding of the needs and expectations of all elements of the Company's shareholder base. The Board must manage shareholders' expectations and should seek to understand the motivations behind shareholder voting decisions.

Compliance

The Board is aware of the need to protect the interests of minority shareholders and the balancing of these interests with those of the majority shareholder. The Board also considers the terms of the relationship agreement the Company has entered with its largest shareholder and, where necessary, will enforce any relevant terms.

The Company holds regular investor events in London, Hong Kong and Dubai, where the Chairman, other members of the Board and the Investment Manager update attendees on key developments in the portfolio. All shareholders are invited to attend these events. The Chairman is principally responsible for shareholder liaison.

The Company regularly updates the market via its RNS news feed of any disclosable matters and where appropriate, also uses social media platforms to engage with a wider audience.

The Company publishes all relevant materials, according to QCA definitions, on its website. This includes annual reports and shareholder circulars.

Principle 3 Take into account wider stakeholder and social responsibilities and their implications for long-term success

Principle

Long-term success relies upon good relations with a range of different stakeholder groups both internal (workforce) and external (suppliers, customers, regulators, and others). The Board needs to identify the Company's stakeholders and understand their needs, interests, and expectations.

Where matters that relate to the Company's impact on society, the communities within which it operates or the environment have the potential to affect the company's ability to deliver shareholder value over the medium to long term, then those matters must be integrated into the Company's strategy and business model.

Feedback is an essential part of all control mechanisms. Systems need to be in place to solicit, consider and act on feedback from all stakeholder groups.

Compliance

The balance of economic value to the Group and social impact is carefully considered, not only throughout the due diligence for any potential investments but also ongoing monitoring by of periodical site visits for the invested projects, with the maintenance of high environmental standards is a key priority. The Board is conscious of its responsibilities in relation to society, particularly in a developing economy such as China.

The key resources for the Company are principally the Investment Manager and the Company's advisory team, including its nominated adviser, brokers, solicitors, and auditors.  The Investment Manager and therefore the Company rely on a network of intermediaries to originate investment deal flow. The Board speaks to the advisory team on a regular basis and takes feedback from it throughout the year. In particular, it seeks advice in relation to compliance with the AIM Rules and their impact on its investments from the nominated adviser and solicitors and from the auditors in relation to accounting matters including net asset value and the annual audit.

Principle 4 Embed effective risk management, considering both opportunities and threats, throughout the organisation

Principle

The Board needs to ensure that the Company's risk management framework identifies and addresses all relevant risks in order to execute and deliver strategy; companies need to consider their extended business, including the Company's supply chain, from key suppliers to end-customer.

Setting strategy includes determining the extent of exposure to the identified risks that the company is able to bear and willing to take (risk tolerance and risk appetite).

Compliance

Effective risk management in relation to the Company's portfolio is key to the Board's assessment of the Investment Manager's performance. Measuring risk in each investment case, in terms of both how it can be mitigated and the potential upside of taking on such risk are critical elements of the analysis produced by the Investment Manager and reviewed by the Board on each proposed investment. Similarly, in conducting the managed disposal programme, the Board is focused on achieving the best possible value for the assets being disposed of. At the same time, the Board assesses the risk of maintaining those positions with the potential for further value to be eroded at the same time as it requires additional time to be spent by the Board and by the Investment Manager.

MAINTAIN A DYNAMIC MANAGEMENT FRAMEWORK

Principle 5 Maintain the Board as a well-functioning, balanced team led by the Chairman

Principle

The Board members have a collective responsibility to promote the interests of the company and are collectively responsible for defining corporate governance arrangements. Ultimate responsibility for the quality of, and approach to, corporate governance lies with the Chairman.

The Board (and any committees) should be provided with high-quality information in a timely manner to facilitate proper assessment of the matters requiring a decision or insight.

The Board should have an appropriate balance between Executive and Non-Executive Directors and should have at least two independent Non-Executive Directors. Independence is a board judgement.

The Board should be supported by committees (e.g., audit, remuneration, nomination) that have the necessary skills and knowledge to discharge their duties and responsibilities effectively.

Directors must commit the time necessary to fulfill their roles.

Compliance

The Board consists of the Executive Chairman and four Non-Executive Directors.

The Executive Chairman has been involved with the Company since its predecessor company, China Private Equity Investment Holdings Limited was admitted to AIM in 2009. Viscount Trenchard, Dr. Lee George Lam, Mr. Stuart Crocker and Mr. John Batchelor have all been appointed to the Board in 2017 or later. All four Non-Executive Directors are considered to be independent.

Each Non-Executive Director is engaged on a 12-month contract with three months' notice on either side and is required to commit to a minimum of two days per calendar month.

The Executive Chairman's roles and responsibilities include but are not limited to engaging potential clients across Jade Road's domain in the APAC region, initiating and agreeing Terms of Engagement with clients, providing the lead consultancy services to clients and support the business development of the Company, liaising with the Company's NOMAD and other advisors in London, and being the main contact between the Board and the Investment Manager, approving public announcements, engaging with Shareholders, Investors and other Stakeholders to promote the Company and its business objectives.

As explained above, the Board receives detailed investment papers from the Investment Manager in relation to any asset which is either recommended for investment or disposal, including an executive summary of the due diligence findings, results of site visits and management meetings (including an assessment of the investee company's management team), key financial metrics, key risk factors, the potential returns available, security for the investment and the type of instrument to be used.

Principle 6 Ensure that between them the directors have the necessary up-to-date experience, skills, and capabilities.

Principle

The Board must have an appropriate balance of sector, financial and public markets skills and experience, as well as an appropriate balance of personal qualities and capabilities. The Board should understand and challenge its own diversity, including gender balance, as part of its composition.

The Board should not be dominated by one person or a group of people. Strong personal bonds can be important but can also divide a board.

As companies evolve, the mix of skills and experience required on the board will change, and board composition will need to evolve to reflect this change.

Compliance

Directors who have been appointed to the Company have been chosen because of the skills and experience they offer. The identity of each Director and his full biographical details are provided on the website, which include each Director's relevant experience, skills, personal qualities, and capabilities. The current team of Directors offer a mix of investment, quoted company, sector and geographical expertise and exposure.

The Board has not taken any specific external advice on a specific matter, other than in the normal course of business as an AIM-quoted company and in pursuit of the investment policy. There are no internal advisors to the Board. The Directors rely on the Company's advisory team to keep their skills up to date and through attending market updates and other seminars provided by the advisory team, the London Stock Exchange plc, and other intermediaries.

The Investment Manager is the key external adviser to the Board.

Principle 7 Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

Principle

The Board should regularly review the effectiveness of its performance as a unit, as well as that of its committees and the individual Board members.

The Board performance review may be carried out internally or, ideally, externally facilitated from time to time. The review should identify development or mentoring needs of individual directors or the wider senior management team.

It is healthy for membership of the Board to be periodically refreshed. Succession planning is a vital task for Boards. No member of the Board should become indispensable.

Compliance

The Board consists predominantly of Non-Executive Directors, the Company having no employees. In this regard, Board performance and oversight lies predominantly with the Chairman and other stakeholders, particularly shareholders. In early 2020, it was determined by the Remuneration Committee that John Croft be designated as Executive Chairman to align with his time commitment and contribution to the Company's affairs.

Events are held with shareholders where feedback on the Company's progress is sought on a regular basis, and this interaction provides valuable input on Board performance. Advice is also sought on Board composition on an ongoing basis from the Company's NOMAD.

The composition of the Board is reviewed regularly, and changes made where appropriate. As the size of the portfolio grows, the Company may look to broaden its skills and experience base by the appointment of additional Directors and/or advisors in due course.

The Board does not carry out a formal review process.

Principle 8 Promote a corporate culture that is based on ethical values and behaviours

Principle

The Board should embody and promote a corporate culture that is based on sound ethical values and behaviours and use it as an asset and source of competitive advantage.

The policy set by the Board should be visible in the actions and decisions of the chief executive and the rest of the management team. Corporate values should guide the objectives and strategy of the company.

The culture should be visible in every aspect of the business, including recruitment, nominations, training, and engagement. The performance and reward system should endorse the desired ethical behaviours across all levels of the company.

Compliance

The Board is focused on investment returns for its shareholders and will at all times seek to make ethical investments, but this is not an investment focus or determinant for an asset being included in the portfolio. As discussed above, given the Company is an investment company with no employees or other internal stakeholders, the Board does not drive a corporate culture within the business.

Principle 9 Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

Principle

The Company should maintain governance structures and processes in line with its corporate culture and appropriate to its:

- size and complexity; and

- capacity, appetite, and tolerance for risk. The governance structures should evolve over time in parallel with the company's objectives, strategy, and business model to reflect the development of the company.

Compliance

This section provides full disclosure on the Company's corporate governance. There are no immediate plans to make any changes to the governance processes and framework which are described in the commentary above.

The Chairman has overall responsibility for shareholder liaison. 

There are no specific matters reserved for the Board.

BUILD TRUST

Principle 10 Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Principle

A healthy dialogue should exist between the Board and all of its stakeholders, including shareholders, to enable all interested parties to come to informed decisions about the Company.

In particular, appropriate communication and reporting structures should exist between the Board and all constituent parts of its shareholder base. This will assist:

- the communication of shareholders' views to the Board; and

- shareholders' understanding of the unique circumstances and constraints faced by the Company.

Compliance

The Board attaches great importance to providing shareholders with clear and transparent information on the Group's activities, strategy, and financial position. Details of all shareholder communications are provided on the Company's website, including historical annual reports and governance-related material together with notices of all general meetings for the last five years. The Company discloses outcomes of all general meeting votes.

The Company has appointed a professional Financial Public Relations firm with an office in London to advise on its communications strategy and to assist in the drafting and distribution of regular news and regulatory announcements. Regular announcements are made regarding the Company's investment portfolio as well as other relevant market and regional news.

The Company lists contact details on its website and on all announcements released via RNS, should shareholders wish to communicate with the Board.

Independent Auditor's Report

Independent Auditor's Report to the Members of Jade Road Investments Limited

Opinion

We have audited the Group financial statements of Jade Road Investments Limited (the 'Group') for the year ended 31 December 2021 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity, the Consolidated Statement of Financial Position, the Consolidated Cash Flow Statement and Notes to the Financial Statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion, the Group financial statements:

· give a true and fair view of the state of the Group's affairs as at 31 December 2021 and of its loss for the year then ended; and

· have been properly prepared in accordance with IFRSs as adopted by the European Union.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Group's ability to continue to adopt the going concern basis of accounting included:

· a review of the management's cash flow forecasts for the going concern period being twelve months from the anticipated date of signing the financial statements;

· holding discussions with management to understand the going concern model;

· challenging management on the appropriateness of the going concern model; and

· a review of post year end information, including committed expenditure.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Our application of materiality

The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for materiality determine the scope of our audit and the nature, timing and extent of our audit procedures.

Group materiality for the financial statements as a whole was US$1,108,000 (2020: US$1,635,000) based on 1.5% of gross assets. We believe gross assets to be the main driver of the business as the Group's principal activity is that of an investment company.

We consider the key benchmark for the Group to be gross assets, given that current and potential investors will be most interested in the valuation of the investments.

Performance materiality was US$664,800 (2020: US$981,000) being 60% of materiality for the financial statements as a whole. In determining performance materiality, we considered the following factors:

our cumulative knowledge of the Group and its environment, including industry specific trends;

the change in the level of judgement required in key accounting estimates;

the stability in key management personnel; and

the level of misstatements identified in prior periods.

We agreed to report to Audit Committee all corrected and uncorrected misstatements we identified through our audit with a value in excess of US$55,400 (2020: US$81,750). We also agreed to report any other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds

Our approach to the audit

In designing our audit, we determined materiality as above and assessed the risk of material misstatement in the financial statements. We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group.

In particular, we looked at areas involving significant accounting estimates and judgement by the directors, such as the fair value of investments, and considered future events that are inherently uncertain.

We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. The Group's key accounting function is based in Hong Kong and our audit was performed by our team in London with regular contact maintained with the Group throughout.

The key balance held within the Group relates to the fair value of investments and is thus considered to be a significant risk and has been determined to be a key audit matter.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter (Note 2(o), 9, 10 and 15)	How the scope of our audit responded to the key audit matter
Valuation and classification of investments
The financial statements include investments in unquoted financial assets held at fair value, totalling US$ 66.2 million. In addition to the above, the financial statements also include investments in loans and other receivables held at fair value, totalling US$5.6 million. All of these investments are measured at fair value based on Level 3 inputs. Consequently, the valuation of investments requires the exercise of considerable judgement which increases the risk that valuation and presentation of investments may be misstated. Furthermore, the investments manager, which is responsible for advising on the valuation of investments, is remunerated by reference to a percentage of the value of investments and is entitled to receive a performance incentive fee if certain performance criteria are met. These remuneration arrangements increase the risk of bias in the calculations.	Our work included the following: · Benchmarking and challenging key assumptions in management's valuation models used to determine fair value and/or recoverable amount, including discount rates used. · Performing test of the mathematical accuracy of underlying cash flow models, re-performing relevant calculations and challenging and agreeing the key assumptions to available data. · Wherever possible benchmarking the assessments of value to independent sources. Considering the appropriateness of the use of external experts and valuations, the valuation methodologies applied, and considering management's evaluation of the sensitivity of valuations to changes in assumptions and inputs. · Reviewing the classification of investments,  disclosure of valuations and inputs within the financial statements and ensuring that it is appropriate and in compliance with IFRS 7 and IFRS 13 · Ensuring that any consequent fair value changes arising from the valuations are appropriately classified through the Consolidated Statement of Comprehensive Income · Reviewing the latest available assessments of the recoverability of loans and other receivables prepared by the investment manager and assessing against the requirements under IFRS 9

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the Group financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the Group financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the Group financial statements, the directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the Group and the sector in which it operates to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management and our industry experience. We also selected a specific audit team based on experience with auditing entities within this industry, facing similar audit and business risks.

We determined the principal laws and regulations relevant to the Group in this regard to be those arising from

· AIM rules;

· Disclosure and Transparency Rules; 

· Anti-Bribery Act;

· Anti Money Laundering Regulations; and

· Local tax laws and regulations.

We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the Group with those laws and regulations. These procedures included, but were not limited to:

· Making enquiries of management;

· Reviewing board minutes;

· Reviewing legal ledger accounts; and

· Reviewing the Regulatory News Service (RNS) announcements.

As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals;  reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. 

This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with our letter of engagement dated 11 December 2020. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Eric Hindson (Engagement Partner)  

For and on behalf of PKF Littlejohn LLP 

Registered Auditor

29^th June 2022

15 Westferry Circus

Canary Wharf

London E14 4HD

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2021

		2021		2020
	Notes	US$'000		US$'000
Income from unquoted financial assets		1,162		1,137
Finance income from loans		1,347		1,337
Gross portfolio income	3	2,509		2,474
Fair value changes on financial assets at fair value through profit or loss		(38,893)		5,045
Investment provisions		731		(779)
Net portfolio income	3	(35,653)		6,740
Management fees		(1,861)		(1,888)
Incentive fees	17	424		(1,750)
Administrative expenses		(812)		(1,017)
Operating (loss)/ profit	5	(37,902)		2,085
Finance expense	6	(522)		(442)
((Loss)/Profit) before taxation		(38,424)		1,643
Taxation	8	-		-
Other comprehensive expense
Foreign currency translation differences		-		-
(Loss)/Profit and total comprehensive (expense) / income for the year		(38,424)		1,643
(Loss)/Earnings per share
Basic	18	(33.33) cents		1.56 cents
Diluted	18	(33.33) cents		1.34 cents

The results reflected above relate to continuing operations.

The accompanying notes on pages 45 to 69 are an integral part of these financial statements.

Consolidated Statement of Changes in Equity

For the year ended 31 December 2021

	Share capital		Treasury share reserve		Share based payment reserve		Accumulated losses		Total
	US$'000		US$'000		US$'000		US$'000		US$'000
Group balance at 1 January 2020	145,027		(671)		2,936		(46,415)		100,877
Profits for the year	-		-		-		1,643		1,643
Other comprehensive income	-		-		-		-		-
Total comprehensive loss for the year	-		-		-		1,643		1,643
Issue of shares	3,876		-		-		-		3,876
Treasury shares acquired	-		(201)		-		-		(201)
Treasury shares sold	-		257		-		-		257
Group balance at 31 December 2020 and 1 January 2021	148,903		(615)		2,936		(44,772)		106,452
Loss for the year	-		-		-		(38,424)		(38,424)
Other comprehensive income	-		-		-		-		-
Total comprehensive loss for the year	-		-		-		(38,424)		(38,424)
Issue of shares net of costs	-		-		-		-		-
Treasury shares acquired	-		-		-		-		-
Treasury shares sold	-		-		-		-		-
Group balance at 31 December 2021	148,903		(615)		2,936		(83,196)		68,028

Note: In October 2020, the Company issued 8,356,663 shares as part of its first ever equity capital raise (which include 389,000 Placing Commission Fee Shares). It raised a total of £2.0 million (before expenses) via an Open Offer and Placement. The shares were issued at £0.25. In conjunction with the share issuance, the Company issued 7,967,663 warrants at a strike price of £0.40 and a 3 year maturity.

The following describes the nature and purpose of each reserve within owners' equity.

Share capital	Amount subscribed for share capital at no par value
Treasury share reserve	Cost of the Company's shares re-purchased and held by the Group
Share based payment reserve	The share-based payment reserve represents amounts in previous and the current periods, relating to share based payment transactions granted as options/warrants and under the Group's share option scheme (Note 16)
Total comprehensive loss / (Total comprehensive income)	Represents the cumulative net gains and losses recognised in the statement of comprehensive income

The accompanying notes on pages 45 to 69 are an integral part of these financial statements.

Consolidated Statement of Financial Position

As at 31 December 2021

		2021		2020
	Notes	US$'000		US$'000
Assets
Unquoted financial assets at fair value through profit or loss	9	66,202		73,423
Loans and other receivables at fair value through profit or loss	10	5,556		34,390
Cash and cash equivalents		848		3,673
Total assets		72,606		111,486
Liabilities
Other payables and accruals	12	1,010		1,530
Current liabilities		1,010		1,530
Loans & borrowings	13	3,568		3,504
Total liabilities		4,578		5,034
Net assets		68,028		106,452
Equity and reserves
Share capital	14	148,903		148,903
Treasury share reserve	14	(615)		(615)
Share based payment reserve		2,936		2,936
Accumulated losses		(83,196)		(44,772)
Total equity and reserves attributable to owners of the parent		68,028		106,452

The financial statements were approved by the Board of Directors and authorised for issue on

29th June 2022 and signed on its behalf by:

John Croft

Executive Chairman

The accompanying notes on pages 45 to 69 are an integral part of these financial statements.

Consolidated Cash Flow Statement 

For the year ended 31 December 2021

		2021			2020
		US$'000			US$'000
Cash flows from operating activities
(Loss)/Profit before taxation		(38,424)			1,643
Adjustments for:
Finance income		(1,347)			(1,336)
Finance expense		522			442
Foreign exchange		23			(197)
Fair value changes on unquoted financial assets at fair value through profit or loss		7,222			(5,923)
Fair value changes on loans and receivables at fair value through profit or loss		30,459			-
Share-based expenses		-			479
Decrease in other receivables		(295)			776
Increase in other payables and accruals		(520)			202
Net cash used in operating activities		(2,359)			(3,914)
Cash flows from investing activities (Note A)
Purchase of unquoted financial assets at fair value through profit or loss		-			(207)
Net cash used in investing activities		-			(207)
Cash flows from financing activities (Note B)
Issue of shares net of issue costs		-			2,367
Proceeds from loans and borrowings		-			1,720
Payment of interest		(459)			(476)
Sale of treasury shares		-			257
Purchase of treasury shares		-			(201)
Net cash (used in) / generated in funding activities		(459)			3,667
Net decrease in cash and cash equivalents		(2,819)			(454)
Cash and cash equivalents and net debt at the beginning of the year		3,673			4,071
Foreign exchange on cash balances		(6)			56
Cash and cash equivalents and net debt at the end of the year		848			3,673

Note A - The following investing activities were undertaken which did not require the use of cash and have been excluded from the statement of cash flows: 2021 2020 US$'000 US$'000 Purchase of unquoted financial assets - share interest in FMHL - (56) Note B - The following financing activities were undertaken which did not require the use of cash and have been excluded from the statement of cash flows: 2021 2020 US$'000 US$'000 Issue of shares to minority investor - share interest in FMHL - 56 Issue of shares to HCIL - 1,453 The accompanying notes on pages 45 to 69 are an integral part of these financial statements.

Notes to the Financial Statements

For the year ended 31 December 2021

1.  GENERAL INFORMATION

The Company is a limited (by shares) company incorporated in the British Virgin Islands ("BVI") under the BVI Business Companies Act 2004 on 18 January 2008. The address of the registered office is Commerce House, Wickhams Cay 1, PO Box 3140, Road Town, Tortola, British Virgin Islands VG1110 and its principal place of business is c/o Harmony Capital, 29/F, Level 29, Infinitus Plaza, 199 Des Voeux Road Central, Hong Kong.

The Company is the holding company of a group of companies comprising a subsidiary, Jade Road Investments (HK) Limited and a number of wholly owned special purpose vehicles ("SPV") each of which holds investments.

The Company is quoted on the AIM Market of the London Stock Exchange (code: JADE) and the Quotation Board of the Open Market of the Frankfurt Stock Exchange (code: 1CP1).

The Company is targeting delivery of income and capital gain from a diversified mix of pan-Asian investments in the Small- and Medium-Sized Enterprise ("SME") sector.

2.  ACCOUNTING POLICIES

a)  Basis of Preparation

The principal accounting policies adopted in the preparation of the financial statements are set out below.

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) as adopted by the EU. The financial statements have been prepared under the historical cost convention. Financial instruments are measured at fair value at the end of each reporting period.

Historical cost is generally based on the Fair Value of the consideration given in exchange for goods and services.

Fair Value Measurements:

Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions.

The Fair Value of investments is first based on quoted prices, where available. Where quoted prices are not available, the Fair Value is estimated using consistent valuation techniques across periods of measurement.

The Group's private credit and equity investments are recorded at Fair Value or at amounts whose carrying values approximate Fair Value. Net gains and losses, including any interest or dividend income, are recognised in its profit or loss statement.

In accordance with IFRS 13, Fair Value measurements are categorised into Level I, II or III based on the degree to which the inputs to the Fair Value measurements are observable and the significance of the inputs to the Fair Value measurement in its entirety. These are described as follows:

Level I Fair Value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level II Fair Value measurements are those derived from inputs other than quoted prices included within Level I that are observable for the assets or liability, either directly or indirectly.

Level III Fair Value measurements are those derived from inputs that are not based on observable market data.

b)  Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (other than structured entities) controlled by the Company. Control is achieved where the Company:

§ has the power over the investee;

§ is expected, or has rights, to variable returns from its involvement with the investee; and

§ has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls a subsidiary if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

The Company holds investments through a number of unlisted wholly owned special purpose vehicles ("SPVs"). The directors have considered the definition of an investment entity in IFRS10 and the associated application guidance and consider that the Company meets that definition. Consequently, the Group's investments in SPVs and the underlying investments are accounted for at fair value through profit and loss and the SPVs are not consolidated as subsidiaries. Please see Note 4(o) Critical accounting estimates and judgements for description of fair value methodology.

Consolidation of a subsidiary other than those held for investment purposes begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Associates are those entities in which the Group has significant influence, but not control, over the financial and operating activities.

Investments that are held as part of the Group's investment portfolio are carried in the balance sheet at fair value even though the Group may have significant influence over those companies. This treatment is permitted by IAS 28 - Investment in Associates, which requires investment held by venture organisations to be excluded from its scope where those investments are designated, upon initial recognition, as at fair value through profit or loss and accounted for in accordance with IFRS9, with changes in fair value recognised in the statement of comprehensive income in the period of change. The Group has no interests in associates through which it carries on its business.

c) Going Concern

The Company's primary source of income comprises finance charges under debt instruments and, from time to time, realisations from investment exits. The Company's expenses primarily consist of advisory and incentive fees paid to the Investment Manager, part of which are paid in shares, Directors' and professional fees. The level of day-to-day overheads payable in cash is relatively low. In addition, the Company makes investments by the issue of shares and also by the application of cash reserves.  Cash reserves are enhanced from time to time by the issue of equity and the realisation of portfolio investments. Investment decisions are made based on detailed appraisals of the investment opportunity and also on the Directors' assessment of the availability of any funding requirement.

In considering the appropriateness of the going concern basis of preparation, the Directors have reviewed the Group's working capital forecasts for a minimum of 12 months from the date of the approval of these financial statements. Following this assessment, the Directors have reasonable expectation that the Group has adequate resources to continue for the foreseeable future and that carrying values of intangible assets are supported. Thus, they continue to adopt the going concern basis of accounting in preparing this financial information. Whilst the COVID-19 pandemic may have an impact on the Company's ability to exit from some of its investments, in the short to medium term, the Directors assessment of going concern is not predicated on the availability of cash proceeds from investment exits in the period.

d)  Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the senior management and Board members. The senior management and Board members, who are responsible for allocating resources and assessing performance of the operating segments, have been identified as the senior management and Board members that make strategic decisions. The Group is principally engaged in investment business, the Directors consider there is only one business activity significant enough for disclosure. This activity consists of entities which operate in two geographical locations, i.e., BVI and Hong Kong.

e)  Revenue Recognition

Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the revenue and costs, if applicable, can be measured reliably and on the following basis:

§ Dividend income is recognised when the Company's right to receive payment is established.

§ Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

§ Fair value changes on financial assets represents the overall changes in net assets from the investment portfolio net of deal-related costs.

  Other income comprised management recharges from the parent company to its subsidiary which are eliminated on consolidation.

f)  Impairment of Non-Financial Assets

At each balance sheet date, the Group reviews internal and external sources of information to determine whether its fixtures, fittings and equipment and investment in subsidiaries have suffered an impairment loss or impairment loss previously recognised no longer exists or may be reduced. If any such indication exists, the recoverable amount of the asset is estimated, based on the higher of its fair value less costs to sell and value in use. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the smallest group of assets that generates cash flows independently (i.e., cash-generating unit).

If the recoverable amount of an asset or a cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately.

A reversal of impairment loss is limited to the carrying amount of the asset or cash-generating unit that would have been determined had no impairment loss been recognised in prior years. Reversal of impairment loss is recognised as income immediately.

g)  Financial Instruments

Financial assets and financial liabilities are recognised on the balance sheet when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Financial assets at fair value through profit or loss includes loans and receivables.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost or fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them.

Unquoted Financial Assets:

Classification

The Group classifies its unquoted financial assets as financial assets at fair value through profit or loss. These financial assets are designated by the directors as at fair value through profit or loss at inception.

Financial assets designated as at fair value through profit or loss at inception are those that are managed as part of an investment portfolio and their performance evaluated on a fair value basis in accordance with the Group's Investment Strategy.

Recognition/Derecognition

Regular-way purchases and sales of investments are recognised on the trade date - the date on which the Group commits to purchase or sell the investment.

A fair value through profit or loss asset is derecognised when the Group loses control over the contractual rights that comprise that asset. This occurs when rights are realised, expire or are surrendered and the rights to receive cash flows from the investments have expired or the Group has transferred substantially all risks and rewards of ownership. Realised gains and losses on fair value through profit or loss assets sold are calculated as the difference between the sales proceeds and cost. Fair value through profit or loss assets that are derecognised and corresponding receivables from the buyer for the payment are recognised as of the date the Group has transacted an unconditional disposal of the assets.

Measurement

Financial assets at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed through the profit or loss. Subsequent to initial recognition, all financial assets at fair value through profit or loss are measured at fair value in accordance with the Group's valuation policy, as the Group's business is to invest in financial assets with a view to profiting from their total return in the form of capital growth and income. Gains and losses arising from changes in the fair value of the financial assets at fair value through profit or loss are presented in the period in which they arise. For more information on valuation principles applied, please see section 4(o) Critical Accounting Estimates.

Quoted Financial Assets:

The fair values of financial assets with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market bid prices and are classified as current assets. Purchases and sales of quoted investments are recognised on the trade date where a contract of sale exists whose terms require delivery within a time frame determined by the relevant market.

In the opinion of the Directors, cash flows arising from transactions in equity investments represent cash flows from investing activities.

Allowance for Expected Credit Losses:

An allowance for ECLs may be established for amounts due from credit contracts within Loans and Receivables where evidence of credit deterioration is observed. In order to assess credit deterioration, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on its historical experience and informed credit assessment, that includes forward-looking information. The main factors considered include material financial deterioration of the borrower, breach of contract such as default or delinquency in interest or principal repayments, probability that a borrower will enter bankruptcy or financial re-organisation and material decline in the value of the underlying applicable security. ECL allowances are distinguished from Likely Credit Loss ("LCL") allowances based on the expectation of a loss. An LCL reserve is established when a loss is both probable and the amount is known.

ECLs are a probability-weighted estimate of lifetime credit losses. Under the ECL model, the Group calculates the allowance for credit losses by considering on a discounted basis the cash shortfalls it would incur in various default scenarios for prescribed future periods and multiplying the shortfalls by the probability of each scenario occurring. The allowance is the sum of these probability weighted outcomes. Credit losses are measured as the present value of all cash shortfalls (i.e., the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive) with a discount factor applied.

Cash and Cash Equivalents:

For the purpose of the cash flow statement, cash equivalents represent short-term highly liquid investments which are readily convertible into known amounts of cash, and which are subject to an insignificant risk of change in value, net of bank overdrafts.

Financial Liabilities

The Group's financial liabilities include other payables and accruals and amounts due to related parties. All financial liabilities except for derivatives are recognised initially at their fair value and subsequently measured at amortised cost, using effective interest method, unless the effect of discounting would be insignificant, in which case they are stated at cost.

Equity Instruments

Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

h)  Investment in Subsidiaries

Investments in subsidiaries are stated at cost less provision for any impairment in value. Under IFRS 10, where the parent company is qualified as an investment entity, the subsidiaries have been deconsolidated from the Group financial statements.

i)  Taxation

The charge for current income tax is based on the results for the period as adjusted for items that are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither the accounting profit nor taxable profit or loss, it is not accounted for.

The deferred tax liabilities and assets are measured at the tax rates that are expected to apply to the period when the asset is recovered or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, tax losses and credits can be recognised.

j)  Leasing

At the lease commencement date, the Group recognises a right-of-use asset and a lease liability, except for short-term leases that have a lease term of 12 months or less and leases of low-value assets, which are expensed to the profit & loss over the expense term.

The right-of-use asset is initially recognised at cost, which comprises the initial amount of the lease liability plus any lease payments made at or before the commencement date, plus any initial direct costs incurred, plus any costs associated with restoring the asset to its original condition, less any lease incentive received. The right-of-use asset is subsequently stated at cost less accumulated depreciation and impairment losses.

Lease payments included in the measurement of the lease liability comprise the following:

§ fixed payments, including in-substance fixed payments;

§ variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

§ amounts expected to be payable under a residual value guarantee; and

§ the exercise price under a purchase option that the group is reasonably certain to exercise, lease payments in an optional renewal period if the group is reasonably certain to exercise such an option to extend and penalties for early termination of a lease unless the group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. The liability recognised at inception of the lease comprises the present value of future payments payable under the lease contract, discounted at the rate implicit in the lease. If there is no discount rate implicit in the lease, then the incremental rate of borrowing is used. The liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, or there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, or there is a change arising from the reassessment of whether the Group will be reasonably certain to exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if carrying amount has been reduced to zero. The Group presents lease liabilities within loans and borrowings within the statement of financial position

k)  Dividends

Dividends payable are recorded in the financial statements in the period in which they meet the IAS 32 definition of having been declared.

l)  Share Based Payments

The Group has applied the requirements of IFRS 2 "Share Based Payments". The Group issues share options/warrants as an incentive to certain key management and staff (including Directors) and its Investment Manager. The fair value of options/warrants granted to Directors, management personnel, employees and Investment Manager under the Company's share option/warrant scheme is recognised as an expense with a corresponding credit to the share-based payment reserve. The fair value is measured at grant date and spread over the period during which the awards vest. The fair value is measured using the Black Scholes Option pricing model.

The Group, on special occasions as determined by the Directors, may issue options/warrants to key consultants, advisers and suppliers in payment or part payment for services or supplies provided to the Group. The fair value of options/warrants granted is recognised as an expense with a corresponding credit to the share-based payment reserve. The fair value is measured at grant date and spread over the period during which the options/warrants vest. The fair value is measured at the fair value of receivable services or supplies.

The options/warrants issued by the Group are subject to both market-based and non-market based vesting conditions.

Non-market vesting conditions are not taken into account when estimating the fair value of awards as at grant date; such conditions are taken into account through adjusting the equity instruments that are expected to vest.

The proceeds received, net of any attributable transaction costs, are credited to share capital when options/warrants are converted into ordinary shares.

m)  Earnings Per Share

The Group calculates both basic and diluted earnings per share in accordance with IAS 33 "Earnings per Share". Under IAS 33, basic earnings per share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of shares during the period plus the period dilutive effect of options outstanding during the period. Potential ordinary shares are only treated as dilutive if their conversion to shares would decrease earnings per share or increase loss per share from continuing operations.

n)  Share Issue Expenses

Share issue expenses are written off against the share capital account arising on the issue of share capital. 

o)  Critical Accounting Estimates and Judgements

Preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

In particular, significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the Financial Statements are in the following areas:

Assessment of accounting treatment under IFRS 10, IFRS 12, and IAS 27 - Investment entities

The directors have concluded that the Company meets the definition of an Investment Entity because the Company:

a.  obtains funds from one or more investors for the purpose of providing those investor(s) with investment management services;

b.  commits to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both; and

c.  measures and evaluates the performance of substantially all of its investments on a fair value basis.

The investment objective of the Company is to produce returns from capital growth and to pay shareholders a dividend. The Group has multiple unrelated investors and indirectly holds multiple investments. Investment positions are in the form of structured loans or equity instruments in private companies operating which is valued on a fair value basis.

As a result, the unlisted open-ended investments, also referred to as SPVs, and in which the Company invests in are not consolidated in the Group financial statements.

Assessment of Accounting Treatment under IAS 28 - Investment in Associates

The Group has taken advantage of the exemption under IAS28 Investments in Associates whereby IAS 28's requirements do not apply to investments in associates held by venture capital organisations. This exemption is conditional on the investments being designated as at fair value through profit and loss or being classified as held for trading upon initial recognition. Such investments are measured at fair value with changes in fair value being recognised in the income statement.

Valuation of Investments

The Group's investment portfolio includes a number of investments in the form of structured loans or equity instruments in private companies operating in emerging markets. Investee companies are often at early or growth stages in their development and operating in an environment of uncertainty in capital markets. Should planned development prove successful, the value of the Group's investment is likely to increase, although there can be no guarantee that this will be the case. Should planned development prove unsuccessful, there is a material risk that the Group's investments may incur fair value losses. The carrying amounts of investments are therefore highly sensitive to the assumption that the strategies of these investee companies will be successfully executed.

The Group has adopted a valuation policy with respect to its portfolio of investments, based on the International Private Equity and Venture Capital Valuation Guidelines ("IPEV Guidelines") valuation practices to derive Fair Value (please see Note 2(a) Basis of preparation for definition of Fair Value). The IPEV Guidelines set out recommendations intended to represent current best practices on the valuation of private capital (unlisted) investments, as well as compliance with IFRS.

The majority of the Group's current and expected investments are credit instruments and as such are likely to be valued based on Level III principles (please see Note 2(a) Basis of preparation for definition of Fair Value measurement categories). The inputs into the determination of Fair Value require significant management judgment or estimation and are subjective in nature. The types of financial instruments generally included in this category are private portfolio companies, real assets investments and credit investments. Details of the Group's Level III valuation methodologies per investment type are as follows:

Private Credit Investments

For credit-focused investments that are not publicly traded or whose market prices are not readily available, the Group may utilise the Discounted Cash Flow ("DCF") method or a Market Approach. In valuing credit-focused investments, the Group exercises prudent judgement. In addition, the Group exercises judgment in selecting the appropriate valuation technique(s) most appropriate for a credit-focused investment:

§ The DCF method projects the expected cash flows of the credit instrument based on contractual terms and discounts such cash flows back to the valuation date using a market-based yield. The market-based yield is estimated using yields of publicly-traded credit instruments issued by companies operating in similar industries as the subject investment, with similar leverage statistics and time to maturity.

§ The Market Approach is generally used to determine the enterprise value of the issuer of a credit investment and considers valuation multiples of comparable companies or transactions. The resulting enterprise value will dictate whether or not such credit investment has adequate enterprise value coverage. In cases of distressed credit instruments, the market approach may be used to estimate a recovery value in the event of a restructuring.

Private Equity Investments

The Fair Value of equity investments are determined by reference to projected net earnings, earnings before interest, taxes, depreciation and amortisation ("EBITDA"), the DCF method, public market or private transactions, valuations for comparable companies and other measures which, in many cases, are based on unaudited information at the time received.

Valuations may be derived by reference to observable valuation measures for comparable companies or transactions (for example, multiplying a key performance metric of the investee company such as EBITDA by a relevant valuation multiple observed in the range of comparable companies or transactions), adjusted by management for differences between the investment and the referenced comparables, and in some instances by reference to option pricing models or other similar methods. Where a DCF method is used, a terminal value is derived by reference to EBITDA or price/earnings exit multiples. The Group will exercise prudent judgment in valuing equity investments and in selecting the appropriate Valuation Technique(s) most appropriate for an equity investment.

Private Convertible & Quasi-Credit Instruments

Private convertible and quasi-credit instruments are hybrids of credit and equity financing. The Fair Value of convertible credit instruments, such as a Convertible Bond, may be determined as a normal private credit instrument (taking into account features such as mandatory / non-mandatory conversion features) or by (i) adding the independent value of the straight credit instrument and (ii) the independent value of the conversion option.

The independent value of the straight credit instrument may be assessed using the DCF method or Market Approach described in Private Credit Investments. The independent value of the conversion option can be determined by first deriving the terminal value of using the DCF method or the comparables method described Private Equity Investments, then adjusting for any conversion premium or discount, the conversion ratio and other conversion mechanisms.

Similarly, the Fair Value for quasi-credit instruments, such as mezzanine financing, can be determined by adding the independent value of the straight credit and the independent value of the conversion option and/or embedded equity instrument features, such as warrants. In valuing both private convertible and quasi-credit instruments the Group exercises its prudent judgment.

Non-US$ Investments

The Group reports its performance in US$. Where this is different from the currency in which the investment is denominated, translation into US$ for reporting purposes is done using the exchange rate prevailing at the Measurement Date.

p)  Foreign currency translation

-  Functional and Presentation Currency

Both the function and presentation currency of the Group's entities are the United States Dollar. The financial statements are presented in United States Dollars and rounded to the nearest thousand dollars, except when otherwise indicated.

  Transactions in foreign currencies are converted into the functional currency on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

-  Group Companies

  The results and financial position of all the Group entities, including the parent company, (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

§ assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;

§ income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

§ all resulting exchange differences are recognised as a separate component of equity.

New Standards, Amendments to Standards or Interpretations adopted in these financial statements:

No standards, amendments or interpretations which became effective from 1 January 2021 had an impact on the Group Financial Statements.

At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases have not yet been adopted by the EU):

· Amendments to IAS 1: Presentation of Financial Statements Disclosure of accounting policies (effective 1 January 2023)*

· Amendments to IAS 1: Presentation of Financial Statements Classification of Liabilities as Current or Non-current (effective date not yet confirmed)*

· Amendments to IFRS 3: Business Combinations - Reference to Conceptual Framework (effective 1 January 2022)*

· Amendments to IAS 16: Property, Plant and Equipment (effective 1 January 2022)*

· Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1 January 2022)*

· Annual Improvements to IFRS Standards 2018-2020 Cycle (effective 1 January 2022)*

· Amendments to IAS 8: Accounting Policies, Changes to Accounting Estimates and Errors (effective 1 January 2023)*

· Amendments to IAS 12: Income Taxes - Deferred Tax arising from a Single Transaction (effective 1 January 2023)*

  *subject to EU endorsement

The Directors do not expect that their adoption will have a material impact on the financial statements of the company in future years. The Directors continue to monitor the impact of future changes to the reporting requirements but do not believe the proposed changes will significantly impact the financial statements.

3.  SEGMENT INFORMATION

The operating segment has been determined and reviewed by the senior management and Board members to be used to make strategic decisions. The senior management and Board members consider there to be a single business segment, being that of investing activity. The reportable operating segment derives its revenue primarily from structured equity and debt investment in several companies and unquoted investments.

Senior management and Board members assess the performance of the operating segments based on a measure of adjusted EBITDA. This measurement basis excludes the effects of non-recurring expenditure from the operating segments such as restructuring costs. The measure also excludes the effects of equity-settled share-based payments and unrealised gains/losses on financial instruments.

The amounts provided to the senior management and Board members with respect to total assets are measured in a manner consistent with that of the financial statements. These assets are allocated based on the strategic operations of the segment.

The segment information provided to the Board for the reportable operating segment is as follows:

Income statement:					2021		2020
			Note		US$'000		US$'000
Income on unquoted financial assets			4		1,162		1,137
Financial income on loans & receivables			6		1,347		1,336
Gross portfolio income					2,509		2,473
Expected credit loss provision			5		731		(529)
Other provisions			5		-		(250)
Foreign exchange			4		(53)		215
Fair value adjustments			4		(38,840)		4,831
Portfolio income through profit or loss					(35,653)		6,740
Operating (loss)/profit
Net assets:
FMHL					50,400		50,400
Meize					8,200		8,200
GCCF					-		2,745
DocDoc					2,592		2,395
ICG					1,343		2,346
Infinity TNP					3,650		7,320
Other					17		17
Unquoted assets at fair value through the profit or loss					66,202		73,423
Loans and other receivables at fair value through the profit or loss (third party)					5,556		34,390
Cash					848		3,673
Liabilities					(4,578)		(5,034)
Net assets					68,028		106,452

Gross portfolio income generated from the Company's investments is derived from income from investments held through wholly owned special purpose vehicles (Unquoted Financial Assets) and direct investments (Loans & Receivables).

4.  FAIR VALUE CHANGES ON FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

					2021		2020
Unquoted Financial Assets					US$'000		US$'000
Income through profit or loss					1,162		1,137
Equity fair value adjustments:
- FMHL					(583)		4,831
- GCCF					(2,745)
- ICG					(1,384)		-
- Infinity TNP					(3,670)		-
					(8,382)		4,831
Expected credit loss provision:
- ICG					27		(62)
Foreign exchange on unquoted financial assets at fair value through profit or loss					(29)		17
Total fair value changes on unquoted financial assets at fair value through profit or loss					(7,222)		5,923

					2021		2020
Loans & Receivables financial assets					US$'000		US$'000
Income through profit or loss					1,347		1,336
Fair value adjustments:
- FMHL (loan principal)					(26,500)		-
- FMHL (Accrued interest)					(3,959)		-
					(30,459)		-
Expected credit loss provision:
- FLMHL					704		(467)
Other movements					118		(342)
Foreign exchange on Loans & Receivables at fair value through profit or loss					(21)		142
Total fair value changes on Loans & Receivables at fair value through profit or loss					(28,311)		669

  The impact of foreign exchange on the investments in the portfolio is as follows:

					2021		2020
					US$'000		US$'000
FMHL					(29)		17
Meize					-		-
GCCF					-		-
DocDoc					-		-
Foreign exchange on unquoted financial assets at fair value through profit or loss					(29)		17
CJRE					(16)		112
FLMH					-		-
Other receivables					(2)		30
Foreign exchange on loans and receivables					(18)		142
Cash					(6)		56
Foreign exchange on portfolio					(53)		215

5.  OPERATING LOSS

Operating loss is stated after charging expenses:

					2021		2020
					US$'000		US$'000
Investment Manager fee					1,861		1,888
Investment Manager incentive fee					(424)		1,750
Expected credit loss provision					(731)		529
Fees to the Group's auditor for audit of the Company and its subsidiaries					55		55
Directors' remuneration					309		256
Professional fees					366		580
Promotion and marketing					16		40
Business travel expenses					11		24
Bank charges					13		16
Foreign exchange					(1)		5
Other expenses					43		41
Total expenses					1,518		5,184

The Investment Manager's incentive fee is only payable in any given year depending on the performance of the Company's net asset value. The charge above is a result of warrants owed (not yet issued) revalued to their prevailing share price at 31 December 2021. (also see Note 17).

6.  NET FINANCE INCOME

					2021		2020
					US$'000		US$'000
Interest from financial assets measured at fair value through profit and loss					1,347		1,336
Finance income					1,347		1,336

Interest payable on debt					(522)		(442)
Interest expense on lease liabilities					-		-
Finance cost					(522)		(442)
Net finance income					825		894

Finance income in the year is from the Convertible Bond issued by Fook Lam Moon Holdings.

7.  DIRECTORS' REMUNERATION

Short term employment benefits					2021		2020
					US$		US$
John Croft					156,137		122,422
Hugh Trenchard					49,572		44,405
Lee George Lam					46,305		44,482
Stuart Crocker					56,567		44,405
					308,581		255,714

Directors' remuneration includes all applicable social security payments. There was no pension cost incurred during 2021 (2020:US$ Nil).

There are no employees within the group other than the Directors (2020: Nil)

8.  TAXATION

The Company is incorporated in the BVI and is not subject to any income tax.

9.  UNQUOTED FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	2021 Unquoted financial assets	2021 Loans and receivables	2020 Unquoted financial assets	2020 Loans and receivables
	US$'000	US$'000	US$'000	US$'000
Balance as at 1 January	73,423	34,390	67,172	33,720
Additions	-	-	264	70
Cash receipts	-	(417)	(81)	-
Reclassification	-	-	156	(156)
Fair value changes through profit or loss	(7,248)	(30,468)	5,975	(114)
ECL	27	704	(62)	(467)
Finance income on loans	-	1,347	-	1,337
Balance as at 31 December	66,202	5,556	73,423	34,390

The Group values its investments at fair value through profit or loss, as prescribed by the investment methodology

adopted by the Board which is summarised in Note 2(o) Critical accounting estimates and judgements.

Future Metal Holdings Limited

The Company holds an 84.8% interest in Linfen Zhuangpeng Magnesium Co. Ltd, which owns a dolomite magnesium limestone quarry operation in the province of Shanxi, China.

During 1Q 2021, the Quarry engaged a new mining contractor to carry out production. The product quality and sales have been improved since then.

In June 2021, several mining accidents occurred in Shanxi Province. Given this, all mining assets in the province, including our Quarry, were required to immediately suspend operations. In early August 2021, after a thorough review and site visits by local officials, it was approved for the Quarry to recommence operations.

Currently, the products of the Quarry are mainly for construction purposes. However, the market observed a surge in magnesium's price in 2021, driven by the increasing costs from raw material prices, such as coal and ferrosilicon, and the reduced supply resulting from the shutdown or maintenance of magnesium smelters in China. The local Management Team of the Quarry has been actively reaching out to different smelting plants in nearby cities/counties to seek potential collaborations and establish sales channels.

Including loan disbursements provided by the Company to Future Metal Holdings and its subsidiaries and accrued PIK interest, the estimated fair value of the Company's investment is US$50.4 million as of 31 December 2021. (2020: US$50.4 million)

Fook Lam Moon Holdings Limited

The Company holds a Convertible Bond of US$26.5 million in FLMH. The Convertible Bond has a maturity of 5 years and pays a coupon of 5.0% per annum (3.0% paid in cash payable quarterly with the remainder rolled up with the principal amount outstanding).

In late 2021, JADE became aware that the underlying group structure of FLM may have changed such that FLMH is no longer the 71% owned controlling shareholder in the Hong Kong based restaurant group.

The Company is actively working to secure more information to clearly understand what potential impact this ownership change may have on the value attributed to the Convertible Bond and the level of any new ownership in the Restaurant Group.

In order to be prudent, the Company decided to apply a 100% provision against this investment. As of 31 December 2021, the carrying value of the Convertible Bond was US$0.0 million (2020: US$28.4 million).

Meize Energy Industries Holdings Limited

Swift Wealth Investments Limited, a 100% (2020: 100%) owned subsidiary of the Company incorporated in the British Virgin Islands, holds a 7.2% stake in Meize through a redeemable preference share structure. 

Meize has three production facilities, which are located in Inner Mongolia, Ningxia Province and Jiangsu Province. The factories in Inner Mongolia and Ningxia Province produce wind blades for onshore wind farms. The Jiangsu plant produces wind blades for offshore wind farms.

Meize's Jiangsu plant, including its Phase II expansion, operated at full capacity in 2021 due to the strong demand from the offshore wind market. Due to high order volumes for offshore wind blades, the Jiangsu site operated 24/7, with staff working in 3 shifts, to fulfil orders from clients.

In 2021, JADE had discussions with Meize regarding a partial divestment. Initial consent on the transaction has been achieved. Currently, both parties are finalising legal documents for the partial divestment.

As of 31 December 2021, the Company's interest in Meize had a fair value of US$8.2 million (2020: US$8.2 million).

DocDoc Pte Ltd

Eastern Champion Limited, a 100% (2020: 100%) owned subsidiary of the Company incorporated in the British Virgin Islands, holds a Convertible Bond in DocDoc.

DocDoc is a privately owned company operating in the healthtech space across Asia and it is headquartered in Singapore. It is Asia's leading patient empowerment company with a presence in over 8 countries and more than 23,000 doctors listed on its doctor discovery platform. The company uses artificial intelligence to find the right medical professional for patients as well as to provide access to qualified professionals who initially assess the patients' needs.

Since 2021, DocDoc has pivoted its business model to become a "Neo Insurer" and currently is in discussion with various insurance companies for potential business collaboration.

As of 31 December 2021, the carrying value of the Convertible Bond was US$2.6 million taking into PIK interest accrued and cash interest receivable (2020: US$2.4 million)

Infinity Capital Group ("ICG")

Ultimate Prosperity Limited, a 100% owned subsidiary of the Company incorporated in the British Virgin Islands, holds a Secured Loan to ICG.

ICG develops premium residential projects in Hirafu Village, a world-class ski village in Niseko, Japan - one of the most popular winter travel destinations in the world.

As COVID-19 continues to have a severe impact on the hospitality industry in Japan, there are no material business updates regarding this portfolio company in 2021. We will continue to monitor the pandemic situation and expect the business to be resumed once the border is open and tourism rebounds.

In order to be prudent, the Company decided to apply a 50% provision against this investment. As at 31 December 2021 the carrying value of the Secured Loan was US$1.4 million taking into account cash interest receivable (2020: US$2.6 million).

The Company also received shares of Ultima United Limited (Listed on ASX) having fair value of US$0.5 million as at year end, as additional security for the outstanding cash interest receivable. These shares are to be returned on receipt of the outstanding interest. These shares are not reflected in the financial statements as they do not meet the definition of a financial asset under IFRS 9.

Infinity TNP

In November 2019, the Company acquired 40% of ICG's wholly owned subsidiary Infinity TNP, which holds units in a luxury hotel condominium called Tellus Niseko, in exchange for US$7.2m in shares in the Company. 

Tellus Niseko is a unique development in Hirafu Village, with its high-end concierge service, a Michelin star chef-managed restaurant, in-room onsen (hot spring) baths and prime location just minutes away from the Grand Hirafu ski lifts.

The occupancy at Tellus Niseko in 2021 has been negatively impacted by the spread of COVID-19 in Japan. Local management has monitored the COVID-19 situation in Japan closely and implemented a series of measures at the property to ensure guests' safety and hygiene.

In order to be prudent, the Company decides to apply a 50% provision against this investment. As of 31 December 2021, the carrying value of its investment was US$3.6 million. (2020: US$7.3 million).

Legacy Portfolio Investments:

Greater China Credit Fund LP (the "GCCF")

The Company invested in GCCF in 2013, a private equity investment fund launched by Adamas Asset Management (HK) Limited ("Adamas"), a Hong Kong-based investment management firm. The fund targets high-return investments in Small and Medium Enterprises ("SMEs") predominantly in Greater China.

In order to be prudent, the Company decides to apply a 100% provision against this investment. As of 31 December 2021, the Company's interest in GCCF has an allocated fair value of US$0.0 million (2020: US$2.8 million) within the legacy portfolio.

Changtai Jinhongbang Real Estate Development Co. Ltd ("CJRE")

Lead Winner Limited ("LWL") is a 100% (2020: 100%) owned subsidiary of the Company incorporated in the British Virgin Islands.

LWL held a 15% stake in CJRE, the owner of a luxury resort and residential development project in Fujian Province, Eastern China. The Company divested its entire investment in 2017, however, the transaction was structured such that an outstanding amount of RMB12.0 million (approximately US$1.8 million), remained receivable on or before 21 December 2018. This 'tail' payment from the original divestment was characterised as a loan and was dependent on CJRE itself receiving funds from the underlying project which was being developed.

CJRE has launched a lawsuit against the buyer in November 2021 to claim end payment. Once this payment is received by CJRE, it is the Company's expectation that the outstanding loan will be repaid in full. The Company is working closely with CJRE to recover the amount owed and it has received confirmation of the outstanding amount with a good faith undertaking to ensure it is settled as soon as funds are received from the underlying project.

As at 31 December 2021, the fair value of the loan was US$1.8 million (2020: US$1.8 million).

SPVs

The unlisted open-ended investments below are defined as SPVs and are reported at the fair value of their underlying investments described above at 31 December 2021. 

Name of SPV	Country of Incorporation	Percentage owned		Principal activities
		2021	2020
Lead Winner Limited	BVI	100%	100%	Investment Holdings
Dynamite Win Limited	BVI	100%	100%	Investment Holdings
Future Metal Holdings Limited	BVI	100%	100%	Investment Holdings
Swift Wealth Investments Limited	BVI	100%	100%	Investment Holdings
Ultimate Prosperity Limited	BVI	100%	100%	Investment Holdings
TNP Asia Limited	BVI	100%	100%	Investment Holdings

Further details of financial assets are set out in Note 15, and investment valuation methodologies are set out in Note 2(o) Critical accounting estimates and judgements.

10.  LOANS AND OTHER RECEIVABLES AT FAIR VALUE THROUGH PROFIT OR LOSS

	2021		2020
	US$'000		US$'000
Loans	-		28,408
Other receivables	5,556		5,982
Amounts receivable from related parties	-		-
	5,556		34,390

As at 31 December 2021, Loans represent the Convertible Bond issued by Fook Lam Moon Holdings plus accrued Paid-in-Kind ("PIK") and cash interest. The Group has assessed the recoverability of Loans in accordance with its policy and has decided to provide against the full value of the convertible debt and accrued interest. This has been recognised as a fair value adjustment through profit or loss. The Expected Credit Allowance ("ECL") allowance associated with the cash interest payable has been released to profit or loss in full.

	2021		2020
	US$'000		US$'000
Loan principal	26,500		26,500
Accrued PIK interest	1,685		1,132
Accrued interest payable in cash	2,274		1,479
Fair Value Adjustments - Principal	(26,500)		-
Fair Value Adjustments - Accrued Interest	(3,959)		-
Gross loans receivable	-		29,111
Less lifetime ECL allowance recognized	-		(704)
Net loans receivable	-		28,407

Reconciliation of ECL allowance balance:

			2021
			US$'000
Balance as at 1 January			704
ECL allowance released to profit or loss			(704)
Balance as at 31 December			-

Other receivables include a US$3.7 million loan provided by the Company but that was disbursed by the issuance of Company shares to CASIL, a former minority shareholder, in return for the cancellation of a put option which CASIL had been granted in the past against FMHL.

12.  OTHER PAYABLES AND ACCRUALS

	2021		2020
	US$'000		US$'000
Accounts payable	870		6
Accruals	140		1,524
Other payables and accruals	1,010		1,530

13.  LOANS AND BORROWINGS

	2021		2020
	US$'000		US$'000
Corporate debt	3,568		3,504
Loans and borrowings	3,568		3,504

i.  Terms and conditions of the outstanding debt is as follows:

	Currency	Interest rate	Year of maturity
Secured loan notes	US$	12.5%	2022

The corporate debt US$3.5 million are proceeds from loan notes issued to a family office investor, with a related debenture which constitutes a fixed and floating charge over the assets and undertakings of the Company. There are US$ 0.1m capitalised debt issue costs, being amortised over the term of the debt.

ii.  Reconciliation of movements of liabilities & equity to cashflows arising from financing activities

	Loans & borrowings		Share capital/ premium		Treasury reserve
	US$'000		US$'000		US$'000
Opening balance at 1 January 2021	3,504		148,903		(615)
Changes from cashflows
Payment of interest	(459)
Total changes from financing cashflows	(459)		-		-
Other changes:
Interest expense	522
Total other changes to liabilities	522		-		-
Closing balance at 31 December 2021	3,568		148,903		(615)

14.  SHARE CAPITAL AND TREASURY SHARE RESERVE

	Share capital
	Number of shares		amount
			US$'000
Authorised, called-up and fully paid ordinary shares of no par value each at 1 January 2020	101,595,575		144,356
Share issuance minor shareholder of FMHL June 2020	159,847		57
Sale of treasury shares February 2020	1,264,000		257
Purchase of treasury shares September 2020	(595,000)		(201)
Share issue October 2020 - open offer and placement	8,356,663		2,699
Share issue October 2020 - HCIL incentive fees	4,496,784		1,453
Share issue costs October 2020	-		(333)
Issued share capital excluding treasury shares at 31 December 2020	115,277,869		148,288
Issued share capital excluding treasury shares at 31 December 2021	115,277,869		148,288
Consisting of:
Authorised, called-up and fully paid ordinary shares of no par value each at 31 December 2021	117,925,673		148,903
Authorised, called-up and fully paid ordinary shares of no par value held as treasury shares by the Company at 31 December 2021	(2,647,804)		(615)

15.  FINANCIAL INSTRUMENTS

Financial Risk Management Objectives and Policies

Management has adopted certain policies on financial risk management with the objective of ensuring that:

(i)  appropriate funding strategies are adopted to meet the Company's and Group's short-term and long-term funding requirements taking into consideration the cost of funding, gearing levels, and cash flow projections;

(ii)  appropriate strategies are also adopted to manage related interest and currency risk funding; and

(iii)  credit risks on receivables are properly managed.

Financial instruments by category

The accounting policies for financial instruments have been applied to the line items below:

Financial assets

					2021		2020
					US$'000		US$'000
Unquoted financial assets at fair value					66,202		73,423
Loans at fair value					-		28,408
Other receivables at fair value					5,521		5,956
Cash and cash equivalents					848		3,673
Financial assets					72,571		111,460

Financial liabilities

					2021			2020
					US$'000			US$'000
Other payables and accruals at amortised cost					1,010			1,530
Corporate debt at amortised cost					3,568			3,504
Financial liabilities					4,578			5,034

The Corporate Bond is due for repayment in October 2022. All other financial liabilities are due within 12 months.

Financial assets at fair value through profit or loss

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1, 2, or 3 based on the degree to which the fair value is observable as described in Note 2(a) Basis of preparation:

	2021		2020
	US$'000		US$'000
Level 3
Unquoted financial assets at fair value through profit or loss (Note 9)	66,202		73,423
Loans and other receivables at fair value through the profit or loss (Note 9)	5,556		34,390
	71,757		107,813

There were no transfers between levels in the current period. Carrying values of all financial assets and liabilities are approximate to fair values.

Significant unobservable inputs used in measuring fair value - Level 3

Description	Fair value at 31 Dec 2021 US$'000	Fair value hierarchy	Valuation technique	Significant unobservable input(s)	Relationship of unobservable inputs to fair value
	84.81% equity investment in Future Metal Holdings Limited engaged in mining project - US$50.4m; (2020: US$50.4m)	Level 3	Income Approach - in this approach, the discounted cash flow method was used to capture the present value of the expected future economic benefits to be derived from the ownership of these investments.	Risk appropriate market-based discount rate applied, ranging from 15.0-25.0% (2020: 15.0-25.0%)		The higher the discount rate applied, the lower the fair value.
Private equity investments	7.2% preferred equity investment in Meize Energy Industries Holdings Limited engaged in designing and manufacturing blades for wind turbines - US$8.2m; (2020: US$8.2m)
	40% equity investment (with guaranteed income yield) in Infinity TNP, holding units in luxury hotel condominium Tellus Niseko - $3.6m; (2020: US$7.3m)
	Private credit fund - Greater China Credit Fund LP US$0.0m ; (2020: US$ 2.8 m)	Level 3	Unadjusted NAV	Not applicable		Not applicable
Credit investments	Convertible Bond - Fook Lam Moon US$0.0m (2020: US$28.4m)	Level 3	Income Approach - see above	Revenue and expense growth rate 5% - 10%, discount rate 6%		Not applicable
	Secured Loan Notes - Infinity Capital Group US$1.4m (2020:US$2.3m)

The above table sets out information about significant unobservable inputs used at 31 December 2021 in measuring material financial instruments categorised as Level 3 in the fair value hierarchy.

The discount of 17% (2020: 17%) is applied to the externally derived Project Value in estimating fair value of the investment in FMHL is a key unobservable input into the valuation model. In the event that other possible discounts had been applied the impact on carrying value of the investment would be as follows:

Discount rate applied	Impact on carrying value (US$ million)
10%	4.4
25%	(5.1)
30%	(8.2)
35%	(11.4)

Credit Risk

The Group's credit risk is primarily attributable to other receivables. Management has a credit policy in place and the exposure to credit risks are monitored on an ongoing basis.

In respect of other receivables, individual credit evaluations are performed whenever necessary. During the year, an ECL provision was recognised in respect of aged interest on the Convertible Bond issued to Fook Lam Moon, see Note 10 for details.

The Group's maximum exposure to credit risk is represented by the total financial assets held by the Group.

Interest Rate Risks

The Group currently operates with positive cash and cash equivalents as a result of issuing share capital and corporate debt in anticipation of future funding requirements.

Other receivables bear interest at a fixed annual rate, therefore there is no exposure to market interest rate risk on these financial assets. The effect of a 10% increase or fall in interest rates obtainable on cash and on short-term deposits would be to increase or decrease the Group's operating results by not more than US$1,000 (2020: US$1,000).

The Group has a US$10 million debt facility with a private family office investor, under which the Company has issued US$3.6 million loan notes, with an associated fixed interest rate of 12.5% for a term of 3 years. As the interest rate has been fixed for the term of the facility, there is no interest rate risk associated with the instruments.

Liquidity Risk

The Group manages its liquidity requirements by the use of both short-term and long-term cash flow forecasts. The Group's policy to ensure facilities are available as required is to issue equity share capital and/or loan notes in accordance with long-term cash flow forecasts.

The Group's financial liabilities are primarily operational costs and debt instruments. All operational costs are due for payment in accordance with agreed settlement terms with professional firms, and all are due within one year. Debt principal and related interest are due for settlement in October 2022.

Price and Valuation Risks

The Group's investment portfolio is susceptible to risk arising from uncertainties about future values of the investment securities, either in relation to market prices (for quoted securities) or fair values (for unquoted securities). This risk is that the fair value or future cash flows will fluctuate because of changes in market prices or valuations, whether those changes are caused by factors specific to the individual investment or financial instrument or its holder or factors affecting all similar financial instruments or investments traded in the market. The Group's investment committee provides the Board of Directors with investment recommendations that are consistent with the Group's objectives. The investment committee recommendations are carefully reviewed by the Board of Directors before the investment decisions are implemented.

During the year under review, the Group did not hedge against movements in the value of its investments. A 10% increase/decrease in the fair value of investments would result in an US$11.0m (2020: US$11.0m) increase/ decrease in the net asset value.   

While investments in companies whose business operations are based in China may offer the opportunity for significant capital gains, such investments also involve a degree of business and financial risk, in particular for unquoted investment.

Generally, the Group prepares to hold the unquoted investments for a middle to long term time frame, in particular, if admission to trading on a stock exchange is considered likely in the future. Sales of securities in unquoted investments may result in a discount to the book value at the time of future disposal.

Currency Risks

Management considers that foreign currency exposure is not significant to the Group and as such, there is no hedging of foreign currencies.

Capital Management

The Group's financial strategy is to utilise its resources to further grow the Group's portfolio. The Group keeps investors and the market informed of its progress with its portfolio through regular announcements and raises additional equity finance at appropriate times when market conditions allow.

The Company regularly reviews and manages its capital structure for the portfolio companies to maintain a balance between the higher shareholder returns that might be possible with certain levels of borrowings for the portfolio and the advantages and security afforded by a sound capital position, and makes adjustments to the capital structure of the portfolio in the light of changes in economic conditions.

The capital structure of the Company and the Group consists of cash and cash equivalents, loans and equity comprising issued capital and reserves.

16.  SHARE BASED PAYMENTS

16.1 Ownership-Based Compensation Scheme for Senior Management

The Group has an ownership-based compensation scheme for senior management of the Group. In accordance with the provisions of the plan, senior management may be granted warrants to purchase ordinary shares. Each warrant converts into one ordinary share of Jade Road Investments Limited on exercise. No amounts are paid or payable by the recipient of the warrants. The warrants carry neither rights to dividends nor voting rights. Warrants may be exercised at any time from the date of vesting to the date of their expiry.

At 31 December 2021, there were 1,907,882 warrants outstanding, issued to the Company's Directors in previous periods in respect of services provided to the Group with at an exercise price of US$1.21 per share, equivalent to £0.89 at 31 December 2021. The warrants will expire in 2027, 10 years after the date of grant. All warrants are equity-settled and may be exercised at any time from the date of grant to the date of their expiry.

In the event that a Director's appointment is terminated for any reason, then in such circumstances each Director's subscription rights shall, to the extent he/she has not been issued or exercised either (i) prior to the date of termination (Date of Termination); or (ii) within the period of 60 days immediately following the Date of Termination, be immediately cancelled.

16.2 Equity Compensation Scheme for Harmony Capital Investors Limited (the " Investment Manager ")

The Group has an equity compensation scheme for Investment Manager of the Group. In accordance with the provision of the scheme, the Investment Manager is granted warrants to subscribe for 20 million (before share consolidation undertaken by the Company on 20 September 2017) ordinary shares, which is to be issued in five equal tranches. No amounts are paid or payable by the recipient of the warrants. The warrants carry neither rights to dividends nor voting rights. Warrants may be exercised at any time from the date of vesting to the date of their expiry. Any equity compensation shares issued to or acquired by Investment Manager are subject to an orderly market period, which is 12 months after each date of issue. During each orderly market period, the Investment Manager undertakes to the Company and the broker not to effect a disposal of the relevant shares unless the Investment Manager gives written notice to do so.

All warrants are equity-settled, the only conditions for all warrants granted is that the warrants holder remains in the office when exercises.

The number of warrants due to the Investment Manager to subscribe for ordinary shares in respect of services provided to the Group were recalculated pursuant to paragraph 2 of Section 2 of the warrant instruction to reflect the share consolidation undertaken by the Company on 20 September 2017. The warrants have an exercise price of US$1.21 per share, equivalent to £0.89 at 31 December 2021. The warrants will expire 10 years after the date of grant. In total the Investment Manager owns 8,000,000 warrants as at 31 December 2021 (2020: 8,000,000).

	2021			2020
	Number of options	Number of warrants	Weighted average exercise price US$	Number of options	Number of warrants	Weighted average exercise price US$
Balance at beginning of the financial year	-	17,567,663	0.84	-	9,600,000	1.21
Issuance during the financial year
-Investment manager	-	-	-	-	-	-
-Directors	-	-	-	-	-	-
-Shareholders	-	-	-	-	7, 967,663	0.40
Expired during the financial year	-	-	-	-	-	-
Balance at end of financial year	-	17,567,663	0.84	-	17,567,663	0.84
Exercisable at end of financial year	-	17,567,663	0.84	-	17,567,663	0.84

The weighted-average remaining contractual life of outstanding warrants at 31 December 2021 was 4 years and 3 months (2020: 6 years and 10 months). During the year there has been a charge/(credit) of $(0.4) (2020: $1.8m relating to share-based compensation of the Investment Manager. This relates to the revaluation of the shares issued yet to issued to HCIL in respect of the 2020 accrued incentive fee, due to the price at grant being lower than the accrued price. There was no incentive fee charged in 2021.

16.3 Equity-Settled Share-Based Payment for Investment Manager as Incentive Fee

Investment Manager is entitled to receive an incentive fee from the Company in the event that the audited net asset value for each year is (1) equal to or greater than the audited net asset value for the last year in relation to which an incentive fee became payable ("High Water Mark"); and (2) in excess of 105% of the audited net asset value as at the last calendar year end ("the Hurdle"). Subject to the High Water Mark and Hurdle being excessed in respect of any calendar year, the incentive fee will be equal to 20% of the difference between the current year end NAV and the previous year end NAV. 50% of the incentive fee shall be paid in cash and the remaining 50% of the incentive fee shall be paid by ordinary shares.

The remaining 50% of incentive fee ("Equity Compensation Amount") shall be satisfied by the Company issuing to Investment Manager such number of ordinary shares as have a Fair Market Value which in aggregate is equal to the Equity Compensation Amount. The Fair Market Value is the closing Volume Weighted Average Price ("VWAP") for the ordinary shares trading on AIM for the ninety prior trading days as at the relevant calculation period year end, i.e., 31 December 2017. The shares issued to or acquired as incentive fee by Investment Manager is subject to an orderly market period, which is 12 months after each date of issue. During each orderly market period, Investment Manager undertakes to the Company and the broker not to effect a disposal of the relevant shares unless the Investment Manager gives written notice to do so.

No incentive fee was accrued in 2021 (2020: $1.3m).

17.   RELATED PARTY TRANSACTIONS

During the year, the Company and the Group entered into the following transactions with related parties and connected parties under existing contracts:

		2021		2020
	Notes	US$'000		US$'000
Remuneration payable to Directors (see Note 7)	(i)	309		256
Harmony Capital Investors Limited	(ii)
- Management fee		1,861		1,888
- Incentive fee		(424)		1,750
Amount due to Harmony Capital Investors Limited at 31 December		865		1,289

Note: Incentive Fee includes:

-  US$0.461 million adjustment expense for the FYE2019 Incentive Fee to Harmony Capital paid in shares. The Incentive Fee was calculated using a 90-day volume weighted average share price as of the year-end 2019 but as the Incentive Fee shares were issued in 4Q2020, there was a c.47% share price increase at the issue date. Shares are valued at the point at which they are issued (as opposed to a historical rate), thus, this is reflected as a charge in 2020. A credit of $(0.424) was recognized in respect of shares yet to be issued, revalued as at 31 December 2021.

(i)  The key management personnel of the Company are considered to be the Directors and appropriate disclosure with respect to them is made in Note 7 of the financial statements. There are no other contracts of significance in which any Director has or had during the year a material interest.

(ii)   Harmony Capital Investors Limited is the Investment Manager of the Group. The management fee, which was calculated and paid bi-annually in advance calculated at a rate of 0.875% of the net asset value of the Group's portfolio of assets as at 30 June and 31 December in each calendar year.

  Harmony Capital Investors Limited is entitled to receive an incentive fee from the Company in the event that the audited net asset value for each year is (1) equal to or greater than the audited net asset value for the last year in relation to which an incentive fee became payable ("High Water Mark"); and (2) in excess of 105% of the audited net asset value as at the last calendar year end ("the Hurdle"). Subject to the High Water Mark and Hurdle being excessed in respect of any calendar year, the incentive fee will be equal to 20% of the difference between the current year end NAV and the previous year end NAV. 50% of incentive fee shall be paid in cash and the remaining 50% of incentive fee shall be paid by ordinary shares.

18.  EARNINGS PER SHARE

The calculation of the basic and diluted profit/(loss) per share attributable to the ordinary equity holders of the Company is based on the following:

		2021		2020
		US$'000		US$'000
Numerator
Basic/Diluted:	Net (Loss)/Profit	(38,424)		1,643
		No. of shares		No. of shares
		'000		'000
Denominator
Basic:	Weighted average shares	115,278		105,518
	Dilutive effect of warrants	-		17,568
Diluted:	Adjusted weighted average shares	115,278		123,086
Earnings per share:
Basic		(33.33) cents		1.56 cents
Diluted		(33.33) cents		1.34 cents

Treasury shares issued by the company totaling 2,647,804 as at the reporting date, have been excluded from the weighted average shares calculation.

19.  EVENTS AFTER THE REPORTING PERIOD

On the 22nd of June, Jade Road announced (RNS Number: 7646P) it has successfully negotiated a partial divestment in Meize Energy Industries Holdings Limited ("Meize"), currently the third-largest holding in the Company's portfolio (7.7% of NAV as at announcement). The company has entered into a share purchase agreement ("SPA") for 112,500 shares of the Series B Preferred Equity in Meize for consideration of USD1.2 million (the "Transaction Price"). Before the release of this RNS, the Company had received the First Tranche Price of USD400,000.

 

END

 

 

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