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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mobilityone Limited | LSE:MBO | London | Ordinary Share | JE00B1Z48326 | ORD 2.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.00 | 4.50 | 5.50 | 5.00 | 5.00 | 5.00 | 29,206 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Business Services, Nec | 233.76M | 24k | 0.0002 | 250.00 | 5.31M |
From Apr 2019 to Apr 2024
TIDMMBO
RNS Number : 9203D
MobilityOne Limited
28 June 2019
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
28 June 2019
MobilityOne Limited
("MobilityOne", "Company" or the "Group")
Audited results for the year ended 31 December 2018
MobilityOne (AIM: MBO), the e-commerce infrastructure payment solutions and platform provider with its main operations in Malaysia, announces its full year results for the year ended 31 December 2018.
A copy of the annual report and audited financial statements, along with notice of the Company's annual general meeting, to be held at B-10-8, Level 10, Megan Avenue II, Jalan Yap Kwan Seng, 50450 Kuala Lumpur, Malaysia on 23 July 2019 at 9.00 am Malaysia time or any adjournment thereof, will shortly be posted to shareholders and available on the Company's website, www.mobilityone.com.my.
For further information, please contact:
MobilityOne Limited +6 03 8996 3600 Dato' Hussian A. Rahman, CEO www.mobilityone.com.my har@mobilityone.com.my Allenby Capital Limited (Nominated Adviser and Broker) +44 20 3328 5656 Nick Athanas/James Hornigold
About the Group:
MobilityOne provides e-commerce infrastructure payment solutions and platforms through its proprietary technology solutions, marketed under the brands MoCS and ABOSSE.
The Group has developed an end-to-end e-commerce solution which connects various service providers across several industries such as banking, telecommunication and transportation through multiple distribution devices including EDC terminals, mobile devices, automated teller machines ("ATM") and internet banking.
The Group's technology platform is flexible, scalable and designed to facilitate cash, debit card and credit card transactions from multiple devices while controlling and monitoring the distribution of different products and services.
For more information, refer to our website at www.mobilityone.com.my
Chairman's Statement
For the year ended 31 December 2018
Introduction
The Directors are pleased to present the audited consolidated financial statements for MobilityOne Limited for the year ended 31 December 2018.
The revenue of the Group increased by 47.37% to GBP125.47 million (2017 revenue: GBP85.14 million) which was mainly contributed by growth of the Group's e-payment business in the mobile phone prepaid airtime reload and bill payment business via the Group's banking channels (such as mobile banking, internet banking and ATMs) with 10 banks and approximately 2,500 payment terminal bases in Malaysia. However, the Group reported a net loss after tax of GBP1.36 million in 2018 (2017 loss after tax: GBP0.73 million) mainly due to the loss contributed by Mobility i Tap Pay (Bangladesh) Limited ("MiTP"), the Company's 55%-owned subsidiary in Bangladesh. The Group is required to consolidate the results of MiTP even though it was acquired for only BDT550,000 (c. GBP5,000) in 2017.
During the year, the Group decided to strike off MobilityOne Ventures Sdn Bhd, a dormant subsidiary in Malaysia, and subscribed for 99.9% shareholding in MobilityOne (B) Sdn Bhd, which was incorporated in Brunei and dormant for the Group to explore business opportunities in Brunei. While the e-payment business was growing in Malaysia, the Group's international remittance service in Malaysia has not made a significant contribution to the Group.
The contribution from the Group's operations in the Philippines remained insignificant with a small revenue contribution through the provision of an e-payment solution.
The Group's business in Bangladesh through MiTP for the provision of a mobile financial services platform named "Tap 'n Pay" for Meghna Bank Ltd which has 47 branches in Bangladesh, has incurred substantial costs in 2018 to build the infrastructure such as the expansion of the point of sales to more than 7,000. However MiTP only generated a small revenue in 2018.
As at 31 December 2018, the Group had cash and cash equivalents of GBP4.18 million (31 December 2017: cash and cash equivalents of GBP3.43 million) and the secured loans and borrowings from financial institutions totaled GBP4.27 million (31 December 2017: GBP3.95 million).
Current trading and outlook
The Directors expect the Group's business operations in Malaysia will continue to grow, especially the mobile phone prepaid airtime reload and bill payment business through more business partnerships to expand the payment terminal base and users.
In addition, the Group is planning to expand its e-Money business, initially by targeting students. e-Money is a type of payment instrument where it contains monetary value that has been paid in advance by the end users to the e-Money issuer to make payments to purchase goods from merchants such as retail outlets. When the end users pay using e-Money, the amounts are automatically deducted from their e-Money balance. The Group currently has agreements with 5 schools in Malaysia to test the integrated student cards with payments. The Group also plans to commence the mobile remittance service by end of this year which allows money transfer using a mobile application. The Board expects this will have a good growth potential in the longer term as there are more than 2 million foreign workers in Malaysia who have the need to send money back to their home countries. For future growth, the Group will continue to enhance its product offering and payment system, including online payment gateway which covers the acceptance of credit cards and payment wallets.
Even though the operations in the Philippines for the provision of an e-payment solution is not expected to make a significant contribution to the Group in 2019, the Group is still exploring other business opportunity, including eMoney business. The Group is also exploring eMoney business in Brunei.
Notwithstanding the business in Bangladesh is expected to continue to incur more costs in 2019 to expand the network infrastructure, the long-term prospects with new services to be introduced in the future, such as inward money transfer services and local municipal bill payment services, are expected to enhance the growth of business in Bangladesh and the Group as a whole. As such, the Board remains confident on the Group's future outlook.
.............................................
Abu Bakar bin Mohd Taib
Chairman
Date: 28 June 2019
Report of the Directors
For the year ended 31 December 2018
The Directors are pleased to submit their report together with the financial statements of the Company and the Group for the year ended 31 December 2018.
PRINCIPAL ACTIVITY
The principal activity of the Group in the year under review was mainly in the business of providing e-commerce infrastructure payment solutions and platforms.
KEY PERFORMANCE INDICATORS
Hot Features
Premium
Year ended Year ended
31.12.2018 31.12.2017
GBP GBP
Revenue 125,471,796 85,140,366
Operating loss (1,360,589) (384,366)
Loss before tax (1,637,015) (613,238)
Net loss for the year (1,362,451) (734,668)
KEY RISKS AND UNCERTANTIES
Operational risks
The Group is not insulated from general business risk as well as certain risks inherent in the industry in which the Group operates. In particular, this includes technological changes, unfavourable changes in Government and international policies, the introduction of new and superior technology or products and services by competitors and changes in the general economic, business and credit conditions.
Dependency on Distributorship Agreements
The Group relies on various telecommunication companies to provide the telecommunication products. As a result, the Group's business may be materially and adversely affected if one or more of these telecommunication companies cut or reduce drastically the supply of their products. The Group has distributorship agreements with telecommunication companies such as DiGi Telecommunications Sdn. Bhd., Celcom (M) Berhad and Maxis Communication Berhad, which are subject to periodic renewal.
Rapid technological changes/product changes in the e-commerce industry
If the Group is unable to keep pace with rapid technological development in the e-commerce industry it may adversely affect the Group's revenues and profits. The e-commerce industry is characterised by rapid technological changes due to changing market trends, evolving industry standards, new technologies and emerging competition. Future success will be dependent upon the Group's ability to enhance its existing technology solutions and introduce new products and services to respond to the constantly changing technological environment. The timely development of new and enhanced services or products is a complex and uncertain process.
Demand of products and services
The Group's future results depend on the overall demand for its products and services. Uncertainty in the economic environment may cause some business to curtail or eliminate spending on payment technology. In addition, the Group may experience hesitancy on the part of existing and potential customers to commit to continuing with its new services.
Financial risks
Please refer to Note 3.
REVIEW OF BUSINESS
The results for the year and financial position of the Company and the Group are as shown in the Chairman's statement.
RESULTS AND DIVIDS
The consolidated total comprehensive (loss)/profit for the year ended 31 December 2018 was (GBP1,361,613) (2017: GBP647,342) which has been transferred to reserves. No dividends will be distributed for the year ended 31 December 2018.
DIRECTORS
The Directors during the year under review were:
Abu Bakar bin Mohd Taib (Non-Executive Chairman)
Dato' Hussian @ Rizal bin A. Rahman (Chief Executive Officer)
Derrick Chia Kah Wai (Chief Operating Officer)
Seah Boon Chin (Non-Executive Director)
The beneficial interests of the Directors holding office at 31 December 2018 in the ordinary shares of the Company, were as follows:
Ordinary shares of 2.5p each
Interest at 31.12.18 % of issued capital
Abu Bakar bin Mohd Taib Nil Nil
Dato' Hussian @ Rizal bin
A. Rahman 53,465,724 50.30
Derrick Chia Kah Wai Nil Nil
Seah Boon Chin Nil Nil
The wife of Derrick Chia Kah Wai holds 1,943,000 ordinary shares in the Company, which is equivalent to 1.83% of the Company's issued capital.
The Directors also held the following ordinary shares under options:
Interest at 31.12.18
Abu Bakar bin Mohd Taib 500,000
Dato' Hussian @ Rizal bin
A. Rahman 800,000
Derrick Chia Kah Wai 2,000,000
Seah Boon Chin 2,000,000
The options were granted on 5 December 2014 at an exercise price of 2.5p. The period of the options is ten years.
The Directors' remuneration of the Group is disclosed in Note 4.
SUBSTANTIAL SHAREHOLDERS
As at 18 June 2019, the Company had been notified of the following beneficial interests in 3% or more of the issued share capital pursuant to Part VI of Article 110 of the Companies (Jersey) Law 1991:
Ordinary 2.5p shares
Number of ordinary % of issued capital
shares
Dato' Hussian @ Rizal bin
A. Rahman 53,465,724 50.30
Thornbeam Limited 16,048,922 15.10
Estate of Dato' Shamsir
bin Omar 9,131,677 8.59
Vidacos Nominees Limited 8,772,001 8.25
Jim Nominees Limited 4,702,667 4.42
PUBLICATION OF ACCOUNTS ON COMPANY WEBSITE
Financial statements are published on the Company's website, which can be found at www.mobilityone.com.my. The maintenance and integrity of the website is the responsibility of the Directors. The Directors' responsibility also extends to the financial statements contained therein.
INDEMNITY OF OFFICERS
The Group does not have the insurance cover against legal action bought against its Directors and officers.
GROUP'S POLICY ON PAYMENT OF CREDITORS
It is the Group's normal practice to make payments to suppliers in accordance with agreed terms provided that the supplier has performed in accordance with the relevant terms and conditions.
EMPLOYEE INVOLVEMENT
The Group places considerable value on the involvement of the employees and has continued to keep them informed on matters affecting the Group. This is achieved through formal and informal meetings.
GOING CONCERN
These financial statements have been prepared on the assumption that the Group is a going concern. Further information is given in Note 2 of the financial statements.
SIGNIFICANT EVENTS
There were no significant events during the financial year.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Directors' Report and financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union. Under Company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently; - make judgments and estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business for the foreseeable future; and
- state that the financial statements comply with International Financial Reporting Standards (IFRS) as adopted by the European Union.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with Article 110 of the Companies (Jersey) Law 1991. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the Directors are aware, there is no relevant audit information of which the Company and Group's auditors are unaware, and each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company and Group's auditors are aware of that information.
AUDITORS
Jeffreys Henry LLP have expressed their willingness to continue in office as auditors to the Company. A resolution proposing that Jeffreys Henry LLP be re-appointed will be put to the forthcoming Annual General Meeting.
ON BEHALF OF THE BOARD:
............................................................................
Dato' Hussian @ Rizal bin A. Rahman
Chief Executive Officer
Date: 28 June 2019
Board of Directors
Abu Bakar bin Mohd Taib
(Non-Executive Chairman)
Abu Bakar bin Mohd Taib, a Malaysian aged 66, has previously worked for several listed companies and financial institutions in Malaysia including Nestle (Malaysia) Berhad, Bank Bumiputera Malaysia Berhad (now part of CIMB Bank Berhad) and United Malayan Banking Berhad (now part of RHB Bank Berhad). He was mainly involved in corporate communications and corporate affairs until 2004. Since 2005 he has been the director of several companies that are principally involved in timber related activities in Malaysia. He obtained a Master of Business Administration in Marketing and Finance from West Coast University (USA) and a Bachelor of Science in Business Administration from California State University (USA).
Dato' Hussian @ Rizal bin A. Rahman
(Chief Executive Officer)
Dato' Hussian @ Rizal bin A. Rahman, a Malaysian aged 57, is the Chief Executive Officer of the Group. He has extensive experience in the IT and telecommunications industries in Malaysia and is responsible for the development of the Group's overall management, particularly in setting the Group's business direction and strategies. He is currently a Non-Executive Director of TFP Solutions Berhad which is listed on the ACE Market of Bursa Malaysia Securities Berhad (Malaysia Stock Exchange). He obtained a certified Master of Business Administration from the Oxford Association of Management, England.
Derrick Chia Kah Wai
(Chief Operating Officer)
Derrick Chia Kah Wai, a Malaysian aged 48, is the Chief Operating Officer of the Group. He began his career as a programmer in 1994, he then joined GHL Systems Berhad in January 1998 as a Software Engineer and was promoted to Software Development Manager in December 1999. He obtained his Bachelor Degree in Commerce, majoring in Management Information System from University of British Columbia, Canada. He joined the Group in May 2005 and is responsible for the Group's R&D team which include the architectural design of its technology platform.
Seah Boon Chin
(Non-Executive Director)
Seah Boon Chin, a Malaysian aged 47, began his career in 1995 as a senior officer with a financial institution in Malaysia and worked in the Corporate Finance Department of several established financial institutions in Malaysia and Singapore. He is currently the Head of Corporate Finance with TA Securities Holdings Berhad in Malaysia and a Non-Executive Director of All Asia Asset Capital Limited, which is listed on the AIM market of the London Stock Exchange. He obtained his Bachelor Degree in Commerce (Honours) with Distinction from McMaster University, Canada.
Corporate Governance Report
The Directors recognise the importance of good corporate governance and have chosen to adopt the Quoted Companies Alliance Corporate Governance Code ("QCA Code") in line with the changes to AIM Rules requiring all AIM quoted companies to adopt and comply with a recognised corporate governance code. The Directors consider that the Company complies with the QCA Code so far as is practicable.
The QCA Code identifies 10 principles that focus on the pursuit of medium to long term value for shareholders. The following report sets out in broad terms how the Company currently complies with the QCA Code.
1. Establish a strategy and business model which promote long-term value for shareholders
The Group's strategy and business model are developed by the Chief Executive Officer ("CEO") and approved by the Board, whenever required. The management team, led by the CEO, is responsible for implementing the strategy.
Over the years, the Group has developed its core competencies in providing a bridge between the service providers to their end consumers using the Group's technology to accept transactions via multiple channels either via mobile phones, Internet, electronic data capture terminals and even via banking channels like Internet banking portal, automated teller machines (ATM) and mobile banking.
Even though the e-payment business in Malaysia, particularly prepaid airtime reload and bill payment business, is contributing substantially to the Group's revenue, the Group continues to explore other business opportunities in Malaysia and other countries such as Bangladesh, the Philippines and Brunei to enhance its product offering for future growth.
The key risks and uncertainties to the business model and strategy are detailed in the Report of the Directors and note 3 of the Company's Accounts for the year ended 31 December 2018.
2. Seek to understand and meet shareholder needs and expectations
The Company encourages two-way communication with its shareholders to understand their needs and expectations.
The Board recognises the annual general meeting ("AGM") as an important opportunity to meet shareholders. The AGM is the main forum for dialogue with shareholders and all members of the Board attend the AGM and are available to answer questions raised by shareholders and to listen to views of shareholders.
It should be noted that the top three shareholders hold over 70% of the Company's share capital, 50.3% of the share capital being held by the CEO. The CEO talks regularly with the Company's major non-board shareholders to understand their needs and expectations. Some of the Company's larger shareholders have been investors in the Company for a number of years. They have the direct contact details of the CEO.
In the future should voting decisions not be in line with the Company's expectations, the Board would endeavour to engage with those shareholders to understand and address any issues.
Contact details are provided on the contacts page of the Company's website and within public documents should shareholders wish to communicate with the Company.
3. Take into account wider stakeholder and social responsibilities and their implications for long-term success
The Group is aware of its corporate social responsibilities and the need to maintain good relationships across a range of stakeholder groups, including employees, business partners, suppliers, customers and regulatory authorities.
The Group's operations and working environment take into account the needs of all stakeholder groups while maintaining focus on the responsibility to promote the success of the Group. The Group encourages feedback from all stakeholder groups as the Group's long term strategy is to create shareholder value.
The Group places considerable value on the involvement of employees and continues to keep them informed on matters affecting the Group through formal and informal meetings which provide opportunities to received feedback on issues affecting the Group.
The Group's activities are reliant on maintaining good relationships with a number of banking partners in Malaysia and in Bangladesh. In addition the Group's remittance business requires certain licences from the Central Bank of Malaysia and the CEO maintains a good flow of communication with the Central Bank of Malaysia to ensure the Group's activities continue to operate under the correct regulatory framework.
4. Embed effective risk management, considering both opportunities and threats, throughout the organization
The principal risks and uncertainties affecting the business are set in the Report of the Directors and note 3 of the Company's Accounts for the year ended 31 December 2018.
The Board monitors these risks, which include technological, regulatory and commercial risks, on a regular basis and the risks are considered by the Group during Board meetings. The Executive Directors and senior management team meet regularly during the year to review and evaluate risks and opportunities. The senior management meets regularly to review ongoing trading performance and any new risks associated with ongoing trading.
Risk identification can come from several sources: employees or other stakeholder feedback; executive meetings; and decisions taken at Audit Committee and Board meetings.
5. Maintain the board as a well- functioning, balanced team led by the chair
The Board comprises two Executive Directors and two Non-Executive Directors. The two Non-Executive Directors are the members of audit, remuneration and nomination committees who have the necessary skills and knowledge to discharge their duties and responsibilities.
The Non-executive Chairman is responsible for the running of the Board and the CEO has main executive responsibility for running the Group's business and implementing the Group's strategy.
The Chairman is considered to be an Independent Director and acts as a Senior Independent Director. Dominic Seah (Non-Executive Director) is not deemed to be independent due to having previously been an executive board member and his length of tenure. Notwithstanding this, the Board considers that Dominic Seah brings an independent judgement to bear notwithstanding the aforementioned considerations.
The Directors receive regular updates on the Group's operational and financial performance during Board meetings and they have committed sufficient time to fulfill their responsibilities.
The Company believes it has effective procedures in place to monitor and deal with conflicts of interest. In particular the Board is aware of the other time commitments and interests of the CEO. Significant changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board.
In addition to the numerous written Board resolutions approved by the Board which have the same force and effect as if adopted at duly convened meetings of all the Directors, the Company had three Board meetings in 2018 and attended by all the Directors.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Directors' biographies are set out in the section "Board of Directors" of the Company's Accounts for the year ended 31 December 2018.
The Board is satisfied that between the Directors, they have sufficient skills, experience and capabilities to enable the strategy of the Company to be delivered.
The Nomination Committee will make recommendations to the Board on all new Board appointments. Where new Board appointments are considered the search for candidates is conducted, and appointments are made, on merit, against objective criteria.
The Board, if required, will review the composition of the Board to ensure that it has the necessary diversity of skills to support the ongoing development of the Group. Gender diversity is not in the Company's immediate plans.
All Directors retire by rotation at regular intervals (every 3 years) in accordance with the Company's Articles of Association.
The Directors attend courses and seminars to keep their skill set up to date.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement
The Directors undergo a performance evaluation before being proposed for re-election to ensure that they continue to be effective and committed to the role. All directors meet to discuss the performance evaluation together.
Appraisals are carried out each year with all Executive Directors.
The Board considers that the size of the Company does not justify the use of third parties to evaluate the performance of the Board on an annual basis.
All Directors retire by rotation at regular intervals (every 3 years) and stand for re-election at the AGM. During the year the Non-executive Directors are responsible for informally reviewing directors' performance and highlighting any issues identified.
At the present time, succession planning is not in the Company's immediate plans however the Board will monitor the need to implement an informal or formal succession plan going forward.
8. Promote a corporate culture that is based on ethical values and behaviours
The Group maintains a high standard of integrity in the conduct of its operations and is committed to providing a safe and healthy working environment for its employees. The Group operates a corporate culture that is based on ethical values and behaviours.
In addition, the Group encourages an open culture, with regular discussions with employees regarding their performance and skills development to achieve the objectives and strategy of the Group.
Any recommendations from staff to improve the working environment or in respect of health and safety matters will be assessed by the Human Resources and Administration Manager and, as appropriate, proposed to the Board for necessary actions to be taken.
Given the size of the Group, all practices undertaken by the Group are reviewed by the Executive Directors to ensure that the ethical values and behaviours are being adhered to.
9. Maintain governance structures and processes that are fit for purpose and support good decision- making by the board
The Board has overall responsibility for promoting the success of the Group. The Executive Directors have day-to-day responsibility for the operational management of the Group's activities. The Non-executive Directors are responsible for bringing independent and objective judgment to Board decisions.
There is a clear separation of the roles of CEO and Non-executive Chairman. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board's decision-making and ensuring the Non-executive Directors are properly briefed on matters. The Chairman has overall responsibility for corporate governance matters in the Group. The CEO has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group.
The Board has established the following committees: Audit Committee, Remuneration Committee and Nomination Committee. The members of the three committees are Abu Bakar bin Mohd Taib (Non-executive Chairman) and Dominic Seah (Non-executive Director). Abu Bakar bin Mohd Taib chairs the Audit Committee, Remuneration Committee and Nomination Committee.
The Audit Committee normally meets twice a year and has responsibility for, amongst other things, planning and reviewing the annual report and accounts and interim statements. It is also responsible for ensuring that an effective system of internal control is maintained. The ultimate responsibility for reviewing and approving the annual financial statements and interim statements remains with the Board.
The Remuneration Committee meets at least once a year and has responsibility for making recommendations to the Board on matter such as the remuneration packages for each of the Directors.
The Nomination Committee, which meets as required, has responsibility for reviewing the size and composition of the Board, the appointment of replacement or additional Directors and making appropriate recommendations to the Board.
The Directors consider that the Group has an appropriate governance framework for its size now and as it grows but they will consider the evolution of this framework on an annual basis.
The Board does not maintain a formal schedule of matters reserved for Board decision but matters such as financial results, Board appointments and acquisitions require approval at Company's Board meetings or written Board resolutions approved by the Board which have the same force and effect as if adopted at duly convened meetings of all the Directors. In 2018, the Company held three Board meetings.
10. Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.
The Company encourages two-way communication with various stakeholder groups, including shareholders and responds quickly to their relevant queries.
The Directors recognise the AGM as an important opportunity to meet shareholders and the Directors are available to answer questions raised by the shareholders.
The Company's website is regularly updated to include business progress, financial performance and corporate actions reflecting information that has already been announced by the Company through regulatory announcements.
The Company will announce and post on its website the results of voting on all resolutions in future general meetings (including annual general meetings) including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent. of independent shareholders.
Under AIM Rule 26, the Company already publishes historical annual reports, notices of meetings and other publications over the last five years which can be found here: http://www.mobilityone.com.my/v4/annual-reports.html
The Company has not published an audit committee or remuneration committee report in its annual report and accounts. The Board feels that this is appropriate given the size and stage of development of the Group. The Board will consider annually whether it considers it appropriate for these reports to be included in future annual report and accounts.
Report of the Independent Auditors to the Members of MobilityOne Limited
Opinion
We have audited the financial statements of MobilityOne Limited (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 December 2018 which comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated and company statements of financial position, the consolidated and company statements of cash flows, the consolidated and company statements of changes in and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
-- the financial statements give a true and fair view of the state of the Group's and of the parent company's affairs as at 31 December 2018 and of the Group's loss for the year then ended;
-- the Group's financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
-- the parent company's financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of Companies (Jersey) Law 1991; and
-- the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-- the Directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-- the Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
Key audit matter How our audit addressed the
key audit matter
Investment in subsidiaries
MobilityOne Limited has significant We reviewed the net assets of
interest in subsidiary companies. the subsidiary companies in
As such there is a risk that comparison to the net book value
the net book value of investments of investments.
may be impaired.
We considered the nature of
MobilityOne Limited as a holding
company, whilst the subsidiary
companies make up the trading
element of the Group. In light
of this we also compared the
net book value of investments
with the market capitalisation
of the Group.
--------------------------------------
Going concern assumption
The Group is dependent upon We evaluated the suitability
its ability to generate sufficient of management's model for the
cash flows to meet continued forecast.
operation costs and hence continue
trading. The income is derived The forecast includes assumptions,
from the provision of e-commerce including those related to the
infrastructure payment solutions growth in revenues.
and platforms.
Our audit work has focused on
The going concern assumption evaluating and challenging the
is dependent on the future growth reasonableness of these assumptions
and return to profitability and their impact on the forecast
of the current business as well period.
as the development of the additional
subsidiaries added to the Group
during the year under review.
--------------------------------------
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:
Group financial statements Company financial
statements
Overall materiality GBP630,000 (2017: GBP301,000) GBP39,000 (2017: GBP24,000).
------------------------------ ------------------------------
How we determined 0.5% of Revenue 2% of Net Assets
it
------------------------------ ------------------------------
Rationale for We believe that Revenue We believe that Net
benchmark applied is the most appropriate Assets is the most
bench mark for this entity appropriate bench
and used by the shareholders mark for this entity
in assessing the performance used by the shareholders
of the Group, and is in assessing the performance
a generally accepted of the Company, and
auditing benchmark. is a generally accepted
auditing benchmark
------------------------------ ------------------------------
For each component in the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of materiality allocated across components was between GBP624,000 and GBP2,000.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above GBP31,500 (Group audit) (2017: GBP15,050) and GBP2,0500 (Company audit) (2017: GBP1,200) as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgments, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and the Company, the accounting processes and controls, and the industry in which they operate.
The Group's financial statements are a consolidation of ten reporting units, comprising the Group's operating businesses and holding companies.
We performed audits of the complete financial information of MobilityOne Limited, MobilityOne Sdn Bhd, M1 Pay Sdn Bhd (formerly known as Netoss Sdn Bhd), One Tranzact Sdn Bhd, and Mobility I Tap Pay (Bangladesh) Limited reporting units, which were individually financially significant and accounted for 100% of the Group's revenue and Mobility I Tap Pay (Bangladesh) Limited accounted for 100% of the Group's loss before tax.
The Group's engagement team performed all audit procedures, with the exception of the audit of MobilityOne Sdn Bhd, M1 Pay Sdn Bhd (formerly known as Netoss Sdn Bhd), One Tranzact Sdn Bhd, MobilityOne South Asia Sdn Bhd, MobilityOne Philippines Inc, Onetransfer Remittance Sdn Bhd (formerly known as Happy Remit Sdn Bhd), Mobility I Tap Pay (Bangladesh) Limited which were performed by a component auditor in Malaysia.
Our involvement in the work of the component auditor in Malaysia included regular communication with a formal meeting arranged following the performance of the procedures. A review of the working papers was undertaken in the United Kingdom. No review was done on MobilityOne (B) Sdn Bhd, the dormant subsidiary.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
-- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
-- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-- the parent company financial statements are not in agreement with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or -- we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the directors' responsibilities statement set out on page 7, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of this report
This report is made solely to the company's members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Sachin Ramaiya (Senior Statutory Auditor)
For and on behalf of Jeffreys Henry LLP, Statutory Auditor
Finsgate
5-7 Cranwood Street
London
EC1V 9EE
United Kingdom
Date: 28 June 2019
Consolidated Income Statement
For the year ended 31 December 2018
2018 2017
Note GBP GBP
Revenue 5 125,471,796 85,140,366
Cost of sales (118,106,575) (79,846,346)
--------------- ---------------
GROSS PROFIT 7,365,221 5,294,020
Other operating income 77,544 233,981
Administration expenses (8,445,816) (5,129,886)
Distribution costs (103,632) -
Other operating expenses (231,621) (782,481)
Share of associate result 15 (22,285) -
--------------- ---------------
OPERATING LOSS (1,360,589) (384,366)
Finance costs 6 (276,426) (228,872)
--------------- ---------------
LOSS BEFORE TAX 7 (1,637,015) (613,238)
Tax 8 274,564 (121,430)
--------------- ---------------
LOSS FOR THE YEAR (1,362,451) (734,668)
=============== ===============
Attributable to:
Owners of the parent (735,204) (633,359)
Non-controlling interests (627,247) (101,309)
--------------- ---------------
(1,362,451) (734,668)
=============== ===============
LOSS PER SHARE
Basic loss per share (pence) 10 (0.692) (0.596)
Diluted loss per share (pence) 10 (0.692) (0.596)
The notes form part of these financial statements
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2018
2018 2017
GBP GBP
(LOSS) FOR THE YEAR (1,362,451) (734,668)
OTHER COMPREHENSIVE PROFIT
Foreign currency translation 838 87,326
------------ ----------
TOTAL COMPREHENSIVE PROFIT (1,361,613) (647,342)
============ ==========
Total comprehensive profit attributable
to:
Owners of the parent (696,138) (9,496)
Non-controlling interests (665,475) (637,846)
------------ ----------
(1,361,613) (647,342)
============ ==========
The notes form part of these financial statements
MOBILITYONE LIMITED (96293)
Consolidated Statement of Changes in Equity
For The Year Ended 31 December 2018
Non-Distributable Distributable
--------------------------------------- --------------
Reverse Foreign Non-
Currency controlling
Interests
Share Share Acquisition Translation Accumulated Total Total
Capital Premium Reserve Reserve Losses Equity
GBP GBP GBP GBP GBP GBP GBP GBP
As at 1 January
2017 2,657,470 909,472 708,951 794,347 (3,386,445) 1,683,795 (6,173) 1,677,622
---------- -------- ------------ ------------- -------------- ---------- -------------- --------------
Comprehensive
profit/(loss)
Loss for the
year - - - - (633,359) (633,359) (101,309) (734,668)
Foreign currency
translation - - - 87,326 - 87,326 (530,364) (443,038)
---------- -------- ------------ ------------- -------------- ---------- -------------- --------------
Total
comprehensive
profit/(loss)
for
the year - - - 87,326 (633,359) (546,033) (631,673) (1,177,706)
At 31 December
2017 2,657,470 909,472 708,951 881,673 (4,019,804) 1,137,762 (637,846) 499,916
========== ======== ============ ============= ============== ========== ============== ==============
Non-Distributable Distributable
--------------------------------------- --------------
Reverse Foreign Non-
Currency controlling
Interests
Share Share Acquisition Translation Accumulated Total Total
Capital Premium Reserve Reserve Losses Equity
GBP GBP GBP GBP GBP GBP GBP GBP
As at 1 January
2018 2,657,470 909,472 708,951 881,673 (4,019,804) 1,137,762 (637,846) 499,916
---------- -------- ------------ ------------- -------------- ---------- -------------- ----------------
Comprehensive
profit/(loss)
Profit/(loss)
for
the year - - - - (735,204) (735,204) (627,247) (1,362,451)
Foreign currency
translation - - - 838 - 838 (38,228) (37,390)
---------- -------- ------------ ------------- -------------- ---------- -------------- ----------------
Total
comprehensive
profit for the
year - - - 838 (735,204) (734,366) (665,475) (1,399,841)
At 31 December
2018 2,657,470 909,472 708,951 882,511 (4,755,008) 403,396 (1,303,321) (899,925)
========== ======== ============ ============= ============== ========== ============== ================
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal value of the respective shares net of share issue expenses.
The reverse acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance with IFRS 3.
The Company's assets and liabilities stated in the Statement of Financial Position were translated into Pound Sterling (GBP) using the closing rate as at the Statement of Financial Position date and the Income Statements were translated into GBP using the average rate for that period. All resulting exchange differences are taken to the foreign currency translation reserve within equity.
Retained earnings represent the cumulative earnings of the Group attributable to equity shareholders.
Non-controlling interests represent the share of ownership of subsidiary companies outside the Group.
The notes form part of these financial statements
MOBILITYONE LIMITED (96293)
Company Statement of Changes in Equity
For The Year Ended 31 December 2018
Non-Distributable
-----------------------------------------------
Share Share Accumulated
Capital Premium Losses Total
GBP GBP GBP GBP
As at 1 January
2018 2,657,470 909,472 (1,408,688) 2,158,254
Loss for the year - - (177,497) (177,497)
At 31 December 2018 2,657,470 909,472 (1,586,185) 1,980,757
========== ========= ============ ==========
As at 1 January
2017 2,657,470 909,472 (1,277,654) 2,289,288
Loss for the year - - (131,034) (131,034)
At 31 December 2017 2,657,470 909,472 (1,408,688) 2,158,254
========== ========= ============ ==========
The notes form part of these financial statements
MOBILITYONE LIMITED (96293)
Consolidated Statement of Financial Position
As at 31 December 2018
2018 2017
Note GBP GBP
ASSETS
Non-current assets
Intangible assets 11 302,286 338,938
Property, plant and equipment 12 1,884,900 2,272,557
Deferred tax assets 193,962 -
2,381,148 2,611,495
------------ ------------
Current assets
Inventories 14 1,381,106 1,621,378
Trade and other receivables 16 4,260,086 3,666,495
Tax recoverable 141,890 75,104
Assets held for sale 17 119,439 -
Cash and cash equivalents 18 4,181,490 3,425,316
------------ ------------
10,084,011 8,788,293
------------ ------------
TOTAL ASSETS 12,465,159 11,399,788
SHAREHOLDERS' EQUITY
Equity attributable to owners
of the parent:
Called up share capital 19 2,657,470 2,657,470
Share premium 20 909,472 909,472
Reverse acquisition reserve 21 708,951 708,951
Foreign currency translation
reserve 22 882,511 881,673
Retained earnings 23 (4,755,008) (4,019,804)
Shareholders' equity 403,396 1,137,762
Non-controlling interests (1,303,321) (637,846)
------------ ------------
TOTAL EQUITY (899,925) 499,916
------------ ------------
2018 2017
Note GBP GBP
LIABILITIES
Non-current liability
Loans and borrowings - secured 24 499,893 431,825
Deferred tax liabilities 470 125,076
Amount owing to directors 27 1,754,319 1,536,417
2,254,682 2,093,318
----------- -----------
Current liabilities
Trade and other payables 26 7,215,540 5,191,171
Amount owing to directors 27 122,685 102,187
Loans and borrowings - secured 24 3,767,696 3,513,196
Tax payables 4,481 -
11,110,402 8,806,554
Total liabilities 13,365,084 10,899,872
----------- -----------
TOTAL EQUITY AND LIABILITIES 12,465,159 11,399,788
=========== ===========
The financial statements were approved and authorised by the Board of Directors on 28 June 2019 and were signed on its behalf by:
............................................................................
Dato' Hussian @ Rizal bin A. Rahman
Chief Executive Officer
The notes form part of these financial statements
MOBILITYONE LIMITED (96293)
Company Statement of Financial Position
As at 31 December 2018
2018 2017
Note GBP GBP
ASSETS
Non-current asset
Investment in subsidiary companies 13 1,976,356 1,976,356
------------ ------------
Current assets
Trade and other receivables 16 1,080,288 1,077,417
Cash and cash equivalents 18 4,353 4,209
------------ ------------
1,084,641 1,081,626
------------ ------------
TOTAL ASSETS 3,060,997 3,057,982
============ ============
SHAREHOLDERS' EQUITY
Equity attributable to owners
of the parent:
Called up share capital 19 2,657,470 2,657,470
Share premium 20 909,472 909,472
Retained earnings 23 (1,586,185) (1,408,688)
------------ ------------
TOTAL EQUITY 1,980,757 2,158,254
============ ============
Current liabilities
Trade and other payables 26 28,913 25,906
Amount owing to subsidiary companies 931,327 774,222
Amount owing to directors 120,000 99,600
TOTAL LIABILITIES 1,080,240 899,728
---------- ----------
TOTAL EQUITY AND LIABILITIES 3,060,997 3,057,982
========== ==========
The financial statements were approved and authorised by the Board of Directors on 28 June 2019 and were signed on its behalf by:
............................................................................
Dato' Hussian @ Rizal bin A. Rahman
Chief Executive Officer
The notes form part of these financial statements
MOBILITYONE LIMITED (96293)
Consolidated Statement of Cash Flows
For the year ended 31 December 2018
2018 2017
Note GBP GBP
Cash flow from operating activities
Cash flow from operations 28 1,201,064 1,069,141
Interest paid (276,426) (228,872)
Interest received 66,554 62,631
Tax paid (93,759) (136,030)
Tax refund -
--------- ---------
Net cash generated from operating
activities 897,433 766,870
--------- ---------
Cash flow from investing activities
Purchase of property, plant and
equipment 12 (893,113) (301,387)
Development costs - (338,200)
Intangible asset - (779)
Increase in asset held for sale (119,439) -
Proceeds from disposal of equipment 779,123 -
Net cash outflow for disposal of
subsidiary company - -
Net cash inflow for acquisition
of subsidiary company 18,267 204,291
Net cash used in investing activities (215,162) (436,075)
Cash flows from financing activities
Drawdown of borrowings 90,429
Increase in pledged fixed deposits (297,416) -
Net change of banker acceptance 25 252,118 1,002,406
Repayment of finance lease payables (13,604) (44,797)
Repayment of term loan (6,375) (3,122)
Net cash from financing activities 25,152 954,487
--------- ---------
Increase in cash and cash equivalents 707,423 1,285,282
Effect of foreign exchange rate
changes 76,044 84,299
Cash and cash equivalents at beginning
of year 3,324,851 1,955,270
--------- ---------
Cash and cash equivalents at end
of year 18 4,108,318 3,324,851
========= =========
The notes form part of these financial statements
MOBILITYONE LIMITED (96293)
Company Statement of Cash Flows
For the year ended 31 December 2018
2018 2017
Note GBP GBP
Cash flow from operating activities
Cash depleted in operations 28 144 2,217
----- -----
Cash flow from investing activities
Investment in subsidiary - (18)
----- -----
Cash flow from financing activities
Proceeds from issuance of shares - -
----- -----
Increase/(Decrease) in cash and cash
equivalents 144 2,199
Effect of foreign exchange rate changes - -
Cash and cash equivalents at beginning
of year 4,209 2,010
----- -----
Cash and cash equivalents at end of
year 18 4,353 4,209
===== =====
The notes form part of these financial statements
Notes to the Financial Statements
For the year ended 31 December 2018
1. GENERAL INFORMATION
The principal activity of the Company is investment holding. The principal activities of the subsidiary companies are set out in Note 13 to the financial statements. There were no significant changes in the nature of these activities during the year.
The Company is incorporated in Jersey, the Channel Islands under the Companies (Jersey) Law 1991 and is listed on AIM. The registered office is located at Queensway House, Hilgrove Street, St Helier, Jersey JE1 1ES, Channel Islands. The consolidated financial statements for the year ended 31 December 2018 comprise the results of the Company and its subsidiary companies undertakings. The Company's shares are traded on AIM of the London Stock Exchange.
MobilityOne Limited is the holding company of an established group of companies ("Group") based in Malaysia which is in the business of providing e-commerce infrastructure payment solutions and platforms through their proprietary technology solutions, which are marketed under the brands MoCS(TM) and ABOSSE(TM) .
The Group has developed an end-to-end e-commerce solution which connects various service providers across several industries such as banking, telecommunication and transportation through multiple distribution devices such as EDC terminals, short messaging services, Automated Teller Machine and Internet banking.
The Group's technology platform is flexible, scalable and has been designed to facilitate cash, debit card and credit card transactions (according to the device) from multiple devices while controlling and monitoring the distribution of different products and services.
2. ACCOUNTING POLICIES
Basis of preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the International Accounting Standards Board (IASB), as adopted by the European Union, and with those parts of the Companies (Jersey) Law 1991 applicable to companies preparing their financial statements under IFRS. The financial statements have been prepared under the historical cost convention.
Going Concern
The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in Chairman's statement on page 2. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the financial statements and associated notes. In addition, Note 3 to the financial statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.
In order to assess the going concern of the Group, the Directors have prepared profit forecasts for companies within the Group. These forecasts show the Group expect an increase in revenue and will have sufficient headroom over available banking facilities. The Group has obtained banking facilities sufficient to facilitate the growth forecast in future periods. No matters have been drawn to the Directors' attention to suggest that future renewals may not be forthcoming on acceptable terms.
The controlling shareholder has also undertaken to provide support to enable the Group to meet its debts as and when they fall due, and in addition, the company has obtained undertakings from the directors of Mobility i Tap Pay (Bangladesh) Limited to postpone the repayment of the amounts due to them if necessary.
Hence, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and have prepared the financial statements on a going concern basis accordingly.
Should the underlying assumptions of the forecasts prove invalid and the shareholder support was withdrawn, the Group may be required to realise its assets and discharge its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classifications of recorded asset amounts or liabilities that may be necessary should the Group & Company be unable to continue as a going concern.
Estimation uncertainty and critical judgements
The significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount amortisation in the financial statements are as follows:
(i) Depreciation of property, plant and equipment
The costs of property, plant and equipment of the Group are depreciated on a straight-line basis over the useful lives of the assets. Management estimates the useful lives of the property, plant and equipment to be within 3 to 50 years. These are common life expectancies applied in the industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. The carrying amounts of the Group's property, plant and equipment as at 31 December 2018 are disclosed in Note 12 to the financial statements.
(ii) Amortisation of intangible assets
Software is amortised over its estimated useful life. Management estimated the useful life of this asset to be within 10 years. Changes in the expected level of usage and technological development could impact the economic useful life therefore future amortisation could be revised.
The research and development costs are amortised on a straight-line basis over the life span of the developed assets. Management estimated the useful life of these assets to be within 5 years. Changes in the technological developments could impact the economic useful life and the residual values of these assets, therefore future amortisation charges could be revised.
The carrying amounts of the Group's intangible assets as at 31 December 2018 are disclosed in Note 11 to the financial statements.
However, if the projected sales do not materialise there is a risk that the value of the intangible assets shown above would be impaired.
(iii) Impairment of goodwill on consolidation
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash generating units ("CGU") to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimation of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.
The Group's cash flow projections include estimates of sales. However, if the projected sales do not materialise there is a risk that the value of goodwill would be impaired.
The Directors have carried out a detailed impairment review in respect of goodwill. The Group assesses at each reporting date whether there is an indication that an asset may be impaired, by considering the cash flows forecasts. The cash flow projections are based on the assumption that the Group can realise projected sales. A prudent approach has been applied with no residual value being factored. At the period end, based on these assumptions, there was indication of impairment of the value of goodwill and of development costs.
The carrying amount of the Group's goodwill on consolidation as at 31 December 2018 is disclosed in the Note 11 to the financial statements.
(iv) Going concern
The Group determines whether it has sufficient resources in order to continue its activities by reference to budget together with current and forecast liquidity. This requires on estimate of the availability of such funding which is critically dependent on external borrowings support from the majority shareholders of the Group and, to an extent, macro-economic factors.
(v) Inventories valuation
Inventories are measured at the lower of cost and net realisable value. The Company estimates the net realisable value of inventories based on an assessment of expected sales prices. Demand levels and pricing competition could change from time to time. If such factors result in an adverse effect on the Group's products, the Group might be required to reduce the value of its inventories. Details of inventories are disclosed in Note 14 to the financial statements.
(vi) Income taxes
Judgement is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business.
The Company recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. As at 31 December 2018, the Group has tax recoverable of GBP141,890 (2017: GBP75,104).
IFRS AND IAS UPDATE FOR 31 DECEMBER 2018 ACCOUNTS
Changes in accounting policies and disclosures
During the financial year, the Group has adopted the following new and amended IFRS and IFRIC interpretations that are mandatory for current financial year:
-- IFRS 9 Financial instruments
-- IFRS 15 Revenue from contracts with customers
-- IFRS 2 (amendments) Share based payment -- IFRS 1 and IAS 28 (amendments) Annual Improvements to IFRS Standards 2014-2016 Cycle
-- IAS 40 Transfers of Investment Property (Amendments to IAS 40)
-- IFRIC 22 Foreign Currency Transactions and Advance Consideration
The impact of adopting the above new and amended IFRS and IFRIC interpretations had no material impact on the financial statements of the Group and the Company, except for:
i) IFRS 9 Financial Instruments
The adoption of IFRS 9 resulted in changes in accounting policies and adjustments to the financial statements. The accounting policies that relate to the recognition, classification, measurement and derecognition of financial instruments and impairment of financial assets are amended to comply with the provisions of this Standard, while the hedge accounting requirements under this Standard are not relevant to the Group and to the Company.
Upon adopting IFRS 9, the Group and the Company applied transitional relief, and have elected not to restate the comparative periods in the financial year of initial adoption. The impact arising from IFRS 9 adoption were included in the opening retained earnings at the date of initial application, 1 January 2018.
(a) Classification of financial assets and liabilities
IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost ("AC"), fair value through other comprehensive income ("FVTOCI") and fair value through profit or loss ("FVTPL") and replaces the existing IFRS 39 Financial Instruments: Recognition and Measurement categories of loans and receivables, held-to-maturity and available-for-sale. Classification under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flows characteristics.
Unquoted equity instruments previously carried at cost less impairment loss that classified as available-for-sale financial assets are classified and measured as equity instruments designated at FVTOCI beginning 1 January 2018. The Group elected to classify irrevocably its unquoted equity instruments under this category at the date of initial application as it intends to hold these investments for the foreseeable future.
Liquid investments were classified as loans and receivables under IFRS 39. On the adoption of IFRS 9, the liquid investments meet the criteria for mandatory measurement of FVTPL because the contractual cash flows of these securities are not solely payments of principal and interest on the principal outstanding.
(b) Impairment
IFRS 9 requires impairment assessments to be based on an Expected Credit Loss ("ECL") model, replacing the incurred loss model under IFRS 39. The Group and the Company require to record ECL on all of its debt instruments, loans and receivables, either on a 12-months or lifetime basis. The Group and the Company applied the simplified approach and record lifetime expected losses on all receivables. Based on readily information as at the date of this report, the Group and the Company do not expect any significant increase in impairment losses.
(c) Effect of changes in classification and measurement of financial assets on 1 January 2018
Reclassification
As at
31.12.2017 To IFRS 9
GBP GBP
Group
Financial assets
Loan and receivables
Trade and other receivables 3,666,495 3,666,495
Cash and cash balances 3,425,316 3,425,316
----------- -----------------
Company
Financial assets
Trade and other receivables 1,077,417 1,077,417
Cash and cash balances 4,209 4,209
----------- -----------------
The Directors regard the liquid investments as cash and cash equivalents in view of their high liquidity and insignificant changes in fair value.
The adoption of IFRS 9 results in changes in accounting policies for financial instruments. The Group and the Company has implemented the new classification and measurement an impairment rules under IFRS 9. The impact of reclassification and the calculation of ECL has no material impact to the financial statements of the Group and of the Company, and the standard has thus been implemented without adjusting the opening balance at 1 January 2018.
(ii) IFRS 15 Revenue from Contracts with Customers
IFRS 15 establishes a five-step model that will apply to recognition of revenue arising from contracts with customers, and provide a more structured approach in measuring and recognising revenue. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The core principle in IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to the customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
The Group and the Company adopted IFRS 15 using the modified retrospective method of adoption with the date of initial application of 1 January 2018. Under this method, IFRS 15 can be applied either to all contracts at the date of initial application or only to contracts that are not completed at this date.
The adoption of IFRS 15 has no material financial impact other than the disclosures made in the financial statements. The directors don't believe that there will be any revenue recognition or related cost accounting changes.
Standards, interpretations and amendments to published standards that are not yet effective
There were a number of standards and interpretations which were in issue at 31 December 2018 but were not effective at 31 December 2018 and have not been adopted for these Financial Statements. The Directors have assessed the full impact of these accounting changes on the Company. To the extent that they may be applicable, the Directors have concluded that none of these pronouncements will cause material adjustments to the Group's Financial Statements. They may result in consequential changes to the accounting policies and other note disclosures. The new standards will not be early adopted by the Group and will be incorporated in the preparation of the Group Financial Statements from the effective dates noted below
The new standards include:
IFRS 3 Business Combinations(2) IFRS 16 Leases(1) IFRS 17 Insurance Contracts(3) IAS 1 Presentation of Financial Statements(2) IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors(2) IAS 19 Employee Benefits (amendment) (1) IAS 28 Investment in associates and joint ventures (amendment) (1) IFRIC 23 Uncertainty over Income Tax Treatments(1) Improvements to IFRSs Annual Improvements 2015-2017 Cycle(1) : Amendments to 2 IFRSs and 2 IASs
1 Effective for annual periods beginning on or after 1 January 2019
2 Effective for annual periods beginning on or after 1 January 2020
3 Effective for annual periods beginning on or after 1 January 2021
The Directors anticipate that the adoption of these standards and the interpretations in future periods will have no material impact on the financial statements of the Group.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiary companies) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
Transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of its subsidiary companies have been changed (where necessary) to ensure consistency with the policies adopted by the Group.
(i) Subsidiary companies
Subsidiary companies are entities over which the Group has the ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity.
In the Company's separate financial statements, investments in subsidiary companies are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in the profit or loss.
(ii) Associates
Associates are all entities over which the group has significant influence but not control or joint control. This is generally the case where the group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see (iv) below), after initially being recognised at cost
(iii) Basis of consolidation
On 22 June 2007 MobilityOne Limited acquired the entire issued share capital of MobilityOne Sdn. Bhd. By way of a share for share exchange, under IFRS this transaction meets the criteria of a Reverse Acquisition. The consolidated accounts have therefore been presented under the Reverse Acquisition Accounting principles of IFRS 3 and show comparatives for MobilityOne Sdn. Bhd. For financial reporting purposes, MobilityOne Sdn. Bhd. (the legal subsidiary company) is the acquirer and MobilityOne Limited (the legal parent company) is the acquiree.
No goodwill has been recorded and the difference between the parent Company's cost of investment and MobilityOne Sdn. Bhd.'s share capital and share premium is presented as a reverse acquisition reserve within equity on consolidation.
The consolidated financial statements incorporate the financial statements of the Company and all entities controlled by it after eliminating internal transactions. Control is achieved where the Group has the power to govern the financial and operating policies of a Group undertaking so as to obtain economic benefits from its activities. Undertakings' results are adjusted, where appropriate, to conform to Group accounting policies.
Subsidiary companies are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intra-group balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.
The share capital in the consolidated statement of changes in equity for both the current and comparative period uses a historic exchange rate to determine the equity value.
(iv) Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the group's share of the post-acquisition profits or losses of the investee in profit or loss, and the group's share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are
recognised as a reduction in the carrying amount of the investment.
When the group's share of losses in an equity-accounted investment equals or exceeds its interest in
the entity, including any other unsecured long-term receivables, the group does not recognise further
losses, unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the group and its associates and joint ventures are eliminated to the extent of the group's interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the group. The carrying amount of equity-accounted investments is tested for impairment in accordance with the policy described in Note 2.
As permitted by and in accordance with Article 110 of the Companies (Jersey) Law 1991, a separate income statement of MobilityOne Limited, is not presented.
Revenue recognition
Revenue is recognised when it is probable that economic benefits associated with the transaction will flow to the Group and the amount of the revenue can be measured reliably.
(i) Revenue from trading activities
Revenue in respect of using the Group's e-Channel platform arises from the sales of prepaid credit, sales commissions received and fees per transaction charged to customers. Revenue for sales of prepaid credit is deferred until such time as the products and services are delivered to end users. Sales commissions and transaction fees are received from various product and services providers and are recognised when the services are rendered and transactions are completed.
Revenue from solution sales and consultancy comprise sales of software solutions, hardware equipment, consultancy fees and maintenance and support services. For sales of hardware equipment, revenue is recognised when the significant risks associated with the equipment are transferred to customers or the expiry of the right of return. For all other related sales, revenue is recognised upon delivery to customers and over the period in which services are expected to be provided to customers.
Revenue from remittance comprises transaction service fees charged to customers/senders. Transaction fees are received from senders and are recognised when the services are rendered and transactions are completed.
(ii) Interest income
Interest income is recognised on a time proportion basis that takes into account the effective yield on the asset.
(iii) Rental income
Rental income is recognised on an accrual basis.
Employee benefits
(i) Short term employee benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the period in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensation absences. Short term non-accumulating compensated absences such as sick and medical leave are recognised when the absences occur.
The expected cost of accumulating compensated absences is measured as the additional amount expected to be paid as a result of the unused entitlement that has accumulated at the Statement of Financial Position date.
(ii) Defined contribution plans
As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund ("EPF"). Such contributions are recognised as an expense in the income statement in the period to which they relate. The other subsidiary companies also make contribution to their respective countries' statutory pension schemes.
Finance leases
Assets financed by leasing arrangements, which give rights approximating to ownership, are treated as if they had been purchased outright and are recognised and depreciated over the shorter of the estimated useful life of the assets and the period of the leases. The capital element of future rentals is treated as a liability and the interest element is charged against profits in proportion to the balances outstanding. The rental costs of all other leased assets are charged against profits on a straight-line basis over the lease term.
Operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of incentives received from the lessor) are charged to the income statement.
Functional currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The functional currency of the Group is Ringgit Malaysia (RM). The consolidated financial statements are presented in Pound Sterling (GBP), which is the Company's presentational currency as this is the currency used in the country in which the entity is listed.
Assets and liabilities are translated into Pound Sterling (GBP) at foreign exchange rates ruling at the Statement of Financial Position date. Results and cash flows are translated into Pound Sterling (GBP) using average rates of exchange for the period.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
(ii) Transactions and balances (Continued)
The financial information set out below has been translated at the following rates:
Exchange rate (RM:
GBP)
At Statement
of Financial Average
Position for year
date
Year ended 31 December 2018 5.27 5.39
Year ended 31 December 2017 5.47 5.53
Taxation
Taxation on the income statement for the financial period comprises current and deferred tax. Current tax is the expected amount of taxes payable in respect of the taxable profit for the financial period and is measured using the tax rates that have been enacted at the Statement of Financial Position date.
Deferred tax is recognised on the liability method for all temporary differences between the carrying amount of an asset or liability in the Statement of Financial Position and its tax base at the Statement of Financial Position date. Deferred tax liabilities are recognised for all taxable temporary differences and 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 profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be recognised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or 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 and liabilities are measured at the tax rates that are expected to apply to the period when the asset is recognised or the liability is settled, based on the tax rates that have been enacted or substantively enacted by the Statement of Financial Position date. The carrying amount of a deferred tax asset is reviewed at each Statement of Financial Position date and is reduced to the extent that it becomes probable that sufficient future taxable profit will be available.
Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.
Intangible assets
(i) Research and development costs
All research costs are recognized in the income statement as incurred.
Expenditure incurred on projects to develop new products is recognised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditures which do not meet these criteria are expensed when incurred.
Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised through other operating expenses in the income statement using the straight-line basis over the commercial lives of the underlying products not exceeding five years. Impairment is assessed whenever there is an indication of impairment and the amortisation period and method are also reviewed at least at each Statement of Financial Position date.
(i) Goodwill on consolidation
Goodwill acquired in a business combination is initially measured at cost, representing the excess of the purchase price over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Following the initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment annually or more frequent when there is objective evidence that the carrying value may be impaired, in accordance with the accounting policy disclosed in impairment of assets.
Gains or losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
(iii) Software
Software which forms an integral part of the related hardware is capitalised with that hardware and included within property, plant and equipment. Software which are not an integral part of the related hardware are capitalised as intangible assets.
Acquired computer software licenses are capitalised on the basis of the costs incurred to acquired and bring to use the specific software. These costs are amortised over their estimated useful life of 10 years.
Impairment of assets
The carrying amounts of assets are reviewed at each reporting date to determine whether there is any indication of impairment.
If any such indication exists then the asset's recoverable amount is estimated. For goodwill that has an indefinite useful life, recoverable amount is estimated at each reporting date or more frequently when indications of impairment are identified.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount unless the asset is carried at a revalued amount, in which case the impairment loss is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same asset. A cash-generating unit is the smallest identifiable asset group that generates cash flows that are largely independent from other assets and groups. Impairment losses are recognized in the income statement in the period in which it arises. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognized for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognized in the income statement unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.
Property, plant and equipment
(a) Recognition and measurement
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar items.
When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
(b) Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in the income statement as incurred.
(c) Depreciation
Depreciation is recognised in the income statement on a straight-line basis over the estimated useful lives of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.
The estimated useful lives for the current and comparative periods are as follows:
Building 50 years Motor vehicles 5 years Leasehold improvement 10 years Electronic Data Capture equipment 10 years Computer equipment 3 to 5 years Computer software 10 years Furniture and fittings 10 years Office equipment 10 years Renovation 10 years
The depreciable amount is determined after deducting the residual value.
Depreciation methods, useful lives and residual values are reassessed at each financial period end.
Upon disposal of an asset, the difference between the net disposal proceeds and the carrying amount of the assets is charged or credited to the income statement. On disposal of a revalued asset, the attributable revaluation surplus remaining in the revaluation reserve is transferred to the distribution reserve.
Investments
Investments in subsidiary companies are stated at cost less any provision for impairment. Investments in associates are accounted for using the equity method of accounting.
Inventories
Inventories are valued at the lower of cost and net realisable value and are determined on the first-in-first-out method, after making due allowance for obsolete and slow moving items. Net realisable value is based on estimated selling price in the ordinary course of business less the costs of completion and selling expenses.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amotised cost using the effective interest method, less loss allowance. See note 16(a) for further information about the Group's accounting for trade receivables and note 2 for a description of the group's impairment policies.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less which have an insignificant risk of changes in value and bank overdrafts. For the purpose of Statement of Cash Flows, cash and cash equivalents are presented net of bank overdrafts.
Assets held for sale
Non-current assets are classified as 'held for sale' when all of the following criteria are met: a decision has been made to sell; the assets are available for sale immediately; the assets are being actively marketed; and a sale has been agreed or is expected to be concluded within 12 months of the balance sheet date.
Immediately prior to classification as held for sale, the assets are remeasured in accordance with the Group's accounting policies. Subsequently, assets classified as held for sale are valued at the lower of book value or fair value less disposal costs. Assets held for sale are not depreciated.
Trade and other payables
Trade and other payables are recognised initially at fair value of the consideration to be paid in the future for goods and services received and subsequently measured at amortised cost using the effective interest method.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings 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 period.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are recognised as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
When the borrowings are made specifically for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation is the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of funds drawndown from those borrowings.
When the borrowings are made generally, and used for the purpose of obtaining a qualifying asset, the borrowing costs eligible for capitalization are determined by applying a capitalization rate which is weighted on the borrowing costs applicable to the Group's borrowings that are outstanding during the financial period, other than borrowings made specifically for the purpose of acquiring another qualifying asset.
Borrowing costs which are not eligible for capitalization are recognised as an expense in the profit or loss in the period in which they are incurred.
Equity instruments
Instruments that evidence a residual interest in the assets of the Group after deducting all of its liabilities are classified as equity instruments. Issued equity instruments are recorded at proceeds received net of direct issue costs.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of value added tax, from the proceeds.
Financial instruments
Financial instruments carried on the Statement of Financial Position include cash and bank balances, deposits, investments, receivables, payables and borrowings. Financial instruments are recognised in the Statement of Financial Position when the Group has become a party to the contractual provisions of the instrument.
Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.
The particular recognition method adopted for financial instruments recognised on the Statement of Financial Position is disclosed in the individual accounting policy statements associated with each item.
Share based payments
Charges for employees services received in exchange for share based payments have been made for all options granted in accordance with IFRS 2 "Share Based Payments" options granted under the Group's employee share scheme are equity settled. The fair value of such options has been calculated using a Black-scholes model, based upon publicly available market data, and is charged to the profit or loss over the vesting period.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision makers are responsible for allocating resources and assessing performance of the operating segments and make overall strategic decisions. The Group's operating segments are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.
3. FINANCIAL INSTRUMENTS (a) Financial risk management objectives and policies
The Group and the Company's financial risk management policy is to ensure that adequate financial resources are available for the development of the Group and of the Company's operations whilst managing its financial risks, including interest rate risk, credit risk, foreign currency exchange risk, liquidity and cash flow risk and capital risk. The Group and the Company operates within clearly defined guidelines that are approved by the Board and the Group's policy is not to engage in speculative transactions.
(b) Interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing financial assets, the Group's income and operating cash flows are substantially independent of changes in market interest rates.
The Group's interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk.
The following tables set out the carrying amounts, the effective interest rates as at the Statement of Financial Position date and the remaining maturities of the Group's financial instruments that are exposed to interest rate risk:
Effective
Interest Within More than
At 31 Note Rate 1 year 1-2 2-3 years 3-4 years 4-5 years 5 years Total
December years
2018
% GBP GBP GBP GBP GBP GBP GBP
Fixed rate:
Fixed
deposits 18 2.95-3.20 2,610,256 - - - - - 2,610,256
Finance
leases 24 2.42-4.00 (114,074) (47,209) (63,994) - - (24,646) (249,923)
========== ============ ========= ========== ========== ========== ========== ============
Floating
rate:
Bankers'
acceptance 24 6.16-6.61 (3,551,792) - - - - - (3,551,792)
Term loan 24 4.60 (3,632,011) (7,719) (17,453) - - (253,412) (3,910,596)
At 31
December
2017
Fixed rate:
Fixed
deposits 18 2.95-3.20 2,312,840 - - - - - 2,312,840
Finance
leases 24 2.42-3.50 (106,915) (74,852) (20,553) (20,771) (17,325) (23,111) (263,527)
========== ============ ========= ========== ========== ========== ========== ============
Floating
rate:
Bankers'
acceptance 24 6.6-6.9 (3,299,674) (3,299,674)
Term loan 24 4.60 - (6,142) (14,227) - - (254,844) (275,213)
Sensitivity analysis for interest rate risk
The interest rate profile of the Group's significant interest-bearing financial instruments, based on carrying amounts as at the end of the reporting period was:
Group
2018 2017
GBP GBP
Floating rate instruments
Financial liabilities (Note
24) 3,944,494 3,581,029
Interest rate risk sensitivity analysis
(i) Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Company does not designate derivatives as hedging instruments under a fair value hedged accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.
(ii) Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points (bp) in interest rates at the end of the reporting period would have increased/(decreased) post-tax profit by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remained constant.
Group
Profit or loss
100 bp 100 bp
Increase Decrease
GBP GBP
2018
Floating rate instruments (39,445) 39,445
2017
Floating rate instruments (35,810) 35,810
(c) Credit risk
The Group's and the Company's exposure to credit risk arises mainly from receivables. Receivables are monitored on an ongoing basis via management reporting procedure and action is taken to recover debts when due. At each Statement of Financial Position date, there was no significant concentration of credit risk. The maximum exposure to credit risk for the Group and the Company is the carrying amount of the financial assets shown in the Statement of Financial Position.
(d) Foreign currency exchange risk
The Group and the Company do not have significant foreign currency risk at the end of reporting date.
(e) Liquidity and cash flow risks
The Group and the Company seeks to achieve a flexible and cost effective borrowing structure to ensure that the projected net borrowing needs are covered by available committed facilities. Debt maturities are structured in such a way to ensure that the amount of debt maturing in any one year is within the Group's and the Company's ability to repay and/or refinance.
The Group and the Company also maintains a certain level of cash and cash convertible investments to meet its working capital requirements.
The table below summarises the maturity profile of the Group's and the Company's liabilities at the reporting date based on contractual undiscounted repayment obligations.
On demand On demand On demand
or within one to over five
one year five year year Total
2018 GBP GBP GBP GBP
Group
Financial liabilities
Trade and other
payables 7,192,093 - - 7,192,093
Amount owing to
directors 122,685 1,754,319 - 1,877,004
Loans and borrowings 3,746,085 521,504 - 4,267,589
------------- ------------ ----------- -------------
Total undiscounted
financial liabilities 11,060,863 2,275,823 - 13,336,686
============= ============ =========== =============
2017 GBP GBP GBP GBP
Group
Financial liabilities
Trade and other
payables 5,191,771 - - 5,191,771
Amount owing to
directors 102,181 1,536,417 - 1,638,604
Loans and borrowings 3,513,196 153,870 277,955 3,945,021
------------- ------------ ----------- -------------
Total undiscounted
financial liabilities 8,807,148 1,690,287 277,955 10,774,796
============= ============ =========== =============
2018 GBP GBP GBP GBP
Company
Financial liabilities
Trade and other
payables 28,913 - - 28,913
Amount owing to
directors 120,000 - - 120,000
Amount owing to
subsidiary 931,327 - - 931,327
------------- -------------
Total undiscounted
financial liabilities 1,080,240 - - 1,080,240
============= ============ =========== =============
2017 GBP GBP GBP GBP
Company
Financial liabilities
Trade and other
payables 25,888 - - 25,888
Amount owing to
directors 99,600 99,600
Amount owing to
subsidiary 774,240 - - 774,240
Total undiscounted
financial liabilities 899,728 - - 899,728
============= ============ =========== =============
(f) Fair Values
The carrying amounts of financial assets and liabilities of the Group at the reporting date approximated their fair value except as set out below:
Group
Carrying
amount Fair value
GBP GBP
2018
Financial lease liabilities
(Note 24) 249,923 273,603
========= =============
2017
Financial lease liabilities
(Note 24) 263,527 281,123
The carrying amounts of financial assets and financial liabilities other than the above are reasonable approximation of fair value due to their short term nature.
The carrying amounts of the current portion of borrowing is reasonable approximation of fair value due to the insignificant impact of discounting.
(g) Capital risk
The Group's and the Company's objectives when managing capital are to safeguard the Group's and the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group and the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
4. EMPLOYEES AND DIRECTORS
Group
2018 2017
GBP GBP
EMPLOYEES
Wages, salaries and bonuses 1,355,896 441,348
Social security contribution 10,017 5,765
Contribution to defined contribution
plan 97,314 52,616
Other staff related expenses 238,064 18,722
---------- --------
Continuing operations 1,701,291 518,451
========== ========
DIRECTORS
Fees 121,628 115,861
Wages, salaries and bonuses 147,078 116,865
Social security contribution 343 299
Contribution to defined contribution
plan 17,649 14,024
---------- --------
Continuing operations 286,698 247,049
========== ========
The number of employees (excluding Directors) of the Group and of the Company at the end of the financial year were 231 (2017: 198) and Nil (2017: Nil) respectively.
The details of remuneration received and receivables by the Directors of the Group during the financial year are as follows:
Defined
Group Salaries Social security contribution
2018 Fees and allowances Bonuses contribution plan Total
GBP GBP GBP GBP GBP GBP
Company's Directors:
Dato' Hussian
@ Rizal bin A.
Rahman 36,000 80,224 - 172 9,627 126,023
Derrick Chia Kah
Wai 24,000 66,854 - 171 8,022 99,047
Seah Boon Chin 43,800 - - - - 43,800
Subsidiary companies'
Directors:
Tengku Muhaini
Binti Sultan Hj.
Ahmad Shah 5,572 - - - - 5,572
Abu Bakar bin
Mohd
Taib 6,685 - - - - 6,685
Abdul Latib bin
Tokimin 5,571 - - - - 5,571
-------- ---------------- -------- ---------------- -------------- --------
121,628 147,078 - 343 17,649 286,698
======== ================ ======== ================ ============== ========
Group
2017
Company's Directors:
Dato' Hussian
@ Rizal bin A.
Rahman 36,000 64,395 - 149 7,728 108,272
Derrick Chia Kah
Wai 24,000 52,470 - 150 6,296 82,916
Seah Boon Chin 39,600 - - - - 39,600
Subsidiary companies'
Directors:
Tengku Muhaini
Binti Sultan Hj.
Ahmad Shah 5,421 - - - - 5,421
Abu Bakar bin
Mohd
Taib 5,420 - - - - 5,420
Abdul Latib bin
Tokimin 5,420 - - - - 5,420
-------- ---------------- -------- ---------------- -------------- --------
115,861 116,865 - 299 14,024 247,049
======== ================ ======== ================ ============== ========
5. OPERATING SEGMENTS
The information reported to the Group's chief operating decision maker to make decisions about resources to be allocated and for assessing their performance is based on the nature of the products and services, and has two reportable operating segments as follows:
(a) Telecommunication services and electronic commerce solutions; and (b) Hardware
Except as above, no other operating segment has been aggregated to form the above reportable operating segments.
Measurement of Reportable Segments
Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the consolidated financial statements.
No segment assets and capital expenditure are presented as they are mostly unallocated items which comprise corporate assets and liabilities.
No geographical segment information is presented as more than 95% of the Group's revenue for the financial ended 31 December 2018 was generated in Malaysia.
Discontinued Continuing operations
operations
Telecommunication Telecommunication
services and services and
electronic electronic
Group commerce solutions commerce solutions Hardware Elimination Total
2018 GBP GBP GBP GBP GBP
============================= ===================== ==================== =========== ============== ============
Segment revenue:
Sales to external customers - 125,585,413 224,963 (338,580) 125,471,796
- 125,585,413 224,963 (338,580) 125,471,796
=================================================== ==================== =========== ============== ============
(Loss) before tax - (1,637,015) - - (1,637,015)
Tax - 274,564 - - 274,564
----------------------------- --------------------- -------------------- ----------- -------------- ------------
(Loss) for the year - (1,362,451) - - (1,362,451)
============================= ===================== ==================== =========== ============== ============
Non-cash expenses/(income)*
Depreciation of property, plant
and equipment - 649,905 - - 649,905
Amortisation of intangible assets - 68,852 - - 68,852
Impairment loss on goodwill - - - - -
- 718,757 - - 718,757
------------------------------------------------ ------------ ----------- ---------- -----------
*The disclosure for non-cash expenses has not been split according to the different segments as the cost to obtain such information is excessive and provides very little by way of information.
Discontinued Continuing operations
operations
Telecommunication Telecommunication
services and services and
electronic electronic
Group commerce solutions commerce solutions Hardware Elimination Total
2017 GBP GBP GBP GBP GBP
==================== ===================== ==================== =================== ============== ==============
Segment revenue:
Sales to external
customers - 83,767,474 1,372,892 - 85,140,366
- 83,767,474 1,372,892 - 85,140,366
========================================== ==================== =================== ============== ==============
(Loss) before tax - (613,238) - - (613,238)
Tax - (121,430) - - (121,430)
-------------------- --------------------- -------------------- ------------------- -------------- --------------
(Loss) for the year - (734,668) - - (734,668)
==================== ===================== ==================== =================== ============== ==============
Non-cash expenses/(income)*
Depreciation of property, plant
and equipment - 179,027 - - 179,027
Amortisation of development costs - 23 - - 23
Impairment loss on goodwill - 643,729 - - 643,729
-
- 822,779 - - 822,779
--------------- ----------- ---------- ---------- ------------
*The disclosure for non-cash expenses has not been split according to the different segments as the cost to obtain such information is excessive and provides very little by way of information.
6. FINANCE COSTS
Group
2018 2017
GBP GBP
Bankers' acceptance interest 222,276 193,874
Finance lease interest 15,616 8,947
Bank guarantee interest 3,731 2,858
Bank overdraft 8,477 8,884
Letters of credit -
Term loan 26,326 14,309
-------- --------
276,426 228,872
======== ========
7. (LOSS) BEFORE TAX
Profit before tax is stated after charging/(crediting):
Group
2018 2017
Note GBP GBP
Auditors' remuneration
* Statutory audit
- Current year 33,354 26,769
- Under/(Over) provided 362 (199)
--------------------------------------------------- ----- --------- --------------
Amortisation of intangible assets 11 68,852 23
Amortisation of development costs 11 - -
Property, plant and equipment written 12
off - -
Impairment loss on goodwill 11 - 643,729
Directors' remuneration 4 286,698 247,049
--------------------------------------------------- ----- --------- --------------
Depreciation 12 649,905 179,027
Inventories written off - 5,650
Rental of premises and equipment - 33,147
Other income (77,544) (149,220)
Interest income (66,554) (62,622)
Gain on foreign exchange
- realised 6,302 9,780
- unrealised 1,671 26,828
8. TAX
Group
2018 2017
GBP GBP
Current tax expense:
Jersey corporation tax for the - -
year
Foreign tax 24,510 115,908
Under/(Over) provision in prior
year: 11,086 (9,760)
Foreign tax
------- --------
35,596 106,148
A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at the effective income tax rate of the Group is as follows:
Group
2018 2017
GBP GBP
(Loss)/profit before taxation from
continuing operations (1,637,015) (613,238)
Loss before taxation from discontinuing
operations - -
------------ ----------
(1,637,015) (613,238)
------------ ----------
Taxation at Malaysian statutory tax
rate of 24% (2017: 24%) (392,884) (174,458)
Effect of different tax rates in
other countries (221,194) (1,606)
Effect of expenses not deductible
for tax 689,174 377,759
Income not taxable for tax purpose (1,246) (38,021)
Deferred tax assets not recognised
during the year of 24% (435,914) 3,847
Utilisation of previously unrecognized
unabsorbed capital allowance 76,414 (36,332)
Overprovision of tax expense in prior
year 11,086 (9,759)
Tax (income)/expense for the year (274,564) 121,430
As at 31 December 2018, the unrecognised deferred tax assets of the Group are as follows:
Group
2018 2017
GBP GBP
Unabsorbed tax losses 171,736 186,592
Unabsorbed capital allowances 293,265 18,536
Taxable temporary difference - 3,268
465,001 208,396
======== ========
The potential net deferred tax assets amounting to GBP465,001 (2017: GBP208,396) has not been recognised in the financial statements because it is not probable that future taxable profit will be available against which the subsidiary company can utilise the benefits.
The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits of the subsidiary company is subject to no substantial changes in shareholdings of the subsidiary company under Section 44(5A) and (5B) of Income Tax Act, 1967.
9. LOSS OF COMPANY
The profit or loss of the Company is not presented as part of these financial statements. The Company's loss for the financial year was GBP177,497 (2017: GBP131,034).
10. LOSS PER SHARE
Group
2018 2017
GBP GBP
Profit/(loss) attributable to owners
of the Parent for the computation of
basic earnings/(loss) per share
Loss from continuing operations (735,204) (633,359)
Issued ordinary shares at 1 January 106,298,780 106,298,780
Effect of ordinary shares issued during - -
the period
------------ ------------
Weighted average number of shares at
31 December 106,298,780 106,298,780
============ ============
Fully diluted weighted average number
of shares at 31 December 116,898,780 116,898,780
============ ============
Loss Per Share
Basic (loss) per share (pence) (0.692) (0.596)
Diluted (loss) per share (pence) (0.692) (0.596)
The basic earnings per share is calculated by dividing the loss of GBP735,204 (2017: loss of GBP633,359) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, which is 106,298,780 (2017: 106,298,780).
The diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the exercise of outstanding dilutive share options.
11. INTANGIBLE ASSETS
Group Software Goodwill Development Total
31 December 2018 on consolidation costs
GBP GBP GBP GBP
Cost
At 1 January 2018 699,717 1,728,640 1,296,768 3,725,125
Acquisition - 20,903 - 20,903
Reclassification 338,200 - (338,200) -
Foreign exchange differences 39,303 - 36,288 75,591
---------- ------------------ ------------ ----------
At 31 December 2018 1,077,220 1,749,543 994,856 3,821,619
========== ================== ============ ==========
Accumulated amortisation
and impairment loss
At 1 January 2018 698,979 1,728,640 958,568 3,386,187
Amortisation charge for
the year 68,852 - - 68,852
Foreign exchange differences 28,006 - 36,288 64,294
---------- ------------------ ------------ ----------
At 31 December 2018 795,837 1,728,640 994,856 3,519,333
========== ================== ============ ==========
Net Carrying Amount
At 31 December 2018 281,383 20,903 - 302,286
========== ================== ============ ==========
-
31 December 2017
Cost
At 1 January 2017 518,811 1,076,904 962,300 2,558,015
Acquisition 951 - - 951
Addition - 641,769 338,200 979,969
Foreign exchange differences 179,955 9,967 (3,732) 186,190
---------- ------------------ ------------ ----------
At 31 December 2017 699,717 1,728,640 1,296,768 3,725,125
========== ================== ============ ==========
Accumulated amortisation
and impairment loss
At 1 January 2017 518,811 1,076,904 962,300 2,558,015
Acquisition 172 - - 172
Amortisation charge for
the year 23 - - 23
Impairment loss for the
year - 643,729 - 643,729
Foreign exchange differences 179,973 8,007 (3,732) 184,248
---------- ------------------ ------------ ----------
At 31 December 2017 698,979 1,728,640 958,568 3,386,187
========== ================== ============ ==========
Net Carrying Amount
At 31 December 2017 738 - 338,200 338,938
========== ================== ============ ==========
The Group assesses at each reporting date whether there is an indication that an asset may be impaired, by considering the net present value of discounted cash flows forecasts. If an indication exists an impairment review is carried out.
Goodwill on consolidation
(a) Impairment testing for goodwill on consolidation
Goodwill on consolidation has been allocated for impairment testing purposes to the individual entities which is also the cash-generating units ("CGU") identified.
(b) Key assumptions used to determine recoverable amount
The recoverable amount of a CGU is determined based on value in use calculations using cash flow projections based on financial budgets approved by the Directors covering 5 years period. The projections are based on the assumption that the Group can recognise projected sales which grow at 10% per annum which is based on expected clientele over time. A prudent approach has been applied with no residual value being factored into these calculations. If the projected sales do not materialise there is a risk that the total value of the intangible assets shown above would be impaired. A pre-tax discount rate of 8.50% per annum was applied to the cash flow projections, after taking into consideration the Group's cost of borrowings, the expected rate of return and various risks relating to the CGU. The directors have relied on past experience and all external evidence available in determining the assumptions.
During the financial year, the Group impairment loss amounting to GBPNil (2017: GBP643,729) in respect of the goodwill on consolidation. A significant proportion of goodwill on consolidation relates to the acquisition of Mobility I Tap Pay (Bangladesh) Ltd. which is a CGU and has a carrying amount of NIL (2017: NIL). Its recoverable amount has been determined based on value in use using cash flow projections and key assumptions as described in (b) above.
Development costs
Development costs will not be amortised if the product is still in its development phase. The amortisation of the development costs is over 5 years period, which in the opinion of the Directors is adequate.
12. PROPERTY, PLANT AND EQUIPMENT
Building Motor Leasehold Electronic Computer Computer Furniture Office Renovation
Group vehicles improvement Data equipment software and equipment
Capture fittings Total
equipment
31 December 2018 GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
COST
At 1 January 2018 329,483 386,105 9,841 1,870,378 429,306 37,063 168,625 90,378 75,510 3,396,689
Additions - 303,760 - 478,280 22,908 58,021 24,598 1,540 4,006 893,113
Disposal - - - (596,668) (13,188) - - - - (609,856)
Reclassification - (113,990) - - - - - - - (113,990)
Foreign exchange
differences 12,473 23,164 73 80,617 17,300 2,700 7,995 3,861 2,948 151,131
---------- ----------
At 31 December
2018 341,956 599,039 9,914 1,832,607 456,326 97,784 201,218 95,779 82,464 3,717,087
---------- ----------
DEPRECIATION
At 1 January 2018 23,184 247,543 4,632 383,623 261,784 29,151 84,817 39,733 49,665 1,124,132
Depreciation
charge
for the year 6,916 86,086 970 478,165 47,583 2,943 12,380 10,068 4,794 649,905
Disposal - - - (524) (12,353) - - - - (12,877)
Foreign exchange
differences 1,033 12,735 56 37,122 11,072 1,169 3,853 2,000 1,987 71,027
---------- ----------
At 31 December
2018 31,133 346,364 5,658 898,386 308,086 33,263 101,050 51,801 56,446 1,832,187
---------- ----------
NET CARRYING
AMOUNT
At 31 December
2018 310,823 252,675 4,256 934,221 148,240 64,521 100,168 43,978 26,018 1,884,900
========== ========== ============= =========== =========== ========== =========== =========== ============ ==========
Building Motor Leasehold Electronic Computer Computer Furniture Office Renovation
Group vehicles improvement Data equipment software and equipment
Capture fittings Total
equipment
31 December GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
2017
COST
At 1 January
2017 387,903 218,278 10,867 180,792 260,781 36,355 83,690 36,286 71,408 1,286,360
Acquisition
on
subsidiary - 70,568 - 1,360,625 48,408 - 81,938 31,779 - 1,593,318
Additions - 97,181 - 302,607 120,581 404 4,321 22,795 3,505 551,394
Disposal - - - (3,198) - - - - - (3,198)
Foreign
exchange
differences (58,420) 78 (1,026) 29,552 (464) 304 (1,324) (482) 597 (31,185)
---------- ----------
At 31
December
2017 329,483 386,105 9,841 1,870,378 429,306 37,063 168,625 90,378 75,510 3,396,689
---------- ----------
DEPRECIATION
At 1 January
2017 21,974 191,213 (1,787) 182,875 218,962 26,890 66,149 28,137 44,796 779,209
Acquisition
on
subsidiary - 13,948 - 131,361 9,557 - 12,209 5,344 - 172,419
Depreciation
charge
for the year 13,458 40,841 1,022 72,111 32,472 2,011 6,256 6,416 4,440 179,027
Disposal - - - (95) - - - - - (95)
Foreign
exchange
differences (12,248) 1,541 5,397 (2,629) 793 250 203 (164) 429 (6,428)
---------- ----------
At 31
December
2017 23,184 247,543 4,632 383,623 261,784 29,151 84,817 39,733 49,665 1,124,132
---------- ----------
NET CARRYING
AMOUNT
At 31
December
2017 306,299 138,562 5,209 1,486,755 167,522 7,912 83,808 50,645 25,845 2,272,557
========== ========== ============= =========== =========== ========== =========== =========== ============ ==========
(a) Cash payments of GBP931,723 (2017: GBP301,387) were made by the Group to purchase property, plant and equipment.
(b) Included in property, plant and equipment of the Group are motor vehicles and Electronic Data Capture equipment with net carrying amounts of GBP105,065 and GBP189,815 (2017: GBP85,949 and GBP214,280) held under finance leases arrangements.
(c) Assets pledged as securities to licensed banks
The carrying amount of property, plant and equipment of the Group and of the Company pledged as securities for bank borrowings as disclosed in Note 24 to the financial statement are:
Group
2018 2017
GBP GBP
Freehold building 310,823 306,299
======== ==========
13. INVESTMENT IN SUBSIDIARY COMPANIES
Company
2018 2017
GBP GBP
COST
At 1 January 1,976,356 1,976,338
Add: Investment during the financial
year - 18
Less: Impairment loss during the financial
year - -
---------- -----------
At 31 December 1,976,356 1,976,356
========== ===========
Details of the subsidiary companies are as follows:
Effective Ownership
of Ordinary
Shares
Name of Subsidiary Country Interest ** Principal Activities
of
Companies Incorporation 2018 2017
% %
Provision of e-Channel
products and services,
technology managed
MobilityOne Sdn. services and solution
Bhd. Malaysia 100 100 sales and consultancy
MobilityOne South
Asia Sdn. Bhd. Malaysia 100 100 Investment holding
Direct subsidiary
companies of MobilityOne
Sdn. Bhd.
M1 Pay Sdn. Bhd.
(Formerly known Provision of solution
as Netoss Sdn. Bhd.) Malaysia 100 100 sales and services
MobilityOne Ventures
Sdn. Bhd. Malaysia 100 100 Struck-off
Direct subsidiary
companies of MobilityOne
Sdn. Bhd. (Continued)
Provision of IT systems
and solutions and
to establish a multi-channel
MobilityOne Philippines, electronic service
Inc* Philippines 95 95 bureau
Provision of electronic
One Tranzact Sdn. payment and product
Bhd. Malaysia 100 100 fulfillment
MobilityOne (B) Brunei 99 - Financial services
Sdn. Bhd.*
Direct subsidiary
company of MobilityOne
South Asia Sdn.
Bhd.
Mobility I Tap Pay* Provision of financial
(Bangladesh) Ltd Bangladesh 55 55 services
* Audited by firm of auditors other than UHY.
** All the above subsidiary undertakings are included in
the consolidated financial statements.
14. INVENTORIES
Group
2018 2017
GBP GBP
At lower of cost and net realisable
value:
Airtime 1,138,674 1,360,261
Electronic date capture equipment 51,838 -
Card 5,812 -
Finished group 184,782 261,117
========== ==========
15. INVESMENT IN ASSOCIATE COMPANY
Group
2018 2017
GBP GBP
At cost:
Unquoted shares in Malaysia 388,143 365,858
Share of post-acquisition reserve (22,285) -
---------- ----------
365,858 365,858
Accumulated impairment losses:
Balance at beginning/at end of the
financial year (365,858) (365,858)
---------- ----------
Balance at end of the financial year - -
========== ==========
Details of the associate company are as follows:
Country
Name of Company of Effective Interest Principal Activities
Incorporation 2018 2017
Onetransfer Remittance
Sdn. Bhd. (Formerly
known as Happy Provider for International
Remit Sdn. Bhd.) Malaysia 50% 50% remittance services
The associate company is not material individually to the financial position, financial performance and cash flows of the Group.
16. TRADE AND OTHER RECEIVABLES
Group Company
2018 2017 2018 2017
GBP GBP GBP GBP
Trade receivables
* Third parties 3,056,458 2,714,144 - -
Other receivables
* Deposits 60,182 19,886 - -
* Prepayments 38,838 4,603 - -
* Sundry receivables 1,097,107 911,024 - -
* Staff advances 7,501 16,838 - -
* Amount due from subsidiary company - - 1,080,288 1,077,417
---------- ---------- ------------ ------------
4,260,086 952,351 1,080,288 1,077,417
Total trade and
other receivables 4,260,086 3,666,495 1,080,288 1,077,417
Ageing analysis
An ageing analysis of trade receivables that are neither individually nor collectively considered to be impaired is as follows:
Group
2018 2017
GBP GBP
Neither past due nor impaired 2,879,647 1,930,438
---------- ----------
1 to 2 months past due 7,486 94,788
3 to 12 months past due 169,325 688,918
---------- ----------
176,811 783,706
---------- ----------
3,056,458 2,714,144
========== ==========
(a) The Group's and the Company's normal trade credit terms range from 30 to 60 days (2018: 30 to 60 days). Other credit terms are assessed and approved on a case to case basis. The directors' are of the opinion that there are no expected credit losses as required under IFRS 9.
Receivables that were neither past due nor impaired relate to a wide range of customers for whom there was no recent history of default.
Receivables that were past due but not impaired relate to a number of independent customers that have a good track record with the Group. Based on past experience, management believes that no impairment allowance is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable.
(b) Related party balances
The amount due from subsidiary companies is unsecured, non-interest bearing and is repayable on demand.
17. ASSETS HELD FOR SALE
Group
2018 2017
GBP GBP
At 1 January
Addition 119,439 -
-------- -----
At 31 December 119,439 -
======== =====
18. CASH AND CASH EQUIVALENTS
Group Company
2018 2017 2018 2017
GBP GBP GBP GBP
Cash in hand and
at banks 1,571,234 1,112,476 4,353 4,209
Fixed deposits with
licensed bank 2,610,256 2,312,840 - -
---------- ---------- ------ ------
4,181,490
Cash and bank balances 3,425,316 4,353 4,209
Less : Bank overdraft
(Note 23) (73,172) (100,465) - -
Cash and cash equivalents 4,108,318 3,324,851 4,353 4,209
(a) The above fixed deposits have been pledged to licensed banks as securities for credit facilities granted to the Group as disclosed in Note 23 to the financial statements.
(b) The Group's effective interest rates and maturities of deposits are range from 2.95% - 3.20% (2017: 2.95% - 3.20%) and from 1 month to 12 months (2017: 1 month to 12 months) respectively.
19. CALLED UP SHARE CAPITAL
Number of ordinary
shares of GBP0.025 Amount
each
2018 2017 2018 2017
GBP GBP
Authorised in MobilityOne
Limited
At 1 January/31
December 400,000,000 400,000,000 10,000,000 10,000,000
============ ============ =========== ===========
Issued and fully
paid in MobilityOne
Limited
At 1 January 106,298,780 106,298,780 2,657,470 2,657,470
At 31 December 106,298,780 106,298,780 2,657,470 2,657,470
============ ============ =========== ===========
20. COMPANY EQUITY INSTRUMENTS
Share Share premium Retained
capital earnings Total
GBP GBP GBP GBP
At 1 January 2018 2,657,470 909,472 (1,408,688) 2,158,254
Loss for the year - - (177,497) (177,497)
---------- -------------- ------------ ------------
At 31 December 2018 2,657,470 909,472 (1,586,185) (1,980,757)
========== ============== ============ ============
Share Share premium Retained
capital earnings Total
GBP GBP GBP GBP
At 1 January 2017 2,657,470 909,472 (1,277,654) 2,289,288
Loss for the year - - (131,034) (131,034)
---------- -------------- ------------ ------------
At 31 December 2017 2,657,470 909,472 (1,408,688) 2,158,254
========== ============== ============ ============
21. REVERSE ACQUISITION RESERVE
The acquisition of MobilityOne Sdn. Bhd. by MobilityOne Limited, which was affected through a share exchange, was completed on 5 July 2007 and resulted in MobilityOne Sdn. Bhd. becoming a wholly owned subsidiary of MobilityOne Limited. Pursuant to a share swap agreement dated 22 June 2007 the entire issued and paid-up share capital of MobilityOne Sdn. Bhd. was transferred to MobilityOne Limited by its owners. The consideration to the owners was the transfer of 178,800,024 existing ordinary shares and the allotment and issuance by MobilityOne Limited to the owners of 81,637,200 ordinary shares of 2.5p each. The acquisition was completed on 5 July 2007. Total cost of investment by MobilityOne Limited is GBP2,040,930, the difference between cost of investment and MobilityOne Sdn. Bhd. share capital of GBP708,951 has been treated as a reverse acquisition reserve.
22. FOREIGN CURRENCY TRANSLATION RESERVE
The subsidiary companies' assets and liabilities stated in the Statement of Financial Position were translated into Sterling Pound (GBP) using the closing rate as at the Statement of Financial Position date and the Income Statements were translated into GBP using the average rate for that period. All resulting exchange differences are taken to the foreign currency translation reserve within equity.
2018 2017
GBP GBP
At 1 January 881,673 794,347
Currency translation differences during
the year 838 87,326
At 31 December 882,511 881,673
======== ========
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group's presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group's net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.
23. RETAINED EARNINGS
Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
Group Company
2018 2017 2018 2017
GBP GBP GBP GBP
At 1 January (4,019,804) (3,386,445) (1,408,688) (1,277,654)
Loss for the
year (735,204) (633,359) (177,497) (131,034)
At 31 December (4,755,008) (4,019,804) (1,586,185) (1,408,688)
============ ============ ============= ==============
24. FINANCIAL LIABILITIES - LOANS AND BORROWINGS
Group
2018 2017
Non-current GBP GBP
Secured:
Finance lease payables (Note 24) 221,309 156,612
Term loan 278,584 275,213
499,893 431,825
========== ==========
Current
Secured:
Bankers' acceptance 3,551,792 3,299,674
Bank overdraft 73,172 100,465
Finance lease payables (Note 24) 135,685 106,915
Term loan 7,047 6,142
3,767,696 3,513,196
========== ==========
Total Borrowings
Secured:
Bankers' acceptance 3,551,792 3,299,674
Bank overdraft 73,172 100,465
Finance lease payables (Note 24) 356,994 263,527
Term loan 285,631 281,355
4,267,589 3,945,021
========== ==========
The bankers' acceptance and bank overdraft secured by the following:
(a) pledged of fixed deposits of a subsidiary company (Note 17);
(b) personal guarantee by Dato' Hussian @ Rizal bin A. Rahman, a Director of the Company; and
(c) corporate guarantee by the Company.
The term loan is secured by the following:
(a) Charge over the Company's building (Note 12); and
(b) joint and several guaranteed by Dato' Hussian @ Rizal bin A. Rahman and Derrick Chia Kah Wai, the Directors of the Company.
The effective interest rates of the Group for the above facilities other than finance leases are as follows:
Group
2018 2017
% %
Bankers' acceptance 6.16-6.61 6.6-6.9
Bank overdraft 8.65 8.85
Term loan 4.60 4.60
The maturity of borrowings (excluding finance leases) is as follows:
Group
2018 2017
GBP GBP
Within one year 3,632,011 3,406,281
Between one to two years 7,719 6,142
Between two to three years 17,453 14,227
Between three and four years - -
Between four to five years - -
More than five years 253,412 254,844
3,910,596 3,681,494
Other information on financial risks of borrowings are disclosed in Note 3.
25. FINANCE LEASE PAYABLES
Group
2018 2017
GBP GBP
Minimum lease payments:
Not later than 1 year 124,519 119,902
Later than 1 year but not later than
2 years 52,514 80,481
Later than 2 years but not later
than 5 years 51,672 23,438
Later than 5 years 44,898 57,302
--------- ---------
273,603 281,123
Less: Future finance charges (23,680) (17,596)
--------- ---------
Present value of finance lease liabilities 249,923 263,527
========= =========
Present value of minimum lease payments:
Not later than 1 year 114,074 106,915
Later than 1 year but not later than
2 years 47,209 74,852
Later than 2 years but not later
than 5 years 63,994 20,553
Later than 5 years 24,646 61,207
249,923 263,527
========= =========
Analysed as:
Due within 12 months (Note 24) 114,074 106,915
Due after 12 months (Note 24) 135,849 156,612
--------- ---------
249,923 263,527
========= =========
The Group has finance lease contracts for certain motor vehicles and Electronic Data Capture equipment as disclosed on Note 12(b).
Other information on financial risks of finance lease payables are disclosed in Note 3.
26. TRADE AND OTHER PAYABLES
Group Company
2018 2017 2018 2017
GBP GBP GBP GBP
Trade payables
* Third parties 1,272,014 481,804 - -
Other payables
* Deposits 173,896 619,503 - -
* Accruals 2,496,923 721,026 3,360
* Sundry payables 3,272,707 3,368,838 25,553 25,888
Amount due to subsidiary
companies - - 931,327 774,240
7,215,540 4,709,361 960,240 800,128
Total trade and other
payables 7,215,540 5,191,171 960,240 800,128
Add: Amount due to
Directors (Note 26) 1,877,004 1,638,604 120,000 99,600
Add: Loans and borrowings
(Note 23) 4,267,589 3,945,021 - -
Total financial liabilities
carried at amortised
costs 13,360,133 10,774,796 1,080,240 899,728
(a) The Group's normal trade credit terms range from 30 to 90 days (2017: 30 to 90 days). Other credit terms are assessed and approved on a case to case basis.
(b) Including in sundry payables of the Group is an amount of GBP1,691,872 (2017: GBP1,038,816) payable to the subsidiary company's partner distributors in Bangladesh.
27. AMOUNT DUE TO DIRECTORS
Group Company
2018 2017 2018 2017
GBP GBP GBP GBP
Non-Current
Dr Md Zahir Uddin* 976,333 1,384,537 - -
Prof. Dr. Md Shahin
Hossain* 773,966 148,047 - -
Keiko Tanida* 4,020 3,833 - -
---------- ---------- -------- -------
1,754,319 1,536,417 - -
---------- ---------- -------- -------
Current
Dato' Hussian
@ Rizal bin A.
Rahman 74,685 38,587 72,000 36,000
Derrick Chia Kah
Wai 48,000 24,000 48,000 24,000
Seah Boon Chin - 39,600 - 39,600
122,685 102,187 120,000 99,600
Total amount due
to directors 1,877,004 1,638,604 120,000 99,600
========== ========== ======== =======
*Amount due from the Group's subsidiary, Mobility I Tap Pay (Bangladesh) Limited, to the subsidiary's directors.
These are unsecured, interest free and repayable on demand.
28. RECONCILIATION OF PROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
Group
2018 2017
GBP GBP
Cash flow from operating activities
Profit before tax
* Continuing (1,637,015) (613,238)
* Discontinued operation - -
------------ ----------
(1,637,015) (613,238)
------------ ----------
Adjustments for:
Depreciation of property, plant
and equipment 649,905 179,027
Amortisation of intangible assets 68,852 23
Amortisation of development costs - -
Impairment loss on goodwill - 643,729
Interest expenses 276,426 228,872
Inventories written off - 5,650
Interest income (66,554) (62,631)
------------ ----------
Operating profit before working
capital changes (708,386) 381,432
Decrease/(increase) in inventories 240,272 (257,526)
Increase in receivables (593,591) (458,111)
(Decrease)/increase in amount due
to Directors & Shareholder 238,400 (104,997)
Increase in payables 2,024,369 1,508,343
Cash generated from operations 1,201,064 1,069,141
Company
2018 2017
GBP GBP
Cash flow from operating activities
Loss before tax (177,497) (131,034)
(Increase)/ in trade and other
receivable (2,871) (9,031)
Increase/(Decrease) in payables 3,007 253,217
Increase/(Decrease) in amount due
to Directors 20,400 (110,935)
Decrease in amount due from subsidiary
company 157,105 -
------------ ----------
Cash depleted in operations 144 2,217
29. RELATED PARTY TRANSACTIONS
At the Statement of Financial Position date, the Group owed the Directors GBP1,877,004 (2017: GBP1,638,604), the Company owed the Directors GBP120,000 (2017: GBP99,600), MobilityOne Sdn. Bhd. owed the Company GBP148,565 (2017: GBP303,177), Netoss Sdn. Bhd. owed MobilityOne Sdn. Bhd. GBP408,225 (2017: GBP436,721), MobilityOne Ventures Sdn. Bhd. owed MobilityOne Sdn. Bhd. GBPNIL (2017: GBP6,895) and MobilityOne Sdn. Bhd. owed One Trazact Sdn. Bhd. GBP997,002 (2017: GBP1,001,978), and Netoss Sdn. Bhd. owed LMS Technology Distribution Sdn. Bhd., a company related to a Director (Dato' Hussian @ Rizal bin A Rahman), GBP15,521 (2017: GBP14,955). The amounts owing to or from the subsidiary companies and related parties are repayable on demand and are interest free.
In 2018, MobilityOne Sdn Bhd continued to rent an office in Sabah, Malaysia from LMS Digital Sdn Bhd, a company related to a Director (Dato' Hussian @ Rizal bin A. Rahman) for RM2,500 (c. GBP460) a month.
On 27 December 2018, MBP Solutions Sdn Bhd (a subsidiary of TFP Solutions Berhad has been appointed as MobilityOne Sdn Bhd's agency/reseller. Dato' Hussian @ Rizal bin A. Rahman is a director and shareholder of TFP Solutions Berhad.
30. ULTIMATE CONTROLLING PARTY
In the opinion of the Directors, as at 31 December 2018, the ultimate controlling party in the Company is Dato's Hussain @ Rizal bin A. Rahman by virtue of his shareholding.
31. CONTINGENT LIABILITIES
Save as disclosed below, the Group has no contingent liabilities arising in respect of legal claims arising from the ordinary course of business and it is not anticipated that any material liabilities will arise from the contingent liabilities other than those provided for.
Group
2018 2017
GBP GBP
Limited of guarantees
Corporate guarantee given to a licensed
bank by the Company for credit facilities
granted to a subsidiary company 4,284,508 3,983,808
Amount utilised
Banker's guarantees in favour of third
parties 174,813 189,332
32. SHARE BASED PAYMENTS
During the year ended 31 December 2018, the Company did not grant any new share option to directors and employees of the Group. No charge was made for the share options of 10,600,000 shares in 2014 as it was not considered to be material.
The fair value of the share options granted in 2014 was calculated using Black-Scholes model assuming the inputs shown below:
Grant date 5 December
2014
Share price at grant date 1.5p
Exercise price 2.5p
Option life in years 10 years
Risk free rate 4.24%
Expected volatility 40%
Expected dividend yield 0%
Fair value of options 1p
No option has been exercised or lapsed.
33. SIGNIFICANT EVENT
There was no significant event after the financial year end.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR BLGDLISDBGCI
(END) Dow Jones Newswires
June 28, 2019 12:54 ET (16:54 GMT)
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