REG - Asia Strategic Ltd - Interim results for six months ended 31 March 2023
23/06/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230623:nRSW7189Da&default-theme=true
RNS Number : 7189D Asia Strategic Holdings Limited 23 June 2023
23 June 2023
Asia Strategic Holdings Ltd.
("Asia Strategic" or the "Company" or the "Group")
Interim results for the six months ended 31 March 2023
The Board of Asia Strategic Holdings Ltd. (LSE: ASIA), the independent
developer and operator of consumer businesses located in emerging Asia, is
pleased to announce its unaudited interim results for the six-month period
ended 31 March 2023.
FINANCIAL HIGHLIGHTS
The financial information in this report to the six-month financial period
ended 31 March 2023 ("6M'23" or "FPE 2023") and the Group's financial year
ended 30 September 2022 ("FYE 2022"), unless otherwise stated. The comparative
six-month financial period from 1 October 2021 to 31 March 2022 is referred to
as "6M'22" or "FPE 2022".
· Group revenues for the six-month financial period ended 31 March 2023
increased 38% year-on-year ("YOY") to US$11.5 million, of which 77% derived
from Education and 23% from Services (6M'22: 64% derived from Education and
36% from Services). The double-digit revenue growth was driven by (i)
Myanmar's Education segment surpassing pre-COVID-19 levels with revenue growth
of 141% YOY despite the complex political and economic environment, and (ii)
the continued turnaround in Vietnam's Education segment, delivering revenue
growth of 22% YOY. The strong performance in the Education segment compensated
for the weaker revenue generation in the Services segment in Myanmar, which
recorded a 13% decline YOY due to the adverse economic conditions and the
currency impact.
· Group gross profit for the six-month financial period ended 31 March
2023 increased 106% YOY to US$6.6 million, of which 90% derived from Education
and 10% from Services (6M'22: 68% derived from Education and 32% from
Services). As a percentage of Group revenues, the gross profit margin stood at
57% for 6M'23 vs. 38% for 6M'22, thanks to (i) the strong commercial
performance post COVID-19, (ii) the shift to higher margin products and (iii)
the higher utilisation of teaching personnel and facilities.
· Despite the significant improvement in gross margin to 57% for 6M'23
(6M'22: 38%), the Group recorded only a moderate improvement in net losses to
US$2.3 million for 6M'23 (6M'22: US$2.6 million net loss). Excluding the
operating losses incurred in the financial period for the newly launched
business of Kids&Us, net losses of the Group would be reduced by US$0.6
million to US$1.7 million. Other contributing factors were (i) the high
volatility of the foreign exchange rates in Myanmar, (ii) the slower than
expected recovery of Wall Street English ("WSE") Vietnam, and (iii) the lower
profitability of EXERA due to a US$0.4 million decline in revenues.
· The Group recorded a net comprehensive loss (including the foreign
exchange difference in the translation of foreign operations and changes in
fair value of FVOCI) for 6M'23 of US$2.4 million (6M'22: US$2.7 million).
· Student fees in the Education segment and risk management report
subscriptions at EXERA are generally collected in advance of service
performance. For 6M'23, the Group collected cash from customers in advance of
service performance amounting to US$9.4 million, an increase of US$2.9 million
compared to the previous financial period (6M'22: US$6.5 million). At 31 March
2023, the Group's current and long-term deferred revenue amounted to US$9.8
million and US$0.7 million respectively (30 September 2022: US$8.1 million and
US$1.9 million). Current deferred revenues shall be realised within the next
twelve months while long-term deferred revenues shall be realised in FYE 2024
and FYE 2025.
· As a result of strong sales performance from the Education segment,
the Group recorded positive cash flows from operating activities of US$1.6
million, an increase of US$0.4 million compared to 6M'22 (US$1.2 million). If
repayment of lease liabilities were considered, the Group would have recorded
US$0.2 million cash inflows from operating activities (6M'22: US$0.2 million
cash outflows).
· The Group maintains a loan facility of US$3.0 million with MACAN, the
Group's largest corporate shareholder and had drawn down US$1.7 million at the
date of this report (US$1.5 million as at 31 March 2023). The recent
additional loan drawn down was to fund the short-term working capital of
Kids&Us in Vietnam and capital expenditures during its start-up phase.
· The diversification of the Group's operations between Vietnam and
Myanmar continues to play an important role in mitigating single-country
exposure. Management has assessed that there are sufficient mitigating actions
within the control of the Group to ensure liquidity for at least the next
twelve months from the date of this report. These include (i) undertaking a
controlled expansion of its existing and future businesses, (ii) maintaining
financial liquidity discipline, and (iii) accessing the unutilised credit
facility of US$1.3 million with MACAN.
OPERATIONAL HIGHLIGHTS
Education
· Group revenues from the owned Education businesses for 6M'23 were US$8.8
million (6M'22: US$5.1 million). Furthermore, during the period the Group
completed service delivery to legacy students resulting in the managed
Education business contributing only US$0.01 million for 6M'23 (6M'22 US$0.2
million).
· The increase in Education revenues is attributable to (i) a US$2.8
million increase in Myanmar revenues (+141% YOY), driven by strong revenue
growth at Auston and Wall Street English Myanmar which exceeded pre-COVID-19,
(ii) a US$0.7 million improvement in WSE Vietnam revenues, and (iii) a US$0.1
million revenue contribution from the launch of Kids&Us in Vietnam with
four centres opened since late 2022. It is worth noting that, despite
persistent headwinds in Myanmar, high revenue and student growth demonstrate
underlying robust demand and willingness to invest in high quality and
globally recognised educational programmes.
· At 31 March 2023, the Group's current and long-term deferred revenue
from Education businesses were US$9.6 million and US$0.7 million (6M'22:
US$7.9 million and US$1.9 million), respectively.
· The Education segment currently operates the Group's owned businesses
and services legacy students for the managed business of a related party, and
comprises:
(i) Adult English language education (Wall Street English) in Vietnam
and Myanmar;
(ii) Tertiary education (Auston University) in Myanmar;
(iii) Children English language education (Kids&Us) in Vietnam and
Myanmar; and
(iv) K-12 international school (Yangon American International School) in
Myanmar.
Through these businesses Asia Strategic provides a wide range of education
services to students from the age of one. Furthermore, Wall Street English
supports the training of the Group's employees and provide synergistic value
to the learning and development goals of the Group.
At 31 March 2023, the number of centres and students were as follows:
Number of centres Number of students
31-Mar-2023 31-Mar-2022 31-Mar-2023 31-Mar-2022
Vietnam
- Wall Street English 7 7 3,584 2,465
- Kids&Us 4 - 228 -
Myanmar
- Wall Street English 5( ) 4 3,631 1,821
- Auston 2 1 583 165
- Yangon American 1 1 57 80
- Kids&Us -(#) - - -
Group 19(#) 13 8,083 4,531
(#) The first Kids&Us centre in Myanmar has opened in June 2023,
bringing the total number of centres to 20.
Wall Street English
· The Group has exclusive development and franchising agreements with
Wall Street English International to develop English language centres across
Myanmar. At 31 March 2023, WSE Myanmar served over 3,600 (+99% YOY) students
over 5 centres.
· In July 2020, the Company completed the acquisition of the Wall
Street English business in Vietnam. At 31 March 2023 WSE Vietnam operated 7
centres in Ho Chi Minh and Binh Duong serving ca. 3,600 students (+45% YOY).
· 6M'23 revenues for Wall Street English Vietnam and Myanmar were
US$4.0 million and US$3.4 million (6M'22: US$3.3 and US$1.4 million),
respectively. Together, the businesses contributed 64% (6M'22: 57%) of the
Group's revenue.
· At 31 March 2023, WSE's deferred revenues (current and long-term)
amounted to ca. US$8.4 million, up from US$8.2 million at 30 September 2022,
including US$7.9 million to be realised as revenue in the next twelve months,
up from US$6.7 million at 30 September 2022.
Auston
· Auston University ("Auston") is the result of a strategic
collaboration with the Auston Institute of Management, an operator of private
schools in Singapore that prepares students for careers in Engineering,
Information Technology and Project Management through higher education
learning.
· In February 2020, the Company entered a partnership with Liverpool
John Moores University ("LJMU") to provide high quality engineering training
programmes for young, working professionals in Myanmar. The partnership
enables a path towards a globally recognised engineering degree earned in
Myanmar from lecturers with at least a master's degree or a PhD from a
recognised awarding body.
· For 6M'23 Auston's revenue grew exponentially, up 544% YOY, to US$0.9
million (6M'22: US$0.1 million), due to 253% growth in enrolled student (583
students at 31 March 2023 vs. 165 at 31 March 2022). This has resulted in
higher monthly average sales of ca. US$0.3 million.
· At 31 March 2023, Auston's deferred revenues (current and long-term)
amounted to ca. US$1.5 million, up from US$1.0 million at 30 September 2022,
including US$1.4 million to be realised as revenue in the next twelve months,
up from US$0.7 million at 30 September 2022.
Kids&Us
· The Group entered into exclusive franchising agreements with Kids&Us
English, S.L.U ("Kids&Us") for the development of English language centres
for children under the brand "Kids&Us School of English" in Myanmar
and Vietnam on 25 April 2022 and 15 August 2022, respectively, for a period
of ten years each.
· Kids&Us is the leading provider of English language education for
children from age one. Founded in Manresa (Barcelona, Spain) in 2003,
Kids&Us teaches annually over 150,000 students across more than 500
schools in nine countries, achieving a loyalty rate in excess of 90%.
· Under the terms of these agreements, the Group paid initial fees of
US$216,000 for Myanmar and Vietnam (EUR100,000 for each territory) and has
committed to pay (i) ongoing service fees as a percentage of revenues, (ii)
cumulative opening fees of EUR150,000 within four years from signing of the
Vietnam franchising agreement, and (iii) didactic materials based on
consumption, among other fees.
· Four Kids&Us centres opened between September 2022 and November
2022 in Ho Chi Minh City, Vietnam, with the flagship locations situated in
prominent and prime locations to create brand awareness. The first centre in
Myanmar was opened in June 2023. More centres are scheduled for the second
half of calendar year 2023 in both Myanmar and Vietnam.
· Revenues at Kids&Us Vietnam for 6M'23 amounted to US$0.1 million
serving over 200 students. At 31 March 2023, current deferred revenues were
ca. US$0.2 million.
Yangon American
· The Group owns and operates Yangon American International School
("Yangon American") an International Baccalaureate Primary Years Programme
("IB PYP") accredited and Myanmar Investment Commission-approved international
school. Yangon American's 3,000 sqm campus has a planned capacity of 400
students and its enrolment for the academic year 2022-2023 was 57 students (31
March 2022: 80 students).
· For 6M'23, Yangon American generated revenues of US$0.4 million in
line with 6M'22. Yangon American remains in a development phase having opened
in the school year 2019-2020 ahead of COVID-19 and the Myanmar's State of
Emergency. Demand for international education remains strong as parents are
in search for a quality education as a path for their children to study
abroad.
· At 31 March 2023, Yangon American's deferred revenues (current and
long-term) amounted to ca. US$0.3 million, down from US$0.6 million at 30
September 2022, including US$0.2 million to be realised as revenue in the next
twelve months, down from US$0.5 million at 30 September 2022. The decrease in
deferred revenues is mainly due to the timeline of the school year which
begins in early August (higher collection) and ends in early June (deferred
revenues realised as revenues) of the following year.
Services
· Through its Services division, the Group is active in (i) owned security
services (EXERA) and (ii) managed hospitality services (Ostello Bello).
· 6M'23 revenues from the owned services businesses amounted to US$2.6
million vs. US$3.0 for 6M'22. No revenues were contributed by the managed
hospitality business.
EXERA
· EXERA is a provider of security and risk management services
operating exclusively in Myanmar. As at 31 March 2023, EXERA employed an
experienced workforce of over 1,400 (31 March 2022: 1,500) security officers
and provides a range of integrated security, manned guarding, protective
services, secured logistics and cash in transit, training, and nationwide risk
consulting, to a wide range of international and local clients across ca. 200
sites (6M'22: 200).
· EXERA's customer base includes multi-national corporations, large oil
and gas companies, established local businesses, governmental bodies and
international organisations and embassies. EXERA's services are essential to
the continued presence of these organisations in Myanmar throughout the
current political and economic instability.
· EXERA's 6M'23 revenues were US$2.6 million down 13% YOY from US$3.0
million for 6M'22 due to (i) the loss of contracts with certain customers
which exited Myanmar due to a challenging political and economic environment,
and (ii) the weakening of the Myanmar Kyat from an average of 1,855 per US$ in
FYE 2022 to 2,100 in 6M'23.
· The ability to continuously maintain and secure new high-profile
customers is mainly due to EXERA's competitive advantage as the only company
in Myanmar with ISO 18788 Management System for Private Security Operations,
ISO 9001, OHSAS 18000, and ANSI/ASIS PSC 1 accreditations. These
accreditations are the hallmark of EXERA's intent on delivering high-quality
services for the benefit of our customers.
· At 31 March 2023, EXERA's deferred revenues (current) to be realised
as revenue in the next twelve months amounted to ca. US$0.2 million in line
with 30 September 2022.
Ostello Bello
· Ostello Bello, comprises boutique hostels with ca. 300 beds and over
70 rooms in two locations across Bagan and Mandalay.
· Due to the adverse political situation in Myanmar, inbound tourism
has become virtually non-existent. Accordingly, in December 2022, management
ceased operations in one location in Bagan. The closure of this outlet does
not have a material impact on the Group as the operations and management fees
were already minimal.
· It is worth noting that through its boutique hostels, the Group
provides livelihood for hundreds of individuals in developing communities such
as Bagan. Management takes great pride and acknowledges its role as a
responsible long-term investor in these communities. Furthermore, Ostello
Bello Mandalay hosts teachers and security personnel, providing safe
accommodation and flexibility to grow the headcount in Mandalay to enable
expansion of the Group's Education operations.
New Business Development
· Asia Strategic continues to develop its business network and expand
its presence within the Group's existing sectors while exploring new sectors.
The Group is focused on expanding its educational offering by building a
stronger presence on the ground in Vietnam whilst seeking new opportunities
throughout emerging Asia to diversify the Group's geographical exposure.
· Management also routinely conducts in-depth studies of new sectors (e.g.
Healthcare, Retail and Financial Services) to determine whether to allocate
additional human and financial resources to selected initiatives.
The Group's minority investments include, among others:
· A minority interest in Myanmar Investments International Limited
("MIL"), a Myanmar-focused investment company listed on the AIM market of the
London Stock Exchange with investments in the telecommunications and financial
sectors. At 31 March 2023, the quoted share price of MIL was US$0.09 (31 March
2022: US$0.27) per share and based on available information, the audited net
asset value reported by MIL at 31 March 2023 was US$8.7 million (31 March
2022: unaudited US$13.2 million), equivalent to US$0.23 (31 March 2022:
US$0.35) per share.
SIGNIFICANT EVENTS
a) Issuance of shares in lieu of bonus payments
Taking into consideration the recommendations of the Remuneration Committee of
the Company, the Directors approved the payment of US$0.2 million of annual
bonuses to certain Group key management personnel with respect to the
financial year ended 30 September 2022. These bonuses were satisfied through
the issuance of 40,000 new ordinary shares in the Company at a price
of US$5.00 per share (being the closing bid price of the Company's ordinary
shares as of 31 January 2023). Refer to Note 18 for further details.
b) Employee Share Options Scheme
On 6 February 2023, the Company granted 33,000 share options to a director of
the Company under the Company's 2022 employee share option plan.
MACROECONOMIC UPDATE
Vietnam macroeconomic highlights
· Vietnam achieved (i) a GDP growth rate of 8.0% in 2022, due in
part to the low base effect post COVID-19 and (ii) a more modest growth of
3.3% in 1Q2023. The gross regional domestic product of the two largest cities,
Ho Chi Minh City and Hanoi increased by 5.8% and 0.7%, respectively. The Asian
Development Bank forecasts GDP growth of 6.5% for 2023 and 6.8% for 2024.
· According to Mirae Asset Securities Vietnam, to meet the full
year GDP growth target of 6.5% set by the National Assembly, public investment
is expected to be deployed in a strong and consistent manner. The Prime
Minister set a government spending budget of VND707 trillion (US$30 billion)
in 2023.
· According to preliminary data from the General Statistics Office
("GSO"), trade activities reached
US$154.3 billion in the first quarter of 2023, of which exports were US$79.2
billion (down 11.9% YOY) and imports registered US$75.1 billion, resulting in
a trade surplus of US$4.1 billion. The United States is Vietnam's largest
export market, with an estimated turnover of US$20.6 billion (down 22% YOY),
followed by China at US$11.5 billion (down 14% YOY). Meanwhile, China is
Vietnam's largest import market, with an
estimated turnover of US$23.6 billion (down 15% YOY).
· Over the longer term, Vietnam continues to be a prime destination in
Southeast Asia for supply chain and manufacturing relocations by global
manufacturers due to strong economic fundamentals and a favourable foreign
investment environment. According to the GSO, total registered foreign direct
investment in the first quarter or 2023 increased by 20% YOY, reaching US$7.8
billion.
Myanmar macroeconomic highlights
· The World Bank's Myanmar Economic Monitor forecasts 3.0% economic
growth for the fiscal year ending September 2023. However, Myanmar's economy
is unlikely to yet reach pre-pandemic levels in the foreseeable future due to
ongoing challenges such as exchange rate volatility, inflation, and low
confidence.
· In April 2022, the Central Bank of Myanmar ("CBM") introduced
foreign exchange control measures, mandating the conversion of all foreign
currency receipts into Myanmar Kyat ("MMK") at a reference rate lower than the
market rate. Between mid-April and late August 2022, the MMK depreciated 14%
against the US Dollar ("USD"). The CBM then shifted the reference rate from
1,850 to 2,100 MMK-USD in August 2022. To alleviate market concerns, the CBM
exempted certain entities from these measures. The CBM also permitted
exporters to convert 65% of their earnings to MMK at the reference rate and
sell the remaining 35% at market rates within one month of receipt.
Additionally, the CBM allowed the use of Thai Baht ("THB") and Renminbi
("RMB") for trade-related payments, which further stabilized the USD exchange
rate.
· According to S&P Global, in May 2023, Myanmar manufacturing
Purchasing Manager's Index ("PMI"), declined to 53.0% from the previous
month's record high of 57.4%, the softest expansion since February. This
indicates a slower but still solid improvement in business conditions. This
slight slowdown was driven by a weaker increase in new orders, leading to a
less pronounced growth in output. Workforce numbers saw fractional expansion
as companies hired additional employees to support production.
· The near-term economic outlook remains weak due to macroeconomic
and regulatory uncertainties. The country's growth prospects are further
hampered by gloomy global economic conditions, inflationary pressures, and
strained relationships with trading partners such as the United States and the
European Union. However, with the reopening of China's economy in 1Q23,
expectations in trade flows and the manufacturing sector have improved.
Enrico Cesenni, Chief Executive Officer of Asia Strategic Holdings, said:
"I am pleased to report that over the six-month financial period ended 31
March 2023, Asia Strategic Holdings has achieved significant growth in both
revenue (+38% YOY) and gross profit margins (+106% YOY), while further
strengthening its business foundations with the launch of Kids&Us in both
Vietnam and Myanmar.
"As the COVID-19 related restrictions have substantially ceased across ASEAN,
the Group has experienced a strong rebound in its Education business,
particularly in Myanmar, supported by pent-up demand and limited local
availability of high-quality products. The total number of students enrolled
with the Group rose 78% YOY to ca. 8,100, almost evenly split between Vietnam
and Myanmar.
"In 2022, the Group expanded its Education product portfolio with the
partnership with Kids&Us and opened four schools in Ho Chi Minh City and
one in Yangon, yielding ca. 300 students as of June 2023. Building on the
initial commercial success, the Group plans additional openings during 2023.
"On the other hand, the Services division experienced a 13% contraction in
revenue driven by the exit of certain customers from Myanmar and the adverse
FX impact. Management expects a rebound in monthly revenues in the second half
of FY'23 driven by the successful negotiation of price increases in existing
contracts and the acquisition of new high-profile customers.
"While global inflation, supply chain shortages and local shocks may reduce
disposable income and hinder discretionary spending, the Board believes that
the Group is strategically positioned in sectors that will attract continued
investments such as Education and that demonstrate less correlation to the
broader economy such as Security services. In turn, this allows us to take a
strategic view, pursue a long-term agenda and strengthen our foundations,
confident in our capital structure.
"We would like to take this opportunity to thank our shareholders for their
continued support and all staff members across the Group for their hard work
and sacrifice through these challenging, uncertain and troubling times."
For more information, please visit www.asia-strategic.com
(http://www.asia-strategic.com) or contact:
Asia Strategic Holdings Ltd. richard@asia-strategic.com (mailto:richard@asia-strategic.com)
Richard Greer, Independent Non-Executive Chairman enrico@asia-strategic.com (mailto:enrico@asia-strategic.com)
Enrico Cesenni (OSI), Founder and CEO
Allenby Capital Limited (Broker) +44 (0)20 3328 5656
Nick Athanas
Nick Naylor
Lauren Wright
Yellow Jersey PR (Financial PR) +44 (0) 20 3004 9512
Sarah Hollins
Bessie Elliot
Notes to editors
Asia Strategic Holdings Ltd.
Asia Strategic Holdings Ltd. (LSE: ASIA) is an independent developer and
operator of consumer businesses in emerging Asia. The Company's portfolio
focuses on Education and Services with the view to expand within the broader
consumer sector and is located in Vietnam and Myanmar, two of the fastest
growing economies in the world over the last decade.
Education sector: the Company operates a range of brands across English
language learning, tertiary education and K-12. As of June 2023, it operated
20 schools (19 at 31 March 2023), serving ca. 8,200 students (ca. 8,100 at 31
March 2023).
The Company currently has exclusive development and franchising agreements
with Wall Street English to develop English language centres across Myanmar.
As of June 2023, Wall Street English Myanmar served over 3,600 students
through five centres.
In July 2020, the Company completed the acquisition of the Wall Street
English business in Vietnam. Founded in 2013, the WSE Vietnam business
operates through seven centres in Ho Chi Minh and Binh Duong serving over
3,700 students (3,600 at 31 March 2023).
The Company also operates a joint venture with Auston Institute of
Management to develop and operate the Auston University. Auston opened in May
2018 offering diplomas in Engineering Technology, Mechanical Engineering and
Networking, Information Systems, and Security. English language learning is
also provided by the Company's nearby Wall Street English centre. In February
2020, the Company announced a partnership with Liverpool John Moores
University to provide high quality engineering training programmes for young,
working professionals in Myanmar, to be taught by its teaching staff in
Myanmar. As of 30 June 2023, Auston University served ca. 600 students (580
at 31 March 2023).
In August 2019 the Company launched its first private K-12 international
school, the Yangon American International School ("Yangon American")
in Yangon. In July 2021 Yangon American was recognised as an official
International Baccalaureate Primary Years Programme ("IB PYP") school by
the International Baccalaureate Organization.
In April 2022, the Company entered into an exclusive franchising agreement
with Kids&Us for the development of English language schools for children
across Myanmar. The first centre opened in Yangon in June 2023. In August
2022, the Company entered into an exclusive franchising agreement with
Kids&Us for the development of English language schools for children
across Vietnam. The first four centres are operational in Ho Chi Minh.
Services sector: through its acquisition of EXERA, the Company offers
security, risk management and secure logistics services. Founded in 2013,
EXERA employs approximately 1,400 well-trained and high-quality security
officers (1,500 on 31 March 2023) making it one of the largest security
services providers accredited to "ISO 18788 Management System for Private
Security Companies" in Myanmar.
Furthermore, the Company provides hospitality services, managing two boutique
hotels in core tourist locations in Myanmar, operating under the
award-winning Ostello Bello budget hospitality brand. The Company operates an
asset-light strategy, entering into long-term operating and management
agreements with local hotel owners.
Vietnam and Myanmar were among the fastest growing economies in Asia in
2017-2020 (Source: Asian Development Bank). Vietnam's annual GDP growth rate
is expected to be 6.5% in 2023 and 6.8% in 2024, while Myanmar's is expected
to be 2.8% in 2023 and 3.2% in 2024 (Source: Asian Development Bank).
The Company is well positioned to provide investors early exposure
to Vietnam's and Myanmar's strong economic fundamentals enhanced
by ASEAN's wider growth prospects.
To receive news alerts on Asia Strategic Holdings please sign up here under
the 'RNS' header: https://asia-strategic.com/investor-relations/
(https://asia-strategic.com/investor-relations/)
FINANCIAL REVIEW
· Group revenues from owned and managed businesses for 6M'23 were
US$11.5 million (+38% YOY) vs. US$8.3 million for 6M'22 (+9% YOY).
· The double-digit revenue growth was a combination of (i) strong
improvements across the Education businesses in Myanmar (+141% YOY), (ii)
the recovery in Education in Vietnam (+22% YOY), leading towards the
completion of WSE Vietnam's turnaround and supported by the opening of four
new Kids&Us English language learning centres in late 2022, and (iii) the
underperformance at EXERA (-13% YOY) due to the loss of certain customers due
to the challenging political and economic environment.
FPE 2023 FPE 2022 FPE 2021 FYE 2022 FYE 2021
Unaudited Unaudited Unaudited Audited Audited
6M'23 6M'22 6M'21 12M'22 12M'21
Brands US$ US$ US$ US$ US$
Owned businesses
Education - Vietnam 4,055,667 3,312,986 4,014,274 7,391,025 7,479,035
- English language learning WSE 3,971,580 3,312,986 4,014,274 7,391,025 7,479,035
- English language learning Kids&Us 84,087 − − − −
Education - Myanmar 4,741,070 1,790,716 553,681 4,485,240 1,331,422
- English language learning WSE 3,356,148 1,248,184 218,079 3,204,937 734,606
- International school Yangon American 447,192 397,660 335,602 804,396 567,982
(K-12)
- Tertiary education Auston 937,730 144,872 − 475,907 28,834
Education 8,796,737 5,103,702 4,567,955 11,876,265 8,810,457
Services EXERA 2,642,785 3,025,078 2,707,920 5,794,603 5,664,019
Total owned businesses 11,439,522 8,128,780 7,275,875 17,670,868 14,474,476
Managed businesses
Education (Legacy) - Myanmar 14,177 184,700 365,159 236,006 497,849
- English language learning WSE 14,177 184,000 355,016 235,363 485,819
- Tertiary education Auston − 700 10,143 643 12,030
Services Ostello Bello − − 6,857 − 13,712
Total managed businesses 14,177 184,700 372,016 236,006 511,561
Group Revenue 11,453,699 8,313,480 7,647,891 17,906,874 14,986,037
RESULTS OF OPERATIONS
· The Group's gross profit for 6M'23 was US$6.6 million up 106% vs US$3.2
million for 6M'22. The notable improvement in gross profit margin (57% for
6M'23 vs. 38% for 6M'22) was attributable to (i) the strong commercial
performance, (ii) the shift to higher-margin products and (iii) the higher
utilization of teachers and facilities thanks to the ramp-up in enrolled
students.
· The growth in Group revenue (+US$3.1 million YOY) and gross profit
(+US$3.4 million YOY) was partially offset by the increase in foreign exchange
loss (+US$0.3 million YOY) and administrative and other operating expenses
(+US$2.8 million YOY). The latter rose primarily due to (i) higher marketing
expenses, and (ii) an increase in personnel costs due to the expansion in the
Education businesses and salary increments to mitigate the inflationary
pressures affecting the Group's employees.
· The Group was close to Adjusted EBITDA break-even for 6M'23 vs. a
US$0.5 million loss for 6M'22. When adjusted for the impact of the
right-of-use assets ("ROUs"), the Group's Adjusted EBITDA loss amounted to
US$1.8 million vs. a US$2.2 million loss in 6M'22.
FPE 2023 FPE 2022 FPE 2021 FYE 2022 FYE2021
Unaudited Unaudited Unaudited Audited Audited
6M'23 6M'22 6M'21 12M'22 12M'21
US$ US$ US$ US$ US$
Revenue 11,453,699 8,313,480 7,647,891 17,906,874 14,986,037
Cost of services (4,897,166) (5,130,275) (5,431,559) (9,924,470) (10,466,705)
Gross profit 6,556,533 3,183,205 2,216,332 7,982,404 4,519,332
Gross profit margin 57% 38% 29% 45% 36%
Other income 8,314 85,052 40,080 80,711 70,350
Foreign exchange (loss)/gain, net (386,886) (121,198) − (972,259) 767,833
Administrative and other operating expenses (7,988,551) (5,227,357) (4,769,401) (12,176,613) (10,320,565)
Loss from operations (1,810,590) (2,080,298) (2,512,989) (5,085,757) (4,963,050)
Finance cost (442,146) (432,306) (449,630) (862,678) (999,992)
Loss before income tax (2,252,736) (2,512,604) (2,962,619) (5,948,435) (5,963,042)
Income tax (expense)/credit − (82,520) 17,611 (33,646) 114,688
Loss for after income tax (2,252,736) (2,595,124) (2,945,008) (5,982,081) (5,848,354)
Selected non-cash items:
Total depreciation of plant and equipment 371,187 205,506 246,594 436,363 419,057
Total amortisation of right-of-use assets 1,382,345 1,350,354 1,331,375 2,694,870 2,560,875
Total amortisation of intangible assets 38,215 28,268 113,270 74,342 113,684
Impairment of trade and other receivables (6,187) 18,421 103,207 15,453 1,004,384
Finance costs (excluding interest on lease liabilities) 44,887 65,342 93,945 115,890 243,547
Total interest on lease liabilities 398,454 372,105 355,685 754,370 756,445
Reversal of impairment of intangible assets
− − − (30,000) −
2,228,901 2,039,996 2,244,076 4,061,288 5,097,992
Adjusted (loss)/earnings before interest, tax, depreciation, and amortisation
("EBITDA")
(23,835) (472,608) (718,543) (1,887,147) (865,050)
Adjusted EBITDA after impact of ROUs (1,804,634) (2,195,067) (2,405,603) (5,336,387) (4,182,370)
LIQUIDITY AND CAPITAL RESOURCES
· At 31 March 2023, the Group's cash and cash equivalents amounted to
US$1.4 million, compared to US$2.0 million at 30 September 2022. The decrease
of US$0.6 million is primarily due to capital expenditures of US$0.8 million
and bank loan repayments of US$0.1 million.
· The Group generated positive cash flows from operating activities of
US$1.6 million, an increase of US$0.4 million vs 6M'22 (US$1.2 million) mainly
due to the increase in prepayments and deposits received from customers of
US$0.8 million (6M'22: increase of US$3.0 million) as of 31 March 2023. If
repayment of lease liabilities were considered, the Group generated cash from
operating activities of US$0.2 million (6M'22: cash outflows of US$0.2
million).
· For 6M'23, the Group incurred capital expenditures of US$0.8 million
vs. US$0.6 million for 6M'22 mainly for leasehold improvements related to the
(i) opening of three Kids&Us Centres in Vietnam, (ii) additional centres
for Wall Street English in Yangon and Auston in Mandalay, (iii) refurbishments
at Wall Street English Vietnam, and (iv) a new dedicated and secured
headquarter for EXERA.
· In December 2022, the interest-free bank loan of US$0.1 million from
a bank in Vietnam was repaid in full. The Group funded its capital
expenditures and business expansion through effective cash management from its
operating activities. No new shares nor convertible notes have been issued
during the financial period.
· For 6M'22, the Group issued Convertible Notes which generated cash
inflows of US$3.2 million (excluding transaction costs) and were utilised for
working capital and partial repayment of the shareholder loans and interest,
totalling US$1.8 million.
OTHER INFORMATION
At 31 March 2023, 97% of the total workforce (30 September 2022: 96%) were
local employees in the countries in which the Group operates. All employees
earn at least the local minimum wage and are provided cost of living
allowances to weather global inflation and benefit from fair working
conditions and shift patterns. Approximately 75% (30 September 2022: 72%) of
the Group's workforce are female (excluding EXERA's security officers).
Direct and indirect Full Time Employees ("FTEs") 31-Mar-2023 31-Sep-2022 31-Mar-2022
Male 121 127 100
Female 355 325 302
476 452 402
Male (EXERA's security officers) 1,371 1,521 1,493
Total employees 1,847 1,973 1,895
Ratio of female representation
(excluding EXERA's security officers) 75% 72% 75%
Direct and indirect FTE decreased to 1,847 (30 September 2022: 1,973) mainly
due to the reduction in EXERA's security officers over the period.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the financial period from 1 October 2022 to 31 March 2023
FPE 2023 FPE 2022
Note US$ US$
Revenue 4 11,453,699 8,313,480
Cost of services (4,897,166) (5,130,275)
Gross profit 6,556,533 3,183,205
Other income 8,314 85,052
Administrative and other operating expenses (8,375,437) (5,348,555)
Loss from operations (1,810,590) (2,080,298)
Finance cost 6 (442,146) (432,306)
Loss before income tax 7 (2,252,736) (2,512,604)
Income tax expense 8 − (82,520)
Loss after income tax (2,252,736) (2,595,124)
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Exchange difference in translation of foreign operations (19,959) 8,754
Items that will not be reclassified subsequently
to profit or loss:
Changes in fair value of equity instruments at FVOCI 12 (80,774) (71,800)
Other comprehensive income for the period, net of tax (100,733) (63,046)
Total comprehensive income (2,353,469) (2,658,170)
Loss for the period attributable to:
Owners of the Company (2,252,736) (2,549,665)
Non-controlling interests − (45,459)
(2,252,736) (2,595,124)
Total comprehensive income attributable to:
Owners of the Company (2,353,469) (2,612,711)
Non-controlling interests − (45,459)
(2,353,469) (2,658,170)
Loss per share attributable to the owners of the
Company (US$)
- Basic and diluted (US$) 21 (0.77) (0.88)
The above condensed interim consolidated statement of comprehensive income
should be read in conjunction with the accompanying notes.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2023
As at As at
31-Mar-2023 30-Sep-2022
Note US$ US$
ASSETS
Non-current assets
Plant and equipment 9 2,364,727 2,032,390
Intangible assets 10 6,711,972 6,681,443
Right-of-use assets ("ROU") 11 10,105,062 11,275,139
Financial assets at FVOCI 12 76,288 157,062
Trade and other receivables 13 1,501,766 1,542,501
Total non-current assets 20,759,815 21,688,535
Current assets
Inventories 184,509 165,891
Trade and other receivables 13 2,028,596 1,628,965
Cash and cash equivalents 14 1,353,782 1,980,232
Total current assets 3,566,887 3,775,088
Total assets 24,326,702 25,463,623
LIABILITIES AND EQUITY
Liabilities
Non-current liabilities
Contract liabilities 4 747,006 1,872,423
Shareholder loans 15 1,544,877 1,500,000
Lease liabilities 8,156,086 9,142,979
Total non-current liabilities 10,447,969 12,515,402
Current liabilities
Contract liabilities 4 9,816,410 8,093,625
Bank loans 16 − 115,530
Trade and other payables 17 4,674,597 3,636,898
Lease liabilities 2,243,574 1,961,444
Income tax payables 3,906 16,229
Total current liabilities 16,738,487 13,823,726
Total liabilities 27,186,456 26,339,128
Equity
Share capital 18 21,639,638 21,439,638
Convertible notes 19 5,730,000 5,730,000
Accumulated losses (30,477,593) (28,224,857)
Other reserves 248,201 179,714
Equity attributable to owners (2,859,754) (875,505)
of the Company
Non-controlling interests 20 − −
Total equity (2,859,754) (875,505)
Total liabilities and equity 24,326,702 25,463,623
The above condensed interim consolidated statement of financial position
should be read in conjunction with the accompanying notes.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial period from 1 October 2022 to 31 March 2023
Unaudited Note Share Convertible Equity Share Fair Foreign exchange reserve Accumulated Equity Non− Total
capital notes reserves option reserve value reserve losses attributable controlling equity
to owners interests
of the Company
31 March 2023 US$ US$ US$ US$ US$ US$ US$ US$ US$ US$
Balance as at 1 October 2022 21,439,638 5,730,000 (212,271) 968,819 (605,692) 28,858 (28,224,857) (875,505) − (875,505)
Total comprehensive income for the financial year:
Loss for the financial period − − − − − − (2,252,736) (2,252,736) − (2,252,736)
Other comprehensive income − − − − (80,774) (19,959) − (100,733) − (100,733)
− − − − (80,774) (19,959) (2,252,736) (2,353,469) − (2,353,469)
Contribution by owners of the Company
Issuance of shares in lieu of bonus 18 200,000 − − − − − − 200,000 − 200,000
Recognition of share-based payments 5 − − − 169,220 − − − 169,220 − 169,220
200,000 − − 169,220 − − − 369,220 − 369,220
Balance as at 31 March 2023 21,639,638 5,730,000 (212,271) 1,138,039 (686,466) 8,899 (30,477,593) (2,859,754) − (2,859,754)
Unaudited Note Share Convertible Equity Share Fair Foreign exchange reserve Accumulated Equity Non− Total
capital notes reserves option reserve value reserve losses attributable controlling equity
to owners interests
of the Company
31 March 2022 US$ US$ US$ US$ US$ US$ US$ US$ US$ US$
Balance as at 1 October 2021 20,799,638 − (128,362) 774,102 (448,629) (123,237) (22,288,235) (1,414,723) (38,449) (1,453,172)
Total comprehensive income for the financial year:
Loss for the financial year − − − − − − (2,549,665) (2,549,665) (45,459) (2,595,124)
Other comprehensive income − − − − (71,800) 8,754 − (63,046) − (63,046)
− − − − (71,800) 8,754 (2,549,665) (2,612,711) (45,459) (2,658,170)
Contribution by owners of the Company
Issuance of shares in lieu of bonus 18 640,000 − − − − − − 640,000 − 640,000
Issuance of convertible notes 19 − 5,730,000 − − − − − 5,730,000 − 5,730,000
Recognition of share-based payments − − − 71,726 − − − 71,726 − 71,726
640,000 5,730,000 − 71,726 − − − 6,441,726 − 6,441,726
Changes in ownership interest
in a subsidiary
Acquisition of non-controlling interests 20 − − (83,909) − − − − (83,909) 83,908 (1)
Balance as at 31 March 2022 21,439,638 5,730,000 (212,271) 845,828 (520,429) (114,483) (24,837,900) (3,399,617) − (3,399,617)
The above condensed interim consolidated statement of changes in equity should
be read in conjunction with the accompanying notes.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial period from 1 October 2022 to 31 March 2023
FPE 2023 FPE 2022
Note US$ US$
Operating activities
Loss before income tax (2,252,736) (2,512,604)
Adjustments for:
Interest income (2,456) (1,355)
Plant and equipment written off − (100)
Intangible assets written off − 3,011
Share-based compensation 5 169,220 71,726
Interest expense on lease liabilities 6, 7 398,454 372,105
Interest expense on loan from
corporate shareholder 6 44,877 65,342
Lease concession 7 − (80,745)
Amortisation of intangible assets 7 38,215 28,268
Depreciation of plant and equipment 9 371,187 205,506
Amortisation of right-of-use assets 11 1,382,345 1,350,354
Impairment loss on trade and other receivables 13 (6,187) 18,421
Transfer of plant and equipment to intangible assets − 4,528
Unrealised exchange difference 33,695 79,815
Operating cash flows before working capital changes 176,614 (395,728)
Working capital changes:
Trade and other receivables (352,709) (190,848)
Inventories (18,618) 17,700
Contract liabilities 597,368 1,259,464
Trade and other payables 1,212,199 577,247
Cash flows provided from operations 1,614,854 1,267,835
Interest received 2,456 1,355
Income tax paid (12,323) (71,409)
Net cash provided from operating activities 1,604,987 1,197,781
Investing activities
Purchase of plant and equipment 9 (758,528) (594,169)
Advances to related parties − (423,813)
Purchase of intangible assets − (13,356)
Net cash flows used in investing activities (758,528) (1,031,338)
FPE 2023 FPE 2022
Note US$ US$
Financing activities
Repayment of shareholder loans 15 − (1,500,000)
Interest paid on shareholder loans 15 − (271,656)
(Repayment)/proceeds from bank loan 16 (115,530) 120,492
Proceeds from convertible notes 19 − 3,230,000
Principal payment for lease liabilities (1,045,976) (990,415)
Interest payment for lease liabilities (332,664) (372,105)
Fixed deposits pledged to bank − 56,868
Acquisition of equity interest from
non-controlling interests 20 − (1)
Net cash (used in)/provided from financing activities (1,494,170) 273,183
Net changes in cash and cash equivalents (647,711) 439,626
Effect of exchange rate changes on cash and cash equivalents 21,261 (14,302)
Cash and cash equivalents at beginning of financial period 1,980,232 2,165,257
Cash and cash equivalents at end of financial period 14 1,353,782 2,590,581
The above condensed interim consolidated statement of cash flows should be
read in conjunction with the accompanying notes.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the financial period from 1 October 2022 to 31 March 2023
1 CORPORATE INFORMATION
Asia Strategic Holdings Limited (the "Company" or "Asia
Strategic") (Registration Number 201302159D) is a public company limited by
shares incorporated and domiciled in Singapore with its principal place of
business and registered office at 80 Raffles Place #32-01, UOB Plaza,
Singapore 048624. The Company's ordinary shares are traded on the Main Market
of the London Stock Exchange under the equity ticker ASIA.
The condensed interim consolidated financial statements as at and
for the six-month financial period ended 31 March 2023 comprise the Company
and its subsidiaries (collectively, the "Group").
For management purposes, the Group is organised into business
units based on its services, and has three reportable operating segments as
follows:
a) Education - Operation of education businesses ranging from early years to
tertiary education and including vocational training, consultancy, advisory
and project management services in the education sector in Myanmar and
Vietnam;
b) Services - Provision of integrated services, consultancy, advisory and
project management services in the security and hospitality sectors in
Myanmar. This reportable segment has been formed by aggregating the relevant
operating entities, which are regarded by management to exhibit similar
economic characteristics; and
c) Others - Corporate services, management support and certain shared
services to subsidiaries of the Group. This segment includes the Group's minor
trading and investment holding activities which are not included in reportable
segments as they are not separately reported to the chief operating decision
maker.
These operating segments are reported in a manner consistent with internal
reporting provided to the chief operating decision-maker responsible for
allocating resources and assessing the performance of the operating segments.
1.1 BASIS OF PREPARATION
The condensed interim consolidated statement of financial position of the
Group as at 31 March 2023 and the related condensed interim consolidated
profit or loss and other comprehensive income, condensed interim consolidated
statement of changes in equity and condensed interim consolidated statement of
cash flows for the six-month financial period ended 31 March 2023 and the
explanatory notes have not been audited by the Group's Independent Auditors.
The condensed interim consolidated financial statements as at and for the
financial period ended 31 March 2023 have been prepared in accordance with
International Accounting Standards ("IAS") 34 Interim Financial Reporting as
adopted by the European Union.
The condensed consolidated interim financial statements do not include all
disclosures that would otherwise be required in a complete set of financial
statements and should be read in conjunction with the annual report for the
financial year ended 30 September 2022 which have been prepared in accordance
with International Financial Reporting Standards ("IFRS") as adopted by the
European Union and are prepared under the historical cost convention, except
as disclosed in the accounting policies below. However, selected explanatory
notes are included to explain events and transactions that are significant to
an understanding of the changes in the Group's financial position and
performance since the last annual financial statements for the financial year
ended 30 September 2022, which can be found on the Company's website at
www.asia-strategic.com (http://www.asia-strategic.com) .
The consolidated financial statements of the Group are presented in United
States dollars ("US$") which is the functional currency and the presentation
currency for the consolidated financial statements.
2 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies adopted are consistent with those of the
previous financial years except for the adoption of new and amended standards
as set out below.
Changes in accounting policy
New or amended standards have become applicable for the current
reporting period. The adoption of these new or amended standards did not
result in substantial changes to the Group's accounting policies and had no
material effect on the amounts reported for the current or previous financial
periods.
IFRSs issued but not yet effective
Certain new accounting standards and interpretations have been
issued but are not yet effective for the current financial year ending 30
September 2023 and have not been adopted early by the Group. The Group expects
that the adoption of these IFRSs, if applicable, will have no material impact
on the financial statements in the period of initial application.
3 USE OF JUDGEMENTS AND ESTIMATES
In preparing the condensed interim financial statements,
management has made judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. These estimates are based on management's
best knowledge of current events and actions. Actual results may differ from
these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the consolidated financial statements as at
and for the financial year ended 30 September 2022.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which
the estimates are revised and in any future periods affected.
There have been no material revisions to the nature and estimates
of amounts reported in prior periods, except those necessitated by the
changing circumstances of Myanmar's State of Emergency.
3.1 SIGNIFICANT EVENTS AND SUBSEQUENT EVENTS
Myanmar's political and economic situation
Myanmar's political and economic situation is evolving daily. The outcome and
long-term effects remain unclear at this stage. The business environment
remains challenging due to (i) persistent electricity and telecommunication
outages, (ii) frequent regulatory changes, (iii) stringent foreign exchange
control measures, (iv) inflationary pressure, and (v) increased security
risks.
Despite these uncertainties, the economic activity and the business
environment in Myanmar experienced gradual improvement over the past quarters,
particularly in the key urban cities where the Group operates such as Yangon
and Mandalay. The Group continuously monitors and applies appropriate
mitigating actions to ensure the Group's operations in Myanmar remain flexible
and adaptable to the current market environment.
The Group remains focused on expanding its current operations in Vietnam which
are expected to exceed Myanmar over time, however, the contribution from both
markets remains an important diversification strategy to mitigate the overall
geographical risk exposure of the Group.
The Group has considered the current market environment in the respective
countries in which it operates as at the reporting date and notes that there
are no indicators that warrant material adjustments to the key estimates and
judgements on the recoverability of the assets as of 31 March 2023.
3.2 SEASONAL OPERATIONS
The Group's businesses were not affected significantly by seasonal or cyclical
factors during the financial period ended 31 March 2023.
4 REVENUE AND SEGMENT INFORMATION
Disaggregation of revenue
Revenues are disaggregated below with the intention to depict how the nature,
amount, and timing of revenue and cash flows are affected by economic factors.
Education Services Total
FPE 2023 FPE 2022 FPE 2023 FPE 2022 FPE 2023 FPE 2022
US$ US$ US$ US$ US$ US$
Rendering of services − − 2,642,785 3,025,078 2,642,785 3,025,078
Technical support services and 14,177 193,625 14,177 193,625
new centre fees − −
Student fees 8,796,737 5,094,777 − − 8,796,737 5,094,777
8,810,914 5,288,402 2,642,785 3,025,078 11,453,699 8,313,480
Timing of transfer of services
Point in time 1,732 7,167 88,299 143,997 90,031 151,164
Over time 8,809,182 5,281,235 2,554,486 2,881,081 11,363,668 8,162,316
8,810,914 5,288,402 2,642,785 3,025,078 11,453,699 8,313,480
The timing of revenue recognition affects the amount of revenue and deferred
revenue (advances from customers) recognised as at the reporting date in the
consolidated statement of financial position.
As at As at
31-Mar-2023 30-Sep-2022
US$ US$
Contract liabilities
Deferred revenue 10,563,416 9,966,048
Analysed as:
Current 9,816,410 8,093,625
Non-current 747,006 1,872,423
10,563,416 9,966,048
Significant changes in contract liabilities are as detailed below:
As at As at
31-Mar-2023 30-Sep-2022
US$ US$
At beginning of financial period/year 9,966,048 5,892,090
Cash received in advance of performance and not 9,448,646 16,213,749
recognised as revenue
Revenue recognised during the financial period/year:
- On contract liabilities at beginning of financial period/year (7,543,274) (4,928,924)
- On cash received in advance during financial period/year (1,348,021) (7,027,948)
(8,891,295) (11,956,872)
Foreign exchange difference 40,017 (182,919)
At end of financial period/year 10,563,416 9,966,048
Remaining performance obligations
Deferred revenues reflect cash received in advance of performance which will
be recognised according to the following:
(i) The Group collected new centre fees in prior years for the Education
businesses in advance of the performance obligations. Deferred revenue for new
centre fees of US$14,177 have been fully realised in the profit or loss during
the financial period.
(ii) Student fees for Education business segments are generally collected one
to twelve months in advance (30-Sep-2022: same) and more than twelve months in
advance for students who prepay in advance of performance, with reference to
the individual terms of the student contracts. Deferred revenues from student
fees are recognised over the duration of the respective courses and the
remaining contract period ranging from one to 5.5 years (30-Sep-2022: one to
six).
(iii) Fees related to certain security services are collected six to twelve
months (30-Sep-2022: same) in advance of performance and revenues are
recognised with reference to the individual terms of the customer contracts.
1 October 2022 Education Services Others Total
to 31 March 2023 (FPE 2023) US$ US$ US$ US$
Revenue 8,810,914 2,642,785 − 11,453,699
Cost of services (2,937,114)(*) (1,960,052)(*) − (4,897,166)
Gross profit 5,873,800 682,733 − 6,556,533
Other income 6,137 541 1,636 8,314
Foreign exchange loss, net (308,308) (42,782) (35,796) (386,886)
Administrative and other operating expenses
(6,621,871) (708,584) (658,096)(**) (7,988,551)
Loss from operations (1,050,242) (68,092) (692,256) (1,810,590)
Finance cost (383,633) (13,626) (44,887) (442,146)
Segment loss (1,433,875) (81,718) (737,143) (2,252,736)
Income tax expense − − − −
Loss after income tax (1,433,875) (81,718) (737,143) (2,252,736)
Other non-cash items:
Total depreciation of plant and equipment
354,545 16,451 191 371,187
Total amortisation of right-of-use asset
1,277,702 104,643 − 1,382,345
Total amortisation of intangible assets 38,048
167 − 38,215
Reversal of impairment of trade and other receivables −
(6,187) − (6,187)
Finance costs (excluding interest on lease liabilities)
− − 44,887 44,887
Total interest on lease liabilities 383,633 14,821 − 398,454
2,053,928 129,895 45,078 2,228,901
Adjusted EBITDA 620,053 48,177 (692,065) (23,835)
Adjusted EBITDA after (1,041,282) (1,804,634)
impact of ROU (71,287) (692,065)
Reportable segment assets 21,052,841 3,033,082 164,491 24,250,414
as at 31 March 2023
Investment in FVOCI - - 76,288 76,288
Total Group's assets 24,326,702
Included in the segment assets:
Additions:
Plant and equipment 730,235 28,293 − 758,528
Right-of-use assets 318,554 − − 318,554
Reportable segment liabilities
as at 31 March 2023 (24,516,359) (875,886) (1,794,211) (27,186,456)
* Cost of services from "Education" and "Services" segments comprise mainly
employee benefit expenses amounting to US$1,475,452 and US$1,705,451,
respectively.
** Other operating expenses from the "Others" segment comprise mainly of
employee benefit expenses of US$410,978 (includes share-based payment of
US$169,220).
1 October 2021 Education Services Others Total
to 31 March 2022 (FPE 2022) US$ US$ US$ US$
Revenue 5,288,402 3,025,078 − 8,313,480
Cost of services (3,131,494)(*) (1,998,781)(*) − (5,130,275)
Gross profit 2,156,908 1,026,297 − 3,183,205
Other income 79,981 341 4,730 85,052
Foreign exchange (loss)/gain, net (151,501) 30,524 (221) (121,198)
Administrative and other operating expenses
(4,075,422) (616,637) (535,298)(**) (5,227,357)
(Loss)/profit from operations (1,990,034) 440,525 (530,789) (2,080,298)
Finance cost (335,741) (31,223) (65,342) (432,306)
Segment (loss)/profit (2,325,775) 409,302 (596,131) (2,512,604)
Income tax expense − (82,520) − (82,520)
(Loss)/profit after income tax (2,325,775) 326,782 (596,131) (2,595,124)
Other non-cash items:
Total depreciation of plant and equipment
188,249 16,732 525 205,506
Total amortisation of right-of-use asset
1,238,017 112,337 − 1,350,354
Total amortisation of intangible assets 28,101
167 − 28,268
Impairment of trade and other receivables −
18,421 − 18,421
Finance costs (excluding interest on lease liabilities)
− − 65,342 65,342
Total interest on lease liabilities 335,741 36,364 − 372,105
1,790,108 184,021 65,867 2,039,996
Adjusted EBITDA (535,667) 593,323 (530,264) (472,608)
Adjusted EBITDA after (2,109,425) (2,195,067)
impact of ROU 444,622 (530,264)
Reportable segment assets 20,964,082 2,376,447 392,262 23,732,791
as at 31 March 2022
Investment in FVOCI - - 242,325 242,325
Total Group's assets 23,975,116
Included in the segment assets:
Additions:
Plant and equipment 580,871 13,298 − 594,169
Right-of-use assets 1,425,137 − − 1,425,137
Reportable segment liabilities
as at 31 March 2022 (18,667,934) (1,292,549) (7,414,250) (27,374,733)
* Cost of services from "Education" and "Services" segments comprise mainly of
employee benefit expenses amounting to US$1,874,606 and US$1,747,784,
respectively.
**Other operating expenses from the "Others" segment comprise mainly of
employee benefit expenses of US$300,355 (includes share-based payment of
US$71,726).
Geographic information
The Group's business segments operate in two main geographical areas. Revenue
is based on the country in which the customers are located. Segment
non-current assets consist primarily of non-current assets other than
financial instruments and deferred tax assets. Segment non-current assets are
shown by geographic area in which the assets are located.
FPE 2023 FPE 2022
Revenue US$ US$
Vietnam 4,055,667 3,312,986
Myanmar 7,398,032 5,000,494
11,453,699 8,313,480
As at As at
31-Mar-2023 30-Sep-2022
Segment non-current assets US$ US$
Vietnam 7,469,410 12,408,875
Myanmar 11,688,808 7,554,647
Singapore 23,543 25,450
19,181,761 19,988,972
Non-current assets consist of plant and equipment, intangible assets and
right-of-use assets in the Group consolidated statement of financial position.
5 EMPLOYEE BENEFIT EXPENSES
FPE 2023 FPE 2022
US$ US$
Wages, salaries and allowances* 6,547,802 5,254,191
Share-based compensation 169,220 71,726
Termination benefits 13,461 35,806
Staff insurance and medical expenses 145,412 125,750
Staff accommodation and welfare 162,910 145,367
Others 110,613 25,462
7,149,418 5,658,302
Total employee benefit expenses:
- Cost of services 3,180,903 3,622,390
- Administrative and other operating expenses 3,968,515 2,035,912
7,149,418 5,658,302
*Included in these expenses are Director fees and
remuneration.
6 FINANCE COST
FPE 2023 FPE 2022
US$ US$
Interest expenses:
- Lease liabilities 397,259 366,964
- Loan from a shareholder 44,887 65,342
442,146 432,306
7 LOSS BEFORE INCOME TAX
In addition to the charges and credits disclosed elsewhere in the financial
statements, the loss before income tax includes the following
charges/(credits):
FPE 2023 FPE 2022
US$ US$
Cost of services
Academic expenses 812,060 567,799
Student enrolment and support fees 450,961 214,755
Expenses relating to student instalment plans 146,135 165,204
Depreciation expense 50,019 104,278
Security service expenses 116,050 81,276
Hotel related operating expenses 25,834 79,581
Amortisation of right-of-use assets 39,957 58,522
Amortisation of intangible assets 1,574 17,679
Interest on lease liabilities 1,195 5,141
Travelling and transportation expenses 69,147 53,205
Administrative and other operating expenses:
Amortisation of right-of-use assets 1,342,388 1,291,832
Amortisation of intangible assets 36,641 10,589
Selling and marketing expenses 1,217,905 857,522
Professional fees 152,991 322,316
Depreciation expense 321,168 101,228
Lease expenses on:
- Short term lease expense 146,614 124,525
- Lease concession((1)) (46,307) (80,745)
Travelling and transportation expenses 152,991 81,296
Foreign exchange (loss)/gain, net 386,886 121,198
((1) ) The lease concession is related to additional discounts received from
landlords (30-Sep-2022: due to the COVID-19 pandemic).
8 INCOME TAX EXPENSE
The corporate income tax rate applicable to the Company and its subsidiaries
in Singapore is 17% (6M'22: 17%). The Group has significant operations in
Myanmar and Vietnam, for which the applicable corporate income tax rates are
22% (6M'22: 25%) and 20% (6M'22: 20%), respectively.
Taxation for other jurisdictions is calculated at the rates prevailing in the
relevant jurisdictions.
The Group calculates the period income tax expense using the tax rate that
would be applicable to the expected total annual earnings of the respective
entities. The material components of the income tax expense in the condensed
interim consolidated statement of profit or loss are:
FPE 2023 FPE 2022
US$ US$
Current income tax
- Current year tax − (82,520)
- Under provision in respect of prior financial periods − −
Deferred income tax
- current financial period − −
Total income tax credit recognised in profit or loss − (82,520)
9 PLANT AND EQUIPMENT
The changes in the net carrying amount of plant and equipment are summarised
below.
FPE 2023 FPE 2022
US$ US$
Purchase of plant and equipment
- Computers and books 298,098 125,122
- Furniture and fittings 65,816 14,663
- Leasehold improvements 207,787 2,921
- Construction-in-progress 186,827 451,463
758,528 594,169
Depreciation for the financial period (371,187) (205,506)
Construction-in-progress mainly relates to leasehold
improvements / renovations for the (i) opening of three Kids&Us centres in
Vietnam, (ii) additional centres for Wall Street English and Auston in
Myanmar, (iii) refurbishments at Wall Street English Vietnam, and (iv) a new
corporate office for EXERA.
10 INTANGIBLE ASSETS
The carrying amounts of significant intangible assets allocated to the
respective cash generating units ("CGU") which have been grouped to the
following segments:
Education Services
Myanmar Vietnam Myanmar
31-Mar-23 30-Sep-22 31-Mar-23 30-Sep-22 31-Mar-23 30-Sep-22
US$ US$ US$ US$ US$ US$
Goodwill − − 4,775,925 4,734,832 1,438,990 1,438,990
Area development and 222,265 195,798 241,797 256,355
centre fees − −
As of the reporting date, there are no new additions to intangible assets
except for the purchase of computer software licenses. Amortisation was
US$38,215 for 6M'23 vs. US$28,268 for 6M'22.
11 RIGHTS-OF-USE ASSETS
The changes in the net carrying amount of rights-of-use assets are summarised
below.
FPE 2023 FPE 2022
US$ US$
Additions for the year 318,554 1,425,137
Amortisation for the six-month financial period (1,382,345) (1,350,354)
12 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
("FVOCI")
As at As at
31-Mar-2023 30-Sep-2022
US$ US$
At beginning of financial period/year 157,062 314,125
Fair value recognised in other comprehensive income (80,774) (157,063)
At end of financial period/year 76,288 157,062
Details of the investment are as follows:
Quoted equity instrument
- London Stock Exchange (AIM Market) 76,288 157,062
The Group designated the investment as quoted equity security to be measured
at fair value through other comprehensive income as at reporting date. The
Group intends to hold this investment for long-term capital appreciation as
well as strategic investment purposes.
The investment in a listed equity instrument has no fixed maturity date nor
coupon rate. The fair value of the equity instrument is based on the quoted
bid market price on the last trading day of the reporting period (Level 1).
The FVOCI are denominated in United States dollar as at reporting date.
13 TRADE AND OTHER RECEIVABLES
As at As at
31-Mar-2023 30-Sep-2022
US$ US$
Current
Trade receivables
Third parties 623,037 663,789
Less: Loss allowances (6,187) (15,453)
Third parties, net 616,850 648,336
Accrued receivables 81,337 6,913
Total trade receivables 698,187 655,249
Other receivables
Third parties((ii)) − 280,327
Less: Loss allowances − (280,327)
− −
Rental deposits 56,725 77,619
Prepayments for enrolment and support fees 611,577 333,229
Sales tax 31,758 56,475
Advances and other prepayments 630,349 506,393
Total other receivables 1,330,409 973,716
Total trade and other receivables (current) 2,028,596 1,628,965
Non−current
Related party (Note 23)
- trade − 1,042,614
- non-trade 5,435,151 4,256,996
Less: Loss allowances (4,403,202) (4,400,124)
1,031,949 899,486
Rental deposits 439,819 545,296
Prepayments for enrolment and support fees 29,998 97,719
Total other receivables (non−current) 1,501,766 1,542,501
Total trade and other receivables 3,530,362 3,171,466
Less: Advances and prepayments (1,271,924) (937,341)
Less: Sales tax (31,758) (56,475)
Add: Cash and cash equivalents (Note 14) 1,353,782 1,980,232
Financial assets at amortised cost 3,580,462 4,157,882
Trade and other receivables
Trade receivables are non-interest bearing and are generally on 15 to 60 days
credit terms (30-Sep-2022: 15 to 60). They are measured at the original
invoice amount which represents their fair value on initial recognition.
Amounts due from subsidiaries and related parties are non−trade in nature,
unsecured, interest−free and are repayable on demand.
Expected credit loss allowances
i) Trade receivables - Third party
In the previous financial year, a one-off loss allowance of US$15,453 was made
for a third-party trade debtor as the likelihood of recovery was remote.
During 6M'23, a loss allowance reversal of US$6,187 was recognised as the
Group successfully recovered a portion of the long outstanding receivables.
ii) Other receivables - Third party
In the previous financial years, allowances for impairment of third-party
receivables of US$280,327 were made with respect to advances to the owners of
the hostels under management as two of the hostels under management
experienced continuous losses and recoverability is in doubt. These allowances
were written off in full during 6M'23 as the Group ceased to operate these
hostels.
iii) Other receivables - Related party (non-current)
At 31 March 2023, the total carrying amount of non-current trade and non-trade
receivables due from a related party was US$1,031,949 (30-Sep-2022:
US$899,486). These trade and non-trade related party receivables are payments
made on behalf and advances for the managed operations of Wall Street English
and Auston in Myanmar. The loss allowance was made based on the financial
information of the related party and the expected repayment from the provision
of property management services to the Group.
The amounts due from a related party were classified as non-current based on
the expected settlement and recovery of the balances which falls more than
twelve months after the end of the reporting period.
14 CASH AND CASH EQUIVALENTS AND FIXED DEPOSITS
For the consolidated statement of cash flows, cash and cash equivalents
comprise the following at the end of the reporting date:
As at As at
31-Mar-2023 30-Sep-2022
US$ US$
Cash at bank 1,076,885 986,400
Cash at financial institutions 20,226 47,980
Cash on hand 256,671 945,852
Cash and cash equivalents 1,353,782 1,980,232
Cash at bank earns interest at floating rates based on daily bank deposit
rates. Cash and cash equivalents and fixed deposits are denominated in the
following currencies:
As at As at
31-Mar-2023 30-Sep-2022
US$ US$
United States Dollar 383,560 1,142,830
Myanmar Kyat 676,460 430,909
Vietnamese Dong 200,176 151,097
Singapore Dollar 90,396 209,294
Euro 3,190 46,102
1,353,782 1,980,232
15 SHAREHOLDER LOANS (UNSECURED)
Below are the changes to shareholder loan balances (interest and principal)
arising from financing activities:
Non−cash changes
As at Drawdown Repayment Subscription of convertible notes Interest expense As at
1-Oct-2022 of loan of loans 31-Mar-2023
US$ US$ US$ US$ US$ US$
Facility 1 1,500,000 − − − 44,877 1,544,877
Non−cash changes
As at Drawdown Repayment Subscription of convertible notes Interest expense As at
1 Oct-2021 of loan of loans 30-Sep-2022
US$ US$ US$ US$ US$ US$
Facility 1 3,151,576 250,000 (2,004,725) − 103,149 1,500,000
Facility 2 2,591,971 − (104,712) (2,500,000) 12,741 −
5,743,547 250,000 (2,109,437) (2,500,000) 115,890 1,500,000
(a) Loan Facility 1
On 1 July 2019, the Group secured a loan facility up to US$3.0 million with
its largest corporate shareholder, Macan Pte Ltd ("MACAN") ("Loan Facility
1"). The Group has drawn down US$1.7 million as at the date of this report
(US$1.5 million as at 31 March 2023).
(b) Loan Facility 2
On 23 March 2020, MACAN granted the Group an additional loan facility of up
to US$4.0 million ("Loan Facility 2").
On 20 October 2021, the Company entered into a loan re-organisation with MACAN
for the following:
i) Subscribed to US$3.5 million Zero Coupon Convertible Notes (Note 19)
of the Company satisfied through cash consideration of US$1.0 million and the
conversion of Macan's Loan Facility 2 amounting to US$2.5 million; and
ii) Terminated the Loan Facility 2 agreement with effect from 31 October
2021 subsequent to the repayment of all accrued interest under Loan Facility 2
on 31 October 2021.
These Loan Facilities bear semi−annual interest at 6% (30-Sep-2022: 6%) per
annum and are repayable on demand in full with all accrued interest, in any
case no later than 30 June 2024. As at reporting date, MACAN has indicated
that it will not demand repayment within the next twelve months from the
approval date (30 January 2023) of the Group audited financial statements for
the financial year ended 30 September 2022.
16 BANK LOAN (UNSECURED)
On 25 January 2022, the Group secured a short-term interest free bank loan
from the Vietnam Bank for Social Policies amounting to US$115,530. The loan
was denominated in Vietnamese Dong, repayable eleven months from the date of
disbursement of the loan with any overdue balance bearing interest of 12% per
annum. The loan was repaid in full in December 2022.
17 TRADE AND OTHER PAYABLES
As at As at
31-Mar-2023 30-Sep-2022
US$ US$
Trade payables
Third parties 747,776 940,798
Accrued enrolment expenses 166,472 116,103
Total trade payables 914,248 1,056,901
Other payables
Third parties 511,096 59,162
Accruals for suppliers, wages, others 1,525,103 1,742,902
Advances and deposits from customers 1,680,829 735,513
Sales tax 43,321 42,420
Total other payables 3,760,349 2,579,997
Total trade and other payables 4,674,597 3,636,898
Add: Lease liabilities 10,399,660 11,104,423
Add: Shareholder loans (Note 15) 1,544,877 1,500,000
Add: Bank loans (Note 16) - 115,530
Less: Sales tax (43,321) (42,420)
Financial liabilities carried at amortised cost 16,575,813 16,314,431
Trade amounts due to third parties are unsecured, non-interest bearing and are
on 15 to 45 day credit terms (30-Sep-2022: 15 to 45).
The non-trade amounts due to third parties and a related party are unsecured,
interest−free and repayable on demand.
18 SHARE CAPITAL
As at As at As at As at
31-Mar-2023 30-Sep-2022 31-Mar-2023 30-Sep-2022
Number of shares US$
Issued and fully paid
ordinary shares:
At beginning of financial period/year 2,925,920 2,845,920 20,799,638
21,439,638
Shares issued during the 40,000 80,000 640,000
financial period/year 200,000
At end of financial period/year 2,965,920 2,925,920 21,639,638 21,439,638
At beginning of financial period/year
2,925,920
2,845,920
21,439,638
20,799,638
Shares issued during the
financial period/year
40,000
80,000
200,000
640,000
At end of financial period/year
2,965,920
2,925,920
21,639,638
21,439,638
On 13 December 2021, the Company issued 80,000 ordinary shares at US$8.00 per
share (being the closing bid price of the Company's ordinary shares as at date
of issuance) in lieu of payment for accrued employee bonuses of US$640,000.
The accrued employee bonuses are with respect to employment services rendered
for the financial year ended 30 September 2021.
In the current financial period, on 1 February 2023, the Company issued 40,000
ordinary shares at US$5.00 per share (being the closing bid price of the
Company's ordinary shares as at 31 January 2023) in lieu of payment for
accrued employee bonuses of US$200,000. The accrued employee bonuses are with
respect to employment services rendered for the financial year ended 30
September 2022.
The holders of ordinary shares are entitled to receive dividends as and when
declared by the Company. All ordinary shares have no par value and carry one
vote per share without restriction.
The Company did not declare any dividends during 6M'23 nor the preceding
financial year ended 30 September 2022.
19 CONVERTIBLE NOTES
As at As at
31-Mar-2023 30-Sep-2022
US$ US$
At beginning of financial period/year 5,730,000 −
Issued and paid during the financial period/year:
- Cash − 3,230,000
- Shareholder loans (Note 15) − 2,500,000
At end of financial period/year 5,730,000 5,730,000
The Group launched a Convertible Notes Programme to raise up to US$10 million
for working capital and future investments. The convertible notes ("CN")
holders had an option to subscribe to either (i) a 10% coupon ("10% Coupon
Convertible Notes") or (ii) a zero−coupon ("Zero Coupon Convertible Notes").
The proceeds from the convertible notes were limited to 50% for activities in
Myanmar and rank pari passu to all present and future unsecured obligations.
The CNs are mandatorily convertible at the date falling on the earlier of the
maturity date (30 October 2024) or when the Qualifying Event is satisfied
("Conversion Date"). On the Conversion Date, the CNs are converted based on
the stipulated conversion price and are paid in full to the note holders
(interest and principal) through the issuance of ordinary shares of the
Company.
Convertible notes were issued on 1 November 2021 and the Group's existing
shareholders have subscribed US$5,730,000 comprising:
i) Zero−Coupon Convertible Notes of US$5.23 million (including
subscription by MACAN amounting to US$3.5 million, of which US$1.0 million was
in cash and the rest was from conversion of a loan from MACAN, as detailed in
Note 15 of the financial statements); and
ii) 10% Coupon Convertible Notes amounting to US$0.5 million.
Both the Zero-Coupon and 10% Coupon Convertible Notes met the established
criteria and the entire amount was recognised within equity. The convertible
notes are denominated in United States dollars.
The salient features of the convertible notes are as follows:
Type Zero-Coupon Convertible Notes 10% Coupon Convertible Notes
Maturity 30 October 2024 30 October 2024
Coupon Zero-coupon 10% annually
Conversion price The higher of: The higher of:
(i) the Floor Subscription Price; and (i) US$15.00 per Share; and
(ii) the Discounted Subscription Price. (ii) 90% of the subscription price per Share for a Qualifying Event
Discount Between 2.0% and 20.5% based on conversion schedule 10% vs. subscription price for a Qualifying Event
Floor conversion price US$11.9 per share (based on the maximum discount listed above) US$15.0 per share
Conversion date The date falling on the earlier of: The date falling on the earlier of:
(i) the Maturity Date; and (i) the Maturity Date; and
(ii) the Qualifying Event. (ii) the Qualifying Event.
Qualifying event Share issuance in excess of Share issuance in excess of
US$5 million US$5 million
Use of proceeds Development of business Development of business
Working capital Working capital
Limitation to use of proceeds Max. 50% of the proceeds for activities in Myanmar Max. 50% of the proceeds for activities in Myanmar
Rank Pari passu to all present and future unsecured obligations Pari passu to all present and future unsecured obligations
20 NON-CONTROLLING INTERESTS
On 7 February 2022, the Company acquired 3,000 ordinary shares from the
non-controlling interest of MS Auston Pte. Ltd. for a cash consideration of
US$1.00. The carrying value of the net liabilities of the subsidiary company,
MS Auston Pte Ltd as at the date of acquisition was US$279,693 and the
carrying value of the additional equity interest of 30% acquired was
US$83,908. The difference of US$83,909 between the consideration and the
carrying value of additional interest acquired resulted in a premium paid on
acquisition of non-controlling interests recognised directly in equity
reserve.
21 LOSS PER SHARE
The calculation of the basic and diluted loss per share attributable to the
ordinary equity holders of the Company is based on the following data:
FPE 2023 FPE 2022
Numerator
Loss for the financial period attributable to the
owners of the parent (US$) (2,252,736) (2,549,665)
Denominator
Weighted average number of ordinary shares for the
purposes of basic and diluted loss per share 2,939,035 2,895,319
Loss per share (US$)
Basic and diluted (0.77) (0.88)
In the current and previous financial period, diluted loss per share is the
same as the basic loss per share because the dilutive potential arising from
ordinary shares to be exercised are anti-dilutive as the effect of the shares'
conversion would be to decrease the loss per share. Accordingly, the dilutive
effect arising from the dilutive share options and full conversion of
convertible notes into ordinary shares are not considered.
22 COMMITMENTS
As at the reporting date, commitments in respect of capital expenditures are
as detailed below:
FPE 2023 FPE 2022
US$ US$
Capital expenditures contracted but not provided for:
- Property, plant and equipment 353,000 115,000
23 SIGNIFICANT RELATED PARTY TRANSACTIONS
For 6M'23, in addition to the information disclosed elsewhere in these
financial statements, the Group entered into the following significant
transactions with related parties at rates and terms agreed between the
parties:
FPE 2023 FPE 2022
US$ US$
With related parties*:
- Management fees 14,177 63,881
- Technical support service fees − 120,820
With a Director of the
subsidiaries:
- Professional fees 21,000 54,000
*Related parties refer to entities where a director of the subsidiaries have
beneficial interests.
24 FAIR VALUE MEASUREMENT
Financial instruments and measurements
Financial instruments not measured at fair value
Financial instruments not measured at fair value include cash and cash
equivalents, current trade and other receivables (excluding advances,
prepayments, sales tax, amounts due from a related party), long term rental
deposits and trade and other payables. Due to their short−term nature, the
carrying amount of these current financial assets and financial liabilities
measured at amortised costs approximate their fair values.
The carrying amount of the non−current loans due to a shareholder
approximates their fair value as the fixed interest rate approximates market
interest rates for such liabilities.
The non-current receivables due from a related party (Note 13) amounting to
US$1,031,949 (30-Sep-2022: US$899,486) have an estimated fair value of
US$1,031,949 (30-Sep-2022: US$899,486) and are measured according to Level 2
of the fair valuation hierarchy. The fair value of the amount due from a
related party is determined based on the discounted cash flow method, taking
into consideration the estimated duration required for the related party to
repay and the market interest rate used for discounting to present value.
The carrying amount of non-current receivables and non-current rental deposits
approximates their fair value due to insignificant effects of discounting.
Financial instruments measured at fair value
The financial instruments, as disclosed in Note 12 to the financial statements
included in Level 1 of the fair value hierarchy, are traded in active markets
and their fair value is based on quoted market prices at the reporting date.
There were no transfers between levels during the financial period.
There have been no changes in the valuation techniques of the various classes
of financial instruments during the financial period.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PPUUGQUPWUCWRecent news on Asia Strategic Holdings
See all newsREG - Asia Strategic Ltd - Result of AGM
AnnouncementREG - Asia Strategic Ltd - Notice of AGM
AnnouncementREG - Asia Strategic Ltd - Results for the period ended 30 September 2024
AnnouncementREG - Asia Strategic Ltd - Convertible Note Programme and Trading Update
AnnouncementREG - Asia Strategic Ltd - Interim results for six months ended 31 March 2024
Announcement