TIDMASIA
RNS Number : 4278Q
Asia Strategic Holdings Limited
28 June 2022
28 June 2022
Asia Strategic Holdings Ltd.
("Asia Strategic" or the "Company" or the "Group")
Interim results for the six months ended 31 March 2022
The Board of Asia Strategic Holdings Ltd. (LSE: ASIA), the
independent developer and operator of consumer businesses located
in emerging Asia, is pleased to announce its unaudited interim
results for the six-month period ended 31 March 2022.
FINANCIAL HIGHLIGHTS
All dates refer to the six-month financial period ended 31 March
2022 ("6M'22"), unless otherwise stated. The comparative six-month
financial period from 1 October 2020 to 31 March 2021, is referred
to as "6M'21".
-- Group revenues for the six-month financial period ended 31
March 2022 increased 9% year-on-year ("YOY") to US$8.3 million, of
which 64% derived from Education and 36% from Services (6M'21: 65%
derived from Education and 35% from Services). This growth is a
remarkable achievement as the Group's performance in 6M'22 was
severely affected by COVID-19 related closures in Vietnam between
Nov'21 and Feb'22.
-- The Group's net loss for the six-month financial period ended
31 March 2022 narrowed to US$2.6 million in comparison to the
previous corresponding period (6M'21: US$2.9 million), primarily
due to (i) the relaxation of COVID-19 restrictions in Feb'22 and
Mar'22 and (ii) operational efficiencies realised throughout the
Group.
-- The Group's net comprehensive loss (including fair value
movement in minority investments) for the six-month financial
period ended 31 March 2022 was US$2.7 million (6M'21: US$3.1
million).
-- COVID-19 cases in Myanmar peaked in the second half of 2021
and recovered by the end of the year. COVID-19 cases in Vietnam
peaked towards the end of 2021 and showed improvement in February
2022. This resulted in an uneven recovery within the Group's
operations wherein the (i) Education division in Myanmar recovered
to pre-COVID-19 levels by Dec'21 whilst Vietnam student numbers
remain depressed, albeit improving, and (ii) EXERA's growth slowed
to low double digits, following stronger growth in the prior
year.
-- As a result of extensive cost control and cash flow
management initiatives, financial resources continued to be
carefully administered. The Group generated cash inflows from
operating activities of ca. US$1.2 million in 6M'22 vs. cash
outflows of US$1.1million in 6M'21. The Group's overall performance
and cash flow generation should further benefit from the expected
economic recovery across ASEAN post COVID-19.
-- In November, the Company announced the subscription of
convertible notes totalling US$5.7 million. Through a loan
re-organisation exercise, the Company's corporate shareholder,
Macan Pte Ltd ("Macan"), subscribed to a US$3.5 million Zero Coupon
Convertible Note satisfied through a cash consideration of US$1.0
million and the conversion of one of the shareholder's loan
facilities amounting to US$2.5 million.
As part of the loan re-organisation exercise, this loan facility
agreement was terminated with effect from 31 October 2021. After
the loan re-organisation exercise, the Group has a remaining loan
facility of up to US$1.5 million with Macan. As at the date of this
report, the Group has drawn down an additional US$0.25 million and
the remaining available facility amounts to US$1.25 million.
-- The diversification of the Group's operations between Vietnam
and Myanmar will continue to play an important role in mitigating
any further pandemic risk and single-country exposure to the Group.
Management has assessed that there are sufficient mitigating
actions within the control of the Group, such as undertaking a
controlled expansion of its existing and future businesses,
maintaining financial liquidity discipline and unutilised credit
facilities for its working capital requirements for the next 12
months from the date of this report.
OPERATIONAL HIGHLIGHTS
Education
-- Through its Education division, the Group is currently active
in (i) English language learning (Wall Street English), (ii) higher
education (Auston) and (iii) K-12 international schools (Yangon
American International School).
Until 30 September 2021, certain businesses in Myanmar were
operated by subsidiaries of the Group through an operating and
management agreement with a related party, TED Limited ("TED").
Following the reorganisation, E Partners and A Partners will
continue to provide operating, management and technical support
services for TED's existing student contracts for a fee over the
remaining period of 12 months. Therefore, these legacy businesses
will continue to be treated as managed businesses and generate
management fees to the Group.
-- Group revenues from the owned and managed Education
businesses for the six-month financial period ended 31 March 2022
amounted to US$5.1 million and US$0.2 million (6M'21: US$4.6 and
US$0.4 million), respectively.
-- The US$0.3 million increase in Education revenues is mainly
attributable to (i) a US$1.1 million increase in Myanmar revenues
(+115% YOY) driven by an early recovery post COVID-19 and (ii) a
US$0.7 decrease in Vietnam's revenues due to the strict lockdowns
imposed in Vietnam between Nov'21 and Jan'22. It is worth noting
that Wall Street English in Vietnam has further recovered following
the removal of COVID-19 restrictions in Feb'22.
Financial Financial Financial
Period Ended Period Ended Year Ended
31 March 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
(6 months) (6 months) (12 months)
US$ US$ US$
Owned businesses
Education 5,103,702 4,567,955 8,810,457
-------------- -------------- --------------
- English language learning 4,561,170 4,232,353 8,213,641
* Higher education 144,872 - 28,834
* K-12 397,660 335,602 567,982
-------------- -------------- --------------
Managed businesses
Education (Legacy WSE Myanmar,
Auston) 184,700 365,159 497,849
-------------- -------------- --------------
- English language learning 184,000 355,016 485,819
- Higher education 700 10,143 12,030
-------------- -------------- --------------
Wall Street English ("WSE")
-- As of 31 March 2022, the Group owned and operated English
language centres under the Wall Street English brand in both
Myanmar and Vietnam. The number of centres and students were as
follows:
Number of WSE centres Number of WSE students
31 March 31 March 31 March 31 March 2021
2022 2021 2022
Vietnam 7 7 2,465 4,800
Myanmar 4 4 1,821 1,600
----------- ----------- --------- --------------
Total 11 11 4,286 6,400
----------- ----------- --------- --------------
-- The marked decrease in students during the 6 months period
ended 31 March 2022 was mainly due to the strict COVID-19
restrictions imposed in Vietnam between Nov'21 and Feb'22.
Management took the opportunity to refurbish two language centres
during this period, which has further contributed to Wall Street
English's commercial recovery post COVID-19.
-- It is worth noting the strong increase in the number of
students in Myanmar. Notwithstanding the complex political and
security environment, the Wall Street English business appears to
have fully recovered and even exceeds its pre COVID-19
performance.
-- Revenues at Wall Street English Vietnam and Myanmar for the
six-month financial period ended 31 March 2022 amounted to US$3.3
million and US$1.4 million (6M'21: US$4.0 and US$0.6 million),
respectively.
Auston
-- Auston University ("Auston") is the result of a strategic
collaboration with the Auston Institute of Management, an operator
of private schools in Singapore that prepares students for careers
in Engineering, IT Technology and Project Management through higher
education learning.
-- Since February 2020, the Company has had in place a
partnership with Liverpool John Moores University ("LJMU") to
provide high quality engineering training programmes for young,
working professionals in Myanmar, to be taught by Auston's teaching
staff at its Junction Square complex in Yangon. The partnership is
of particular relevance to Auston as it enables a path towards an
engineering degree and provides globally recognised degrees in
Myanmar from lecturers with, at a minimum, a master's degree or a
PhD from a recognised awarding body.
-- During the six-month financial period ended 31 March 2022,
Auston generated revenues of US$0.1 million (6M'21: Nil) and
student numbers grew exponentially to 165 students as at 31 March
2022 (31 March 2021: 24 students). The first programme commenced in
June 2021 and most students are still at the Foundation level, a
pre-requisite to enter the Higher Diploma programme. It takes
approximately 36 months for a student to attain a bachelor's
degree.
-- As of 31 May 2022, the number of enrolled students at Auston
has grown to over 200 (30 September 2021: 47) and the cumulative
contract value increased to US$2.0 million (30 September 2021:
US$0.1 million). Students are seeking globally recognised diplomas
/ degrees in Myanmar to further their studies abroad in search of
better job opportunities locally and abroad.
Yangon American
-- The Group owns and operates Yangon American International
School ("Yangon American") an International Baccalaureate Primary
Years Programme ("IB PYP") accredited and Myanmar Investment
Commission-approved international school. Yangon American's 3,000
sqm campus has a planned capacity of 400 students and its enrolment
for academic year 2021-2022 was ca. 80 students (31 March 2021: 70
students).
-- During the six-month financial period ended 31 March 2022,
Yangon American generated revenues of US$0.4 million (6M'21: US$0.3
million). Yangon American's student enrolment for the 2022/2023
academic year is expected to increase gradually towards capacity,
since enrolment in government schools remains low and parents are
in search of quality education as a path for their children to
study abroad.
Services
-- Through its Services division, the Group is currently active
in (i) owned security services (EXERA) and (ii) managed hospitality
services (Ostello Bello).
-- Group revenues from the owned and managed services businesses
for the six-month financial period ended 31 March 2022 amounted to
US$3.0 million and Nil (6M'21: US$2.7 and US$0.01 million),
respectively.
EXERA
-- EXERA is an internationally-managed provider of security and
risk management services, operating exclusively in Myanmar. As of
31 March 2022, EXERA has an experienced workforce of over 1,600
(6M'21: ca. 1,700) security officers and provides a range of
integrated security, guarding, protective services, journey
management, training, and nationwide risk consulting, to a wide
range of international and local clients.
-- Its customer base includes multi-national corporations, large
oil and gas companies, established local businesses, governmental
bodies and international organisations and embassies. EXERA's
services are essential to the continued presence of these
organisations in Myanmar throughout the current political and
economic instability.
-- The Group's revenues for the six-month financial period ended
31 March 2022 were US$3.0 million (6M'21: US$2.7 million). The 12%
YOY growth was attributable to (i) continuous demand for
high-margin quality integrated security and risk management
services throughout the current political and economic instability,
(ii) favourable currency mix, and (iii) successful renegotiation of
certain key contracts.
-- The ability to continuously maintain and secure new
high-profile customers is mainly due to EXERA's competitive
advantage as the only company in Myanmar with ISO 18788 Management
System for Private Security Operations, ISO 9001, OHSAS 18000, and
ANSI/ASIS PSC 1 accreditations.
Ostello Bello
-- Ostello Bello, previously operating within the Hospitality
Division, comprises boutique hostels with 423 beds and 105 rooms in
four locations across Bagan, Mandalay and Nyaung Shwe, the most
popular tourist destinations in Myanmar.
-- The performance of Ostello Bello has been severely impacted
by the continued COVID-19 related travel restrictions in place
between 2020 and 2022. The Group has recently decided to
discontinue its location in Nyaung Shwe from July 2022, thus
reducing the number of beds and rooms managed by the Group. As at
the date of this report, the number of beds and rooms managed are
282 and 73, respectively.
-- To address the continued under performance of Myanmar's
tourism industry and to offset the currently challenging operating
environment in Myanmar, the Group's remains focused on reducing
operating costs and generating operational synergies. It is worth
noting that through its boutique hostels the Group provides
livelihood for hundreds of individuals in developing communities
such as Bagan. Management takes great pride and acknowledges its
role as a responsible long-term investor in these communities.
New Business Development
-- Asia Strategic continues to develop its business network and
expand its pipeline within the Group's existing sectors and explore
new sectors. The Group is currently focused on building stronger
presence on-the-ground in Vietnam whilst seeking new opportunities
throughout emerging Asia to diversify the Group's geographical
exposure.
-- Management also routinely conducts in-depth studies of new
sectors (e.g. Healthcare, Retail and Financial Services) to
determine whether to allocate additional human and financial
resources to selected initiatives.
The Group's minority investments include, among others:
-- A minority interest in Myanmar Investments International
Limited ("MIL"), a Myanmar-focused investment company listed on the
AIM market of the London Stock Exchange with investments in the
telecommunications and financial sectors. As at 31 March 2022, the
quoted share price was US$0.27 (31 March 2021: US$0.61) per share
and the unaudited net asset value reported by MIL as at 30
September 2021 was US$0.67 (31 March 2021: US$0.74) per share.
SIGNIFICANT AND SUBSEQUENT EVENTS
a) Settlement and termination of shareholder's loans
During the financial period , the Company entered into a loan
re-organisation with the Company's shareholder, Macan Pte Ltd
("Macan") as detailed below:
(i) Subscribed US$3.5 million Zero Coupon Convertible Notes of
the Company satisfied through cash consideration of US$1.0 million
(Note 16) and the conversion of principal shareholder's Loan
Facility 2 amounting to US$2.5 million (Note 15); and
(ii) Terminated Loan Facility 2 agreement with the Company with
effect from 31 October 2021.
b) Convertible Note Programme
On 4 November 2021, the Company launched a Convertible Note
Programme to raise up to US$10.0 million over a six-month period
for working capital and future investments. The convertible note
("CN") holders have an option to subscrib e to either (i) a 10%
coupon option ("10% Coupon Convertible Note") or (ii) a zero-coupon
option ("Zero Coupon Convertible Note").
As of the date of approval of these financial statements, the
Company's existing shareholders have subscribed to CN amounting to
US$5.7 million (excluding transaction costs) comprising:
(i) 10% Coupon Convertible Notes amounting to US$0.5 million;
and
(ii) Zero-Coupon Convertible Notes amounting to US$5.2 million
including subscription by Macan as detailed above and in Note
16.
c) Issuance of shares in lieu of bonus payments
In December 2021, through recommendations of the Remuneration
Committee of the Company, the Directors approved the payment of
annual bonuses to certain key management personnel of the Group in
respect of financial year ended 30 September 2021 of US$640,000
satisfied through the issuance of 80,000 new ordinary shares in the
Company at a price of US$8.00 per share (being the closing bid
price of the Company's ordinary shares as of 10 December 2021).
Refer to Note 19 for further details.
d) Adoption of the 2022 Employee Share Options Scheme
At the Annual General Meeting held on 4 March 2022, in order to
incentivise existing and new management and employees, the
Company's shareholders approved a new share option scheme (the
"2022 ESOS"), whereby share options in respect of up to 200,000
ordinary shares in the capital of the Company may be granted to
certain individuals at an exercise price of US$11.00 per share with
a typical vesting schedule of 40% of the option on the first
anniversary of the grant date, 40% of the option on the second
anniversary of the grant date and 20% of the option on the third
anniversary of the grant date. No option has been granted under the
2022 ESOS as of the date of this report.
e) Exclusive agreement for Kids&Us School of English
On 25 April 2022, the Group entered into an exclusive
franchising agreement with Kids&Us English, S.L.U
("Kids&Us") for the development of English language centres for
children under the brand "Kids&Us School of English" in
Myanmar.
Kids&Us is a leading provider of English language education
for children from as young as one-year old through teenagers.
Founded in Manresa, Barcelona, in 2003, Kids&Us has over
155,000 students across 437 schools in Spain and 90 schools
internationally. Kids&Us has developed an innovative and
effective pedagogical method:
-- Kids&Us uses a unique teaching method based on the
natural process of developing one's mother tongue, a process which
takes place in a specific, natural and spontaneous order.
-- The courses are adapted to the students' ages and life experiences.
-- Small groups - a maximum of five in the 'Babies' stage (one
and two-year-olds) and eight across the rest of the courses - allow
for personalised attention and a high level of student
participation and interaction in the classroom.
-- Continuity of the courses allows children to learn from one-year old.
-- Classes are conducted entirely in English, ensuring total linguistic immersion.
-- Students can continue learning English outside of class time:
o The Kids&Us 360 Universe provides an endless range of
activities and stimulating opportunities to continue learning at
urban day camps, workshops (for cooking, science, theatre), summer
camps, etc.
o Products created by Kids&Us include books, boardgames,
etc.
o Apps, online homework exercises and electronic devices.
Under the terms of this exclusive franchising agreement, the
Company shall pay Kids&Us (i) an initial fee of approximately
EUR100,000, upon signing of franchising agreement (ii) ongoing
service fees as a percentage of revenues and (iii) didactic
materials based on consumption, among other fees.
The Company is planning for its first two centres to in Yangon
to be operational by June 2023.
Vietnam Macro-Economic highlights
-- The General Statistics Office ("GSO") reported that Vietnam
ended 2021 with a 2.6% GDP growth rate, despite witnessing a harsh
COVID-19 lockdown in the second half of 2021. Vietnam is one of
very few economies in the world to post two consecutive years of
growth since the start of COVID-19. The GSO report explained that
industries have been impacted in different ways. Tourism,
hospitality, F&B have been struck the hardest whilst
export-based sectors in Vietnam have shown resilience over the past
two years. Vietnam recorded an increase in total export value in
2021 from to US$336 billion (2021: US$286 billion), according to
the GSO. According to Vietnam Agribank, overall Vietnam remains a
resilient economy as the country is expected to bounce back
strongly in 2022 to become the fastest-growing ASEAN economy, with
forecasted GDP growth at 6.6%, followed by Philippines (6.3%) and
Malaysia (6.0%).
-- According to the GSO, Vietnam's economy in Q1 of 2022
(January-March) expanded by 5.0% compared to the same period last
year. The growth however was down sequentially from 5.2% in Q4 of
2021. Nevertheless, the government agency stated that Vietnam is on
track for economic recovery. Q1's GDP structure was dominated by
services at 41.7% followed by industry and construction at 38.0%,
and agriculture, forestry, and fishery at 10.9%. Total retail sales
of consumer goods increased by 4.4% YOY though passenger transport
was down. Vietnam's exports stood at US$89 billion while imports
were recorded at US$88 billion. As with previous years, the US
remains Vietnam's largest export market at US$25.2 billion in Q1of
2022.
-- Vietnam is now the destination of multiple supply chain and
manufacturing relocations, due to strong economic fundamentals and
a favourable foreign investment environment when compared with
neighbouring countries. According to the Foreign Investment Agency
("FIA"), the country recorded total new, adjusted capital and share
purchases by foreign investors of US$31 billion as of 20 December
2021, an annual increase of 9.2%.
-- In recent years, Vietnam has emerged as a leading hub for
manufacturing electronics in Southeast Asia. Relocations by
manufacturing companies such as Foxconn, Intel, Foster, and
Luxshare since 2019 highlight this trend.
Myanmar Macro-Economic Highlights
-- The World Bank's Myanmar Economic Monitor January 2022
projects economic growth of 1.0% in the fiscal year ending
September 2022, a single digit recovery after experiencing a
contraction of 18% in fiscal year 2021. The near-term economic
outlook remains weak due to the ongoing impact of the military
coup. The recent Russian war against Ukraine caused additional
economic uncertainties and inflationary pressures globally
exacerbating the economic issues.
-- In April 2022, through notifications and directives, the
Central Bank of Myanmar ("CBM") implemented certain foreign
exchange control measures requiring all foreign currency receipts
from 4 April 2022 to be converted to Myanmar Kyat ("Kyat"),
restricting conversion of foreign currencies and limiting offshore
remittance. The immediate impact was further weakening of the
Kyat.
-- Any future recovery in domestic activity will likely be
contingent on political improvement, the removal of temporary
foreign control measures, the reopening of the country to
international travel in a bid to bolster international tourism and
continued engagement with the international business
communities.
Enrico Cesenni, Chief Executive Officer of Asia Strategic
Holdings, said:
"I am very pleased to report that over the six-month financial
period ended 31 March 2022, Asia Strategic Holdings has continued
to grow, in a complex social, economic and political
environment.
"As the COVID-19 related restrictions were gradually lifted from
November 2021 in Myanmar and February 2022 in Vietnam, the Group
has experienced a strong rebound in its operating businesses,
particularly within consumer facing brands such as Wall Street
English and Auston. It is worth noting that revenues grew across
both Education (+7% YOY) and Services (+12% YOY) and that the Group
continues to benefit from commercial momentum that is driven by
pent-up demand and the limited spending options available to
customers, particularly in Myanmar.
"While global inflation and supply chain shortages may reduce
disposable income and hinder discretionary spending, the Board and
I feel that the Group is strategically positioned in sectors that
will attract continued investments such as Education and that
demonstrate less correlation to the broader economy such as
Security services. In turn this allows us to take a long-term view
and pursue a long-term agenda, confident in our capital
structure.
"We would like to take this opportunity to thank shareholders
for their continued support and all members of staff across the
Group for their hard work and sacrifices through these challenging,
uncertain and troubling times."
For more information, please visit www.asia-strategic.com or
contact:
Asia Strategic Holdings Ltd.
Richard Greer, Independent Non-Executive richard@asia-strategic.com
Chairman enrico@asia-strategic.com
Enrico Cesenni (OSI), Founder and CEO
Allenby Capital Limited (Broker)
Nick Athanas
Nick Naylor
Freddie Wooding +44 (0)20 3328 5656
Yellow Jersey PR (Financial PR)
Henry Wilkinson
James Lingfield +44 (0) 7951 402 336
Notes to editors
Asia Strategic Holdings Ltd.
Asia Strategic Holdings Ltd. (LSE: ASIA) is an independent
developer and operator of consumer businesses in Vietnam and
Myanmar, two of the fastest growing economies in the world over the
last decade. The Company's portfolio currently focuses on Education
and Services with the view to expand within the broader consumer
sector.
Education sector: the Company currently has exclusive
development and franchising agreements with Wall Street English for
up to ten English language centres across Myanmar. Two centres were
opened in 2017, a third in August 2018, and a fourth in February
2020. As of March 2022, Wall Street English Myanmar served over
1,800 students.
In July 2020, the Company completed the acquisition of the Wall
Street English business in Vietnam. Founded in 2013, the WSE
Vietnam business operates through seven centres in Ho Chi Minh and
Binh Dhuong serving ca. 2,500 students.
The Company also operates a joint venture with Auston Institute
of Management to develop and operate the Auston College Myanmar.
The private school opened in May 2018 offering diplomas in
Engineering Technology, Mechanical Engineering and Networking,
Information Systems, and Security. English language learning is
also provided by the Company's nearby Wall Street English centre.
In February 2020, the Company announced a partnership with
Liverpool John Moores University to provide high quality
engineering training programmes for young, working professionals in
Myanmar, to be taught by Auston College Myanmar's teaching staff at
its Junction Square complex in Yangon.
In August 2019 the Company launched its first private K-12
international school, the Yangon American International School
("Yangon American") in Yangon. In July 2021 Yangon American was
recognised as an official International Baccalaureate Primary Years
Programme ("IB PYP") school by the International Baccalaureate
Organization.
In April 2022, the Company entered into an exclusive franchising
agreement with Kids&Us for the development of English language
schools for children across Myanmar. The first two centres shall be
opened in Yangon by June 2023.
Services sector: through its acquisition of EXERA, the Company
offers security, risk management and secure logistics services,
including cash-in-transit. Founded in 2013, EXERA employs
approximately 1,500 well-trained and high-quality security officers
making it one of the largest security services providers in
Myanmar.
Furthermore, the Company provides hospitality services, managing
over 282 beds across four boutique hotels in three core tourist
locations in Myanmar, operating under the award winning Ostello
Bello budget hospitality brand. The Company operates an asset light
strategy, entering into long-term operating and management
agreements with local hotel owners.
Vietnam and Myanmar were among the fastest growing economies in
Asia in 2017-2020 (Source: Asian Development Bank). In 2022,
Vietnam's annual GDP growth is expected to be 6.5% (Source: Asian
Development Bank).
The Company is well positioned to provide investors early
exposure to Vietnam's and Myanmar's strong economic fundamentals
enhanced by ASEAN's wider growth prospects.
To receive news alerts on Asia Strategic Holdings please sign up
here under the 'RNS' header:
https://ms-holdings.com/investor-relations/#
FINANCIAL REVIEW
-- Group revenues from the owned and managed businesses for the
six-month period ended 31 March 2022 were US$8.3 million (6M'21:
US$7.6 million).
-- The 9% YOY increase in group revenues reflected the impact of
(i) a strong recovery in Myanmar's education businesses (+115%
YOY), (ii) the sustained performance of EXERA (+12% YOY) and (iii)
the underperformance of Vietnam's education businesses (-17% YOY).
It is worth noting that Vietnam's education businesses have further
recovered, thanks to the full re-opening of Vietnam since
Feb'22.
Financial Financial Financial
Period Ended Period Ended Year Ended
31 March 31 March 30 September
2022 2021 2021
Unaudited Unaudited Audited
(6 months) (6 months) (12 months)
US$ US$ US$
Owned businesses
Education 5,103,702 4,567,955 8,810,457
-------------- -------------- --------------
- Myanmar 1,790,716 553,681 1,331,422
* Vietnam 3,312,986 4,014,274 7,479,035
-------------- -------------- --------------
Services 3,025,078 2,707,920 5,664,019
Total owned businesses 8,128,780 7,275,875 14,474,476
-------------- -------------- --------------
Managed businesses
Education (Legacy WSE Myanmar,
Auston) 184,700 365,159 497,849
Services (Ostello Bello) - 6,857 13,712
-------------- -------------- --------------
Total managed businesses 184,700 372,016 511,561
-------------- -------------- --------------
Total group revenue 8,313,480 7,647,891 14,986,037
============== ============== ==============
RESULTS OF OPERATIONS
-- Group gross profit for the six-month period ended 31 March
2022 was US$3.2 million (6M'21: US$2.2 million), a marked increase
in both absolute and relative terms (38% in 6M'22 vs. 29% in
6M'21). The notable improvement in gross profit margin was
attributable to (i) the recovery of Myanmar's revenues, (ii) the
shift to a more profitable product mix, (iii) positive net FX
exposure and (iv) further cost efficiencies across all
divisions.
-- The growth in revenue (+9% YOY) and gross profit margin (+44%
YOY) was partially offset by the increase in administrative and
other operating expenses (+12% YOY excluding depreciation and
amortisation), primarily due to higher marketing expenses and
employee welfare (e.g. extensive vaccination campaigns).
-- The Group's EBITDA loss for the six-month period ended 31
March 2022 also reduced to ca. US$0.5 million (6M'21: US$0.7
million loss). When adjusted to include the impact of the
Right-of-use assets ("ROUs"), the Group's Adjusted EBITDA loss
amounted to US$2.2 million (6M'21: US$2.4 million).
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 March 31 March 30 September
2022 2021 2021
US$ US$ US$
Revenue 8,313,480 7,647,891 14,986,037
Cost of services (5,130,275) (5,431,559) (9,573,568)
------------ ------------ -------------
Gross profit 3,183,205 2,216,332 5,412,469
Gross profit margin 38% 29% 36%
Other income 85,052 40,080 838,183
Administrative and other operating
expenses (5,327,870) (4,769,401) (11,213,702)
------------ ------------ -------------
Loss from operations (2,059,613) (2,512,989) (4,963,050)
Finance cost (452,991) (449,630) (999,992)
Loss before income tax (2,512,604) (2,962,619) (5,963,042)
Income tax (expense)/credit (82,520) 17,611 114,688
------------ ------------ -------------
Loss for after income tax (2,595,124) (2,945,008) (5,848,354)
------------ ------------ -------------
Selected non-cash items:
Total depreciation of plant
and equipment 205,506 246,594 419,057
Total amortisation of right-of-use
asset 1,350,354 1,331,375 2,560,875
Total amortisation of intangible
assets 28,268 113,270 113,684
Impairment of trade and other
receivables 18,421 103,207 1,004,384
Finance costs (excluding interest
on lease liabilities) 86,027 93,945 243,547
Total interest on lease liabilities 372,105 355,685 756,445
------------ ------------ -------------
2,060,681 2,244,076 5,097,992
------------ ------------ -------------
Adjusted earnings before interest,
tax, depreciation, and amortisation
("EBITDA") (451,923) (718,543) (865,050)
============ ============ =============
Adjusted EBITDA after impact
of ROUs (2,174,382) (2,405,603) (4,182,370)
============ ============ =============
LIQUIDITY AND CAPITAL RESOURCES
-- As at 31 March 2022, the Group's cash and cash equivalents
amounted to US$2.6 million, compared to US$2.2 million as at 30
September 2021, an increase of US$0.4 million.
-- The Group recorded positive cash flows generated from
operating activities of US$1.2 million, compared to cash outflows
from operating activities of US$1.1 million in 6M'21. This is
mainly due to the increase in contract liabilities of US$1.3
million (6M'21: US$0.3 million) arising from strong collections
from WSE Myanmar and Auston where courses are paid in advance of
services being delivered over the duration of the respective
courses. If repayment of leases liabilities were considered, the
Group would record a manageable cash outflow from operating
activities of US$0.2 million (6M'21: US$2.6 million).
-- During the six-month financial period ended 31 March 2022,
the Group incurred capital expenditures of US$0.6 million (6M'21:
US$0.1 million) mainly on leasehold improvements for the relocation
and space optimisation of three English language centres in Vietnam
and the expansion of the Auston campus in Myanmar. Such investment
is expected to further enhance the Group's commercial success post
COVID-19 and set it apart from its competitors.
-- The Group's Convertible Note Programme launched in November
2021, successfully generated cash subscriptions amounting to US$3.2
million (excluding transaction costs) which were utilised for
working capital and partial repayment of the shareholder's loan and
interests. As part of the Group's loan re-organisation with Macan,
the Group repaid cash of US$1.8 million as part cash settlement of
the Loan Facility 1 and full settlement of the Loan Facility 2
which terminated with effect from 31 October 2021 (6M'21: drawdown
of US$1.5 million).
OTHER INFORMATION
In support of the nation's effort to achieve a higher
vaccination rate in Myanmar and ensuring the well-being of its
employees, the Group, on its own accord, initiated the COVID-19
vaccination programme for all eligible employees in Myanmar, and
subsequently Vietnam.
As of 31 March 2022, 78% of the employees in Myanmar and Vietnam
had been vaccinated and are back in the office and on the
sites.
As of 31 March 2022, 96% of the total workforce (30 September
2021: 96%) are local employees in the countries where the Group
operates. All employees are paid at least the local minimum wages
and approximately 69% (30 September 2021: 71%) of the Group's
workforce are female (excluding EXERA's security officers).
31 March 30 September 31 March
Direct and indirect Full Time Employees 2022 2021 2021
("FTEs")
Male 231 202 219
Male (EXERA's security officers) 1,514 1,580 1,478
Female 512 502 502
--------- ------------- ---------
Total employees 2,257 2,284 2,199
========= ============= =========
Ratio of female representation
(excluding EXERA's security officers) 69% 71% 70%
Male 122 137 67
Male (EXERA's security officers) 241 772 352
Female 196 241 138
--------- ------------- ---------
Total new hirers (net) 559 1,150 557
========= ============= =========
Ratio of female new hires
(excluding EXERA's security officers) 62% 64% 67%
Direct and indirect Full Time Employees ("FTEs") marginally
decreased to 2,257 (30 September 2021: 2,284) due to a slight
decrease in EXERA's security officers and the hospitality
segment.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
For the financial period from 1 October 2021 to 31 March
2022
Unaudited Unaudited
6 months 6 months
ended ended
31 March 31 March
2022 2021
Note US$ US$
Revenue 4 8,313,480 7,647,891
Cost of services (5,130,275) (5,431,559)
-------------- --------------
Gross profit 3,183,205 2,216,332
Other income 85,052 40,080
Administrative and other operating
expenses (5,309,449) (4,666,194)
Loss allowance on trade and other
receivables (18,421) (103,207)
-------------- --------------
Loss from operations (2,059,613) (2,512,989)
Finance cost 6 (452,991) (449,630)
Loss before income tax 7 (2,512,604) (2,962,619)
Income tax (expense)/credit 8 (82,520) 17,611
Loss for after income tax (2,595,124) (2,945,008)
Other comprehensive income:
Items that may be reclassified subsequently
to profit
or loss:
Exchange difference in translation
of foreign operations 8,754 (37,259)
Items that will not be reclassified subsequently to
profit or loss:
Changes in fair value of equity instruments
at FVOCI 12 (71,800) (123,611)
Other comprehensive income for the
period,
net of tax (63,046) (160,870)
-------------- --------------
Total comprehensive income (2,658,170) (3,105,878)
============== ==============
Loss for the period attributable
to:
Owners of the Company (2,549,665) (2,885,464)
Non-controlling interest (45,459) (59,544)
-------------- --------------
(2,595,124) (2,945,008)
============== ==============
Total comprehensive income attributable
to:
Owners of the Company (2,612,711) (3,046,334)
Non-controlling interest (45,459) (59,544)
-------------- --------------
(2,658,170) (3,105,878)
Loss per share attributable to the
owners of the
Company (US$)
* Basic and diluted (US$) 21 (0.88) (1.03)
============== ==============
The above condensed interim consolidated statement of
comprehensive income should be read in conjunction with the
accompanying notes.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
As at 31 March 2022
Unaudited Audited
As at As at
31 March 2022 30 September
2021
Note US$ US$
ASSETS
Non-current assets
Plant and equipment 9 1,253,224 868,989
Intangible assets 10 6,679,424 6,696,483
Right-of-use assets ("ROU") 11 10,109,980 10,094,291
Financial assets at FVOCI 12 242,325 314,125
Trade and other receivables 13 1,406,993 990,616
Total non-current assets 19,691,946 18,964,504
-------------- -------------
Current assets
Inventories 78,666 96,366
Trade and other receivables 13 1,570,166 1,390,303
Fixed deposits 14 43,757 100,625
Cash and cash equivalents 14 2,590,581 2,165,257
Total current assets 4,283,170 3,752,551
-------------- -------------
Total assets 23,975,116 22,717,055
============== =============
LIABILITIES AND EQUITY
Liabilities
Non-current liabilities
Contract liabilities 4 880,567 607,578
Shareholder's loans 15 1,537,233 5,743,547
Convertible notes 16 5,750,685 -
Lease liabilities 7,841,210 7,911,109
Total non-current liabilities 16,009,695 14,262,234
-------------- -------------
Current liabilities
Bank loan 17 120,492 -
Trade and other payables 18 2,614,243 2,697,681
Contract liabilities 4 6,270,987 5,284,512
Lease liabilities 2,282,475 1,860,070
Income tax payables 76,841 65,730
Total current liabilities 11,365,038 9,907,993
-------------- -------------
Total liabilities 27,374,733 24,170,227
-------------- -------------
Equity
Share capital 19 21,439,638 20,799,638
Accumulated losses (24,837,900) (22,288,235)
Other reserves (1,355) 73,874
-------------- -------------
Equity attributable to owners
of the Company (3,399,617) (1,414,723)
Non-controlling interest 20 - (38,449)
-------------- -------------
Total equity (3,399,617) (1,453,172)
-------------- -------------
Total liabilities and equity 23,975,116 22,717,055
-------------- -------------
The above condensed interim consolidated statement of financial
position should be read in conjunction with the accompanying
notes.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
For the financial period from 1 October 2021 to 31 March
2022
Equity
Share Foreign attributable Non-controlling
Share Equity option Fair Exchange Accumulated to Total
value owners of
the
Unaudited Note capital reserves reserve reserve reserve losses Company interest Equity
31 March 2022 US$ US$ US$ US$ US$ US$ US$ US$ US$
Balance as at 1
October
2021 20,799,638 (128,362) 774,102 (448,629) (123,237) (22,288,235) (1,414,723) (38,449) (1,453,172)
Total
comprehensive
income for the
financial
period:
----------- ----------- --------- ---------- ---------- ------------- -------------- ----------------- ------------
Loss for the
financial
period - - - - - (2,549,665) (2,549,665) (45,459) (2,595,124)
Other
comprehensive
income - - - (71,800) 8,754 - (63,046) - (63,046)
----------- ----------- --------- ---------- ---------- ------------- -------------- ----------------- ------------
- - - (71,800) 8,754 (2,549,665) (2,612,711) (45,459) (2,658,170)
Contributions
by owners of the
Company
Issuance of
shares 19 640,000 - - - - - 640,000 - 640,000
Recognition of
share-based
payments 5 - - 71,726 - - - 71,726 - 71,726
Changes in
ownership
interest in a
subsidiary
Acquisition of
non-controlling
interest 20 - (83,909) - - - - (83,909) 83,908 (1)
Balance as at
31
March 2022 21,439,638 (212,271) 845,828 (520,429) (114,483) (24,837,900) (3,399,617) - (3,399,617)
----------- ----------- --------- ---------- ---------- ------------- -------------- ----------------- ------------
Equity
Share Foreign attributable Non-controlling
Share Equity option Fair Exchange Accumulated to Total
value owners of
the
Unaudited Note capital reserves reserve reserve reserve losses Company interest Equity
31 March 2021 US$ US$ US$ US$ US$ US$ US$ US$ US$
Equity
Balance as at
1
October
2020 20,553,638 (118,061) 610,737 (87,180) (58,714) (16,517,220) 4,383,200 28,589 4,411,789
Total
comprehensive
income for the
financial
period:
----------- ----------- --------- ---------- ---------- ------------- ------------- ----------------- ------------
Loss for the
financial
period - - - - - (2,885,464) (2,885,464) (59,544) (2,945,008)
Other
comprehensive
income - - - (123,611) (37,259) - (160,870) - (160,870)
----------- ----------- --------- ---------- ---------- ------------- ------------- ----------------- ------------
- - - (123,611) (37,259) (2,885,464) (3,046,334) (59,544) (3,105,878)
Liquidation of
a subsidiary - (10,301) - - - 10,301 - - -
Contribution
by
owners of the
Company
Recognition of
share-based
payments 5 - - 92,440 - - - 92,440 - 92,440
Balance as at
31
March 2021 20,553,638 (128,362) 703,177 (210,791) (95,973) (19,392,383) 1,429,306 (30,955) 1,398,351
----------- ----------- --------- ---------- ---------- ------------- ------------- ----------------- ------------
The above condensed interim consolidated statement of changes in
equity should be read in conjunction with the accompanying
notes.
CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial period from 1 October 2021 to 31 March
2022
Unaudited Unaudited
6 months 6 months
ended ended
31 March 31 March
2022 2021
Note US$ US$
Operating activities
Loss before income tax (2,512,604) (2,962,619)
Adjustments for:
Interest income 1,355 (5,772)
Lease concession 7 (80,745) (200,000)
Share-based compensation 5 71,726 92,440
Interest expense on lease liabilities 6, 7 372,105 355,685
Interest expense on loan due from
corporate shareholder 6 65,342 93,945
Interest on convertible notes 6 20,685 -
Plant and equipment written off (100) -
Depreciation of plant and equipment 9 205,506 246,594
Intangible assets written off 3,011 -
Amortisation of intangible assets 10 28,268 113,270
Amortisation of right-of-use assets 11 1,350,354 1,331,375
Impairment loss on trade and other
receivables 13 18,421 103,207
Transfer of plant and equipment 4,528 -
to intangible assets
Unrealised exchange difference 79,815 89,534
------------ ------------
Operating cash flows before working
capital
changes (372,333) (742,341)
Working capital changes:
Trade and other receivables (190,848) (496,363)
Inventories 17,700 (76,149)
Contract liabilities 1,259,464 344,728
Trade and other payables 556,562 (120,053)
------------ ------------
Cash generated from/(used in) operations 1,270,545 (1,090,178)
Interest received (1,355) 5,772
Income tax (paid)/refunded (71,409) 22,562
Net cash flows generated from/(used
in)
operating activities 1,197,781 (1,061,844)
------------ ------------
Investing activities
Purchase of plant and equipment 9 (594,169) (33,663)
Advances to related parties (423,813) (308,269)
Purchase of intangible assets (13,356) -
Net cash flows used in investing
activities (1,031,338) (341,932)
------------ ------------
Unaudited Unaudited
6 months 6 months
ended ended
31 March 31 March 2021
2022
Note US$ US$
Financing activities
Acquisition of equity interest
from
non-controlling interest 20 (1) -
Fixed deposits pledged to bank 14 56,868 -
Proceeds from bank loan 17 120,492 -
(Repayment)/drawdown of shareholder's
loan 15 (1,500,000) 1,500,000
Interest paid on shareholder's
loans 15 (271,656) -
Proceeds from convertible notes 16 3,230,000 -
Principal payment for lease liabilities (990,415) (1,146,456)
Interest payment for lease liabilities (372,105) (355,685)
Net cash generated from/(used in)
financing activities 273,183 (2,141)
------------ --------------
Net changes in cash and cash equivalents 439,626 (1,405,917)
Effect of exchange rate changes
on cash and cash equivalents (14,302) (33,944)
Cash and cash equivalents at beginning
of financial period 2,165,257 3,941,413
Cash and cash equivalents at end
of financial period 14 2,590,581 2,501,552
============ ==============
The above condensed interim consolidated statement of cash flows
should be read in conjunction with the accompanying notes.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
For the financial period from 1 October 2021 to 31 March
2022
1 CORPORATE INFORMATION
Asia Strategic Holdings Limited (the "Company" or "Asia
Strategic") (Registration Number 201302159D) is a public company
limited by shares incorporated and domiciled in Singapore with its
principal place of business and registered office at 80 Raffles
Place #32-01, UOB Plaza, Singapore 048624. The Company's ordinary
shares are traded on the Main Market of the London Stock Exchange
under the equity ticker ASIA.
The condensed interim consolidated financial statements as at
and for the six-month financial period ended 31 March 2022 comprise
the Company and its subsidiaries (collectively, the "Group"). The
primary activities of the Company are investments and trading in
Vietnam and Myanmar.
For Management purposes, the Group is organised into business
units based on its services, and has three reportable operating
segments as follows:
a) Education - Provision of English language training,
kindergarten to primary school education (K-12 education), higher
education, consultancy, advisory and project management services in
the education sector in Myanmar and Vietnam;
b) Services - Provision of integrated security services,
consultancy, advisory and project management services in the
security and hospitality sectors in Myanmar; and
c) Others - Corporate services to provide management and
marketing support to respective entities of the Group.
These operating segments are reported in a manner consistent
with internal reporting provided to the chief operating decision
maker who is responsible for allocating resources and assessing the
performance of the operating segments.
1.1 BASIS OF PREPARATION
In the current financial period, the Group changed the
presentation format of its condensed interim consolidated statement
of comprehensive income from classifying expenses by nature to the
function in a manner consistent with the internal reporting
provided to the chief operating decision maker to analyse the
financial performance of the Group. Accordingly, the comparative
figures for the condensed interim consolidated statement of
comprehensive income for the previous financial period were
re-organised to conform to the current financial period's
presentation.
Direct employee benefit expenses, academic expenses, hotel
related operating costs, security service costs and other directly
attributable expenses of the respective businesses are included in
the cost of services. This is to compute and present the gross
profit of the Group, a key performance indicator of the Group.
The condensed interim consolidated financial statements as at
and for the six months financial period ended 31 March 2022 have
been prepared in accordance with International Accounting Standards
("IAS") 34 Interim Financial Reporting as adopted by the European
Union.
The condensed consolidated interim financial statements do not
include all disclosures that would otherwise be required in a
complete set of financial statements and should be read in
conjunction with the annual report for the financial period from 1
October 2020 to 30 September 2021 ("financial period ended 2021")
which have been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union.
However, selected explanatory notes are included to explain
events and transactions that are significant to an understanding of
the changes in the Group's financial position and performance of
the Group since the last annual financial statements for the
financial period from 1 October 2020 to 30 September 2021 which can
be found on the Company's website at www.asia-strategic.com .
The consolidated financial statements of the Group are presented
in United States dollars ("US$") which is the functional currency
and the presentation currency for the consolidated financial
statements.
2 SIGNIFICANT ACCOUNTING POLICIES
The condensed financial statements have been prepared under the
historical cost convention, except as disclosed in the accounting
policies in the Group financial statements for the financial year
ended 30 September 2021.
Changes in accounting policy
New or amended standards have become applicable for the current
reporting period. The adoption of these new or amended standards
did not result in substantial changes to the Group's accounting
policies and had no material effect on the amounts reported for the
current or previous financial periods.
IFRSs issued but not yet effective
Certain new accounting standards and interpretations have been
issued but are not yet effective for the current financial year
ending 30 September 2022 and have not been adopted early by the
Group. The Group expects that the adoption of these IFRSs, if
applicable, will have no material impact on the financial
statements in the period of initial application.
3 USE OF JUDGEMENTS AND ESTIMATES
In preparing the condensed interim financial statements,
Management has made judgments, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
The significant judgments made by Management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial statements as at and for the financial period from 1
October 2021 to 30 September 2022.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
There have been no material revisions to the nature and
estimates of amounts reported in prior periods, except those
necessitated by the changing circumstances of the COVID-19 pandemic
and Myanmar's State of Emergency.
3.1 SIGNIFICANT EVENTS AND SUBSEQUENT EVENTS
a) Updates on Impact of Coronavirus ("COVID-19")
Vietnam
The number of new COVID-19 daily cases in Vietnam was at a
manageable level in February 2022 which enabled the Government to
ease COVID-19 restrictions and reopen to vaccinated international
tourists in mid-March in line with other ASEAN countries. As at the
date of this report, we have no knowledge of further restrictions
being planned.
Myanmar
Myanmar has largely recovered from the latest surge of COVID-19
with substantially fewer cases reported and has recently reopened
the country to international travel in a bid to bolster
international tourism and engage with the international business
communities.
In support of the country's effort to achieve a higher
vaccination rate and ensuring the well-being of its employees, the
Group on its own accord initiated a COVID-19 vaccination programme
for all eligible employees. With employees substantially
vaccinated, all Group businesses were able to operate continuously
without any disruptions. This enables management to focus firmly on
operational improvements, planned expansion and capitalize on any
new business opportunities with sufficient preventive measures from
past experiences for future disruptions arising from spikes in
COVID-19.
In April 2022, through notifications and directives, the Central
Bank of Myanmar ("CBM") implemented foreign exchange control
measures requiring all foreign currency receipts from 4 April 2022
to be converted to Myanmar Kyat ("Kyat"), restricting conversion of
foreign currencies and limiting offshore remittance. The CBM has
recently announced exemptions and the relaxation of certain
measures to Myanmar Investment Committee ("MIC") Permitted foreign
investments, investments in Special Economic Zones, Embassies,
Airlines and certain non-profit organisations.
The Group owns and operates the Yangon American International
School ("Yangon American"), a Myanmar Investment Commission ("MIC")
approved international school qualified for certain foreign
exchange control exemptions. The Group is assessing the impact of
these directives and will continue to manage its currency exposure
proactively in view of the general shortage of USD in the
market.
Countries within emerging Asia are navigating through the
recovery of the prolonged pandemic, however the recent Russian war
against Ukraine fueled new economic uncertainties and inflationary
pressures globally. The Group will continuously undertake measured
expansion of its existing and future businesses and maintain
financial liquidity discipline.
The Group's operations in Vietnam are expected to exceed Myanmar
over time, however contribution from both markets remains an
important diversification strategy to mitigate the overall COVID-19
and geographical risk exposure of the Group. The Group will closely
monitor the developments in Myanmar and provide regular updates to
its shareholders who remain supportive of the Group's efforts and
initiatives.
b) Exclusive agreement for Kids&Us School of English
On 25 April 2022, the Group entered into an exclusive
franchising agreement with Kids&Us English, S.L.U
("Kids&Us") for the development of English language centres for
children under the brand "Kids&Us School of English" in
Myanmar.
Kids&Us is a leading provider of English language education
for children from as young as 1 year old and teenagers. Founded in
Manresa, Barcelona, in 2003, Kids&Us has over 155,000 students
across 437 schools in Spain and 90 schools internationally.
Under the terms of this exclusive franchising agreement, the
Company shall pay Kids&Us (i) an initial fee of approximately
EUR 100,000 (approximately US$106,044), (ii) ongoing service fees
as a percentage of revenues and (iii) didactic materials based on
consumption, among other fees.
The Company is planning for its first two centres in Yangon to
be operational by June 2023.
c) Adoption of the 2022 Employee Share Options Scheme
At the Annual General Meeting held on 4 (th) March 2022, in
order to incentivise existing and new management and employees, the
Company's shareholders approved a new share option scheme ("2022
ESOS"), whereby share options in respect of up to 200,000 ordinary
shares in the capital of the Company may be granted to certain
individuals at an exercise price of US$11.00 per share with a
typical vesting schedule of 40% of the option on the first
anniversary of the grant date, further 40% of the option on the
second anniversary of the grant date and further 20% of the option
on the third anniversary of the grant date.
3.2 SEASONAL OPERATIONS
The Group's businesses were not affected significantly by
seasonal or cyclical factors during the financial period.
4 REVENUE AND SEGMENT INFORMATION
Disaggregation of revenue
The Group has disaggregated revenue into various categories in
the following table which is intended to:
-- depict how the nature, amount, timing and uncertainty of
revenue and cash flows are affected by economic factors; and
-- enable users to understand the relationship with revenue segment information provided.
Education Services Total
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
6 months 6 months 6 months 6 months 6 months 6 months
ended ended ended ended ended ended
31 March 2022 31 March 2021 31 March 2022 31 March 2021 31 March 2022 31 March 2021
US$ US$ US$ US$ US$ US$
Rendering of
services - - 3,025,078 2,707,920 3,025,078 2,707,920
Technical
support
services
and
new centre
fees 193,625 365,159 - 6,857 193,625 372,016
Student fees 5,094,777 4,567,955 - - 5,094,777 4,567,955
5,288,402 4,933,114 3,025,078 2,714,777 8,313,480 7,647,891
============== ============== ============== ============== ============== ==============
Timing of
transfer of
services
Point in time 7,167 - 143,997 144,446 151,164 144,446
Over time 5,281,235 4,933,114 2,881,081 2,570,331 8,162,316 7,503,445
-------------- -------------- -------------- -------------- -------------- --------------
5,288,402 4,933,114 3,025,078 2,714,777 8,313,480 7,647,891
============== ============== ============== ============== ============== ==============
The timing of revenue recognition would affect the amount of
revenue and deferred revenue (advances from customers) recognised
as at the reporting date in the consolidated statement of financial
position.
Unaudited Audited
As at
As at 30 September
31 March 2022 2021
US$ US$
Contract liabilities
Deferred revenue 7,151,554 5,892,090
============== =============
a) Significant changes in contract liabilities are as detailed below:
Unaudited Audited
As at
As at 30 September
31 March 2022 2021
US$ US$
Balance at beginning 5,892,090 5,180,719
Cash received in advance of performance
and not
recognised as revenue 6,538,656 9,381,140
Revenue recognised during the financial
period/year:
-------------- -------------
* On contract liabilities at beginning of financial
period/year (2,462,538) (4,566,761)
* On cash received in advance during financial
period/year (2,817,330) (4,181,407)
-------------- -------------
(5,279,868) (8,748,168)
Foreign exchange difference 676 78,399
-------------- -------------
Balance at end 7,151,554 5,892,090
============== =============
b) Remaining performance obligations
Non-current deferred revenues are in respect of cash received in
advance of performance which will be recognised according to the
following:
(i) The Group recognised deferred revenue for new centres
developed by the related party in prior years for the Education
businesses and collected fees in advance of the performance
obligations.
(ii) Student fees for Education business segments are generally
collected 1 to 12 months (30 September 2021: same) and more than 12
months for certain students who prepaid in advance of performance
with reference to the individual terms of the student
contracts.
Deferred revenue from student fees are recognised over the
duration of the respective courses and the remaining contract
period ranging from 1 to 6.5 (30 September 2021: 1 to 7) years.
1 October 2021 Education Services Others Total
to 31 March 2022 US$ US$ US$ US$
Revenue 5,288,402 3,025,078 - 8,313,480
Cost of services (3,131,494)(*) (1,998,781)(*) - (5,130,275)
--------------- --------------- ---------------- ---------------
Gross profit 2,156,908 1,026,297 - 3,183,205
Other income 79,981 341 4,730 85,052
Administrative and other
operating expenses (4,226,923) (586,113) (514,834)(**) (5,327,870)
--------------- --------------- ---------------- ---------------
(Loss)/profit from operations (1,990,034) 440,525 (510,104) (2,059,613)
Finance cost (335,741) (31,223) (86,027) (452,991)
Segment (loss)/profit (2,325,775) 409,302 (596,131) (2,512,604)
Income tax expense - (82,520) - (82,520)
--------------- --------------- ---------------- ---------------
(Loss)/profit after
income tax (2,325,775) 326,782 (596,131) (2,595,124)
Other non-cash items:
--------------- --------------- ---------------- ---------------
Total depreciation of
plant and equipment 188,249 16,732 525 205,506
Total amortisation of
right-of-use asset 1,238,017 112,337 - 1,350,354
Total amortisation of
intangible assets 28,101 167 - 28,268
Impairment of trade
and other receivables - 18,421 - 18,421
Finance costs (excluding
interest on lease liabilities) - - 86,027 86,027
Total interest on lease
liabilities 335,741 36,364 - 372,105
--------------- --------------- ---------------- ---------------
1,790,108 184,021 86,552 2,060,681
Adjusted earnings before
interest, tax, depreciation,
and amortisation (535,667) 593,323 (509,579) (451,923)
Reportable segment
assets
as at 31 March 2022 20,964,082 2,376,447 392,262 23,732,791
Investment in FVOCI - - 242,325 242,325
Total Group's assets 23,975,116
=============== =============== ================ ===============
Included in the segment
assets:
Additions:
Plant and equipment 580,871 13,298 - 594,169
Right-of-use assets 1,425,137 - - 1,425,137
=============== =============== ================ ===============
Reportable segment
liabilities
as at 31 March 2022 (18,667,934) (1,292,549) (7,414,250) (27,374,733)
* Cost of services from "Education" and "Services" segments
comprise mainly employee benefits expenses amounting to
US$1,874,606 and US$1,747,784, respectively for the financial
period ended 31 March 2022.
** Other operating expenses from the "Others" segment comprise
mainly employee benefit expenses of US$300,355 for the financial
period ended 31 March 2022.
1 October 2020 Education Services Others Total
to 31 March 2021 US$ US$ US$ US$
Revenue 4,933,114 2,714,777 - 7,647,891
Cost of services (3,303,520)(*) (2,128,039)(*) - (5,431,559)
--------------- --------------- ---------------- ---------------
Gross profit 1,629,594 586,738 - 2,216,332
Other income 32,754 4,050 3,276 40,080
Administrative and
other operating expenses (3,187,326) (891,299) (690,776)(**) (4,769,401)
--------------- --------------- ---------------- ---------------
Loss from operations (1,524,978) (300,511) (687,500) (2,512,989)
Finance cost (338,745) (16,940) (93,945) (449,630)
Segment (loss)/profit (1,863,723) (317,451) (781,445) (2,962,619)
Income tax benefit 7,176 10,435 - 17,611
--------------- --------------- ---------------- ---------------
(Loss)/profit after
income tax (1,856,547) (307,016) (781,445) (2,945,008)
Other non-cash items:
--------------- --------------- ---------------- ---------------
Total depreciation
of plant and equipment 230,457 15,734 403 246,594
Total amortisation
of right-of-use asset 1,250,985 80,390 - 1,331,375
Total amortisation
of intangible assets - 70,160 43,110 113,270
Impairment of trade
and other receivables 103,207 - - 103,207
Finance costs (excluding
interest on lease liabilities) - - 93,945 93,945
Total interest on lease
liabilities 338,745 16,940 - 355,685
--------------- --------------- ---------------- ---------------
1,923,394 183,224 137,458 2,244,076
Adjusted earnings
before interest, tax,
depreciation, and amortisation 59,671 (134,227) (643,987) (718,543)
Reportable segment
assets
as at 31 March 2021 20,146,346 3,956,113 1,057,939 25,160,398
Investment in FVOCI - - 551,963 551,963
Total Group's assets 25,712,361
=============== =============== ================ ===============
Included in the segment
assets:
Additions:
Right-of-use assets 3,088,394 354,304 - 3,442,698
=============== =============== ================ ===============
Reportable segment
liabilities
as at 31 March 2021 (17,432,877) (1,338,537) (5,324,673) (24,096,087)
Deferred tax liabilities (214,445) (3,478) - (217,923)
Total Group's liabilities (24,314,010)
* Cost of services from "Education" and "Services" segments
comprise mainly employee benefits expenses amounting to
US$2,294,150 and US$1,797,508, respectively for the 6M'21.
** Other operating expenses from the "Others" segment comprise
mainly employee benefit expenses of US$447,475 for the 6M'21.
Geographical information
The Group's business segments operate in three main geographical
areas. Revenue is based on the country in which the customers are
located. Segmental non-current assets consist primarily of
non-current assets other than financial instruments and deferred
tax assets. Segment non-current assets are shown by geographical
area in which the assets are located.
Unaudited Unaudited
6 months 6 months
ended ended
31 March 2022 31 March 2021
US$ US$
Revenue
Vietnam 3,312,986 4,014,274
Myanmar 5,000,494 3,633,617
8,313,480 7,647,891
============== =============
Unaudited Audited
As at As at
31 March 2022 30 September
2021
US$ US$
Segment non-current assets
Vietnam 12,044,048 9,643,022
Myanmar 5,996,584 8,015,138
Singapore 1,996 1,603
18,042,628 17,659,763
============== ===============
Non-current assets consist of plant and equipment, intangible
assets and right-of-use assets in the consolidated statement of
financial position of the Group.
5 EMPLOYEE BENEFIT EXPENSES
Unaudited Unaudited
6 months 6 months
ended ended
31 March 31 March 2021
2022
US$ US$
Wages, salaries and allowances * 5,192,705 5,664,586
Contributions to defined contribution
plans 61,486 62,656
Share-based compensation 71,726 92,440
Termination benefits 35,806 35,407
Staff insurance and medical expenses 125,750 113,234
Staff accommodation and welfares 145,367 194,106
Others 25,462 40,317
5,658,302 6,202,746
========== ==============
Total employee benefit expenses comprised:
* Cost of services 3,622,390 4,091,658
* Administrative and other operating expenses 2,035,912 2,111,088
---------- --------------
5,658,302 6,202,746
========== ==============
*Included in these expenses are Director's fees and
remuneration.
6 FINANCE COST
Unaudited Unaudited
6 months 6 months
ended ended
31 March 2022 31 March 2021
US$ US$
Interest expenses:
* Convertible notes 20,685 -
* Lease liabilities 366,964 355,685
* Loan from a shareholder 65,342 93,945
------------- -------------
452,991 449,630
============= =============
7 LOSS BEFORE INCOME TAX
In addition to the charges and credits disclosed elsewhere in
the financial statements, the loss before income tax includes the
following charges:
Unaudited Unaudited
6 months 6 months
ended ended
31 March 31 March 2021
2022
US$ US$
Cost of services:
Academic expenses 567,799 223,878
Student enrolment and support fees 214,755 61,705
Bank charges on student instalment
plans 165,204 182,931
Depreciation expense 104,278 181,855
Security service expense 81,276 134,790
Hotel related operating expenses 79,581 152,611
Amortisation of right-of-use assets 58,522 -
Amortisation of intangible assets 17,679 56,898
Interest on lease liabilities 5,141 -
Administrative and other operating
expenses:
Amortisation of right-of-use assets 1,291,832 1,331,375
Marketing expenses 857,522 534,119
Professional fees 322,316 412,878
Depreciation expense 101,228 64,739
Travelling expenses 81,296 50,999
Lease expenses on:
* Short term lease expense 124,525 114,728
* Lease concession (1) (80,745) (200,000)
Amortisation of intangible assets 10,589 56,372
(1) The variable lease payments are related to additional rent
concessions received from landlord due to the COVID-19
pandemic.
8 INCOME TAX EXPENSE
The corporate income tax rate applicable to the Company and its
subsidiaries in Singapore is at 17% ( 6M'21 : 17%). The Group has
significant operations in Myanmar and Vietnam, for which the
corporate income tax rate applicable are 22% ( 6M'21: 25%) and 20%
( 6M'21 : 20%), respectively.
Taxation for other jurisdictions is calculated at the rates
prevailing in the relevant jurisdictions.
The Group calculates the period income tax expense using the tax
rate that would be applicable to the expected total annual earnings
of the respective entities. The material components of the income
tax expense in the condensed interim consolidated statement of
profit or loss are:
Unaudited Unaudited
6 months 6 months
ended ended
31 March 2022 31 March 2021
US$ US$
Current income tax
* Current year tax (82,520) -
* Under provision in respect of prior financial periods - (10,197)
Deferred income tax
* current financial period - 27,808
Total income tax credit recognised in
profit or loss (82,520) 17,611
============= =============
9 PLANT AND EQUIPMENT
During the six-month financial period ended 31 March 2022, the
movements in the net carrying amount of plant and equipment are
summarised below.
Unaudited Unaudited
6 months 6 months
ended ended
31 March 31 March 2021
2022
US$ US$
Purchase of plant and equipment
---------- --------------
* Computers and books 125,122 8,563
* Furniture and fittings 14,663 9,855
* Leasehold improvements 2,921 4,080
* Construction-in-progress 451,463 11,165
---------- --------------
594,169 33,663
Depreciation for the six-month financial
period (205,506) (246,594)
========== ==============
Construction-in-progress mainly relates to leasehold
improvements for three English language centres in Vietnam and the
Auston campus in Myanmar, respectively.
10 INTANGIBLE ASSETS
For presentation purposes, the carrying amounts of goodwill
(excluding computer software/license) are allocated to the
respective CGU have been group to the following segments:
Education Security services
Myanmar Vietnam Myanmar
31 31 30 31
March 30 September March September March 30 September
2022 2021 2022 2021 2022 2021
US$ US$ US$ US$ US$ US$
Goodwill - - 4,938,217 4,937,416 1,438,990 1,438,990
Area development
and
centre fees 106,668 114,168 172,207 177,300 - -
As at reporting date, there are no new additions in intangible
assets except for purchase of computer software license.
Amortisation for the six months financial period ended 31 March
2022 amounted to US$28,268 (6M'21: US$113,270).
11 RIGHTS-OF-USE ASSETS
During the six months financial period ended 31 March 2022, the
movements in the net carrying amount of rights-of-use assets are
summarised below.
Unaudited Audited
As at As at
31 March 30 September
2022 2021
US$ US$
Additions for the year 1,425,137 3,541,687
Amortisation for the 6 months financial
period (1,350,354) (1,331,375)
============ ==============
12 FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME ("FVOCI")
Unaudited Audited
As at As at
31 March 2022 30 September
2021
US$ US$
Balance at beginning 314,125 675,574
Fair value recognised in other comprehensive
income (71,800) (361,449)
Balance at end 242,325 314,125
============== =============
Details of the investment is as follows:
Quoted equity instrument
- London Stock Exchange (AIM) 242,325 314,125
======= =======
The Group designated investment as quoted equity security to be
measured at FVOCI as at reporting date. The Group intends to hold
investment for long-term appreciation in value as well as strategic
investment purposes.
The investment in listed equity instrument has no fixed maturity
date nor coupon rate. The fair value of the equity instrument is
based on quoted bid market price on the last market date of the
reporting date (Level 1).
The FVOCI are denominated in United States dollar as at
reporting date.
13 TRADE AND OTHER RECEIVABLES
Unaudited Audited
As at As at
31 March 2022 30 September
2021
US$ US$
Current
Trade receivables
Third parties 775,701 741,036
Accrued receivables 39,658 75,554
Related party (Note 23) 907,930 1,042,614
Less: Loss allowances (926,352) (989,688)
-------------- -------------
Total trade receivables 796,937 869,516
Third parties(ii) 280,327 280,327
Less: Loss allowances (280,327) (280,327)
-------------- -------------
- -
Advances 6,135 3,743
Sundry receivables - 39,465
Rental deposits 72,390 75,642
Prepayments for enrolment and support fees 361,013 229,250
Other prepayments 333,691 172,687
-------------- -------------
Total other receivables 773,229 520,787
Total trade and other receivables (current) 1,570,166 1,390,303
-------------- -------------
Non-current
Rental deposits 429,712 442,609
Prepayments for enrolment and support fees 49,498 44,037
Related party (Note 23) 4,419,976 3,914,406
Less: Loss allowances (3,492,193) (3,410,436)
-------------- -------------
Total other receivables (non-current) 1,406,993 990,616
-------------- -------------
Total trade and other receivables 2,977,159 2,380,919
Less: Prepayments (744,202) (445,974)
Less: Advances (6,135) (3,743)
Add: Cash and cash equivalents and fixed
deposits (Note 14) 2,634,338 2,265,882
Financial assets at amortised costs 4,861,160 4,197,084
============== =============
Trade and other receivables
Trade receivables are non-interest bearing and are generally on
15 to 60 (30 September 2021: 15 to 60) days credit term. They are
measured at their original invoice amounts which represent their
fair value on initial recognition.
Amounts due from subsidiaries and related parties are non-trade
in nature, unsecured, interest-free and are repayable on
demand.
Expected credit loss allowances
i) Amount due from a related party
In the previous financial year, loss allowances of US$1,004,384
were made on the trade and non-trade amounts due from a related
party in respect of payments made on behalf and advances for the
operation of the managed language centres and Engineering college
in Myanmar. The loss allowance made was based on the financial
information of the related party and the expected repayments from
the provision of property management services to the Group over a
period of 8 (30 September 2021: 9) years.
No additional allowance for impairment was made on the amount
due from a related party in the current financial period.
ii) Amount due from third parties - hostels
In prior years, allowance for impairment of receivables from
third parties of US$280,327 was made in respect of advances to the
owners of the hostels under management as two of the hostels under
management experienced continuous losses and recoverability is in
doubt.
The Group may commit to provide annual or monthly advances to
the owners of the managed hostels pursuant to each operation and
management agreement. If the managed hostels do not meet the agreed
performance measures, such advances are recognised as hostel
related operating expenses in the profit or loss.
No additional allowance for impairment was made on the amount
due from third parties in the current financial period.
iii) Amount due from third-parties
In the current financial period, loss allowance of US$18,421
were made on the current third-party trade receivables as the
likelihood of recovery is in doubt.
14 CASH AND CASH EQUIVALENTS AND FIXED DEPOSITS
For the consolidated statement of cash flows, cash and cash
equivalents comprise the following at the end of the reporting
date:
Unaudited Audited
As at As at
31 March 2022 30 September 2021
US$ US$
Fixed deposits 43,757 100,625
Cash and bank balances and on hand 2,590,581 2,165,257
Total 2,634,338 2,265,882
Less: pledged fixed deposits (43,757) (100,625)
Cash and cash equivalents for the
purpose of the consolidated statement
of cash flows 2,590,581 2,165,257
============== ==================
Cash at bank earns interest at floating rates based on daily
bank deposit rates. Fixed deposits placed are for a period of up to
365 (30 September 2021: ranging from 30 to 365) days and bears
interest of 5.4% (30 September 2021: ranging from 4.6% to 5.4%) per
annum. The entire fixed deposits were pledged to a Vietnam bank as
security for credit facility and represented restricted cash.
Cash and cash equivalents and fixed deposits are denominated in
the following currencies:
Unaudited Audited
As at As at
31 March 2022 30 September 2021
US$ US$
United States dollar 1,156,491 1,111,559
Myanmar Kyat 1,051,026 667,072
Vietnamese Dong 343,473 430,555
Singapore dollar 82,866 56,181
Euro 482 515
-------------- ------------------
2,634,338 2,265,882
============== ==================
15 SHAREHOLDER'S LOANS (UNSECURED)
Changes in shareholder's loan balances ( interest and principal)
arising from financing activities:
Non-cash Non-cash
changes changes
As at As at
1 October Repayment Conversion Interest 31 March
2021 of loan of loan expense 2022
Group US$ US$ US$ US$ US$
Facility 1(a) 3,151,576 (1,666,944) - 52,601 1,537,233
Facility 2(b) 2,591,971 (104,712) (2,500,000) 12,741 -
---------- ----------- ----------- -------- ---------
5,743,547 (1,771,656) (2,500,000) 65,342 1,537,233
========== =========== =========== ======== =========
Non-cash
changes
As at As at
1 October Drawdown Repayment Interest 30 September
2020 of loan of loan expense 2021
Group US$ US$ US$ US$ US$
Facility 1(a) 2,188,124 1,000,000 (188,124) 151,576 3,151,576
Facility 2(b) 1,030,083 1,500,000 (30,083) 91,971 2,591,971
3,218,207 2,500,000 (218,207) 243,547 5,743,547
========== ========= ========= ======== =============
(a) Loan Facility 1
On 1 July 2019, the Group secured a loan facility of up to
US$3,000,000 with its shareholder, Macan ("Loan Facility 1"). On 1
November 2021, the Group had repaid outstanding principal loan
amounting to US$1,500,000. Accordingly, the Group has a remaining
unutilised credit facility of US$1,500,000 as at 31 March 2022.
(b) Loan Facility 2
On 23 March 2020, the shareholder, Macan granted the Group an
additional loan facility of up to US$4,000,000 ("Loan Facility
2").
On 20 October 2021, the Company entered into a loan
re-organisation with the Company's shareholder, Macan for the
following:
i) Subscribed a total amount of US$3,500,000 Zero Coupon
Convertible Notes (Note 16) of the Company satisfied through cash
consideration of US$1,000,000 and the conversion of Macan's Loan
Facility 2 amounting to US$2,500,000; and
ii) Terminated Loan Facility 2 agreement with effect from 31
October 2021 subsequent to the repayment of all accrued interest
under Loan Facility 2 on 31 October 2021.
These Loan Facilities bear semi-annual interest at 6% (30
September 2021: 6%) per annum and are repayable on demand in full
with all accrued interest or no later than 30 June 2024. As at
reporting date, the shareholder has indicated that it will not
demand repayment within the next 12 months from the date of the
audited financial statements of the Group for the financial year
ended 30 September 2022.
16 CONVERTIBLE NOTES
The salient features of the convertible loans are as
follows:
Type Zero-Coupon Convertible 10% Coupon Convertible
Note Note
Tenure Up to 3 years Up to 3 years
------------------------------ ----------------------------------
Maturity 30 October 2024 30 October 2024
------------------------------ ----------------------------------
Coupon Zero-coupon 10% annual
------------------------------ ----------------------------------
Discount Between 2.0% and 20.5% 10% vs. subscription price
based on conversion schedule for a Qualifying Event
------------------------------ ----------------------------------
Floor conversion US$11.9 per share (based US$15.0 per share
price on the maximum discount
listed above)
------------------------------ ----------------------------------
Qualifying event Share issuance in excess Share issuance in excess
of of
US$5 million US$5 million
------------------------------ ----------------------------------
Use of proceeds Development of business Development of business
Working capital Working capital
------------------------------ ----------------------------------
Limitation to Max. 50% of the proceeds Max. 50% of the proceeds
use of proceeds for activities in Myanmar for activities in Myanmar
------------------------------ ----------------------------------
Rank Pari passu to all present Pari passu to all present
and future unsecured and future unsecured obligations
obligations
------------------------------ ----------------------------------
Principal amount US$5.23 million US$0.50 million
in issuance as
at 31 March 2022
------------------------------ ----------------------------------
Convertible Notes with conversion option are accounted for as
financial liabilities with an embedded equity conversion derivative
based on the terms of the contract. On issuance of Convertible
Notes, the embedded option is recognised at its fair value as
derivative liability with subsequent changes in fair value
recognised in profit or loss. The remaining proceeds are allocated
to the liability component that are carried at amortised cost until
the liability is extinguished on conversion or redemption. When an
equity conversion option is exercised, the carrying amounts of the
liability component and the equity conversion option are
derecognised with a corresponding recognition of share capital.
On 4 November 2021, the Group launched a Convertible Note
Programme to raise up to US$10 million over a six-month period for
working capital and future investments. The convertible note ("CN")
holders have an option to subscribe to either (i) a 10% coupon
option ("10% Coupon Convertible Note") or (ii) a zero-coupon option
("Zero Coupon Convertible Note").
As at reporting date, the Group's existing shareholders have
subscribed to CN amounting to US$5,730,000 comprising:
(i) Zero-Coupon Convertible Notes of US$5,230,000 (including
subscription of Macan amounting to US$2,500,000 as detailed in Note
15 of the financial statements); and
(ii) 10% Coupon Convertible Notes amounting to US$500,000.
Convertible loans are denominated in United States dollar.
17 BANK LOAN (UNSECURED)
On 25 January 2022, the Group secured a short-term interest free
bank loan from a third-party bank, the Vietnam Bank for Social
Policies, amounting to VND901,680,000 (US$120,492). The loan is
repayable 11 months from the date of disbursement of the loan and
any overdue balances bears interest of 12% per annum.
18 TRADE AND OTHER PAYABLES
Unaudited Audited
As at As at
31 March 2022 30 September
2021
US$ US$
Trade payables
Third parties 632,166 624,725
Accrued enrolment expenses 145,323 55,563
-------------- -------------
Total trade payables 777,489 680,288
-------------- -------------
Other payables
Third parties 52,961 18,429
Related party - 18,512
Accruals - others 1,195,064 1,060,038
Accruals - staff bonus 96,335 769,195
Refundable deposits from customers 480,436 131,293
Sales tax 11,958 19,926
Total other payables 1,836,754 2,017,393
-------------- -------------
Total trade and other payables 2,614,243 2,697,681
Add: Shareholder's loan (Note 15) 1,537,233 5,743,547
Add: Convertible notes (Note 16) 5,750,685 -
Add: Bank loan (Note 17) 120,492 -
Add: Lease liabilities 10,123,685 9,771,179
Less: Sales tax ( 11,958 ) (19,926)
-------------- -------------
Financial liabilities carried at amortised
cost 20,134,380 18,192,481
============== =============
Trade amounts due to third parties are unsecured, non-interest
bearing and are on a 15 to 60 (30 September 2021: 15 to 60) days
credit term.
The non-trade amounts due to third parties and a related party
are unsecured, interest-free and repayable on demand.
19 SHARE CAPITAL
Unaudited Audited Unaudited Audited
As at As at As at As at
31 March 30 September 31 March 30 September
2022 2021 2022 2021
Number of shares US$ US$
Issued and fully paid
ordinary shares:
Ordinary shares
At beginning of financial
period/year 2,845,920 2,804,920 20,799,638 20,553,638
Shares issued during
the
financial period 80,000 41,000 640,000 246,000
At end of financial
period 2,925,920 2,845,920 21,439,638 20,799,638
========== ============== ============= ==============
On 10 December 2021, the Company issued 80,000 ordinary shares
at US$8 per share (being the closing bid price of the Company's
ordinary shares as at 10 December 2021) in lieu of payment for
accrued employee bonus of US$640,000, in respect of employment
services rendered for the previous financial period to certain key
management personnel as detailed in Note 5 to the financial
statements.
In the previous financial year, on 24 June 2021, the Company
issued 41,000 ordinary shares at US$6 per share (being the closing
bid price of the Company's ordinary shares as at date of issuance)
in lieu of payment for accrued employee bonus of US$246,000, in
respect of employment services rendered for the previous financial
period to certain key management personnel as detailed in Note 6 to
the financial statements.
The holders of ordinary shares are entitled to receive dividends
as and when declared by the Company. All ordinary shares have no
par value and carry one vote per share without restrictions.
The Company did not declare any dividend in respect of the
financial period from 1 October 2021 to 31 March 2022 and financial
period from 1 October 2020 to 30 September 2021.
20 NON-CONTROLLING INTEREST
On 7 February 2022, the Company acquired 3,000 ordinary shares
from the non-controlling interest of MS Auston Pte. Ltd. for a cash
consideration of US$1.00. The carrying value of the net liabilities
of the subsidiary company, MS Auston Pte Ltd as at date of
acquisition was US$279,693 and the carrying value of the additional
equity interest of 30% acquired was US$83,908. The difference of
US$83,909 between the consideration and the carrying value of
additional interest acquired resulted in a premium paid on
acquisition of non-controlling interests recognised directly in
equity reserve.
The following table shows the effect of changes in the Group's
ownership interest that did not result in loss of control, on the
equity attributable to owners of the Company:
Unaudited
As at
31 March 2022
US$
Amount paid on changes in ownership interest in subsidiary 1
Non-controlling interest comprising of net liabilities
acquired 83,908
Total amount recognised in equity reserves 83,909
21 LOSS PER SHARE
The calculation of the basic and diluted loss per share
attributable to the ordinary equity holders of the Company is based
on the following data:
Unaudited Unaudited
6 months 6 months
ended ended
31 March 2022 31 March 2021
Numerator
Loss for the financial period attributable
to the
owners of the parent (US$) (2,549,665) (2,885,464)
Denominator
Weighted average number of ordinary shares
for the
purposes of basic and diluted loss per
share 2,895,319 2,804,920
Loss per share (US$)
Basic and diluted (0.88) (1.03)
In the current financial period and previous financial period,
diluted loss per share is the same as the basic loss per share
because the dilutive potential ordinary shares to be exercised are
anti-dilutive as the effect of the shares' conversion would be to
decrease the loss per share.
22 COMMITMENTS
As at the reporting date, commitments in respect of capital
expenditures are as detailed below:
Unaudited Unaudited
6 months 6 months
ended ended
31 March 2022 31 March
2021
US$ US$
Capital expenditures contracted
but not provided for:
- Property, plant and equipment 115,000 -
23 SIGNIFICANT RELATED PARTY TRANSACTIONS
During the financial period, in addition to the information
disclosed elsewhere in these financial statements, the Group
entered into the following significant transactions with related
parties at rates and terms agreed between the parties:
Unaudited Unaudited
6 months 6 months
ended ended
31 March 2022 31 March 2021
US$ US$
With related parties*:
* Management fees 63,881 -
* Technical support service fees 120,820 361,409
With a Director of the
subsidiaries:
* Professional fees 54,000 54,000
*Related parties refer to entities where a Director of the
subsidiaries have beneficial interests.
24 FAIR VALUE MEASUREMENT
Financial instruments and measurements
Financial instruments not measured at fair value
Financial instruments not measured at fair value includes cash
and cash equivalents and fixed deposits, current trade and other
receivables (excluding prepayments and advances), long term rental
deposits (current) and trade and other payables. Due to their
short-term nature, the carrying amount of these current financial
assets and financial liabilities measured at amortised costs
approximate their fair value.
The carrying amounts of the non-current loans due to a
shareholder and liability component of the convertible notes
approximates their fair values as the fixed interest rate
approximates market interest rates for such liabilities.
The carrying amounts of the non-current liability component of
the convertible notes approximates their fair values as the fixed
interest rate approximates market interest rates for such
liabilities.
The non-current receivables due from a related party (Note 13)
amounting to US$927,783 (30 September 2021: US$503,970) has an
estimated fair value of US$927,783 (30 September 2021: US$318,328),
is measured according to Level 2 of the fair valuation hierarchy.
The fair value of the amount due from a related party is determined
based on discounted cash flow method, taking into consideration the
estimated duration required for the related party to repay and the
market interest rate used for discounting to present value.
Financial instruments measured at fair value
The financial instruments as disclosed in Note 12 to the
financial statements included in Level 1 of the fair value
hierarchy, are traded in active market and their fair values are
based on quoted market prices at the reporting date.
There were no transfers between levels during the financial
period.
There have been no changes in the valuation techniques of the
various classes of financial instruments during the financial
period.
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