Cordlife Group Limited
Annual Report 2016
91
Notes to
The Financial Statements
for the financial year ended 30 June 2016
15. Financial asset designated at fair value through profit or loss (cont’d)
The Group had agreed to sell to Meditech, the Group’s financial asset designated at fair value through profit or
loss, and a 7% senior unsecured convertible note due 3 October 2017 issued by CCBC to the Company in the
principal amount of US$25,000,000 (the “Convertible Note”).
On 30 October 2015, the Company completed the disposal of the financial asset designated at fair value
through profit or loss and a gain on sale of financial asset designated at fair value through profit or loss of
$151,000 was recognised (2015: $Nil).
16. Available-for-sale asset
Group
Company
2016
2015
2016
2015
$’000
$’000
$’000
$’000
Available-for-sale asset
4,200
–
4,200
–
On 1 February 2016, the Group purchased unquoted shares of CellResearch Corporation Pte. Ltd. at cost
amounting to S$4,200,000. The unquoted equities are classified as available-for-sale asset and are measured
at cost as the shares do not have a quoted price in an active market and the fair value cannot be reliably
measured.
17. Derivative asset
Group
Company
2016
2015
2016
2015
$’000
$’000
$’000
$’000
Derivative asset
–
37,971
–
37,971
On 10 November 2014, the Group and Magnum Opus International Holding Limited (“Magnum”) completed the
acquisition of a 7% senior convertible note due 3 October 2017 issued by CCBC to Meditech in the principal
amount of US$50 million (the “CCBC Note”). Under the terms of the acquisition, the Group will purchase 50%
of the CCBC Note and Magnum will purchase the remaining 50% of the CCBC Note. The Group and Magnum
also entered into a facility agreement pursuant to which the Company will lend Magnum funds in an aggregate
amount of US$46,500,000. The loan to external party is recognised as non-current loans and receivables at
amortised cost (Note 19).
The Convertible Note bears interest at a rate equal to 7% per annum and is payable annually on 3 October in
arrears until the maturity of the Convertible Note.
Under the terms of the Convertible Note, the Group may, at any time before the maturity of the Convertible
Note, convert the principal amount of the Convertible Note into 8,809,020 fully paid shares in CCBC. The
conversion price per share in CCBC under the Convertible Note based on the principal amount of US$25 million
is US$2.838.
The financial instrument was bifurcated into a bond receivable and a conversion option, which were recognised
as non-current loans and receivables at amortised cost (Note 19) and a financial derivative asset respectively.
As at 30 June 2015, the fair value of the derivative asset is $37,971,000.
Fair value changes on the conversion option is mainly affected by the time to maturity of the bond, the share
price of CCBC as at the reporting date compared to the date of acquisition and the value of the bond as a
function of the cash inflow from the bond at redemption date. Fair value gain on derivative asset of $2,519,000
(2015: $12,922,000) is recognised in profit or loss.
