Unaudited Interim Results for the Six Months Ended 31 August 2023
27/03/2024 08:30
FOR IMMEDIATE RELEASE
27
March 2024
Asia Wealth Group Holdings Limited
("Asia Wealth", the “Group” or the "Company")
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 31 AUGUST 2023
The Board notes that it omitted to announce its unaudited interim results to
31 August 2023, in line with its reporting deadline of 30 November 2023. The
unaudited interim results were approved by the board on 27 October 2023. The
announcement of the approved accounts is as follows.
The Board is pleased to report the unaudited interim results of Asia Wealth
Group Holdings Limited (“Accounts”) for the period from 1 March 2023 to 31
August 2023. These Accounts have been prepared under IFRS and will shortly be
available via the Company’s website, www.asiawealthgroup.com.
Chairman’s Statement
Financial Highlights
The highlights for the six months ended 31 August 2023 include:
* Consolidated revenue of US$523,350 (2022: US$843,863)
* Gross profit for Meyer Group of US$325,062 (representing a gross margin of
62%) (2022: US$405,506 and 48%)
* Cash at bank and on hand of US$1,034,152 at 31 August 2023 (2022:
$1,187,226).
The Group reports a loss after tax of US$93,790 on sales of US$523,350 for the
six months ended 31 August 2023. These sales were principally generated by the
Company’s wholly owned subsidiary, Meyer Asset Management Ltd., BVI. This
result was principally caused by reduced revenue, but also by continuing
unrealised exchange losses on a weak Yen.
Cash balance has decreased by US$105,446 and net assets by US$81,693,
respectively, since 1st March 2023.
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.
Asia Wealth continues to seek investment opportunities in the UK as well as in
the Asia region and is currently engaged in multiple discussions on various
potential acquisitions. The Directors continue to run the business in a
cost-effective manner.
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.
Richard Cayne
Executive Chairman
Contacts:
Richard Cayne (Executive Chairman)
Asia Wealth Group Holdings Limited, +66 2 2611 2561
www.asiawealthgroup.com
Guy Miller (Corporate Advisers)
Peterhouse Capital Limited, +44 20 7220 9795
EXTRACTS ARE SET OUT BELOW:
ASIA WEALTH GROUP HOLDINGS LIMITED
Consolidated Statement of Financial Position
At 31 August 2023
Expressed in U.S. Dollars
Note(s) 31-Aug-23 31-Aug-22
Non-current assets
Fixed assets 3 4,255 3,948
Investment property 4,13 603,891 578,250
608,146 582,198
Current assets
Cash and cash equivalents 1,034,152 1,187,226
Trade receivables 79,034 127,427
Financial assets at fair value through profit or loss 5 210,594 283,324
Loans and other receivables 6 44,461 56,434
Due from director 7 418,753 464,359
Prepaid tax 941 650
Prepayments and other assets 54,010 48,048
1,841,945 2,167,468
Total assets $ 2,450,091 $ 2,749,666
Equity
Share capital 8 913,496 913,496
Treasury shares 8 (318,162) (318,162)
Consolidation reserve 391,793 405,997
Translation reserve 35,679 (26,008)
Retained earnings 287,287 386,760
Total equity 1,310,093 1,362,083
Current liabilities
Trade payables 1,105,192 1,346,464
Other payables and accrued expenses 7 34,806 41,119
Total liabilities 1,139,998 1,387,583
Total equity and liabilities $ 2,450,091 $ 2,749,666
ASIA WEALTH GROUP HOLDINGS LIMITED
Consolidated Statement of Comprehensive Income
For the half year ended 31 August 2023
Expressed in U.S. Dollars
Note(s) Mar – Aug 2023 Mar – Aug 2022
Revenue
Commission income 523,350 843,863
523,350 843,863
Expenses
Commission expense 198,043 438,297
Directors’ fees 7 171,027 170,661
Professional fees 7 121,412 127,054
Salaries and wages 21,084 30,271
Office expenses 21,405 23,786
Rent 8,402 8,045
Travel and entertainment 24,213 27,237
Marketing 3,584 3,914
Impairment losses - -
Depreciation 3 380 871
Other expenses 21,260 5,494
590,810 835,630
Net profit/(loss) from operations (67,460) 8,233
Other income/(expenses)
Net foreign currency exchange gain/(loss) (36,948) (197,409)
Other income 10,618 6,609
(26,330) (190,800)
Net profit/(loss) before taxation (93,790) (182,567)
Taxation 9 - -
Total comprehensive income/(loss) $ (93,790) $ (182,567)
Total comprehensive income/(loss) attributable to equity
holders of the Parent Company $ (93,790) $ (182,567)
Earnings/(losses) per share attributable to the equity holders of the Parent Company:
Basic earnings per share 10 $ (0.00844) (0.01643)
Diluted earnings per share 10 $ (0.00844) (0.01643)
ASIA WEALTH GROUP HOLDINGS LIMITED
Consolidated Statement of Changes in Equity
For the half year ended 31 August 2023
Expressed in U.S. Dollars
Attributable to Equity Holders of the Parent Company
Share Capital Treasury Shares Consolidation Reserve Translation Reserve Retained Earnings Equity
Number US$
Balances at beginning of 1 Mar 2023 11,433,433 913,496 (318,162) 391,793 23,582 381,077 1,391,786
Translation differences - - - - 12,097 - 12,097
Total comprehensive income - - - - - (93,790) (93,790)
Balances at end of 31 Aug 2023 11,433,433 $913,496 $(318,162) $391,793 $35,679 $287,287 $1,310,093
Attributable to Equity Holders of the Parent Company
Share Capital Treasury Shares Consolidation Reserve Translation Reserve Retained Earnings Equity
Number US$
Balances at beginning of 1 Mar 2022 11,433,433 913,496 (318,162) 405,997 16,001 569,327 1,586,659
Translation differences - - - - (42,009) - (42,009)
Total comprehensive income - - - - - (182,567) (182,567)
Balances at end of 31 Aug 2022 11,433,433 $913,496 $(318,162) $405,997 $(26,008) $386,760 $1,362,083
ASIA WEALTH GROUP HOLDINGS LIMITED
Consolidated Statement of Cash Flows
For the half year ended 31 August 2023
Expressed in U.S. Dollars
Mar – Aug 2023 Mar – Aug 2022
Operating activities
Total comprehensive income/(Loss) (93,790) (182,567)
Adjustments for:
Depreciation 380 871
Net unrealised (gain)/loss on investment property (3,677) 66,693
Net foreign currency exchange (gain)/loss 12,097 (42,009)
Operating income/(loss) before changes in operating assets and liabilities (84,990) (157,012)
Changes in operating assets and liabilities:
Decrease/(Increase) in trade receivables 13,638 (7,375)
Decrease/(Increase) in loan and other receivable 4,998 6,182
Decrease/(Increase) in prepaid tax (269) (202)
Decrease/(Increase) in prepayments and other assets 9,709 19,229
Increase/(Decrease) in trade payables (34,385) 121,385
Increase/(Decrease) in other payables and accrued expenses (16,611) (11,889)
Net cash flows from/(used in) operating activities (107,910) (29,682)
Investing activities
Acquisition of fixed assets - (618)
Cash flows from/(used in) investing activities - (618)
Financing activities
Net advances from/(to) related party 2,464 769
Cash flows from/(used in) financing activities 2,464 769
Net increase/(decrease) in cash and cash equivalents (105,446) (29,531)
Cash and cash equivalents at beginning of year 1,139,598 1,216,757
Cash and cash equivalents at end of period $ 1,034,152 $ 1,187,226
- -
Cash and cash equivalents comprise cash at bank.
ASIA WEALTH GROUP HOLDINGS LIMITED
Notes to and forming part of the Consolidated Financial Statements
For the half year ended 31 August 2023
Expressed in U.S. Dollars
1) GENERAL INFORMATION
Asia Wealth Group Holdings Limited (the “Parent Company”) was incorporated
in the British Virgin Islands on 7 October 2010 under the BVI Business
Companies Act, 2004. The liability of the shareholders is limited by
shares. The Parent Company maintains its registered office in the British
Virgin Islands. The consolidated financial statements were authorised for
issue by the Board of Directors on 27 October 2023.
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.
The Parent Company’s shares were listed on the PLUS Stock Exchange based in
London, United Kingdom. In June 2012, ICAP Plc, an interdealer broker based
in London, United Kingdom, bought PLUS Stock Exchange and rebranded and
relaunched it as ICAP Securities & Derivatives Exchange (“ISDX”). On 30
December 2016, ISDX was renamed NEX Exchange. In March 2020, the U.K.
Financial Conduct Authority approved the acquisition of NEX Exchange Limited
by Aquis Exchange PLC. Consequently, NEX Exchange changed its name to Aquis
Stock Exchange (“AQSE”). The Parent Company’s shares were automatically
listed to AQSE.
The Parent Company has the following subsidiaries as at 31 August 2023 and 31
August 2022:
Incorporation Country of Functional Ownership
Date Incorporation Currency Interest
2022 2021
Meyer Asset Management Ltd. (“Meyer BVI”) 2000 British Virgin Islands U.S. Dollars 100.00% 100.00%
Meyer International Limited (“Meyer Thailand”) 2010 Thailand Thailand Baht 49.00% 49.00%
Nihon Wealth Management Company Limited (formerly Prime RE Limited) 2016 Thailand Thailand Baht 49.00% 49.00%
On 13 June 2012, Meyer BVI was licensed to provide investment business
services under Section 3 of the Securities and Investment Business Act, 2010
of the British Virgin Islands.
On 23 September 2016, Meyer Thailand acquired 51.00% of Nihon Wealth
Management Company Limited.
On 20 October 2016, 51.00% of Meyer Thailand, owned beneficially via a trust
agreement in favour of Meyer BVI, was acquired by Nihon Wealth Management
Company Limited.
Therefore the Parent Company is the indirect owner of 51.00% of the
outstanding shares of Nihon Wealth Management Company Limited and Meyer
Thailand, and accordingly the Parent Company has accounted for them as wholly
owned subsidiaries.
2) SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in the preparation of the
Group’s consolidated financial statements are set out below. The accounting
policies have been consistently applied by the Group and are consistent with
those used in the previous year, unless otherwise stated.
a) Basis of preparation
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 International Accounting Standards Board.
Historical cost convention
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 except for financial assets at fair value through profit or loss and
investment property measured at fair value.
The Group’s consolidated financial statements and records are presented and
maintained in U.S. Dollars, rounded to the nearest dollar.
New and amended standards
There are no new, revised or amended IFRSs or IFRS IC interpretations that are
effective for the first time for the financial period beginning 1 March 2022
that would be expected to have a material impact on the Group’s consolidated
financial statements.
A number of new standards, amendments to standards and interpretations are
effective for annual periods beginning after 1 March 2022, and have not been
adopted early in preparing these consolidated financial statements. None of
these are expected to have a significant effect on the consolidated financial
statements of the Group.
b) Critical estimates and judgments
The preparation of consolidated financial statements requires the use of
accounting estimates which may differ from actual results. Management also
needs to exercise judgments in the application of policies.
Below is an overview of the areas that involved a higher degree of judgment or
complexity, and of items which are more likely to be materially adjusted due
to estimates and assumptions turning out to be wrong.
The areas involving significant estimates or judgments are:
Impairment of receivables
Determination of fair value of investment property Estimating the useful lives
of fixed assets Judgment on going concern
Fair value of securities not quoted in an active market Fair value of
investments in funds
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
b) Critical estimates and judgments (Cont’d)
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised prospectively. They are based
on historical experience and other factors, including expectations of future
events that may have a financial impact on the entity and that are believed to
be reasonable under the circumstances.
Impairment of receivables
Provision for doubtful accounts is maintained at a level considered adequate
to provide for potentially uncollectible receivables. The level of allowance
for doubtful accounts is based on ageing of the accounts receivable, past
collection trends and other factors that may affect collectability, including
knowledge of individual customer circumstances, customer credit-worthiness and
current economic trends. An allowance account is used when there is
objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the agreement.
Determination of fair value of investment property
The Group obtains independent valuations for its investment property at least
annually. At the end of each reporting period, the Directors update their
assessment of the fair value, taking into account the most recent independent
valuations. The Directors determine a property’s value within a range of
reasonable fair value estimates. The best evidence of fair value is current
prices in an active market for similar properties. Where such information is
not available the Directors consider information from a variety of sources
including:
* current prices in an active market for properties of a different nature or
recent prices of similar properties in less active markets, adjusted to
reflect those differences
* discounted cash flow projections based on reliable estimates of future cash
flows
* capitalised income projections based on a property’s estimated net market
income, and a capitalisation rate derived from an analysis of market evidence.
Estimating the useful lives of fixed assets
The useful lives of the Group’s fixed assets are estimated based on the
period which they are expected to be available for use. The estimated useful
lives of fixed assets are reviewed and updated if expectations differ
materially from previous estimates.
Judgment on going concern
A key assumption in the preparation of the consolidated financial statements
is that the Group will continue as a going concern. The going concern
assumption assumes that the Group will continue in operation for the
foreseeable future and will be able to realise its assets and discharge its
liabilities in the normal course of operations.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
b) Critical estimates and judgments (Cont’d)
Fair value of securities not quoted in an active market
The fair value of such securities not quoted in an active market may be
determined by the Group using reputable pricing sources. Broker quotes as
obtained from the pricing sources may be indicative and not executable or
binding. The Group would exercise judgment on the quantity and quality of
pricing sources used. Where no market data is available, the Group may value
positions using its own models, which are usually based on valuation methods
and techniques generally recognised as standard within the industry. The
inputs into these models are primarily earning multiples and discounted cash
flows. The models used to determine fair values are validated and periodically
reviewed by experienced personnel at the Group, independent of the party that
created them. The models used for private equity securities are based mainly
on earnings multiples (based on the historical earnings of the issuer over the
past decade), adjusted for lack of marketability and control premiums. The
models used for debt securities are based on net present value of estimated
future cash flows, adjusted as appropriate for liquidity, and credit and
market risk factors.
Models use observable data, to the extent practicable. However, areas such as
credit risk (both own and counterparty), volatilities and correlations require
management to make estimates. Changes in assumptions about these factors could
affect the reported fair value of financial instruments. The sensitivity to
unobservable inputs is based on management’s expectation of reasonable
possible shifts in these inputs, taking into consideration historical
volatility and estimations of future market movements.
The determination of what constitutes ‘observable’ requires significant
judgment by the Group. The Group considers observable data to be 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.
Fair value of investments in funds
The fair value of investments in underlying funds that are not quoted in an
active market is determined primarily by reference to the latest available
redemption price of such units for each underlying fund, as determined by the
administrator of such underlying fund. The Group may make adjustments to the
reported net asset value of various underlying funds based on considerations
such as:
* the liquidity of the underlying fund or its underlying investments;
* the value date of the net asset value provided;
* any restrictions on redemptions; and
* the basis of accounting and, in instances where the basis of accounting is
other than fair value, fair valuation information provided by the underlying
fund’s advisors.
The models used to determine fair value of investments in funds are validated
and periodically reviewed by experienced personnel at the Group, independent
of the party that created them.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
c) Principles of consolidation
Subsidiaries
The consolidated financial statements include the financial statements of the
Parent Company and its subsidiaries for the half year ended 31 August 2023.
Details of the Group are set out in note 1.
Subsidiaries are all entities (including structured entities) over which the
Group has control. The Group controls an entity where the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the
date that control ceases.
Inter-company transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of the transferred
asset. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown
separately in the consolidated financial statements.
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
acquired entity’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling
interest in the acquired entity and the acquisition-date fair value of any
previous equity interest in the acquired entity over the fair value of the net
identifiable assets acquired is recorded as goodwill. If these investments are
less than the fair value of the net identifiable assets of the business
acquired, the difference is recognised directly in profit or loss as a bargain
purchase.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
c) Principles of consolidation (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.
d) Fixed assets
Fixed assets are stated at historical cost less accumulated depreciation and
impairment loss, if any. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised
as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. All other
repairs and maintenance are charged to profit or loss during the reporting
period in which they are incurred.
Depreciation is charged to the consolidated statement of comprehensive income
on a straight line basis over the estimated useful lives of the fixed
assets.
The annual rates of depreciation in use are as follows:
Leasehold
improvements
20%
Office
equipment
20-33%
Vehicles
20%
e) Investment property
Investment property, which is property held to earn rentals and/or for capital
appreciation and is not occupied by the Group, is measured initially at cost,
including transaction costs.
Transaction costs include transfer taxes, professional fees for legal services
and initial leasing commissions to bring the property to the condition
necessary for it to be capable of operating. The carrying amount also includes
the cost of replacing part of an existing investment property at the time that
cost is incurred if the recognition criteria are met.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
e) Investment property (Cont’d)
Subsequent to initial recognition, investment property is measured at fair
value. Gains or losses arising from changes in the fair value of investment
property are included in the consolidated statement of comprehensive income in
the period in which they arise.
Fair value is based on active market prices, adjusted, if necessary, for
differences in the nature, location or condition of the specific asset. If
this information is not available, the Group uses alternative valuation
methods, such as recent prices on less active markets or discounted cash flow
projections. Valuations are performed as at the reporting date by professional
independent appraisers who hold recognised and relevant professional
qualifications and have recent experience in the location and category of
investment property being valued. These valuations form the basis for the
carrying amounts in the consolidated financial statements.
The fair value of investment property reflects, among other things, rental
income from current leases and other assumptions market participants would
make when pricing the property under current market conditions.
Subsequent expenditure is capitalised to the asset’s carrying amount only
when it is probable that future economic benefits associated with the
expenditure will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance costs are expensed when incurred.
When part of an investment property is replaced, the cost of the replacement
is included in the carrying amount of the property, and the fair value is
reassessed.
An investment property is derecognised upon disposal or when the investment
property is permanently withdrawn from use and no future economic benefits are
expected from the disposal. Any gain or loss arising on derecognition of the
property, which is calculated as the difference between the net disposal
proceeds and the carrying amount of the asset, is included in the statement of
comprehensive income in the period in which the property is derecognised.
Investment property is derecognised when it has been disposed of or
permanently withdrawn from use and no future economic benefit is expected from
its disposal. The difference between the net disposal proceeds and the
carrying amount of the asset would result in either gains or losses at the
retirement or disposal of investment property.
Investment property comprises condominium units.
f) Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows,
cash and cash equivalents include current deposits with banks and other
short-term highly liquid financial instruments with original maturities of
three months or less that are readily convertible to known amounts of cash and
are subject to an insignificant risk of changes in value, and bank overdrafts.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
g) Investments and other financial instruments
i) Classification
The Group classifies its investments and other financial instruments at
initial recognition into the following categories:
* those to be measured subsequently at fair value, either through profit or
loss or other comprehensive income; and
* those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the
financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in
profit or loss or other comprehensive income. For investments in equity
instruments that are not held for trading, this will depend on whether the
Group has made an irrevocable election at the time of initial recognition to
account for the equity investment at fair value through other comprehensive
income (FVOCI). The Group has not taken the option to irrevocably designate
any equity securities as FVOCI.
The Group reclassifies debt investments when and only when its business model
for managing those assets changes.
Financial assets and liabilities at fair value through profit or loss
The Group classifies the following financial assets at fair value through
profit or loss (“FVPL”):
* debt investments that do not qualify for measurement at either amortised
cost or financial assets at fair value through other comprehensive income
(“FVOCI”);
* equity investments that are held for trading, and
* equity investments for which the Group has not elected to recognise fair
value gains and losses through other comprehensive income.
A financial asset or financial liability is considered to be held for trading
if:
1. 1. 1. it is acquired or incurred principally for the purpose of selling
or repurchasing in the near term; or
2. on initial recognition, it is part of a portfolio of identified financial
instruments that are managed together and for which, there is evidence of a
recent actual pattern of short- term profit-taking; or
3. it is a derivative, except for a derivative that is a financial guarantee
contract or a designated and effective hedging instrument.
As at 31 August 2023, this comprised an investment in a fund and investment in
private equity.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
g) Investments and other financial instruments (Cont’d)
i) Classification (Cont’d)
Financial instruments at amortised cost
Financial assets and liabilities at amortised cost comprise debt
instruments. A debt instrument is measured at amortised cost if it is held
within a business model whose objective is to hold financial assets in order
to collect contractual cash flows and its contractual terms give rise on
specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. The Group’s debt instruments
include trade receivables, due from director and loans and other receivables.
ii) Recognition, derecognition and measurement
Regular purchases and sales of financial assets are recognised on the trade
date, the date on which the Group commits to purchase or sell the instrument.
Financial assets and financial liabilities at fair value are initially
recognised at fair value. Transaction costs of financial assets and financial
liabilities carried at FVPL are expensed as incurred in the consolidated
statement of comprehensive income.
Financial assets and liabilities are derecognised when the rights to receive
cash flows from the financial assets and liabilities have expired or the Group
has transferred substantially all risks and rewards of ownership. Financial
liabilities are derecognised when the obligation specified in a contract is
discharged, cancelled or expired.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business
model for managing the asset and the cash flow characteristics of the asset.
The following are the measurement categories into which the Group classifies
its debt instruments:
* Amortised cost
Assets and liabilities that are held for collection of contractual cash flows
where those cash flows represent solely payments of principal and interest are
subsequently measured at amortised cost using the effective interest method.
Interest income from these financial assets is included in financial income.
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.
* Fair value through profit or loss
Assets that do not meet the criteria for amortised cost or fair value through
other comprehensive income are measured at fair value through profit or loss.
A gain or loss on a debt investment that is subsequently measured at fair
value through profit or loss is recognised in profit or loss and presented net
within other gains/(losses) in the period in which it arises.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
g) Investments and other financial instruments (Cont’d)
ii) Recognition, derecognition and measurement (Cont’d)
Equity instruments and other investment funds
The Group subsequently measures all equity instruments and other investment
funds at fair value.
Changes in the fair value of financial assets at fair value through profit or
loss are recognised in other gains/(losses) in the consolidated statement of
comprehensive income as applicable.
iii) Fair value estimation
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date.
The fair value of financial assets and liabilities that are not traded in an
active market is determined using valuation techniques. Valuation techniques
used include the use of comparable recent arm’s length transactions and
market price provided by the underlying entity as a result of its independent
appraiser’s valuation based on market inputs. Investments in non-exchange
traded investment funds are recorded at the net asset value per share as
reported by the respective administrators of such funds.
For assets and liabilities that are measured at fair value on a recurring
basis, the Group identifies transfers between levels in the hierarchy by
re-assessing the categorisation (based on the lowest level of input that is
significant to the fair value measurement as a whole), and deems transfers to
have occurred at the beginning of each reporting period.
iv) Impairment
The Group applies the IFRS 9 general approach which requires expected credit
losses (“ECL”) to be recognised based on the full three-stage model 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.
Impairment losses are presented as a separate line item in the consolidated
statement of comprehensive income.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
g) Investments and other financial instruments (Cont’d)
iv) Impairment (Cont’d)
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, are written off
against the provision when there is no expectation of recovering additional
cash.
h) Equity
Share capital represents the nominal value of shares that have been issued.
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 represent the cumulative balance of periodic net
income/loss, dividend distributions and prior period adjustments, if any.
Other components of equity include the following:
* consolidation reserve – comprises differences in the valuation bases and
post-acquisition reserves of investment in subsidiaries.
* translation reserve – comprises foreign currency translation differences
arising from the translation of financial statements of the Group’s foreign
entities into the reporting currency.
i) Income 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 using the effective interest method.
All expenses are recognised in the consolidated statement of comprehensive
income on the accrual basis.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
j) Leases
The Group assessed and applied the short-term lease
recognition exemption under IFRS 16, “Leases”. Lease payments are
recognised in the consolidated statement of comprehensive income on a
straight-line basis over the term of the lease.
k) Impairment
The Group’s other assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs of disposal and
value in use. For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets or groups
of assets (cash-generating units). Non-financial assets other than goodwill
that suffered an impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
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.
l) 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 there is an
intention to settle on a net basis or realise the asset and settle the
liability simultaneously.
m) Foreign currency transactions
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities
are measured using the functional currency of the primary economic environment
in which the entity operates.
The subsidiaries’ functional currencies are disclosed in note 1 to the
financial statements. The consolidated financial statements are presented in
U.S. Dollars, rounded to the nearest dollar.
Transactions and balances
Foreign currency transactions are converted into U.S. Dollars using the
exchange rates at the dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions, and from the
translation of monetary assets and liabilities denominated in foreign
currencies at year end exchange rates, are generally recognised in profit or
loss. They are deferred in equity if they relate to qualifying cash flow
hedges and qualifying net investment hedges or are attributable to part of the
net investment in a foreign operation.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
m) Foreign currency transactions (Cont’d)
Transactions and balances (Cont’d)
Foreign exchange gains and losses that relate to borrowings are presented in
the consolidated statement of comprehensive income, within finance costs. All
other foreign exchange gains and losses are presented in the consolidated
statement of comprehensive income on a net basis within other gains/(losses).
Non-monetary items that are measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was
determined. Translation differences on assets and liabilities carried at fair
value are reported as part of the fair value gain or loss.
Group companies
The results and financial position of foreign operations (none of which has
the currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
* assets and liabilities for each statement of financial position presented
are translated at the closing rate at the date of that balance sheet;
* income and expenses for each statement of comprehensive income are
translated at average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the
dates of the transactions); and,
* all resulting exchange differences are recognised in other comprehensive
income.
On consolidation, exchange differences arising from the translation of any net
investment in foreign entities, and of borrowings and other financial
instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings
forming part of the net investment are repaid, the associated exchange
differences are reclassified to profit or loss, as part of the gain or loss on
sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and
translated at the closing rate.
Translation reserve
Assets and liabilities of the Group’s non-U.S. Dollar functional currency
subsidiaries are translated into U.S. Dollars at the closing exchange rates at
the reporting date. Revenues and expenses are translated at the average
exchange rates for the year. All cumulative differences from the translation
of the equity of foreign subsidiaries resulting from changes in exchange rates
are included in a separate caption within equity without affecting income.
n) 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)
o) 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 11 of the consolidated financial
statements.
p) 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 carry-forwards. 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.
3) FIXED ASSETS
Leasehold improvement Office equipment Vehicles Total
Cost:
At 28 February 2023 20,281 45,646 55,392 121,319
Additions - - - -
At 31 August 2023 20,281 45,646 55,392 121,319
Depreciation:
At 28 February 2023 20,281 41,011 55,392 116,684
Charge for 1 March – 31 August 2023 - 380 380
At 31 August 2023 20,281 41,391 55,392 117,064
Net book value:
At 31 August 2023 $ - $ 4,255 $ - $ 4,255
At 28 February 2023 $ - $ 4,635 $ - $ 4,635
4) INVESTMENT PROPERTY
2023 2022
Balance at 1 March 600,214 644,943
Effects of translations 3,677 (66,693)
Balance at 31 August $ 603,891 $ 578,250
Investment property comprises condominium units at The Prime 11 Condominium in
Bangkok, Thailand. As at 31 August 2023, it had a fair value of THB 21,000,000
(2022: THB 21,000,000).
5) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
31-Aug-23 31-Aug-22
Investment in Phillip Investment Fund 168,245 237,425
Investment in private equity 42,349 45,899
$ 210,594 $ 283,324
On 25 August 2021, the Company acquired 180,000 Class A Common Shares of BRM
Agri Cambodia Limited, a company incorporated in Canada.
The investment in Philip Investment Fund in Singapore comprises 215,024.30
(2022: 310,608.32) units in Philip Money Market Fund. The amount of investment
recognised in the consolidated statement of financial position is $168,245
(2022: $237,425), net of unrealised gain of $1,049.30 (2022: net of unrealised
loss of $3,569).
6) LOANS AND OTHER RECEIVABLES
On 24 August 2021, Meyer Thailand entered into a Loan Agreement with First Aid
Training Bangkok Co. Ltd. (“FATB”) amounting to THB 1,500,000. The loan
earns interest at a rate of 1% per annum.
The loan is due on 24 August 2023 and secured by 100% of FATB’s shares. The
loan was issued by Meyer BVI on behalf of Meyer Thailand. The related
intercompany balances were eliminated during consolidation.
On 8 February 2019, Meyer BVI entered into a Loan Agreement with MVT
Development Ltd. amounting to THB 16,000,000. The loan earnt interest at a
rate of 15% per annum. The loan was secured and was guaranteed with a property
in Bangkok, Thailand.
The loan was due on 8 February 2021. However, MVT Development Ltd. was not
able to repay the loan on the due date. On 30 September 2021, MVT Development
Ltd. offered THB 15,500,000 as repayment in full including any interest
outstanding. The Directors accepted the lower cash offer, and as such the
money is in a separate bank account held on behalf of Meyer BVI by a Director.
The lower cash offer resulted in a loan write off of $128,313 in 2021.
7) RELATED PARTY TRANSACTIONS
The Group was charged $16,631 (2022: $20,880) in accounting fees by
Administration Outsourcing Co., Ltd, a company related by way of common
directorship, of which $2,695 (2022: $5,644) remained outstanding as at half
year end.
During the half year, the Group incurred directors’ fees, inclusive of
school fees and accommodation allowance, amounting to $171,027 (2021:
$170,661).
As at 31 August 2023, due from director amounted to $418,753 (2022: $464,359).
All amounts are unsecured, interest-free and repayable on demand.
8) SHARE CAPITAL AND TREASURY SHARES
Share capital
Authorised
The Parent Company is authorised to issue an unlimited number of no par value
shares of a single class.
2023 2022
Issued and fully paid
11,433,433 (2022: 11,433,433) shares of no par value per share. $913,496 $913,496
Each share of 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
On 26 September 2018, the Parent Company entered into a Settlement Agreement
with the appropriate parties and agreed to settle on a full and final basis
all claims, disputes and differences with regard to the unauthorised transfer
of shares in Ray Alliance Financial Advisers Pte Ltd (“Ray Alliance”),
investment in private equity of the Parent Company in the prior years.
The following was agreed by the parties under the Settlement Agreement:
a) the Group consented and ratified the transfer of Ray Alliance
shares;
b) return of 322,000 shares of the Parent Company previously issued
as consideration for the Ray Alliance shares;
c) payment of SGD 350,000 to the Parent Company for claims on
costs and damages.
Treasury shares recognised by the Group for the return of the Parent
Company’s shares amounted to $318,162 (2022: $318,162).
9) TAXATION
There is no mainstream taxation in the British Virgin Islands. The Parent
Company and Meyer BVI are not subject to any forms of taxation in the British
Virgin Islands, including income, capital gains and withholding taxes.
Meyer Thailand and Nihon Wealth Management Company Limited are subject to
Thailand graduated statutory income tax at a rate of 0-15% (2022: 0-15%) on
profit before tax.
The current tax expense included in the consolidated statement of
comprehensive income was $nil (2022 : $nil).
The Group had no deferred tax assets or liabilities as at the reporting date.
10) 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.
31-Aug-23 31-Aug-22
Earnings attributable to equity holders of the Parent Company $ (93,790) $ (182,567)
Weighted average number of shares in issue 11,433,433 11,433,433
Adjusted for weighted average number of:
- treasury shares (322,000) (322,000)
Weighted average number of shares in issue and for basic earnings for share 11,111,433 11,111,433
Basic earnings per share $ (0.00844) $ (0.01643)
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 August 2023 and 31 August 2022, the Parent Company had no
share warrants or share options as potential dilutive shares. For the share
options and warrants, if any, a calculation is done to determine the number of
shares that could have been acquired at fair value based on the monetary value
of the subscription rights attached to outstanding share options and warrants.
The number of shares calculated is compared with the number of shares that
would have been issued assuming the exercise of the share options and
warrants.
10) EARNINGS PER SHARE (Cont’d)
b) Diluted (Cont’d)
31-Aug-23 31-Aug-22
Earnings attributable to equity holders of the Parent Company $ (93,790) $ (182,567)
Weighted average number of shares in issue and for diluted earnings for share 11,111,433 11,111,433
Diluted earnings per share $ (0.00844) $ (0.01643)
11) SEGMENTAL INFORMATION
The Group has two reportable segments based on geographical areas where the
Group operates and these were as follows:
British Virgin Islands (“BVI”) – where the Parent Company and Meyer BVI
are domiciled. The Parent Company serves as the investment holding company
of the Group and Meyer BVI provides wealth management and advisory services.
Thailand – where Meyer Thailand is domiciled and provides marketing and
economic consulting services to the Group and where Nihon Wealth Management
Company Limited is domiciled and provides property rental services.
The reportable segmental revenue, other profit and loss disclosures, assets
and liabilities were as follows:
Revenue
31-Aug-23 31-Aug-22
Total segment revenue Inter-segment revenue Revenue from external customers Total segment revenue Inter-segment revenue Revenue from external customers
BVI 521,434 - 521,434 842,203 - 842,203
Thailand 98,101 (96,185) 1,916 93,161 (91,501) 1,660
Total $ 619,535 $ (96,185) $ 523,350 $ 935,364 $ (91,501) $ 843,863
The revenue between segments is carried out at arm’s length. Revenues from
two customers of the BVI segment represent approximately 58% (2022: 66%) of
the Group’s total revenues.
11) SEGMENTAL INFORMATION (Cont’d)
Other profit and loss disclosures
31-Aug-23 31-Aug-22
Commission expense Depreciation Income tax Commission expense Depreciation Income tax
BVI 196,371 252 - 436,696 680 -
Thailand 1,672 128 - 1,601 191 -
Total $ 198,043 $ 380 $ - $ 438,297 $ 871 $ -
Assets
31-Aug-23 31-Aug-22
Total Assets Total Assets
BVI 1,836,398 2,161,804
Thailand 613,693 587,862
Total $ 2,450,091 $ 2,749,666
Intersegment assets amounting to $1,553,490 (2022: $1,294,104) were already
eliminated in the total assets per segment above.
Liabilities
31-Aug-23 31-Aug-22
Total Liabilities Total Liabilities
BVI 1,123,708 1,367,196
Thailand 16,290 20,387
Total $ 1,139,998 $ 1,387,583
Intersegment liabilities amounting to $1,435,117 (2022: $1,178,222) were
already eliminated in the total liabilities per segment above.
12) FINANCIAL RISK MANAGEMENT
The Group has exposure to a variety of financial risks that are associated
with its 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.
12) FINANCIAL RISK MANAGEMENT (Cont’d)
a) Market risk
Market risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate as a result of market factors which
includes 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 these
financial instruments, which earn interest at floating interest rates that are
reset as market rates change.
A sensitivity analysis was performed with respect to the interest-bearing
financial instruments and management noted that the anticipated interest rate
changes would have no material impact on the net assets of the Group.
Foreign 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 U.S. Dollar.
31-Aug-23 31-Aug-22
Fair value % of net assets Fair value % of net assets
Thailand Baht $1,064,001 81.22% $1,079,276 79.24%
Japanese Yen $501,438 38.27% $774,466 56.86%
Singaporean Dollar $168,245 12.84% $237,425 17.43%
Euro $14,625 1.12% $5,725 0.42%
United Kingdom Pound $142,145 10.85% $151,590 11.13%
$ 1,890,454 144.30% $ 2,248,482 165.08%
The amounts in the above table are based on the net carrying value of
monetary assets and liabilities.
The table below summarises the sensitivity of the net assets to changes in
foreign exchange movements at 31 August 2023 and 31 August 2022. The
analysis is based on the assumption that the relevant foreign exchange rate
increased/decreased against the U.S. Dollar by the percentages disclosed in
the table below, with all other variables held constant. This represents
management’s best estimate of a reasonable possible shift in the foreign
exchange rates, having regard to historical volatility of those rates.
12) FINANCIAL RISK MANAGEMENT (Cont’d)
a) Market risk (Cont’d)
Foreign Currency risk (Cont’d)
31-Aug-23 31-Aug-22
Possible shift in rate Possible shift in amount Possible shift in rate Possible shift in amount
Thailand Baht 6.85% $72,884 4.40% $47,488
Japanese Yen 10.36% $51,949 3.15% $24,396
Singaporean Dollar 4.41% $7,420 4.49% $10,660
Euro 5.80% $848 1.91% $109
United Kingdom Pound 8.49% $12,068 2.70% $4,093
$ 145,169 $ 86,746
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.
The carrying amounts of financial assets best represent the maximum credit
risk exposure at the reporting date.
As at 31 August 2023 and 31 August 2022, the Group’s financial assets
exposed to credit risk amounted to the following:
31-Aug-23 31-Aug-22
Cash and cash equivalents 1,034,152 1,187,226
Trade receivables (net of allowance for doubtful 79,034 127,427
accounts of $8,572 (2022: $8,572)
Financial assets at fair value through profit or loss 210,594 283,324
Loans and other receivables 44,461 56,434
Due from director 418,753 464,359
$ 1,786,994 $ 2,118,770
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 available cash and cash equivalents with various banks.
The Group is exposed to credit-related losses in the event of non-performance
by such counterparties to financial instruments, but given their reasonable
credit ratings, management does not expect any such counterparty to fail to
meet its obligations.
12) FINANCIAL RISK MANAGEMENT (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
$20,058 (2022: $39,187) as at half year end, which represents 23% (2022: 29%)
of gross trade receivables. The Group is exposed to credit-related losses in
the event of non-performance by these customers. The exposure to credit risk
is reduced as these customers have a good working relationship with the Group
and management does not expect any significant customer to fail to meet its
obligations.
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 become limited.
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.
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 ECL, 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 31 August 2023 or 31 August 2022, respectively, and
the corresponding historical credit losses experienced within this period.
The historical loss rates are adjusted to reflect current and forward-looking
information on macroeconomic factors affecting the ability of the customers to
settle the receivables.
On that basis, the loss allowance as at 31 August 2023 and 31 August 2022 were
determined as follows:
12) FINANCIAL RISK MANAGEMENT (Cont’d)
b) Credit risk (Cont’d)
iii) Impairment of financial assets (Cont’d)
Expected
Balance at Credit Loss Allowance at
31-Aug-23 Loss Rate 31-Aug-23
Trade receivables $87,606 9.78% $8,572
Expected
Balance at Credit Loss Allowance at
31-Aug-22 Loss Rate 31-Aug-22
Trade receivables $135,999 6.30% $8,572
The closing loss allowances for trade receivables as at 31 August 2023 and 31
August 2022 reconcile to the opening loss allowances as follows:
31-Aug-23 31-Aug-22
Opening balance 8,572 8,572
Increase/(decrease) in loss allowance - -
Closing balance $ 8,572 $ 8,572
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.
While cash and cash equivalents, due from director and loans and other
receivables are also subject to the impairment requirements of IFRS 9, the
identified impairment loss was immaterial.
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.
The Group’s financial liabilities are expected to be settled within a year
from the reporting date.
13) FAIR VALUE INFORMATION
The fair value of assets and liabilities in active markets is based on quoted
market prices on the reporting date.
An active market is a market in which transactions for the asset or liability
take place with sufficient frequency and volume to provide pricing information
on an ongoing basis.
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.
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.
Financial assets and financial liabilities
The Group’s financial assets at fair value through profit or loss comprise
an investment in a fund and an investment in private equity.
For certain of the Group’s financial instruments, not carried at fair value,
including cash and cash equivalents, trade receivables, loans and other
receivables, due from director, 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 from director approximates its fair value, since such amount is
repayable on demand.
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.
13) FAIR VALUE INFORMATION (Cont’d)
Financial assets and financial liabilities (Cont’d)
Investments classified within Level 3 have significant unobservable inputs, as
they trade infrequently and include investments in private equity. As
observable prices are not available for these securities, the Group uses
valuation techniques to derive the fair value.
The following table shows the carrying amounts and fair values of financial
assets and financial liabilities, including their levels in the fair value
hierarchy at 31 August 2023 and 31 August 2022. It does not include fair
value information for financial assets and financial liabilities not measured
at fair value if the carrying amount is a reasonable approximation of fair
value.
31-Aug-23 31-Aug-22
Financial assets - Level 2
Philip Investment Fund 168,245 237,425
Financial assets - Level 3
Investment in private equity 42,349 45,899
Total financial assets at fair value through profit or loss $ 210,594 $ 283,324
The table below provides a reconciliation of the movement in Level 3
investments:
The Level 3 investment is not priced in an open market and is valued using
valuation techniques and other information. Management believes that the
valuation technique used is most representative of fair value, and that no
alternative valuation was available.
2023 2022
Balance at 1 March 42,349 45,899
Purchase - -
Net unrealised loss - -
Balance at 31 August $ 42,349 $ 45,899
The Group did not hold any investments under the Level 1 hierarchies as at 31
August 2023 and 31 August 2022.
There were no significant investments transferred between Levels 1, 2 and 3.
Non-financial assets
At the end of each reporting period, the Directors update their assessment of
the fair value, taking into account the most recent independent valuation. The
Directors determine a property’s value within a range of reasonable fair
value estimates. The best evidence of fair value is current prices in an
active market for similar properties.
13) FAIR VALUE INFORMATION (Cont’d)
Non-financial assets (Cont’d)
The Group engages an external, independent and qualified appraiser to
determine the fair value of investment property at least annually at the end
of each reporting period. As at 31 August 2023 and 31 August 2022, the fair
value of investment property has been determined by American Appraisal
(Thailand) Ltd. The last independent valuation report of the investment
property was dated 15 June 2021.
The fair value estimate for investment property is included in Level 2 and has
been derived using the sales comparison approach. The key inputs under this
approach are the price per square metre from recent sales and listings of
comparable properties in the area (location and size). Adjustments were made
for the differences between the Group’s investment property and the recent
sales and listings of properties regarded as comparable.
The following table shows the carrying amounts and fair values of
non-financial assets, including their levels in the fair value hierarchy at 31
August 2023 and 31 August 2022:
31-Aug-23 31-Aug-22
Non-financial assets - Level 2
Investment property $ 603,891 $ 578,250
The Group did not hold any non-financial assets measured at fair value under
the Levels 1 and 3 hierarchies as at 31 August 2023 and 31 August 2022.
There were no significant investments transferred between Levels 1, 2 and 3.
14) 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.
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