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Eastbridge Inv PLC (EBIV)

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Thursday 30 June, 2016

Eastbridge Inv PLC

Final Results

RNS Number : 7552C
Eastbridge Investments PLC
30 June 2016
 

30 June 2016

Eastbridge Investments Plc

Preliminary Results for the year ended 31 December 2015

Eastbridge Investments Plc ("Eastbridge" or "Company") is pleased to present its results for the year ended 31 December 2015.

Results and Review of Business

The loss for the period was £432,000 (2014: restated loss £12,188,000) representing a loss per share of 0.24p (2014: Loss 20.30p).

On 9 January 2015, the Company held a general meeting at which the disposal of its former business and adoption of a new investing policy was approved by shareholders. The Company successfully raised over £400,000 through the issue of new equity to investors in order to progress its investing policy and identified a number of potential investment targets.  However, it became apparent to the Directors that the likelihood of obtaining the additional financing required to complete any of these investments, for which approximately another £600,000 was needed was unlikely.

 On the 30th October 2015, in light of the increasing difficulty in securing additional investment to enact the Company's existing investing policy, and in order to best generate returns, the Directors proposed and shareholders approved a new investing policy focussed on asset backed or insured equity and debt instruments which make regular cash payments, principally those used to fund retail finance in the form of secured and unsecured personal loans from the issuers of the securities being acquired.  The Directors believed that this opportunity presented shareholders with a better chance of a return on their investment in the Company than the existing policy and thus adopted it. Following the general meeting, a placing raised £500,000 and these funds were invested in the Tranche B Helix Securitisation Fund, which yield 9.85% per annum. We were unable to conclude any further fund raising within the period.

Outlook

Under the AIM Rules for Companies, an investing company such as Eastbridge is required to either have fulfilled its investing policy or carried out a reverse acquisition within 12 months of the date upon which it became an investing company.  Given the limited financial resources available to Eastbridge, the majority of which have been invested, the Company was not considered to have fulfilled its investing policy and it had not yet completed a reverse acquisition by the anniversary date. Pursuant to AIM Rule 15, shares in the Company were suspended from trading on 11th January 2016. At the same time we announced that we had agreed terms for the acquisition of Privilege Wealth Plc ("Privilege"). The acquisition of Privilege would constitute a reverse transaction under the AIM Rules for Companies and would be subject to approval by Eastbridge's shareholders in general meeting.  Further to the completion of Heads of Agreement on 8 January 2016, negotiation and due diligence regarding the reverse acquisition of Privilege were ongoing and the Company made every effort to conclude the acquisition. However the complexities of the deal within the limited time window proved insurmountable and the board concurrently sought other possibilities to generate shareholder value.

On the 21 June 2016, the Company announced that it has now received an alternative proposal regarding the future of the Company.  In light of the limited progress that has been made in respect of the acquisition of Privilege and the short time remaining until the Company is liable to be cancelled from trading on AIM, the directors have agreed with the owners of Privilege that following passing of the resolutions at the general meeting held on 24 June, 2016, negotiations with Privilege regarding the potential reverse transaction are terminated and that the Company is pursuing the alternative proposal. On the same day the outstanding warrants and warrant issuance programme with Peterhouse Corporate Finance and Helix Investment Management SLP were cancelled. As compensation for the cancellation of the 8.5 billion warrants subscribing for ordinary shares in Eastbridge previously held by Helix, they will receive a fee of £30,000.  This fee will be settled from the fixed coupon due to the Company in respect of the £500,000 Tranche B Helix Securitisation Fund notes ("Helix Notes") acquired on 2 December 2015, which yield 9.85% per annum.  In addition, Eastbridge has agreed that henceforth any coupon payment received in respect of the Helix Notes (over and above the aforementioned £30,000) will be reinvested in new further notes issued under the same programme.  The Helix Notes are scheduled to be redeemed on 30 June 2020 but, as a result of these arrangements, until such time as redemption takes place the Company will not receive any cash distribution in respect of its holding. 

Under the new terms being offered the Company will receive, upon shareholder approval to the revised investing policy, approximately £3.17 million of new investment which will be immediately deployed towards fulfilment of that revised investing policy.  The funds will be invested in a range of low-risk equity and debt instruments issued by banks and other financial service providers that produce regular cashflow and this will be used as the cornerstone of the Company's investment portfolio.  It is the current intention that further funds will be raised later in the year to add to the portfolio.

Presuming that the new investing policy is adopted at the general meeting on 6 July 2016, the placing completed and a range of new investments acquired the Company will apply to AIM Regulation for confirmation that, by holding approximately £3.6 million of securities spread across a range of issuers in accordance with its investing policy, it has satisfied its investing policy and thus trading in its ordinary shares, on AIM should resume. 

I would like to thank shareholders for their continued patience.

 

Gregory Collier

Chairman

 

The directors present their strategic report for the year ended 31 December 2015.

 

Principal activity

In 2014, the principal activity of the company was that of an investing holding company for a group involved in the manufacture of lathes and machinery tools.

 

In October 2015 the company changed its principal business activity to be an investment company involved in asset backed or insured debt instruments which make regular cash payments, principally those offered to retail consumers in the form of secured and unsecured personal loans.

 

It has been classified as an Investing Company under AIM Rule 15.

 

Key performance indicators

The key performance indicators are set out below:

 

31 December

2015

31 December

2014

Total assets

£729,000

£106,000

Net asset value per share

0.14p

(0.08)p

Closing share price

0.38p

5.5p

Market capitalisation

£1,623,000

£3,302,000

 

Key risks and uncertainties

Currently the principal risk is that the Company is unable to find sufficient suitable investments to ensure compliance with the requirements of its listing on AIM.

Going Concern

As disclosed in the Chairman's statement, the Company plans to proceed with its new investment proposal which would provide sufficient funds to enable the Company to continue its operation and facilitate further investments for the foreseeable future.  The Directors' new investment proposal is, however, subject regulation prescribed by AIM Rules on agreeing the company meeting its Investing Policy.  If it is not possible for the Directors to realise their plans, over which there is significant uncertainty, the carrying value of the assets of the Company is likely to be impaired.

Based on the current forecast, the Company is likely to need additional funds within twelve months of the date of approval of this Annual Report in order to maintain its proposed work programme and levels of expenditure.

 

Dividends

The Directors do not recommend payment of a dividend for the year (2014: £nil). The loss is transferred to reserves.

 

Directors and Directors' interests

The Directors who served during the year and their interests in the Ordinary Shares in the Company are as follows:

 

 

Ordinary shares of 0.01p held at

31 December 2015

Ordinary shares of 0.01p held at

 31 December 2014

Mark Chapman (resigned 05.03.2015)

117,632

     117,632

Roberto Lima (resigned 09.01.2015)

-

-

Hao Qiang (resigned 09.01.2015)

500,000

500,000

Gregory Collier (appointed 09.01.2015)

-

-

Stuart Black (appointed 05.03.2015, resigned 29.07.2015)

-

-

Andrew Oswald (appointed 29.07.15)

-

-

Steven Hodgetts (appointed 30.10.15, resigned 24.06.2016)

-

-

 

Other significant shareholdings

As on 19th June 2016 the company had been notified of the following interests in its ordinary shares which represent 3% or more of the issued share capital of the company other than directors interests which is disclosed above.

 

 

Number of shares

%

Beaufort Nominees Limited

178,901,640

41.88

Philip McGinlay

80,142,857

18.76

Paul Segal

55,225,737

12.93

Wonder Employee Capital Limited

30,266,344

7.08

  

Share capital

Details of issues of Ordinary Share capital during the year are set out in note 14.

 

Financial instruments and other risks

Details of the use of financial instruments by the Company are contained in note 16 of the financial statements.

 

Details of risks and uncertainties that affect the Company's business are given in the Strategic Report.

 

 

 

STATEMENT OF COMPREHENSIVE INCOME

YEAR ENDED 31 DECEMBER 2015

 

 

 

 

Note

 

2015

Restated

2014

 

 

£'000

£'000

 

 

 

 

Administrative expenses

6

(440)

(257)

 

 

 

 

Exceptional item

5

-

(11,931)

 

 

                        

                        

 

 

 

 

Loss on operating activities

 

(440)

(12,188)

 

 

 

 

Finance income

 

8

-

 

 

                       

                       

Loss before taxation                                                               

 

(432)

(12,188)

 

 

                       

                       

 

 

 

 

Loss for the year

 

(432)

(12,188)

 

 

                       

                       

 

 

 

 

Loss per share (pence)

 

 

 

 

 

 

 

Basic and diluted loss per share

13

(0.24p)

(20.30p)

 

 

                       

                       

 

 

 

 

 

 

 

 

No separate statement of comprehensive income is provided as all income and expenditure is disclosed above.

 

 

STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

 

 

 

 

 

 

2015

Restated

2014

 

Note

                £'000

                £'000

Non-current assets

 

 

 

Investments - available for sale

8

615

-

 

 

                   

                   

 

 

615

-

 

 

                   

                   

Current assets

 

 

 

Other receivables

9

2

2

Cash and cash equivalents

10

112

106

 

 

                   

                   

 

 

114

108

 

 

                   

                   

Total assets

 

 

 

 

 

729

108

 

 

                   

                   

Equity and reserves

 

 

 

Called-up share capital

14

1,495

1,501

Share premium account

Share-based payment reserve

 

9,566

107

8,260

-

Loan note equity reserve

 

-

11

Profit and loss account

 

(10,550)

(10,118)

 

 

                   

                   

 

 

 

 

Total equity

 

618

(346)

 

 

                   

                   

 

 

 

 

Non-current liabilities

 

 

 

Convertible loan notes

15

-

39

 

 

                   

                   

 

 

-

39

Current liabilities

 

 

 

Trade and other payables

11

111

415

 

 

                   

                   

 

 

 

 

Total liabilities

 

111

454

 

 

                   

                   

 

 

 

 

Total equity and liabilities

 

729

108

 

 

                   

                   

 

 

 

 

 

 

 

 

The financial statements were approved by the board of directors and authorised for issue on 29 June 2016 and signed on its behalf by:

 

 

 

 

Gregory Collier

Chairman

STATEMENT OF CHANGES IN EQUITY

YEAR ENDED 31 DECEMBER 2015

 

 

Share Capital

 

Share Premium

Restated Retained Earnings Account

Loan Note Equity Reserve

Share-based payment reserve

 

 

Total

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

At 1 January 2014

1,451

8,260

2,070

-

-

11,781

 

 

 

 

 

 

 

Issue of share capital

50

-

-

-

-

50

Convertible loan note

-

-

-

11

-

11

Total comprehensive loss for the year

-

-

(12,188)

-

-

(12,188)

 

 

 

 

 

 

 

At 31 December 2014

(10,118)

11

-

(346)

 

 

 

 

 

 

 

Issue of share capital

27

-

-

-

-

27

Share premium

-

1,273

-

-

-

1,273

Convertible loan note

-

-

-

(11)

-

(11)

Share-based payment equity

-

-

-

-

107

107

Transfer of shares to no par value

(33)

33

-

-

-

-

Total comprehensive loss for the year

 

-

 

-

(432)

-

-

 

(432)

 

 

 

 

 

 

 

At 31 December 2015

1,495

9,566

(10,550)

-

107

618

 

CASH FLOW STATEMENT

YEAR ENDED 31 DECEMBER 2015

 

 

 

 

 

 

Year ended     31 December

Restated

Year ended     31 December

 

 

2015

2014

 

 

£'000

£'000

Cash flows from operating activities

 

 

 

Loss on operating activities

 

(440)

(12,188)

Decrease/(increase) in trade and other receivables

 

-

(2)

(Decrease)/increase in trade and other payables

 

(189)

321

Exceptional item

 

-

11,806

Foreign exchange loss

 

-

 

26

 

 

 

                 

                 

Net cash inflow/(outflow) from operating activities

 

(629)

(37)

 

 

                 

                 

Cash flows from investing activities

 

 

 

Purchase of investments

 

(500)

-

 

 

                 

                 

 

 

 

 

Net cash used in investing activities

 

(500)

-

 

 

                 

                 

 

 

 

 

Cash flows from financing activities

 

 

 

Proceeds from issue of ordinary shares

 

1,020

50

Proceeds from loan 

 

115

50

 

 

                 

                 

 

 

 

 

Net cash inflow from financing activities

 

1,135

100

 

 

                 

                 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

6

63

Cash and cash equivalents at beginning of year

 

106

43

 

 

                 

                 

 

 

 

 

Cash and cash equivalents at end of year

 

112

106

 

 

                 

                 

 

 

 

 

 

NOTES TO THE COMPANY'S FINANCIAL STATEMENTS

YEAR ENDED 31 DECEMBER 2015

 

1.            General information

 

Eastbridge Investments Plc is a company incorporated in Jersey under the Companies (Jersey) Law 1991.  The address of the registered office is given on page 1.

 

The principal activity of the company is that of an investment company.

 

These financial statements are rounded to the nearest thousand ('000).

 

2.            Accounting policies

 

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs"), as adopted by European Union, IFRIC Interpretations and in accordance with those parts of the Companies (Jersey) Law 1991, applicable to companies reporting under IFRS.

 

The Company has adopted all relevant standards effective for accounting periods beginning on or after 1 January 2014 with the exception of IFRS 10 Consolidated Financial Statements.  Win Yu International Investments Company Limited ("WYIC") and Jiangsu Qihang CNC Machinery Tools Co., Ltd ("JSQH") were subsidiary undertakings of the Company from July 2011 until their disposal on 9 January 2015.  The disposal of the subsidiary companies was put through the 2014 accounts and were reflected under discontinued activities.  As these companies were the only subsidiaries, Group accounts have not been prepared and the accounts presented herein, both for the current period and the comparative period, represent those of the Company only.

 

The comparative figures in the income statement and statement of financial position for the year ended 31 December 2014 have been restated to include an amount of £125,000 due to Wonder Employee Capital Limited at 31 December 2014 which was settled by the issue of 30,266,344 shares at 0.413p per share in January 2015.

 

Going concern

At the year end the company had net assets of £618,000 (2014: net liabilities £346,000) with cash at bank of £112,000 (2014: £106,000). Based on the current forecast, the Company is likely to need additional funds within twelve months of the date of approval of this Annual Report in order to maintain its proposed work programme and levels of expenditure.

Since the year end, the directors have sourced an investment proposal which they believe meets the Investment criteria as prescribed by the AIM rules. However this proposal is subject to both shareholder and approval from the AIM regulation team.

 

For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements. Whilst there are inherent uncertainties in relation to future events, and therefore no certainty over the outcome of the matters described, the Directors consider that, based upon financial projections and dependent on the success of their efforts to complete these activities, the Company will be a going concern for the next twelve months. If it is not possible for the Directors to realise their plans, over which there is significant uncertainty, the carrying value of the assets of the Company is likely to be impaired.

 

Statement of Compliance

The following new and revised Standards and Interpretations have been adopted in the current period by the Company for the first time and do not have a material impact on the Company.

 

IFRS 10

 

Consolidated financial statements

IFRS 12

 

Disclosures of interests in other entities

 

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and not early adopted. None of these are expected to have a significant effect on the financial statements of the Company.

 

Segmental reporting

The Company does not have separately identifiable business or geographical segments which are material to disclose.

 

Revenue recognition

All revenue is stated net of the amount of sales tax. Currently the Company does not generate any revenue.

 

Presentational and functional currency

This financial information is presented in pounds sterling, which is the Company's functional currency.

 

Financial assets

Financial assets comprise investments, cash and cash equivalents and receivables. Unless otherwise indicated, the carrying amounts of the Company's financial assets are a reasonable approximation of their fair values.

 

Investments available for sale

Available for sale investments are recognised on a trade date where a purchase of an investment takes place.

 

Investments are measured at fair value in the balance sheet with finance income recognised in the Statement of Comprehensive Income on an effective interest rate basis.

 

Trade and other receivables

Provision for impairment of trade receivables is made when there is objective evidence that the Company will not be able to collect all amounts due to it in accordance with the original terms of those receivables.  The amount of the write-down is the difference between the receivables carrying amount and the present value of the estimated future cash flows.

 

An assessment for impairment is undertaken at least annually.

 

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, demand deposits and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.

 

Financial liabilities

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.  Financial liabilities comprise only trade and other payables.

 

All financial liabilities are recorded at amortised cost, using the effective interest method, with interest-related charges being recognised as an expense under finance costs in the Income Statement. A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged, is cancelled, or expires.

 

Finance costs

Finance costs of debt, including premiums payable on settlement and direct issue costs are charged to the income statement on an accruals basis over the term of the instrument, using the effective interest method.

 

The taxation charge represents the sum of current tax and deferred tax.

 

Income taxation

The tax payable is based on the taxable profit for the period using the tax rates that have been enacted or substantially enacted by the balance sheet date. Taxable profit differs from the net profit as reported in the income statement because

it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

 

Deferred taxation

Deferred tax is recognised, using the liability method, in respect of temporary differences between the carrying amount of the Company's assets and liabilities and their tax base. Deferred tax liabilities are offset against deferred tax assets within the same taxable entity. Any remaining deferred tax asset is recognised only when, on the basis of all available evidence, it can be regarded as probable that there will be suitable taxable profits in the foreseeable future against which the deductible temporary difference can be utilised. Deferred tax is determined using tax rates that are expected to apply in the periods in which the asset is realised or liability settled, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is recognised in the income statement, except when the tax relates to items charged or credited directly in equity, in which case the tax is also recognised in equity.

 

Share capital

Ordinary shares are classified as equity.  Incremental costs directly attributable to the issue of new shares or options are shown in equity as deduction, net of tax, from the proceeds.

 

Impairment

The carrying amounts of non-current assets are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. If there are indicators of impairment, an exercise is undertaken to determine whether the carrying values are in excess of their recoverable amount. Such a review is undertaken on an asset by asset basis, except where such assets do not generate cash flows independent of other assets, in which case the review is undertaken at the cash generating unit level. If the carrying amount of an asset or its cash generating unit exceeds the recoverable amount, a provision is recorded to reflect the asset or cash generating unit at the lower amount.

 

Foreign currency

Transactions entered into by by the Company in a currency other than the currency of the primary economic environment in which it operates (the "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date and the gains and losses on translation are included in the statement of profit or loss.

 

Critical accounting estimates and areas of judgement

The Company makes estimates and assumptions concerning the future, which by definition will seldom result in actual results that match the accounting estimate. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are those in relation to investments.

 

3.            Staff costs

 

2015

2014

 

                £'000

£'000

 

 

 

Wages and salaries

107

49

 

The average number of employees and directors during the year was as follows:

 

 

2015

2014

 

 

 

Administration

2

6

 

4.            Directors' remuneration

 

The aggregate directors' emoluments, including compensation for loss of office, in the year were:

                                                                                                                                                                                           

 

2015

2014

 

£'000

£'000

 

 

 

Emoluments

107

38

The highest paid director received remuneration of £50,664 (2014: £10,337).

 

5.            Exceptional item

 

During the year the Company fully impaired its investment in a subsidiary. Please see note 12 for movement in investments in the year.

 

2015

2014

 

£'000

£'000

 

 

 

Impairment of investment

-

(12,294)

Provision against intra group payables

-

515

Provision against intra group receivables

-

(27)

 

-

(11,806)

 

 

 

 

6.            Administrative expenses

 

2015

2014

 

£'000

£'000

 

 

 

Staff costs

107

49

Other expenses

333

182

Foreign exchange loss

-

26

 

440

257

 

7.            Auditors' remuneration

 

2015

2014

 

£

£

 

 

 

Audit fees

26

26

 

8.            Investments - available for sale

 

2015

2014

 

£'000

£'000

 

 

 

Cash consideration

500

-

Origination fee*

Effective interest

107

8

-

-

 

615

-

 

On 30 October 2015 the Company entered into an agreement with Helix Investment Management SLP ("Helix") to originate securities, to provide and secure access to allocations of securities to be issued from time to time by Helix, and provide support to the executive management of the Company.

 

* - On November 2015, the Company subscribed for 50 units of the Tranche B Helix Securitisation Fund at an aggregate cost of £500,000. The Tranche B Helix Securitisation Fund notes yield 9.85% per annum. Under the terms of the agreement, 10 warrants representing 42,500,000 Warrant Shares in the Company were issued to Helix, and this has been accounted for as an origination fee. At the date of grant the warrants were valued using the Black-Scholes option pricing model.

 

On 24 June 2016 all warrant programs and issued warrants were cancelled by agreement with relevant parties. The Company has no outstanding warrants.

 

The fair value per warrant share granted and the assumptions used in the calculation were as follows:

Date of grant

10 November 2015

Share price at grant date

£0.00375

Warrant exercise price

£0.0030

Expected volatility

114.1%

Expected life

3 years

Risk-free interest rate

1.14%

Expected dividend yield

0%

Fair value per warrant

£0.00253

 

9.            Trade and other receivables

 

2015

2014

 

£'000

£'000

Current

 

 

Other receivables

2

2

 

 

 

 

10.          Cash and cash equivalents

Cash and cash equivalents include the following for the purposes of the cash flow statement:

 

2015

2014

 

£'000

£'000

 

 

 

Cash at bank and in hand

112

106

 

 

 

 

11.          Trade and other payables

 

2015

2014

 

£'000

£'000

 

 

 

Trade and other payables

3

218

Accruals and deferred income

60

34

Other payables

48

163

 

111

415

 

 

 

12.          Investment in subsidiary

 

2015

2014

 

£'000

£'000

 

 

 

At 1 January

-

12,294

Impairment of investment

-

(12,294)

At 31 December

-

-

On 23 December 2014 the Company agreed to dispose of its 100% holding in Win Yu International Investments Limited. See Note 18 for further details.

 

13.          Loss per share

The basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of shares in issue.

 

The loss attributable to equity shareholders and weighted average number of ordinary shares for the purposes of calculating diluted earnings per ordinary share are identical to those used for basic earnings per ordinary share. This is because the exercise of warrants would have the effect of reducing the loss per ordinary share and is therefore anti-dilutive.

 

2015

2014

 

£

£

 

 

 

Net loss for the year attributable to ordinary shareholders

(432,000)

(12,188,000)

 

 

 

Weighted average number of shares in issue

177,320,048

60,036,263

 

 

 

Basic and diluted loss per share

(0.0024)

(0.2030)

 

14.          Share capital

 

2015

2014

 

No

No

Issued and fully paid

 

 

Ordinary shares of £0.025 each

Ordinary shares of no par value

Deferred shares of £0.0249 each

 

-

427,175,955

60,036,263

60,036,263

-

-

 

                          

                          

 

 

 

 

2015

2014

 

£

£

Ordinary shares of £0.025 each

Ordinary shares of of no par value

Deferred shares of £0.0249 each

-

-

1,494,903

1,500,907

-

-

 

1,494,903

1,500,907

 

                          

                          

On 9 January 2015 the Company undertook a share capital sub-division whereby each existing ordinary share of £0.025 each was subdivided into one new ordinary share of £0.0001 and one deferred share of £0.0249.

 

On 23 January 2015 the Company raised £225,000 by way of an issue of 78,071,429 new ordinary shares of £0.0001 each at 0.14p per share, and the issue of £115,700 nominal value convertible loan notes, exercisable at the Placing Price for 3 years from the date of issue.

 

On this date, the Company also agreed to issue 28,266,344 new ordinary shares to the holders of the £50,000 nominal value loan notes announced on 23 December 2014 who have served a conversion notice for their entire holding of convertible loan notes and a further 30,266,344 ordinary shares to Wonder Employee Capital Limited in full satisfaction of amounts owed to them, totalling £125,000.

 

On 5 March 2015 the ordinary shares of 0.01p each were amended to ordinary shares of no par value.

 

On 15 May 2015 the Company raised £100,000 by way of an issue of 11,494,252 new ordinary shares of no par value at a price of 0.87p per share.

On 12 June 2015 the Company raised £120,000 by way of an issue of 13,793,103 new ordinary shares of no par value at a price of 0.87p per share.

On 10 July 2015 the Company raised £100,000 by way of an issue of 11,494,252 new ordinary shares of no par value at a price of 0.87p per share.

On 6 August 2015 the Company raised £100,000 by way of an issue of 11,111,111 new ordinary shares of no par value at a price of 0.90p per share.

On 18 November the Company issued 82,642,857 new ordinary shares for settlement of the outstanding amount relating to the Convertible Loan Note of £115,700 together with accrued interest to date. See Note 15 for further details.

 

15.          Convertible loan notes

 

2015

2014

 

£'000

£'000

 

 

 

Convertible loan note

-

39

 

 

 

In January 2015, the Company entered into a convertible loan note agreement for £115,700. The interest rate on the loan was 10% per annum.

 

On 18 November 2015, the loan notes were fully converted into 82,642,857 new ordinary shares of no par value.

 

The convertible loan recognised on inception were calculated as follows:

 

2015

2014

 

£'000

£'000

 

 

 

Nominal value of convertible loan note issued

116

50

Equity component

(30)

(11)

Liability component on initial recognition

86

39

 

16.          Financial instruments

Capital Risk Management

The Company's objectives when managing capital are:

·     to safeguard the Company's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;

·     to support the Company's growth; and

·     to provide capital for the purpose of strengthening the Company's risk management capability

The Company actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Company and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.

Risk Management Objectives and Policies

The Company is exposed to a variety of financial risks which result from both its operating and investing activities.  The Company's risk management is coordinated by the board of directors, and focuses on actively securing the Company's short to medium term cash flows by minimising the exposure to financial markets.

Market Price Risk

The Company's exposure to market price risk mainly arises from potential movements in the fair value of its investments.  The Company manages this price risk within its long-term investment strategy to manage a diversified exposure to the market.  If each of the Company's equity investments were to experience a rise or fall of 10% in their fair value, this would result in the Company's net asset value and statement of comprehensive income increasing or decreasing by £61,500 ( 2014: £nil).

Foreign Currency Risk

The Company's exposure to foreign currencies is limited to its investments which are quoted on overseas stock markets in currencies other than Pounds Sterling and is not material.

Credit Risk

The Company's financial instruments, which are exposed to credit risk, are considered to be mainly cash and cash equivalents and the Company's receivables are not material.  The credit risk for cash and cash equivalents is not considered material since the counterparties are reputable banks.

The Company's exposure to credit risk is limited to the carrying amount of the financial assets recognised at the balance sheet date, as summarised below:

 

2015

£'000

2014

£'000

Cash and cash equivalents

112

106

Other receivables

2

2

 

114

108

Liquidity Risk

Liquidity risk is managed by means of ensuring sufficient cash and cash equivalents are held to meet the Company's payment obligations arising from administrative expenses. 

Financial Instruments

The Company's financial instruments comprise borrowings, cash and various items, such as trade receivables and trade payables that arise directly from its operations.  The main purpose of these financial instruments is to raise finance for the Company's operations. 

The main risks arising from its financial instruments are interest rate, liquidity, foreign currency and credit risk.  The board reviews and agrees policies for managing each of these risks and they are summarised below together with a sensitivity analysis.  These policies have remained unchanged from previous years.

Interest rate risk

The Company finances its operations through a mixture of loans and equity capital.  Borrowings are generally at floating rates of interest.  The Company does not enter into any interest rate derivative transactions to manage interest rate risk.  The Company had no interest bearing loans at the year-end or the prior period end and hence no interest rate exposure.

 

Liquidity risk

The Company seeks to manage financial risk by ensuring liquidity is available to meet foreseeable needs and by investing cash assets safely and profitably.

As at 31 December 2015 the Company's liabilities have contractual maturities which are summarised below:

31 December 2015

Current

Non-current

 

Within 6 months

6 to 12 months

1 to 5 years

 

later than 5 years

 

£'000

£'000

£'000

£'000

Convertible Loan note

-

-

-

-

Trade and other payables

111

-

-

-

 

111

-

-

-

 

This compares to the maturity of the Company's financial liabilities in the previous reporting period as follows:

31 December 2014

Current

Non-current

 

Within 6 months

6 to 12 months

1 to 5 years

 

later than 5 years

 

£'000

£'000

£'000

£'000

Convertible loan note

-

39

-

-

Trade and other payables

290

-

-

-

 

290

39

-

-

 

Credit risk

The Company's exposure to credit risk is limited to the carrying amounts of financial assets recognised at the balance sheet date, as follows:

 

 

2015

2014

 

 

£'000

£'000

Trade and other receivables

 

111

            290

Cash and cash equivalents

 

112

            106

 

 

223

            396

 

The key management of the Company continuously monitor defaults of customers and other counterparties, identified either individually, or by group, and incorporates this information into its credit controls.  Where available at reasonable cost external credit ratings and/or reports on customers and other counter parties are obtained and used.  The Company's policy is to deal only with creditworthy counterparties.

 

The Company's management considers that all the above financial assets that are not impaired for each of the reporting dates under review are of good credit quality, including those that are past due.

None of the Company's financial assets are secured by collateral or other credit enhancements.

In respect of trade and other receivables, the Company is not exposed to any significant credit risk exposure to any counterparties having similar characteristics.  The credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable banks with high quality external credit ratings.

 

Financial instruments measured at fair value

The Company adopted the amendments to IFRS 7 Improving Disclosures about Financial Instruments effective from 1 January 2009.  These amendments require the Company to present certain information about financial instruments measured at fair value in the statement of financial position specifically the fair value hierarchy.  The fair value hierarchy Company's financial assets and liabilities into three levels based on the significance of inputs used in

measuring the fair values of the financial assets and liabilities.  The fair value hierarchy has the following levels; Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) and Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).  No financial assets or liabilities are measured at fair value in the statement of financial position.

 

Categories of financial instruments

The carrying amounts of the Company's financial assets and liabilities as recognised at the balance sheet date of the reporting periods under review may also be categorised as follows:

 

 

 

2015

2014

 

 

£'000

£'000

Financial assets:

 

 

 

Investments held at fair value through profit or loss

 

615

-

Cash and bank balances

 

112

106

Loans and receivables

 

2

2

 

 

729

108

 

Financial liabilities at amortised cost:

 

 

 

Trade and other payables

 

111

290

 

 

111

290

 

17.          Reserves

 

The following describes the nature and purpose of each reserve:

 

Share Capital

represents the nominal value of equity shares

Share Premium

amount subscribed for share capital in excess of the nominal value

Retained Earnings

cumulative net gains and losses less distributions made

 

18.          Discontinued Operations

 

On 23 December 2014, the Company agreed to dispose of its operating subsidiary -Jiangsu Qihang CCNC Machinery Tools CO. Ltd ("JSQH") back to its original owners.

 

Under the terms of the agreement approved by the shareholders on 9 January 2015, the purchasers agreed to acquire the entire issued share capital of Win Yu International Investments Company Limited ("Win Yu"), which held 100%. of JSQH and assume all of the operational debt of JSQH.  In additional consideration for the transaction, the purchasers also transferred Purchaser shares they currently held back to the company. 

 

The major classes of assets and liabilities comprising the disposal group and classified as held for sale are as follows:

 

 

 

2015

2014

 

 

£'000

£'000

Financial assets at amortised cost

 

 

 

 

 

 

 

Goodwill

 

-

3,841

Property, plant and equipment

 

-

17,101

Inventories

 

-

8,803

Trade and other receivables

 

-

4,363

Cash and bank balances

 

-

4,022

Total assets classified as held for sale

 

-

38,130

 

Financial liabilities at amortised cost:

 

 

 

 

 

 

 

Trade and other payables

 

-

14,248

Borrowings

 

-

19,842

Total liabilities associated with assets classified as held for sale

 

-

34,090

 

 

 

 

Net assets of disposal group

 

-

4,040

 

During the year discontinued operations used net cash of £404,000 (2014: £901,000) in operating activities, paid £42,000 (2014: £413,000) in respect of investing activities, and paid £nil (2014: £nil) in respect of financing activities.

 

 

19.          Related Party Transactions

 

Gregory Collier was paid fees of £50,664 in the year as per the terms of his consultancy agreement with the Company.

Stuart Black was paid fees of £40,000 in the year as per the terms of his consultancy agreement with the Company

Andrew Oswald was paid fees of £16,664 under the terms of his consultancy agreement with the Company.

 

20.          Capital Commitments and Contingent Liabilities

At the balance sheet date, the Company had no known contingent liabilities and capital commitments other than those shown in the financial statements.

 

21.          Post Year End Events

 

On 11 January 2016 the directors of Eastbridge announced that they have agreed terms for the acquisition of Privilege Wealth Plc ("Privilege"). 

On 11 January 2016 the Company announced the temporary suspension of trading on AIM.

On 21 June 2016, the directors announced that they had terminated their negotiations to acquire "Privilege" but were pursuing an alternative investment plan.

 

22.          Ultimate Controlling Party

 

There was no single controlling party.

 

 

For further additional information please contact:

 

Eastbridge Investments Plc

Gregory Collier

 

Tel: +44 (0)78 301 82501 

Nominated Adviser

Northland Capital Partners Limited                      

William Vandyk / Matthew Johnson

 

Tel: +44 (0)20 3861 6625

Broker

Peterhouse Corporate Finance Limited

Fungai Ndoro /Lucy Williams

Tel: +44 (0)20 7469 0930

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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