TIDMSYQ
RNS Number : 4398O
SyQic PLC
07 November 2016
7 November 2016
SyQic plc ("SyQic", the "Company" or the "Group")
Final results for the year ended 31 December 2015
SyQic plc (AIM:SYQ), a fast growing provider of live TV and
on-demand video content across mobile and internet enabled consumer
devices, today announces its final results for the year ended 31
December 2015.
FINANCIAL HIGHLIGHTS
-- Revenue increased by 9% to GBP11.66m (2014: GBP10.67m)
-- EBITDA increased by 21% to GBP2.84m (2014: GBP2.34m)
-- Profit after tax increased by 25% to GBP2.48m (2014: GBP1.99m)
-- Earnings per share increased by 13% to 9.20p (2014: 8.14p)
-- Net assets of GBP9.45m at 31 December 2015 (31 December 2014: GBP8.27m)
-- Trade receivables (before fair value adjustment) of GBP12.42m (31 December 2014: GBP7.47m)
-- Fair value discount expense of GBP0.69m (31 December 2014:
GBP0.34m) applied to trade receivables
-- Foreign exchange reserve movement of GBP1.33m (2014: GBP0.03m)
-- Qualified audit opinion on the financial statements for the
year ended 31 December 2015 as the auditors are unable to obtain
sufficient audit evidence to assess the recoverability of the
Company's trade debtors. Additionally, the audit opinion for the
year ended 31 December 2015 includes a going concern emphasis of
matter
OPERATIONAL HIGHLIGHTS
-- Launch of Yoomob service in Europe
-- Click to pay payment platform introduced
-- Increased use of social media has helped to boost growth opportunities
POST PERIOD HIGHLIGHTS
-- Launch of Yoomob in the UK, Italy and Spain
-- Commencement of Yoomob trial service in Kenya
-- Introduction of Cool2vu subscription service
-- Merging of Cool2vu and Yoomob services for ease of product
management for uniform commercial model comprising of subscriptions
and advertising revenues in all markets
-- The Company has received interest from Yuma Ventures Ltd, a
BVI incorporated investment holding company, to acquire all shares
in the Company
On 28 June 2016, the board of directors of SyQic announced that
it had become apparent that the Company would not be in a position
to publish its audited report and accounts for the year ended 31
December 2015 by 30 June 2016 in accordance with Rule 19 of the AIM
Rules for Companies. As a result trading in the Company's shares
was suspended on AIM.
Due to the qualified audit opinion on the financial statements
for the year ended 31 December 2015 and emphasis about the
Company's ability to continue as a going concern being dependent,
inter alia, on the collection of trade receivables and the ability
to raise future funds, the Company's shares remain suspended from
trading on AIM. Further details on the qualified opinion on the
financial statements and the going concern emphasis of matter are
set out in note 1 of the financial statements for the year ended 31
December 2015.
In the event that trading in the Company's shares is not
recommenced within six months of the date of suspension, trading in
the Company's shares on AIM will be cancelled altogether.
Jamal Hassim, Group Chief Executive Officer, commented: "The
Board is pleased with the progress made during 2015, which saw
further increases in revenues and earnings notwithstanding the
challenges of a 15% depreciation in the Malaysian Ringgit."
"Furthermore, we have expanded our Yoomob services beyond our
traditional markets and commenced trials of Cool2vu in Africa."
"We continue to address the problem of slow collection from our
two largest customers and as a prudent measure have made a
provision against the oldest balances outstanding. This has
impacted on cash flow but new payment plans have recently been
agreed which should help to improve the position. The slow payments
by our two largest customers has resulted in the financial
statements for the year ended 31 December 2015 containing a
qualified audit opinion and an emphasis of matter in relation to
the Company's ability to trade as a going concern."
The annual report will shortly be available on the Company's
website (www.syqic.com) and will be posted to all registered
shareholders.
For further information:
SyQic plc Tel: +44 (0) 20 7933 8780 (via Walbrook)
Jamal Hassim, Group Chief Executive Officer
Steve Elliff, Chief Financial Officer
www.syqic.com
Allenby Capital Limited Tel: +44 (0) 20 3328 5656
Jeremy Porter / Nick Naylor www.allenbycapital.com
Walbrook, Financial PR and IR Tel: +44 (0) 20 7933 8790
Paul Cornelius syqic@walbrookpr.com
Chairman's Statement
2015 was another year of significant progress for SyQic with
increases in revenues and profits.
2015 continued to see acceleration in terms of global demand for
premium video streaming over mobile devices.
It was a significant year for the Company in terms of both
operational and financial progress. Revenue generation from our
core telco products increased while we continued to invest in the
development of our exciting OTT (over-the-top) platforms.
Core business performance
Our core telco business performed well in 2015 with revenues
increasing on the previous year by 9% despite the weakening of the
Malaysian currency. The growth in Group revenue was primarily
attributable to increased user take-up across the Group's telco
service platforms as well as through its international payment
provider via the Company's social media platforms. We continue to
believe the opportunity exists to enhance this offering further by
the addition of more compelling content and the Company plans to
continue to acquire content that has a high value to its user
base.
In the second quarter of 2015, the Company embarked on
developing a new Cool2Vu platform with better encryption technology
which reduces data consumption whilst delivering higher video
quality. The new platform also integrates well with non-video media
and social media platforms.
OTT payment service increase
Since the Company has established a relationship with Fortumo,
an international payment provider, Yoomob is now able to expand its
geographical reach up to 95 countries.
Trade receivables
As in previous years the Company has generated a high proportion
of its revenues from the Indonesian market where SyQic works with
two Master Content Partners ("MCPs") to access the end users of the
three largest telcos. The combined amount receivable from the two
MCPs (PTNP and PTITV), before adjustments for fair value and
impairment provisions, increased from GBP7.9 million to GBP12.8
million during 2015. The payment terms involved in operating this
business model are protracted and periodically during the year this
has put pressure on the Company's operating cash flow. This led to
the Company receiving financial support through a series of loans
from our CEO, Jamal Hassim, as announced on 23 September 2016.
As at 31 December 2015, a total GBP6.6 million of these
receivables had been outstanding for more than a year. However, I
am pleased to report that repayments during the course of 2016 have
substantially cleared these amounts outstanding for more than one
year as at 31 December 2015 such that the outstanding amount has
been reduced to GBP0.8 million. Management has decided to make an
impairment provision of GBP0.4 million against these amounts as a
prudent measure to reflect the uncertainties of full
collection.
The Company has also had to agree to separate payment plans with
PTNP and PTITV (the two MCPs) to recover amounts totalling GBP7.9
million due from 2015 sales. Under these plans, which were signed
in September 2016, a total of GBP3.2 million is to be paid in
monthly instalments during the remainder of 2016 with monthly
payments totalling GBP4.7 million to be made in 2017. These
payments are expected to commence soon. No impairment has been made
in respect of these amounts. However, a fair value adjustment of
GBP920,000 (2014: GBP448,000) has been made to these trade
receivables in respect of the time value of money concept.
In performing their audit work, the Company's auditors were
unable to obtain sufficient audit evidence to assess the audit or
the Company's two largest debtors to make payments to the Company.
This led the Company's auditor to include a qualified opinion on
the financial statements for the year ended 31 December 2015 and
emphasis of matter paragraph in relation to the trade receivables
credit exposure in their audit statement. Further details are set
out in note 1 to the notes to the financial statements.
Due to the qualified audit opinion on the financial statements
for the year ended 31 December 2015 and uncertainties about the
Company's ability to continue as a going concern in light of, inter
alia, the high level of trade debtors and dependence on the ability
to raise future funds, the Company's shares remain suspended from
trading on AIM. In the event that trading in the Company's shares
is not recommenced within six months of the date of suspension,
trading in the Company's shares on AIM will be cancelled
altogether.
Further details of our Indonesian operations are given in the
Group Chief Executive Officer's Statement.
Prospects for 2016
Global trends for video streaming on mobile continue to be
encouraging. However, in the short-term, the Company needs to
address its cash flow difficulties and the uncertainties this
brings to the Company's ability to capitalise on the opportunities
in the sector.
Potential Offer
On 20 April 2016 the Company announced that it was in
discussions with Jamal Hassim, Chief Executive of SyQic, and MMV
Investments (HK) Limited, a company owned by Johan Robb, (together
"Bidco"), in connection with a possible offer for the whole of the
issued share capital of the Company. The Independent Board of the
Company is continuing discussions with Bidco, although there is no
guarantee of a successful outcome.
David Cotterell
Non-Executive Chairman
4 November 2016
Group Chief Executive Officer's Statement
The Board is pleased to report the Company's audited financial
results for the year to 31 December 2015.
Shareholders should note that the audited financial statements
for the year ended 31 December 2015 contain a qualified audit
opinion relating to the inability of the Company's auditors to get
sufficient audit evidence on the ability of the Company's two
principal debtors to make payments due to the Company under agreed
payment plans. Further details are set out in note 1 of the notes
to the financial statements. In addition, shareholders should be
aware that the audit opinion for the year ended 31 December 2015
contains an emphasis of matter in relation to the Company
continuing as a going concern. Again, further details are set out
in note 1 of the notes to the financial statements. As a result of
the uncertainties in the Company's financial position, the
Company's shares remain suspended from trading on AIM.
Turnover for the year was GBP11.66 million (year ended 31
December 2014: GBP10.67 million). The Directors believe that
turnover would have been higher had it not been for a more than 15%
depreciation of the Malaysian Ringgit against Sterling, the
Company's reporting currency. In view of the depreciation of the
Malaysian Ringgit against Sterling, operation and administrative
costs were also lower than expected and therefore based on the
management accounts, the EBITDA for the year was in line with
market expectations. Due to depreciation and amortisation being
lower than expected, the profit before tax for the year was ahead
of market expectations.
The Company has recorded strong growth in revenues and
profitability during the year under review. Revenues increased 9%
to GBP11.66m from GBP10.67 million in 2014 as the result of
business in Indonesia recovering following the continuing easing of
regulatory action on the industry in mid-2013. Gross profit
increased 3% to GBP4.8m from GBP4.65m in 2014. Operating profit
increased 18% to GBP2.50m (2014: GBP2.11m), the increase being
partly as a result of the growth coming from a smaller cost base
and a 3% reduction in administrative costs. Excluding the
impairment provision made against trade receivables, administrative
costs were some 24% lower than in 2014.
Earnings per share have increased from 8.14p in 2014 to 9.20p in
2015, a 13% improvement.
At 31 December 2015 the Company had outstanding trade
receivables (net of a fair value discount of GBP0.92m) of GBP11.5
million. The Company has applied a fair value adjustment against
certain of these receivables to reflect the fact that amounts are
not expected to be settled within one year. Collections from the
Company's primary customers have been less than previously
anticipated by the Board. The Directors have reviewed trade
receivables on an ongoing basis and are of the opinion that an
impairment provision of GBP0.4 million is appropriate. In
performing their audit work, the Company's auditors were unable to
obtain sufficient audit evidence to assess the audit or the
Company's two largest debtors to make payments to the Company. This
led the Company's auditor to include a qualified opinion on the
financial statements for the year ended 31 December 2015 and
emphasis of matter paragraph in relation to, inter alia, the trade
receivables credit exposure in their audit statement. Further
details are set out in note 1 of the notes to the financial
statements.
Due to the qualified audit opinion on the financial statements
for the year ended 31 December 2015 and uncertainties about the
Company's ability to continue as a going concern in light of, inter
alia, the high level of trade debtors and dependence on the ability
to raise future funds, the Company's shares remain suspended from
trading on AIM. In the event that trading in the Company's shares
is not recommenced within six months of the date of suspension,
trading in the Company's shares on AIM will be cancelled
altogether.
The Company had cash of GBP11,000 and an overdraft balance of
GBP75,000 at 31 December 2015.
Operationally, SyQic's Yoomob service is still registering good
growth and the Company has now expanded the service beyond its
traditional markets in South East Asia. The Yoomob service has now
been launched in the UK, Italy and Spain, with other countries in
Europe to follow. These countries did not generate significant
revenues during 2015 but are expected to do so in 2016.The UK
service has started to develop traction and the Directors hope the
same will shortly be true of Italy and Spain. The target consumers
in the Western markets will be migrant communities. SyQic's use of
social media to promote and proliferate the Yoomob service to
acquire customers, as well as using Fortumo (the mobile payment
aggregator) to reduce reliance on telcos, has borne fruit. SyQic
will be looking to grow this acquisition channel as its primary
revenue growth driver.
The Company has commenced the Cool2vu technical trial service in
Kenya, as a testbed for the service to be launched in the rest of
Africa. The full commercial service in Kenya is expected to
commence before the end of 2016.
Concurrently, work has begun to commence trials in India and
Brunei.
As our Chairman has already noted, the Company has continued to
experience slow collection from its two largest customers, which
has put pressure on our working capital. This led to the Company
receiving financial support through a series of loans from me, as
announced on 23 September 2016. This position is being addressed by
way of new repayment plans from these customers and a concerted
effort to recover long outstanding amounts. I believe we are
starting to make better progress on collecting these amounts but,
as a prudent measure, we have decided to make an impairment
provision which reflects prudence in our views over collections of
outstanding amounts. The receivables position continues to receive
our full focus as sales during the course of 2016 have increased
the total amount of trade receivables at the time of writing.
The business is critical to both telcos and the easiest solution
would have been for the debtors to turn off the service, cut their
losses and try to reach a settlement with SyQic. However, despite
it being a hard year economically in Indonesia last year, which
affected most companies, they have started paying SyQic again since
the economy took an upturn. The business is continuing to grow and
we are adding subscribers and it is helping create "stickiness" and
differentiation for the telcos' core businesses. So we believe we
remain an essential part of the telcos' product value chain as
their core data and voice businesses ARPU (average revenue per
user) is dropping due to competition amongst the telcos. The telcos
have methodically made it a point of clearing the earliest invoices
and are working their way towards becoming more current.
We do understand that business dynamics in Asia differ from the
West, but relationships are essential in preserving and developing
businesses mutually further East. We have built a relationship with
the telcos for many years now, and they are continuing to fulfil
their obligations albeit very late, as they recognise that we have
delivered a valuable service.
We are starting to apply for ECP licenses in Malaysia and this
is a practice and approach that we are taking across all our sites.
An ECP license allows us to deal directly with the telcos in
parallel with the current intermediaries i.e. PTNP and PTITV. The
eventual intended outcome from this move is that we will work
directly with the telcos which we expect will cut the payment cycle
by another 30-60 days and allow us to have more direct engagement
with the telcos. However, to arrive in this position we have had to
spend the last 5-6 years building the trust with the telcos and the
regulatory authorities in the jurisdictions where we operate.
To address the above risks the Company is actively in expansion
mode to widen its customer base and manage its customer risk
profile. The Company is also applying the use of independent mobile
payment aggregators rather than telcos to conduct consumer billings
to speed up collections. It will be some time however before the
full effect of these measures are felt in addressing debtors ageing
in a significant manner. The Company has been experiencing a
balance sheet weakness for some time due to the significant debtors
ageing and this is also impacting cashflow and expansion
opportunities. The operational issues have impacted share price and
management have been considering the best options for the Company
for some time. There have been offers to take the Company private
and the Board is now considering one of these offers in a serious
manner, to obtain the best possible outcome for shareholders and
also to give the Company the best opportunity to focus on
addressing its operational issues and to be able to grow.
Dividends
The Directors do not propose a dividend for the year ended 31
December 2015.
Outlook
The Directors expect to be able to report further growth for the
rest of 2016, as the first half of the year has seen further growth
in revenues. The traditional Southeast Asian markets are beginning
to see the entrance of a number of possible competitors. As such
management is putting increased emphasis on expanding into new
markets such as India and African markets to widen the revenue
profile and also to keep the current growth momentum. Management is
also in the midst of rationalising the existing product lines to
streamline product management and to create greater operational
efficiencies. Advertising inventory is being added to the core
mobile video service to add revenue streams.
Jamal Hassim
Chief Executive
4 November 2016
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF SYQIC PLC
We have audited the Financial Statements of SyQic Plc for the
year ended 31 December 2015, which comprise the Consolidated
Statement of Comprehensive Income, Consolidated Statement of
Financial Position, Consolidated Statement of Changes in Equity,
Consolidated Statement of Cash flows and their related notes.
The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards ("IFRS") as adopted by the European Union.
This report is made solely to the company's members, as a body,
in accordance with Article 113A of the Companies (Jersey) Law,
1991. Our audit work has been undertaken so that we might state to
the Company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Statement of Directors'
Responsibilities, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view. Our responsibility is to audit and express an
opinion on the financial statements in accordance with applicable
law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board's
Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the directors; and the
overall presentation of the financial statements.
In addition, we read all the information in the Chairman's
Statement, Group Chief Executive Officer's Statement, Directors'
Report, Corporate Governance Statement and any other surround
information to identify material inconsistencies with the audited
financial statements and to identify any information that is
apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
Basis for qualified opinion on financial statements - Limitation
on scope
As disclosed in Note 11 and Note 18(iii) there are significant
amounts outstanding from the Group's two largest customers. The
gross carrying amount (before fair value adjustments and impairment
provisions) is equivalent to GBP12,787,000 (2014: GBP6,968,000)
where a balance of GBP12,261,000 (2014: GBP4,154,000) is outside
the Group's normal payment terms. Whilst the directors of the Group
are of the opinion that the debts are fully recoverable, a
provision of GBP408,000 has been made within the financial
statements as at 31 December 2015 (2014: GBPnil) based on the
current pattern of settlement. Whilst management have provided
support for their recoverability assessment to the fullest extent
possible the audit evidence to us was limited in order to assess
the recoverability as we were unable to obtain sufficient audit
evidence to assess their ability to make repayments. As a
consequence we have been unable to obtain sufficient and
appropriate audit evidence in relation to the Group financial
statements concerning:
-- The carrying value of GBP11,459,000 of the Group's trade
receivables as at 31 December 2015 in relation to the two largest
customers;
-- The quantum of the impairment provision of GBP408,000; and
-- The quantum of the fair value and the unwinding of the fair
value of trade receivables for the period from 1 January 2015 to 31
December 2015 of GBP920,000.
Qualified opinion on financial statements
In our opinion, except for the effects of the matter described
in the Basis for Qualified Opinion paragraph, the financial
statements:
-- the financial statements give a true and fair view of the
state of the Group's affairs as at 31 December 2015 and of the
group's profit for the year then ended;
-- the financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies (Jersey) Law 1991.
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosures in
Notes 1 to the financial statements concerning the Group's ability
to continue as a going concern.
The future of the Group's operations are dependent, as described
in note 1, on the recoverability of the trade receivable amounts
due along with the expected continued support from certain of its
shareholders and Directors and the ability to raise future funds
from future shareholders and Directors. Notwithstanding the Board's
belief that the Company will be able to raise the required finance,
this indicates the existence of a material uncertainty which may
cast doubt about the Group's ability to continue as a going
concern. The financial statements do not include any adjustments
that would result if the Group was unable to continue as a going
concern.
The Annual Report will shortly be available to the shareholders
and the public on the Company's website (www.syqic.com) in
accordance with AIM Rule 20.
Matters on which we are required to report by exception
In respect solely on the limitation of scope on our work
relating to trade receivables, described above we have not obtained
all the information and explanations that we considered necessary
for the purpose of our audit.
We have nothing to report to you in respect of the following
matters where the Companies (Jersey) Law 1991 requires us to report
to you if, in our opinion:
-- proper accounting records have not been kept by the parent company; or
-- proper returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns.
Leo Malkin (Senior Statutory Auditor)
For and on behalf of Crowe Clark Whitehill LLP
Statutory Auditor
10 Salisbury Square
London EC4Y 8EH
4 November 2016
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2015
Year ended Year ended
31 December 31 December
2015 2014
Note GBP'000 GBP'000
------------------------------------------------------------------------------- ----- ------------ ------------
Continuing operations
Revenue 11,655 10,672
Cost of sales (6,854) (6,022)
Gross profit 4,801 4,650
------------------------------------------------------------------------------- ----- ------------ ------------
Other income 644 420
Other operating expenses (1,038) (985)
Administrative expenses (1,911) (1,978)
------------------------------------------------------------------------------- ----- ------------ ------------
Operating profit 2,496 2,107
------------------------------------------------------------------------------- ----- ------------ ------------
Net finance costs 5 (13) (13)
Profit before taxation 6 2,483 2,094
------------------------------------------------------------------------------- ----- ------------ ------------
Income tax expense 7 (7) (103)
------------------------------------------------------------------------------- ----- ------------ ------------
Profit after taxation 2,476 1,991
------------------------------------------------------------------------------- ----- ------------ ------------
Other comprehensive income:
Items that will or may be reclassified to profit or loss:
Currency translation differences arising on translation of foreign operations (1,333) (32)
------------------------------------------------------------------------------- ----- ------------ ------------
Total comprehensive income for the year 1,143 1,959
------------------------------------------------------------------------------- ----- ------------ ------------
Profit attributable to:
Equity holders of SyQic plc 2,476 1,991
Total comprehensive income attributable to:
Equity holders of SyQic plc 1,143 1,959
Earnings per share attributable to equity holders of SyQic plc
Earnings per share - basic (pence) 8 9.20 8.14
Earnings per share - diluted (pence) 8 9.20 8.14
------------------------------------------------------------------------------- ----- ------------ ------------
Consolidated Statement of Financial Position
As at 31 December 2015
At 31 December At 31 December
2015 2014
Note GBP'000 GBP'000
------------------------------------------------------------------ ----- --------------- ---------------
Assets
Non-current assets
Property, plant and equipment 9 57 100
Intangible assets 10 647 1,037
Non-current trade receivables 11 4,693 768
------------------------------------------------------------------- ----- --------------- ---------------
5,397 1,905
------------------------------------------------------------------ ----- --------------- ---------------
Current assets
Trade receivables 11 6,807 6,252
Other receivables, deposits and prepayments 12 29 585
Cash and bank balances 13 11 218
------------------------------------------------------------------- ----- --------------- ---------------
6,847 7,055
------------------------------------------------------------------ ----- --------------- ---------------
Total assets 12,244 8,960
------------------------------------------------------------------- ----- --------------- ---------------
Liabilities
Current liabilities
Trade payables 1,131 66
Other payables and accruals 17 1,146 315
Taxation 25 30
Due to Directors (non-trade) 20 289 112
Due to shareholders (non-trade) 20 64 71
Bank overdraft 13 75 -
Finance lease obligations 19 11 19
------------------------------------------------------------------- ----- --------------- ---------------
2,741 613
------------------------------------------------------------------ ----- --------------- ---------------
Non-current liabilities
Finance lease obligations 19 53 79
53 79
------------------------------------------------------------------ ----- --------------- ---------------
Total liabilities 2,794 692
------------------------------------------------------------------- ----- --------------- ---------------
Net assets 9,450 8,268
------------------------------------------------------------------- ----- --------------- ---------------
Equity
Capital and reserves attributable to equity holders of SyQic plc
Stated capital account 14 15,859 15,859
Merger Reserve 15 (8,654) (8,654)
Share option reserve 15 115 105
Translation reserve 15 (1,676) (343)
Retained profits 3,806 1,301
------------------------------------------------------------------- ----- --------------- ---------------
Total equity 9,450 8,268
------------------------------------------------------------------- ----- --------------- ---------------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2015
Attributable to equity holders of SyQic plc
---------------------------------------------------------------------------------------------
Stated Retained profits /
capital Merger Translation reserve/ (accumulated Share option
account reserve (deficit) losses) reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ----------- -------- --------------------- ---------------------- ------------- --------
Balance as at 1
January 2014 14,165 (8,654) (311) (690) 6 4,516
Issue of ordinary
shares 1,694 - - - - 1,694
Share-based payment
charge - - - - 99 99
----------------------- ----------- -------- --------------------- ---------------------- ------------- --------
Transactions with
owners 1,694 - - - 99 1,793
Profit for the year - - - 1,991 - 1,991
Other comprehensive
income - - (32) - - (32)
----------------------- ----------- -------- --------------------- ---------------------- ------------- --------
Total comprehensive
income - - (32) 1,991 - 1,959
Balance as at 31
December 2014 15,859 (8,654) (343) 1,301 105 8,268
----------------------- ----------- -------- --------------------- ---------------------- ------------- --------
Share-based payment
charge - - - - 39 39
Release on surrender
of share options - - - 29 (29) -
Transactions with
owners - - - 29 10 39
Profit for the year - - - 2,476 - 2,476
Other comprehensive
income - - (1,333) - - (1,333)
----------------------- ----------- -------- --------------------- ---------------------- ------------- --------
Total comprehensive
income - - (1,333) 2,476 - 1,143
Balance as at 31
December 2015 15,859 (8,654) (1,676) 3,806 115 9,450
----------------------- ----------- -------- --------------------- ---------------------- ------------- --------
Consolidated Statement of Cash Flows
For the year ended 31 December 2015
2015 2014
Note GBP'000 GBP'000
---------------------------------------------------------------- ----- -------- --------
Cash flows from operating activities:
Profit before income tax 2,483 2,094
Adjustments:
Depreciation of property, plant and equipment 9 27 40
Amortisation of intangible assets 10 314 189
Gain on disposal of property, plant and equipment 8 -
Fair value loss on trade receivables 11 680 330
Unwinding of fair value loss on trade receivables (101) (188)
Share option charge 39 99
Interest expense 5 13 13
---------------------------------------------------------------- ----- -------- --------
Operating cash flow before working capital changes 3,463 2,577
---------------------------------------------------------------- ----- -------- --------
Increase in trade and other receivables (6,285) (3,935)
Increase in provisions 408 -
Increase/(decrease) in trade and other payables 2,032 (398)
Increase/(decrease) in amounts due to Directors 177 (88)
(Decrease)/increase in amounts due to shareholders (7) 1
---------------------------------------------------------------- ----- -------- --------
Cash used in operations (212) (1,843)
---------------------------------------------------------------- ----- -------- --------
Interest paid (13) (13)
Income taxes received/(paid) 7 (22)
---------------------------------------------------------------- ----- -------- --------
Net cash used in operating activities (218) (1,878)
---------------------------------------------------------------- ----- -------- --------
Cash flows from investing activities
Purchase of plant and equipment 9 (1) (10)
Acquisition of intangibles 10 - (570)
Net cash used in investing activities (1) (580)
---------------------------------------------------------------- ----- -------- --------
Cash flows from financing activities
Proceeds from issue of share capital, net of share issue costs 14 - 1,694
Repayment of lease obligations (33) (22)
---------------------------------------------------------------- ----- -------- --------
Net cash (used in)/generated from financing activities (33) 1,672
---------------------------------------------------------------- ----- -------- --------
Net (decrease) in cash and bank balances (252) (786)
Cash and bank balances at beginning of year 218 1,049
Effects of foreign currency exchange rate changes (30) (45)
---------------------------------------------------------------- ----- -------- --------
Cash and cash equivalents at end of year 13 (64) 21
---------------------------------------------------------------- ----- -------- --------
Notes to the Financial Statements
1. General information
The Company is a public company limited by shares and
incorporated in Jersey. The Company is domiciled in Jersey with its
registered office and principal place of business is at Queensway
House, Hilgrove Street, St Helier, Jersey JE1 1ES.
The principal activity of the Group is the provision of live TV
and on-demand paid video content across various types of
internet-enabled consumer electronics devices.
Basis of preparation
The Company was incorporated under the laws of Jersey on 13
November 2013, and on 4 December 2013 acquired the entire share
capital of SyQic Capital Private Limited. As a result of this
transaction, the ultimate shareholders in SyQic Capital Private
Limited received shares in the Company in direct proportion to
their original shareholdings in SyQic Capital Private Limited.
In determining the appropriate accounting treatment for this
transaction, the Directors considered IFRS 3 - Business
Combinations (Revised 2008). However, they concluded that this
transaction fell outside the scope of IFRS 3 (revised 2008) since
the transaction described above represents a combination of
entities under common control.
In accordance with IAS 8 - Accounting Policies, Changes in
Accounting Estimates and Errors, in developing an appropriate
accounting policy, the Directors have considered the pronouncements
of other standard setting bodies and specifically looked to
accounting principles generally accepted in the United Kingdom ("UK
GAAP") for guidance (in particular, FRS 102 - Section 19 - Business
Combinations and Goodwill), which does not conflict with IFRS and
reflects the economic substance of the transaction.
Under UK GAAP, the assets and liabilities of both entities are
recorded at book value, not fair value. Intangible assets and
contingent liabilities are recognised only to the extent that they
were recognised by the legal acquirer in accordance within
applicable IFRS, no goodwill is recognised, any expenses of the
combination are written off immediately to the income statement and
comparative amounts, if applicable, are restated as if the
combination had taken place at the beginning of the earliest
accounting period presented.
Therefore, although the Group reconstruction did not become
unconditional until 28 November 2013, these consolidated financial
statements are presented as if the Group structure has always been
in place, including the activity from incorporation of the Group's
principal subsidiary. Both entities had the same management as well
as majority shareholders.
The Consolidated Financial Statements are presented in Pounds
Sterling, which is the currency of the primary economic environment
in which the Company operates. All values are rounded to the
nearest thousand pounds except where otherwise indicated. They have
been prepared under the historical cost convention, except for
financial instruments that have been measured at fair value through
profit and loss.
The financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the EU
("IFRS") issued by the International Accounting Standards Board
("IASB"), including related interpretations issued by the
International Financial Reporting Interpretations Committee
("IFRIC").
As permitted by section 105 of the Jersey Companies Act,
separate financial statements of the Company are not presented.
This statement was approved by the directors on 4 November 2015.
This statement does not constitute the Group's statutory accounts
for the year ended 31 December 2015. Statutory accounts for the
year ended 31 December 2014 have been delivered to the Jersey
Registrar of Companies. The auditor's report on those accounts
contained an emphasis of matter in relation to certain trade
receivables but did not contain any statement equivalent to that
required under section 495 of the Companies Act 2006.
The auditor's report on the accounts for the year ended 31
December 2015 has been qualified in the basis of a limitation on
scope as follows:
"Basis for qualified opinion on financial statements -
Limitation on scope
As disclosed in Note 11 and Note 18(iii) of the financial
statements there are significant amounts outstanding from the
Group's two largest customers. The gross carrying amount (before
fair value adjustments and impairment provisions) is equivalent to
GBP12,787,000 (2014: GBP6,968,000) where a balance of GBP12,261,000
(2014: GBP4,154,000) is outside the Group's normal payment terms.
Whilst the directors of the Group are of the opinion that the debts
are fully recoverable, a provision of GBP408,000 has been made
within the financial statements as at 31 December 2015 (2014:
GBPnil) based on the current pattern of settlement. Whilst
management have provided support for their recoverability
assessment to the fullest extent possible, the audit evidence to us
was limited in order to assess the recoverability as we were unable
to obtain sufficient audit evidence to assess their ability to make
repayments. As a consequence we have been unable to obtain
sufficient and appropriate audit evidence in relation to the Group
financial statements concerning:
-- the carrying value of GBP11,459,000 of the Group's trade
receivables as at 31 December 2015 in relation to the two largest
customers;
-- the quantum of the impairment provision of GBP408,000; and
-- the quantum of the fair value and the unwinding of the fair
value of trade receivables for the period from 1 January 2015 to 31
December 2015 of GBP920,000.
Qualified opinion on financial statements
In our opinion, except for the effects of the matter described
in the Basis for Qualified Opinion paragraph:
-- the financial statements give a true and fair view of the
state of the Group's affairs as at 31 December 2015 and of the
group's profit for the year then ended;
-- the financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies (Jersey) Law 1991."
The auditor's report on the accounts for the year ended 31
December 2015 also contains the following emphasis of matter in
relation to going concern:
"Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not
modified, we have considered the adequacy of the disclosures in
Notes 1 to the financial statements concerning the Group's ability
to continue as a going concern.
The future of the Group's operations are dependent, as described
in note 1, on the recoverability of the trade receivable amounts
due along with the expected continued support from certain of its
shareholders and Directors and the ability to raise future funds
from future shareholders and Directors. Notwithstanding the Board's
belief that the Company will be able to raise the required finance,
this indicates the existence of a material uncertainty which may
cast doubt about the Group's ability to continue as a going
concern. The financial statements do not include any adjustments
that would result if the Group was unable to continue as a going
concern."
Going concern
The Directors have assessed the Company's ability to continue in
operational existence for the foreseeable future in accordance with
the FRC Guidance on the going concern basis of accounting and
reporting on solvency and liquidity risks issued in April 2016.
The operations of the Group are currently being financed from
funds which the Company has raised from private placings of its
shares and loans from certain of its shareholders and Directors.
The Group is reliant on the continuing support from its existing
shareholders and Directors and the expected support of future
shareholders and Directors.
Having made relevant and appropriate enquiries, including
consideration of the Group's current resources and working capital
forecasts, the Directors have a reasonable expectation that, at the
time of approving the financial statements, the Company has
adequate resources to continue in operational existence for at
least the next twelve months. The Group held a cash less overdraft
balance of GBP(64,000) at 31 December 2015 [but has funding plans
in place to meet the Group's planned activities.
The Directors believe that payment terms from its major
customers will improve and accordingly the Board continues to adopt
the going concern basis in preparing the financial statements.
Further information regarding trade receivables is disclosed in
Note 11.
Adoption of new and revised International Financial Reporting
Standards
A number of new standards and amendments to standards and
interpretations have been issued but are not yet effective and in
some cases have not yet been adopted by the EU.
The Directors do not expect that the adoption of these standards
will have a material impact on the financial statements of the
Company in future period, except that IFRS 9 will impact both the
measurement and disclosures of financial instruments, IFRS 15 may
have an impact on revenue recognition and related disclosures and
IFRS 16 will have an impact on the recognition of operating leases.
At this point, it is not practicable for the Directors to provide a
reasonable estimate of the effect of these standards as their
detailed review of these standards is still ongoing.
2. Basis of consolidation
The Consolidated Financial Statements include the financial
statements of all subsidiaries. The financial year ends of all
entities in the Group are coterminous.
The financial statements of subsidiaries are included in the
Consolidated Financial Statements from the date on which control
over the operating and financial decisions is obtained and cease to
be consolidated from the date on which control is transferred out
of the Group. Control exists when the Company has the power,
directly or indirectly, to govern the financial and operating
policies of an entity so as to obtain economic benefits from its
activities.
All intercompany balances and transactions, including recognised
gains arising from inter-group transactions, have been eliminated
in full.
Unrealised losses are eliminated in the same manner as
recognised gains except to the extent that they provide evidence of
impairment.
The principal activities of the subsidiaries are as follows:
Name Place of incorporation Principal activities Effective interest %
----------------------------- ------------------------ -------------------------------------- ---------------------
Development of software for
interactive digital media and motion
pictures, video and television
SyQic Capital Pte Ltd Singapore related activities 100
----------------------------- ------------------------ -------------------------------------- ---------------------
Provision of project implementation,
software development and related
SyQic Capital Sdn Bhd Malaysia consultancy services 100
----------------------------- ------------------------ -------------------------------------- ---------------------
Provision of OTT Broadband TV
SyQic UK Limited UK services 100
----------------------------- ------------------------ -------------------------------------- ---------------------
SyQic Tech (Beijing) Co Ltd China Non-trading 70
----------------------------- ------------------------ -------------------------------------- ---------------------
K Lifestyle Limited* Malaysia Non-trading 100
----------------------------- ------------------------ -------------------------------------- ---------------------
3. Segmental analysis
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker (which
takes the form of the Board of Directors of the Company) as defined
in IFRS 8, in order to allocate resources to the segment and to
assess its performance.
Based on management information there is only one operating
segment. Revenues are reviewed based on the products and services
provided.
The Directors of the Company consider the principal activity of
the Group to be that of a provider of OTT live TV and on-demand
paid video content across mobile, internet-enabled consumer
electronics devices such as mobile phones and tablets, and to
consummate one reportable segment, that of the provision of OTT
live TV and on-demand paid video content services.
Revenues derived from major customers, which individually
represent 10% or more of total revenue are as follows:
2015 2014
GBP'000 GBP'000
----------------- -------- --------
Customer A 5,471 5,565
Customer B 5,984 4,644
Customer C 188 301
Other customers 12 162
--------------------- -------- --------
11,655 10,672
----------------- -------- --------
All revenues were generated by operations in South East Asia in
each of the two years ended 31 December 2015.
5. Finance costs
2015 2014
GBP'000 GBP'000
---------------------------- --- -------- --------
Lease obligations interest 6 8
Other interest 7 5
------------------------------------ -------- --------
13 13
---- ---------------------------- -------- --------
6. Profit before income tax
This is determined after charging / (crediting) the
following:
2015 2014
GBP'000 GBP'000
-------------------------------------------------------- -------- --------
Depreciation of property, plant and equipment (note 9) 27 40
Amortisation of intangible assets (note 10) 314 189
Audit fee:
- auditor of SyQic plc 23 24
* fees payable to auditors of subsidiaries 16 21
Impairment provision against trade receivables 408 -
Fair value loss on trade receivables 680 330
Unwinding of fair value loss on trade receivables (101) (188)
Research and development expenses 10 591
Operating lease expenses 79 111
Foreign exchange gains (564) (55)
Foreign exchange losses 127 151
Staff costs (including directors) 894 1,321
------------------------------------------------------------ -------- --------
The average number of employees, including the Directors, during
the year was as follows:
2015 2014
-------------------------- ----- -----
Directors and Commercial 3 3
Technical 17 23
Administration 10 9
------------------------------ ----- -----
30 35
-------------------------- ----- -----
Total remuneration of key management personnel, being the Directors of the Company,
is set
out below in aggregate for each of the relevant categories specified in IAS 24,
related party
disclosures.
2015 2014
-------------------------------------------------------------------------------------- -------- --------
GBP'000 GBP'000
Short-term employee benefits 324 342
------------------------------------------------------------------------------------------ -------- --------
Further details relating to the remuneration of key management
can be found in the Director's report on page [--].
7. Income tax expense
The major components of income tax expense for each year
were:
2015 2014
GBP'000 GBP'000
------------------------------ -------- --------
Current tax
- current year 7 9
- (over)/ under provision in
prior years - 43
Deferred tax (Note 16)
- current year: reversal
of deferred tax assets - 51
7 103
------------------------------ -------- --------
A reconciliation of income tax expense applicable to the profit before taxation at
the statutory
tax rates to the income tax expense at the effective tax rate of the subsidiaries is
as follows:
2015 2014
GBP'000 GBP'000
-------------------------------------------------------------------------------------- -------- --------
Profit before taxation 2,483 2,094
------------------------------------------------------------------------------------------ -------- --------
Tax at the Company's applicable tax rate of 0%) (2014: 0%) - -
Tax effect of:
different tax rates in other countries 839 699
- expenses not deductible for tax purposes 81 24
- income not taxable (1,103) (1,011)
- deferred tax assets not recognised 190 297
* under provision in prior years - 43
* deferred tax assets written-off - 51
Income tax expense 7 103
------------------------------------------------------------------------------------------ -------- --------
There is no taxation arising from other comprehensive
income.
8. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders by the weighted average number of
ordinary shares in issue during the year.
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential shares. As at 31 December
2015, the exercise price of the options exceeded the share price
and are therefore not dilutive.
2015 2014
GBP'000 GBP'000
------------------------------------------------------ ----------- -----------
Profit after tax attributable to owners of the Group 2,476 1,991
Weighted average number of shares:
Basic 26,898,845 24,450,900
Adjustment for share options - 15,311
Diluted 26,898,845 24,466,211
Earnings per share (pence)
Basic 9.20 8.14
Diluted 9.20 8.14
9. Property, plant and equipment
Computers Motor Furniture
and software vehicle and fittings Renovations Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------------------- ------------ ------- ------------ ----------- -------
Cost
As at 1 January 2014 328 193 60 10 591
Additions 6 - 4 - 10
As at 31 December 2014 334 193 64 10 601
Additions - - - 1 1
Disposals (12) (46) (10) (6) (74)
Foreign currency translation adjustments (44) (22) (7) (1) (74)
----------------------------------------- ------------ ------- ------------ ----------- -------
As at 31 December 2015 278 125 47 4 454
----------------------------------------- ------------ ------- ------------ ----------- -------
Accumulated depreciation
As at 1 January 2014 266 154 42 1 463
Charge for the year 29 4 5 2 40
Disposals (2) - - - (2)
As at 31 December 2014 293 158 47 3 501
----------------------------------------- ------------ ------- ------------ ----------- -------
Charge for the year 16 4 5 2 27
Disposal (12) (46) (5) (3) (66)
Foreign currency translation adjustments (42) (17) (6) - (65)
----------------------------------------- ------------ ------- ------------ ----------- -------
As at 31 December 2015 255 99 41 2 397
----------------------------------------- ------------ ------- ------------ ----------- -------
Net carrying amount
As at 31 December 2015 23 26 6 2 57
----------------------------------------- ------------ ------- ------------ ----------- -------
As at 31 December 2014 41 35 17 7 100
----------------------------------------- ------------ ------- ------------ ----------- -------
Assets held under finance leases
The carrying amount of computers and motor vehicles held under
finance leases at 31 December 2015 were GBPnil (2014: GBP7,500) and
GBP27,000 (2014: GBP35,000) respectively.
10. Intangible assets
Development User
costs base Software Totals
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ------------ -------- --------- --------
Cost:
As at 1 January 2014 705 - - 705
Additions - 529 41 570
Foreign currency translation
adjustments 9 1 - 10
------------------------------ ------------ -------- --------- --------
As at 31 December 2014 714 530 41 1,285
------------------------------ ------------ -------- --------- --------
Foreign currency translation
adjustments (13) (79) (6) (98)
------------------------------ ------------ -------- --------- --------
As at 31 December 2015 701 451 35 1,187
------------------------------ ------------ -------- --------- --------
Amortisation:
As at 1 January 2014 59 - - 59
Charge for the year 141 45 3 189
------------------------------ ------------ -------- --------- --------
As at 31 December 2014 200 45 3 248
------------------------------ ------------ -------- --------- --------
Charge for the year 140 161 13 314
Foreign currency translation
adjustments (3) (18) (1) (22)
------------------------------ ------------ -------- --------- --------
As at 31 December 2015 337 188 15 540
------------------------------ ------------ -------- --------- --------
Net carrying amount:
As at 31 December 2015 364 263 20 647
------------------------------ ------------ -------- --------- --------
As at 31 December 2014 514 485 38 1,037
------------------------------ ------------ -------- --------- --------
The user base and related software costs were acquired in August
2014 when the Company entered into a conditional asset purchase
agreement to acquire Maaduu, an online video-on-demand service
providing Korean content across multiple devices, which has now
been rebranded as 'Cool2vu'.
These assets were put into commercial use in October 2014 and
are being amortised over three years on a straight-line basis.
Capitalised development costs are amortised over five years on a
straight-line basis.
Amortisation charges are included in administrative expenses
within the Consolidated Statement of Comprehensive Income as
disclosed in Note 6.
Impairment tests for intangibles
The recoverable amount of each intangible asset was determined
based on value in-use calculations in relation to SyQic Capital Sdn
Bhd ("SCSB"), the principal operating subsidiary. Cash flow
projections used in these calculations were based on financial
budgets with assumptions for revenues, margins and growth rates and
which were approved by management covering a three-year period.
These assumptions were used for the analysis of the cash generating
unit ("CGU") of SCSB within the business on a consistent basis each
year. Management determined budgeted gross margins based on its
expectations of market developments. The weighted average growth
rates used were consistent with the forecasts included in industry
reports. The discount rates used were pre-tax and reflected
specific risks relating to the relevant segments.
The key assumptions used in the determination of the recoverable
amount are as follows: -
(i) Budgeted gross margin Based on the potential successful subscription of the plans
(User base: 34%, development costs;41%)
(ii) Discount rate (pre-tax) Reflects specific risks relating to the relevant cash-generating unit: 1(User
base: 16.3%,
development costs: 15%)
The values assigned to the key assumptions represent
management's assessment of the future trends in the cash-generating
unit and are based on both external and internal sources historical
data.
11. Trade receivables
2015 2014
GBP'000 GBP'000
--------------------------- -------- --------
Trade receivables 11,500 7,020
Less: non-current portion (4,693) (768)
------------------------------- -------- --------
Current portion 6,807 6,252
------------------------------- -------- --------
Included in the trade receivables at 31 December 2015 is a gross
amount (before fair value adjustments and impairment provisions)
equivalent to GBP12,787,000 (31 December 2014: GBP4,932,000) owed
by two foreign customers (31 December 2014: one foreign customer)
of which approximately GBP6,605,000 (31 December 2014:
GBP1,335,000) has been outstanding for more than a year. As at the
date of approval of these financial statements, approximately
GBP815,000 is still outstanding from one customer. Management
considers that it is appropriate therefore to make an impairment
provision against these amounts which currently remain unpaid. It
is considered that, on the basis of the current pattern of
settlement, it is more likely than not that such amounts will be
substantially recovered and that a provision equal to 50% of the
remaining balance currently outstanding is appropriate.
Accordingly, an impairment provision of GBP408,000 has been made to
reflect this uncertainty.
In assessing the recoverability of these debts, the Directors
have given due consideration to all pertinent information relating
to the ability of the customers to settle these debts, including
amounts settled up to the date of approval of these financial
statements as well as agreed repayment plans in place with each
customer.
SCSB has agreed payment plans in respect of two customers for
the recovery of receivables totalling GBP7,883,000. Under these
plans, a total Sterling equivalent of GBP3,190,000 is being paid in
monthly instalments during 2016 with monthly payments totalling
GBP4,693,000 to be made in 2017. As the debts are not due to be
fully repaid until December 2017, amounts receivable under the
payment plans agreed have been discounted at the rate of 7.5% over
the period they are to be expected to be settled to reflect the
time value of money, with such discount being unwound over the
remaining course of the payment plan. No impairment has been made
in respect of these amounts. A fair value adjustment of GBP920,000
(2014: GBP448,000) has been made to these trade receivables in
respect of the time value of money concept. No further impairment
has been made in respect of these amounts.
In performing their audit work, the Company's auditors were
unable to obtain sufficient audit evidence to assess the audit or
the Company's two largest debtors to make payments to the Company.
This led the Company's auditor to include a qualified opinion on
the financial statements for the year ended 31 December 2015 and
emphasis of matter paragraph in relation to the trade receivables
credit exposure in their audit statement. Further details are set
out in note 1 to the notes to the financial statements.
Other than the debts with the two foreign customers described
above, the Group's credit terms range between 30 and 90 days.
Trade receivables and the aggregate amounts of discount applied
in each year are as follows:
2015 2014
GBP'000 GBP'000
------------------------------------------------------- ---- ---- ---- ---- -------- --------------------
Trade receivables (gross) 12,828 7,468
Impairment provision (408) -
(Imputed interest)/unwind of discount, at amortised
cost:
At 1 January (448) (306)
Imputed interest during the year, under other expenses (680) (330)
Unwind of discount, under other income 101 188
Foreign exchange movements 107 -
------------------------------------------------------- ---- ---- ---- ---- -------- --------------------
At 31 December (920) (448)
------------------------------------------------------------------------------- -------- --------------------
Trade receivables (net of discount) 11,500 7,020
------------------------------------------------------------------------------- -------- --------------------
Ageing analysis
The ageing analysis of trade receivables as at each of the two
years ended 31 December 2015 is as follows:
2015 2014
GBP'000 GBP'000
----------------------------------- --------- --------
Not past due and not impaired 607 2,866
Past due but not impaired
- Past due less than three months 1,702 1,751
- Past due three to six months 1,678 1,459
- Past due over six months 7,513 944
--------------------------------------- --------- --------
10,893 4,154
----------------------------------- --------- --------
11,500 7,020
----------------------------------- --------- --------
12. Other receivables, deposits and prepayments
2015 2014
GBP'000 GBP'000
------------------- -------- --------
Other receivables 6 11
Deposits 8 8
Prepayments 15 566
----------------------- -------- --------
29 585
------------------- -------- --------
13. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash
equivalents comprise the following:
2015 2014
GBP'000 GBP'000
Cash and bank
balances 11 218
Bank overdraft (75) -
----------------- -------- --------
Cash and cash
equivalents (64) 218
----------------- -------- --------
14. Stated capital account
2015 2014
----------- --------------- ----------------------------
Number Stated capital Number Stated capital
of shares GBP'000 of shares GBP'000
-------------------------- ----------- --------------- ----------- ---------------
At beginning of the year 26,898,845 15.859 23,198,845 14.165
Issuance of shares: - - 3,700,000 1,850
Less share issue costs - - - (156)
------------------------------ ----------- --------------- ----------- ---------------
At the end of the year 26,898,845 15,859 26,898,845 15,859
------------------------------ ----------- --------------- ----------- ---------------
The Company has no authorised share capital. All ordinary shares
have a nil par value. All issued share capital is fully paid
up.
15. Reserves
The merger reserve arose on the Group reorganisation described
in Note 1 (Basis of preparation). The reserve is
non-distributable.
The share option reserve arises from the requirement to value
share options in existence at the year end at fair value (see Note
22).
The translation reserve represents cumulative foreign exchange
differences arising from the translation of the Financial
Statements of foreign subsidiaries and is not distributable by way
of dividends.
16. Deferred tax assets
2015 2014
GBP'000 GBP'000
-------------------------------- --------- --------
At beginning of year - 52
Recognised in the Consolidated
Income statement - (51)
Foreign currency translation
adjustments - (1)
------------------------------------ ----- --------
- -
------------------------------------------ --------
Deferred tax assets are recognised to the extent that it is
probable that the future taxable profits will allow the deferred
tax assets to be recovered. In the year ended 31 December 2014, the
balance was considered to be irrecoverable and has been written off
in full.
17. Other payables and accruals
2015 2014
GBP'000 GBP'000
------------------ ---- ---- ---- -------- --------
Other payables 167
Accrued expenses 618
528 148
1,146 315
--------------------------------- -------- --------
18. Financial instruments
Financial risk management objectives and policies
It is the Group's policy not to trade in derivative
contracts.
The main risks arising from the Group's financial instruments
are foreign currency risk, interest rate risk, credit risk, capital
risk and liquidity risk. The Group does not have formal risk
management policies and guidelines. However, the Board of Directors
reviews and agrees policies for managing each of these risks as
summarised below.
(i) Market risk
(a) Foreign exchange risk
The Group is exposed to foreign currency risk on transactions
and balances that are denominated in currencies other than Pounds
Sterling. The functional currencies giving rise to this risk are
primarily the Malaysian Ringgit, Singapore Dollar, and Indonesian
Rupiah. Foreign currency risk is monitored closely on an ongoing
basis to ensure that the net exposure is at an acceptable
level.
The Group maintains a natural hedge whenever possible, by
matching the cash inflows (revenue stream) and cash outflows used
for purposes such as capital and operational expenditure in the
respective currencies. The carrying amounts of the Group's monetary
assets and liabilities at the end of each reporting period were as
follows:
Singapore United States Malaysian Indonesian Pounds
Dollar Dollar Ringgit Rupiah Sterling Others Total
As at 31 December 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
Financial assets:
Trade receivables - - 5,401 6,099 - - 11,500
Other receivables and deposits - - 11 - 18 - 29
Cash and bank balances - - 11 - - - 11
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
- - 5,423 6,099 18 - 11,540
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
Financial liabilities:
Trade payables - - 1,130 - - 1 1,131
Other payables and accruals - - 448 - 698 - 1,146
Other financial liabilities - - 406 - 111 - 517
- - 1,984 - 809 1 2,794
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
Foreign currency exposure - - 3,439 6,099 (791) (1) 9,154
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
Singapore United States Malaysian Indonesian Pounds
Dollar Dollar Ringgit Rupiah Sterling Others Total
As at 31 December 2014 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
Financial assets
Trade receivables - - 5,422 1,594 - 4 7,020
Other receivables and deposits - - 8 - 7 - 15
Cash and bank balances - - 175 - 43 - 218
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
- - 5,605 1,594 50 4 7,253
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
Financial liabilities
Trade payables 16 3 8 - 39 - 66
Other payables and accruals 51 - 127 - 113 24 315
Other financial liabilities 27 - 273 - 11 - 311
94 3 408 - 163 24 692
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
Foreign currency exposure (94) (3) 5,197 1,594 (113) (20) 6,561
-------------------------------- ---------- -------------- ---------- ----------- --------- -------- --------
The following table details the sensitivity analysis to possible
changes in the relative values of foreign currencies to which the
Group is exposed as at the end of each year, with all other
variables held constant:-
31 December 31 December
2015 2014
Increase/ Increase/
(Decrease) (Decrease)
GBP'000 GBP'000
------------------------ ------------ ------------
Effects on profit
after taxation/equity
Singapore Dollar
- strengthened by
10% - (9)
- weakened by 10% - 9
------------------------ ------------ ------------
Malaysian Ringgit:
- strengthened by
10% 344 520
- weakened by 10% (344) (520)
------------------------ ------------ ------------
Indonesian Rupiah:
- strengthened by
10% 651 159
- weakened by 10% (651) (159)
------------------------ ------------ ------------
Others:
- strengthened by
10% - (2)
- weakened by 10% - 2
------------------------ ------------ ------------
(b) Interest rate risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market interest rates.
Interest rate risk sensitivity analysis
As the Group does not have significant third party borrowings, a
100 basis points strengthening/weakening of the interest rate as at
the end of each year would have immaterial impact on profit after
taxation and/or equity. This assumes that all other variables
remain constant.
(ii) Liquidity risk
The Group monitors liquidity risk and maintains a level of cash
and bank balances deemed adequate by management to finance the
Group's operations and to mitigate the effects of fluctuations in
cash flows. Typically, the Group ensures that it has sufficient
cash on demand to meet expected operational expenses including the
servicing of financial obligations.
The following tables detail the remaining contractual maturity
for non-derivative financial liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Group can be
required to pay.
On demand or Within two
within one year to five years
GBP'000 GBP'000
----------------------------- ---------------- --------------
As at 31 December 2015
Trade payables 1,131 -
Other payables and accruals 1,146 -
Other financial liabilities 464 53
2,741 53
----------------------------- ---------------- --------------
As at 31 December 2014
Trade payables 66 -
Other payables and accruals 315 -
Other financial liabilities 242 79
629 79
----------------------------- ---------------- --------------
(iii) Credit risk
Credit risk refers to the risk that counterparty will default on
its contractual obligations, resulting in financial loss to the
Group.
The Group has continued to experience difficulties in collecting
overdue amounts from its two principal customers. The Directors
believe that all amounts will be recovered but the principal risks
in the medium term are to the Group's cash flows and its ability to
fund growth opportunities. Repayment plans have been put in place
and the Group continues to look to new markets such as India and
Africa to widen the customer base and reduce the exposure to
customer defaults.
For other financial assets, the Group adopts the policy of
dealing only with high credit quality counterparties. In addition,
receivables are closely monitored on an ongoing basis. Management
defines major credit risk as exposure to a concentration exceeding
10% of a total class of such asset.
The Group's trade receivables at 31 December 2015 included two
customers (2014: two customers) that collectively represented 99%
(2014: 99%) of trade receivables.
As the Group does not hold any collateral, the maximum exposure
to credit risk for each class of financial instruments is the
carrying amount of that class of financial instruments presented in
the Consolidated Statement of Financial Position. The Group's trade
receivables are non-interest bearing and credit terms range between
30 and 90 days. Receivables are recognised at their original
invoice amounts which represent their fair values on initial
recognition.
The credit risk for trade receivables based on the information
provided to key management is as follows:
2015 2014
GBP'000 GBP'000
----------------- -------- --------
By geographical
areas
- Indonesia 11,459 6,968
- Philippines - 4
- Malaysia 41 48
11,500 7,020
----------------- -------- --------
The carrying amounts of cash and bank balances, trade and other
receivables represent the Group's maximum exposure to credit risk
in relation to financial assets. No other financial assets carry a
significant exposure to credit risk.
Cash and bank balances are placed with reputable local financial
institutions. Therefore, credit risk arises mainly from the
inability of customers to make payments when due. The amounts
presented in the Consolidated Statement of Financial Position are
net of fair value adjustments and allowances for impairment of
receivables, estimated by management based on prior experience and
the current economic environment.
iv) Capital risk management
Management defines capital as the total equity of the Group. The
Group's objectives when managing capital are to safeguard the
Group's ability to continue as a going concern in order to provide
returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of
capital. In order to maintain or adjust the capital structure, the
Directors may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to
reduce debt.
(v) Financial instruments by category
The carrying amounts of each category of financial instruments
are as follows:
2015 2014
GBP'000 GBP'000
---------------------------------------------------------- -------- --------
Financial assets:
Loans and receivables (including cash and bank balances) 11,540 7,253
Financial liabilities:
Financial liabilities at amortised cost 2,794 692
-------------------------------------------------------------- -------- --------
The carrying value of financial instruments approximates their
fair value.
19. Finance lease obligations
Present
Minimum lease value of
payments Interest payments
GBP'000 GBP'000 GBP'000
------------------------------------------------- -------------- --------- ----------
At 31 December 2015
More than one year and not later than five years 60 7 53
Later than five years - - -
------------------------------------------------- -------------- --------- ----------
60 7 53
------------------------------------------------- -------------- --------- ----------
Not later than one year 15 4 11
----------------------------------------------------------- -------------- --------- ----------
75 11 64
------------------------------------------------- -------------- --------- ----------
At 31 December 2014
More than one year and not later than five years 91 12 79
Later than five years - - -
------------------------------------------------- -------------- --------- ----------
91 12 79
------------------------------------------------- -------------- --------- ----------
Not later than one year 25 6 19
----------------------------------------------------------- -------------- --------- ----------
116 18 98
------------------------------------------------- -------------- --------- ----------
Interest was payable at effective interest rates ranging from
2.35% to 4.65% per annum during the year ended 31 December 2015
(2014: 2.35% to 4.65%)
20. Related party information
Transactions between SyQic plc and its subsidiaries, which are
related companies of SyQic plc have been eliminated on
consolidation and are not disclosed in this note. Details of
transactions between the Group and other related companies are
disclosed below. Balances relating to transactions with Directors
are shown in the Consolidated Statement of Financial Position.
Transactions with key management personnel
2015 2014
GBP'000 GBP'000
---------------- -------- --------
Amounts due
to Directors: 289 112
-------------------- -------- --------
The amounts owing to Directors are unsecured, interest-free and
are repayable on demand. The amounts owing are to be settled in
cash.
Directors' guarantees:
A personal guarantee from Muhamad Jamal Bin Muhamad Hassim and
Lee Ai Lin, a director of SCSB, dated 5 July 2013, in support of a
Maybank Islamic Berhad Islamic Banking Facility Cash Line of
RM500,000 taken up by SCSB.
Amounts owing to shareholders:
2015 2014
GBP'000 GBP'000
--------------- -------- --------
Stream Global
Pte Ltd* 64 71
64 71
--------------- -------- --------
* Stream Global is a shareholder of SyQic plc.
The amounts owing to shareholders are unsecured, interest-free
and repayable on demand.
Remuneration of Directors and other transactions
The remuneration, interests and related party transactions with
the Directors of the Company, considered to be the key management
personnel of the entity, are disclosed in the Directors Report.
21. Operating lease commitments
The future aggregate minimum lease payments under
non-cancellable operating leases in respect of land and buildings,
contracted for at each reporting date but not recognised as
liabilities, are as follows:
2015 2014
GBP'000 GBP'000
------------------------ --------- --------
Operating leases
which expire:
Within one
year - 35
In the second to
fifth years inclusive - 78
- 113
---------------------------------- --------
Payments recognised as an expense under these operating leases
were as follows:
2015 2014
GBP'000 GBP'000
------------ -------- --------
Land and
buildings 74 84
---------------- -------- --------
22. Share options
During the year ended 31 December 2013, the Company granted
500,000 share options to employees with an exercise price of 52.7p
each. The weighted average fair value of the options granted was
40.96p per share. A charge of GBP38,000 (2014: GBP99,000) has been
made to the Statement of Comprehensive Income relating to these
options.
These fair values were calculated using the Black Scholes option
pricing model. The inputs in the model were as follows:
Stock
price 62p
Exercise price 52.7p
Interest
rate 2.73%
Volatility 50%
Time to maturity 10 years
------------------- ---------
The expected volatility was determined with reference to similar
entities trading on AIM.
Details of share options outstanding at the year-end are as
follows:
WAEP WAEP
Number (pence) Number (pence)
31 December 31 December 31 December 31 December
2015 2015 2014 2014
----------------------------- ------------ ------------ ------------ ------------
Outstanding as at 1 January 400,000 52.7 500,000 52.7
Granted during the year - -
Forfeited during the year (100,000) 52.7 (100,000) 52.7
Exercised during the year - - - -
Options outstanding at 31
December 300,000 52.7 400,000 52.7
------------------------------- ------------ ------------ ------------ ------------
Exercisable at 31 December - - - -
------------------------------- ------------ ------------ ------------ ------------
The weighted average remaining contractual life of the options
outstanding at the statement of financial position date is 7.9
years.
The share options were all granted on 4 December 2013 when the
Company was admitted to the AIM market and vest in 3 annual
instalments on the subsequent anniversaries of that date and, on
exercise, will be settled by the issue of ordinary shares in the
Company.
An option-holder has no voting or dividend rights in the Company
before the exercise of a share option.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKADBDBDBODK
(END) Dow Jones Newswires
November 07, 2016 02:00 ET (07:00 GMT)
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