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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Green & Smart Holdings Plc | LSE:GSH | London | Ordinary Share | JE00BYTQ7945 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.85 | 2.70 | 3.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2021 to Apr 2024
TIDMBION
RNS Number : 6413I
Bion PLC
19 April 2022
19 April 2022
BiON plc
("BiON" or the "Company" or, together with BiON Ventures Sdn Bhd, the "Group")
Final Results and Publication of Annual Report
BiON (AIM: BION) announces its final results for the year ended 31 December 2020.
Financial Summary
-- Revenue was RM103.67m (2019: RM24.06m) -- Gross profit was RM6.27 (2019: RM2.88m) -- Gross margin was 6.04% (2019: 11.96%) -- Operating loss excluding exceptional items was RM0.72m (2019: RM1.35m)* -- Exceptional impairment charge of RM118.73m relating to historic receivables (2019: RM0.87m) -- Operating loss including exceptional item was RM119.45m (2019: RM0.48m profit) -- Loss before tax was RM120.25m (2019: RM0.94m profit) -- Cash and cash equivalents at 31 December 2020 were RM2.29m (31 December 2019: RM0.08m)
-- Post period, on 19 April 2022, the operating sub-Group, BiON Ventures Sdn Bhd and its subsidiaries, were sold for a nominal sum, being GBP1
* Operating profit excluding exceptional items is defined as the operating profit/(loss), less impairment charges and write backs.
Post-period Events
-- As announced earlier today, the Company has disposed of its operating entity, BVSB -- Accordingly, the Company has become an AIM Rule 15 cash shell
-- The Company is now focused on making an acquisition that constitutes a reverse takeover under AIM Rule 14 on or before the date falling six months from completion of the disposal of BVSB
-- As also announced today, with immediate effect, Dato' Dr. Ir. Ts. Mohd Abdul Karim Abdullah, former Chairman, has resigned from the Board and Aditya Chathli has assumed the role of Interim Chairman
This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310).
Enquiries:
Hot Features
Premium
BiON plc
+44 20 7618
c/o Luther Pendragon 9100
Beaumont Cornish Limited (Nominated Adviser)
+44 20 7628
Roland Cornish, Felicity Geidt 3396
Optiva Securities Limited (Joint Broker)
+44 20 3137
Vishal Balasingham 1903
VSA Capital Limited (Joint Broker)
+44 20 3005
Andrew Raca, Maciek Szymanski (Corporate Finance) 5000
Andrew Monk (Corporate Broking)
Luther Pendragon (Financial PR Adviser)
+44 20 7618
Claire Norbury 9100
OVERVIEW
With the outbreak of the COVID-19 pandemic, the Group faced a difficult year in 2020 as governments worldwide imposed strict restrictions on the movement of people and supplies, severely disrupting BiON's course of business and supply chain. In particular, in Malaysia the restrictions were far more severe than those experienced in the UK, for example. Accordingly, the Group was unable to progress its biogas powerplants as planned and revenues from its engineering, procurement, construction and commissioning ("EPCC") contracts were depressed. In addition, the Group incurred a significant operating loss for the year of RM119.45m, which was compounded due to the impairment of RM118.73m of historic receivables.
These challenges became more acute in 2021 with the continuing impact of the COVID-19 restrictions, worsening the financial position and operating issues such as a severe fire at the palm oil mill adjoining the Group's Malpom power plant. Additionally, to upgrade and repair the Group's existing plants would require further funding to which the Company does not have access to.
As a result of the delay in the publication of the audited accounts for the year ended 31 December 2020 ("the Accounts") and the unaudited interim results for the period ended 30 June 2021 (the "Interims") while the Company sought a solution to provide a stable financial operating basis that would support its listing and therefore enable the Accounts and the Interims to be published, the Company's ordinary shares were suspended from trading on AIM on 1 October 2021.
The Group's indebtedness had hitherto been guaranteed by the major shareholder, Serba Dinamik. However, they are no longer in a position to do so, which required the Company to find a solution to enable the long-term refinancing of the Group's debt.
Throughout the period from suspension, the Company engaged with various parties with a view to injecting new resources into the existing business and was close to securing an outcome in January 2022. However, this was not achieved, and the Board concluded that, given the liabilities within the operating business, the unpaid debtors and the operational issues and need for future financing to re-establish its business, it would be in the best interests of shareholders to sell the Company's operating business (BiON Ventures Sdn Bhd ("BVSB"), which holds all of the Group's trading subsidiaries) for a nominal sum but without any future recourse or liability to BiON plc. On this basis, the Company's broker advised that it would be able to facilitate the conditional raising of finance (as announced on 31 March 2022 and described further in the Financial Review below) to cover the BiON plc creditors and provide future working capital whilst the Company seeks a new business that is capable of sustaining the ongoing listing. Together, these actions would enable the completion and publication of the Company's Accounts and the Interims and resumption of trading in its shares on AIM. The sale of the existing business rather than placing it into an insolvency process, was to better preserve the position of the other stakeholders in the business for whom the Board bear responsibility.
In accordance with AIM Rule 15, the disposal of BVSB constituted a fundamental change of business of the Company and therefore requires the passing of an ordinary resolution at a general meeting of shareholders. Accordingly, as announced on 31 March 2022, the Board sought approval of shareholders at a general meeting (the "General Meeting") on 19 April 2022. Approval for the disposal was granted at the General Meeting and the disposal of BVSB was completed on 19 April 2022 following which, the Company ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. The Company has therefore become an AIM Rule 15 cash shell as described below.
OUTLOOK AND AIM RULE 15
On 19 April 2022, the Company disposed of its operating business (BVSB) and became an AIM Rule 15 cash shell. The Company's strategy is to acquire a business that is seeking an AIM quoted platform via a reverse takeover. The Directors intend to consider opportunities in a number of sectors and will focus on an acquisition that can create value for shareholders in the form of capital growth and/or dividends.
As an AIM Rule 15 cash shell, the Company will be required to make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission as an investing company (as defined under the AIM Rules)) on or before the date falling six months from completion of the disposal of BVSB or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least GBP6 million), failing which the Company's ordinary shares would then be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM would be cancelled six months from the date of suspension should the Company fail to complete an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 during that period.
OPERATIONAL REVIEW
EPCC - discontinued activity post year-end following BVSB disposal
The Group's revenue in 2020 was based on its EPCC work, which was expanded into Indonesia. The Group delivered three infrastructure projects in Indonesia in the second half of the year, which accounted for 66.9% of total revenue for 2020. The Group also undertook EPCC work in Malaysia in the first part of the year, providing hydraulic and water supply-related engineering and technology services at a wastewater treatment plant in Terengganu and undertaking an equipment supply project at Pengerang Industrial Park.
However, as noted above and described further below, the Group experienced difficulties in revenue collection, which impeded its ability to pay its suppliers thereby impacting its debtor position. Accordingly, management decided to pause its pursuit of further EPCC contracts in order to limit the Group's risk exposure at a time when the market was suffering from the prolonged impact of COVID-19 as well as when the Group was unable to access funding to support new projects. As such, the Group has not generated revenue from EPCC contracts subsequent to 2020.
Power Sales - discontinued activity post year-end following BVSB disposal
Biogas Power Plants
As a result of the Malaysian government's stringent COVID-19 restrictions combined with political changes in Malaysia that impeded the activities of the regulatory bodies while adjusting to a new regime, progress was delayed across the Group's biogas power plants in 2020. The visits from testers and regulators that are required to enable commencement of power sales were cancelled or postponed while some equipment parts and specialist engineers faced delays in arriving from outside Malaysia.
A summary of the developments with the Group's biogas power plants during 2020 is as follows:
-- Seberang Perak (2MW) was acquired by the Group in 2020. The plant received its Initial Operation Date ("IOD") date shortly post period, in January 2021, which enabled it to commence exporting power to Tenaga National Berhad ("TNB") electricity grid at a reduced Feed-in-Tariff ("FiT") rate.
-- Malpom (2MW) continued its upgrading works during the year and recommenced exporting power to TNB in December 2020.
-- Nasaruddin (1MW) was acquired by the Group during 2020. During the year, the plant was awaiting the granting of the IOD, which was subject to a visit to the site from TNB and, accordingly, was impacted by the government restrictions on travel.
-- Kahang (2MW) continued its upgrading works, which were completed at the end of the year.
Post period, the Group made limited progress with its biogas power plant portfolio. Seberang Perak was awarded the Commercial Operation Date ("COD") in May 2021, enabling it to export electricity to TNB at the full FiT rate, and received the letter of approval from Sustainable Energy Development Authority ("SEDA") in September 2021, which enabled the Group to recognise the revenue generated from power sales (including receiving payment for revenue that had been accrued to date). Accordingly, from May 2021, Seberang Perak has been exporting 1MW to TNB - with the reduction compared with the plant's 2MW capacity being due to an insufficient supply of palm oil mill effluent ("POME") feedstock.
In early 2021, power sales were temporarily ceased at Malpom due to engine downtime and scheduled maintenance while upgrading works continued. However, since July 2021, the plant has been unable to generate power as a fire incident at the neighbouring palm oil mill that supplies the POME feedstock to Malpom forced the plant to shut down. While the mill resumed operations in March 2022, the Group was unable to recommence power production as it did not have the financing available that is required for the process to re-start the plant after a prolonged period of downtime.
The Group continued to await the granting of an IOD at Nasaruddin, which was further delayed both by the restrictions on travel and also a shutdown at the neighbouring mill for maintenance work from December 2021 to mid-January 2022. The visit from the regulators is currently expected to take place by the end of April 2022, however, BVSB requires additional funding to be able to progress its operations at Nasaruddin. At Kahang, the Group recommenced operations in January 2021, but due to the prolonged period of shutdown for upgrading works, it was required to undergo a 'Re-IOD' process to be able to export power to TNB. This did not occur as a result of the government restrictions on travel preventing the regulatory visit and then a visit scheduled for December 2021 needing to be postponed due to an outbreak of COVID-19 among employees at the site. An initial visit occurred in March 2022 and BVSB is awaiting a subsequent visit to complete the re-IOD process.
In addition, in July 2021, the Group entered into an agreement regarding a 3MW waste-to-energy biogas power plant in Aceh, Tamiang, Indonesia whereby it would provide EPCC services and then receive a shareholding in the plant upon completion. However, due to the financial constraints of the Group and the other parties involved, progress was impeded, with RM10 million being required to complete the project. The Group nor the other parties had access to this funding.
Solar Power
During the year, the Group established BiON Suria, a solar-focused subsidiary, and conditionally acquired the right-of-use of rooftop solar panels supplying 0.95MW to TNB under the Malaysian government's Net Energy Metering programme where any excess power generated by solar powers can be sold to TNB. The solar panels had long-term power purchase agreements in place, at attractive FiT rates, with the majority expiring in Q4 2040 and a small number in Q4 2038. However, due to the financial constraints described above, the Group was unable to complete the acquisition.
FINANCIAL REVIEW
Revenue
Revenue for the year ended 31 December 2020 was RM103.67m (2019: RM24.06m), which was primarily generated by the provision of EPCC services with an immaterial contribution from the sale of electricity from its Malpom plant.
Gross profit & margin
The gross profit for 2020 was RM6.27m, with a gross margin of 6.04% (2019: gross profit of RM2.88m; gross margin of 11.96%).
Operating (loss)/profit
There was an operating loss for the year of RM119.45m (2019: profit of RM0.48m), which reflects an allowance for impairment as described below for RM118.73m. Accordingly, the loss before tax was at RM120.25m (2019: profit of RM0.94m). Excluding the impairment, the Group generated an operating loss of RM0.72m (2019: profit of 1.35m).
Earnings/(loss) per share
On a consolidated level, the Group's basic loss per share for the year ended 31 December 2020 was RM0.29 (2019: profit of RM0.002 per share) based on the weighted number of ordinary shares.
Prior year adjustments
The prior year adjustment represents the cost of sales which have been understated by RM 0.17m and taxation which has been overstated by RM1.09m in the prior year. This prior year error has been accounted for retrospectively and comparatives have been restated.
Taxation
BiON Sdn Bhd, the underlying operating entity of the Group (which is wholly owned by BVSB), is subject to a corporate tax rate of 24% on its taxable profits. There was an error made in the provision for taxation in the prior year where the provision was overstated by RM1.09m and, accordingly, the tax in the year under review of RM0.54m and the deferred tax of RM0.55m were adjusted to reflect the actual provision made in the prior year. The Group's taxation charges during the year were RM1.31m (2019: RM0.08m).
Cash flow and financing
Cash and cash equivalents at 31 December 2020 were RM2.29m (31 December 2019: RM0.08m).
On 24 January 2020, the Group converted a loan of approximately RM8.40m into ordinary shares of BiON plc. The loan had been procured during 2019, for working capital purposes, from a director of the Company, Syed Nazim Syed Faisal.
On 6 February 2020, the Group, via its subsidiary, BiON Sdn Bhd, entered into a facility agreement with Serba Dinamik Sdn Bhd, obtaining a loan of RM10m for working capital purposes at the rate of 5% per annum, which was fully drawdown during the year.
On 24 February 2020, the Group, via its subsidiary, BiON Sdn Bhd, obtained a loan facility from SME Bank Development Malaysia Bhd amounting to RM55.3m (refer to note 14 for further details). During the year, the total drawdown was RM49.28m.
Post period, as announced on 31 March 2022, the Company conditionally raised GBP1m before expenses through a placing of new Ordinary Shares (the "Proposed Placing"). The Proposed Placing remains conditional on the resumption of trading in the Company's Ordinary Shares on AIM, which is expected to occur at 8.00am BST on 20 April 2022. The net proceeds of the Proposed Placing, following the settlement of outstanding creditors of the Company, are estimated at about GBP600,000.
The Company's broker, Optiva Securities ("Optiva"), will receive a commission of 6% of the funds raised in the Proposed Placing. In addition, the Company has agreed, subject to completion of the Proposed Placing, to issue Optiva warrants exercisable over 20,000,000 Ordinary Shares at 0.3 pence for a period of three years from the resumption of trading of its Ordinary Shares on AIM.
The Placing Price of 0.3 pence per placing share represents a discount of approximately 81.82% to the closing mid-market price of 1.65 pence per Ordinary Share on 1 October 2021, being the date on which trading in the Company's Ordinary Shares on AIM was suspended.
Receivables
Trade and other receivables (before provision for impairment) amounted to RM142.79m as of 31 December 2020 (31 December 2019: RM19.87m). This included an amount of RM10.51m (2019: RM10.51m) that was due to the Group from Concord Green Energy Sdn Bhd ("CGE"). Post year end, CGE fully settled the entire outstanding amount. As a result, this had a positive impact on other income where the impairment charge of RM1.44m from the prior year was written back.
Having considered the age profile of the total receivable amounts as at balance sheet date and until the date of signing of the annual report, the Directors have decided to be cautious and made the decision to impair almost all receivables (trade receivables and non-trade receivables not yet collected and with no further correspondence to suggest recoverable) by RM118.73m, which includes RM46.65m due to the Group from Megagreen Energy Sdn Bhd and the balances are mostly from the Indonesian projects. Following the provision for impairment, trade and other receivables amounted to RM17.15m as of 31 December 2020 (31 December 2019: RM19.06m), which is mainly due to EPCC works delivered in Q4 2020. The Group commenced collection of these receivables in Q3 2021, which it used to pay some of its suppliers for the related projects.
Going concern
The Group made a loss for the year of RM121.57m (2019: RM0.85m profit) and recorded a net cash outflow from operating activities of RM12.90m (2019: inflow of RM0.44m). At the reporting date, the Group held cash and cash equivalents of RM2.29m (2019: RM0.08m) and had current liabilities of RM112.76m (2019: RM68.23m) and was in a net liability position of RM61.69m.
In addition, the Group's indebtedness had hitherto been guaranteed by the major shareholder, Serba Dinamik. However, they are no longer in a position to do so and that required a long-term refinancing of the debt.
This resulted in the delay in the publication of the audited accounts for the year ended 31 December 2020 ("the Accounts") and the unaudited interim results for the period ended 30 June 2021 (the "Interims") while the Company sought a solution to provide a stable financial operating basis that would support its listing and therefore enable the Accounts and Interims to be published. Accordingly, the Company's ordinary shares were suspended from trading on AIM on 1 October 2021.
Throughout the period from suspension, the Company engaged with various parties with a view to injecting new resources into the existing business. However, despite pursuing a number of options, ultimately, this was not achieved, and the Board concluded that, given the liabilities within the operating business, the unpaid debtors and the operational issues and need for future financing to re-establish its business, the best outcome that could be achieved for its stakeholders would be to sell its operating business (BiON Ventures Sdn Bhd ("BVSB")) for a nominal sum but without any future recourse or liability to BiON plc. This sale was approved by the shareholders on 19 April 2022 (see note 36).
On completion of the disposal of BVSB, BiON plc ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. Thus, BiON plc has become an AIM Rule 15 cash shell company. Its strategy is to acquire a business that is seeking an AIM quoted platform via a reverse takeover. The Directors intend to consider opportunities in a number of sectors and will focus on an acquisition that can create value for shareholders in the form of capital growth and/or dividends.
The definition of a going concern is that of "any entity unless its management intends to liquidate the entity or to cease trading, or has no realistic alternative to liquidation or cessation of operations". The Directors have taken the decision to cease trading through the disposal of all subsidiaries of the Company and, as such, have prepared the financial statements on a basis other than a going concern. The financial statements have been prepared on a basis that takes into account the likely realisation of assets and liabilities, but which does not take into account any liabilities to which the Company was not committed to as at 31 December 2020; for the purposes of these financial statements, this shall be referred to as a "realisation basis of preparation". Assets have not been revalued upwards in cases where the potential realisation of assets might be greater than the value held within the financial statements, nor have write downs been made to assets or liabilities recognised which have arisen as a result of events which have occurred subsequent to 31 December 2020. The Directors do not consider that the realisation basis of preparation has given rise to any material differences compared to the financial statements being prepared on a going concern basis.
Details of the Disposal
The Company disposed of its main operational subsidiary, BVSB, which includes its trading group. Therefore, the Company has executed the Disposal Agreement as at the date of approving this report.
Under the terms of the Disposal Agreement, Minnos Ventures Inc, acquired the entire issued capital of BVSB for a total consideration of GBP1.00.
The disposal represented a fundamental change of business for the Company.
Auditor's report
The audit report on the Group's accounts was one of a disclaimer of opinion on the basis that l ate in the audit completion process, the auditor became aware of new information that led them to conclude that significant amounts of the audit work, previously thought to be complete, would need to be re-performed to gain sufficient appropriate audit evidence over multiple areas of the financial statements, including key areas of judgement and estimation. In particular, the audit work around property, plant and equipment, trade receivables, related party balances, revenue recognition on contracts, potential unrecorded liabilities, contingent liabilities or capital commitments and going concern required additional procedures to be performed. Due to the Directors being required to approve the financial statements no later than 19 April 2022 being the date of the last extension AIM were prepared to accept after which the Company would be de-listed from AIM, the auditor was not provided the time to be able to complete the necessary, additional audit work required. Accordingly, the auditor was unable to confirm or verify by alternative means, the areas of the financial statements referred to above. As a result of this, the auditor was unable to determine whether any adjustments might have been found necessary in respect of the valuation of property, plant and equipment; recorded or unrecorded trade receivables, related party balances, liabilities, contingent liabilities or capital commitments; recognition of revenue; and the elements making up the consolidated statement of financial position, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows.
Publication of annual report and accounts
The Company's annual report and accounts for the year ended 31 December 2020 has been published today and is available on the BiON website in the Investor Relations section under 'Reports and Accounts': https://www.bionplc.com/
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
31.12.2020 31.12.2019
Note RM'000 RM'000
ASSETS (Restated)
NON-CURRENT ASSETS
Intangible assets 5 722 776
Property, plant and equipment 6 88,713 44,578
Right-of-use assets 12 (a) 4,826 4,963
Total non-current assets 94,261 50,317
----------- -----------
CURRENT ASSETS
Trade and other receivables 7 17,148 17,060
Amount due from customer contracts 8 401 401
Amounts due from related parties 9 1,786 59,654
Cash and cash equivalents 10 2,287 83
Total current assets 21,622 77,198
----------- -----------
Total assets 115,883 127,515
=========== ===========
EQUITY
Stated capital 11 69,458 61,052
Foreign translation reserve 26 (2,586) (2,683)
Retained loss (124,685) (3,529)
Merger reserve 26 (4,028) (4,028)
Total shareholders' equity (61,841) 50,812
Non-controlling interests 148 163
Total equity (61,693) 50,975
----------- -----------
CURRENT LIABILITIES
Trade and other payables 13 108,280 52,791
Lease liabilities 12 (b) 457 409
Short-term borrowings 14 2,590 15,033
Income tax liabilities 22 1,429 -
Total current liabilities 112,756 68,233
----------- -----------
NON-CURRENT LIABILITY
Government grants deferred income 15 83 96
Long-term borrowings 14 56,690 -
Lease liabilities 12 (b) 5,636 5,818
Amounts due to directors 23 2,329 2,311
Deferred taxation 16 82 82
Total non-current liabilities 64,820 8,307
----------- -----------
Total liabilities 177,576 76,540
----------- -----------
Total liabilities and equity 115,883 127,515
=========== ===========
The notes to the financial statements form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
YEARED YEARED
31.12.2020 31.12.2019
Note RM'000 RM'000
(Restated)
Revenue 17 103,673 24,061
(21,1 83
Cost of sales (97,408) )
Gross profit 6,265 2,878
Other income 18 6,481 6,442
Less: operating expenses
Administrative expenses (132,199) (8,839)
Operating (loss)/profit (119,453) 4 81
Finance income 19 1,982 2,265
Finance costs 20 (2,783) (1,810)
(Loss)/profit before taxation 21 (120,254) 936
Income tax expense 22 (1,311) (82)
(Loss)/profit for the year (121,565) 854
------------- -------------------
Other comprehensive profit/(loss)
Exchange difference on translation of foreign
operations 97 (184)
Total comprehensive (loss)/profit (121,468) 670
============= ===================
(Loss)/profit for the year attributable
to: -
- Owners of the company (121,550) 732
- Non-controlling interest (15) 122
(121,565) 854
============= ===================
Total comprehensive (loss)/profit attributable
to: -
- Owners of the company (121,453) 548
- Non-controlling interest (15) 122
(121,468) 670
============= ===================
(Loss)/profit per share:
Basic (RM) 25 (0.29) 0.002
Diluted (RM) 25 (0.29) 0.002
============= ===================
The notes to the financial statements form an integral part of these financial statements.
All amounts are derived from continuing operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Foreign Merger Retained Attributable Non- Total
capital translation reserve profit to owners controlling equity
reserve of the Company interest
Note RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Balance as at 1
January 2019 61,052 (2,499) (4,028) (3,350) 51,175 41 51,216
Effects on
adoption of
IFRS
16* - - - (911) (911) - (911)
Loss for the
year - - - (187) (187) 122 (65)
Translation of
foreign
operations - (184) - - (184) - (184)
--------- ------------- --------- ---------- --------------- -------------- ----------
Total
comprehensive
income /(loss) - (184) - (1,098) (1,282) 122 (1,160)
--------- ------------- --------- ---------- --------------- -------------- ----------
Balance at 31
December 2019 61,052 (2,683) (4,028) (4,448) 49,893 163 50,056
Prior year
adjustment - - - 919 919 - 919
--------- ------------- --------- ---------- --------------- -------------- ----------
Balance at 31
December 2019
- restated 61,052 (2,683) (4,028) (3,529) 50,812 163 50,975
Loss for the
year - - - (121,550) (121,550) (15) (121,565)
Translation of
foreign
operations - 97 - - 97 - 97
--------- ------------- --------- ---------- --------------- -------------- ----------
Total
comprehensive
loss - 97 - (121,550) (121,453) (15) (121,468)
--------- ------------- --------- ---------- --------------- -------------- ----------
Transaction with
owners
Issuance of
shares** 11 8,406 - - - 8,406 - 8,406
Capital
contribution*** - - - 394 394 - 394
Balance at 31
December 2020 69,458 (2,586) (4,028) (124,685) (61,841) 148 (61,693)
--------- ------------- --------- ---------- --------------- -------------- ----------
The notes to the financial statements form an integral part of these financial statements.
* Details explained in note 3 (iv), changes in accounting policies. ** The issue of shares is recognised net of fundraising cost totaling to RM Nil.
*** The capital contribution is recognized for the waiver of interest on loan from related party whom being a significant shareholder in BiON plc.
CONSOLIDATED STATEMENT OF CASH FLOWS
YEARED YEARED
31.12.2020 31.12.2019
Note RM'000 RM'000
(Restated)
CASH FLOW FROM OPERATING ACTIVITIES
(Loss)/profit before taxation (120,254) 936
Adjustments for:
Amortisation of intangible assets 54 55
Depreciation of property, plant and equipment 6 2,105 2,126
Depreciation of right-of-use assets 611 615
Government grant income (13) (13)
Impairment loss: -
- Trade receivables 71,012 -
- Non-trade receivables 4,822 868
- Amount owing by related parties 42,893 -
- Allowance written back (1,435) (140)
Interest expenses: -
- Lease liabilities interest 20 645 671
- Loan interest 20 2,132 1,131
Interest income 19 (1,982) (2,265)
Gain on disposal of right-of-use assets (53) -
Property, plant and equipment written off 1,631 -
Unrealised gain on foreign exchange (276) (59)
Waived of amount due to related parties (3,758) (6,329)
Cash flow from/ (used in) operating activities
before working capital changes (1,866) (2,404)
Decrease/(increase) in trade and other receivables (72,721) 3,990
Increase in trade and other payables 62,417 22,293
(Increase)/decrease in amount due from related
parties 1,003 (22,309)
------------- -----------
Cash flow from/ (used in) operating activities (11,167) 1,570
Interest paid (1,738) (1,131)
Interest received - -
------------- -----------
NET CASH FLOW FROM OPERATING ACTIVITIES (12,905) 439
------------- -----------
CASH FLOW FOR INVESTING ACTIVITIES
Proceeds from disposal of right-of-use assets 130 -
Purchase of property, plant and equipment 6 (36,441) (5,434)
Purchase of right-of-use assets (89) -
------------- -----------
NET CASH FLOW USED IN INVESTING ACTIVITIES (36,400) (5,434)
------------- -----------
CASH FLOW FOR FINANCING ACTIVITIES
Drawdown of term loans 59,280 9,142
Repayment of lease liabilities (1,241) (1,042)
Repayment of term loans (6,627) (3,309)
------------- -----------
NET CASH FLOW FROM FINANCING ACTIVITIES 51,412 4,791
------------- -----------
Net increase/(decrease) in cash and cash
equivalents 2,108 (204)
Effects of foreign exchange translation 97 (184)
Cash and cash equivalents at the beginning
of the year 83 471
------------- -----------
Cash and cash equivalents at the end of the
year 10 2,287 83
------------- -----------
The notes to the financial statements form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIODED 31 DECEMBER 2020
1. GENERAL INFORMATION
BiON plc ("the Company") was incorporated as a public limited company in Jersey with registration number 119200 on 7 August 2015. The registered office of the Company is 12 Castle Street, St. Helier, Jersey JE2 3RT, Channel Islands.
Pursuant to a special resolution ratified at the Extraordinary General Meeting of the Company held on 30 April 2020, the Company has changed its name to BiON plc. Accordingly the change of name was taken effective from 1 May 2020, upon receiving the certificate from the Registrar of Companies in Jersey.
The Company is listed on the AIM market of the London Stock Exchange. For the year under review, the Company's nature of operations was to act as the holding company for a group of subsidiaries that are involved in research and development, provision of professional engineering consultancy and process design services in the areas of industrial biotechnology, pollution control and renewable energy; and engineering, procurement and construction of various waste treatment plants/systems; development, commercialisation, operation and maintenance of
renewable energy plants .
Post period, following the disposal of the Group's operating entity, BiON Ventures Sdn Bhd (which holds the Group's trading subsidiaries), the Company is an AIM Rule 15 cash shell focused on acquiring a business that is seeking an AIM quoted platform via a reverse takeover.
The consolidated financial statements include the financial statements of the Company and its controlled subsidiaries (the "Group") as follows:
Place of Registered
Name incorporation address Principal activity Effective interest
31.12.2020 31.12.2019
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BiON Ventures
Sdn Bhd (fka
Green & Smart
Ventures Sdn
Bhd) Malaysia Note 1 Holding company 100% 100%
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BiON Sdn Bhd
(fka Green &
Smart Sdn Bhd) Malaysia Note 1 IPP & EPCC contractor 100% 100%
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BiON Suria Sdn Malaysia Note 1 IPP & EPCC contractor 100% -
Bhd
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Our Energy Group
(M) Sdn Bhd Malaysia Note 2 IPP 51% 51%
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Note 1 - registered address: B-1-15, Block B, 8 Avenue, Jalan Sungai Jernih 8/1, Section 8, 46050 Petaling Jaya, Selangor.
Note 2 - registered address: 3-2, 3rd. Mile Square, No. 151, Jalan Klang Lama, Batu 3 1/2 , 58100 Kuala Lumpur.
2. BASIS OF PREPARATION
The financial statements have been prepared in accordance with UK adopted International Accounting Standards, including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC").
As permitted by Companies (Jersey) Law 1991 only the consolidated financial statements are presented.
The financial statements are presented in Ringgit Malaysia ("RM") unless otherwise stated and is the currency of the primary economic environment in which the Group operates. All values are rounded to the nearest thousand ringgits ("RM'000") except where otherwise indicated.
Going Concern
The Group made a loss for the year of RM121.57m (2019: RM0.85m profit) and recorded a net cash outflow from operating activities of RM12.90m (2019: inflow of RM0.44m). At the reporting date, the Group held cash and cash equivalents of RM2.29m (2019: RM0.08m) and had current liabilities of RM112.76m (2019: RM68.23m) and was in a net liability position of RM61.69m.
In addition, the Group's indebtedness had hitherto been guaranteed by the major shareholder, Serba Dinamik. However, they are no longer in a position to do so and that required a long-term refinancing of the debt.
This resulted in the delay in the publication of the audited accounts for the year ended 31 December 2020 ("the Accounts") and the unaudited interim results for the period ended 30 June 2021 (the "Interims") while the Company sought a solution to provide a stable financial operating basis that would support its listing and therefore enable the Accounts and Interims to be published. Accordingly, the Company's ordinary shares were suspended from trading on AIM on 1 October 2021.
Throughout the period from suspension, the Company engaged with various parties with a view to injecting new resources into the existing business. However, despite pursuing a number of options, ultimately, this was not achieved, and the Board concluded that, given the liabilities within the operating business, the unpaid debtors and the operational issues and need for future financing to re-establish its business, the best outcome that could be achieved for its stakeholders would be to sell its operating business (BiON Ventures Sdn Bhd ("BVSB")) for a nominal sum but without any future recourse or liability to BiON plc. This sale was approved by the shareholders on 19 April 2022 (see note 36).
On completion of the disposal of BVSB, BiON plc ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. Thus, BiON plc has become an AIM Rule 15 cash shell company. Its strategy is to acquire a business that is seeking an AIM quoted platform via a reverse takeover . The Directors intend to consider opportunities in a number of sectors and will focus on an acquisition that can create value for shareholders in the form of capital growth and/or dividends.
The definition of a going concern is that of "any entity unless its management intends to liquidate the entity or to cease trading, or has no realistic alternative to liquidation or cessation of operations". The Directors have taken the decision to cease trading through the disposal of all subsidiaries of the Company and, as such, have prepared the financial statements on a basis other than a going concern. The financial statements have been prepared on a basis that takes into account the likely realisation of assets and liabilities, but which does not take into account any liabilities to which the Company was not committed to as at 31 December 2020; for the purposes of these financial statements, this shall be referred to as a "realisation basis of preparation". Assets have not been revalued upwards in cases where the potential realisation of assets might be greater than the value held within the financial statements, nor have write downs been made to assets or liabilities recognised which have arisen as a result of events which have occurred subsequent to 31 December 2020. The Directors do not consider that the realisation basis of preparation has given rise to any material differences compared to the financial statements being prepared on a going concern basis.
Details of the Disposal
The Company disposed of its main operational subsidiary, BVSB, which includes its trading group. Therefore, the Company has executed the Disposal Agreement as at the date of approving this report.
Under the terms of the Disposal Agreement, Minnos Ventures Inc, acquired the entire issued capital of BVSB for a total consideration of GBP1.00.
The disposal represented a fundamental change of business for the Company.
3. basis of COnSOLIDATION
The consolidated financial statements comprise the financial information of the Company and its subsidiaries made up to the end of the reporting period. Control is achieved when the Group 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 over the investee. The consolidated financial statements present the results of the Company and its subsidiaries and joint arrangements as if they formed a single entity. Inter-company transactions and balances between Group companies are therefore eliminated in full. The financial information of subsidiaries is included in the Group's financial statements from the date that control commences until the date that control ceases.
On 6 May 2016, the Company entered into agreements with all of the shareholders of BiON Ventures Sdn Bhd ("Green & Smart Ventures Sdn Bhd") for a share for share exchange regarding the ordinary shares in BiON plc and ordinary shares in BiON Ventures. As a result of this transaction, the ultimate shareholders in the Company received shares in BiON plc in direct proportion to their original shareholdings in BiON Ventures.
The acquisition of BiON Ventures by the Company was that of a re-organisation of entities which were under common control. As such, that combination also falls outside the scope of IFRS 3 'Business Combinations' (Revised 2008). The Directors have, therefore, decided that it is appropriate to reflect the combination using the merger basis of accounting in order to give a true and fair view. No fair value adjustments were made as a result of that combination.
Post year-end, the Company disposed of its trading group (as detailed in note 2). The Directors did not consider the trading group to be discontinued as at the year-end, nor do the Directors consider that this asset was held for sale as at the year-end.
CHANGES IN ACCOUNTING POLICIES
Standards issued and not yet effective
There are several standards, amendments to standards, and interpretations which have been issued by IASB that are effective in future accounting periods that the Group has decided not to adopt early. The most significant of these are as follows:
o Amendments to IAS 37 Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) (effective for periods commencing on or after 1 January 2022);
o Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) (effective for periods commencing on or after 1 January 2022);
o Annual Improvements to IFRS Standards 2018-2020 (Amendments IFRS 1, IFRS 9, IFRS 16 and IAS 41) (effective for periods commencing on or after 1 January 2022); and
o References to Conceptual Framework (Amendments to IFRS 3) (effective for periods commencing on or after 1 January 2022).
The Directors do not anticipate the adoption of any of the above listed changes to have a material impact to the Group's financial statements.
4. SIGNIFICANT ACCOUNTING POLICIES
4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Group financial statements in conformity with Financial Report Standard requires the use of judgements, estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure made at the date of the financial statements including the amounts of revenue and expenses during the financial year. Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on directors and management's best knowledge of current events and actions, actual result may differ from those estimates.
The estimates and judgements that affect the application of the Group accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, revenue and expenses are discussed below:
a) Impairment of assets
When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.
b) Impairment of trade and other receivables
An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivable financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.
c) Construction contracts
As described in note 4.14, the Group's accounting approach w here the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.
Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised as expenses in the year in which they are incurred.
The carrying amounts of the Group's construction contracts due from/(to) customers at the end of the reporting year are disclosed in note 8 including any allowance for impairment if there is a material uncertainty to fully recover costs of each contract.
d) Going Concern
The financial statements of the Group are prepared on a basis other than the going concern basis. As stated in note 2, the Company disposed of its subsidiaries post year-end and at the date of signing this report, the Company is an AIM Rule 15 entity. The definition of a going concern is that of "any entity unless its management intends to liquidate the entity or to cease trading, or has no realistic alternative to liquidation or cessation of operations". The Directors have taken the decision to cease trading through the disposal of all subsidiaries of the Company and, as such, have prepared the financial statements on a basis other than a going concern. The financial statements have been prepared on a basis that takes into account the likely realisation of assets and liabilities, but which does not take into account any liabilities to which the Company was not committed to as at 31 December 2020; for the purposes of these financial statements, this shall be referred to as a "realisation basis of preparation". Assets have not been revalued upwards in cases where the potential realisation of assets might be greater than the value held within the financial statements, nor have write downs been made to assets or liabilities recognised which have arisen as a result of events which have occurred subsequent to 31 December 2020. The Directors do not consider that the realisation basis of preparation has given rise to any material differences compared to the financial statements being prepared on a going concern basis.
e) Revenue Recognition
Revenue is recognised when the amount of revenue and cost incurred or to be incurred can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the Group at the point of transaction. Note 4.11 describes the Group's accounting approach when recognizing revenue.
The Directors will then continue to monitor the outstanding receivable balances arising from recognizing the revenue. The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience or in light of new information and the current economic environment.
4.2 FUNCTIONAL AND FOREIGN CURRENCIES a) Transactions and balances
Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.
b) Foreign operations
Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end of the reporting period. Revenues and expenses of foreign operations are translated at exchange rates approximating those ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity under the foreign exchange translation reserve. On the disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that particular foreign operation is reclassified from equity to profit or loss.
4.3 FINANCIAL INSTRUMENTS
4.3.1 Financial Assets
On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss ("FPVL"), held-to-maturity investments, loans and receivables financial assets, or available-for sale financial assets, as appropriate. The Group currently holds financial assets as:
Loans and receivables
These assets are non-derivative financial assets that have fixed or determinable payments that are not quoted in an active market. They arise through the provision of services to customers (trade receivables). They are initially recognised at fair value plus transaction costs that are directly attributable to the acquisition or issue and subsequently carried at amortised cost using the effective interest method less provision for impairment. The effect of discounting on these financial instruments is not considered to be material.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all the amounts due under the term's receivable. The amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
4.3.2 Financial Liabilities
All financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
4.3.3 Equity Instruments
Instruments classified as equity are measured at cost and are not remeasured subsequently.
Ordinary shares
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds.
4.3.4 Derecognition
A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
4.4 PROPERTY, PLANT AND EQUIPMENT a) Owned Assets
Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses, if any. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to the location and condition for its intended use.
b) Assets under construction
Assets under construction are items of property, plant and equipment that are yet to be completed or ready for use. These are held at historical cost less any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is not provided until such a time that the asset is capable of operating in the manner intended by management. Upon completion of the asset, the assets will be carried at fair value determined annually by the directors.
c) Depreciation
Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straight-line basis to write off the depreciable amount of the assets net of the estimated residual values over their estimated useful lives. Assets under construction are depreciated from the date they are ready for use. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are: -
Estimated Useful Lives
Office equipment 5 -10 years
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Furniture and fittings 5 -10 years
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Renovation 5 -10 years
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Industrial building 20 years
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The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.
d) Subsequent expenditure
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from de-recognition of the asset is recognised in profit or loss.
4.5 INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and any accumulated impairment losses (note 5). The useful lives of intangible assets are assessed to be either finite or indefinite.
Intangible assets with a finite life are amortised on straight-line basis over the estimated economic useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year-end.
The amortisation expense on intangible assets with finite useful lives is recognised in the profit or loss in the expense category consistent with the function of the intangible asset.
a) Trademark
Trademarks are stated at cost less accumulated amortisation and any impairment losses (note 5). Trademarks are tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at cash generating unit level. Trademarks are amortised over a period of ten (10) years.
4.6 IMPAIRMENT a) Impairment of Financial Assets
The recognition of an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit and loss ("FVPL"). ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of timing of the default (a lifetime ECL).
For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment which could affect debtors' ability to pay.
The Group considers a financial asset in default when contractual payments are past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or 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 financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
b) Impairment of Non-Financial Assets
The carrying values of assets, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value--in--use, which is measured by reference to discounted future cash flow.
An impairment loss is recognised in profit or loss immediately.
When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined net of amortisation and depreciation, had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.
4.7 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less.
4.8 LEASES
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognizes lease liabilities representing the obligations to make lease
payments and right-of-use assets representing the right to use the underlying leased assets.
a) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. The accounting policy for impairment is disclosed in note 4.6 (b).
b) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
c) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.
4.9 TAXES
Income tax for the period comprises current and deferred tax.
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting period and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.
Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period/year and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year/period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting year/period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity. Deferred tax arising from a business combination is included in the resulting goodwill or excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the business combination costs.
4.10 EMPLOYEE BENEFITS a) Short-term benefits
Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss and included in the development costs, where appropriate, in the period/year in which the associated services are rendered by employees of the Group.
b) Defined contribution plans
The Group's contribution to defined contribution plans are recognised in profit or loss in the period/year to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.
4.11 REVENUE AND OTHER INCOME
Revenue is recognised at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer net of sales taxes and discounts. A performance obligation may be satisfied at a point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation.
(i) Revenue from construction contracts
The Group contracts with its customers for construction services. Revenue from construction contracts is recognised over time using the input method, which is based on the actual cost incurred to date on the construction project as compared to the total budgeted cost for the respective construction project.
(ii) Government grants
Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis over the period necessary to match them with the related costs which they are intended to compensate for.
Grants that compensate the Group for the costs of assets are recognised in profit or loss on a systematic basis over the expected life of the related asset.
(iii) Revenue from Sale of Electricity
Revenue from the sale of electricity generated from the renewable energy plant is recognised as and when the electricity is delivered to the off-taker, based on the invoiced value of sale of electricity, computed at a predetermined rate. Accrued unbilled revenues are reversed in the following month when actual billing occurs.
4.12 BORROWING COSTS
Borrowing costs, directly attributable to the acquisition, construction or production of a qualifying asset, are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.
All other borrowing costs are recognised in the profit or loss as expenses in the period in which they are incurred. No interest costs were capitalised during the period.
Investment income earned on the temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
4.13 CONTINGENT LIABILITIES
A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required, or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.
4.14 CONSTRUCTION CONTRACTS (i) Contract revenue
Revenue from construction contracts is recognised as described in note 4.11 (i).
(ii) Amount due from / (to) customer for contract work
Amount due from / (to) customer for contract work is the net amount of cost incurred for construction and contract-in-progress plus profit attributable to contract-in-progress less foreseeable losses, if any, and progress billings. Contract cost incurred to date include costs directly related to the contract or attributable to contract activities in general and costs specifically chargeable to the customer under the terms of the contract.
When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.
5. INTANGIBLE ASSETS
Trademarks Patents Total
RM'000 RM'000 RM'000
Cost
At 31 December 2019 1,319 8 1,327
Additions - - -
At 31 December 2020 1,319 8 1,327
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Trademarks Patents Total
RM'000 RM'000 RM'000
Accumulated amortisation
At 31 December 2019 544 7 551
Charge for the year 54 - 54
At 31 December 2020 598 7 605
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Net book value
At 31 December 2020 721 1 722
--------------------- ------------------------ ---------------------
At 31 December 2019 775 1 776
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(a) Trademark
The trademarks "GRASS", "POME-MAS" and "GREENPAK" are registered in Malaysia in respect of patented wastewater and bio-waste treatment technologies. These trademarks have been granted for an indefinite period, however, they are being amortised over ten (10) years in line with Management's best estimate of their expected useful life.
The remaining amortisation period of trademarks is between one (1) to two (2) years, the remaining amortisation period of patents is between two (2) to twelve (12) years.
(b) Impairment Test
The Group has assessed the recoverable amounts of intangible assets and determined that no impairment is required. The disposal of the equity interest in BVSB for a total consideration of GBP1 (One Pound Sterling) subsequent to the year-end, justified to the directors that the intangible assets do not require an impairment.
6. PROPERTY, PLANT AND EQUIPMENT
Furniture Renovations Office Equipment Assets under Industrial Motor Total
& Fittings Construction Building
Vehicles
(Restated)
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Cost
At 1 January 2019 159 3044 167 21,418 21,587 807 44,482
Addition - - - - 5,434 - 5,434
Reclassification - - - (13,876) 13,875 (807) (808)
---------------------- ---------------------- ---------------------- ---------------------- ------------------- ----------- ------------
At 1 January 2020 159 344 167 7,542 40,896 - 49,108
Addition 46 - 113 49,857 414 - 50,430
Disposal/written
off - (344) - (3,982) - - (4,326)
---------------------- ---------------------- ---------------------- ---------------------- ------------------- ----------- ------------
At 31 December 2020 205 - 280 53,417 41,310 - 95,212
---------------------- ---------------------- ---------------------- ---------------------- ------------------- ----------- ------------
Accumulated
depreciation
At 1 January 2019 53 102 90 - 2,159 442 2,846
Reclassification (442) (442)
Depreciation for
the year 15 34 32 - 2,045 - 2,126
---------------------- ---------------------- ---------------------- ---------------------- ------------------- ----------- ------------
At 1 January 2020 68 136 122 - 4,204 - 4,530
Depreciation for
the year 19 - 35 - 2,051 - 2,105
Disposals/written
off - (136) - - - - (136)
At 31 December 2020 87 - 157 - 6,255 - 6,499
---------------------- ---------------------- ---------------------- ---------------------- ------------------- ----------- ------------
Net carrying
amount
At 31 December 2020 118 - 123 53,417 35,055 - 88,713
---------------------- ---------------------- ---------------------- ---------------------- ------------------- ----------- ------------
At 31 December 2019 91 208 45 7,542 36,692 - 44,578
---------------------- ---------------------- ---------------------- ---------------------- ------------------- ----------- ------------
a) Assets under construction represents biogas power plant under construction. It is subject to depreciation only when completed and ready for use. No interest was capitalised during the financial year, but total interest capitalised to date included in the industrial building amounts to RM0.54m (2019: RM0.54m).
b) Industrial building with carrying amount of approximately RM35.06m (2019: RM36.69m) and Assets under construction with carrying amount of approximately RM53.42m (2019: RM7.54m) are pledged against the banking facility (note 14).
c) Acquisition of property, plant and equipment:
31.12.2020 31.12.2019
RM'000 RM'000
Purchase of property, plant and equipment 50,430 5,434
Finance by fixed loan (32,000) -
----------- -----------
Cash paid to acquire property, plant
and equipment 18,430 5,434
----------- -----------
d) During the year the written off assets were:
31.12.2020 31.12.2019
RM'000 RM'000
Office renovation 344 -
Assets under constructions 3,982 -
----------- -----------
4,326 -
----------- -----------
Disposal office renovation cost was due to change in new office premises and whereas assets under constructions were no longer in progress and to be constructed.
e) Motor vehicles relate to vehicles under hire purchase, which have been retrospectively reclassified to right of use assets as appropriate under IFRS 16 (note 12).
7. TRADE AND OTHER RECEIVABLES
31.12.2020 31.12.2019
RM'000 RM'000
Restated
Trade receivables 84,926 16,130
Less: allowance for impairment
loss (71,012) (1,435)
----------- ------------------------
13,914 14,695
----------- ------------------------
Other receivables & deposits 9,427 3,736
Less: allowance for impairment
loss (6,193) (1,371)
----------- ------------------------
3,234 2,365
----------- ------------------------
17,148 17,060
-----------
Allowance for impairment losses
Opening balance - Trade receivables (1,435) (1,575)
Allowance written back 1,435 140
Allowance for the year (71,012) -
(71,012) (1,435)
----------- ------------------------
Opening balance - Other receivables (1,371) (503)
Allowance for the year (4,822) (868)
----------- ------------------------
(6,193) (1,371)
----------- ------------------------
Closing balance (77,205) (2,806)
----------- ------------------------
a) The Group's normal credit terms range from 90 to 120 days (2019: 90 to 120 days). Other credit terms are assessed and varied on a case-by-case basis.
b) Trade and other receivables that are individually determined to be impaired relate to customers that have defaulted on payments or the amount due from third parties considered irrecoverable.
c) Included in the Trade Receivables is an amount of RM10.51m (2019: RM10.51m) from CGE, which was fully repaid in April 2021.
d) The amounts in Trade Receivables are analysed as follows:
31.12.2020 31.12.2019
RM'000 RM'000
Not past due 24 2
Past due by less than 3 months 69,402 -
Past due by less than 3 -
6 months - 162
Past due by 6 months and above 15,500 15,966
84,926 16,130
----------- -------------------
8. DUE FROM CUSTOMERS FOR CONSTRUCTION CONTRACTS
31.12.2020 31.12.2019
RM'000 RM'000
Aggregate cost incurred to
date 143,816 52,669
Add: attributable profits 30,888 18,386
174,704 71,055
Less: progress billings (174,303) (70,654)
401 401
----------- -----------
Represented by:
Amounts due from customer
contracts 401 401
9. AMOUNTS DUE FROM/(TO) RELATED PARTIES
Party Relationship* Trade Receivables Other Receivables Total
RM'000 RM'000 RM'000
31.12.2020
Megagreen
Energy Sdn
Bhd Associate 32,507 15,924 48,431
Less: Allowance
for impairment
loss (32,507) (14,147) (46,654)
----------------------- ----------------------- -----------------------
- 1,777 1,777
----------------------- ----------------------- -----------------------
K2M Ventures Ultimate holding
Sdn Bhd co. - 10 10
Less: Allowance
for impairment
loss - (1) (1)
----------------------- ----------------------- -----------------------
- 9 9
----------------------- ----------------------- -----------------------
- 1,786 1,786
----------------------- ----------------------- -----------------------
Party Relationship* Trade Receivables Other Receivables Total
RM'000 RM'000 RM'000
31.12.2019
(Restated)
Megagreen
Energy Sdn
Bhd Associate 51,497 11,853 63,350
Less: Allowance
for impairment
loss (3,762) - (3,762)
----------------------- ----------------------- -----------------------
47,735 11,853 59,588
Makmur Hidro
Sdn Bhd. Associate - 66 66
----------------------- ----------------------- -----------------------
47,735 11,919 59,654
----------------------- ----------------------- -----------------------
* Relationship
a) The Group via its subsidiary, BiON Sdn Bhd holds 15% shares in Megagreen Energy Sdn Bhd and Datuk Syed Nazim Syed Faisal was appointed as Director effective 3 July 2020.
b) Mr. Saravanan, who was a director in BiON plc for the year to 31 December 2019 and is a significant shareholder in BiON Plc, is also one of the appointed Directors in Makmur Hydro Sdn Bhd. Subsequently he has resigned as director in BiON plc on 31 January 2020.
c) K2M Ventures Sdn Bhd, holds 32.52% of the share's capital in BiON plc.
31.12.2020 31.12.2019
RM'000 RM'000
Allowance for impairment losses
Opening balance (3,762) (3,762)
Allowance for the year (42,892) -
Closing balance (46,654) (3,762)
----------- -----------
Amounts due from related parties principally comprise trade debts due from Megagreen Energy Sdn Bhd ("MGE"). The amounts due are collectible in cash, have arisen in the ordinary course of the business of the Group and are subject to credit terms of 30 days. The amounts owing, before impairment, are analysed as follows:
31.12.2020 31.12.2019
RM'000 RM'000
Not past due - 20,539
Past due by less than 3 months - -
Past due by less than 3 - - -
6 months
Past due by 6 months and above 32,507 30,958
32,507 51,497
----------- -----------
Other than trade debts, the amount due from MGE also arose from non-trade activities. These amounts due are collectible in cash, have arisen in the ordinary course of the business of the Group and are subject to credit terms of 30 days. The amounts owing, before impairment, are analysed as follows:
31.12.2020 31.12.2019
RM'000 RM'000
Not past due - 11,853
Past due by less than 3 months - -
Past due by less than 3 - - -
6 months
Past due by 6 months and above 15,924 -
15,924 11,853
----------- -----------
During the year, MGE has made repayment totaling to RM18.99m, partly by offsetting some of the balance against the acquisition of two (2) BPP's amounting to RM13.99m and the balance via cash.
The outstanding amount had been fully written-down as the Company does not expect any recovery of this debt.
10. CASH AND CASH EQUIVALENTS
Cash and cash equivalents included in the cash flow statement comprise the following amounts:
31.12.2020 31.12.2019
RM'000 RM'000
Cash and bank balances 2,287 83
----------- -----------
11. STATED CAPITAL
No. of shares RM'000
Issued and Fully Paid-Up at
no par value
31 December 2019 345,375,812 61,052
Issuance of shares:
On 27 January 2020 86,343,953 8,406
31 December 2020 431,719,765 69,458
---------------- -------------------
On 24 January 2020, the Group announced that, at the Extraordinary General Meeting ("EGM"), the Resolution placed in respect of the approval of the waiver under Rule 9 of the City Code and taken by Independent Shareholders on a poll was approved in regards to loan conversion to ordinary shares.
In view of the above and other the relevant approved application, i.e. London Stock Exchange, on 27 January 2020, the loan of RM8.4 million from Datuk Syed Nazim Syed Faisal was converted into 86,343,953 new Ordinary Shares representing 20 per cent (20%) of the enlarged share capital at an effective share price of approximately 1.85 pence. As a result of the shares issued to Datuk Syed Nazim Syed Faisal's, the Concert Party's shareholding increased to 172,687,543 Ordinary Shares (40% of the enlarged share capital of the Group).
12. LEASES
Group as a lessee
The Group has lease contracts for lands. The Group's obligations under these leases are secured by the lessor's title to the leased assets. The Group is restricted from assigning and subleasing the leased assets.
The Group also has certain leases of office equipment with low value. The Group applies the 'lease of low-value assets' recognition exemptions for these leases.
a) Right-of-use assets
Motor
Land Vehicles Total
RM'000 RM'000 RM'000
Cost
At 1 January 2020 6,979 807 7,786
Additions - 551 551
Disposal - (577) (577)
----------
At 31 December 2020 6,979 781 7,760
------- ---------- --------
Accumulated depreciation
At 1 January 2020 2,219 604 2,823
Depreciation 453 158 611
Disposal - (500) (500)
------ ------ ----------
At 31 December 2020 2,672 262 2,934
------ ------ ----------
Net carrying amount at 31
December 2020 4,307 519 4,826
------ ---- ------
Net carrying amount at 31
December 2019 4,760 203 4,963
------ ---- ------
During the financial year, the Group made the following cash payments to purchase right-of-use assets:
2020 2019
RM'000 RM'000
Purchase of right-of-use assets 551 -
Finance by lease liabilities (462) -
Cash payment on purchase of right-of-use 89 -
assets
------- -------
The net carrying amount of motor vehicles under hire purchase are RM0.52m (2019: RM0.20m).
b) Lease liabilities
The carrying amount of lease liabilities is as follows: -
2020 2019
RM'000 RM'000
Minimum hire purchase and lease
liabilities
- not later than 1 year 1,071 1,045
- later than one year and not
later than five years 4,234 4,057
- Later than 5 years 4,248 5,177
-------- --------
9,553 10,279
Less: Future interest charges (3,460) (4,052)
-------- --------
At 31 December 6,093 6,227
-------- --------
Repayable as follows:
Current liabilities
- not later than 1 year 457 409
Non-current liabilities
- later than one year and not
later than five years 2,318 1,962
- Later than 5 years 3,318 3,856
------ ------
5,636 5,818
6,093 6,227
------ ------
Summarised as follows:
Motor vehicle under hire purchase 570 387
Land lease 5,523 5,840
------ ------
6,093 6,227
------ ------
c) Amounts recognised in profit or loss
2020 2019
RM'000 RM'000
(Restated)
Depreciation of right of use
assets 611 615
Interest expenses on lease liabilities 645 671
Lease expenses not capitalised
in lease liabilities:
- Expenses related to low value
assets 12 11
- Expenses related to short term
lease 649 486
At 31 December 1,917 1,783
------- -----------
d) Total cash outflow
The Group had a total cash outflow for leases of RM1.24m in the current financial year (2019: RM1.04m).
13. TRADE AND OTHER PAYABLES
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
Trade payables 89,043 35,780
Other payables and accruals 19,237 17,011
108,280 52,791
----------- -----------
The normal credit terms granted to the Group by the suppliers are 30 to 90 days (2019: 90 days) from invoice date. Other credit terms are assessed and varied on a case-by-case basis.
14. BORROWINGS
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
Short-term borrowings
Mezzanine loan (Note 14.1) - 9,269
Term loans (Note 14.2) - 5,764
Term loans (Note 14.3) 750 -
Term loans (Note 14.4) 1,840 -
2,590 15,033
----------- -----------
Long-term borrowings
Term loan (Note 14.3) 48,530 -
Term loan (Note 14.4) 8,160 -
----------- -----------
56,690 -
----------- -----------
Maturity of borrowings:
Not later than 1 year 2,590 15,033
Later than 1 year but not later 16,369 -
than 5 years
Later than 5 years 40,321 -
----------- -----------
59,280 15,033
----------- -----------
14.1 Mezzanine loan
a) During the year, the interest free loan of RM8.40m with Datuk Syed Nazim Syed Faisal was fully converted into ordinary shares. (Refer to note 11)
b) During the year, the 6-month loan of approximately RM0.51m with a UK-based lender at an interest rate of 1.5% per month was fully repaid.
14.2 Term loan
During the year, term loan with Malaysian Debt Ventures (MDV) has been fully repaid. Inconsideration of the full settlement, MDV irrevocably and unconditionally releasees, reassigns and discharges the Charged Assets and all security created under the Debenture and all rights, interest, titles and benefits of MDV under the Debenture shall cease and terminate.
14.3 Term loan
On 24 February 2020, SME Bank Development Malaysia Bhd (SME) has approved bank borrowing (Islamic bank facilities) of RM55.3m for the Group via its subsidiary, BiON Sdn Bhd:
Bank Borrowing RM '000 Purpose
Facility 32,000 To part finance the acquisition of
1 2 biogas power plant
-------- ---------------------------------------
Facility 6,200 To redeem existing facility from MDV
2
-------- ---------------------------------------
Facility 12,100 To part finance remaining project cost
3 of biogas power plant
-------- ---------------------------------------
Revolving 5,000 For working capital requirement
credit
-------- ---------------------------------------
During the year, SME has successfully disbursed the following:
Bank Borrowing RM'000
Facility 1 32,000
Facility 2 6,200
Facility 3 (part) 11,080
-------
49,280
-------
The term loans are secured against:
(i) Fixed and floating charges over the present and future assets;
(ii) Assignment of all rights, interest and benefits and the proceeds from the sales of the electricity;
(iii) Assignment of all rights, benefits interest and title as stated under industrial building and assets under construction;
(iv) Joint and severally guaranteed by the Directors/Shareholders of the Company; (v) Corporate guarantee by the ultimate holding company.
The term loan is repayable over period of 15 years and bear interest rate of 1.5% above bankers base financing rate per annum.
14.4 Loan from related company
The loan from related company is unsecured, repayable over period of 5 years and bear an interest at rate of 5% per annum.
15. DEFERRED GRANT INCOME
The Group received a government grant in financial years 2007 and 2008 which was provided for the project "Greenpak", to develop a new individual septic tank using Upflow Anaerobic Sludge Blanket principle. The grant income is amortised on a systematic basis over the useful life of the related patent.
During the financial year ended 31 December 2020, an amortised amount of RM13,000 was recognised (2019: RM13,000) as other income in profit or loss.
16. DEFERRED TAXATION
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
At beginning of the year 82 -
Charge to profit or loss for
the year - 82
At end of the year 82 82
----------- -----------
17. REVENUE
31.12.2020 31.12.2019
RM'000 RM'000
Contract revenue 103,649 21,602
Sale of electricity 24 2,459
103,673 24,061
----------- -----------
18. OTHER INCOME
31.12.2020 31.12.2019
RM'000 RM'000
Deferred grant income 13 13
Insurance claim 452 41
Wage subsidy 140 -
Rental income 10 -
Gain on disposal of right-of-use 53 -
assets
Impairment loss written back 1,435
Realised gain on foreign exchange 39 -
Unrealised gain on foreign exchange 580 59
Waiver of debts 3,759 6,329
6,481 6,442
----------- -----------
19. FINANCE INCOME
The finance income recognised is in relation to the interest charged for advances given to the related party, at a rate of 18% per annum (1.5% per month) (see note 24 for detail).
20. FINANCE COSTS
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
Bank charges 6 8
Bank interest - 1
Mezzanine loan interest 55 443
Term loan interest 2,077 687
----------- -----------
2,132 1,131
----------- -----------
Interest on lease liabilities 645 671
----------- -----------
2,783 1,810
----------- -----------
21. LOSS BEFORE TAXATION
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
Loss before taxation is arrived
at after charging/(crediting):
-
Auditors' remuneration
Fees payable to Company's auditor and
its associates
for the audit of the consolidated financial
statements 262 177
Amortisation of intangible assets 54 55
Depreciation of property, plant
and equipment 2,105 2,126
Depreciation of right-of-use assets 611 615
Gain on disposal of right-of-use (53) -
assets
Government grant income (13) (13)
Impairment loss on trade receivables 71,012 -
Impairment loss on non-trade receivables 4,822 868
Impairment loss on amount owing
by related parties 42,893 -
Impairment loss on trade receivables
written back (1,435) (140)
Rental of premises 224 107
Rental of equipment 12 12
Rental of motor vehicles 201 222
Unrealised gain on foreign exchange
- net trade (276) (59)
Realised gain on foreign exchange (39) (4)
Employees provident fund expense 305 331
22. INCOME TAX EXPENSE
The Company is regarded as resident, for tax purposes, in Jersey and on the basis that the Company is neither a financial service company nor a utility company for the purpose of the Income Tax (Jersey) Law 1961, as amended, the Company is subject to income tax in Jersey at a rate of zero per cent.
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
Income Tax
- Current year 1,311 544
- Over provision in prior years - -
Deferred taxation
- Current year - 936
Over provision in prior years - (1,093)
- Not provided for in prior years - (305)
Income tax expenses for the year 1,311 82
----------- ----------------
Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2019: 24%) of the estimated assessable profit for the financial year.
A reconciliation of income tax expense applicable to the profit before taxation at the statutory tax rate to income tax expense at the effective tax rate of the Group is as follows:
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
(Loss)/profit before taxation (120,254) 936
----------- -----------
Tax at the statutory tax rate of 24% (2019:
24%) (28,861) 225
Tax effect of:
Non-deductible expenses 30,540 3,208
Tax effect on non-taxable income (387) (54)
Tax exempt income - (2,974)
Deferred tax assets on current year temporary
difference not recognized 19 -
Over provision of deferred taxation in the
previous financial year - (323)
Income tax expenses for the year 1,311 82
----------- -----------
23. DIRECTORS' EMOLUMENTS
The amount of remuneration received by each director in the year was as follows:
Approved
Remuneration Fees contribution Total
RM'000 RM'000 RM'000 RM'000
31.12.2020
Datuk Syed Nazim bin Syed
Faisal 360 65 44 469
Datuk Dr. Haji Radzali
Hassan - 65 - 65
Aditya Chathli - 65 - 65
Dato' Dr. IR. Ts. Mohd
Karim Abdullah - 43 - 43
Habizan Rahman Habeeb
Rahman - 43 - 43
Mohd Sofiyuddin Ahmad
Tabrani - 8 - 8
360 289 44 693
--------------- ------- -------------- -------
Approved
Remuneration Fees contribution Total
RM'000 RM'000 RM'000 RM'000
31.12.2019
Datuk Syed Nazim bin Syed
Faisal 360 64 45 469
Saravanan Rasaratnam 300 63 37 400
Navindran Balakrishnan 300 63 37 400
Datuk Dr. Haji Radzali
Hassan - 64 - 64
Aditya Chathli - 63 - 63
960 317 119 1,396
--------------- ------- -------------- -------
24. RELATED PARTY TRANSACTIONS
a) Identities of Related Parties
Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control.
In addition to the information detailed elsewhere in the financial statements, the Group has related party relationships with its directors, key management personnel and entities within the same group of companies.
Other than those disclosed elsewhere in the financial statements, the Group also carried out the following significant transactions with the related parties during the financial period: -
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
i) Megagreen Energy Sdn. Bhd.
- Contract revenue - 20,539
- Interest income 1,982 2,265
- Allowance for impairment loss 46,654 3,762
- Amount due from (net of impairment) 1,777 59,588
ii) K2M Ventures Sdn Bhd
- Other income (waive of debts) - 1,633
- Allowance for impairment loss 1 -
- Amount due from (net of impairment) 9 -
iii) Serba Dinamik group of companies
- Contract revenue 29,367 -
- Other income (waive of debts) 3,737 -
- Services rendered from 6,379 8,397
- Allowance for impairment loss 480 -
- Capital contribution (waive of interest 394 -
on loan)
- Term loan payable 10,000 -
- Amount due to (net trade and non-trade) 9,332 10,078
1,607 -
* Allowance for impairment loss
iv) Datuk Syed Nazim Syed Faisal
- Mezzanine loan - 8,406
- Director advance 1,085 1,305
- Director fees due 148 81
- Director fees 65 64
v) Datuk Dr. Hj. Radzali Hassan
- Director fees due 367 395
- Director fees 65 64
vi) Aditya Chathli
- Director fees due 313 242
- Director fees 65 63
vii) Dato' Dr. IR. Ts. Mohd Abdul
Karim
Abdullah
- Director fees due 44 -
- Director fees 43 -
viii) Habizan Rahman Habeeb Rahman
- Director fees due 44 -
- Director fees 43 -
ix) Mohd Sofiyuddin Ahmad Tabrani
- Director fees due 8 -
- Director fees 8 -
x) Makmur Hidro Sdn Bhd
- Amount due from - 66
xi) Saravanan Rasaratnam
- Director fees - 63
- Other income (waive of debts) - 3,595
xii) Navindran Balakrishnan
- Director fees - 63
- Other income (waive of debts) - 1,101
xiii) Sivadas Kumar
- Director fees due - 288
Related parties: -
i) The Group, via its subsidiary, BiON Sdn Bhd, holds 15% of the share capital of Megagreen Energy Sdn Bhd.
ii) K2M Ventures Sdn Bhd ("K2M"), holds 32.52% shares in BiON plc.
iii) Serba Dinamik group of companies , one of the significant shareholders in BiON plc for the year ended 31 December 2020.
iv) Datuk Syed Nazim Syed Faisal , being an Executive Director in BiON plc for the year ended 31 December 2020.
v) Datuk Dr. Hj. Radzali Hassan, who was a Non-Executive Director in BiON plc, resigned on 16 March 2021.
vi) Mr. Aditya Chathli, being a Non-Executive Director in BiON plc for the year ended 31 December 2020.
vii) Dato' Dr. IR. Ts. Mohd Karim Abdullah was appointed as a Non-Executive Director of BiON plc on 30 April 2020.
viii) En. Mohd Habizan Habeeb Rahman was appointed as an Executive Director in BiON plc on 30 April 2020 and subsequently he has resigned on 15 March 2022.
ix) En. Mohd Sofiyuddin Ahmad Tabrani, was appointed as a Non-Executive Director in BiON plc, on 11 November 2020 and subsequently he has resigned on 15 March 2022.
x) Mr. Saravanan Rasaratnam, appointed director in Makmur Hidro Sdn Bhd, no longer a related party by virtue of his resignation as the Executive Director in BiON plc on 31 January 2020.
xi) Mr. Saravanan Rasaratnam, no longer a related party by virtue of his resignation as an Executive Director on 31 January 2020.
xii) Mr. Navindran Balakrishnan, no longer a related party by virtue of his resignation as an Executive Director on 31 January 2020.
xiii) Mr. Sivadas Kumar, no longer a related party by virtue of his resignation on 25 October 2018.
b) Compensation of key management personnel
The remuneration of directors and other members of key management personnel during the year are as follows: -
31.12.2020 31.12.2019
RM'000 RM'000
Short-term employee benefits 933 1,632
Defined contribution plan (EPF) 75 273
1,008 1,905
----------- -----------
Included in the total key management
personnel
compensation is: -
Directors remuneration 360 960
Executive Directors Fees 108 190
Non-Executive Directors Fees 181 127
649 1,277
----------- -----------
The key management personnel are those personnel having authority and responsibility for planning, directing and controlling the activities within the Group, either directly or indirectly.
The payment of emoluments to the director is disclosed in the remuneration report.
25. EARNINGS PER SHARE
The calculation of earnings per share is based on the following earnings and number of shares:
31.12.2020 31.12.2019
(Restated)
(Loss)/profit attributable
to the owners of the Company
(RM'000) (121,550) 732
------------ ------------
Weighted average number of
shares 424,524,436 345,375,812
Warrant instruments 7,232,013 7,232,013
Diluted number of shares* 431,756,449 352,607,825
------------ ------------
Basic earnings per share (RM) (0.29) 0.002
Diluted earnings per share
(RM) (0.29) 0.002
------------ ------------
Earnings per share has been calculated by dividing the profit or loss for the year attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the year.
* The diluted earnings per share ignores the diluted number of shares and is therefore the same as the basic earnings per share, as the Group made a loss in the year.
26. RESERVES a) Foreign currency translation reserves
The foreign currency translation reserves arose from the translation of the financial information of foreign subsidiaries and are not distributable by way of dividends.
b) Merger reserves
The accounting treatment for Group reorganisations is scoped out of IFRS 3. Accordingly, as required under IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, the Group has referred to current UK GAAP to assist its judgement in identifying a suitable accounting policy. The introduction of the holding company, BiON plc, had been accounted for as a capital reorganisation using the merger accounting principles prescribed under current UK GAAP. Therefore, the consolidated financial statements of BiON plc are presented as if the Company has always been the holding company for the Group.
The use of merger accounting principles has resulted in a balance on Group capital and reserves that have been classified as a merger reserve and included in the Group's shareholders' funds. The consolidated financial statements include the results of the Company and all its subsidiary undertakings made up to the same accounting date.
27 . CONTINGENCIES
No provisions are recognised on the following matters as it is not probable that a future sacrifice of economic benefits will be required, or the amount is not capable of reliable measurement: -
31.12.2020 31.12.2019
RM'000 RM'000
Corporate guarantee given to licensed
banks for
credit facilities granted to a related
party 10,233 32,489
----------- -----------
The Group has provided Megagreen Energy with a corporate guarantee in support of a loan facility. Credit Guarantee Corporation Malaysia Berhad has confirmed that repayment of the 60% of the amount borrowed by Megagreen under the facility is guaranteed by Credit Guarantee Corporation Malaysia Berhad up to June 2025 pursuant to the Green Technology Financing Scheme - established by the Malaysian government. In July 2020, the loan was partially repaid and, on that basis, the Directors expect the exposure of BiON under the guarantee to
be limited to approximately RM4.1m (2019: RM3.8m). 28. CAPITAL COMMITMENTS
At 31 December, the Group had the following capital commitments in respect to plant & equipment:
31.12.2020 31.12.2019
RM'000 RM'000
Approved and contracted for construction 5,722 -
of property, plant and equipment
----------- -----------
29. OPERATING SEGMENTS
(a) Operating segments
Operating segments are prepared in a manner consistent with the internal reporting provided to the management as its chief operating decision maker in order to allocate resources to segments and to assess their performance. Currently, the Group operates under two operating segments providing consulting and contract services to customers in the renewable energy sector and the supply of power to National Grid.
Information on geographical segments is not presented as the Group operates wholly in Malaysia where all of its assets and liabilities are located.
The information provided to management for the reportable segments during each year are as follows:
Consulting
Business Segments & contract Power Head office Total
RM'000 RM'000 RM'000 RM'000
31.12.2020
Contract revenues 103,649 - - 103,649
Power sold - 24 - 24
------------ --------- ------------------ ----------
Group revenues 103,649 24 - 103,673
Gross profit/(loss) 12,306 (6,041) - 6,265
Net profit/(loss) (101,436) (15,306) (4,823) (121,565)
Segment Assets 15,932 96,674 3,277 115,883
Segment Liabilities 84,699 17,063 75,814 177,576
Capital Expenditure - 36,281 159 36,440
Depreciation and amortisation - 2,051 719 2,770
Impairment loss on
receivables 113,902 2 4,823 118,727
Consulting
Business Segments & contract Power Head office Total
RM'000 RM'000 RM'000 RM'000
31.12.2019
(Restated)
Contract revenues 21,602 - - 21,602
Power sold - 2,459 - 2,459
------------ --------- ------------------ ----------
Group revenues 21,602 2,459 - 24,061
Gross profit/(loss) 4,511 (1,632) - 2,879
Net profit/(loss) 2,813 (1,958) - 855
Segment Assets 72,432 52,652 2,431 127,515
Segment Liabilities 27,105 19,548 29,887 76,540
Capital Expenditure - 5,434 - 5,434
Depreciation and amortisation - 2,126 670 2,796
Impairment loss on
receivables - - 868 868
(b) Information about major customers
During the year, there are two (2) major customers from Indonesia and one (1) from Malaysia whom contributed more than 10% of the total revenue for the Group (2019: Two (2) from Malaysia).
31.12.2020 31.12.2019
Consulting Consulting
Business Segments & contract Power & contract Power
RM'000 RM'000 RM'000 RM'000
By country:
Malaysia 29,367 - 21,602 24
Indonesia 61,938 - - -
------------ ------- ------------ -------
91,305 - 21,602 24
------------ ------- ------------ -------
30. WARRANT INSTRUMENTS
31.12.2020 31.12.2019
Average exercise Number Average exercise Number
price per warrants of warrants price per warrants of warrants
At 1 January 0.092p 7,232,013 0.092p 7,232,013
-------------------- ------------- -------------------- -------------
As at 31 December 0.092p 7,232,013 0.092p 7,232,013
-------------------- ------------- -------------------- -------------
On 6 May 2016, the Company granted 1,383,333 warrants to S.P. Angel Corporate Finance LLP, the Company's previous nominated adviser, at the exercise price of 9 pence each, which were exercisable immediately upon grant, with an expiring date of 5 May 2021.
On 19 June and 28 June 2017, the Company issued 5,848,680 warrants, at the exercise price of an average closing bid price at three trading days prior to the day of notice to exercise, to subscribers to a private placing arranged by Charles Street Securities Europe LLP ("CSS"), and to CSS as part of the fee arrangements for arranging the placement. Of the total warrants issued, 2,777,778 were issued to CSS as fees payable in connection with that placement. The warrants issued to subscribers are outside the scope of IFRS 2. In accordance with IFRS 2 the fair value of the warrants issued as fees for the placement services provided has been estimated as RM220,000. This has been recognised within the stated capital component of equity as the costs were directly incurred in raising the related equity funds.
There were no movements during the year.
31. ULTIMATE CONTROLLING PARTIES
At the reporting date, the Directors consider there is no ultimate controlling party.
32. FINANCIAL INSTRUMENTS
The Group's activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk and equity price risk), credit risks and liquidity risks. The Group's overall financial risk management policy focuses on the unpredictability of finance market and seek to minimise potential adverse effects on the Group's financial performance by having in place adequate financial resources for the development of the Group's business whilst managing its market risk, credit risk and liquidity risk.
The Group holds the following financial instruments:
31.12.2020 31.12.2019
RM'000 RM'000
(Restated)
Financial Assets
Trade receivables 13,914 14,695
Other receivables and deposits 3,234 2,365
Amount due from customer contracts 401 401
Amount due from related parties 1,786 59,654
Cash and bank balances 2,287 83
21,622 77,198
----------- -----------
Financial Liabilities
Trade payables 89,043 35,780
Other payables and accruals 19,237 17,011
Amount due to directors 2,329 2,311
Lease liabilities 6,093 6,227
Term loans 59,280 15,033
175,982 76,362
----------- -----------
32.1 Financial Risk Management Policies
The following sections provide details on the Group's exposure to the abovementioned financial risks and the objectives, policies and processes for the management of these risks.
32.1.1 Market Risk
(a) Foreign Currency Risk
The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than functional currency. The currencies giving rise to this risk are primarily the United States Dollar ("USD") and Great British Pound ("GBP"). Foreign currency risk is monitored closely on an on-going basis to ensure that the net exposure is at an acceptable level. At the end of the reporting period, the Group does not have any derivative financial instruments used to hedge foreign currency risk.
The Group exposure to foreign currency risk, based on the carrying amounts at the reporting date is as follows:
USD GBP IDR RM TOTAL
31.12.2020 RM'000 RM'000 RM'000 RM'000 RM'000
Financial Assets
Trade receivables - - 114 13,800 13,914
Other receivables and deposit - 82 - 3,152 3,234
Amount due from customers contract - - - 401 401
Amount due from related parties - - - 1,786 1,786
Cash and bank balance 1 9 - 2,277 2,287
1 91 114 21,416 21,622
------- -------- --------- --------- ----------
Financial Liabilities
Trade payables - - 60,623 28,420 89,043
Other payables and accruals - 1,157 - 18,080 19,237
Amount due to directors - 924 - 1,405 2,329
Lease liabilities - - - 6,093 6,093
Term loans - - - 59,280 59,280
- 2,081 60,623 113,278 175,982
------- -------- --------- --------- ----------
Net financial assets/(liabilities) 1 (1,990) (60,509) (91,862) (154,360)
Less: Net financial liabilities denominated - - - 91,862 91,862
in the Group's functional currency
Currency exposure 1 (1,990) (60,509) - (62,498)
------- -------- --------- --------- ----------
USD GBP IDR RM TOTAL
31.12.2019 RM'000 RM'000 RM'000 RM'000 RM'000
(Restated)
Financial Assets
Trade receivables - - 1,065 13,630 14,695
Other receivables and
deposits - - - 2,365 2,365
Amount due from contract customers - - - 401 401
Amount due from related parties - - - 59,654 59,654
Cash and bank balance 1 10 - 72 83
1 10 1,065 76,122 77,198
------- --------- ------- --------- ---------
Financial Liabilities
Trade payables 867 - - 34,913 35,780
Other payables and accruals - 1,071 - 15,940 17,011
Amount due to directors - 1,006 - 1,305 2,311
Lease liabilities - - - 6,227 6,227
Term loans - 9,269 - 5,764 15,033
867 11,346 - 64,149 76,362
------- --------- ------- --------- ---------
Net financial assets/(liabilities) (866) (11,336) 1,065 11,973 836
Less: Net financial liabilities
denominated - - - (11,973) (11,973)
in the Group's functional currency
Currency exposure (866) (11,336) 1,065 - (11,137)
------- --------- ------- --------- ---------
The following details the sensitivity analysis of the Group's profit after tax to a reasonably possible change in the foreign currencies at the end of the reporting period with all other variables held constant:
Increase/(Decrease)
31.12.2020 31.12.2019
RM RM
Effects on Profit After
Taxation
USD/RM
- strengthened by 1% (0.01) (8)
- weakened by 1% 0.01 8
GBP/RM
- strengthened by 1% (20) (11)
- weakened by 1% 20 11
IDR/RM
- strengthened by 1% (61) (1)
- weakened by 1% 61 1
A weakening of the above currencies against Ringgit Malaysia at the reporting date would have had the equal but opposite effect on the above currencies to the amounts shown above, with all other variables held constant.
(b) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to interest rate risk arises mainly from interest-bearing financial liabilities. The Group's policy is to obtain the most favourable interest rates available. Any surplus funds of the Group will be placed with licensed financial institutions to generate interest income.
The sensitivity analysis is not presented as the sensitivity impact is immaterial because the loan has a fixed interest rate which is subsequently rolled-up into the principal.
(c) Equity Price Risk
The Group does not have any quoted investments and hence is not exposed to equity price risk.
32.1.2 Credit Risk
The Group's exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an on-going basis.
The Group uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due, which are deemed to have higher credit risk, are monitored individually.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience and the current economic environment.
The Group provided a financial guarantee to financial institutions for credit facilities granted to an associate undertaking, as disclosed in note 27 to the financial statements. The Group monitors its exposure to credit risk, or the risk of counterparties defaulting, arising mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an on-going basis.
Credit risk concentration profile
The Group's major concentration of credit risks relates to the amount owing by 4 (2019: 2) customers which constitutes approximately 90% (2019: 90%) of its trade & other receivables at the end of the reporting period.
The ageing analysis of receivables (including amount owing by associates and amount owing by affiliates) and at the end of the reporting period is disclosed in note 7 and note 9.
At the end of the reporting period, trade receivables that are individually impaired were those with significant long outstanding obligations. These receivables are not secured by any collateral or credit enhancement but have nevertheless demonstrated that they are meeting their obligations though payments have been protracted.
32.1.3 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 maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure as far as possible, that they will have sufficient liquidity to meet its liabilities when they fall due.
The following table sets out the maturity profile of the financial liabilities at the reporting date based on contractual undiscounted cash flows:
Contractual
Effective undiscounted
interest rate Carrying amount cashflow Within 1 year 1-5 years
% RM'000 RM'000 RM'000 RM'000
31.12.2020
Trade payables 89,043 89,043 89,043 -
Other payables and accruals 19,237 19,237 19,237 -
Amount due to directors 2,329 2,329 - 2,329
Lease liabilities 6,093 6,093 457 5,636
Term loans 5.0-8.0 59,280 59,280 2,590 56,690
175,982 175,982 111,327 64,655
---------------- -------------- -------------- ----------
31.12.2019
(Restated)
Trade payables 35,780 35,780 35,780 -
Other payables and accruals 17,011 17,011 17,011 -
Amount owing to directors 2,311 2,311 - 2,311
Lease liabilities 6,227 6,227 409 5,818
Term loans 5.0-8.0 15,033 15,033 15,033 -
76,362 76,362 68,233 8,129
---------------- -------------- -------------- ----------
32.1.4 Fair Values Measurements
The fair values of the financial assets and financial liabilities maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments.
Fair Value of Financial Instruments Fair Value of Financial Total Carrying
Instruments
Carried at Fair Value Not Carried at Fair Value Fair Amount
Value
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
31.12.2020
Term loans - - - - 59,280 - 59,280 59,280
Lease
liabilities - - - - 570 - 570 570
Amount owing
to directors - - - - - 2,329 2,329 2,329
---------- ----------- ------------ ---------- ---------- ---------- ---------- ---------
31.12.2019
(Restated)
Term loans - - - - 15,033 - 15,033 15,033
Lease
liabilities - - - - 387 - 387 387
Amount owing
to directors - - - - - 2,311 2,311 2,311
---------- ----------- ------------ ---------- ---------- ---------- ---------- ---------
- Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
- Level 2: Valuation techniques for which the lowest level input that is significant to the fair value.
- Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).
Fair Value of Financial Instruments Not Carried at Fair Value
The fair values, which are for disclosure purposes, have been determined using the following basis: -
(i) The fair value of term loan with fixed interest rate is determined by discounting the relevant cash flows using current market interest rate for similar instruments at the end of the reporting period. The interest
rate (per annum) used to discount the estimated cash flows is as follows: -
31.12.2020 31.12.2019
% %
Term loan (fixed interest
rate) 5.0-8.0 5.0-8.0
=========== ===========
(ii) The carrying amount of term loan with variable interest rate approximates its fair value.
(iii) The fair value of amount owing to directors (non-current) is determined by discounting the relevant cash flows using current market interest rates for similar instruments at rates of 4.5% per annum.
33. CAPITAL RISK MANAGEMENT
The Group manages its capital to ensure that it will be able to maintain an optimal capital structure so as to support their businesses and maximize shareholders' value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.
The Group manages its capital based on debt-to-equity ratio that complies with debt covenants and regulations, if any. The debt-to-equity ratio is calculated as total borrowings from financial institutions divided by total equity.
There was no change in the Group's approach to capital management during the financial year.
The debt-to-equity ratio of the Group at the end of the reporting period was as follows:
31.12.2020 31.12.2019
RM'000 RM'000
Lease liabilities payables 570 387
Term loans 59,280 15,033
Less: Cash and bank balances (2,287) (83)
Net debt 57,563 15,337
----------- -----------
Total shareholders' equity (61,841) 50,812
----------- -----------
Debt-to-equity ratio (0.93) 0.30
34. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform with the current year's presentation.
As reported As reclassified
2019 2019
RM'000 RM'000
Statement of financial position
Property, plant and equipment 44,781 44,578
Right-of-use assets 4,760 4,963
Trade and other payables (after
prior adjustment - refer note
35) 54,096 52,791
Lease liabilities 5,840 6,227
Hire purchase payables 295 -
Short-term borrowings 15,125 15,033
Amount due to directors 1,006 2,311
Statement of comprehensive income
Depreciation of property, plant
and equipment 2,288 2,126
Depreciation of right-of-use
assets 453 615
Interest - lease liability 651 671
Interest expenses 1,151 -
Interest - loan - 1,131
Note
a) Motor vehicles relate to vehicles under hire purchase, which have been previously classified as property, plant and equipment will now be retrospectively reclassified to right-of-use assets as appropriate under IFRS 16.
As result of the above, the following has been reclassified accordingly: -
i) Lease liabilities (Refer note 12 (b))
ii) Hire purchase payables (Refer note 12 (b))
iii) Short-term borrowings (Refer note 14)
iv) Depreciation of property, plant and equipment (Refer note 6)
v) Depreciation of right-of-use assets (Refer note 12 (a))
vi) Interest - lease liabilities (Refer note 12 (c))
b) Trade and other payables which includes advances made by director amounting to RM1.30m will now be reclassified as amount due to directors.
c) Interest expenses which relates to loan and hire purchase has been reclassified as loan interest and lease liabilities interest.
35. PRIOR YEAR ADJUSTMENT
The prior year adjustment represents the cost of sales which have been understated by RM 0.17m and taxation which has been overstated by RM1.09m in the prior year. This prior year error has been accounted for retrospectively and comparative have been restated. The effect of the changes are as follows:
As previously
reported Adjustment As restated
2019 2019 2019
RM'000 RM'000 RM'000
Statement of financial position
Retained loss (4,448) 919 (3,529)
Trade and other payables 53,922 (1,131) 52,791
Deferred taxation 631 (549) 82
Income tax liabilities 544 (544) -
Statement of comprehensive income
Cost of sales 21,009 174 21,183
Taxation 1,175 (1,093) 82
36. SIGNIFICANT EVENTS OCCURING AFTER THE REPORTING PERIOD
FIRE INCIDENT AT MALPOM
On 22 July 2021, a serious fire occurred at the neighbouring palm oil mill that supplies the POME feedstock to Malpom, such that the mill was forced to shut down. The Group's plant was undamaged, but it was also forced to shut down as it is not receiving feedstock from the mill. The Group expects the mill and the Group's Malpom plant to resume operations in Q2 2022. This event suggests that an impairment of the Group's PPE may be required. Such impairment is not appropriate to post as an adjusting event in the year to 31 December 2020 but will be considered in the period in which the incident took place. At this stage, it is not possible to accurately quantify the level of impairment that might be required, which is dependent on the timing of returning the palm oil mill back to full production.
GROUP RESTRUCTURING
On 31 March 2022, the Board of Directors of BiON plc agreed to enter into a conditional Sale and Purchase Agreement ("SPA") with a third-party purchaser, Minnos Venture Inc ("MVI"), to acquire all the shares of BiON Ventures Sdn Bhd ("BVSB") for a purchase consideration of GBP1 (one Pound Sterling) or RM5.50. Pursuant to the SPA, MVI agreed to acquire BVSB and consequently all its controlled subsidiaries and, as a result, to assume all of BVSB's assets and liabilities.
In accordance with AIM Rule 15, the disposal of BVSB constitutes a fundamental change of business of BiON plc. The shareholders approved the sale of BVSB on 19 April 2022, and the disposal was completed, following which, BiON plc has ceased to own, control or conduct all or substantially all, of its pre-existing trading business, activities or assets. Thus, BiON plc has become an AIM Rule 15 cash shell company.
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