TIDMLEAL
RNS Number : 5706D
Lead All Investments Limited
30 April 2013
Lead All Investments Limited
("LEAL" or the "Company")
Financial Results for the period ended 31 December 2012
CHAIRMAN'S STATEMENT
This is Lead All Investments Limited's ("Company's") first
Annual Report for the period ended 31 December 2012. The Company
was admitted to trading on AIM, a market operated by the London
Stock Exchange, on 8 February 2012.
The Company raised GBP3 million at the time of its initial
public offering with a view to seeking growth by way of acquiring
and investing in multi-level marketing direct selling businesses
("MLM Businesses") operating from its home base in Malaysia and
throughout Asia Pacific utilising the investment strategy that we
have developed.
The Company's directors, myself and Mr Geoffrey Fielding
("Board") are currently evaluating a number of potential
acquisitions together with our financial adviser which would give
us the opportunity to attain a level of significant growth and
shareholder return. And to this end, the Board and management have
been active in considering a wide range of opportunities and
analysing a number of proposals from businesses located across the
Asia Pacific region.
The process of any evaluation of the type of business
opportunities we are interested in is extensive and, in this
context, I am mindful of the trust that the Company's shareholders
have placed in our ability to source attractive investment
opportunities. It is therefore the Board's intention along with its
financial adviser to proceed with the utmost caution in any
discussions with other companies and individuals wishing to
establish and obtain funding for operations in this significant
growth market or in our evaluation of any possible acquisitions we
might be disposed to consider.
The Board is encouraged by the number of potentially viable
investment opportunities in the Asia Pacific region. Accordingly we
remain confident about the future growth prospects for MLM
businesses operating in South East Asia and the opportunities that
exist for the Company to achieve success through the implementation
of its investment approach.
Following admission the Company had funds of approximately
GBP2.55 million (after admission costs). The Company has used
GBP0.14 million in the ordinary course of business to 31 December
2012. The Company's cash position as at 31 December 2012 was
GBP2.41 million. This cash will continue to be used to meet our
operating expenses and to finance any future projects.
Finally, I would like to thank our financial adviser,
accountants, lawyers and all those individuals who contributed to
our successful listing on the London Stock Exchange.
Ahmad Nasri Bin Abdul Rahim
Chairman
Malaysia
30 April 2013
Contact details:
Ahmad Nasri Bin Abdul Rahim
Lead All Investments Limited Director 006019575 7732
--------------------------------------------- ---------------------------- ------------------
John Depasquale
ZAI Corporate Finance Ltd (Nomad and Broker) Wei Wang +44(0)20 7060 2220
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A copy of the Annual Report has been posted to shareholders and
will shortly be made available on the Company's website
www.leadallinv.com
Statement of Comprehensive Income
for the period ended 31 December 2012
2012
Notes GBP'000
Revenue -
Administrative expenses (192)
Operating loss (192)
Finance income 15
Loss before tax 3 (177)
Income tax expense 6 -
Loss attributable to equity shareholders (177)
Other comprehensive income for the period -
Total comprehensive loss for the period attributable
to equity holders (177)
Loss per share
- Basic and diluted (pence per share) 7 (0.97)
The above items relate entirely to continuing operations.
Statement of Financial Position
at 31 December 2012
2012
Notes GBP'000
Assets
Current assets
Other receivables 16
Fixed term deposit 8 2,330
Cash and cash equivalents 9 81
2,427
Total assets 2,427
Liabilities
Current liabilities
Trade and other payables 10 46
Total liabilities 46
Net assets 2,381
Equity and reserves
Share capital 11 300
Share premium 11 2,153
Share based payment reserve 11 105
Retained losses (177)
Total equity 2,381
The financial statements were approved by the Board of Directors
on 30 April 2013 and signed on its behalf by:
Ahmad Nasri Bin Abdul Rahim Geoffrey Baillie Fielding
Chairman Independent Non-Executive Director
Statement of Changes in Equity
for the period ended 31 December 2012
Share based
Share Share payment Retained Total
Note capital premium reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 13 July 2011
(date of incorporation) - - - - -
Total comprehensive loss
for the period - - - (177) (177)
Transactions with owners:
Shares issued 11 300 2,700 - - 3,000
Share issue costs 11 (442) - - (442)
Share based payments 11 - (105) 105 - -
300 2,153 105 - 2,558
At 31 December 2012 300 2,153 105 (177) 2,381
All reserves are attributable to the equity holders of the
parent company.
Statement of Cash flows
for the period ended 31 December 2012
2012
Notes GBP'000
Cash flows from operating activities
Operating loss (192)
Adjustments for changes in working capital:
Increase in other receivables (16)
Increase in payables 46
Net cash used in operating activities (162)
Cash flows from investing activities
Interest received 15
Placement of fixed term deposit 8 (2,330)
--------
Net cash used in investing activities (2,315)
Cash flows from financing activities
Proceeds from issue of shares (net of issue costs
in cash) 11 2,558
Net cash generated from financing activities 2,558
Net increase in cash and cash equivalents 81
Opening cash and cash equivalents -
Cash and cash equivalents at end of period 9 81
Notes to the Financial Statements
for the period ended 31 December 2012
1 General information
Lead All Investments Limited (the "Company") is a company
incorporated in Cayman Islands under the Companies Law 2011 (as
amended) of the Cayman Island on 13 July 2011. The Company is
governed by its articles of association and the principal statute
governing the Company is Cayman Island law. The Company is
domiciled and has its registered office in Cayman Islands and the
Company's registration number is WK-259337.
The Company's place of business is Malaysia.
These financial statements are presented in Pounds Sterling
("GBP"), this being the Company's functional and presentational
currency, and rounded to the nearest thousand ("GBP000").
These financial statements have been approved for issue by the
Board of Directors on 30 April 2013.
2 Summary of significant accounting policies
2.1 Basis of preparation
The principal accounting policies applied by the Company in the
preparation of these financial statements are set out below and
have been applied consistently.
Financial statements of the Company are prepared in accordance
with International Financial Reporting Standards, International
Accounting Standards and their interpretations issued or adopted by
the International Accounting Standards Board, as adopted by the
European Union ("IFRSs"). The Company's accounting reference date
is 31 December.
The financial statements have been prepared on a going concern
basis and on the historical cost basis.
2.2 Going concern
The financial statements of the Company are prepared on a going
concern basis. The Company raises finance for their investment
activities focusing on the use of multiple distribution strategies
for the distribution of their goods and services, especially in the
Asia Pacific region.
The Directors are of the opinion that the Company will have
sufficient cash to fund its activities based on forecast cash flow
information for a period in excess of twelve months from the date
of these financial statements' approval. Management continues to
monitor all working capital commitments and balances on a weekly
basis and believe that they have access to appropriate levels of
financing for the Company to continue to meet their liabilities as
they fall due at least the next twelve months and is trading as a
going concern.
2.3 Segmental reporting
For the purposes of IFRS 8 'Operating Segments' the Company
currently has one segment, being investing in the Multi-level
Marketing (MLM) sector. No further operating segment financial
information is disclosed as, at the period end, the company has not
made any investments and therefore does not have any revenue or
non-current assets.
2.4 Foreign currency translation
(a) Functional and presentational currency
Items included in the financial statements of the entity are
presented in Pounds Sterling ("GBP"). The currency of the primary
economic environment in which the Company raises funds (the
"functional currency") is Pounds Sterling.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period
end exchange rates of the monetary assets and liabilities
denominated in foreign currencies are recognised in the Statement
of Comprehensive Income.
2.5 Cash and cash equivalents
Cash and cash equivalents (readily convertible into a known
amount of cash) include cash in hand and deposits held at call with
banks with an original maturity of three months or less. For the
purpose of the cash flow statement, cash and cash equivalents are
as defined above, net of outstanding bank overdrafts. Fixed
deposits secured against bank loans are shown separately on the
statement of financial position as they do not meet the definition
of cash and cash equivalents.
2.6 Loans and other receivables
Trade and other receivables are initially recognised at fair
value, which is usually the original invoiced amount plus
transaction costs, and subsequently carried at amortised cost using
the effective interest method less provisions made for impairment
of receivables.
2.7 Trade and other payables
Trade and other payables are initially recognised at fair value,
which is usually the original invoiced amount, and subsequently
carried at amortised cost using the effective interest method.
2.8 Taxation
Deferred tax is provided in full using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Deferred tax is not accounted for if it arises from initial
recognition of an asset or liability in a transaction other than a
business combination that, at the time of the transaction, affects
either accounting nor taxable profit or loss. Deferred tax is
determined using tax rates that are expected to apply when the
related deferred tax asset is realised or when the deferred tax
liability is settled. Deferred tax assets are recognised to the
extent that it is probable that future taxable profits will be
available against which the temporary differences can be
utilised.
2.9 Equity instruments
Ordinary shares are classified as equity. Costs directly
attributable to the issue of new shares are shown in equity as a
deduction from the proceeds.
2.10 Share-based payments
The fair value of options and warrants granted is recognized as
an expense, with a corresponding increase in equity, over the
period that the holders become unconditionally entitled to the
options and warrants. The amount recognized as an expense is
adjusted to reflect the actual number of share options and warrants
that vest.
For equity settled share-based payment transactions other than
transactions with employees the Company measures the goods or
services received at their fair value, unless that fair value
cannot be estimated reliably. If this is the case the Company
measures their fair values and the corresponding increase in
equity, indirectly, by reference to the fair value of equity
instruments granted. Fair value is measured by use of an
appropriate model. In valuing equity-settled transactions, no
account is taken of any vesting conditions, other than conditions
linked to the price of the shares of Lead All Investments Limited.
The charge is adjusted at each balance sheet date to reflect the
actual number of forfeitures and cancellations during the period.
The movement in cumulative charges since the previous balance sheet
is recognized in the statement of comprehensive income, with a
corresponding entry in equity.
2.11 Standards and Interpretations in issue not yet adopted
Certain changes to IFRS will be applicable for the Company's
accounts in future periods. To the extent that the Company has not
adopted these early in the current financial statements, they will
not affect the Company's reported profit or equity but they may
affect disclosures. As at the date of approval of these financial
statements, the following standards and interpretations were in
issue but not yet effective:
IFRS 10 - Consolidated Financial Statements
IFRS 11 - Joint Arrangements
IFRS 12 - Disclosure of Interests in other entities
IFRS 13 - Fair value measurement
IAS 1 - (amended) - Presentation of items of other comprehensive
income
IAS 12 - (amended) - Deferred tax: Recovery of underlying
Assets
IAS 19 - (amended) - Employee Benefits
IAS 27 - Separate Financial Statements
IAS 28 - Investments in Associates and Joint Ventures
IFRS 7 (amended) - Disclosures-offsetting financial assets and
financial liabilities
IAS 32 (amended) - Offsetting financial assets and financial
liabilities
Numerous other minor amendments to standards have been made as a
result of the IASB's annual improvement project. The Directors do
not anticipate that the adoption of these standards in future
periods will have a material impact on the financial statements in
the period of adoption and have decided not to adopt them
early.
2.12 Critical accounting judgments and key sources of estimation uncertainty
Estimates and judgements need to be regularly evaluated and are
based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances. The Company makes estimates and
assumptions concerning the future. The resulting accounting
estimates will, by definition, rarely equal the related actual
results. The estimates and underlying assumptions are reviewed on
an on-going basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and
future periods if the revision affects both current and future
periods.
The estimates significant to the financial statements during the
period and at the period end are the share based payment
calculation, as set out in the relevant accounting policy.
3 Expenses by nature
2012
GBP'000
Included within administrative expenses are:
Staff expenses (note 4) 67
Auditors' Remuneration
* Fees payable to the Company's auditor 10
4 Staff expenses
2012
GBP'000
Staff expenses 17
Directors' fees (note 5) 50
67
The average number of employees (including executive directors)
employed by the Company during the period is 5.
5 Directors' Remuneration
Details of Directors' remuneration (who are considered to be the
key management personnel of the Company) are as follows:
Short term Bonus Others Total
Period to 31 December 2012: employment GBP'000 GBP'000 GBP'000
benefits
GBP'000
Ahmad Nasri Bin Abdul Rahim 16 - - 16
Richard Berry 17 - - 17
Brian Rowbotham 17 - - 17
50 - - 50
6 Income tax expense
2012
GBP'000
Current tax charge -
Deferred tax -
-
The Company is incorporated in Cayman Islands. No tax
reconciliation note has been presented as the income tax rate for
Cayman Islands companies is 0%.
7 Loss per share
Basic
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
2012
Loss attributable to equity holders of the Company (GBP'000) 177
Basic loss per share (pence) (0.97)
Diluted loss per share (pence) (0.97)
The weighted average number of ordinary shares outstanding
before adjustments for the effects of all dilutive potential
ordinary shares calculated as follows:
2012
Weighted average number of shares in issue
Ordinary shares 18,268,157
Diluted
The diluted loss per share is the same as the basic loss per
share because the conversion of the 17,400,000 share warrants (see
note 11) decrease the basic loss per share and are therefore
anti-dilutive.
8 Fixed term deposit
2012
GBP'000
Fixed term deposit 2,330
In October 2012, cash of GBP2,330,000 was placed on deposit with
an institution which is approved as a scheduled institution by the
Bank Negara, Malaysia and located in Malaysia, to run a business of
leasing, factoring, fund management and credit financing for
projects. The funds are to be held on deposit for the period of one
year and a minimum interest rate of 3% will be earned.
9 Cash and cash equivalents
2012
GBP'000
Cash at bank and in hand 81
10 Trade and other payables
2012
GBP'000
Non-trade
Other payables 46
46
The carrying amounts of other payables and accruals equate to
their fair value and are repayable within 12 months of the period
end.
11 Share capital and options
On incorporation the Company had an authorized share capital of
US$50,000 comprising 50,000 shares of a nominal value of US$1 each.
On incorporation one share was issued fully paid at par value of
US$1. On 11 August 2011 a further share of a nominal value of US$1
was issued at par, fully paid.
On 30 January 2012, the Company amended its authorized share
capital from US$50,000 to GBP3,000,000 and US$2 divided into
300,000,000 shares of a par value of GBP0.01 each and two shares of
a par value of US$1 each. On 30 January 2012 the Company
repurchased 2 shares of a par value of US$1 each at par from the
shareholders and simultaneously issued them two shares of a par
value of GBP0.01 each at par, fully paid.
On 30 January 2012, the Company reduced its share capital to
GBP3,000,000 divided into 300,000,000 shares of a par value of
GBP0.01 each.
On admission of the Ordinary Shares to trading on AIM on 8
February 2012, 30,000,000 Ordinary Shares were placed at a price of
GBP0.10 per share.
Share Capital Share Premium
GBP'000 GBP'000
Authorised share capital
300,000,000 ordinary shares of GBP0.01 per 3,000 -
share
Issued and fully paid
30,000,000 ordinary shares of GBP0.10 per
share 300 2,700
Less:
Share issue costs - (442)
Share based payment charge - (105)
Issued share capital at 31 December 2012 300 2,153
On 30 January 2012, the Company entered into a deed of warrant
with two parties, conditional upon Admission, to subscribe for 5%
(1,500,000 shares) and 3% (900,000 shares) respectively, of the
aggregate value of the Exercise Price of all new shares subscribed
by investors on the Placing of shares. The shares are exercisable
at any time up to five years from the date of Admission at the
Placing price of GBP0.10. These shares were granted for services
rendered relating to the Placing of shares on AIM.
Using the Black Scholes method, the fair value of these options
was calculated to be GBP105,360 and the charge was shown as a
deduction from the proceeds of the share issue. The following
assumptions were used in the Black Scholes formula:
2012
Share price at date of grant (GBP) 0.10
Exercise price (GBP) 0.10
Expected volatility (%) 46%
Option life, years 5 years
Risk free interest rate (%) 3%
Number of shares 2,400,000
Fair value at date of grant (GBP) 0.0439
Expected volatility is estimated by considering the Company's
share price data since admission to AIM.
In addition, pursuant to share option agreement dated 30 January
2012, conditional upon Admission, the Company has granted the
Company's founder, Zheng Zhuoxuan, an option to subscribe for
5,000,000 Ordinary Shares in the Company, at an exercise price of
GBP0.02 per Ordinary Share. The option shall be exercisable by
Zheng Zhuoxuan if either:
(i) the average daily closing share price of the Company over
any four month period is equal to or in excess of GBP0.20 per
Ordinary Share; or
(ii) the net asset value of each Ordinary Share (as determined
by the auditors of the Company) on (a) the Business Day immediately
before the Company's financial year end and (b) the Business Day
which is six calendar months after that date is equal to or in
excess of GBP0.20 per Ordinary Share.
Subject to the option becoming exercisable, the Zheng Zhuoxuan
may exercise his option, in whole or in part, from time to time, at
any time during an exercise period that commences on the date which
is four calendar months after the date of Admission and ends
immediately prior to the third anniversary of Admission. The
option, to the extent that it remains unexercised, shall
automatically lapse and cease to be exercisable on the third
anniversary of Admission.
The share options granted to Zheng Zhuoxuan are in
acknowledgement of the start-up monies provided to the Company.
In addition, pursuant to share option agreement dated 30 January
2012, conditional upon Admission, the Company has granted Ahmad
Nasri Bin Abdul Rahim an option to subscribe for 10,000,000
Ordinary Shares in the Company, at an exercise price of GBP0.02 per
Ordinary Share. The option shall be exercisable by Ahmad Nasri Bin
Abdul Rahim if either:
(i) the average daily closing share price of the Company over
any four month period is equal to or in excess of GBP0.30 per
Ordinary Share; or
(ii) the net asset value of each Ordinary Share (as determined
by the auditors of the Company) on (a) the Business Day immediately
before the Company's financial year end and (b) the Business Day
which is six calendar months after that date is equal to or in
excess of GBP0.30 per Ordinary Share.
Subject to the option becoming exercisable, the Ahmad Nasri
Abdul Rahim may exercise his option, in whole or in part, from time
to time, at any time during an exercise period that commences on
the date which is four calendar months after the date of Admission
and ends immediately prior to the third anniversary of
Admission.
The option, to the extent that it remains unexercised, shall
automatically lapse and cease to be exercisable on:
(i) the third anniversary of Admission; or
(ii) the date on which Mr. Ahmad Nasri ceases to be either a
director, an employee or a consultant to the Company unless:
(a) Mr. Ahmad Nasri ceases to be either a director, an employee
or a consultant to the Company on grounds of ill health; or
(b) the board of directors of the Company has confirmed in
writing that the options shall not automatically lapse and cease to
be exercisable prior to Mr. Ahmad Nasri ceasing to be either a
director, an employee or a consultant to the Company.
The share options granted Ahmad Nasri Bin Abdul Rahim form part
of his remuneration package and will only come into effect after
the Company has generated a significant return for investors.
Using the Black Scholes method, the fair value of these options
was calculated to be GBP1,228,500. It is the directors' best
estimate, based on the evidence available at the period end and the
lack of investment opportunities during the period, that these
options will not vest and therefore the charge has not been
recognised. The directors will revise their estimate as and when
subsequent information indicates that the shares will vest.
The following assumptions were used in the Black Scholes
formula:
2012
Share price at date of grant (GBP) 0.10
Exercise price (GBP) 0.02
Expected volatility (%) 46%
Option life, years 3 years
Risk free interest rate (%) 3%
Number of shares 15,000,000
Fair value at date of grant (GBP) 0.0819
Expected volatility is estimated by considering the Company's
share price data since admission to AIM.
The weighted average exercise price of all warrants and options
at the period end is GBP0.03 and the weighted average contractual
life is 3.3 years.
At the period end, none of the 17,400,000 share options have
been exercised.
12 Contingencies
There were no contingent liabilities at 31 December 2012.
13 Related party transactions
There is no related party transaction with the Company.
14 Capital commitments
The Company had no contracted capital commitments at 31 December
2012.
15 Financial risk management
The Company's activities expose it to credit risk, liquidity
risk and market risk (including interest rate risk, currency risk
and commodity price risk). The Company's overall risk management
strategy seeks to minimise adverse effects from the volatility of
financial markets on the Company's financial performance.
The Board of Directors is responsible for setting the objectives
and underlying principles of financial risk management for the
Company. The Company management then establishes the detailed
policies such as risk identification and measurement, exposure
limits and hedging strategies, in accordance with the objectives
and underlying principles approved by the Board of Directors.
There has been no change to the Company's exposure to these
financial risks or the manner in which it manages and measures the
risk. Market risk exposures are measured using sensitivity analysis
indicated below.
Credit risk
Credit risk refers to the risk that counterparty will default on
its contractual obligations resulting in a loss to the Company. The
Company has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral where
appropriate, as a means of mitigating the risk of financial loss
from defaults. The Company performs on going credit evaluation of
its counterparties' financial condition. The Company does not hold
any collateral as security over its customers. The Company's major
classes of financial assets are fixed term deposits and cash and
cash equivalents.
As at the end of the financial period, the Company's maximum
exposure to credit risk is represented by the carrying amount of
each class of financial assets recognised in the statements of
financial position.
As at 31 December 2012, substantially all the cash and bank
balances as detailed in Notes 9 to the financial statements, are
held in major financial institutions which are regulated and
located in Hong Kong, which management believes are of high credit
quality. The management does not expect any losses arising from
non-performance by these counterparties.
As at 31 December 2012, the fixed term deposit as detailed in
Note 8 to the financial statement is held with an institution which
is approved as a scheduled institution by the Bank Negara, Malaysia
and located in Malaysia, to run a business of leasing, factoring,
fund management and credit financing for projects. The directors
believe that the institution is of high credit quality. The
management does not expect any losses arising from non-performance
by these counterparties.
The carrying amount of financial assets represents the maximum
credit exposure. The maximum exposure to credit risk at the
reporting date of the Company is as follows:
2012
GBP'000
Other receivables and deposits 16
Fixed term deposit 2,330
Cash and cash equivalents 81
2,427
Currency risk
Currency risk arises from a change in foreign currency exchange
rate, which is expected to have adverse effect on the Company in
the current reporting period and in future years.
The Company maintains its books and accounts in its functional
currency. As a result, the Company is subject to transaction and
translation exposures resulting from currency exchange rate
fluctuations. However, to minimise such foreign currency exposures,
the Company uses natural hedges between sales receipts and
purchases, and operating expenses disbursement. It is, and has been
throughout the current financial period the Company's policy that
no derivatives shall be undertaken except for the use as hedging
instruments where appropriate and cost-efficient. The Company does
not apply hedge accounting.
The Company incurs foreign currency risk on sales, purchases and
operating expenses that are denominated in currencies other than
the functional currency.
The Company's currency exposure is as follows:
2012
GBP'000
Financial assets
Bank balances denominated in Hong Kong Dollars (HK$) 6
Net currency exposure 6
------------------------------------------------------ --------
Interest rate risk
The Company monitors the interest rates on its interest bearing
assets closely to ensure favourable rates are secured.
As at the period ended, the Company's only interest-bearing
assets relate to bank balances and fixed term deposits. A change in
interest rates at the reporting date would not materially affect
profit or loss and as such sensitivity analysis have not been
disclosed.
Liquidity risk
Liquidity risk is the risk that the Company will encounter
difficulty in meeting financial obligations due to shortage of
funds. The Company's exposure to liquidity risk arises primarily
from mismatches of the maturities of financial assets and
liabilities. The Company's objective is to maintain a balance
between continuity of funding and flexibility through financial
support of shareholders and secures committed funding facilities
from financial institution.
15 Financial risk management (continued)
The table below summarises the maturity profile of the Company's
financial liabilities at the reporting date based on contractual
undiscounted payments:
Less than Later than
one year one year Total
GBP'000 GBP'000 GBP'000
Other payables and accruals 46 - 46
46 - 46
------------- ----------- --------
Capital risk management
The Company's objectives when managing capital (defined as share
capital and reserves) are to safeguard the Company'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.
The Company has no borrowing and cash and cash equivalents
consist of the Company own cash at bank only.
16 Control
The Company is not controlled by any one party. Details of
significant shareholders are shown in the Directors' Report.
17 Subsequent events
There were no other material events subsequent to the end of the
period under review.
About Lead All Investments Limited
The Company's objective is to generate an attractive rate of
return for Shareholders, predominantly through capital
appreciation, by taking advantage of opportunities to invest in
businesses focusing on the use of MLM strategies.
MLM is based on grassroots-level networking where products are
sold directly from an individual (known as distributor) to
end-users without going through a retail distribution channel.
Products are sold by these businesses direct to the distributors,
who may develop their own networks of recruits to reach out to more
prospects and assist in generating more sales. Subsequently, the
distributor receives commission for all revenues generated
individually and through his recruits. The compensation is however
for the products sold and not for the recruitment of
individuals.
The Company aims to provide equity and equity-related investment
capital, such as convertible loans, to companies which are seeking
capital for growth and development, consolidation or acquisition,
or as a pre-IPO round of financing. The Company's equity interest
in a proposed investment may range from a minority position to 100
per cent. ownership, as set out below. The proposed investments are
likely to be unquoted in the majority of cases, but may include
publicly traded securities. These investments may be made in
combination with additional debt or equity-related financing and,
in appropriate circumstances, in collaboration with other financial
and/or strategic investors. It is likely that a substantial portion
of the Company's financial resources will be invested in building a
broad portfolio of assets through smaller investments.
The Company intends to be an involved and active investor.
Accordingly, where necessary, the Company may seek participation in
the day to day management through board representation, with a view
to seeking to improve the performance and growth of the
business.
The Company intends to focus on the Asia Pacific region. It will
however consider any geographical area, to the extent that the
investment fits within the Investing Policy.
The Company will not be subject to any borrowing or leveraging
limits.
The Directors consider that as investments are made, and new
opportunities arise, further funding of the Company will be
required.
The Directors are confident that the Investing Policy of the
Company can substantially be implemented within eighteen months of
Admission. If this is not the case, the Directors will seek the
consent of the Shareholders for its Investing Policy at the
Company's annual general meeting immediately following and on an
annual basis thereafter until such time that its Investing Policy
has substantially been implemented. If it appears unlikely that the
Investing Policy can be substantially implemented at any time, the
Directors may consider returning any remaining funds to the
Shareholders.
The Company has adopted the following principles as part of its
Investing Policy:
a) The Company will not invest in any business which is not a
member of the applicable direct selling association or equivalent
body present in the area(s) in which the proposed target business
operates.
b) The Company will not invest in any business which has not
adopted or does not adhere to the relevant code of conduct or best
practice endorsed by the applicable direct selling association or
equivalent body present in the area(s) in which the proposed target
business operates.
c) The Company will consider any licensing requirements
applicable to MLM businesses in the area(s) in which a proposed
target business operates and will not proceed with the investment
if the target does not comply with those licensing
requirements.
d) If there is any doubt whatsoever as to whether the business
model of the proposed investment target is or is connected to a
"pyramid scheme" the Company will not proceed with a proposed
investment.
Private Companies
The Company will aim to invest primarily in private companies
with high growth potential, where a timely investment will allow
the Company to increase market share and create long-term
shareholder value. It is envisaged that, in relation to an
investment in a private company prior to that company listing on a
stock market, the Company would retain a part of its investment in
the listed entity going forward. The Company intends to work
closely with the management of each investee company to create
value by focusing on driving growth through revenue creation,
margin enhancement and extracting cost efficiencies, as well as by
creating appropriate capital structures to enhance returns.
The Company will target small and mid-sized companies and will
seek to secure at least "blocking minority" stakes (usually around
25 per cent) and board representation, where it considers that the
Company and/or an investee company would benefit from such an
appointment. The Company will consider making equity investments in
lower than blocking minority stakes only where it sees ways to
increase the stakes to blocking or controlling stakes at a later
date. Each investment is expected to be in the region of US$250,000
(GBP155,000).
Public Companies
In addition, the Company may also invest in companies which have
securities listed on a stock exchange or over-the-counter
market.
When investing in publicly quoted companies, the Company will
seek to select companies with a strong market position or strong
growth potential in their respective segments. No restrictions will
be placed on the size of public companies in which the Company may
make an investment. The Directors intend to make investments in
companies or businesses with attractive valuations and growth
potential, with competent and motivated management, which enjoy
brand recognition, have scalable business models, have strong
relationships with customers and which have in place transparent
and recognised accounting policies and good corporate governance
practices.
Realisation of Returns
The Company expects to derive returns on investments principally
through long-term capital gains and/or the receipt of dividends
from investee companies. As a result, the Board does not envisage
the distribution of dividends to Company shareholders in the short
to medium term. The primary ways in which the Company expects to
realise returns include: (a) the sale or merger of the investee
company; (b) the sale of securities of the investee company by
means of public or private offerings; and (c) the ultimate disposal
of public equity investments through the stock exchanges on which
they are listed.
For private investee companies the Company believes that its
typical investment holding period should provide sufficient time
for investee companies to adequately benefit from the capital and
operational improvements resulting from the Company's investment.
The targeted holding period shall be reviewed on a regular basis by
the Company, but it is expected that this will typically be between
two and four years.
For publicly quoted investee companies the objective is to
maximise capital appreciation without any generally expected
investment period. Following the acquisition, the Company will
monitor the investment closely. Importance will be placed on the
timing of any disposal which will follow a thorough review of
market conditions and those reports and sources that are available
to investors. Should the Company consider that the capital
appreciation of a particular public equity investment has reached
its peak or is likely to or has begun to decline, then the Company
will consider the sale of that investment.
Generally, the Directors will keep under review how best to
realise value for Shareholders, whether through a trade sale,
flotation or secondary refinancing of the investee companies. The
proposed exit route will form a key consideration of the initial
investment analysis.
It should be noted that the nature of the Company's activities
is speculative and, being dependant on specific investment
opportunities, uncertain. Accordingly, an investment in the
Ordinary Shares is designed only for investors who understand such
risks and uncertainties, and who can afford to bear the loss of
their individual investment
Given the nature of the Investing Policy, the Company will not
make regular periodic disclaimers, notifications, or calculations
of Net Asset Value.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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