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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Asia Wealth Group Holdings Ltd | AQSE:AWLP | Aquis Stock Exchange | Ordinary Share | VGG0540E1097 | Ordinary shares |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 32.50 | 25.00 | 40.00 | 32.50 | 32.50 | 32.50 | 0.00 | 07:00:18 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMAWLP
FOR IMMEDIATE RELEASE
1
November 2019
Asia Wealth Group Holdings Limited
("Asia Wealth" or the "Company")
UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHSED 31 AUGUST 2019
The Board is pleased to report the unaudited interim results of Asia Wealth
Group Holdings Limited ("Accounts") for the period from 1 March 2019 to 31
August 2019. 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 2019 include:
· Consolidated revenue of US$797,329 (2018: US$1,240,960)
· Gross profit for Meyer Group of US$326,518 (representing a gross margin of
42%) (2018: US$541,350 and 44%)
· Cash at bank and on hand of US$0.7m at 31 August 2019 (2018:$1.4m).
The Group reports a loss after tax of US$0.037 million on sales of US$0.797
million for the six months ended 31 August 2019. These sales were principally
generated by the Company's wholly owned subsidiary, Meyer Asset Management
Ltd., BVI. This reduction in profitability was principally caused by revenue
decrease.
Cash balance has decreased by US$357,940 and net assets by US$34,344,
respectively, since 1st March 2019.
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 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 2019
Expressed in U.S. Dollars
Note 31-Aug-19 31-Aug-18
Non-current assets
Fixed assets 4 10,233 18,591
Investment property 5 377,809 373,981
388,042 392,572
Current assets
Cash and cash equivalents 725,940 1,387,633
Trade receivables 227,525 201,902
Financial assets at fair value 6 230,302 318,162
through profit or loss
Loans and other receivables 7 647,426 94,970
Prepayments and other assets 85,063 97,047
1,916,256 2,099,714
Total assets $ 2,304,298 $ 2,492,286
Equity
Share capital 10 913,496 913,496
Treasury Shares 10 (318,162) -
Consolidation reserve 405,997 405,997
Translation reserve 32,209 25,839
Retained earnings/(accumulated 86,633 (70,068)
deficit)
Total equity 1,120,173 1,275,264
Non-current liabilities
Liabilities under finance lease 13 - 4,485
agreements
Current liabilities
Trade payables 1,064,832 1,136,351
Due to related parties 3,419 1,177
Liabilities under finance lease 13 4,796 8,970
agreements
Other payables and accrued expenses 111,078 66,039
1,184,125 1,212,537
Total liabilities 1,184,125 1,217,022
Total equity and liabilities $ 2,304,298 $ 2,492,286
ASIA WEALTH GROUP HOLDINGS LIMITED
Consolidated Statement of Comprehensive Income
For the half year ended 31 August 2019
Expressed in U.S. Dollars
Note Mar - Aug Mar - Aug
2019 2018
Revenue
Commission income 780,283 1,221,908
Rental income 16,736 15,651
Other income 310 3,401
Revenue 797,329 1,240,960
Expenses
Commission expense 455,983 685,743
Professional fees 8 144,529 141,863
Directors' fees 8 152,245 146,607
Impairment expense - 5,372
Travel and entertainment 40,788 33,625
Office expenses 29,467 24,795
Wages and salaries 32,977 29,691
Depreciation 4, 5 17,776 16,575
Rent 9,109 8,518
Marketing expenses 2,830 4,029
Other expenses 5,594 5,778
Bank charges - -
Sundry expenses - -
891,298 1,102,596
Net profit/(loss) from operations (93,969) 138,364
Other income/(expenses)
Foreign exchange gain/(loss) 18,402 (72,477)
Interest Income 38,799 199
57,201 (72,278)
Net profit/(loss) before finance (36,768) 66,086
cost
Finance cost
Interest expense (460) (424)
Net profit/(loss) before taxation (37,228) 65,662
Taxation 14 - -
Total comprehensive income (loss) $ (37,228) $ 65,662
ASIA WEALTH GROUP HOLDINGS LIMITED
Consolidated Statement of Changes in Equity
For the half year ended 31 August 2019
Expressed in U.S. Dollars
31-Aug-19
Share Capital Treasury Consolidation Translation Retained Equity
Shares Reserve Reserve Earnings
Number US$
Balances at beginning of 1 Mar 11,433,433 913,496 (318,162) 405,997 29,325 123,861 1,154,517
2019
Translation differences - - - 2,884 - 2,884
Total comprehensive income - - - - (37,228) (37,228)
Balances at end of 31 Aug 2019 11,433,433 913,496 (318,162) 405,997 32,209 86,633 1,120,173
31-Aug-18
Share Capital Treasury Consolidation Translation Retained Equity
Shares Reserve Reserve Earnings
Number US$
Balances at beginning of 1 Mar 11,433,433 913,496 405,997 28,725 (135,730) 1,212,488
2018
Translation differences - - - (2,886) - (2,886)
Total comprehensive income - - - - 65,662 65,662
Balances at end of 31 Aug 2018 11,433,433 913,496 405,997 25,839 (70,068) 1,275,264
ASIA WEALTH GROUP HOLDINGS LIMITED
Consolidated Statement of Cash Flows
For the half year ended 31 August 2019
Expressed in U.S. Dollars
Mar - Aug Mar - Aug
2019 2018
Operating activities
Total comprehensive income/(Loss) (37,228) 65,662
Add back Depreciation 18,941 16,575
Receivables (69,498) 26,675
Loan and Other Receivable (24,408) 327
Prepayments and other assets 5,070 5,475
Payables (250,466) (58,241)
Liabilities Under Finance Lease (4,539) (5,230)
Agreements
Deferred Revenue (14,890) (108)
Other Payables and Accrued Expenses 30,811 (19,977)
Cash flows from operating activities (346,207) 31,158
Investing activities
Acquisition of fixed assets (15,636) (10,036)
Investments 714 26,362
Change in equity 2,884 (2,886)
Cash flows from investing activities (12,038) 13,440
Financing activities
Net advances from related party 305 (3,620)
Cash flows from financing activities 305 (3,620)
Net increase/(decrease) in cash and (357,940) 40,978
cash equivalents
Cash and cash equivalents at beginning 1,083,880 1,346,655
of year
Cash and cash equivalents at end of $ 725,940 $ 1,387,633
period
Cash and cash equivalents comprise
cash at bank.
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 31 October 2019.
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. The Parent Company's shares were
automatically admitted to NEX Exchange.
The Parent Company has the following subsidiaries as at 31 August 2019 and
2018:
Incorporation Country of Functional Ownership
Date Incorporation Currency Interest
2019 2018
Meyer Asset Management 2000 British Virgin US Dollars 100.00% 100.00%
Ltd. Islands
("Meyer BVI")
Meyer International 2010 Thailand Thailand 49.00% 49.00%
Limited Baht
("Meyer Thailand")
Prime RE Limited 2016 Thailand Thailand 49.00% 49.00%
Baht
("Prime RE")
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 Prime RE.
On 20 October 2016, 51.00% of Meyer Thailand, owned beneficially via a trust
agreement in favour of Meyer BVI, was acquired by Prime RE.
The Parent Company is the indirect owner of 51.00% of the outstanding shares of
Prime RE and Meyer Thailand, and accordingly the Parent Company intends to
account 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.
a) Statement of compliance
The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards ("IFRSs") and
interpretations issued by the IFRS Interpretations Committee ("IFRS IC")
applicable to companies reporting under IFRSs. The financial statements comply
with IFRSs as issued by the International Accounting Standards Board ("IASB").
b) Basis of preparation
The consolidated financial statements have been prepared on the basis of
historical costs and do not take into account increases in the market value of
assets.
The Group's financial records and statements are maintained and presented in
U.S. Dollars, rounded to the nearest dollar.
The accounting policies have been applied consistently by the Group and are
consistent with those used in the previous year, except for IFRS 9, "Financial
Instruments" ("IFRS 9"). See note 3 for an explanation of the impact.
c) Use of estimates
The preparation of consolidated financial statements in conformity with IFRSs
requires management to make judgments, estimates and assumptions that affect
the application of policies and the reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgments about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period
of the revision and future periods if the revision affects both current and
future periods.
d) Investment in subsidiaries
Basis of consolidation
The consolidated financial statements include the financial
statements of the Parent Company and its subsidiaries for the six month ended
31 August 2019. Details of the Group are set out in note 1.
Subsidiaries are enterprises controlled by the Parent Company.
Control is achieved when the Parent Company is exposed or has rights to
variable returns from its involvement with the investee 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 Parent Company. Assets, liabilities, income and expenses of
a subsidiary acquired or disposed of during the year are included or excluded
in the consolidated financial statements from the date the Parent Company gains
control or until the date the Parent Company ceases to control the subsidiary.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
d) Investment in subsidiaries (Cont'd)
Basis of consolidation (Cont'd)
Non-controlling interests pertain to the equity in a subsidiary not
attributable, directly or indirectly to the Parent Company. Any equity
instruments issued by a subsidiary that are not owned by the Parent Company are
non-controlling interests including preferred shares and options under
share-based transactions.
Non-controlling interests represent the portion of profit or loss and net
assets in subsidiaries not wholly-owned and are presented in the consolidated
statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of financial position, separately from the Parent
Company's equity.
Losses within a subsidiary are attributed to the non-controlling interests even
if that results in a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control,
is accounted for as an equity transaction. Any difference between the amount
by which the non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognised directly in equity as an "equity
reserve" and attributed to the owners of the Group.
Where necessary, adjustments are made to the financial statements of the
subsidiary to bring the accounting policies used in line with those used by the
Parent Company.
All intra-group transactions, balances, income and expenses are eliminated in
consolidation. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.
Acquisitions
The acquisition method of accounting is used to account for business
combinations by the Group.
The consideration transferred for the acquisition of a subsidiary or business
comprises the fair value of the assets transferred, the liabilities incurred
and the equity interests issued by the Group. The consideration transferred
also includes the fair value of any contingent consideration arrangement and
the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are, with limited exceptions, measured initially at
their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the Group recognises any
non-controlling interest in the acquiree at the date of acquisition either at
fair value or at the non-controlling interest's proportionate share of the
acquiree's net identifiable assets.
The excess of (i) the consideration transferred, the amount of any
non-controlling interest in the acquiree and the acquisition-date fair value of
any previous equity interest in the acquiree over the (ii) fair value of the
net identifiable assets acquired is recorded as goodwill.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
d) Investment in subsidiaries (Cont'd)
Acquisitions (Cont'd)
Where settlement of any part of cash consideration is deferred, the amounts
payable in the future are discounted to their present value as at the date of
exchange. The discount rate used is the entity's incremental borrowing rate,
being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial
liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in profit or
loss.
If the business combination is achieved in stages, the acquisition date
carrying value of the acquirer's previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date. Any gains or
losses arising from such remeasurement are recognised in profit or loss.
e) Fixed assets
Items of fixed assets are stated at cost less accumulated depreciation.
Depreciation is charged to the consolidated statement of comprehensive income
on a straight-line basis over the estimated useful lives of fixed assets.
Subsequent expenditure incurred to replace a component of a fixed asset is
capitalised only when it increases the future economic benefits embodied in the
item of a fixed asset. All other expenditure is recognised in the consolidated
statement of comprehensive income when it is incurred.
The annual rates of depreciation in use are as follows:
Leasehold improvements 20%
Office equipment 20-33%
Vehicles 20%
f) Investment property
Investment property is property held either to earn rental income or capital
appreciation or for both, but not for sale in the ordinary course of business,
use in the production or supply of goods or services or for administrative
purposes. Investment property is initially measured at cost and subsequently at
cost less any accumulated depreciation and impairment losses (refer to
accounting policy (p)), if any, with any change therein recognised in the
consolidated statement of comprehensive income.
Investment property comprises condominium units.
Cost includes expenditure that is directly attributable to the acquisition of
investment property. The cost of self-constructed investment property includes
the cost of materials and direct labour, any other costs directly attributable
to bringing the investment property to a working condition for their intended
use and capitalised borrowing costs.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
f) Investment property (Cont'd)
Any gain or loss on disposal of an investment property (calculated as the
difference between the net proceeds from disposal and the carrying amount of
the item) is recognised in the consolidated statement of comprehensive income.
When an investment property that was previously classified as property, plant
and equipment is sold, any related amount included in the revaluation reserve
is transferred to retained earnings.
When the use of property changes such that it is reclassified as fixed assets,
its fair value at the date of reclassification becomes its cost for subsequent
accounting.
Depreciable investment property is stated at cost less accumulated
depreciation. Depreciation is charged to the consolidated statement of
comprehensive income on a straight-line basis over the estimated useful lives
of the investment property.
The annual rate of depreciation in use for condominium units is
5%.
Subsequent expenditure incurred is capitalised only when it increases the
future economic benefits embodied in that property. All other expenditure is
recognised in the consolidated statement of comprehensive income when it is
incurred.
g) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash includes
current deposits with banks and other short-term highly liquid investments with
original maturities of three months or less that are readily convertible to
known amounts of cash, are subject to an insignificant risk of changes in
value, and bank overdrafts.
h) Financial assets measured at fair value through profit or loss
(FVTPL)
A financial asset is measured at fair value through profit or loss or other if;
i) its contractual terms do not give rise to cash flows on
specified dates that are solely payments of principal and interest (SPPI) on
the principal amount outstanding; or
ii) it is not held within a business model whose objective is either
to collect contractual cash flows, or to both collect contractual cash flows
and sell; or
iii) at initial recognition, it is irrevocably designated as measured
at fair value through profit or loss when doing so eliminates or significantly
reduces a measurement or recognition inconsistency that would otherwise arise
from measuring assets or liabilities or recognising the gains and losses on
them on different bases.
The Group recognises financial assets measured at FVTPL when it becomes a party
to the contractual provisions of an instrument and comprise investment in fund
and investment in private equity
Financial assets measured at FVTPL are recorded in the consolidated statement
of financial position at fair value. All transaction costs for such instruments
are recognised directly in profit or loss.
Subsequent to initial recognition, all financial assets measured at FVTPL are
measured at fair value. Gains and losses arising from changes in the fair value
are presented in the consolidated statement of comprehensive income within
other net changes in fair value of financial assets and liabilities at fair
value through profit or loss in the period in which they arise.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
i) Financial assets at amortised cost
Financial assets at amortised cost comprise cash and cash equivalents, trade
receivables and loans and other receivables. Financial assets are recognised
initially at fair value plus transaction costs that are directly attributable
to its acquisition. These financial assets are held for collection of
contractual cash flows representing solely payments of principal and interest,
if any, and therefore are measured subsequently at amortised cost using
the effective interest method. Any gain or loss arising on derecognition is
recognised directly in profit or loss and presented in other gains/(losses)
together with foreign exchange gains and losses. Impairment losses are
presented as a separate line item in the consolidated statement of
comprehensive income.
Regular way purchases and sales are recognised on the trade-date, the date on
which the Group commits to purchase or sell the asset. Financial assets are
derecognised when the rights to receive cash flows from the financial assets
have expired or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.
From 1 March 2018, the Group applied the general approach permitted by IFRS 9,
which requires expected credit losses ("ECL") to be recognised based on the
full three-stage model.
The Group's approach to ECLs reflects a probability-weighted outcome, the time
value of money and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic conditions.
The Group considers a receivable in default when contractual payments are over
365 days past due. However, in certain cases, the Group may also consider a
receivable to be in default when internal and external information indicates
that the Group is unlikely to receive the outstanding contractual amounts in
full before taking into account any credit enhancements held by the Group. A
receivable is written off when there is no reasonable expectation of recovering
the contractual cash flows.
Receivables for which an impairment provision was recognised, were written off
against the provision, when there was no expectation of recovering additional
cash.
Impairment losses are presented as a separate line item in the consolidated
statement of comprehensive income.
See note 17(b).
j) Financial liabilities at amortised cost
Financial liabilities are non-derivative contractual obligations to deliver
cash or another financial asset to another entity and comprise trade payables,
due to director and other payables and accrued expenses.
These financial liabilities are initially recognised at fair value on the date
the Group becomes a party to the contractual provisions of an instrument and
are subsequently measured at amortised cost using the effective interest
method.
Financial liabilities are derecognised when the obligation specified in a
contract is discharged, cancelled or expired
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
k) Accounting policies applied up to 28 February 2018
The Group has applied IFRS 9 retrospectively, but has elected not to restate
comparative information. As a result, the comparative information provided
continues to be accounted for in accordance with the Group's previous
accounting policy.
Loans and receivables and other financial liabilities
Until 28 February 2018, the Group classified its financial assets and financial
liabilities at amortised cost as loans and receivables and other financial
liabilities, respectively.
The initial recognition, subsequent measurement and derecognition of these
financial instruments did not change on adoption of IFRS 9.
The Group primarily used the specific identification method to determine if the
receivable was impaired. The carrying amount of the receivable was reduced
through the use of an allowance account, and the amount of the loss was
recognised in the consolidated statement of comprehensive income.
The Group determined its allowance by considering a number of factors,
including the length of time trade receivables were past due, the Group's
previous loss history, the customer's current ability to pay its obligation to
the Group, and the condition of the general economy and the industry as a
whole. The Group wrote off accounts receivable when they became uncollectible.
Actual bad debts, when determined, reduced the allowance, the adequacy of which
management then reassessed. The Group wrote off accounts after a determination
by management that the amounts at issue were no longer likely to be collected,
following the exercise of reasonable collection efforts and upon management's
determination that the costs of pursuing the collection outweighed the
likelihood of recovery.
Available-for-sale ("AFS") investments
Until 28 February 2018, the Group classified its financial assets measured at
FVTPL as AFS investments.
AFS investments are carried at fair value. Gains and losses arising from
changes in the fair value are recognised as other comprehensive income. When
securities classified as AFS are sold or impaired, the accumulated fair value
adjustments recognised in other comprehensive income are included in the
consolidated statement of comprehensive income as gains and losses from
investment securities.
AFS are presented as non-current assets unless they mature, or the Group
intends to dispose of them within twelve (12) months from the end of the
reporting period.
l) Associates
Associates are those enterprises in which the Group has significant influence,
but not control, over the financial and operating policies. The consolidated
financial statements include the Group's share of the total recognised gains
and losses of associates on an equity accounted basis, from the date that
significant influence commences until the date that significant influence
ceases. When the Group's share of losses exceeds the carrying amount of the
associate, the carrying amount is reduced to nil and recognition of further
losses is discontinued except to the extent that the Group has incurred
obligations in respect of the associate.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
m) Share capital, treasury shares and retained earnings/accumulated
deficit
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares are recognised as a deduction from
equity.
Where any group company purchases the Parent Company's equity instruments, for
example as the result of a share buy-back or a share-based payment plan, the
consideration paid, including any directly attributable incremental costs (net
of income taxes) is deducted from equity attributable to the owners of the
Group as treasury shares until the shares are cancelled or reissued. Where such
ordinary shares are subsequently reissued, any consideration received, net of
any directly attributable incremental transaction costs and the related income
tax effects, is included in equity attributable to the owners of the Group.
Retained earnings/accumulated deficit represent the cumulative balance of
periodic net income/loss, dividend distributions and prior period adjustments.
n) Share-based payment
The Group entered into a series of equity-settled, share-based payment
transactions, under which the Group received services from a third party as
consideration for equity instruments (shares, options or warrants) of the
Group.
For non-vesting share-based payments, the fair value of the service received in
exchange for the shares is recognised as an expense immediately with a
corresponding credit to share capital.
For share-based payments with vesting periods, the service received is
recognised as an expense by reference to the fair value of the share options
granted or warrants issued. The total expense is recognised over the vesting
period, which is the period over which all of the specified vesting conditions
are to be satisfied with a corresponding credit to the share capital reserve.
o) Foreign currency
Functional and presentation currency
The subsidiaries' functional currencies are disclosed in note 1 to the
financial statements. The consolidated financial statements are presented in
U.S. Dollars, rounded off to the nearest dollar.
Transactions and balances
Transactions in foreign currencies are converted at the foreign currency
exchange rate ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the foreign
currency closing exchange rate ruling at the reporting date. Foreign currency
exchange differences arising on conversion or translation and realised gains
and losses on disposals or settlements of monetary assets and liabilities are
recognised in the consolidated statements of income and comprehensive income.
Non- monetary assets and liabilities denominated in foreign currencies that are
measured at fair value are translated at the foreign currency exchange rates
ruling at the dates that the values were determined. Foreign currency exchange
differences relating to investments are included in net realised/unrealised
gain/(loss) on investments. All other foreign currency exchange differences
relating to monetary items, including cash and cash equivalents, are presented
in the consolidated statements of income and comprehensive income.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
o) Foreign currency (Cont'd)
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on acquisition, are translated into U.S. Dollars at
the exchange rates ruling at the reporting date. The income and expenses of
foreign operations are translated into U.S. Dollars at the average rate. The
net differences arising from translation and remeasurement of foreign
operations are recognised as other comprehensive income and accumulated in a
separate reserve within equity. The cumulative amount is reclassified to profit
and loss when the foreign operation is disposed of.
None of the foreign operations has the currency of a hyperinflationary economy.
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.
p) Leases
Leases of equipment where the Group assumes substantially all the benefits and
risks of ownership are classified as finance leases. Finance leases are
capitalised at the estimated present value of the underlying lease payments.
Each lease payment is allocated between the liability and finance charges so as
to achieve a constant rate on the finance balance outstanding. The
corresponding rental obligations, net of finance charges, are recorded as
long-term liabilities. The finance charge is taken to the consolidated
statement of comprehensive income over the lease period. Assets acquired under
finance lease agreements are depreciated over their useful lives.
Leases of assets under which all the risks and rewards of ownership are
effectively retained by the lessor are classified as operating leases. Payments
made under operating leases are charged to the consolidated statement of
comprehensive income on a straight line basis over the term of the lease. When
an operating lease is terminated before the lease term has expired, any penalty
is recognised as an expense in the period in which the termination takes place.
q) Impairment
The carrying amounts of the Group's assets are reviewed at each reporting date
to determine whether there is any indication of impairment. If any such
indication exists, the asset's recoverable amount is estimated. The recoverable
amount is estimated as the greater of an asset's net selling price or value in
use. An impairment loss is recognised in the consolidated statement of
comprehensive income whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount.
If in a subsequent period, the amount of an impairment loss decreases and the
decrease can be linked objectively to an event occurring after the write-down,
the write-down is reversed through the consolidated statement of comprehensive
income.
An impairment is reversed only to the extent that the asset's carrying amount
does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
r) Revenue and expense recognition
In relation to the rendering of professional services, the Group recognises fee
income as time is expended and costs are incurred, provided the amount of
consideration to be received is reasonably determinable and there is reasonable
expectation of its ultimate collection.
Rental income arising from operating leases on investment property is
recognised in the consolidated statement of comprehensive income on a straight
line basis over the term of the lease.
Interest income is recognised in the consolidated statement of comprehensive
income as it accrues.
All expenses are recognised in the consolidated statement of comprehensive
income on the accrual basis.
s) Offsetting
Financial assets and liabilities are offset and the net amount is reported in
the consolidated statement of financial position whenever the Group has a
legally enforceable right to set off the recognised amounts and the
transactions are intended to be settled on a net basis.
t) Segment reporting
The Group's operating businesses are organised and managed separately according
to geographical area, with each segment representing a strategic business unit
that serves a different market. Financial information on business segments is
presented in note 16 of the consolidated financial statements.
u) Taxation
Taxation on net profit before taxation for the year comprises both current and
deferred tax.
Current tax is the expected income tax payable on the taxable income for the
year, using tax rates enacted or substantially enacted at the reporting date
and any adjustment to tax payable in respect of previous years in the countries
where the Parent Company and its subsidiaries operate and generate taxable
income.
The Group accounts for income taxes in accordance with IAS 12, "Income Taxes,"
which requires that a deferred tax liability be recognised for all taxable
temporary differences and a deferred tax asset be recognised for an
enterprise's deductible temporary differences, operating losses, and tax credit
carryforwards. A deferred tax asset or liability is measured using the marginal
tax rate that is expected to apply to the last dollars of taxable income in
future years. The effects of enacted changes in tax laws or rates are
recognised in the period that includes the enactment date.
v) Related parties
Related parties are individuals and entities where the individual or entity has
the ability, directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial and operating
decisions.
2) SIGNIFICANT ACCOUNTING POLICIES (Cont'd)
w) Amended and newly issued accounting standards not yet adopted
A number of new standards, amendments to existing standards and interpretations
are effective for annual periods beginning after 1 March 2018 and have not been
applied in preparing these consolidated financial statements. None of these are
expected to have a significant effect on the consolidated financial statements
of the Group; however, IFRS 16, "Leases", effective for annual periods
beginning on or after 1 January 2019, may result in additional disclosures for
the Group upon implementation.
3) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The Group applied for the first time, IFRS 9 effective 1 January 2018. IFRS 9
replaces IAS 39 and introduces new requirements for classification and
measurement, impairment and hedge accounting. IFRS 9 is not applicable to
items that have already been derecognised at 1 March 2018, the date of initial
application.
The nature and the impact of IFRS 9 is described below:
a) Classification and measurement
The Group has assessed the classification of financial instruments as at the
date of initial application and has applied such classification
retrospectively. Based on that assessment:
· Financial assets previously classified as loans and receivables, are
held to collect contractual cash flows and give rise to cash flows representing
solely payments of principal and interest. Thus, such instruments continue to
be measured at amortised cost under IFRS 9.
· The classification of financial liabilities under IFRS 9 remains broadly
the same as under IAS 39. The main impact on measurement from the
classification of liabilities under IFRS 9 relates to the element of gains and
losses for financial liabilities designated as at fair value through profit or
loss attributable to changes in credit risk. IFRS 9 requires that such element
be recognised in other comprehensive income, unless this treatment creates or
enlarges an accounting mismatch in profit or loss, in which case, all gains and
losses on that liability, including the effect of changes in credit risk,
should be presented in profit or loss. The Group has not designated financial
liabilities at fair value through profit or loss. Therefore, this requirement
has not had an impact on the Group.
b) Impairment
IFRS 9 requires the Group to record expected credit losses on all of its loans
and trade receivables, either on a 12-month or lifetime basis. These financial
assets at amortised cost have no financing component and have maturities of
less than 12 months. The Group applied the general approach by recognising a
provision based on the three stages that reflect the potential variation in
credit quality of these financial assets.
Impact of adoption of IFRS 9
The classification and measurement requirements of IFRS 9 have been adopted
retrospectively as of the date of initial application on 1 March 2018.
However, the Group has chosen to take advantage of the option not to restate
comparatives. Therefore, the 2018 figures are presented and measured under IAS
39. The reclassifications and the adjustments arising from the new impairment
rules are therefore not reflected in the consolidated statement of financial
position as at 28 February 2018, but are recognised in the opening consolidated
statement of financial position on 1 March 2018.
3) CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Cont'd)
Impact of adoption of IFRS 9 (Cont'd)
The total impact on the Group's retained earnings as at 1 March 2018 and 28
February 2018 is as follows:
1 March 2018 28 February
2018
Restated retained earnings
Increase in provision for commission receivable ( 7,179) -
Adjustment to retained earnings from adoption of ( 7,179) -
IFRS 9
Restated retained earnings $(142,909) $(135,730)
The following table shows the original measurement categories in accordance
with IAS 39 and the new measurement categories under IFRS 9 for the Group's
financial assets and financial liabilities as at 1 March 2018:
In line with the characteristics of the Group's financial instruments as well
as its approach to their management, the Group neither revoked nor made any new
designations on the date of initial application. IFRS 9 has resulted in
changes in the carrying amount of the Group's financial instruments due to
changes in measurement categories. All financial assets that were classified
as loans and receivables and measured at amortised cost continue to be.
The carrying amounts of amortised cost instruments continued to approximate
these instruments' fair values on the date of transition after transition to
IFRS 9.
4) FIXED ASSETS
Leasehold Office Vehicles Total
improvement equipment
Cost:
At 28 February 2019 20,281 37,802 55,392 113,475
Translation reserve (244) (4,549) (2,410) (7,203)
Disposal - - - -
Additions - 2,994 - 2,994
At 31 August 2019 20,037 36,247 52,982 109,266
Depreciation:
At 28 February 2019 20,281 33,851 45,805 99,937
Translation reserve (244) (4,623) (2,675) (7,542)
Disposal - - - -
Charge for 1 March - 31 - 1,296 5,342 6,638
August 2019
At 31 August 2019 20,037 30,524 48,472 99,033
Net book value:
At 31 August 2019 $- $5,723 $4,510 $10,233
At 28 February 2019 $- $3,951 $9,587 $13,538
As at 31 August 2019, the Group had fixed assets under a finance lease
agreement (refer to note 13) with a net book value of $4,342 (2018 : $13,875).
5) INVESTMENT PROPERTY
Condominium
units
Cost:
At 28 February 2019 430,057
Translation reserve 11,843
At 31 August 2019 441,900
Depreciation:
At 28 February 2019 51,534
Translation reserve 1,419
Charge for 1 March - 31 11,138
August 2019
At 31 August 2019 64,091
Net book value:
At 31 August 2019 $377,809
At 28 February 2019 $378,523
Investment property comprises condominium units at The Prime 11 Condominium in
Bangkok, Thailand.
Rental income arising from the investment properties during the half year
amounted to $16,736 (2018: $15,651).
6) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
31-Aug-19 31-Aug-18
Investment in fund 230,302 -
Investment in private equity - 318,162
$230,302 $318,162
Investment in Phillip Investment Fund
The investment in Phillip Investment Fund in Singapore comprise 310,608.32
(2018: nil) units in Phillip Money Market Fund. The amount of investment
recognised in the consolidated statement of financial position is $230,302
(2018: $nil), net of unrealised gain of $2,425 (2018: $nil).
Investment in Ray Alliance Financial Advisers Pte Ltd
On 12 June 2012, the Parent Company acquired a 15% equity interest in Ray
Alliance Financial Advisers Pte Ltd ("Ray Alliance") for a consideration of
322,000 shares issued at GBP0.70 per share. The Parent Company also issued 16,100
shares at GBP0.60 per share in consideration for the advisory services provided
during the transaction. The total cost of the investment amounted to $318,162.
In June 2016, it came to the attention of the Group that the 45,000 ordinary
shares in Ray Alliance owned by the Parent Company had been transferred without
any authorisation by the Parent Company to the two other shareholders of Ray
Alliance. At that stage it was not known how the transfer was done without the
authorisation or consent of the Parent Company. Under the circumstances, the
Parent Company considered the unauthorised transfer to be wrongful and entirely
without legal basis.
The Parent Company engaged a Singapore law firm and took legal advice on the
matter. The Parent Company considered various options including taking legal
action against the appropriate parties. Through its solicitors, the Parent
Company made a demand to the two other shareholders to immediately transfer
back to the Parent Company the said 45,000 ordinary shares in Ray Alliance.
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.
The following were 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.
Other income earned related to the Group's claims amounting to $255,042 (2018:
$nil).
Treasury shares recognised by the Group for the return of the Parent Company's
shares amounted to $318,162 (2018: $nil).
7) LOAN RECEIVABLE
On 8 February 2019, Meyer BVI entered into a Loan Agreement with MVT
Development Ltd. amounting to THB 16,000,000. The loan will be due on 8
February 2020 and earns interest at a rate of 15% per annum.
7) LOAN RECEIVABLE (Cont'd)
As at 31 August 2019, loan to MVT Development Ltd. amounted to $515,642 (2018:
$nil). The loan is secured and is guaranteed with a property in Bangkok,
Thailand.
8) RELATED PARTY TRANSACTIONS
During the half year, the Group was charged $19,081 (2018: $19,639) in
accounting fees by Administration Outsourcing Co., Ltd, a company related by
way of common directorship
During the half year, the Group paid directors' fees, inclusive of school fees
and accommodation allowance, amounting to $152,245 (2018: $146,607).
As at 31 August 2019, due to director amounted to $3,419 (2018: $1,177). The
amount due is unsecured, interest-free and repayable on demand
9) INVESTMENT IN ASSOCIATE
On 21 December 2016, the Group paid $29,382 for a 50.995% interest in Beehive
Asia Co., Ltd., a company incorporated in Thailand. The Group had no control
over the financial and reporting policies of Beehive and has accordingly
accounted for it as an associate.
On 10 November 2017, Beehive Asia Holdings Company Limited exercised its call
option to require the Group to sell its interest in Beehive Asia Co., Ltd. In
the prior year, the Group received THB 252,117 and a gain on disposal of $7,522
was recognised in the consolidated statement of comprehensive income.
10) SHARE CAPITAL AND TREASURY SHARE
Authorised
The Parent Company is authorised to issue an unlimited number of no par value
shares of a single class.
Issued and fully paid: 31-Aug-19 31-Aug-18
11,433,433 (2018: 11,433,433) shares of no par $913,496 $913,496
value per share.
Each share in the Parent Company confers upon the shareholder:
(a) the right to one vote on any resolution of shareholders;
(b) the right to an equal share in any dividend paid by the Parent
Company; and
(c) the right to an equal share in the distribution of the surplus
assets of the Parent Company on its liquidation
Treasury Shares
As discussed in note 6, the Parent Company acquired treasury shares of 322,000
(2018: nil) amounting to $318,162 (2018: $nil). This resulted from the
Settlement Agreement entered into by the Parent Company on 26 September 2018
relating to the unauthorised transfer of Ray Alliance shares.
11) SHARE-BASED PAYMENTS
In the prior year, share options of 150,000 with an exercise price of GBP0.60
were not exercised and, thus expired resulting in a transfer to accumulated
deficit of $10,708.
12) INVESTMENT IN SUBSIDIARY
As at 28 February 2017, the Group held 68.99% of BTS Property Holdings Limited
("BTS Property"). The acquisition earned the Group goodwill of $11,815 which
was impaired and written off in the consolidated statement of comprehensive
income in the year ended 2017.
Effective 1 March 2017, the Parent Company, through Meyer Thailand, transferred
its ownership of BTS Property but retained title as a nominee shareholder on
behalf of the ultimate beneficial owner, and accordingly the Parent Company has
not accounted for it as a subsidiary.
13) LEASES
31-Aug-19 31-Aug-18
Liabilities under finance lease
agreement:
Less than 1 year 4,796 8,970
1 to 5 years - 4,485
Total 4,796 13,455
Less: Deferred interest (324) (1,086)
4,472 12,369
Less: Current portion net of short term (4,472) (8,187)
deferred interest
Net $- $4,182
14) 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 Prime RE are subject to Thailand graduated statutory income
tax at a rate of 0-20% on profit before tax.
The current tax expense included in the consolidated statement of comprehensive
income was $nil (20 18: $nil).
The Group had no deferred tax assets or liabilities as at the reporting date.
15) EARNINGS PER SHARE
a) Basic
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Parent Company by the weighted average number of shares
in issue during the year excluding treasury shares.
15) EARNINGS PER SHARE (cont'd)
a) Basic (cont'd)
31-Aug-19 31-Aug-18
Earnings/(loss) attributable to equity holders of the $(37,228) $65,662
Parent Company
Weighted average number of shares in issue 11,433,433 11,433,433
Adjusted for weighted average number of:
- treasury shares (322,000) -
Weighted average number of shares in issue and for 11,111,433 11,433,433
basic earnings for share
Basic earnings per share $(0.00335) $0.00574
b) Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of shares outstanding to assume conversion of all dilutive potential
shares. As at 31 August 2019 and 2018, the Parent Company had no share warrants
and 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.
31-Aug-19 31-Aug-18
Earnings/(loss) attributable to equity holders of the $(37,228) $65,662
Parent Company
Weighted average number of shares in issue and for 11,111,433 11,433,433
diluted earnings for share
Diluted earnings per share $(0.00335) $0.00574
16) SEGMENTAL INFORMATION
The Group has three reportable segments based on geographical areas where the
Group operates and these were as follows:
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 Prime RE is domiciled and
provides property rental services
The reportable segmental revenue, other profit and loss disclosures and assets
and liabilities were as follows:
16) SEGMENTAL INFORMATION (Cont'd)
Revenue
31-Aug-19 31-Aug-18
Total Inter-segment Revenue Total Inter-segment Revenue
segment revenue from segment revenue from
revenue external revenue external
customers customers
BVI 780,593 - 780,593 1,225,309 - 1,225,309
Thailand 138,126 (121,390) 16,736 125,988 (110,337) 15,651
Total $918,719 $(121,390) $797,329 $1,351,297 $(110,337) $1,240,960
Other profit and loss disclosures
31-Aug-19 31-Aug-18
Commission Depreciation Income Commission Depreciation Income
expense tax expense tax
BVI 454,075 371 - 683,959 428 -
Thailand 1,908 17,405 - 1,784 16,147 -
Total $455,983 $17,776 $- $685,743 $16,575 $-
Assets
31-Aug-19 31-Aug-18
Total Assets Total Assets
BVI 1,795,151 1,981,851
Thailand 509,147 510,435
Total $2,304,298 $2,492,286
Intersegment assets amounting to $944,653 (2018: $3,436,675) were already
eliminated in the total assets per segment above.
Liabilities
31-Aug-19 31-Aug-18
Total Total
Liabilities Liabilities
BVI 1,112,543 1,152,427
Thailand 71,582 64,595
Total $1,184,125 $1,217,022
Intersegment Liabilities amounting to $818,000 (2018: $3,314,360) were already
eliminated in the total Liabilities per segment above.
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS
Financial assets of the Group include cash and cash equivalents, trade
receivables, loans and other receivables and financial assets at fair value
through profit or loss. Financial liabilities include trade payables, due to
director and other payables and accrued expenses.
The Group has exposure to a variety of financial risks that are associated with
these financial instruments. The most important types of financial risk to
which the Group is exposed are market risk, credit risk and liquidity risk.
The Group's overall risk management program is established to identify and
analyse this risk, to set appropriate risk limits and controls, and to monitor
risks and adherence to limits in an effort to minimise potential adverse
effects on the Group's financial performance.
a) Market risk
Market risk represents the potential loss that can be caused by a change in the
market value of the Group's financial instruments. The Group's exposure to
market risk is determined by a number of factors which include interest rate
risk and currency risk.
Interest rate risk
The financial instruments exposed to interest rate risk comprise cash and cash
equivalents.
The Group is exposed to interest rate cash flow risk on cash and cash
equivalents, which earn interest at floating interest rates that are reset as
market rates change. The Group is exposed to interest rate risk to the extent
that these interest rates may fluctuate.
A sensitivity analysis was performed with respect to the interest-bearing
financial instruments with exposure to fluctuations in interest rates and
management noted that there would be no material effect to shareholders' equity
or net income for the year.
Currency risk
The Group may invest in financial instruments and enter into transactions
denominated in currencies other than its functional currency. Consequently, the
Group is exposed to risk that the exchange rate of its currency relative to
other foreign currencies may change in a manner that has an adverse affect on
the value of that portion of the Group's assets or liabilities denominated in
currencies other than the U.S. Dollar
The Group's total net exposure to fluctuations in foreign currency exchange
rates at the reporting date stated in U.S. Dollars was as follows:
2019 2018
Fair value % of net Fair value % of net
assets assets
Assets
Thailand Bhat 964,284 83.52 461,897 38.09
Japanese Yen 677,726 58.70 781,264 64.43
Singaporean Dollar 230,302 19.95 - -
Euro 157,128 13.61 164,903 13.60
United Kingdom Pound 7.39 106,685 8.80
85,309
$2,114,749 183.17 $1,514,749 124.92
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Cont'd)
a) Market risk (Cont'd)
Currency risk (Cont'd)
The table below summarises the sensitivity of the net assets to changes in
foreign exchange movements at 28 February 2019. 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.
2019 2018
Possible Possible Possible Possible
shift shift shift shift
in rate in amount in rate in amount
Thailand Bhat 3.13% 30,160 4.66% 21,524
Japanese Yen 4.00% 27,105 3.06% 23,907
Euro 5.44% 8,541 6.57% 10,834
Singaporean Dollar 2.91% 6,698 -% -
United Kingdom 6.27% 5,347 5.96% 6,358
Pound
$77,851 $62,623
b) Credit risk
Credit risk represents the accounting loss that would be recognised at the
reporting date if financial instrument counterparties failed to perform as
contracted.
As at 31 August 2019 and 2018, the Group's financial assets exposed to credit
risk amounted to the following:
31-Aug-19 31-Aug-18
Cash and cash equivalents 725,940 1,387,633
Trade receivables 227,525 201,902
Loans and other receivables 647,426 94,970
Financial assets at fair value through 230,302 318,162
profit or loss
$1,831,193 $2,002,667
i) Risk management
The extent of the Group's exposure to credit risk in respect of these financial
assets approximates their carrying values as recorded in the Group's
consolidated statement of financial position
The Group invests all its available cash and cash equivalents in several banks.
The Group is exposed to credit risk to the extent that these banks may be
unable to repay amounts owed. To manage the level of credit risk, the Group
attempts to deal with banks of good credit standing, whenever possible.
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Cont'd)
b) Credit risk (Cont'd)
i) Risk management (Cont'd)
The Group's exposure to credit risk is influenced mainly by the individual
characteristics of each customer. To reduce exposure to credit risk, the Group
may perform ongoing credit evaluations on the financial condition of its
customers, but generally does not require collateral. The Group has
significant exposure to a small number of customers, the two largest owing
$156,320 (2018: $107,752) as at 31 August 2019, which represents 67% (2018:
53%) 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 limited.
The ageing of the Group's trade receivables as at 31 August 2019 and 2018 is as
follows:
31-Aug-19 31-Aug-18
1 - 90 days 114,613 145,951
Over 90 days 120,002 55,951
Allowance for doubtful Debts (7,090) -
$227,525 $201,902
ii) Security
For some trade receivables, the Group may obtain security in the form of
guarantees, deeds of undertaking or letters of credit which can be called upon
if the counterparty is in default under the terms of their agreement
iii) Impairment of financial assets
The Group applies the IFRS 9 general approach to measuring ECL based on the
full three-stage model.
Under IFRS 9's general approach, impairments are recognised in three stages as
follows:
Stage 1: Items that have not deteriorated significantly in credit quality since
initial recognition. A loss allowance equal to 12-month ECL is recognised and
interest income is calculated on the gross carrying amount of the financial
asset.
Stage 2: Items that have deteriorated significantly in credit quality since
initial recognition but do not have objective evidence of a credit loss event.
A loss allowance equal to lifetime ECL is recognised but interest income is
still calculated on the gross carrying amount of the asset.
Stage 3: Items that have objective evidence of impairment at the reporting
date. A loss allowance equal to lifetime ECL is recognised and interest income
is calculated on the net carrying amount.
While cash and cash equivalents and loans and other receivables are also
subject to the impairment requirements of IFRS 9, the identified impairment
loss was immaterial.
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Cont'd)
b) Credit risk (Cont'd)
iii) Impairment of financial assets (Cont'd)
The Group determined the ECL based on probability-weighted outcome, the time
value of money and reasonable and supportable information that is available
without undue cost or effort at the reporting date about past events, current
conditions and forecast of future economic conditions. The assessment also
considered borrower specific information.
To measure the expected credit losses, trade receivables have been grouped
based on shared credit risk characteristics and the days past due.
The expected loss rates are based on the payment profiles of revenues over a
period of 36 months before 28 February 2019 or 1 March 2018 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 28 February 2019 and 1 March 2018 (on
adoption of IFRS 9) was determined as follows:
Balance at Expected Loss Allowance
1 March 2018 Credit at 1 March 2018
Loss Rate
Trade receivables $228,577 3.14% $7,179
Balance at Expected Loss Allowance
28 February 2019 Credit at 28 February
Loss Rate 2019
Trade receivables $165,117 4.29% $7,090
The closing loss allowances for trade receivables as at 28 February 2019
reconcile to the opening loss allowances as follows:
2019 2018
28 February - IAS 39 - -
Restated through retained earnings 7,179 -
Opening loss allowance as at 1 March
2018 - IFRS 9 7,179
Decrease in loss allowance during the ( 89)
year
$7,090
Trade receivables are written off when there is no reasonable expectation of
recovery. Indicators that there is no reasonable expectation of recovery
include, amongst others, the failure of a debtor to engage in a repayment plan
with the Group, and a failure to make contractual payments for a period of
greater than 365 days past due.
Impairment losses on trade receivables are presented as net impairment losses
within operating profit. Subsequent recoveries of amounts previously written
off are credited against the same line item.
17) FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS (Cont'd)
b) Credit risk (Cont'd)
iv) Previous accounting policy for impairment of trade receivables
Individual receivables which were known to be uncollectible were written off by
reducing the carrying amount directly. The other receivables were assessed
collectively to determine whether there was objective evidence that an
impairment had been incurred but not yet been identified. For these receivables
the estimated impairment losses were recognised in a separate provision for
impairment. The Group considered that there was evidence of impairment if any
of the following indicators were present:
· significant financial difficulties of the debtor;
· probability that the debtor would enter bankruptcy or financial
reorganisation; and
· default or late payments (more than 365 days overdue).
Receivables for which an impairment provision was recognised were written off
against the provision when there was no expectation of recovering additional
cash.
c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the
Group's reputation. Typically, the Group ensures that it has sufficient cash on
demand to meet expected operational needs as they arise.
All of the Group's financial liabilities are expected to be settled within a
year from the reporting date.
18) FAIR VALUE INFORMATION
The Group's financial assets at fair value through profit or loss comprise an
investment in a fund (2018: an investment in private equity). Investments in
private equity that have no active markets and whose fair value cannot be
reliably measured are carried at cost, less impairment, if any.
For certain of the Group's financial instruments, not carried at fair value,
including cash and cash equivalents, trade receivables, loans and other
receivables, trade payables and other payables and accrued expenses, the
carrying amounts approximate fair value due to the immediate or short-term
nature of these financial instruments. The carrying value of the amount due to
director approximates its fair value, since such amount is repayable on demand.
The fair value hierarchy has the following levels:
* Level 1 inputs are quoted prices (unadjusted) in active markets for
identical assets or liabilities that the entity can access at the
measurement date.
* Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
* Level 3 inputs are unobservable inputs for the asset or liability.
18) FAIR VALUE INFORMATION (Cont'd)
The level in the fair value hierarchy within which the fair value measurement
is categorised in its entirety is determined on the basis of the lowest level
of input that is significant to the fair value measurement in its entirety.
For this purpose, the significance of an input is assessed against the fair
value measurement in its entirety. If a fair value measurement uses observable
inputs that require significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of a
particular input to the fair value measurement in its entirety requires
judgment, considering factors specific to the asset or liability.
The determination of what constitutes 'observable' requires significant
judgment by the Group. The Group considers observable data to be that market
data that is readily available, regularly distributed or updated, reliable and
verifiable, not proprietary, and provided by independent sources that are
actively involved in the relevant market.
Investments whose values are based on quoted market prices in active markets
are therefore classified within Level 1.
Financial instruments that trade in markets that are not considered to be
active but are valued based on quoted market prices, dealer quotations or
alternative pricing sources supported by observable inputs are classified
within Level 2. As Level 2 investments include positions that are not traded in
active markets and/or are subject to transfer restrictions, valuations may be
adjusted to reflect illiquidity and/or non transferability, which are
generally based on available market information.
Investments classified within Level 3 have significant unobservable inputs, as
they trade infrequently.
The following table analyses within the fair value hierarchy the Group's
financial assets (by class) measured at fair value :
31-Aug-19 31-Aug-18
Level 1
Investment in fund $230,302 $-
31-Aug-19 31-Aug-18
Level 3
Investment in private equity $- $318,162
The Group did not hold any investments under the Level 2 hierarchies as at 31
August 2019.
Level 3 investments are valued at their acquisition cost since there was no
available information to estimate its fair value. Management believes that the
values stated as at 28 February 2018 are most representative of fair value.
There were no significant investments transferred between Levels 1, 2 and 3.
19) CAPITAL RISK MANAGEMENT
The Group's objectives when managing capital are:
* to safeguard the Group's ability to continue as a going concern; and
* to provide adequate returns to its shareholders.
In order to maintain or balance its overall capital structure to meet its
objectives, the Group is continually monitoring the level of share issuance
and any dividend declaration and distributions to shareholders in the
future.
20) OTHER MATTERS
On 27 March 2019, in accordance with the Securities and Investment Business
Act, 2010, Meyer BVI was granted another Investment Business Licence with the
following additional categories to those detailed in note 1:
Category 4: Investment Advice
- Sub-Category A: Investment Advice (Excluding Mutual Funds)
- Sub-Category B: Investment Advice (Mutual Funds)
21) COMPARATIVE INFORMATION
Certain comparative figures have been reclassified to conform with the current
year's presentation.
END
(END) Dow Jones Newswires
November 01, 2019 07:40 ET (11:40 GMT)
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