COINSILIUM GROUP LIMITED - Unaudited Interim Results PR Newswire

19 January 2016

COINSILIUM GROUP LIMITED
(“Coinsilium” or the “Company”)

UNAUDITED INTERIM FINANCIAL INFORMATION FROM INCORPORATION TO 30 JUNE 2015

30 June 2015 Interim Report

Unaudited interim results for the period from incorporation and ended 30 June 2015

Coinsilium Group Limited (“Coinsilium” or the “Company”), the ISDX quoted, blockchain investment and development company, is pleased to announce its maiden unaudited interim results for the period since incorporation 25 September 2014 and ended 30 June 2015.

Key Highlights

Financial

    --  Raised a total of £660,000 cash (gross) during the period.

    --  Paid £2.04m, by way of an issue of 20,500,000 new ordinary shares at an
        implied price of 8p each and 3,125,000 shares at an implied price of
        12.8p each respectively, to acquire: 100% of the assets and business of
        Seedco Ventures Limited (“SVL”) including the “Seedcoin” brand and
        investments in six investee companies operating in, and developing
        applications and business models that relate to blockchain technologies;
        and 27.3% of TRAC Technologies (“TRAC”), a gold trading platform
        developing a gold-backed cryptocurrency proposition.

    --  Loss per share of 2 pence for the period. Net Assets amounted to
        £2,137,125.

    --  As at 30 June 2015, cash and cash equivalents was £45,534. Financial
        assets available for sale were £663,912.

Investment

    --  Coinsilium, through its BVI incorporated wholly-owned subsidiary,
        Seedcoin Limited, has built up interests in eleven investee companies
        developing and/or utilising blockchain technologies.

    --  Coinsilium consolidated into its group structure its wholly-owned
        UK-incorporated advisory and consultancy subsidiary, Coinsilium Limited.

    --  Coinsilium established its blockchain technology accelerator programme
        'Block Chain Space' as a Hong Kong-based wholly-owned subsidiary,
        Blockchain Space Limited.

Development

    --  Coinsilium Group Limited established its corporate structure comprising
        the Company and its advisory and training arm - Coinsilium Limited; its
        investing division; Seedcoin Limited, and its incubator/accelerator
        Blockchain Space Limited (collectively the “Group”).

    --  Increased its investment portfolio to achieve a diverse critical mass.

    --  Developed the organisation with relevant staffing and infrastructure to
        carry out its corporate advisory, business consultancy and educational
        services. 

Post Period end highlights

    --  Admission to ISDX Growth Market on 24 December 2015 having raised
        c.£1.12m (gross) through the issue of new ordinary shares at 10p per
        share.

    --  Obtained accreditation as a CPD (Continuing Professional Development)
        provider and trainer

    --  Inaugural Block Chain Space accelerator programme fully subscribed and
        launches in February in Barcelona

Statement by the Board

Coinsilium Group Limited (“Coinsilium” or the “Company”) was incorporated on 25 September 2014 as the holding company for a group of wholly owned subsidiary companies being: the Company's advisory arm, Coinsilium Limited (“Coinsilium UK”); its investing division, Seedcoin Limited (“Seedcoin”); and Coinsilium's accelerator, Blockchain Space Limited (“Block Chain Space”); (collectively the “Group”), for the principal activity of investing in blockchain technologies and companies.  Coinsilium's operations also include planned in-house development of blockchain applications and providing consultancy services within the industry (corporate/business advisory) and to large corporates and individuals looking to learn more about the disruptive potential of blockchain technology (consultancy and training).

To date Coinsilium has built up a portfolio of interests in 12 blockchain fintech focused companies. We believe that a combination of the financial investment and advisory support we provide to our investee companies will help accelerate their commercial development and product rollout, thereby generating shareholder value.

A blockchain is an immutable distributed ledger that chronologically records the transfer of value and data.  The first and most widely known application of a blockchain is bitcoin – the digital units of value whose ownership transfers are recorded on the Bitcoin blockchain.

We believe that, as with the Internet, it is the early adopters who are best positioned to embrace and financially gain from the potential of blockchain technologies and applications.  As an early adopter, Coinsilium is well positioned to take advantage of the global market opportunity that blockchain technology presents both through its spread of portfolio investments operating in the space and directly through its own initiatives.

Coinsilium intends to become a leading financier and adviser in blockchain technologies, building a brand and portfolio which will attract increased investment opportunities from the around the world.  Furthermore, by being recognised as a thought leader on the technology and industry, Coinsilium will attract more specialist consultancy work, providing services to major corporates as the technologies gain further traction and acceptance in everyday use.  Part of the strategy to increase Coinsilium's profile was to become the world's first IPO of a blockchain technology company on a Recognised Investment Exchange, which we are pleased to report occurred when Coinsilium was admitted to trading on ICAP's ISDX growth market here in London on Christmas Eve 2015.

These interim financials cover the period from incorporation to the period ended 30 June 2015.  We look forward to reporting on the full financial year ending 31 December 2015 in due course and providing regular updates on the Company's investment portfolio and its own activities.  We thank all stakeholders for their support of the Company to date and we hope you find the scope and potential of Coinsilium, and blockchain technology, as exciting as we do.

Cameron Parry
Executive Chairman


STATEMENT OF TOTAL COMPREHENSIVE INCOME


                                                                  Note  9 months
                                                                              to
                                                                         30 June
                                                                            2015
                                                                       Unaudited

                                                                             GBP

Revenue                                                                    5,907

Cost of sales                                                                  -
                                                                         _______

Gross Profit                                                               5,907

Administrative expenses                                                (705,229)

Other gains/(losses)                                                           -
                                                                         _______

Profit/(Loss) before Income Tax                                        (699,322)
                                                                         _______

Income tax expense                                                             -
                                                                         _______

Profit/(Loss) for the Period from Continuing Operations                (699,322)

                                                                         _______

Other Comprehensive Income

Items that will not be reclassified to profit or loss                          -

Items that may be subsequently reclassified to profit or loss                  -
                                                                         _______

Total Other Comprehensive Income for the Period, Net of Tax                    -
                                                                         _______

Total Comprehensive Income for the Period attributable to owners               -
of the Company
                                                                         _______

Earnings per Share

Basic and diluted earnings per share attributable to equity        2      (0.02)
holders of the Company
                                                                         _______




STATEMENT OF FINANCIAL POSITION


                                          As at
                                        30 June
                                           2015

                                      Unaudited

                                            GBP

Assets

Non Current Assets

Goodwill                              1,418,501

Intangible assets                           400

Available for sale financial assets     663,912

Other financial assets                  131,393

                                       ________

                                      2,214,206

Current Assets

Other receivables                        63,493

Cash and cash equivalents                45,534
                                       ________

                                        109,027

                                       ________

Total Assets                          2,323,233

                                       ________

Equity and Liabilities

Called up share capital                       -

Share premium account                 2,836,447

Retained earnings                     (699,322)
                                       ________

                                      2,137,125

Current Liabilities

Trade and other payables                186,108
                                       ________

Total Equity and Liabilities          2,323,233
                                       ________




STATEMENT OF CHANGES IN EQUITY


                                     Attributable to equity shareholders

                                 Share     Share   Retained Earnings
                                Capital   Premium                      Total

                                  GBP       GBP           GBP           GBP

Balance at incorporation               -        -*                 -         -

Comprehensive loss for the             -         -         (699,322) (699,322)
period

                                ________  ________          ________  ________

Total comprehensive income for         -         -         (699,322) (699,322)
the period

                                ________  ________          ________  ________

Transaction with owners

Shares issued on incorporation        -*        -*                 -         -

Shares issued                          - 2,836,447                 - 2,836,447

                               ________  ________          ________  ________ 

Balance as at 30 June 2015             - 2,836,447         (699,322) 2,137,125

                                ________  ________          ________  ________



1 Ordinary share of £nil par value issued and fully paid on incorporation.


STATEMENT OF CASH FLOWS


                                                           9 months to
                                                               30 June
                                                                  2015

                                                             Unaudited

                                                                   GBP

Cash Flows from Operating Activities

Loss before taxation                                         (699,322)

Adjustments for:

    --  Amortisation                                           133,950

    --  Issue of shares – Director fees                        160,000

Changes in working capital:

(Increase) in trade and other receivables                     (63,493)

Increase in trade and other payables                           186,108

                                                               _______

Net Cash used in operating activities
                                                             (282,757)

                                                               _______

Cash Flows from Investing Activities

Purchase of available for sale financial assets              (176,162)

Purchase of other financial assets                           (131,393)

Purchase of intangible assets                                    (600)

                                                               _______

Net Cash outflows from investing activities
                                                             (308,155)

                                                               _______

Cash Flows from Financing Activities

Net cash proceeds from issue of shares                         636,447

                                                               _______

Net Cash Generated from Financing Activities
                                                               636,447

                                                               _______

Net Increase in Cash and Cash Equivalents                       45,534

                                                               _______

Cash and cash equivalents at the beginning of the period             -

                                                               _______

Cash and Cash Equivalents at end of Period                      45,534

                                                               _______



Non Cash Transactions

On 31st March 2015, 20,500,000 ordinary shares of £nil par value were issued at a price of £0.08 per share as consideration for the acquisition of the business and assets of Seedco Ventures Limited, totalling £1,640,000.

On 15th April 2015 two non-executive directors were appointed to the Company. 1 million Ordinary shares were issued to each of the two Directors on a fully paid basis, at an implied price of 8p per share.

On 24 June 2015 the Group acquired a 27.3% interest in TRAC Technology Ltd for a consideration of £400,000. The consideration was satisfied by the issue and transfer of, in aggregate 3.125 million ordinary shares in the Company.


NOTES TO THE INTERIM FINANCIAL STATEMENTS

1.   Basis of Preparation

General Information

The Company was incorporated in the British Virgin Islands on 25 September 2014 as a limited liability company with the name Coinsilium Group Limited.

The Company is domiciled in the British Virgin Islands.

The principal business of the Company and its subsidiaries is investing in blockchain technologies with a particular focus on fintech. Headquartered in London with offices in Hong Kong, the Group makes investments in innovative blockchain / fintech companies, with the intent of supporting the further development and commercialisation of these technologies.

Basis of Preparation

The interim financial information has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union (“IFRS”) and those parts of the BVI Business Companies Act applicable to companies reporting under IFRS. 

The interim financial information contained in this document does not constitute statutory accounts.  In the opinion of the directors, the interim financial information for this period fairly presents the financial position, result of operations and cash flows for this period. 

The Board of Directors approved this interim financial information on 18 January 2016

The interim financial information is presented in Pound Sterling (£), the functional currency of the Company.

Statement of Compliance

The interim financial information has been prepared in accordance with the requirements of the ISDX Growth Market Rules for Issuers.  As permitted, the Company has chosen not to adopt IAS 34 “Interim Financial Statements” in preparing this interim financial information. The interim financial information should be read in conjunction with the Admission Document for the period ended 31 March 2015, which has been prepared in accordance with IFRS as adopted by the European Union

Basis of Consolidation

Subsidiaries are all entities over which the group has control. The Group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.  They are deconsolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations.  The consideration transferred for the acquisition of a subsidiary or a business is the fair values of the assets transferred, the liabilities incurred to former owners of the acquiree and the equity interests issued to the Group.  The consideration transferred includes the fair values of any asset or liability resulting from a contingent consideration arrangement.  Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on the acquisition date.    Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date.

Acquisition-related costs are expensed as incurred. Inter-company transactions, unrealised gains and losses on intra-group transactions and balances between group companies are eliminated on consolidation.

Accounting policies

The financial information for the period ended 30 June 2015 has not been audited or reviewed by the Company’s Auditor. 

The figures were prepared using applicable accounting policies and practices consistent with those adopted in the in the Historical Financial Information for the period ended 31 March 2015 as set out in the Admission Document, and which are detailed below.

Financial Assets

All financial assets are recognised and derecognised when the Group becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for the transaction costs, except for those carried at fair value through profit and loss which are measured initially at fair value.   Subsequent measurement of financial assets and liabilities are as set out below.

For the purpose of subsequent measurement, financial assets, other than those designated as effective hedging instruments, have been classified into the following categories on initial recognition:

·     Available for sale (AFS) financial assets

·     Loans and receivables

All income relating to financial assets that are recognised in profit and loss are presented within other income.

Financial assets are assessed for indicators of impairment at each balance sheet date. Provision against financial assets is made where there is objective evidence that the value of a financial asset or a group of financial assets is impaired.

The amount of the write down is determined based on the category of the financial asset as set out below.

(i)   Available for Sale Investments

Available for sale assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets.

Available for sale investments are initially measured at fair value plus incidental acquisition costs.  Subsequently, they are measured at fair value in accordance with IAS 39.  Gains and losses on measurement are recognised in other comprehensive income except for impairment losses and foreign exchange gains and losses on monetary items denominated in a foreign currency, which are recognised directly in profit or loss.  Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss. The loss is measured as the difference between the cost of the financial asset and its current fair value less any previous impairment.

Unquoted investments are valued by the directors using primary valuation techniques such as recent transactions, last price or net asset value.

Where the fair value of an equity investment cannot be estimated reliably, such as investments in unquoted companies, fair value is based on cost less any impairment charges.  In this case impairment charges are made to the profit and loss. The Company assesses at each period end date whether there is any objective evidence that a financial asset or group of financial assets classified as available-for-sale has been impaired. An impairment loss is recognised if there is objective evidence that an event or events since initial recognition of the asset have adversely affected the amount or timing of future cash flows from the asset. A significant or prolonged decline in the fair value of a security below its cost shall be considered in determining whether the asset is impaired.

(ii)  Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.  After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash at hand and current and deposit balances at banks with maturities of three months or less from inception, together with other short-term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. Cash equivalents include cash held on behalf of the Group by its solicitors.

Equity

An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.

The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.

The share capital account represents the amount subscribed for shares at nominal value. Since the Company’s shares have a Nil par value, no amounts are credited to share capital and all amounts received on the initial issuing of shares are credited to the share premium.

Retained earnings include all results as disclosed in the statement of comprehensive income.

Going Concern

The Directors have assessed the current financial position of the Company, along with future cash flow requirements to determine if the Company has financial resources to continue as a going concern for the foreseeable future. On 2nd July 2015, the Company raised an additional £351,960 (before transaction costs) of pre-IPO funding, on the 4th September 2015, the Company raised an additional £300,000 (before transaction costs) of pre-IPO funding and on the 24th December 2015 the Company raised £1.12m (before transaction costs) on IPO.  For this reason the Directors continue to adopt the going concern basis in preparing the historic financial information. The Interim financial information does not include any adjustments that would result in the going concern basis of preparation being inappropriate.

Foreign Currency Translation

(i)   Functional and presentation currency

The functional currency is £ sterling.  This is on the basis that the Group is based in the UK, its overheads are generally incurred in sterling, and its funds are generally held mainly in sterling bank accounts, and its investors have invested in sterling-based instruments.

(ii)  Transactions and balances

Transactions in foreign currencies are translated at the exchange rate ruling at the date of each transaction. Foreign currency monetary assets and liabilities are retranslated using the exchange rates at the reporting date. Gains and losses arising from changes in exchange rates after the date of the transaction are recognised in profit and loss. Non–monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the date of the original transaction.

Current and Deferred Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the period.  Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.  The Group’s liability for current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.  Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be recognised.  Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates and laws that are expected to apply in the period when the liability is settled or the asset is recognised based on tax laws and rates that have been enacted at the balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt with in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and 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.

Revenue

Revenue comprises the fair value of the consideration received or receivable for the consultancy and advisory services provided, excluding VAT and relevant Sales Taxes.

Revenue is recognised for services when the group has satisfied its performance obligation in respect of the services.  The amount recognised for the services performed is the consideration that the group is entitled to for performing the services provided.

Operating Leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the group as lessee are classified as operating leases.

Where the group is a lessee, payments in respect of operating leases agreements are recognised as an expense on a straight line basis over the period of the lease, net of any incentives received from the lessor.  Associated costs, such as maintenance and insurance are expensed as incurred.

Related Parties

Parties are considered to be related to the Company if the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals (being members of key management personnel, significant shareholders and/or their close family members) or other entities and include entities which are under significant influence of related parties of the Company where those parties are individuals, and post-employment benefit plans which are for the benefit of employees of the Company or of any entity that is a related party of the Company.

Intangible Assets

(i)   Brands and Trademarks

The Group has acquired the following intangible assets.  These assets have been recorded at cost, being their estimated fair value at the time of acquisition.  They are amortised over estimated useful lives as follows:


Brands and trademarks  1 year



(ii)  Goodwill

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognised.  Goodwill is carried at cost less accumulated impairment losses.

(iii)  Impairment testing

For the purposes of assessing impairment of goodwill, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).  As a result some assets are tested individually for impairment and some are tested at cash-generating unit level. All other individual assets or cash-generating units are tested for impairment annually.

Foreign Currencies

These accounts are presented in the functional currency of the Group which the directors consider to be the UK Sterling Pound (£).

Transactions in foreign currencies are translated at the exchange rate ruling at the date of each transaction. Foreign currency monetary assets and liabilities are retranslated using the exchange rates at the reporting date. Gains and losses arising from changes in exchange rates after the date of the transaction are recognised in profit and loss. Non–monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated at the exchange rate at the date of the original transaction.

      Share Based Payments

All services received in exchange for share-based consideration are measured at their fair values.

In all circumstances to date where the Group has agreed with its creditors to make share based-payments, the consideration for the services has been fixed as a sterling cash value, and the consideration will be in the form of shares issued at the market value at the time of issue if the company completes the proposed IPO.   

Accordingly the fair value of the services have been recorded at their sterling cash value agreed at the time of the transaction and recorded as an expense in the income statement at that amount.

Financial Liabilities

Financial liabilities are recognised in the Group’s balance sheet when the Group becomes a party to the contractual provisions of the instrument and are initially measured at fair value.  They are derecognised when it is extinguished, discharged, is cancelled or expired.

The Group’s financial liabilities comprise trade and other payables.

Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest rate method less settlement payments.

New and Amended Standards Adopted by the Company

      New and Amended Standards

(i)   New and amended standards and interpretations mandatory for the first time for the financial period beginning 25 September 2014 and relevant to the Company.

The financial statements have been drawn up on the basis of accounting standards, interpretations and amendments effective at the beginning of the accounting period. The following new standards, interpretations and amendments to published standards effective in the period have been adopted by the Company:


Standard            Impact on initial application                Effective date

IAS 27              Separate financial statements                1 January 2014

IAS 27 (amendment)  Separate financial statements – Investment   1 January 2014
                    entities

IAS 28              Investments in associates and joint ventures 1 January 2014

IFRS 10             Consolidated financial statements            1 January 2014

IFRS 10 (amendment) Consolidated financial statements –          1 January 2014
                    Investment entities



   


IFRS 10 (amendment) Consolidated financial statements –         1 January 2014
                    transition guidance

IFRS 11             Joint arrangements                          1 January 2014

IFRS 11 (amendment) Joint arrangements – transition guidance    1 January 2014

IFRS 12             Disclosure of interests in other entities   1 January 2014

IFRS 12 (amendment) Disclosure of interests in other entities – 1 January 2014
                    Investment entities

IFRS 12 (amendment) Disclosure of interests in other entities – 1 January 2014
                    transition guidance



The above pronouncements have been adopted for the first time this period as part of the Company’s first reporting period.

      New and Amended Standards

(ii)  New and amended standards and interpretations in issue but not yet effective or not yet endorsed and not early adopted.

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.  Unless otherwise stated, the Directors are assessing the possible impact of the following on the Financial Statements. However, the Directors consider that these new and amended standards are not expected to have a material impact on the Company’s results or shareholders’ funds.


Standard                      Impact on initial application     Effective date

IAS 1 (Amendments)            Presentation of Financial         1 January 2016*1
                              Statements: Disclosure
                              initiative 

IAS 27 (Amendment)            Equity method in Separate         1 January 2016*1
                              Financial Statements

IAS 28 (Amendments)           Investments in Associates and     1 January 2016*1
                              Joint Ventures 

IAS 28 and IFRS 1 and IFRS 12 Investment Entities: Applying the 1 January 2016*1
(Amendments)                  Consolidation Exception

IAS 38 (Amendment)            Clarification of Acceptable       1 January 2016*1
                              Methods of Amortisation

IFRS 9 (Amendments)           Financial Instruments             1 January 2018*1

IFRS 10 (Amendments)          Consolidated Financial            1 January 2016*1
                              Statements 

IFRS 15                       Revenue from contracts with       1 January 2017*1
                              customers

Annual Improvements           2010 – 2012 Cycle                 1 July 2014*1

Annual Improvements           2011 – 2013 Cycle                 1 July 2014*1

Annual Improvements           2012 – 2014 Cycle                 1 July 2016*1



*1 Not yet endorsed by the EU

Risk Management

The directors have adopted the following policies to manage risk in respect of financial assets and liabilities:

(i)   Financial Instrument Risk

The Group is exposed to various risks in relation to financial instruments. The main types of risks are market risk, credit risk and liquidity risk.

The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of Directors, and focuses on actively securing the Group’s short to medium-term cash flows by minimising the exposure to financial markets. Long-term financial investments are managed to generate lasting returns for shareholders.

The Group does not actively engage in the trading of financial assets for speculative purposes.

(ii)  Market Risk

The Group’s exposure to market price risk mainly arises from potential movements in the fair value of its investments.  This risk can be significant due to the early-stage nature of many investments.  The Company manages this price risk within its investment strategy by carrying out careful research prior to any decision to invest and by investing in a diversified range of entities within their target sector.

(iii)  Liquidity Risk

The Group’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at 30 June 2015, the Group had unrestricted cash of £45,534 to settle accounts payable of £186,108. Most of these accounts payable have contractual maturities of less than 30 days and are subject to normal trade terms. Through the funds raised in early July 2015, management expects that the Group will generate cash sufficient to settle operating accounts payable.

(iv) Credit Risk

Credit risk is the risk of loss associated with counterparty’s inability to fulfil its payment obligations. The Group’s credit risk is attributable to cash and trade receivables. The credit risk on cash is limited because the Group invests its cash in deposits with well-capitalised financial institutions with strong credit ratings.

(v)  Interest Rate Risk

Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets that the Group uses. Treasury activities take place under procedures and policies approved and monitored by the Board to minimise the financial risk faced by the Group. Interest bearing assets comprise cash and cash equivalents which are considered to be short- term liquid assets. The Group is not exposed to any significant interest rate risk as the amount of interest receivable is insignificant.

(vi) Foreign Currency Risk

At 30 June 2015 management maintained the majority of the Group’s cash assets in sterling bank accounts to minimise foreign currency risk.  The company will continue to hold any significant cash assets in sterling.

In respect of investments, management believe that the foreign currency risk is a far lower risk than the market risk and do not currently actively look to manage foreign currency risk arising from investments.  

(vii) Capital Risk Management

The Group's objectives when managing capital are to safeguard the entity's ability to continue as a going concern, so that it can continue to develop and support its interests in cryptocurrency and blockchain technology products and services and provide returns for shareholders and benefits for stakeholders.

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

The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets.

The Group considers its capital to include share capital, share premium and retained earnings. Net cash comprises cash and cash equivalents only as there is no debt held.

Critical Accounting Estimates

The preparation of the consolidated financial statements in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the Interim financial information and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amounts, events or actions, actual results ultimately may differ from these estimates.

Estimates and judgments are continually 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 key areas of judgement used in the preparation of these financial statements are as follows: 

(i)   Fair Value Measurement

For the first 12 months following their acquisition, investments are valued at cost as this is deemed to be the fair value.  Subsequent to this, management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date. 

(ii)  Business Combinations

Coinsilium Group Limited acquired its interest in Coinsilium Limited by way of an exchange of shares.  The directors have not treated the transaction as a business acquisition in accordance with IFRS 3: Business combinations on the basis that neither company had commenced active trading. Coinsilium Limited had no inputs, processes or outputs at the time of the transaction. The entity had not begun planned principal activities, it had no employees, nor was it pursuing a plan to produce outputs.

(iii)  Business Combinations (Ctd)

Coinsilium Group Limited acquired the business and assets of Seedco Ventures Limited by way of an issue of Coinsilium Group Limited shares.  Whilst there were shareholders and directors who were common to both companies, in the opinion of the directors those common to both companies were not in a position to exert control over both companies.  Accordingly the transaction has been treated as a business acquisition with Coinsilium Group Limited as the acquirer. The assets acquired were deemed to meet the definition of a business as although only available for sale investments were recognised on acquisition, Seedco Ventures Ltd had begun planned principal activities, had a management team, was pursuing a plan to produce outputs and will be able to obtain access to customers.

(iv) Assessment of Control and Significant Influence

Where the proportion of equity held in an investment is near 20%, the directors consider carefully whether the Group has significant influence over the entity.  The directors consider the percentage of equity held, the extent to which they are actually involved with management of the entity and their ability to change the percentage of equity held/ influence management in the future.  Where management believes that the Group exerts significant influence over an investment, the investment will be considered an associate investment in the accounts.  

In the case of many of the investments acquired from Seedco Ventures Limited, Coinsilium Group Limited has agreed not to exercise its rights as a shareholder to influence the operation of the investees’ businesses for the first twelve months after it acquired an interest in the investment.  These agreements override any potential rights to exert significant influence or control these businesses, either as shareholder or through the appointment of directors.  Accordingly the directors have concluded these investments should be classified as available for sale investments as the Group has agreed and is legally bound not to exert any significant influence or control over these investments.

Following the lapse of the 12 month period over which the Group is legally bound not to appoint a director to the Board, or to influence strategic or operational policy over the investee the Group may henceforth be required to reclassify some or all of these investments as either associates or subsidiaries as may be the case considering the situation at the time.

2.   Loss Per Share (LPS)

Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares outstanding during the period.


                                               Weighted
                                                average
                                              number of  Loss per
                                     Profit      Shares     Share

                                        GBP                   GBP

Basic LPS

Loss attributable to shareholders (699,322)  39,358,813      0.02
                                    _______  __________    ______

                                  (699,322)  39,358,813      0.02
                                    _______  __________    ______



Diluted earnings per share is calculated by adjusting the weighted average number of shares to assume the conversion of all dilutive potential shares.  The Company had no dilutive potential shares during the period. 

The Directors of Coinsilium Group Limited take responsibility for this announcement.

For further information please visit www.coinsilium.com or contact the following:


Cameron Parry                  Coinsilium Group Limited   +44 (0) 207 099 0740

David Coffman / Asha Chotai    Daniel Stewart & Company   +44 (0) 207 776 6550
                               (Corporate Adviser & Joint
                               Broker)

Nick Emerson / Jake Nixon      SI Capital Limited         +44 (0) 1483 413 500
                               (Joint Broker)

Josh Royston / Hilary Buchanan Alma PR                    +44 (0) 7515 805 218
                               (Public Relations)



Notes to Editor

Coinsilium is a London-based blockchain technology focused investment and development company, supporting early-stage blockchain companies through investment, acceleration, development and education. 

Coinsilium is the world's first blockchain technology focused company to be admitted to trading on an Exchange Regulated Market and has a portfolio of interests in blockchain companies and projects.  In addition to pursuing its investment strategy, through the experience of the Directors and management team, Coinsilium is able to offer a suite of services including corporate/business advisory, CPD accredited training & education, investment solutions, in-house development and other professional services to blockchain/fintech companies and major corporates wanting to learn more about blockchain technology and its implications to the way the world transfers value over the internet.

For further information please visit http://www.coinsilium.com/