Tmt Investments Regulatory News (TMT)

16 March 2017

TMT INVESTMENTS PLC

("TMT" or the "Company")

Results for the year ended 31 December 2016

TMT Investments PLC, the venture capital company which invests in high-growth, technology companies across a number of core specialist sectors, is pleased to announce its final results for the year ended 31 December 2016.

· US$6.15 million of profitable cash exits from Depositphotos (partial) and VitalFields (full)

· US$4.08 million positive revaluation of Pipedrive

· US$2.57 million impairment of WhalePath, Adinch and Gild

· US$2.25 million allocated to new and follow-on investments (Vinebox, Send A Job, Attendify, Sixa, Virool, APPrise, Try the World, and Scentbird)

· Special dividend of US$0.10 per share paid in November 2016

· NAV per share of US$1.89 (down 1% from US$1.91 as of 31 December 2015)

· Diversified portfolio of over 30 companies focused around big data, e-commerce, and business SaaS (software-as-a-service) tools

· Many portfolio companies continue to experience rapid growth

· Strong expectations of a number of positive revaluations in 2017

Alexander Selegenev, Executive Director of TMT, commented: "2016 was another successful year for the Company, with several sizeable revaluations and exits across our portfolio. There is always an asymmetric approach when revaluing the portfolio's assets. The downward re-valuations generally precede the upgrades, which normally only come when there is a tangible 3rd party equity transaction. This has the effect of dulling the NAV performance in the first several years of the portfolio's life.

However, we were especially pleased to have effected a major partial disposal in cash of our stake in stock photo marketplace Depositphotos for US$5.83m net. This allowed us to keep investing in promising new companies as well as reinvesting in our most successful portfolio companies to date as they continue to grow. A recent US$17m capital raise by Pipedrive, one of our star portfolio companies, has increased the fair value of our investment in Pipedrive by US$4.08 million. In total, positive revaluations have added 15.2 cents to the Company's NAV per share.

As the portfolio matures, it is not surprising to register some impairments, of which we made three in 2016. These reduced the Company's NAV by 9.3 cents per share.  

The Company paid a maiden dividend of 10 cents per share in November 2016, and the net result was that our NAV per share as of 31 December 2016 decreased only slightly to US$1.89 (down 1% from US$1.91 as of 31 December 2015)."

Alexander Selegenev added: "TMT has successfully exited from 9 investments (including two partial exits) since its admission to AIM in December 2010 to date. This demonstrates the management team's ability to identify highly promising companies with exceptional leadership at an early stage.  Given the rapid growth experienced by a significant number of our portfolio companies, we strongly expect 2017 to produce several further positive revaluations across our portfolio."

The Annual Report and Accounts for the year ended 31 December 2016 are available on the Company's website at www.tmtinvestments.com, where an electronic copy can be accessed.

For further information contact:

About TMT Investments

TMT Investments PLC invests in high-growth, technology companies across a number of core specialist sectors and has a significant number of Silicon Valley investments in its portfolio. Founded in 2010, TMT has net assets of US$53m and has invested in over 40 companies to date. The company's objective is to generate an attractive rate of return for shareholders, predominantly through capital appreciation. The company is traded on the AIM market of the London Stock Exchange. www.tmtinvestments.com

EXECUTIVE DIRECTOR'S STATEMENT

Although quieter than 2015, 2016 has been another successful year for the Company, with a number of sizeable revaluations and exits across our portfolio. As a result, even after the payment of the Company's maiden dividend of 10 cents per share in November 2016, our NAV per share as of 31 December 2016 decreased only slightly to US$1.89 (down 1% from US$1.91 as of 31 December 2015). TMT has now invested in over 40 companies since its admission to AIM in December 2010 and has a diversified portfolio of over 30 investees focused primarily on big data, e-commerce, and business SaaS (software-as-a-service) tools.

Portfolio Performance

Following the exceptional performance in calendar year 2015, in which over 10 of the Company's portfolio companies experienced positive revaluations for a total of US$18.5 million, 2016 was relatively quieter as the portfolio continued to mature. Key highlights included the partial disposal of our successful investment in stock photo marketplace Depositphotos and the significant positive revaluation of our equity stake in Pipedrive. We continue to pursue a conservative approach to valuations of poorly performing assets and wrote down three of our investee companies in 2016 for a combined total of US$2.57 million. This was more than offset by the US$2.55 million fair value uplift on the partial disposal of our investment in Depositphotos and the US$4.08 million fair value uplift in our investment in Pipedrive.

The following developments took place within the Company's portfolio in 2016:

Cash and partial cash exits, and positive non-cash revaluations:

· As announced in March 2016, the Company sold a sizeable part of its holding in Depositphotos for a net cash consideration of US$5.83 million to a private European investor. The transaction represented an approximately 5.5 times increase in the valuation of TMT's holding in Depositphotos since its original investments in 2011, 2012 and 2015, and an approximately US$2.55 million (or 18%) uplift in fair value compared to the previously reported amount as of 31 December 2015.

· In November 2016, farm management software provider VitalFields was acquired by The Climate Corporation, a subsidiary of Monsanto. The acquisition by Monsanto became the ninth profitable exit by TMT from its investment portfolio since its admission to AIM in December 2010 and represented a US$145,329 (or 84%) uplift in fair value compared to the previously reported amount as of 31 December 2015.

· As announced in January 2017, Pipedrive, Inc. ("Pipedrive") completed a US$17 million Series B equity financing round, led by Atomico, with participation from Bessemer Venture Partners and Rembrandt Venture Partners. The transaction represented a revaluation uplift of approximately US$4.08 million (or 132%) in the fair value of TMT's investment in Pipedrive, compared to the previously reported amount as of 31 December 2015.

Impairments and write-offs:

· As announced in our interim accounts, in the first half of 2016, Whale Path, Inc. suspended its operations after not securing further funding. Accordingly, the Company incurred an impairment charge equal to 100% of the previously reported fair value of the Company's investment, as well as unpaid accumulated interest payable to TMT of approximately US$220,000 in total.

· As announced in our interim accounts, online advertising platform Adinch, in which TMT invested in 2013, has suffered from the challenging economic conditions in Russia in the last three years, as well as certain recent operating issues. Accordingly, in the first half of 2016 the Board of TMT considered it prudent to incur an impairment charge equal to US$1.8 million, or 75% of the fair value of the Company's investment in Adinch previously reported as of 31 December 2015.

· In the second half of 2016, online recruitment platform Gild, in which TMT invested in 2011, was sold to a strategic buyer. Unfortunately, the size of the consideration was not sufficient for any of Gild's preferred or common stockholders to participate in the distribution of proceeds. Accordingly, the Company wrote off the entire value of its investment in Gild of US$549,345 previously reported as of 31 December 2015.

10 largest portfolio holdings:

Key developments for the 10 largest portfolio holdings in 2016 (compared to 2015; source: TMT's portfolio companies)

Depositphotos (stock photo marketplace):

· Continuing double-digit growth in revenue and number of files in the photobank

· US$5.83m partial cash exit by TMT

Backblaze (online data backup and cloud storage provider):

· Continuing double-digit growth in revenues

· Stores 300 petabytes (about half as much as Dropbox)

· Listed on Deloitte's Fast 500 of fastest growing companies

Pipedrive (sales CRM software):

· Continuing double-digit growth in revenue and number of paid accounts

· US$17m new equity raised from Atomico and others

Wanelo (online social shopping platform):

· Revenues up 82%

· Over 550,000 stores and 30 million products on the platform

Wrike (work management and collaboration software):

· Continuing double-digit growth in revenue and number of paid accounts

Virool (native video advertising platform):

· Sizeable new convertible note round completed

· Significant growth in new clients and revenues

Unicell (provider of digital marketing solutions and mobile applications and services):

· Generally breakeven

· Traditional business is contracting

· 50%-owned Pango, a parking payment operator in Israel, is fast-growing and cash generative, helping Unicell gradually reduce its debt levels

LeTote (Netflix-style fashion rental platform):

· Continuing triple-digit growth in revenue and number of users

Anews (news reading app):

· Total monthly active users up 85%

· Revenues up 38%

ScentBird (perfume subscription service):

· Revenues up 544%

· Total paying subscribers up 300%

· New make-up palette subscription service Deck of Scarlet launched and rapidly growing

New investments

In 2016, the Company made the following investments:

· US$300,000 in wine-by-the-glass subscription club Vinebox, Inc. (www.getvinebox.com);

· US$150,000 in field service management software provider Send A Job Inc. (www.sendajob.com);

· An additional US$200,000 in KitApps Inc., the provider of Attendify, the mobile app platform for the events industry (www.attendify.com);

· US$300,000 in cloud-based PC emulator Sixa, Inc. (www.sixa.io);

· An additional US$200,000 in native video advertising platform Virool, Inc. (www.virool.com);

· US$300,000 in Theirapp, Inc., developer of APPrise-branded mobile apps for the public relations, investor relations, and corporate communications industries (www.apprise-mobile.com);

· US$299,995 in online marketplace for authentic specialty foods Try The World, Inc. (www.trytheworld.com); and

· An additional US$500,000 in perfume subscription service ScentBird (www.scentbird.com).

NAV per share

The Company's net asset value per share as of 31 December 2016 decreased to US$1.89 (31 December 2015: US$1.91).

Operating Expenses

In 2016, the Company's Administrative Expenses of US$1,065,442 were broadly in line with the 2015 levels (US$997,705). Total Operating Expenses increased in the reporting period due to the bonus charge of US$837,359 (2015: zero), covering the first period of the Company's bonus plan from 1 July 2015 to 30 June 2016.

Dividends

In November 2016, the Company paid its first special dividend of US$0.10 per share, for the total of US$2,774,496.

Financial position

The partial disposal of our successful investment in stock photo marketplace Depositphotos for a net consideration of US$5.83 million significantly improved the Company's cash position in 2016. TMT's founders and senior managers German Kaplun, Artyom Inyutin and Alexander Morgulchik extended their commitment to helping the Company's cash position by deferring half of their respective 2016 salaries (a total of US$150,000) until 31 December 2018. In addition, the same senior managers agreed to defer the entire amounts of their respective bonus awards due to them under the terms of the Company's bonus plan for the financial period from 1 July 2015 to 30 June 2016 (a total of US$489,855), until 31 December 2019. Accordingly, despite the Company's payment of its first dividend in November 2016 and continuing investment programme, as of 31 December 2016 the Company had no financial debt and approximately US$1.06 million in cash reserves. As of the date of this report, the Company has approximately US$870,000 in cash reserves.

Events after the reporting period

TMT's founders and senior managers German Kaplun, Artyom Inyutin and Alexander Morgulchik agreed to defer half of their respective 2017 salaries (a total of US$150,000) until 31 December 2019.

Outlook

2016 was our sixth full year as a publicly traded company. Against the backdrop of continuing investor interest in the Tech/Internet sector, and expected revival in the Tech IPO and M&A markets, we expect to see a number of positive revaluations across our portfolio, especially from our star portfolio companies.

We continue to see exciting investment opportunities in our chosen sectors and look forward to updating our shareholders on the Company's progress in the near future.

Alexander Selegenev

Executive Director

Statement of Comprehensive Income

Statement of Financial Position

Statement of Cash Flows

Statement of Changes in Equity

For the year ended 31 December 2015 and for year ended 31 December 2016, USD

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016

1. Company information

TMT Investments Plc ("TMT" or the "Company") is a company incorporated in Jersey with its registered office at Queensway House, Hilgrove Street, St Helier, JE1 1ES, Channel Islands.

The Company was incorporated and registered on 30 September 2010 in Jersey under the Companies (Jersey) Law 1991 with registration number 106628 under the name TMT Investments Limited. The Company obtained consent from the Jersey Financial Services Commission pursuant to the Control of Borrowing (Jersey) Order 1985 on 30 September 2010. On 1 December 2010 the Company re-registered as a public company and changed its name to TMT Investments PLC.

The memorandum and articles of association of the Company do not restrict its activities and therefore it has unlimited legal capacity. The Company's ability to implement its Investment Policy and achieve its desired returns will be limited by its ability to identify and acquire suitable investments. Suitable investment opportunities may not always be readily available.

The Company will seek to make investments in any region of the world.

Financial statements of the Company are prepared by and approved by the Directors 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.

2. Summary of significant accounting policies

2.1 Basis of presentation

The principal accounting policies applied by the Company in the preparation of these financial statements are set out below and have been applied consistently.

The financial statements have been prepared on a going concern basis, under the historical cost basis as modified by the fair value of available-for-sale financial assets, as explained in the accounting policies below, and in accordance with IFRS. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

2.2 Going concern

The Directors confirm that, after giving due consideration to the financial position and expected cash flows of the Company, they have a reasonable expectation that the Company will have adequate cash resources to continue in operational existence for the foreseeable future, and for at least one year from the date of approval of these financial statements and they have therefore adopted the going concern basis in preparing the financial statements.

2.3 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker who is responsible for allocating resources and assessing performance of the operating segments and which has been identified as the Board of Directors that make strategic decisions. For the purposes of IFRS 8 'Operating Segments' the Company currently has one segment, being 'Investing in the TMT sector'.

Even though the Company only has one segment, there are still geographical disclosures that need to be made to comply with IFRS 8 'Operating Segments'.

The Company analyses revenue and non-current financial assets according to the geographical location of the investment (see note 4).

2.4 Foreign currency translation

(a) Functional and presentation currency

Items included in the financial statements of the Company are measured in United States Dollars ('US dollars', 'USD' or 'US$'), which is the Company's functional and presentation currency.

(b) Transactions and balances

Foreign currency transactions are translated into US$ using the exchange rates prevailing at the dates of the transactions. Exchange differences arising from the translation at the year-end exchange rates of 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 consist of cash at bank and in hand, deposits held at call with banks, bank overdrafts and other short-term highly liquid investments with maturities of three months or less from the date of acquisition.

2.6 Financial assets

Recognition and measurement

Investments are recognized and de-recognized on a date where the purchase or sale of an investment is under a contract whose terms require the delivery or settlement of the investment. The Company manages its investments with a view to profiting from the receipt of dividends and changes in fair value of equity investments.

"Available-for-sale" financial instruments include unlisted equity investments and convertible promissory loan notes. Equity instruments classified as available-for-sale are those which are neither classified as held-for-trading nor designated as fair value through profit or loss. Convertible promissory loan notes are treated as similar in nature to the unlisted equity investments and designated as available-for-sale.

Available-for-sale investments are carried at fair values except for financial assets that do not have a quoted market price in an active market and whose fair value cannot be reliably measured which are measured at cost less any identified impairment losses at the end of the period in accordance with the IAS 39 para 46 (c) exemptions. Fair value information has therefore not been disclosed for those investments.

Where there has been a relevant transaction during the year that gives an indication of the fair value of the available-for-sale unlisted shares, the shares are included at that fair value and the increase or decrease in fair value is recognised in the investment fair value reserve. The "price of recent investment" methodology is used mainly for investments in venture capital companies and includes cost of investment or valuation by reference to a subsequent financing round. Valuation increases above cost are only recognised if that round involved a new external investor and the company is meeting milestones set by investors.

Investments are classified on recognition as "fair value through profit and loss" when their fair values can be estimated reliably on a regular basis and when they are managed on a fair value basis. Fair value changes of investments at fair value through profit and loss are included within profit/loss in the income statement. At 31 December 2016 all investments are classified as "available-for-sale" and none are classified as "fair value through profit and loss".

Financial assets that qualify as an associate as 20% or more of the voting rights are held by the company, are exempt from IAS 28 'Investments in Associates', as TMT Investments plc is a venture capital organisation. Such investments are therefore treated as available-for-sale financial assets.

Income

Interest income from convertible notes receivable is recognized as it accrues by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts the estimated future cash flows through the expected life of the financial asset to the asset's carrying value.

Impairment of available-for-sale financial assets

A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. In the case of available for sale assets, a significant or prolonged decline in the fair value of the financial asset below its cost is considered an indicator that the financial assets are impaired.

If objective evidence indicates that financial assets that are carried at cost need to be tested for impairment, calculations are based on information derived from business plans and other information available for estimating their fair value. Any impairment loss is included in profit/loss for the year in the Statement of Comprehensive Income.

2.7 Net finance income

Net finance income comprises interest income on deposits. Interest income is recognized as it accrues in the statement of comprehensive income, using the effective interest method. Finance costs comprise interest expenses on borrowings and the unwinding of the discount on provisions.

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 neither 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 granted to employees is recognized as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the options. The amount recognized as an expense is adjusted to reflect the actual number of share options 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.

The Company enters into arrangements that are equity-settled share-based payments with certain employees. These are measured at fair value at the date of grant, which is then recognized in the statement of comprehensive income on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest. 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 TMT Investments. The charge is adjusted at each year end date to reflect the actual number of forfeitures, cancellations and leavers during the period. The movement in cumulative charges since the previous year end is recognized in the statement of comprehensive income, with a corresponding entry in equity.

2.11 New IFRSs and interpretations not applied

The IASB has issued the following standards and interpretations which have been endorsed by the European Union to be applied to financial statements with periods commencing on or after the following dates:

The IASB has also issued the following standards and interpretations which have not been endorsed by the European Union:

The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the financial statements in the period of initial application and have decided not to adopt any of them early.

2.12 Accounting estimates and judgements

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 year and at the year-end is the consideration of the fair value of available-for-sale assets, the impairment of available-for-sale assets and share-based payment calculations, as set out in the relevant accounting policies shown above. A number of the available-for-sale financial assets held by the Company are at an early stage of their development. The Company cannot yet carry out regular reliable fair value estimates of some of these investments. Future events or transactions involving the companies invested in may result in more accurate valuations of their fair values (either upwards or downwards) which may affect the Company's overall net asset value.

3 Gains (Losses) on investments

4 Segmental analysis

Geographic information

The Company has investments in six principal geographical areas - USA, Israel, BVI, Cyprus, Estonia and Russia.

Non-current financial assets

As at 31/12/2016

As at 31/12/2015

5 Administrative expenses

Administrative expenses include the following amounts:

6 Staff expenses

Wages and salaries shown above include salaries relating to 2016. These costs are included in administrative expenses.

The bonus scheme payment charge for the year is analysed as follows:

The average number of staff employed (excluding Directors) by the Company during the year was 5 (2015: 5).

The Directors' fees for 2016 were as follows:

The Directors' fees shown above are all classified as 'short term employment benefits' under International Accounting Standard 24. The Directors do not receive any pension contributions or other benefits and hold no share options.

Key management personnel of the Company are defined as those persons having authority and responsibility for the planning, directing and controlling the activities of the Company, directly or indirectly. Key management of the Company are therefore considered to be the Directors of the Company. There were no transactions with the key management, other than their Directors fees, bonuses and reimbursement of business expenses.

7 Net finance income

8 Income tax expense

The Company is incorporated in Jersey. No tax reconciliation note has been presented as the income tax rate for Jersey companies is 0%.

9 Earnings/(Loss) per share

The calculation of basic gain per share is based upon the net gain for the year ended 31 December 2016 attributable to the ordinary shareholders of US$1,763,327 (2015: net loss of US$3,250,752) and the weighted average number of ordinary shares outstanding calculated as follows:

The weighted average number of ordinary shares outstanding before and after adjustment for the effects of all dilutive potential ordinary shares calculated as follows:

The diluted loss per share for 2015 is as the basic loss per share because the conversion of the share options decreases the basic loss per share and is therefore anti-dilutive.

10 Non-current financial assets

Reconciliation of fair value measurements of non-current financial assets:

Available-for-sale investments are carried at fair values. Where financial assets do not have a quoted market price in an active market and their fair values cannot be reliably measured they are measured at cost less any identified impairment losses at the end of reporting period, in accordance with IAS 39 para 46 (c) exemption.

Where there has been a relevant transaction during the year that gives an indication of the fair value of the unlisted shares, the shares are included at that fair value and the increase or decrease in fair value is recognised in the fair value reserve. The "price of recent investment" methodology is used mainly for investments in venture capital companies and includes cost of investment or valuation by reference to a subsequent financing round. Valuation increases above cost are only recognised if that round involved a new external investor and the company is meeting milestones set by investor.

(i) Equity investments as at 31 December 2016:

(ii) Convertible loan notes as at 31 December 2016:

11 Trade and other receivables

12 Cash and cash equivalents

The cash and cash equivalents as at 31 December 2016 include cash on hand and in banks, deposits, net of outstanding bank overdrafts. The effective interest rate at 31 December 2016 was 0.7%.

Cash and cash equivalents comprise the following:

The following table represents an analysis of cash and equivalents by rating agency designation based on Fitch rating or their equivalent:

13 Trade and other payables

14 Other payables

15 Share capital

On 31 December 2016 the Company had an authorised share capital of unlimited shares of no par value and had issued share capital of:

There have been no changes to the Company's share capital between the year-end date and the date of approval of these financial statements.

16 Share-based payments

On 24 October 2012, the Board of Directors approved a share option plan (the "Plan") for directors, officers, employees of or consultants to the Company and/or any company directly or indirectly controlled by the Company.

Under the Plan, options for a total of 7,500,000 ordinary shares in the Company, representing approximately 30% of the then issued share capital (or 23% of the enlarged share capital at the time, assuming full exercise of the options), could be made available at an exercise price determined by the Board or its remuneration committee, which would not be less than the closing middle market price for the Company's share on AIM on the date of grant as published by or on behalf of the London Stock Exchange plc.

Options were to vest on a daily basis over a period of 3 years whilst the option holder remains eligible, and vested options could be exercised on each anniversary of the grant, but if not exercised within 1 year from the allowable date of exercise, would lapse.

None of the options that vested in Year 3 under the Plan were exercised, and those options have now lapsed.

17 Reserves

18 Capital management

The capital structure of the Company consists of equity share capital, reserves, and retained losses.

The Board's policy is to maintain a strong capital base so as to maintain investor and market confidence and to enable the successful future development of the business.

The Company is not subject to externally imposed capital requirements.

No changes were made to the objectives, policies and process for managing capital during the year.

19 Financial risk management and financial instruments

The Company has identified the following risks arising from its activities and has established policies and procedures to manage these risks. The Company's principal financial assets are cash and cash equivalents, investments in equity shares, and convertible notes receivable.

Credit risk

As at 31 December 2016 the largest exposure to credit risk related to cash and cash equivalents, which was US$1,057,098. The exposure risk is reduced because the counterparties are banks with high credit ratings ("BBB" Liquidity banks) assigned by international credit rating agencies. The Directors intend to continue to spread the risk by holding the Company's cash reserves in more than one financial institution.

(i) Exposure to credit risk

The carrying amount of the following assets represents the maximum credit exposure. The maximum exposure to credit risk as at 31 December is as follows:

Market risk

The Company's financial assets are classified as available-for-sale and are measured at fair value. The measurement of the Company's investments in equity shares and convertible notes is largely dependent on the underlying trading performance of the investee companies, but the valuation and other items in the financial statements can also be affected by the interest rate and fluctuations in the exchange rate.

Interest rate risk

Changes in interest rates impact primarily cash and cash equivalents by changing either their fair value (fixed rate deposits) or their future cash flows (variable rate deposits). Management does not have a formal policy of determining how much of the Company's exposure should be to fixed or variable rates.

At 31 December 2016 the Company had a cash deposit of US$ 500,000, earning a variable rate of interest. The Board of Directors monitors the interest rates available in the market to ensure that returns are maximized.

Foreign currency risk management

The Company is exposed to foreign currency risks on investments and salary and director remuneration payments that are denominated in a currency other than the functional currency of the Company. The currency giving rise to this risk is primarily GBP, EUR. The exposure to foreign currency risk as at 31 December 2016 was as follows:

The foreign exchange rates of the USD at 31 December were as follows:

This analysis assumes that all other variables, in particular interest rates, remain constant.

Liquidity risk management

The Company's approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company.

The Company has low liquidity risk due to maintaining adequate banking facilities, by continuously monitoring actual cash flows and by matching the maturity profiles of financial assets and current liabilities.

As at 31 December 2016, the cash and equivalents of the Company were US$1,057,098.

The following are the maturities of current liabilities as at 31 December 2016:

The following are the maturities of non-current liabilities as at 31 December 2016:

20 Related party transactions

Since May 2012, TMT's Moscow-based staff have been located in an office that belongs to a cooperative ("Orgtekhnika") of which the Company's senior managers Alexander Morgulchik and German Kaplun are members. German Kaplun also owns 19.28% of the issued share capital of TMT. Thus Orgtekhnika is considered a related party. Together with other related expenses (support personnel, company car, security services, etc.), the total office rent costs to TMT from 1 February 2015 were US$7,000 per month, and from 1 February 2016 temporarily reduced to zero.

21 Subsequent events

TMT's founders and senior managers German Kaplun, Artyom Inyutin and Alexander Morgulchik agreed to defer half of their respective 2017 salaries (a total of US$150,000) until 31 December 2019.

22 Control

The Company is not controlled by any one party. Details of significant shareholders are shown in the Directors' Report.