Amedeo Resources Regulatory News (AMED)

7 June 2018

Amedeo Resources plc("Amedeo" or the "Company")Audited Results for the Year Ended 31 December 2017and Notice of AGM

Amedeo, the resource and resource infrastructure and asset investment company, is pleased to announce its consolidated audited results for the year ended 31 December 2017.

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

Highlights

· Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJ Offshore"), in which Amedeo has a 19% stake, profitable to the tune of US$276,000 (2016: loss of US$1,802,000).

· YZJ Offshore's Le Tourneau Super 116E Class design self-elevating mobile offshore jack up drilling rig ("Explorer 1"), complete and being marketed.

· Acquisition of a 2.5% stake in Ganjine Kani Company ("GKC") a producing copper mine with an option to acquire a further 5.0%.

· Loss on ordinary activities before taxation decreased significantly to US$233,000 (2016: loss of US$1,887,000)

· Post the year end, Mr Ghanim Al Saad, a supportive substantial shareholder of the Company, resigned as Chairman and Non-Executive Director of the Company. Zafarullah Karim, Executive Director, is currently acting as Interim Chairman.

ENDS

For further information please visit www.amedeoresources.com or contact:

Notes

Amedeo Resources plc is an investment company whose policy is to invest principally, but not exclusively, in the resources and resources infrastructure and asset sectors. Amedeo has a deep and broad global network and wide contact base in these sectors, including in East and South East Asia and the Middle East which it leverages to source and make investments. These sectors exhibit high growth and are strategically important. Amedeo is a proactive investor which assists its investee companies to grow by providing investment, expertise and contacts.

CHIEF EXECUTIVE OFFICER'S STATEMENT

Introduction

During the year under review, Jiangsu Yangzijiang Offshore Engineering Co. Ltd ("YZJ Offshore") continued to market its first completed rig, a Le Tourneau Super 116E Class design self-elevating mobile offshore jack up drilling rig ("Explorer 1"). In addition, it continued to seek new orders. The market, however remained soft and the rig was not sold, nor were new orders obtained. YZJ Offshore, however, was profitable to the tune of US$276,000 for the year, due to work done on other components and a cost cutting programme.

MGR Resources Pte ("MGR"), in which Amedeo has a 49% stake, increased its activities but due to the volatility of the iron ore price, made a small loss of US$90,000. In addition to ore trading, it put in place steps to increase profits while reducing risk going forward.

In January 2017, Amedeo acquired for US$500,000 a 2.5% stake in Ganjine Kani Company ("GKC"), a copper mining company. GKC is a producing miner which has extracted around 1 million tonnes of ore from its three mines. MGR intends to work with GKC to supply copper to East Asia. Amedeo has an option to increase this stake by 5.0%

Despite the ongoing difficult environment, Amedeo continues to pursue its long-term strategy of building a vertically integrated investment business in the resource and energy and related infrastructure sectors, while on an operational level, using its cash resources conservatively.

YZJ Offshore

YZJ Offshore, having built and readied Explorer 1 for delivery, pending customary final checks, is marketing the rig to third parties.

Explorer 1 is a Le Tourneau Super 116 Enhanced Class design self-elevating mobile offshore jack up drilling rig. The Le Tourneau is the most established design in the offshore world and has a very popular footprint. Other rig designs do not have this significant advantage.

While the offshore rig market has been soft, these factors, along with the increasing age of currently utilised offshore rigs and, over the course of the last several years, the oil price rising from a low of less than US$30 per barrel in 2015 to over US$70 per barrel, are expected to result in a strengthening of the market for offshore rigs. YZJ Offshore remains confident that Explorer 1 will be sold.

With respect to new orders, YZJ Offshore continues discussions with potential customers for further orders with the benefit that it now has a rig that is physically complete to showcase. This is important from both a marketing perspective and from a reputational perspective. No new orders, however, have yet been received.

Amedeo believes that the medium to long term outlook for the offshore marine vessel market is positive with activity set to increase. YZJ Offshore, having completed its first rig, has taken the first step to establishing a strong reputation. This reputation together with the resources of a large and well-equipped yard and the expertise to build product carriers, specialised platforms, semi-submersibles, amongst other vessels, as well as rigs, positions it well to take advantage of the recovery in the offshore fabrication market.

In the meantime, YZJ Offshore has been constructing components including cutting plates for blocks and constructing hatches for specialised gas carriers. Further, a pipe manufacturing facility has been added which is constructing coring pipes. Work is also being done related to liquid natural gas carriers.

This, along with a cost cutting programme has resulted in it generating a profit of US US$276,000 (2016: loss of US$1,802,000).

Amedeo has an indirect 19.0% stake in YZJ Offshore which it holds through its 47.5% stake in the joint venture company, YZJ Offshore Engineering Pte Ltd ("YZJ JV").

MGR Resources

MGR's increased activities related to iron ore trading during 2017. The iron ore price fluctuated between a high of above US$90 to a low of below US$55 a barrel during the year. Unfortunately, as a result of the fluctuations, despite the increased activity, MGR made a loss of US$90,000 for the year (2016: loss of US$25,000).

Notwithstanding, during the year, MGR introduced better technologies to the mine owner suppliers that have allowed them to produce richer substrate. In return the mine owners have offered better terms to MGR that reduce MGR's holding risk and improve its price margins. MGR has also expanded its distribution network in China which should allow it to increase its activities going forward.

These developments put MGR in a position to do more business and with a lower risk in the future.

Amedeo has a 49.0% stake in MGR.

Ganjine Kani Company

In January 2017, Amedeo acquired a 2.5% stake for US$500,000 in GKC, a copper mining company close to the city of Mashhad in Iran. As part of the transaction, Amedeo has a 5-year option to acquire a further 5.0% of GKC for US$2 million. GKC is a producing miner and has the required infrastructure to produce copper concentrate from ore.

Iranian studies estimate that the producing mine alone may have at least 6.5 million tonnes of copper ore with a 0.9% average copper content. The extent of the ore and its copper content has yet to be confirmed to international standards. In addition, it is suspected that the copper mineralisation has good potential for associated gold mineralisation. There are plans to increase the volumes of ore which are being extracted. With respect to the recent actions of the current US Administration regarding Iran, Amedeo is taking no immediate action with respect to GKC but is monitoring the situation.

Financial Review

Revenue for the year ended 31 December 2017 was US$110,000 (2016: US$108,000), an increase of US$2,000 or 1.9% on the prior year. Revenue is invoiced in GBP and total revenue in GBP in 2017 remains the same as 2016. The increase in revenue in US$ relates entirely to the appreciation in the GBP versus the US$. Amedeo provides various business development and marketing services to MGR.

Amedeo's share of profit in associates was US$41,000 (2016: loss of US$881,000). This was made up of a profit of US$131,000 (2016: loss of US$856,000) at YZJ JV and a loss of US$90,000 (2016: US$25,000 profit) at MGR. The profits increase the carrying value of the investments whilst the losses reduce the carrying value of the investments. In both instances, these are not cash items.

Finance income increased to US$188,000 (2016: US$44,000) due to the loan of US$800,000 to MGR.

Overall loss on ordinary activities before taxation decreased significantly for the reasons outlined above to US$233,000 (2016: loss of US$1,887,000) or by 87.7%. Basic and fully diluted loss per share for the year was US¢0.71 (2016: US¢5.78).

Excluding non-cash items, (share-based payment charge, share of profit/(loss) of associates and foreign exchange gain/(loss)) loss on ordinary activities before taxation for the year ended 31 December 2017 was US$327,000 (2016: loss of US$478,000). The decrease in loss excluding non-cash items was due to an increase in finance income of US$144,000 to US$188,000 (2016: US$44,000).

A foreign exchange translation gain of US$841,000 (2016: loss of US$946,000) arose, which related to Amedeo's indirect investment in YZJ Offshore, as YZJ Offshore's presentational currency is RMB. This translation has no impact on cash.

Overall, total comprehensive income for the year increased significantly to US$608,000 (2016: loss of US$2,833,000), a 121% increase on prior year.

As at the year end, the carrying amount on the statement of financial position of investments in associates rose to US$15,268,000 (2016: US$14,386,000), primarily due to the foreign exchange retranslation movement. Current assets fell to US$3,411,000 (2016: US$4,133,000). Cash as at 31 December 2017 was US$915,000 (2016: US$2,510,000).

At the date of these financial statements, the Group had approximately US$2,500,000 of cash and cash equivalent balances.

Trade payables at the year-end increased to US$155,000 (2016: US$104,000) due to timing differences on when invoices were paid around the year end.

Overall, at the year end, net and total assets were US$19,024,000 (2016: US$18,415,000) and US$19,179,000 (2016: US$18,519,000), respectively.

Subsequent Events

Mr Ghanim Al Saad, a supportive substantial shareholder of the Company, resigned as Chairman and Non-Executive Director of the Company. Zafarullah Karim, Executive Director, is currently acting as Interim Chairman.

On 5 April 2018, MGR repaid a loan of $800,000 to Amedeo, which Amedeo had provided to MGR in January 2017.

On 18 May 2018, MGR repaid a loan of $1,400,000 to Amedeo and following this, there are no outstanding loans with MGR.

Outlook

Amedeo is well resourced and remains focused on its long-term strategy of building a vertically integrated investment business in the resource and energy and related infrastructure sectors.

The Board looks forward confidently to the future.

Annual general meeting

The annual general meeting of the Company ("AGM") to be held at 201 Temple Chambers, 3-7 Temple Avenue, London EC4Y 0DT at 2.00pm on 29 June 2018.

Posting of annual report accounts and notice of AGM

The annual report and accounts and notice of AGM have been posted to shareholders and copies thereof have been placed on the Company's website, www.amedeoresources.com.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2017 (AUDITED)

Other Comprehensive Income

The accompanying notes are an integral part of these financial statements.

 STATEMENTS OF CHANGES IN EQUITY

for the year ended 31 December 2017 (AUDITED)

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITION

as at 31 December 2017 (AUDITED)

The Company has elected to take exemption under section 408 of the Companies Act 2006 from presenting the Company statement of comprehensive income. The loss for the Company for the year ended 31 December 2017 was US$90,000 (2016: loss of US$757,000).

Approved by the Board and authorised for issue on 6 June 2018 and signed on behalf of the Board by

Glen Lau

Director

Registered Number 05216336

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF CASH FLOWS

for the year ended 31 December 2017 (AUDITED)

The accompanying notes are an integral part of these financial statements.

 NOTES TO THE GROUP FINANCIAL STATEMENTS

1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the year and the preceding year unless stated otherwise.

Basis of accounting

The financial statements of the Group and the Company have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the International Accounting Standards Board as adopted by European Union, and in accordance with the Companies Act 2006 as regards to the Company.

The financial statements have been prepared under the historical cost convention, with the exception of financial instruments, some of which are measured at fair value.

The accounting policies applied are the same as those applied in the financial statements for the year ended 31 December 2016. New standards introduced during the year had no material impact on the results or net assets of the Group.

The additional disclosures required by IAS 7 regarding changes to liabilities has not resulted in additional disclosures as the Group has no financing liabilities.

Standards and interpretations in issue but not yet effective

A number of new standards and amendments to existing standards have been published but are not effective for the year ended 31 December 2017. The Directors do not anticipate that the adoption of these new and revised standards and interpretations will have a significant impact on the figures included in the Financial Statements in the year of initial application other than the following:

IFRS 9 Financial Instruments

The standard makes substantial changes to the classification and measurement of financial assets and financial liabilities. There will only be three categories of financial assets whereby financial assets are recognised at either fair value through profit and loss, fair value through other comprehensive income or measured at amortised cost. On adoption of the standard, the Group will have to re-determine the classification of its financial assets based on the business model for each category of financial asset. This is not considered likely to give rise to any significant adjustments other than reclassifications.

The principal change to the measurement of financial assets measured at amortised cost or fair value through other comprehensive income is that impairments will be recognised on an expected loss basis compared to the current incurred loss approach. As such, where there are expected to be credit losses these are recognised in profit or loss. For financial assets measured at amortised cost the carrying amount of the asset is reduced for the loss allowance.

For financial assets measured at fair value through other comprehensive income the loss allowance is recognised in other comprehensive income and does not reduce the carrying amount of the financial asset.

Most financial liabilities will continue to be carried at amortised cost, however, some financial liabilities will be required to be measured at fair value through profit or loss, for example derivative financial instruments, with changes in the liabilities' credit risk recognised in other comprehensive income. The Group expects this to have some impact due to the value of financial instruments across its entities.

The standard is effective for periods beginning on or after 1 January 2018.

IFRS 15- Revenue for contracts with customers

The standard has been developed to provide a comprehensive set of principles in presenting the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The standard is based around five steps in recognising revenue:

1. Identify the contract with the customer;

2. Identify the performance obligations in the contract;

3. Determine the transaction price;

4. Allocate the transaction price; and

5. Recognise revenue when a performance obligation is satisfied.

On application of the standard the disclosures are likely to increase. The standard includes principles on disclosing the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, by providing qualitative and quantitative information.

The standard is effective for periods beginning on or after 1 January 2018. An initial assessment of the standard was carried out and it was concluded that it will have no material effect on the recognition and measurement.

IFRS16 - Leases The standard is effective for periods beginning on or after 1 January 2019 but can be applied before that date if the Company also applies IFRS 15 revenue from Contracts with Customers. IFRS 16 eliminates the classification of leases as either operating leases or finance leases for a lessee. Instead all leases are treated in a similar way to finance leases applying IAS 17. Leases are 'capitalised' by recognising the present value of the lease payments and showing them either as lease assets (right-of-use assets) or together with property, plant and equipment, with a corresponding financial liability representing its obligation to make future lease payments. IFRS 16 replaces the typical straight-line operating lease expense for those leases applying IAS 17 with a depreciation charge for lease assets (included within operating costs) and an interest expense on lease liabilities (included within finance costs).

An initial assessment of the standard was carried out and it was concluded that it will have no material effect.

Basis of consolidation

Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Company and its subsidiary undertaking, Amedeo Resources (Asia) PTE Ltd ("Amedeo Asia") as if they formed a single entity. Inter-company transactions and balances between Group companies are therefore eliminated in full.

Revenue

The revenue received from the services provided to MGR is recognised in the accounting period in which the services are rendered.

Investments in subsidiaries

Investments in subsidiary undertaking is stated at cost less any provision for impairment.

Investment in associates

Where the Group, or its wholly owned subsidiary, has significant influence over an entity, normally having an interest being more than 20% and less than 50%, such as Amedeo Asia's holdings in YZJ JV and MGR, then that investment is classified as an associate and is equity accounted, see note 9.

Under the equity method, on initial recognition the investment in an associate is recognised at cost, and the carrying amount is increased or decreased to recognise the Company's share of the total comprehensive income of the investee after the date of acquisition. The Company's share of the associate's profit or loss is recognised in its profit or loss and statement of other comprehensive income. Distributions received from an associate reduce the carrying amount of the investment.

After application of the equity method, an impairment review is carried out to determine whether it is necessary to recognise any impairment loss with respect to its net investment in the associate.

Financial assets

Where the Group has little or no influence and control over an entity, normally having an interest being less than 20%, such as Amedeo Asia's holding in GKC, then the investment is classified as a financial asset using the fair value through the profit and loss method.

The asset is initially recognised at cost and thereafter is measured at fair value. Any differences will increase or decrease the value of the asset and will be recognised in the statement of comprehensive income.

Financial assets whose fair value cannot be reliably measured shall be accounted for at cost.

The Group has two different types of financial assets, loans and receivables and fair value through the profit and loss. The Group's loans and receivables comprise loans and other receivables and cash and cash equivalents in the statement of financial position. The financial asset comprises shares in a company where no control or influence is exercised.

Loans receivable

Loans receivable are valued at nominal amount less provisions against recoverability. The maximum exposure in respect of the loan portfolio at the year-end is the amount receivable shown in note 11. No hedging transactions have been entered into with respect to the loan portfolio.

Impairment

At each financial year end date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of the individual asset, the Group estimates that recoverable amount of the cash-generating unit to which the asset belongs.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank, in hand and demand deposit and other short term highly liquid investments of three months or less at inception that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Financial liabilities and equity

Financial liabilities and equity are classified according to the substance of the financial instrument's contractual obligations rather than the financial instrument's legal form. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

Trade payables

Trade payables are not interest bearing and are stated at their nominal value.

Equity instruments

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

Current and deferred tax

Taxation is applied on a current basis in accordance with IAS 12 "Income taxes". Deferred taxation is provided in full on temporary differences that result in an obligation at the reporting date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Temporary differences arise from differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for taxation purposes. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which unused tax losses and credits can be utilised. Deferred tax assets and liabilities are not discounted.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Foreign currencies

The financial information is presented in United States Dollars which is the functional currency of the Company.

Transactions in foreign currencies are translated at the rate prevailing at the date of transaction, with any differences recognised to the Income Statement. Monetary assets and liabilities denominated in foreign currencies in each company are translated at the rates of exchange prevailing at the accounting date.

On consolidation, revenues, costs and cash flows of undertakings with a different functional currency are included in the Group income statement at average rates of exchange for the year. The assets and liabilities denominated in foreign currencies are translated into United States Dollars using rates of exchange at the reporting date.

Exchange differences on the re-translation of opening net assets and results for the year of foreign subsidiary undertakings and associates are dealt with through other comprehensive income net of differences on loans denominated in foreign currency. Other gains and losses arising from foreign currency transactions, mainly loans including trading, are included in the profit or loss.

Share-based payments

All share-based payments are accounted for in accordance with IFRS 2 - "Share-based payments". The Company issues equity-settled share-based payments in the form of share warrants to certain Directors and key advisers. Equity settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on the Company's estimate of shares that will eventually vest.

Fair value is estimated using a Black Scholes probability valuation model. The expected life used in the model has been calculated by reducing the total contractual life to management's best estimate of the expected date of exercise.

The remainder of the warrants (of which the vesting date was during the year ended December 2017), all vested in January 2017.

Critical accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Impairment of investment in associated company: 

The investment in the associated company is stated on an equity accounting basis supported by the audited financial statements of the associate. The Group is also required to determine whether any impairment loss should be recognised in accordance with IAS 28. The recoverable amount is determined based on the Group estimates as follows:

(i) its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate or joint venture and the proceeds from the ultimate disposal of the investment; or

(ii) the present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal. 

b) Recoverability of loans receivable:

Separately, the Group determines the recoverability of its loans to its associate, MGR. As the loans were used to make working capital available to MGR, consideration of the recoverability of the loans is related to consideration of the carrying value of the associate. 

The parent Company determines the recoverability of its loans to its subsidiary, Amedeo Asia. These are intercompany loans which are repayable on demand. The directors consider there to be no issue with recoverability.

c) Impairment of investment in financial asset:

The investment in the financial asset is stated at fair value through the profit or loss. The Group is also required to determine whether any impairment loss should be recognised in accordance with IAS 28. Any impairment loss will be included in the profit and loss, there is no impairment as at 31 December 2017.

2. Segmental reporting

No segmental analysis is considered necessary as the Directors believe that the Group has only one segment in the year under review, being that of an investment company with a focus on investments in, but not exclusively, the resources and/or resources infrastructure sectors, with no specific national or regional focus.

3. Administrative expenses

Expenses included in administrative expenses are analysed below

The auditor's fees payable to the associates of the company's auditors in respect of audit of the subsidiary's financial statements were US$11,000 (2016: US$12,000).

4. Share of profit/ loss of associates

The Company's wholly-owned Singapore-registered subsidiary, Amedeo Asia, holds a 47.51% investment in YZJ JV, a Singapore registered company. The profit of US$131,000 represents Amedeo Asia's share of YZJ JV's profit for the year ended 31 December 2017 (2016: loss of US$856,000) and Amedeo Asia's share of MGR's loss for the year ended 31 December 2017 of US$90,000 (2016: US$25,000).

5. Finance income

Interest on loans made to associates is made up of interest receivable from MGR. Finance income increased to US$188,000 (2016: US$44,000) due to advance of a loan to MGR during the year.

Deferred income tax assets are recognised for tax losses carried-forward to the extent that the realisation of the related tax benefit through future taxable profits is probable. The Group does not recognise any deferred income tax assets relating to carried forward tax losses as there is insufficient evidence that any deferred tax asset recognised will be recovered.

At the reporting date, the Group's UK parent company had unused tax losses of approximately US$11,008,000 available for offset against future profits. US$2,119,000 represents unrecognised deferred tax assets thereon at 19.25%. The deferred tax asset has not been recognised due to uncertainty over timing of utilisation.

7. Loss per share

The basic and diluted loss per share for the year to 31 December 2017 was US0.71¢ (2016: US5.78¢). The calculation of loss per share is based on the loss of US$233,000 for the year ended 31 December 2017 (2016: US$1,887,000 loss) and the weighted average number of shares in issue during the year to 31 December 2017 of 32,653,843 (2016: 32,653,843).

No warrants were exercised in the year ended 31 December 2017.The outstanding warrants represent approximately 15% of the Company's current issued share capital and are considered by the Directors to be anti-dilutive, given that the various exercise prices of warrants are all in excess of the average share price for the year.

8. Investment in subsidiaries

The investment in subsidiary shown above is the investment in Amedeo Asia.

The Company's subsidiary is as follows:

The registered addressed of the above subsidiary is 17 Jalan Mesin #04-01, Singapore, (368816).

9. Investments in associates

Amedeo's wholly owned subsidiary, Amedeo Asia has a holding in YZJ JV, which is incorporated in Singapore, of 47.51%. YZJ JV has a 40% stake in the ordinary share capital of YZJ Offshore, which is incorporated in Singapore. YZJ JV equity accounts for its 40% interest in YZJ Offshore, and Amedeo Asia equity accounts for its 47.51% stake in YZJ JV. Amedeo provided an interest free unsecured loan to Amedeo Asia to acquire the 47.51% stake in YZJ JV. The registered address is 17 Jalan Mesin #04-01, Singapore, (368816).

Amedeo Asia also has a 49% stake in the ordinary share capital of MGR, which is incorporated in Singapore. Amedeo Asia equity accounts for its 49% stake in MGR. The Group received no dividend from either associate in either period. The registered address is 17 Jalan Mesin #04-01, Singapore, (368816).

10. Financial asset

During the year, the Group acquired a 2.5% stake in GKC for US$500,000 (2016: Nil) with a 5 year option to acquire another 5% at a specified exercise price.

At the year-end, the option was valued at US$20,000.

11. Loans receivable

During the year, the Group made a USD loan to an associate, MGR, of US$800,000 (2016: US$1,000,000). This loan was repaid subsequent to year end in April 2018. The unsecured loan attracted an interest rate of 10% and was due to be repaid in July 2017, which was subsequently extended to May 2018.

The Directors consider that the carrying amount of loans receivable approximates to their fair value.

12. Other receivables

The Directors consider that the carrying amount of other receivables approximates to their fair value.

13. Trade and other payables

14. Called up share capital

The 44,190,545 deferred shares of 0.9p each ("Deferred Shares") do not entitle the holder thereof to receive notice of or attend and vote at any general meeting of the Company or to receive a dividend or other distribution or to participate in any return on capital on a winding up unless the assets of the Company are in excess of GBP1,000,000,000,000. The Company retains the right to purchase the Deferred Shares from any Shareholder for a consideration of one penny in aggregate for all that shareholder's Deferred Shares. As such, the Deferred Shares effectively have no value. Share certificates have not and will not be issued in respect of the Deferred Shares.

15. Warrants

During the year ended 31 December 2017, no warrants were granted (2016: Nil warrants were granted). This leaves 4,362,657 warrants outstanding at 31 December 2017. All the warrants can be exercised between the date of grant and the end of the exercise period shown below.

The weighted average exercise price for the warrants at the beginning of the period was 81 pence.

The weighted average exercise price for the warrants at the end of the period was 87 pence.

The weighted average remaining contractual life of outstanding warrants as at the end of the period was 6.59 years.

The charge in the current year of US$1,000 (2016: US$138,000) relates to the 3,107,211 warrants issued in the year ended 31 December 2015.

The following table sets out the warrants held by Directors, or entities connected with the Directors, who served during the year and up to the date of this report:

Notes

 (1) Fulton Capital Management Limited is a company owned and controlled by Mr Lau, the Company's chief executive officer

The Black Scholes pricing model was used to calculate the share-based payment charge.

16. Asset value per share

The net asset value per share at 31 December 2017 was US$0.58 (31 December 2016: US$0.56). Net asset value is based on the net assets as at 31 December 2017 of US$19.0 million (31 December 2016: US$18.4 million) and on the number of ordinary shares in issue at 31 December 2017 being 32,653,843 ordinary shares (31 December 2016: 32,653,843).

17. Staff numbers and costs

The average monthly number of employees of the Group, including Directors, during the year was 4 (2016: 4). The Directors are considered the key management of the Group. The aggregate remuneration of the Directors is set out in the remuneration report. All employees are Directors of the Company; therefore, no remuneration was paid to staff of the Company (2016: US$: Nil).

18. Related party transactions

In April 2014, Amedeo signed a management services agreement with MGR to provide marketing assistance and services to MGR. During the year, MGR paid US$110,000 to Amedeo in respect of these services (2016: US$108,000).

During the year, Amedeo made a loan of US$800,000 to MGR which was outstanding at year-end. The Group earned US$188,000 in interest on their loans to MGR for the year to 31 December 2017 (2016: US$44,000). As part of the other receivables balance at year-end, US$228,000 includes amounts owed by MGR (2016: US$162,000).

19. Financial instruments and risk management

Investments

All of the Group's actual and intended investments present a risk of loss of capital. Such investments are subject to investment specific, industry specific, sector specific, market specific and macro-economic risks including, but not limited to, international economic conditions, international financial policies and performance, governmental events and changes in laws. Moreover, the Group may only have a limited ability to vary its investments in response to changing conditions.

The success of the Group is dependent upon the identification, making, management and realisation of suitable investments. There can be no guarantee that such investments can or will be made or that such investments will be successful. Poor performance by an investment could severely affect the net asset value per share of the Group.

The Group may have minority interests in companies, partnerships and ventures. As such it may be unable to exercise control over the operations of such investments or exercise control over any exit, or timing of any exit, by other investors in such investments. In addition, the managements of the investee companies targeted by the Directors may not always welcome proactive shareholder involvement.

The Group may dispose of investments in certain circumstances and may be required to give representations and warranties about those investments. In certain cases, such representations and warranties may be challenged. This may lead to the Group having to pay damages to the extent that such representations and warranties turn out to be inaccurate or other terms of sale are breached.

There can be no certainty that the value of investments as reported from time to time will in fact be realised.

Investments in unquoted companies

It is intended that the Group's investment portfolio will comprise interests predominantly in unquoted, growth companies, which may be difficult to value and/or realise. Investments in unquoted growth companies may involve greater risks than is customarily associated with investments in larger, more established quoted companies. In particular, such companies may have limited product offerings, markets or resources and may be dependent on a small number of key individuals. As at 31 December 2017, the Group's holding of unquoted investments was recognised at approximately US$15 million (31 December 2016: US$14.4 million).The investment under financial assets is currently held at cost, $0.5 million (2016: $Nil).

Market risk

It is possible that certain investments will represent a significant proportion of the Group's total assets, such as Amedeo Asia's investment in YZJ JV. As a result, the impact on the performance and the potential returns to investors will be adversely affected to a greater degree if any one of those investments were to perform badly than would be the case if the portfolio of investments was more diversified. At 31 December 2017, the overall investment allocation was a portfolio of 3 investments all of which were in unquoted companies. As at 31 December 2017, the Company's investment in YZJ JV represented 95% of the value of the Group's investment portfolio and almost 78% of the Group's gross assets.

Interest rate risk

The majority of the Group's financial assets and liabilities are not interest bearing. As a result, the Group is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. Any cash and cash equivalents are held in short notice accounts. The table below summarises the Group's exposure to interest rate risks.

Hedging and currency risk

As the current focus of the Company's investment has been outside of the UK, the majority of the Company's investments are denominated in US$. The Company's functional currency is also US$. As such, the company does not hedge currencies.

Liquidity risk

The Company has a procedure to manage liquidity risk whereby the board meet regularly to review investment holdings and current and anticipated levels of financial liabilities. Where liquidity of the investments within the portfolio is believed to be at a level which may adversely affect the Company's ability to service its financial obligations, the board will consider taking action to improve cash flow, which may include utilising bank overdrafts or other credit arrangements.

The table below details the contractual, undiscounted cash flows of the Group's financial liabilities.

Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Group. The carrying amounts of financial assets best represent the maximum credit risk exposure at the reporting date.

Capital risk management

The Company is currently financed solely through equity and manages its capital to ensure that it has sufficient financial resources to implement its planned operations while maximising the return to stakeholders. Please see the Strategic Report on page 6 for details.

20. Subsequent events

On 4 April 2018, Mr Ghanim Al Saad, a supportive substantial shareholder of the Company, resigned as Chairman and Non-Executive Director of the Company. Zafarullah Karim, Executive Director, is currently acting as Interim Chairman.

On 5 April 2018, MGR repaid a loan of $800,000 to Amedeo, which Amedeo had provided to MGR in January 2017.

On 18 May 2018, MGR repaid a loan of $1,400,000 to Amedeo and following this, there are no outstanding loans with MGR.

There are no other significant subsequent events to report.

21. Ultimate controlling party

The ultimate controlling party is Qatar Investment Corporation, which holds 61.1% of the issued Ordinary Share capital of the Group. Qatar Investment Corporation is a wholly owned investment vehicle of Mr Ghanim Al Saad, previous Non-Executive Chairman of the Company.