Asia Wealth Group Holdings Ltd - Interim Results to 31 August 2019
Announcement provided by
Asia Wealth Group Holdings Ltd · AWLP01/11/2019 11:40
FOR IMMEDIATE RELEASE
("
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED
The Board is pleased to report the unaudited interim results of
Chairman’s Statement
Financial Highlights
The highlights for the six months ended
· Consolidated revenue of
· Gross profit for
· Cash at bank and on hand of
The Group reports a loss after tax of
Cash balance has decreased by
The Board has taken and is continuing to forge new revenue generating relationships, as well as expanding revenue creating opportunities, in both new avenues and existing. We continue to seek alliances and partnerships with firms in the same and new sectors.
The Accounts have not been audited or reviewed by the Company’s auditors.
The Directors of the Company accept responsibility for the content of this announcement.
Executive Chairman
Contacts:
www.asiawealthgroup.com
EXTRACTS ARE SET OUT BELOW:
Consolidated Statement of Financial Position
At
Expressed in
Note 31-Aug-19 31-Aug-18
Non-current assets
Fixed assets 4 10,233 18,591
Investment property 5 377,809 373,981
388,042 392,572
Current assets
Cash and cash equivalents 725,940 1,387,633
Trade receivables 227,525 201,902
Financial assets at fair value through profit or 6 230,302 318,162
loss
Loans and other receivables 7 647,426 94,970
Prepayments and other assets 85,063 97,047
1,916,256 2,099,714
Total assets $ 2,304,298 $ 2,492,286
Equity
Share capital 10 913,496 913,496
Treasury Shares 10 (318,162) -
Consolidation reserve 405,997 405,997
Translation reserve 32,209 25,839
Retained earnings/(accumulated deficit) 86,633 (70,068)
Total equity 1,120,173 1,275,264
Non-current liabilities
Liabilities under finance lease agreements 13 - 4,485
Current liabilities
Trade payables 1,064,832 1,136,351
Due to related parties 3,419 1,177
Liabilities under finance lease agreements 13 4,796 8,970
Other payables and accrued expenses 111,078 66,039
1,184,125 1,212,537
Total liabilities 1,184,125 1,217,022
Total equity and liabilities $ 2,304,298 $ 2,492,286
Consolidated Statement of Comprehensive Income
For the half year ended
Expressed in
Note Mar – Aug 2019 Mar – Aug 2018
Revenue
Commission income 780,283 1,221,908
Rental income 16,736 15,651
Other income 310 3,401
Revenue 797,329 1,240,960
Expenses
Commission expense 455,983 685,743
Professional fees 8 144,529 141,863
Directors’ fees 8 152,245 146,607
Impairment expense - 5,372
Travel and entertainment 40,788 33,625
Office expenses 29,467 24,795
Wages and salaries 32,977 29,691
Depreciation 4, 5 17,776 16,575
Rent 9,109 8,518
Marketing expenses 2,830 4,029
Other expenses 5,594 5,778
Bank charges - -
Sundry expenses - -
891,298 1,102,596
Net profit/(loss) from operations (93,969) 138,364
Other income/(expenses)
Foreign exchange gain/(loss) 18,402 (72,477)
Interest Income 38,799 199
57,201 (72,278)
Net profit/(loss) before finance cost (36,768) 66,086
Finance cost
Interest expense (460) (424)
Net profit/(loss) before taxation (37,228) 65,662
Taxation 14 - -
Total comprehensive income (loss) $ (37,228) $ 65,662
Consolidated Statement of Changes in Equity
For the half year ended
Expressed in
31-Aug-19 Share Capital Treasury Consolidation Translation Retained Equity Shares Reserve Reserve Earnings Number US$ Balances at 11,433,433 913,496 (318,162) 405,997 29,325 123,861 1,154,517 beginning of 1 Mar 2019 Translation - - - 2,884 - 2,884 differences Total - - - - (37,228) (37,228) comprehensive income Balances at 11,433,433 913,496 (318,162) 405,997 32,209 86,633 1,120,173 end of 31 Aug 2019 31-Aug-18 Share Capital Treasury Consolidation Translation Retained Equity Shares Reserve Reserve Earnings Number US$ Balances at 11,433,433 913,496 405,997 28,725 (135,730) 1,212,488 beginning of 1 Mar 2018 Translation - - - (2,886) - (2,886) differences Total - - - - 65,662 65,662 comprehensive income Balances at 11,433,433 913,496 405,997 25,839 (70,068) 1,275,264 end of 31 Aug 2018
Consolidated Statement of Cash Flows
For the half year ended
Expressed in
Mar – Aug 2019 Mar – Aug 2018
Operating activities
Total comprehensive income/(Loss) (37,228) 65,662
Add back Depreciation 18,941 16,575
Receivables (69,498) 26,675
Loan and Other Receivable (24,408) 327
Prepayments and other assets 5,070 5,475
Payables (250,466) (58,241)
Liabilities Under Finance Lease Agreements (4,539) (5,230)
Deferred Revenue (14,890) (108)
Other Payables and Accrued Expenses 30,811 (19,977)
Cash flows from operating activities (346,207) 31,158
Investing activities
Acquisition of fixed assets (15,636) (10,036)
Investments 714 26,362
Change in equity 2,884 (2,886)
Cash flows from investing activities (12,038) 13,440
Financing activities
Net advances from related party 305 (3,620)
Cash flows from financing activities 305 (3,620)
Net increase/(decrease) in cash and cash (357,940) 40,978
equivalents
Cash and cash equivalents at beginning of 1,083,880 1,346,655
year
Cash and cash equivalents at end of period $ 725,940 $ 1,387,633
Cash and cash equivalents comprise cash at
bank.
1) GENERAL INFORMATION
The principal activity of the Parent Company and its subsidiaries (the "Group") is to provide wealth management advisory services to Asian-based high net worth individuals and corporations.
Incorporation Country of Functional Ownership
Date Incorporation Currency Interest
2019 2018
Meyer Asset 2000 British Virgin US Dollars 100 .00% 100.00%
Management Ltd. Islands
("Meyer BVI")
Meyer 2010 Thailand Thailand Baht 49 .00% 49.00%
International
Limited
("Meyer Thailand")
Prime RE Limited 2016 Thailand Thailand Baht 49 .00% 49.00%
("Prime RE")
On
On
On
2) SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in the preparation of the Group's consolidated financial statements are set out below.
a) Statement of compliance
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRSs") and interpretations issued by the IFRS Interpretations Committee ("IFRS IC") applicable to companies reporting under IFRSs. The financial statements comply with IFRSs as issued by the
b) Basis of preparation
The consolidated financial statements have been prepared on the basis of historical costs and do not take into account increases in the market value of assets.
The Group's financial records and statements are maintained and presented in
The accounting policies have been applied consistently by the Group and are consistent with those used in the previous year, except for IFRS 9, "Financial Instruments" ("IFRS 9"). See note 3 for an explanation of the impact.
c) Use of estimates
The preparation of consolidated financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing 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.
d) Investment in subsidiaries
Basis of consolidation
The consolidated financial statements include the financial statements of the Parent Company and its subsidiaries for the six month ended
Subsidiaries are enterprises controlled by the
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
d) Investment in subsidiaries (Cont’d)
Basis of consolidation (Cont’d)
Non-controlling interests pertain to the equity in a subsidiary not attributable, directly or indirectly to the
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not wholly-owned and are presented in the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position, separately from the Parent Company’s equity.
Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity as an “equity reserve” and attributed to the owners of the Group.
Where necessary, adjustments are made to the financial statements of the subsidiary to bring the accounting policies used in line with those used by the Parent Company.
All intra-group transactions, balances, income and expenses are eliminated in consolidation. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Acquisitions
The acquisition method of accounting is used to account for business combinations by the Group.
The consideration transferred for the acquisition of a subsidiary or business comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of (i) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the (ii) fair value of the net identifiable assets acquired is recorded as goodwill.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
d) Investment in subsidiaries (Cont’d)
Acquisitions (Cont’d)
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss.
e) Fixed assets
Items of fixed assets are stated at cost less accumulated depreciation. Depreciation is charged to the consolidated statement of comprehensive income on a straight-line basis over the estimated useful lives of fixed assets.
Subsequent expenditure incurred to replace a component of a fixed asset is capitalised only when it increases the future economic benefits embodied in the item of a fixed asset. All other expenditure is recognised in the consolidated statement of comprehensive income when it is incurred.
The annual rates of depreciation in use are as follows:
Leasehold improvements 20%
Office equipment 20-33%
Vehicles 20%
f) Investment property
Investment property is property held either to earn rental income or capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is initially measured at cost and subsequently at cost less any accumulated depreciation and impairment losses (refer to accounting policy (p)), if any, with any change therein recognised in the consolidated statement of comprehensive income.
Investment property comprises condominium units.
Cost includes expenditure that is directly attributable to the acquisition of investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bringing the investment property to a working condition for their intended use and capitalised borrowing costs.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
f) Investment property (Cont’d)
Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognised in the consolidated statement of comprehensive income. When an investment property that was previously classified as property, plant and equipment is sold, any related amount included in the revaluation reserve is transferred to retained earnings.
When the use of property changes such that it is reclassified as fixed assets, its fair value at the date of reclassification becomes its cost for subsequent accounting.
Depreciable investment property is stated at cost less accumulated depreciation. Depreciation is charged to the consolidated statement of comprehensive income on a straight-line basis over the estimated useful lives of the investment property.
The annual rate of depreciation in use for condominium units is 5%.
Subsequent expenditure incurred is capitalised only when it increases the future economic benefits embodied in that property. All other expenditure is recognised in the consolidated statement of comprehensive income when it is incurred.
g) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash includes current deposits with banks and other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value, and bank overdrafts.
h) Financial assets measured at fair value through profit or loss (FVTPL)
A financial asset is measured at fair value through profit or loss or other if;
i) its contractual terms do not give rise to cash flows on specified dates that are solely payments of principal and interest (SPPI) on the principal amount outstanding; or
ii) it is not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell; or
iii) at initial recognition, it is irrevocably designated as measured at fair value through profit or loss when doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.
The Group recognises financial assets measured at FVTPL when it becomes a party to the contractual provisions of an instrument and comprise investment in fund and investment in private equity
Financial assets measured at FVTPL are recorded in the consolidated statement of financial position at fair value. All transaction costs for such instruments are recognised directly in profit or loss.
Subsequent to initial recognition, all financial assets measured at FVTPL are measured at fair value. Gains and losses arising from changes in the fair value are presented in the consolidated statement of comprehensive income within other net changes in fair value of financial assets and liabilities at fair value through profit or loss in the period in which they arise.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
i) Financial assets at amortised cost
Financial assets at amortised cost comprise cash and cash equivalents, trade receivables and loans and other receivables. Financial assets are recognised initially at fair value plus transaction costs that are directly attributable to its acquisition. These financial assets are held for collection of contractual cash flows representing solely payments of principal and interest, if any, and therefore are measured subsequently at amortised cost using the effective interest method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the consolidated statement of comprehensive income.
Regular way purchases and sales are recognised on the trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
From
The Group's approach to ECLs reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
The Group considers a receivable in default when contractual payments are over 365 days past due. However, in certain cases, the Group may also consider a receivable to be in default when internal and external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A receivable is written off when there is no reasonable expectation of recovering the contractual cash flows.
Receivables for which an impairment provision was recognised, were written off against the provision, when there was no expectation of recovering additional cash.
Impairment losses are presented as a separate line item in the consolidated statement of comprehensive income.
See note 17(b).
j) Financial liabilities at amortised cost
Financial liabilities are non-derivative contractual obligations to deliver cash or another financial asset to another entity and comprise trade payables, due to director and other payables and accrued expenses.
These financial liabilities are initially recognised at fair value on the date the Group becomes a party to the contractual provisions of an instrument and are subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the obligation specified in a contract is discharged, cancelled or expired
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
k) Accounting policies applied up to
The Group has applied IFRS 9 retrospectively, but has elected not to restate comparative information. As a result, the comparative information provided continues to be accounted for in accordance with the Group's previous accounting policy.
Loans and receivables and other financial liabilities
Until
The initial recognition, subsequent measurement and derecognition of these financial instruments did not change on adoption of IFRS 9.
The Group primarily used the specific identification method to determine if the receivable was impaired. The carrying amount of the receivable was reduced through the use of an allowance account, and the amount of the loss was recognised in the consolidated statement of comprehensive income.
The Group determined its allowance by considering a number of factors, including the length of time trade receivables were past due, the Group's previous loss history, the customer's current ability to pay its obligation to the Group, and the condition of the general economy and the industry as a whole. The Group wrote off accounts receivable when they became uncollectible. Actual bad debts, when determined, reduced the allowance, the adequacy of which management then reassessed. The Group wrote off accounts after a determination by management that the amounts at issue were no longer likely to be collected, following the exercise of reasonable collection efforts and upon management's determination that the costs of pursuing the collection outweighed the likelihood of recovery.
Available-for-sale (“AFS”) investments
Until
AFS investments are carried at fair value. Gains and losses arising from changes in the fair value are recognised as other comprehensive income. When securities classified as AFS are sold or impaired, the accumulated fair value adjustments recognised in other comprehensive income are included in the consolidated statement of comprehensive income as gains and losses from investment securities.
AFS are presented as non-current assets unless they mature, or the Group intends to dispose of them within twelve (12) months from the end of the reporting period.
l) Associates
Associates are those enterprises in which the Group has significant influence, but not control, over the financial and operating policies. The consolidated financial statements include the Group's share of the total recognised gains and losses of associates on an equity accounted basis, from the date that significant influence commences until the date that significant influence ceases. When the Group's share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
m) Share capital, treasury shares and retained earnings/accumulated deficit
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.
Where any group company purchases the Parent Company's equity instruments, for example as the result of a share buy-back or a share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of the Group as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Group.
Retained earnings/accumulated deficit represent the cumulative balance of periodic net income/loss, dividend distributions and prior period adjustments.
n) Share-based payment
The Group entered into a series of equity-settled, share-based payment transactions, under which the Group received services from a third party as consideration for equity instruments (shares, options or warrants) of the Group.
For non-vesting share-based payments, the fair value of the service received in exchange for the shares is recognised as an expense immediately with a corresponding credit to share capital.
For share-based payments with vesting periods, the service received is recognised as an expense by reference to the fair value of the share options granted or warrants issued. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied with a corresponding credit to the share capital reserve.
o) Foreign currency
Functional and presentation currency
The subsidiaries' functional currencies are disclosed in note 1 to the financial statements. The consolidated financial statements are presented in
Transactions and balances
Transactions in foreign currencies are converted at the foreign currency exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the foreign currency closing exchange rate ruling at the reporting date. Foreign currency exchange differences arising on conversion or translation and realised gains and losses on disposals or settlements of monetary assets and liabilities are recognised in the consolidated statements of income and comprehensive income. Non- monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated at the foreign currency exchange rates ruling at the dates that the values were determined. Foreign currency exchange differences relating to investments are included in net realised/unrealised gain/(loss) on investments. All other foreign currency exchange differences relating to monetary items, including cash and cash equivalents, are presented in the consolidated statements of income and comprehensive income.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
o) Foreign currency (Cont’d)
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into
None of the foreign operations has the currency of a hyperinflationary economy.
Translation reserve
Assets and liabilities of the Group's non-
p) Leases
Leases of equipment where the Group assumes substantially all the benefits and risks of ownership are classified as finance leases. Finance leases are capitalised at the estimated present value of the underlying lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are recorded as long-term liabilities. The finance charge is taken to the consolidated statement of comprehensive income over the lease period. Assets acquired under finance lease agreements are depreciated over their useful lives.
Leases of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the consolidated statement of comprehensive income on a straight line basis over the term of the lease. When an operating lease is terminated before the lease term has expired, any penalty is recognised as an expense in the period in which the termination takes place.
q) Impairment
The carrying amounts of the Group's assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. The recoverable amount is estimated as the greater of an asset's net selling price or value in use. An impairment loss is recognised in the consolidated statement of comprehensive income whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
If in a subsequent period, the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the write-down, the write-down is reversed through the consolidated statement of comprehensive income.
An impairment is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
r) Revenue and expense recognition
In relation to the rendering of professional services, the Group recognises fee income as time is expended and costs are incurred, provided the amount of consideration to be received is reasonably determinable and there is reasonable expectation of its ultimate collection.
Rental income arising from operating leases on investment property is recognised in the consolidated statement of comprehensive income on a straight line basis over the term of the lease.
Interest income is recognised in the consolidated statement of comprehensive income as it accrues.
All expenses are recognised in the consolidated statement of comprehensive income on the accrual basis.
s) Offsetting
Financial assets and liabilities are offset and the net amount is reported in the consolidated statement of financial position whenever the Group has a legally enforceable right to set off the recognised amounts and the transactions are intended to be settled on a net basis.
t) Segment reporting
The Group's operating businesses are organised and managed separately according to geographical area, with each segment representing a strategic business unit that serves a different market. Financial information on business segments is presented in note 16 of the consolidated financial statements.
u) Taxation
Taxation on net profit before taxation for the year comprises both current and deferred tax.
Current tax is the expected income tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date and any adjustment to tax payable in respect of previous years in the countries where the Parent Company and its subsidiaries operate and generate taxable income.
The Group accounts for income taxes in accordance with IAS 12, "Income Taxes," which requires that a deferred tax liability be recognised for all taxable temporary differences and a deferred tax asset be recognised for an enterprise's deductible temporary differences, operating losses, and tax credit carryforwards. A deferred tax asset or liability is measured using the marginal tax rate that is expected to apply to the last dollars of taxable income in future years. The effects of enacted changes in tax laws or rates are recognised in the period that includes the enactment date.
v) Related parties
Related parties are individuals and entities where the individual or entity has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
w) Amended and newly issued accounting standards not yet adopted
A number of new standards, amendments to existing standards and interpretations are effective for annual periods beginning after
3) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The Group applied for the first time, IFRS 9 effective
The nature and the impact of IFRS 9 is described below:
a) Classification and measurement
The Group has assessed the classification of financial instruments as at the date of initial application and has applied such classification retrospectively. Based on that assessment:
· Financial assets previously classified as loans and receivables, are held to collect contractual cash flows and give rise to cash flows representing solely payments of principal and interest. Thus, such instruments continue to be measured at amortised cost under IFRS 9.
· The classification of financial liabilities under IFRS 9 remains broadly the same as under IAS 39. The main impact on measurement from the classification of liabilities under IFRS 9 relates to the element of gains and losses for financial liabilities designated as at fair value through profit or loss attributable to changes in credit risk. IFRS 9 requires that such element be recognised in other comprehensive income, unless this treatment creates or enlarges an accounting mismatch in profit or loss, in which case, all gains and losses on that liability, including the effect of changes in credit risk, should be presented in profit or loss. The Group has not designated financial liabilities at fair value through profit or loss. Therefore, this requirement has not had an impact on the Group.
b) Impairment
IFRS 9 requires the Group to record expected credit losses on all of its loans and trade receivables, either on a 12-month or lifetime basis. These financial assets at amortised cost have no financing component and have maturities of less than 12 months. The Group applied the general approach by recognising a provision based on the three stages that reflect the potential variation in credit quality of these financial assets.
Impact of adoption of IFRS 9
The classification and measurement requirements of IFRS 9 have been adopted retrospectively as of the date of initial application on
3) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Cont’d)
Impact of adoption of IFRS 9 (Cont’d)
The total impact on the Group’s retained earnings as at
1 March 2018 28 February 2018
Restated retained earnings
Increase in provision for commission receivable (7,179) —
Adjustment to retained earnings from adoption of (7,179) —
IFRS 9
Restated retained earnings $(142,909) $(135,730)
The following table shows the original measurement categories in accordance with IAS 39 and the new measurement categories under IFRS 9 for the Group’s financial assets and financial liabilities as at
In line with the characteristics of the Group’s financial instruments as well as its approach to their management, the Group neither revoked nor made any new designations on the date of initial application. IFRS 9 has resulted in changes in the carrying amount of the Group’s financial instruments due to changes in measurement categories. All financial assets that were classified as loans and receivables and measured at amortised cost continue to be.
The carrying amounts of amortised cost instruments continued to approximate these instruments’ fair values on the date of transition after transition to IFRS 9.
4) FIXED ASSETS
Leasehold improvement Office equipment Vehicles Total
Cost:
At 28 February 2019 20,281 37,802 55,392 113,475
Translation reserve (244) (4,549) (2,410) (7,203)
Disposal - - - -
Additions - 2,994 - 2,994
At 31 August 2019 20,037 36,247 52,982 109,266
Depreciation:
At 28 February 2019 20,281 33,851 45,805 99,937
Translation reserve (244) (4,623) (2,675) (7,542)
Disposal - - - -
Charge for 1 March – - 1,296 5,342 6,638
31 August 2019
At 31 August 2019 20,037 30,524 48,472 99,033
Net book value:
At 31 August 2019 $- $5,723 $4,510 $10,233
At 28 February 2019 $- $3,951 $9,587 $13,538
As at
5) INVESTMENT PROPERTY
Condominium units
Cost:
At 28 February 2019 430,057
Translation reserve 11,843
At 31 August 2019 441,900
Depreciation:
At 28 February 2019 51,534
Translation reserve 1,419
Charge for 1 March – 31 August 2019 11,138
At 31 August 2019 64,091
Net book value: At31 August 2019 $377,809 At28 February 2019 $378,523
Investment property comprises condominium units at The Prime 11 Condominium in
Rental income arising from the investment properties during the half year amounted to
6) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
31-Aug-19 31-Aug-18
Investment in fund 230,302 -
Investment in private equity - 318,162
$230,302 $318,162
Investment in Phillip Investment Fund
The investment in
Investment in
On
In
On
The following were agreed by the parties under the Settlement Agreement:
a) the Group consented and ratified the transfer of
b) return of 322,000 shares of the Parent Company previously issued as consideration for the
c) payment of
Other income earned related to the Group's claims amounting to
7) LOAN RECEIVABLE
On
7) LOAN RECEIVABLE (Cont’d)
As at
8) RELATED PARTY TRANSACTIONS
During the half year, the Group was charged
During the half year, the Group paid directors' fees, inclusive of school fees and accommodation allowance, amounting to
As at
9) INVESTMENT IN ASSOCIATE
On
On
10) SHARE CAPITAL AND TREASURY SHARE
Authorised
Issued and fully paid:31-Aug-19 31-Aug-18 11,433,433 (2018: 11,433,433) shares of no par value per$913,496 $913,496 share.
Each share in the Parent Company confers upon the shareholder:
(a) the right to one vote on any resolution of shareholders;
(b) the right to an equal share in any dividend paid by the Parent Company; and
(c) the right to an equal share in the distribution of the surplus assets of the Parent Company on its liquidation
Treasury Shares
As discussed in note 6, the Parent Company acquired treasury shares of 322,000 (2018: nil) amounting to
11) SHARE-BASED PAYMENTS
In the prior year, share options of 150,000 with an exercise price of £0.60 were not exercised and, thus expired resulting in a transfer to accumulated deficit of
12) INVESTMENT IN SUBSIDIARY
As at
Effective
13) LEASES
31-Aug-19 31-Aug-18
Liabilities under finance lease agreement:
Less than 1 year 4,796 8,970
1 to 5 years - 4,485
Total 4,796 13,455
Less: Deferred interest (324) (1,086)
4,472 12,369
Less: Current portion net of short term deferred interest (4,472) (8,187)
Net $- $4,182
14) TAXATION
There is no mainstream taxation in the
Meyer Thailand, and Prime RE are subject to
The current tax expense included in the consolidated statement of comprehensive income was $nil (20 18: $nil).
The Group had no deferred tax assets or liabilities as at the reporting date.
15) EARNINGS PER SHARE
a) Basic
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Parent Company by the weighted average number of shares in issue during the year excluding treasury shares.
15) EARNINGS PER SHARE (cont’d)
a) Basic (cont’d)
31-Aug-19 31-Aug-18
Earnings/(loss) attributable to equity holders of the $(37,228) $65,662
Parent Company
Weighted average number of shares in issue 11,433,433 11,433,433
Adjusted for weighted average number of:
- treasury shares (322,000) -
Weighted average number of shares in issue and for basic 11,111,433 11,433,433
earnings for share
Basic earnings per share $(0.00335) $0.00574
b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential shares. As at
31-Aug-19 31-Aug-18
Earnings/(loss) attributable to equity holders of the $(37,228) $65,662
Parent Company
Weighted average number of shares in issue and for 11,111,433 11,433,433
diluted earnings for share
Diluted earnings per share $(0.00335) $0.00574
16) SEGMENTAL INFORMATION
The Group has three reportable segments based on geographical areas where the Group operates and these were as follows:
The reportable segmental revenue, other profit and loss disclosures and assets and liabilities were as follows:
16) SEGMENTAL INFORMATION (Cont’d)
Revenue
31-Aug-19 31-Aug-18
Total Inter-segment Revenue Total Inter-segment Revenue
segment revenue from segment revenue from
revenue external revenue external
customers customers
BVI 780,593 - 780,593 1,225,309 - 1,225,309
Thailand 138,126 (121,390) 16,736 125,988 (110,337) 15,651
Total $918,719 $(121,390) $797,329 $1,351,297 $(110,337) $1,240,960
Other profit and loss disclosures
31-Aug-19 31-Aug-18
Commission Depreciation Income tax Commission Depreciation Income tax
expense expense
BVI 454,075 371 - 683,959 428 -
Thailand 1,908 17,405 - 1,784 16,147 -
Total $455,983 $17,776 $- $685,743 $16,575 $-
Assets
31-Aug-19 31-Aug-18
Total Assets Total Assets
BVI 1,795,151 1,981,851
Thailand 509,147 510,435
Total $2,304,298 $2,492,286
Intersegment assets amounting to
Liabilities
31-Aug-19 31-Aug-18
Total Liabilities Total Liabilities
BVI 1,112,543 1,152,427
Thailand 71,582 64,595
Total $1,184,125 $1,217,022
Intersegment Liabilities amounting to
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
Financial assets of the Group include cash and cash equivalents, trade receivables, loans and other receivables and financial assets at fair value through profit or loss. Financial liabilities include trade payables, due to director and other payables and accrued expenses.
The Group has exposure to a variety of financial risks that are associated with these financial instruments. The most important types of financial risk to which the Group is exposed are market risk, credit risk and liquidity risk.
The Group's overall risk management program is established to identify and analyse this risk, to set appropriate risk limits and controls, and to monitor risks and adherence to limits in an effort to minimise potential adverse effects on the Group's financial performance.
a) Market risk
Market risk represents the potential loss that can be caused by a change in the market value of the Group's financial instruments. The Group's exposure to market risk is determined by a number of factors which include interest rate risk and currency risk.
Interest rate risk
The financial instruments exposed to interest rate risk comprise cash and cash equivalents.
The Group is exposed to interest rate cash flow risk on cash and cash equivalents, which earn interest at floating interest rates that are reset as market rates change. The Group is exposed to interest rate risk to the extent that these interest rates may fluctuate.
A sensitivity analysis was performed with respect to the interest-bearing financial instruments with exposure to fluctuations in interest rates and management noted that there would be no material effect to shareholders' equity or net income for the year.
Currency risk
The Group may invest in financial instruments and enter into transactions denominated in currencies other than its functional currency. Consequently, the Group is exposed to risk that the exchange rate of its currency relative to other foreign currencies may change in a manner that has an adverse affect on the value of that portion of the Group's assets or liabilities denominated in currencies other than the
The Group’s total net exposure to fluctuations in foreign currency exchange rates at the reporting date stated in
2019 2018
Fair value % of net assets Fair value % of net
assets
Assets
Thailand Bhat 964,284 83.52 461,897 38.09
Japanese Yen 677,726 58.70 781,264 64.43
Singaporean Dollar 230,302 19.95 — —
Euro 157,128 13.61 164,903 13.60
United Kingdom Pound 85,309 7.39 106,685 8.80
$2,114,749 183.17 $1,514,749 124.92
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Cont’d)
a) Market risk (Cont’d)
Currency risk (Cont’d)
The table below summarises the sensitivity of the net assets to changes in foreign exchange movements at
2019 2018
Possible Possible Possible Possible
shift shift shift shift
in rate in amount in rate in amount
Thailand Bhat 3.13% 30,160 4.66% 21,524
Japanese Yen 4.00% 27,105 3.06% 23,907
Euro 5.44% 8,541 6.57% 10,834
Singaporean Dollar 2 .91% 6,698 —% —
United Kingdom Pound 6.27% 5,347 5.96% 6,358
$77,851 $62,623
b) Credit risk
Credit risk represents the accounting loss that would be recognised at the reporting date if financial instrument counterparties failed to perform as contracted.
As at
31-Aug-19 31-Aug-18
Cash and cash equivalents 725,940 1,387,633
Trade receivables 227,525 201,902
Loans and other receivables 647,426 94,970
Financial assets at fair value through profit or loss 230,302 318,162
$1,831,193 $2,002,667
i) Risk management
The extent of the Group's exposure to credit risk in respect of these financial assets approximates their carrying values as recorded in the Group's consolidated statement of financial position
The Group invests all its available cash and cash equivalents in several banks. The Group is exposed to credit risk to the extent that these banks may be unable to repay amounts owed. To manage the level of credit risk, the Group attempts to deal with banks of good credit standing, whenever possible.
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Cont’d)
b) Credit risk (Cont’d)
i) Risk management (Cont’d)
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. To reduce exposure to credit risk, the Group may perform ongoing credit evaluations on the financial condition of its customers, but generally does not require collateral. The Group has significant exposure to a small number of customers, the two largest owing
The Group is exposed to credit risk with respect to its investments. Bankruptcy or insolvency of the investee companies may cause the Group's rights to the security to be delayed or limited.
The ageing of the Group’s trade receivables as at
31-Aug-19 31-Aug-18
1 – 90 days 114,613 145,951
Over 90 days 120,002 55,951
Allowance for doubtful Debts (7,090) -
$227,525 $201,902
ii) Security
For some trade receivables, the Group may obtain security in the form of guarantees, deeds of undertaking or letters of credit which can be called upon if the counterparty is in default under the terms of their agreement
iii) Impairment of financial assets
The Group applies the IFRS 9 general approach to measuring ECL based on the full three-stage model.
Under IFRS 9’s general approach, impairments are recognised in three stages as follows:
Stage 1: Items that have not deteriorated significantly in credit quality since initial recognition. A loss allowance equal to 12-month ECL is recognised and interest income is calculated on the gross carrying amount of the financial asset.
Stage 2: Items that have deteriorated significantly in credit quality since initial recognition but do not have objective evidence of a credit loss event. A loss allowance equal to lifetime ECL is recognised but interest income is still calculated on the gross carrying amount of the asset.
Stage 3: Items that have objective evidence of impairment at the reporting date. A loss allowance equal to lifetime ECL is recognised and interest income is calculated on the net carrying amount.
While cash and cash equivalents and loans and other receivables are also subject to the impairment requirements of IFRS 9, the identified impairment loss was immaterial.
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Cont’d)
b) Credit risk (Cont’d)
iii) Impairment of financial assets (Cont’d)
The Group determined the ECL based on probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecast of future economic conditions. The assessment also considered borrower specific information.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of revenues over a period of 36 months before
On that basis, the loss allowance as at
Balance at Expected Credit Loss Loss Allowance at 1 March
1 March 2018 Rate 2018
Trade receivables $228,577 3.14% $7,179
Balance at Expected Credit Loss Loss Allowance at 28
28 February 2019 Rate February 2019
Trade receivables $165,117 4.29% $7,090
The closing loss allowances for trade receivables as at
2019 2018
28 February – IAS 39 — —
Restated through retained earnings 7,179 —
Opening loss allowance as at 1 March 2018 - IFRS 9
7,179
Decrease in loss allowance during the year (89)
$7,090
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of greater than 365 days past due.
Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are credited against the same line item.
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Cont’d)
b) Credit risk (Cont’d)
iv) Previous accounting policy for impairment of trade receivables
Individual receivables which were known to be uncollectible were written off by reducing the carrying amount directly. The other receivables were assessed collectively to determine whether there was objective evidence that an impairment had been incurred but not yet been identified. For these receivables the estimated impairment losses were recognised in a separate provision for impairment. The Group considered that there was evidence of impairment if any of the following indicators were present:
· significant financial difficulties of the debtor;
· probability that the debtor would enter bankruptcy or financial reorganisation; and
· default or late payments (more than 365 days overdue).
Receivables for which an impairment provision was recognised were written off against the provision when there was no expectation of recovering additional cash.
c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, 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 Group's reputation. Typically, the Group ensures that it has sufficient cash on demand to meet expected operational needs as they arise.
All of the Group’s financial liabilities are expected to be settled within a year from the reporting date.
18) FAIR VALUE INFORMATION
The Group's financial assets at fair value through profit or loss comprise an investment in a fund (2018: an investment in private equity). Investments in private equity that have no active markets and whose fair value cannot be reliably measured are carried at cost, less impairment, if any.
For certain of the Group's financial instruments, not carried at fair value, including cash and cash equivalents, trade receivables, loans and other receivables, trade payables and other payables and accrued expenses, the carrying amounts approximate fair value due to the immediate or short-term nature of these financial instruments. The carrying value of the amount due to director approximates its fair value, since such amount is repayable on demand.
The fair value hierarchy has the following levels:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
• Level 3 inputs are unobservable inputs for the asset or liability.
18) FAIR VALUE INFORMATION (Cont’d)
The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level of input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.
The determination of what constitutes 'observable' requires significant judgment by the Group. The Group considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
Investments whose values are based on quoted market prices in active markets are therefore classified within Level 1.
Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non transferability, which are generally based on available market information.
Investments classified within Level 3 have significant unobservable inputs, as they trade infrequently.
The following table analyses within the fair value hierarchy the Group's financial assets (by class) measured at fair value :
31-Aug-19 31-Aug-18
Level 1
Investment in fund $230,302 $-
31-Aug-19 31-Aug-18
Level 3
Investment in private equity $- $318,162
The Group did not hold any investments under the Level 2 hierarchies as at
Level 3 investments are valued at their acquisition cost since there was no available information to estimate its fair value. Management believes that the values stated as at
There were no significant investments transferred between Levels 1, 2 and 3.
19) CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
• to safeguard the Group's ability to continue as a going concern; and
• to provide adequate returns to its shareholders.
In order to maintain or balance its overall capital structure to meet its objectives, the Group is continually monitoring the level of share issuance and any dividend declaration and distributions to shareholders in the future.
20) OTHER MATTERS
On
Category 4: Investment Advice
- Sub-Category A: Investment Advice (Excluding Mutual Funds)
- Sub-Category B: Investment Advice (Mutual Funds)
21) COMPARATIVE INFORMATION
Certain comparative figures have been reclassified to conform with the current year’s presentation.
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