Annual Report • Jun 29, 2018
Annual Report
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RNS Number : 1487T
MobilityOne Limited
29 June 2018
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.
29 June 2018
MobilityOne Limited
("MobilityOne", "Company" or the "Group")
Audited results for the year ended 31 December 2017
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 2017.
A copy of the annual report and audited financial statements, along with notice of the Company's annual general meeting, to be held at 9.00 a.m. Malaysia time on 27 July 2018 at B-10-8, Level 10, Megan Avenue II, Jalan Yap Kwan Seng, 50450 Kuala Lumpur, Malaysia, is being posted to shareholders today and will be available shortly 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 |
| [email protected] | |
| Allenby Capital Limited (Nominated Adviser and Broker) | +44 20 3328 5656 |
| Nick Athanas/James Reeve | |
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 2017
Introduction
The Directors are pleased to present the audited consolidated financial statements for MobilityOne Limited for the year ended 31 December 2017.
The revenue of the Group increased by 37.9% to £85.14 million (2016 revenue: £61.73 million), which was mainly contributed by the growth of the Group's e-payment business in mobile phone prepaid airtime reload and bill payments via the Group's banking channels (such as mobile banking, internet banking and ATMs), with 10 banks and approximately 2,000 payment terminal bases in Malaysia. However, the Group reported a net loss after tax of £0.73 million in 2017 (2016 profit after tax: £0.31 million), mainly due to a one-off impairment loss on goodwill of £0.64 million in relation to the Group's acquisition of a 55% equity interest in Mobility I Tap Pay (Bangladesh) Limited ("MiTP") in November 2017 for BDT550,000 (c. £5,000). MiTP had net liabilities of BDT126.4 million (c. £1.16 million) as at 6 November 2017. In addition, the Group has shared the post-acquisition loss of BDT23.16 million (c. £0.12 million) in MiTP.
MobilityOne Sdn Bhd ("MobilityOne Malaysia"), the Group's wholly-owned subsidiary in Malaysia, is supporting MiTP to provide a mobile financial services platform in Bangladesh, which includes a mobile banking app, for Meghna Bank Ltd ("Meghna"). Meghna is a commercial bank which currently has 47 branches in Bangladesh. The mobile financial services platform, named "Tap 'n Pay", has been launched by Meghna. MiTP anticipates that these services will play an important role in Bangladesh where the majority of the population remains unbanked but now, utilising "Tap 'n Pay", they are able to get access to basic banking services such as fund transfers from banking agents at convenience stores. "Tap 'n Pay" uses a Near Field Communication (NFC) enabled card as a payment instrument and an android based point of sales as the payment device. An extensive network of partner distributors provides the necessary coverage to support the transactions conducted by the banking agents for bank account opening, digital payment, domestic fund transfer, mobile prepaid reload, bill payment and the purchase of bus and movie e-tickets. The mobile banking app is in addition to the more than 7,000 point of sales devices deployed in Bangladesh by MiTP for Meghna's mobile financial services. MiTP has been investing to expand the point of sales and user base and has generated revenue since early 2018.
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 international remittance services in Malaysia via its 50%-owned associate company, Happy Remit Sdn Bhd (formerly known as Unique Change Sdn Bhd)("Happy Remit"), holds a remittance business license issued by the Central Bank of Malaysia and has six outlets in Malaysia. However, it has not made a significant contribution to the Group in 2017.
As at 31 December 2017, the Group had cash and cash equivalents of £3.43 million (31 December 2016: cash and cash equivalents of £2.11 million) and the secured loans and borrowings from financial institutions totaled £3.95 million (31 December 2016: £2.80 million).
Current trading and outlook
MobilityOne Malaysia has obtained interests from numerous entities, such as schools, local councils and cooperatives for collaboration to use the Group's e-money system. In addition, the mobile remittance services by Happy Remit to conduct money transfer services using a mobile application, will provide convenience to the foreign workers where previously their only option to conduct remittances was limited to approaching money transfer outlets during office hours. This is expected to open up the Group's money transfer services to untapped markets which the Board believes will bring growth to this segment of the Group's business.
The Directors expect that the financial performance of the Group in Malaysia will be positive as the e-payment business, particularly prepaid airtime reload and bill payment business, in Malaysia is expected to continue its growth. However, the business in Bangladesh via MiTP is expected to incur more costs in the short term to grow the business. Nevertheless, the long-term prospects in Bangladesh with new services to be introduced soon, such as inward money transfer services and local municipal bill payment services, is expected to grow MiTP's business in Bangladesh. As such, the Directors continue to view the future prospects of the Group with cautious optimism.
.............................................
Abu Bakar bin Mohd Taib
Chairman
Date: 29 June 2018
Report of the Directors
For the year ended 31 December 2017
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 2017.
PRINCIPAL ACTIVITY
The principal activity of the Group in the year under review was the provision of e-commerce infrastructure payment solutions and platforms.
KEY PERFORMANCE INDICATORS
| Year ended 31.12.2017 | Year ended 31.12.2016 | ||
| £ | £ | ||
| Revenue | 85,140,366 | 61,734,675 | |
| Operating (loss)/profit | (384,366) | 557,444 | |
| (Loss)/profit before tax | (613,238) | 381,165 | |
| Net (loss)/profit for the year | (734,668) | 314,977 | |
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 DIVIDENDS
The consolidated total comprehensive loss for the year ended 31 December 2017 was £647,342 (2016: profit of£419,903) which has been transferred to reserves. No dividends will be distributed for the year ended 31 December 2017.
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 2017 in the ordinary shares of the Company, were as follows:
Ordinary shares of 2.5p each
| Interest at 31.12.17 | % 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 current issued capital.
The Directors also held the following options to subscribe for new ordinary shares:
| Interest at 31.12.17 | |
| 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 at13 June 2018, 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 shares | % of issued capital | |
| 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 | 8,813,255 | 8.29 |
| 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
During the financial year, the Group acquired a 55% equity interest in Mobility I Tap Pay (Bangladesh) Limited for BDT550,000 (c. £5,000).
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: 29 June 2018
Board of Directors
Abu Bakar bin Mohd Taib
(Non-Executive Chairman)
Abu Bakar bin Mohd Taib, a Malaysian aged 65, 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 56, 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 47, 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 46, 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.
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 2017 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 2017 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 interest in subsidiary companies. As such there is a risk that the net book value of investments may be impaired. |
We reviewed the net assets of the subsidiary companies in comparison to the net book value of investments. 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 its ability to generate sufficient cash flows to meet continued operation costs and hence continue trading. The income is derived from the provision of e-commerce infrastructure payment solutions and platforms. The going concern assumption is dependent on the future growth and return to profitability of the current business as well as the development of the additional subsidiaries added to the Group during the year under review. |
We evaluated the suitability of management's model for the forecast. The forecast includes assumptions, including those related to the growth in revenues. Our audit work has focused on evaluating and challenging the reasonableness of these assumptions and their impact on the forecast period. |
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 | £301,000 (2016: £265,000). | £24,000 (2016:£26,000). |
| How we determined it | 1% of revenue 10% of profit before tax 1% of gross assets |
10% of profit before tax 2% of gross assets |
| Rationale for benchmark applied |
We believe that revenue, profit before tax and gross assets are the primary measures used by the shareholders in assessing the performance of the Group, and is a generally accepted auditing benchmark. | We believe that profit before tax and gross assets are the primary measure used by the shareholders in assessing the performance of the Company, and 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 £300,000 and £2,000.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £15,050 (2016: £13,250) and £1,200 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 nine 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, Netoss Sdn Bhd, MobilityOne Ventures Sdn Bhd, One Tranzact Sdn Bhd, Happy Remit Sdn Bhd, MobilityOne South Asia Sdn Bhd and Mobility I Tap Pay (Bangadesh) Limited reporting units, which were individually financially significant and accounted for 100% of the Group's revenue and 95% of the Group's absolute profit before tax (i.e. the sum of the numerical values without regard to whether they were profits or losses for the relevant reporting units).
The Group's engagement team performed all audit procedures, with the exception of the audit of MobilityOne Sdn Bhd, Netoss Sdn Bhd, MobilityOne Ventures Sdn Bhd, One Tranzact Sdn Bhd, Happy Remit Sdn Bhd, MobilityOne South Asia Sdn Bhd and Mobility I Tap Pay (Bangadesh) 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.
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: 29 June 2018
For the year ended 31 December 2017
| 2017 | 2016 | ||||
| Note | £ | £ | |||
| Revenue | 5 | 85,140,366 | 61,734,675 | ||
| Cost of sales | (79,846,346) | (56,795,647) | |||
| GROSS PROFIT | 5,294,020 | 4,939,028 | |||
| Other operating income | 233,981 | 136,382 | |||
| Administration expenses | (5,129,886) | (4,002,159) | |||
| Other operating expenses | 7 | (782,481) | (515,807) | ||
| OPERATING (LOSS)/PROFIT | (384,366) | 557,444 | |||
| Finance costs | 6 | (228,872) | (176,279) | ||
| (LOSS)/PROFIT BEFORE TAX | 7 | (613,238) | 381,165 | ||
| Tax | 8 | (121,430) | (66,188) | ||
| (LOSS)/PROFIT FOR THE YEAR | (734,668) | 314,977 | |||
| Attributable to: | |||||
| Owners of the parent | (633,359) | 315,352 | |||
| Non-controlling interests | (101,309) | (375) | |||
| (734,668) | 314,977 | ||||
| (LOSS)/EARNINGS PER SHARE | |||||
| Basic (loss)/earnings per share (pence) | 10 | (0.596) | 0.297 | ||
| Diluted (loss)/earnings per share (pence) | 10 | (0.596) | 0.270 | ||
The notes form part of these financial statements
For the year ended 31 December 2017
| 2017 | 2016 | ||||
| £ | £ | ||||
| (LOSS)/PROFIT FOR THE YEAR | (734,668) | 314,977 | |||
| OTHER COMPREHENSIVE PROFIT | |||||
| Foreign currency translation | 87,326 | 104,926 | |||
| TOTAL COMPREHENSIVE (LOSS)/PROFIT | (647,342) | 419,903 | |||
| Total comprehensive (loss)/profit attributable to: | |||||
| Owners of the parent | (9,496) | 420,453 | |||
| Non-controlling interests | (637,846) | (550) | |||
| (647,342) | 419,903 | ||||
The notes form part of these financial statements
MOBILITYONE LIMITED (96293)
Consolidated Statement Of Changes in Equity
For The Year Ended 31 December 2017
| Non-Distributable | Distributable | ||||||||||||||||||
| Reverse | Foreign Currency |
Non- controlling Interests |
|||||||||||||||||
| Share Capital |
Share Premium |
Acquisition Reserve | Translation Reserve | Accumulated Losses | Total | Total Equity |
|||||||||||||
| £ | £ | £ | £ | £ | £ | £ | £ | ||||||||||||
| As at 1 January 2016 | 2,657,470 | 909,472 | 708,951 | 689,246 | (3,701,797) | 1,263,342 | (5,623) | 1,257,719 | |||||||||||
| Comprehensive profit/(loss) | |||||||||||||||||||
| Profit/(loss) for the year | - | - | - | - | 315,352 | 315,352 | (375) | 314,977 | |||||||||||
| Foreign currency translation | - | - | - | 105,101 | - | 105,101 | (175) | 104,926 | |||||||||||
| Total comprehensive profit for the year | - | - | - | 105,101 | 315,352 | 420,453 | (550) | 419,903 | |||||||||||
| At 31 December 2016 | 2,657,470 | 909,472 | 708,951 | 794,347 | (3,386,445) | 1,683,795 | (6,173) | 1,677,622 | |||||||||||
The notes form part of these financial statements
MOBILITYONE LIMITED (96293)
Consolidated Statement Of Changes in Equity (continued)
For The Year Ended 31 December 2017
| Non-Distributable | Distributable | ||||||||||||||||||
| Reverse | Foreign Currency |
Non- controlling Interests |
|||||||||||||||||
| Share Capital |
Share Premium |
Acquisition Reserve | Translation Reserve | Accumulated Losses | Total | Total Equity |
|||||||||||||
| £ | £ | £ | £ | £ | £ | £ | £ | ||||||||||||
| 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 | |||||||||||
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 (£) using the closing rate as at the Statement of Financial Position date and the Income Statements were translated into £ 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 2017
| Non-Distributable | |||||||
| Share Capital |
Share Premium |
Accumulated Losses | Total | ||||
| £ | £ | £ | £ | ||||
| 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 | |||
| As at 1 January 2016 | 2,657,470 | 909,472 | (1,185,189) | 2,381,753 | |||
| Loss for the year | - | - | (92,465) | (92,465) | |||
| At 31 December 2016 | 2,657,470 | 909,472 | (1,277,654) | 2,289,288 | |||
The notes form part of these financial statements
Consolidated Statement of Financial Position
As at 31 December 2017
| 2017 | 2016 | |||||
| Note | £ | £ | ||||
| ASSETS | ||||||
| Non-current assets | ||||||
| Intangible assets | 11 | 338,938 | - | |||
| Property, plant and equipment | 12 | 2,272,557 | 507,151 | |||
| 2,611,495 | 507,151 | |||||
| Current assets | ||||||
| Inventories | 14 | 1,621,378 | 1,101,772 | |||
| Trade and other receivables | 16 | 3,666,495 | 2,922,999 | |||
| Tax recoverable | 75,104 | 45,222 | ||||
| Cash and cash equivalents | 17 | 3,425,316 | 2,118,164 | |||
| 8,788,293 | 6,188,157 | |||||
| TOTAL ASSETS | 11,399,788 | 6,695,308 | ||||
| SHAREHOLDERS' EQUITY | ||||||
| Equity attributable to owners of the parent: | ||||||
| Called up share capital | 18 | 2,657,470 | 2,657,470 | |||
| Share premium | 19 | 909,472 | 909,472 | |||
| Reverse acquisition reserve | 20 | 708,951 | 708,951 | |||
| Foreign currency translation reserve | 21 | 881,673 | 794,347 | |||
| Accumulated losses | 22 | (4,019,804) | (3,386,445) | |||
| Shareholders' equity | 1,137,762 | 1,683,795 | ||||
| Non-controlling interests | (637,846) | (6,173) | ||||
| TOTAL EQUITY | 499,916 | 1,677,622 | ||||
| 2017 | 2016 | |||||||||
| Note | £ | £ | ||||||||
| LIABILITIES | ||||||||||
| Non-current liabilities | ||||||||||
| Loans and borrowings - secured | 23 | 431,825 | 323,726 | |||||||
| Deferred tax liabilities | 125,076 | - | ||||||||
| Amount due to Directors | 26 | 1,536,417 | - | |||||||
| 2,093,318 | 323,726 | |||||||||
| Current liabilities | ||||||||||
| Trade and other payables | 25 | 5,191,171 | 2,101,229 | |||||||
| Amount due to Directors | 26 | 102,187 | 113,501 | |||||||
| Loans and borrowings - secured | 23 | 3,513,196 | 2,479,230 | |||||||
| 8,806,554 | 4,693,960 | |||||||||
| Total liabilities | 10,899,872 | 5,017,686 | ||||||||
| TOTAL EQUITY AND LIABILITIES | 11,399,788 | 6,695,308 | ||||||||
The financial statements were approved and authorised by the Board of Directors on 29 June 2018 and were signed on its behalf by:
............................................................................
Dato' Hussian @ Rizal bin A. Rahman
Chief Executive Officer
Company Statement of Financial Position
As at 31 December 2017
| 2017 | 2016 | ||||
| Note | £ | £ | |||
| ASSETS | |||||
| Non-current asset | |||||
| Investment in subsidiary companies | 13 | 1,976,356 | 1,976,338 | ||
| Current assets | |||||
| Trade and other receivables | 16 | 1,077,417 | 1,068,386 | ||
| Cash and cash equivalents | 17 | 4,209 | 2,010 | ||
| 1,081,626 | 1,070,396 | ||||
| TOTAL ASSETS | 3,057,982 | 3,046,734 | |||
| SHAREHOLDERS' EQUITY | |||||
| Equity attributable to owners of the parent: | |||||
| Called up share capital | 18 | 2,657,470 | 2,657,470 | ||
| Share premium | 19 | 909,472 | 909,472 | ||
| Accumulated losses | 22 | (1,408,688) | (1,277,654) | ||
| TOTAL EQUITY | 2,158,254 | 2,289,288 |
| Current liabilities | |||||
| Trade and other payables | 25 | 800,128 | 646,511 | ||
| Amount due to Directors | 26 | 99,600 | 110,935 | ||
| TOTAL LIABILITIES | 899,728 | 757,446 | |||
| TOTAL EQUITY AND LIABILITIES | 3,057,982 | 3,046,734 | |||
The financial statements were approved and authorised by the Board of Directors on 29 June 2018and were signed on its behalf by:
............................................................................
Dato' Hussian @ Rizal bin A. Rahman
Chief Executive Officer
The notes form part of these financial statements
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
| 2017 | 2016 | ||||
| Note | £ | £ | |||
| ##### Cash flow from/(used in) operating activities | |||||
| Cash flow from/(used in) operations | 27 | 1,069,141 | (792,145) | ||
| Interest paid | (228,872) | (176,279) | |||
| Interest received | 62,631 | 46,872 | |||
| Tax paid | (136,030) | (108,394) | |||
| Net cash generated from /(used in) operating activities | 766,870 | (1,029,946) | |||
| Cash flow from investing activities | |||||
| Purchase of property, plant and equipment | 12 | (301,387) | (23,871) | ||
| Development costs | (338,200) | ||||
| Intangible asset | (779) | - | |||
| Net cash inflow for acquisition of subsidiary company | 204,291 | - | |||
| Net cash used in investing activities | (436,075) | (23,871) | |||
| Cash flows from financing activities | |||||
| Net change of banker acceptance | 23 | 1,002,406 | 763,946 | ||
| Repayment of finance lease payables | (44,797) | (35,962) | |||
| Repayment of term loan | (3,122) | (33,783) | |||
| Net cash from financing activities | 954,487 | 761,767 | |||
| Increase/(decrease) in cash and cash equivalents | 1,285,282 | (292,050) | |||
| Effect of foreign exchange rate changes | 84,299 | 30,605 | |||
| Cash and cash equivalents at beginning of year | 1,955,270 | 2,216,715 | |||
| Cash and cash equivalents at end of year | 17 | 3,324,851 | 1,955,270 | ||
The notes form part of these financial statements
Company Statement of Cash Flows
For the year ended 31 December 2017
| 2017 | 2016 | ||||
| Note | £ | £ | |||
| Cash flow from operating activities | |||||
| Cash increase/(depleted) in operations | 27 | 2,217 | (8) | ||
| Cash flow from investing activities | |||||
| Investment in subsidiary | (18) | - | |||
| ## Increase/(Decrease) in cash and cash equivalents | 2,199 | (8) | |||
| Cash and cash equivalents at beginning of year | 2,010 | 2,018 | |||
| Cash and cash equivalents at end of year | 17 | 4,209 | 2,010 | ||
The notes form part of these financial statements
Notes to the Financial Statements
For the year ended 31 December 2017
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 2017 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 MoCSTM and ABOSSETM.
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 cashflow forecasts for companies within the Group. These cashflow 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.
In addition, the controlling shareholder has also undertaken to provide support as necessary to enable the Group to meet its debts as and when they fall due.
Going Concern (continued)
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
The financial statement does not include any adjustments that would result if the forecast were not achieved and shareholder support was withdrawn.
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 2017are 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 2017 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.
Estimation uncertainty and critical judgements (continued)
(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 2017 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 2017, the Group has tax recoverable of £75,104 (2016: £45,222).
IFRS AND IAS UPDATE FOR 31 DECEMBER 2017 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:
| Amendments to IAS 7 | Disclosure Initiative |
| Amendments to IAS 12 | Recognition of Deferred Tax Assets for Unrealised Losses |
| Annual Improvements to IFRS standard 2014- 2016 | Amendments to IFRS 12 Disclosure of Interest in Other Entities |
The impact of adopting the above amendments had no material impact on the financial statements of the Group.
Standards, interpretations and amendments to published standards that are not yet effective
The following standards, amendments and interpretations applicable to the Group are in issue but are not yet effective and have not been early adopted in these financial statements. They may result in consequential changes to the accounting policies and other note disclosures. We do not expect the impact of such changes on the financial statements to be material. These are outlined in the table below:
| Effective dates for Financial periods Beginning on or after |
||
| IFRS 15 | Revenue from Contracts with Customers | 1 January 2018 |
| IFRS 9 | Financial Instruments | 1 January 2018 |
| IFRIC 22 | Foreign Currency Transactions and Advance Consideration | 1 January 2018 |
| Amendments to IFRS 2 | Classification and Measurement of Share-Based Payment Transactions | 1 January 2018 |
| Amendments to IFRS 4 | Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts | 1 January 2018* |
| Amendments to IFRS 15 | Clarification to IFRS 15 | 1 January 2018 |
| Amendments to IAS 40 | Transfer of Investment Property | 1 January 2018 |
| Annual Improvements to IFRS Standards 2014 - 2016 Cycle | ||
| · Amendments to IFRS 1 First-time Adoption of IFRS | 1 January 2018 | |
| · Amendments to IAS 28 Investment in Associate and Joint Venture | 1 January 2018 | |
| IFRS 16 | Leases | 1 January 2019 |
| Amendments to IFRS 9 | Prepayment Features with Negative Compensation | 1 January 2019 |
| IFRIC 23 | Uncertainty over Income Tax Treatments | 1 January 2019 |
| Amendments to IAS 28 | Long-term Interest in Associates and Joint Ventures | 1 January 2019 |
| Amendments to IAS 19 | Plan Amendment, Curtailment or Settlement | 1 January 2019 |
Standards, interpretations and amendments to published standards that are not yet effective (Continued)
| Effective dates for Financial periods Beginning on or after |
||
| Annual Improvements to IFRS Standards 2015 - 2017 Cycle - Various standards | 1 January 2019 | |
| · Amendment to IFRS 3 | 1 January 2019 | |
| · Amendment to IFRS 11 | 1 January 2019 | |
| · Amendment to IAS 12 | 1 January 2019 | |
| · Amendment to IAS 23 | 1 January 2019 | |
| Amendment to References to Conceptual Framework in IFRS Standards | 1 January 2020 | |
| IFRS 17 | Insurance Contracts | 1 January 2021 |
| Amendment to IFRS 10 and IAS 28 | Sale or Contribution of Assets between an Investor and its Associate or joint Venture | Deferred until further notice |
Note:
* Entities that meet the specific criteria in IFRS 4, paragraph 20B, may choose to defer the application of IFRS 9 until that earlier of the application of the forthcoming insurance contracts standard or annual periods beginning before 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 profit or loss.
(ii) 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.
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 (£), 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 (£) at foreign exchange rates ruling at the Statement of Financial Position date. Results and cash flows are translated into Pound Sterling (£) 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.
The financial information set out below has been translated at the following rates:
| Exchange rate (RM: £) | ||
| At Statement of Financial Position date | Average for year | |
| Year ended 31 December 2017 | 5.47 | 5.53 |
| Year ended 31 December 2016 | 5.51 | 5.61 |
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.
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 | 5 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.
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 are recognised initially at fair value and subsequently measured at their cost when the contractual right to receive cash or other financial assets from another entity is established.
A provision for doubtful debts is made when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization and default or delinquency in payments are considered indicators that a trade and other receivables are impaired.
Cash and cash equivalents
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.
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 drawn down 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 December 2017 | Note | Rate | 1 year | 1-2 years | 2-3 years | 3-4 years | 4-5 years | 5 years | Total |
| % | £ | £ | £ | £ | £ | £ | £ | ||
| Fixed rate: | |||||||||
| Fixed deposits | 17 | 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 | 23 | 6.6-6.9 | (3,299,674) | - | - | - | - | - | (3,299,674) |
| Term loan | 23 | 4.60 | - | (6,142) | (14,227) | - | - | (254,844) | (275,213) |
| At 31 December 2016 | |||||||||
| Fixed rate: | |||||||||
| Fixed deposits | 17 | 2.95-3.20 | 1,590,201 | - | - | - | - | - | 1,590,201 |
| Finance leases | 24 | 2.42-3.50 | (13,619) | (14,103) | (27,056) | - | - | (3,539) | (58,317) |
| Floating rate: | |||||||||
| Bankers' acceptance | 23 | 6.6-6.9 | (2,297,268) | - | - | - | - | - | (2,297,268) |
| Term loan | 23 | 4.60 | (5,449) | (6,091) | (14,110) | - | - | (258,827) | (284,477) |
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 | ||||||
| 2017 | 2016 | |||||
| £ | £ | |||||
| Floating rate instruments | ||||||
| Financial liabilities (Note 23) | 3,581,029 | 2,581,745 | ||||
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 | ||||
| £ | £ | ||||
| 2017 | |||||
| Floating rate instruments | (35,810) | 35,810 | |||
| 2016 | |||||
| Floating rate instruments | (20,578) | 20,578 | |||
(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 Statements 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 or within one year | On demand one to five year | On demand over five year | Total | ||||
| 2017 | £ | £ | £ | £ | |||
| Group | |||||||
| Financial liabilities | |||||||
| Trade and other payables | 5,191,171 | - | - | 5,191,171 | |||
| Amount due 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 | 8,806,554 | 1,690,287 | 277,955 | 10,774,796 | |||
| 2016 | £ | £ | £ | £ | |||
| Group | |||||||
| Financial liabilities | |||||||
| Trade and other payables | 2,101,229 | - | - | 2,101,229 | |||
| Amount due to Directors | 113,501 | - | - | 113,501 | |||
| Loans and borrowings | 2,802,957 | - | - | 2,802,957 | |||
| Total undiscounted financial liabilities | 5,017,587 | - | - | 5,017,687 | |||
| 2017 | £ | £ | £ | £ | |||
| Company | |||||||
| Financial liabilities | |||||||
| Trade and other payables | 25,888 | - | - | 25,888 | |||
| Amount due to Directors | 99,600 | - | - | 99,600 | |||
| Amount owing to subsidiary | 774,240 | - | - | 774,240 | |||
| Total undiscounted financial liabilities | 899,728 | - | - | 899,728 | |||
| 2016 | £ | £ | £ | £ | |||
| Company | |||||||
| Financial liabilities | |||||||
| Trade and other payables | 646,511 | - | - | 646,511 | |||
| Loans and borrowings | 110,935 | - | - | 110,935 | |||
| Total undiscounted financial liabilities | 757,446 | - | - | 757,446 | |||
(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 | ||||||
| £ | £ | ||||||
| 2017 | |||||||
| Financial lease liabilities (Note 24) | 263,527 | 281,123 | |||||
| 2016 | |||||||
| Financial lease liabilities (Note 24) | 58,317 | 64,404 | |||||
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 | |||||||
| 2017 | 2016 | ||||||
| £ | £ | ||||||
| ## EMPLOYEES | |||||||
| Wages, salaries and bonuses | 441,348 | 474,336 | |||||
| Social security contribution | 5,765 | 3,887 | |||||
| Contribution to defined contribution plan | 52,616 | 38,787 | |||||
| Other staff related expenses | 18,722 | 13,126 | |||||
| Continuing operations | 518,451 | 530,136 | |||||
| DIRECTORS | |||||||
| Fees | 115,861 | 108,838 | |||||
| Wages, salaries and bonuses | 116,865 | 118,037 | |||||
| Social security contribution | 299 | 222 | |||||
| Contribution to defined contribution plan | 14,024 | 12,578 | |||||
| Continuing operations | 247,049 | 239,675 | |||||
The number of employees (excluding Directors) of the Group and of the Company at the end of the financial year were198(2016: 58) and Nil (2016: Nil) respectively.
The details of remuneration received and receivables by the Directors of the Group during the financial year are as follows:
| Group 2017 |
Fees | Salaries and allowances | Bonuses | Social security contribution | Defined contribution plan | Total |
| £ | £ | £ | £ | £ | £ | |
| 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 | |
| Group | ||||||
| 2016 | ||||||
| Company's Directors: | ||||||
| Dato' Hussian @ Rizal bin A. Rahman | 36,000 | 57,767 | - | 111 | 6,932 | 100,810 |
| Derrick Chia Kah Wai | 24,000 | 53,670 | - | 111 | 5,646 | 83,427 |
| Seah Boon Chin | 36,000 | 6,600 | - | - | - | 42,600 |
| Subsidiary companies' Directors: | ||||||
| Tengku Muhaini Binti Sultan Hj. Ahmad Shah | 6,419 | - | - | - | - | 6,419 |
| Abu Bakar bin Mohd Taib |
6,419 | - | - | - | - | 6,419 |
| 108,838 | 118,037 | - | 222 | 12,578 | 239,675 | |
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 the Group mainly trades and provides services in only one region - the Far-East.
| Discontinued operations | Continuing operations | ||||
| Group | Telecommunication services and electronic commerce solutions | Telecommunication services and electronic commerce solutions | Hardware | Elimination | Total |
| 2017 | £ | £ | £ | £ | £ |
| Segment revenue: | |||||
| Sales to external customers | - | 83,767,474 | 1,372,892 | - | 85,140,366 |
| Loss before tax | - | (613,238) | - | - | (613,238) |
| Tax | - | (121,430) | - | - | (121,430) |
| Lossfor the year | - | (734,668) | - | - | (734,668) |
| Non-cash expenses/(income)* | |||||||
| Depreciation of property, plant and equipment | - | 179,027 | - | - | 179,027 | ||
| Amortisation of intangible assets | - | 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.
| Discontinued operations | Continuing operations | ||||
| Group | Telecommunication services and electronic commerce solutions | Telecommunication services and electronic commerce solutions | Hardware | Elimination | Total |
| 2016 | £ | £ | £ | £ | £ |
| Segment revenue: | |||||
| Sales to external customers | - | 60,190,920 | 1,543,755 | - | 61,734,675 |
| - | 60,190,920 | 1,543,755 | - | 61,734,675 | |
| Profit before tax | - | 381,165 | - | - | 381,165 |
| Tax | - | (66,188) | - | - | (66,188) |
| Profit for the year | - | 314,977 | - | - | 314,977 |
| Non-cash expenses/(income)* | |||||||||
| Depreciation of property, plant and equipment | - | 88,608 | - | - | 88,608 | ||||
| Amortisation of development costs | - | 54,291 | - | - | 54,291 | ||||
| - | 142,899 | - | - | 142,899 | |||||
*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 | |||||||
| 2017 | 2016 | ||||||
| £ | £ | ||||||
| Bankers' acceptance interest | 193,874 | 147,826 | |||||
| Finance lease interest | 8,947 | 3,957 | |||||
| Bank guarantee interest | 2,858 | 865 | |||||
| Bank overdraft | 8,884 | 8,666 | |||||
| Letters of credit | - | 215 | |||||
| Term loan | 14,309 | 14,750 | |||||
| 228,872 | 176,279 |
7. PROFIT BEFORE TAX
Profit before tax is stated after charging/(crediting):
| Group | ||||||||||
| 2017 | 2016 | |||||||||
| ## Note | £ | £ | ||||||||
| Auditors' remuneration - Statutory audit |
||||||||||
| - Current year | 26,769 | 27,755 | ||||||||
| - (Over)/Underprovided | (199) | 2,908 | ||||||||
| Amortisation of intangible assets | 11 | 23 | - | |||||||
| Amortisation of development costs | 11 | - | 54,291 | |||||||
| Property, plant and equipment written off | 12 | - | 531 | |||||||
| Impairment loss on goodwill | 11 | 643,729 | - | |||||||
| Directors' remuneration | 4 | 247,049 | 226,874 | |||||||
| Depreciation | 12 | 179,027 | 88,608 | |||||||
| Inventories written off | 5,650 | 1,701 | ||||||||
| Rental of premises and equipment | 33,147 | - | ||||||||
| Other income | (149,220) | (10,780) | ||||||||
| Interest income | (62,622) | (46,872) | ||||||||
| Gain/(loss) on foreign exchange | ||||||||||
| - realised | 9,780 | (1,154) | ||||||||
| - unrealised | 26,828 | - | ||||||||
8. TAX
| Group | |||||||
| 2017 | 2016 | ||||||
| £ | £ | ||||||
| Current tax expense: | |||||||
| Jersey corporation tax for the year | |||||||
| Foreign tax | 115,908 | 38,654 | |||||
| (Over)/Under provision in prior year | (9,760) | 27,534 | |||||
| 106,148 | 66,188 | ||||||
| Deferred tax: | |||||||
| Current year provision | 15,282 | - | |||||
| 121,430 | 66,188 | ||||||
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 | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| (Loss)/profit before taxation from continuing operations | (613,238) | 381,165 | ||
| Taxation at Malaysian statutory tax rate of 24% (2016: 24%) | (174,458) | 133,938 | ||
| Effect of different tax rates in other countries | (20,172) | (375) | ||
| Effect of expenses not deductible for tax | 396,325 | 58,595 | ||
| Income not taxable for tax purpose | (38,021) | (203,992) | ||
| Deferred tax assets not recognised during the year of 24% | 3,847 | 50,488 | ||
| Utilisation of previously unrecognised unabsorbed capital allowance | (36,332) | - | ||
| (Over)/Under provision of tax expense in prior year | (9,759) | 27,534 | ||
| Tax expense for the year | 121,430 | 66,188 | ||
As at 31 December 2017, the unrecognised deferred tax assets of the Group are as follows:
| Group | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| Unabsorbed tax losses | 186,592 | 260,792 | ||
| Unabsorbed capital allowances | 18,536 | 30,883 | ||
| Taxable temporary difference | 3,268 | - | ||
| 208,396 | 291,675 | |||
The potential net deferred tax assets amounting to £208,396 (2016: £291,675) 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 £131,034 (2016: £92,465).
10. (LOSS)/EARNINGS PER SHARE
| Group | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| (Loss)/Profit attributable to owners of the Parent for the computation of basic (loss)/earnings per share | ||||
| (Loss)/profit from operations | (633,359) | 315,352 | ||
| 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)/earnings Per Share | ||||
| Basic (loss)/earnings per share (pence) | (0.596) | 0.297 | ||
| Diluted (loss)/earnings per share (pence) | (0.596) | 0.270 | ||
The basic (loss)/earnings per share is calculated by dividing the loss of £633,359 (2016: profit of £315,352) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, which is 106,298,780 (2016: 106,298,780).
The diluted (loss)/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 31 December 2017 |
Software | Goodwill on consolidation | Development costs | Total |
| £ | £ | £ | £ | |
| Cost | ||||
| At 1 January 2017 | 518,811 | 1,076,904 | 962,300 | 2,558,015 |
| Acquisition of subsidiary company | 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 of subsidiary company | 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 |
| 31 December 2016 | ||||
| Cost | ||||
| At 1 January 2016 | 518,811 | 1,076,904 | 962,300 | 2,558,015 |
| Foreign exchange differences | - | - | - | - |
| At 31 December 2016 | 518,811 | 1,076,904 | 962,300 | 2,558,015 |
| Accumulated amortisation and impairment loss | ||||
| At 1 January 2016 | 518,811 | 1,076,904 | 908,009 | 2,503,724 |
| Amortisation charge for the year | - | - | 54,291 | 54,291 |
| Impairment loss for the year | - | - | - | - |
| Foreign exchange differences | - | - | - | - |
| At 31 December 2016 | 518,811 | 1,076,904 | 962,300 | 2,558,015 |
| Net Carrying Amount | ||||
| At 31 December 2016 | - | - | - | - |
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£643,729 (2016: NIL) in respect of the goodwill on consolidation. A significant proportion of goodwill on consolidation relates to the acquisition of Mobility I TapPay (Bangladesh) Ltd. which is a CGU and has a carrying amount of NIL (2016: 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
| Group | Building | Motor vehicles | Leasehold improvement |
Electronic Data Capture equipment | Computer equipment | Computer software | Furniture and fittings | Office equipment | Renovation | Total |
| 31 December 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 | - | 299,409 | 120,581 | 404 | 4,321 | 22,795 | 3,505 | 548,196 |
| 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 | 72,016 | 32,472 | 2,011 | 6,256 | 6,416 | 4,440 | 178,932 |
| 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 |
| Group | Building | Motor vehicles | Leasehold improvement |
Electronic Data Capture equipment | Computer equipment | Computer software | Furniture and fittings | Office equipment | Renovation | Total |
| 31 December 2016 | £ | £ | £ | £ | £ | £ | £ | £ | £ | £ |
| COST | ||||||||||
| At 1 January 2016 | 336,158 | 189,160 | 9,532 | 152,220 | 212,794 | 31,347 | 71,625 | 30,082 | 61,883 | 1,094,801 |
| Additions | - | - | - | 5,140 | 15,933 | 183 | 1,042 | 1,573 | - | 23,871 |
| Written off | - | - | - | - | (531) | - | - | - | - | (531) |
| Foreign exchange differences | 51,745 | 29,118 | 1,335 | 23,432 | 32,585 | 4,825 | 11,023 | 4,631 | 9,525 | 168,219 |
| At 31 December 2016 | 387,903 | 218,278 | 10,867 | 180,792 | 260,781 | 36,355 | 83,690 | 36,286 | 71,408 | 1,286,360 |
| DEPRECIATION | ||||||||||
| At 1 January 2016 | 8,215 | 147,910 | 2,581 | 130,481 | 175,816 | 21,249 | 52,892 | 22,972 | 35,118 | 597,234 |
| Depreciation charge for the year | 6,640 | 20,182 | 1,031 | 31,753 | 15,889 | 2,329 | 5,013 | 1,573 | 4,198 | 88,608 |
| Foreign exchange differences | 7,119 | 23,121 | (5,399) | 20,641 | 27,257 | 3,312 | 8,244 | 3,592 | 5,480 | 93,367 |
| At 31 December 2016 | 21,974 | 191,213 | (1,787) | 182,875 | 218,962 | 26,890 | 66,149 | 28,137 | 44,796 | 779,209 |
| NET CARRYING AMOUNT | ||||||||||
| At 31 December 2016 | 365,929 | 27,065 | 12,654 | (2,083) | 41,819 | 9,465 | 17,541 | 8,149 | 26,612 | 507,151 |
(a) Cash payments of £301,387 (2016: £23,871) 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 £85,949 and £214,280 (2016: £27,065 and NIL) held under finance leases arrangements.
(c) Assets pledged as securities to financial institutions
The carrying amount of property, plant and equipment of the Group pledged as securities for bank borrowings as disclosed in Note 23 to the financial statements are :-
| Group | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| Building | 306,299 | 365,929 | ||
13. INVESTMENT IN SUBSIDIARY COMPANIES
| Company | |||||
| 2017 | 2016 | ||||
| £ | £ | ||||
| COST | |||||
| At 1 January | 1,976,338 | 1,976,338 | |||
| Add: Investment during the financial year | 18 | - | |||
| Less: Impairment loss during the financial year | - | - | |||
| At 31 December | 1,976,356 | 1,976,338 | |||
Details of the subsidiary companies are as follows:
| Effective Ownership of Ordinary Shares | ||||
| Name of Subsidiary | Country of | Interest ** | Principal Activities | |
| Companies | Incorporation | 2017 | 2016 | |
| % | % | |||
| MobilityOne Sdn. Bhd. | Malaysia | 100 | 100 | Provision of e-Channel products and services, technology managed services and solution sales and consultancy |
| MobilityOne South Asia Sdn. Bhd. | Malaysia | 100 | 100 | Investment holding |
| Direct subsidiary companies of MobilityOne Sdn. Bhd. | ||||
| Netoss Sdn. Bhd. | Malaysia | 100 | 100 | Provision of solution sales and services |
| Effective Ownership of Ordinary Shares | |||||||
| Name of Subsidiary | Country of | Interest ** | Principal Activities | ||||
| Companies | Incorporation | 2017 | 2016 | ||||
| % | % | ||||||
| Direct subsidiary companies of MobilityOne Sdn. Bhd. (Continued) | |||||||
| MobilityOne Ventures Sdn. Bhd. | Malaysia | 100 | 100 | Dormant | |||
| MobilityOne Philippines, Inc* | Philippines | 95 | 95 | Provision of IT systems and solutions and to establish a multi-channel electronic service bureau | |||
| One Tranzact Sdn. Bhd. | Malaysia | 100 | 100 | Provision of electronic payment and product fulfillment | |||
| Direct subsidiary company of MobilityOne South Asia Sdn. Bhd. | |||||||
| Mobility I Tap Pay(Bangladesh) Ltd*# | Bangladesh | 55 | - | Provision of financial services | |||
| * | Audited by firm of auditors other than UHY. | ||||||
| ** | All the above subsidiary undertakings are included in the consolidated financial statements. | ||||||
| # | The 55% equity interest was acquired on 6 November 2017 for BDT550,000 (c. £5,000). | ||||||
The effect of the acquisition on the financial results of the Group in respect of the financial period is as follows:
| 2017 | ||||
| £ | ||||
| Property, plant and equipment | 1,420,898 | |||
| Intangible assets | 779 | |||
| Inventory | 267,730 | |||
| Other receivables | 285,385 | |||
| Cash and Bank balances | 209,330 | |||
| Loan from Director | (1,530,500) | |||
| Deferred tax liability | (113,605) | |||
| Trade payables | (188,409) | |||
| Other payables | (1,509,300) | |||
| Total identifiable assets and liabilities | (1,157,692) | |||
The gross carrying amount of the trade and other receivables approximately their fair value. None of the receivables were impaired and the full contractual amount were expected to be collected.
Net cash flows arising from acquisition of subsidiary company are as follows:
| 2017 | ||||
| £ | ||||
| Purchase consideration settled in cash | 5,039 | |||
| Cash and cash equivalents acquired | (209,330) | |||
| Net Cash inflows arising from acquisition of subsidiary companies | (204,291) |
Goodwill arising from business combination:
| 2017 | ||||
| £ | ||||
| Fair value of consideration transferred | 5,039 | |||
| Non-controlling interests, based on their proportionate Interest in the recognized amounts of the assets and liabilities of the acquire | 520,961 | |||
| Fair value of identifiable assets acquired and liabilities assumed | (1,157,692) | |||
| (636,730) | ||||
| Goodwill | 641,769 |
Impact of the acquisition on the Statement of Profit or Loss and Other Comprehensive Income
From the date of acquisition, acquired subsidiary company has not contributed any revenue to the Group's revenue and decrease the Group's profit for the financial period by £224,320. The combination has taken place at the beginning of the financial year.
Material partially owned non-controlling interests
Set out below are the Group's subsidiary company that have material non-controlling interests:
| Proportion of ownership interests and voting rights held by non-controlling interests | Profit allocated to non-controlling interests | Accumulated non-controlling interests | ||
| Name of company | ||||
| 2017 | 2017 | 2017 | ||
| % | £ | £ | ||
| Mobility I Tap Pay | ||||
| (Bangladesh) Ltd | 45 | (224,320) | (629,996) | |
| Total non-controlling interests | (629,996) |
(i) Summarised statements of financial position
| Mobility I Tap Pay | |||
| (Bangladesh) Ltd | |||
| 2017 | |||
| £ | |||
| Non-current assets | 1,360,770 | ||
| Current assets | 621,444 | ||
| Non-current liabilites | (1,661,493) | ||
| Current liabilities | (1,656,806) | ||
| Net liabilities | (1,336,085) |
(ii) Summarised of statement of profit or loss and other comprehensive income
| Mobility I Tap Pay | |||
| (Bangladesh) Ltd | |||
| 2017 | |||
| £ | |||
| Revenue | - | ||
| Net loss for the financial | |||
| period | (224,320) | ||
| Total comprehensive loss for | |||
| the financial period | (224,320) |
(iii) Summarised statement of cash flows
| Mobility I Tap Pay | |||
| (Bangladesh) Ltd | |||
| 2017 | |||
| £ | |||
| Net cash used in operating activities | (241,436) | ||
| Net cash used in investing activities | (765,381) | ||
| Net cash from financing activities | 1,028,551 | ||
| Net increase in cash and cash equivalent | 21,734 |
14. INVENTORIES
| Group | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| At lower of cost and net realisable value: | ||||
| Airtime | 1,360,261 | 1,101,772 | ||
| Goods | 261,117 | - | ||
| 1,621,378 | 1,101,772 | |||
| Recognised in profit or loss: | ||||
| Cost of sales | 79,157,699 | 58,270,192 | ||
| Inventories written off | 5,650 | 1,694 | ||
15. INVESMENT IN ASSOCIATE COMPANY
In previous financial year, the subsidiary Company acquired 50% of the issued and paid-up share capital of Happy Remit Sdn Bhd. (formerly known as Unique Change Sdn. Bhd.)
| Name of Company | Country of | Effective Interest | Principal Activities | |||
| Incorporation | 2017 | 2016 | ||||
| Happy Remit Sdn. Bhd. (formerly known as Unique Change Sdn. Bhd.) |
Malaysia | 50% | 50% | Provider for International 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 | ||||||
| 2017 | 2016 | 2017 | 2016 | ||||
| £ | £ | £ | £ | ||||
| Trade receivables | |||||||
| - Third parties | 2,714,144 | 2,024,291 | - | - | |||
| Other receivables | |||||||
| - Deposits | 19,886 | 281,969 | - | - | |||
| - Prepayments | 4,603 | 3,838 | - | - | |||
| - Sundry receivables | 911,024 | 609,110 | - | - | |||
| - Staff advances | 16,838 | 3,791 | - | - | |||
| - Amount due from subsidiary company | - | - | 1,077,417 | 1,068,386 | |||
| 952,351 | 898,708 | 1,077,417 | 1,068,386 | ||||
| Total trade and other receivables | 3,666,495 | 2,922,999 | 1,077,417 | 1,068,386 | |||
(a) The Group's and the Company's normal trade credit terms range from 30 to 60 days (2016: 30 to 60 days). Other credit terms are assessed and approved on a case to case basis.
Ageing analysis
An ageing analysis of trade receivables that are neither individually nor collectively considered to be impaired is as follows:
| Group | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| Neither past due nor impaired | 1,930,438 | 1,448,176 | ||
| 1 to 2 months past due | 94,788 | 1,116,372 | ||
| 3 to 12 months past due | 688,918 | (540,256) | ||
| 783,706 | 576,116 | |||
| 2,714,144 | 2,024,292 | |||
(a) The Group's and the Company's normal trade credit terms range from 30 to 60 days (2016: 30 to 60 days). Other credit terms are assessed and approved on a case to case basis.
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. CASH AND CASH EQUIVALENTS
| Group | Company | ||||||
| 2017 | 2016 | 2017 | 2016 | ||||
| £ | £ | £ | £ | ||||
| Cash in hand and at banks | 1,112,476 | 527,964 | 4,209 | 2,010 | |||
| Fixed deposits with licensed bank | 2,312,840 | 1,590,201 | - | - | |||
| Cash and bank balances | 3,425,316 | 2,118,165 | 4,209 | 2,010 | |||
| Less : Bank overdraft (Note 23) |
(100,465) | (162,895) | - | - | |||
| Cash and cash equivalents | 3,324,851 | 1,955,270 | 4,209 | 2,010 | |||
(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 from2.95% - 3.20%(2016: 2.95% - 3.20%) and from 1 month to 12 months (2016: 1 month to 12 months) respectively.
18. CALLED UP SHARE CAPITAL
| Number of ordinary shares of £0.025 each | Amount | ||||||
| 2017 | 2016 | 2017 | 2016 | ||||
| £ | £ | ||||||
| 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 |
19. COMPANY EQUITY INSTRUMENTS
| Share capital |
Share premium | Accumulated losses | Total | |||||
| £ | £ | £ | £ | |||||
| 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 | ||||
| Share capital |
Share premium | Accumulated losses | Total | |||||
| £ | £ | £ | £ | |||||
| At 1 January 2016 | 2,657,470 | 909,472 | (1,185,189) | 2,381,753 | ||||
| Loss for the year | - | - | (92,465) | (92,465) | ||||
| At 31 December 2016 | 2,657,470 | 909,472 | (1,277,654) | 2,289,288 |
20. 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 £2,040,930, the difference between cost of investment and MobilityOne Sdn. Bhd. share capital of £708,951 has been treated as a reverse acquisition reserve.
21. FOREIGN CURRENCY TRANSLATION RESERVE
The subsidiary companies' assets and liabilities stated in the Statement of Financial Position were translated into Sterling Pound (£) using the closing rate as at the Statement of Financial Position date and the Income Statements were translated into £ using the average rate for that period. All resulting exchange differences are taken to the foreign currency translation reserve within equity.
| 2017 | 2016 | |||
| £ | £ | |||
| At 1 January | 794,347 | 689,246 | ||
| Currency translation differences during the year | 87,326 | 105,101 | ||
| At 31 December | 881,673 | 794,347 | ||
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.
22. RETAINED EARNINGS
Retained earnings represents the cumulative earnings of the Group attributable to equity shareholders.
| Group | Company | |||||||
| 2017 | 2016 | 2017 | 2016 | |||||
| £ | £ | £ | £ | |||||
| At 1 January | (3,386,445) | (3,701,797) | (1,277,654) | (1,185,189) | ||||
| Profit/(loss) for the year | (633,359) | 315,352 | (131,034) | (92,465) | ||||
| At 31 December | (4,019,804) | (3,386,445) | (1,408,688) | (1,277,654) | ||||
23. FINANCIAL LIABILITIES - LOANS AND BORROWINGS
| Group | ||||
| 2017 | 2016 | |||
| Non-current | £ | £ | ||
| Secured: | ||||
| Finance lease payables (Note 24) | 156,612 | 44,698 | ||
| Term loan | 275,213 | 279,028 | ||
| 431,825 | 323,726 | |||
| Current | ||||
| Secured: | ||||
| Bankers' acceptance | 3,299,674 | 2,297,268 | ||
| Bank overdraft | 100,465 | 162,894 | ||
| Finance lease payables (Note 24) | 106,915 | 13,619 | ||
| Term loan | 6,142 | 5,449 | ||
| 3,513,196 | 2,479,230 | |||
| Total Borrowings | ||||
| Secured: | ||||
| Bankers' acceptance | 3,299,674 | 2,297,268 | ||
| Bank overdraft | 100,465 | 162,894 | ||
| Finance lease payables (Note 24) | 263,527 | 58,317 | ||
| Term loan | 281,355 | 284,477 | ||
| 3,945,021 | 2,802,956 | |||
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 | ||||
| 2017 | 2016 | |||
| % | % | |||
| Bankers' acceptance | 6.60 - 6.90 | 6.60 - 6.90 | ||
| Bank overdraft | 8.85 | 8.85 | ||
| Term loan | 4.60 | 4.60 | ||
The maturity of borrowings (excluding finance leases) is as follows:
| Group | |||||
| 2017 | 2016 | ||||
| £ | £ | ||||
| Within one year | 3,406,281 | 2,465,612 | |||
| Between one to two years | 6,142 | 6,092 | |||
| Between two to three years | 14,227 | 14,109 | |||
| Between three and four years | - | - | |||
| Between four to five years | - | - | |||
| More than five years | 254,844 | 258,827 | |||
| 3,681,494 | 2,744,640 | ||||
Other information on financial risks of borrowings are disclosed in Note 3.
24. FINANCE LEASE PAYABLES
| Group | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| Minimum lease payments: | ||||
| Not later than 1 year | 119,902 | 15,946 | ||
| Later than 1 year but not later than 2 years | 80,481 | 15,753 | ||
| Later than 2 years but not later than 5 years | 23,438 | 20,538 | ||
| Later than 5 years | 57,302 | 12,167 | ||
| 281,123 | 64,404 | |||
| Less: Future finance charges | (17,596) | (6,087) | ||
| Present value of finance lease liabilities | 263,527 | 58,317 | ||
| Present value of minimum lease payments: | ||||
| Not later than 1 year | 106,915 | 13,619 | ||
| Later than 1 year but not later than 2 years | 74,852 | 14,103 | ||
| Later than 2 years but not later than 5 years | 20,553 | 27,056 | ||
| Later than 5 years | 61,207 | 3,539 | ||
| 263,527 | 58,317 | |||
| Analysed as: | ||||
| Due within 12 months (Note 20) | 106,915 | 13,619 | ||
| Due after 12 months (Note 20) | 156,612 | 44,698 | ||
| 263,527 | 58,317 |
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.
25. TRADE AND OTHER PAYABLES
| Group | Company | ||||||
| 2017 | 2016 | 2017 | 2016 | ||||
| £ | £ | £ | £ | ||||
| Trade payables | |||||||
| - Third parties | 481,804 | 81,334 | - | ||||
| Other payables | |||||||
| - Deposits | 619,503 | 46,143 | - | - | |||
| - Accruals | 721,026 | 969,583 | - | 1,155 | |||
| - Sundry payables | 3,368,838 | 1,004,169 | 25,888 | 645,356 | |||
| Amount due to subsidiary companies | - | - | 774,240 | - | |||
| 4,709,361 | 2,019,895 | 800,128 | 646,511 | ||||
| Total trade and other payables | 5,191,171 | 2,101,229 | 800,128 | 646,511 | |||
| Add: Amount due to Directors (Note 26) | 1,638,604 | 113,501 | 99,600 | 110,935 | |||
| Add: Loans and borrowings (Note 23) | 3,945,021 | 2,802,956 | - | - | |||
| Total financial liabilities carried at amortised costs | 10,774,796 | 5,017,686 | 899,728 | 757,446 | |||
(a) The Group's normal trade credit terms range from 30 to 90 days (2016: 30 to 90 days).
(b) Other payables are non-interest bearing. Other payables are normally settled on an average terms of 60 days (2016: 60 days).
26. AMOUNT DUE TO DIRECTORS
| Group | Company | ||||||
| 2017 | 2016 | 2017 | 2016 | ||||
| £ | £ | £ | £ | ||||
| Non-Current | |||||||
| Dr Md Zahir Uddin* | 1,384,537 | - | - | - | |||
| Prof. Dr. Md Shahin Hossain* | 148,047 | - | - | - | |||
| Keiko Tanida* | 3,833 | - | - | - | |||
| 1,536,417 | - | - | - | ||||
| Current | |||||||
| Dato' Hussian @ Rizal bin A. Rahman | 38,587 | 40,301 | 36,000 | 37,735 | |||
| Derrick Chia Kah Wai | 24,000 | 30,600 | 24,000 | 30,600 | |||
| Seah Boon Chin | 39,600 | 42,600 | 39,600 | 42,600 | |||
| 102,187 | 113,501 | 99,600 | 110,935 | ||||
| Total amount due to directors | 1,638,604 | 113,501 | 99,600 | 110,935 | |||
* 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.
27. RECONCILIATION OFPROFIT BEFORE TAX TO CASH GENERATED FROM OPERATIONS
| Group | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| Cash flow from operating activities | ||||
| (Loss)/profit before tax | ||||
| - Continuing | (613,238) | 381,165 | ||
| - Discontinued operation | - | - | ||
| (613,238) | 381,165 | |||
| Adjustments for: | ||||
| Depreciation of property, plant and equipment | 179,027 | 88,608 | ||
| Amortisation of intangible assets | 23 | - | ||
| Amortisation of development costs | - | 54,291 | ||
| Impairment loss on goodwill | 643,729 | - | ||
| Interest expenses | 228,872 | 176,279 | ||
| Inventories written off | 5,650 | 1,701 | ||
| Interest income | (62,631) | (46,872) | ||
| Operating profit before working capital changes | 381,432 | 655,172 | ||
| (Increase) in inventories | (257,526) | (40,465) | ||
| (Increase)/Decrease in receivables | (458,111) | 424,789 | ||
| (Decrease) in amount due to Directors | (104,997) | (5,102) | ||
| Increase/(Decrease) in payables | 1,508,343 | (1,826,539) | ||
| Cash generated from/(used in) operations | 1,069,141 | (792,145) | ||
| Company | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| Cash flow from operating activities | ||||
| Loss before tax | (131,034) | (92,465) | ||
| (Increase)/ in trade and other receivable | (9,031) | (531,404) | ||
| Increase/(Decrease) in payables | 253,217 | 626,021 | ||
| Increase/(Decrease) in amount due to Directors | (110,935) | (2,160) | ||
| Cash increase/(depleted) in operations | 2,217 | (8) | ||
28. RELATED PARTY TRANSACTIONS
At the Statement of Financial Position date, the Group owed the Directors £1,638,604 (2016: £2,566), the Company owed the Directors £99,600 (2016: £109,200), MobilityOne Sdn. Bhd. owed the Company £303,177 (2016: £448,685), Netoss Sdn. Bhd. owed MobilityOne Sdn. Bhd. £436,721 (2016:£819,715), MobilityOne Ventures Sdn .Bhd. owed MobilityOne Sdn. Bhd. £6,895 (2015: £4,725) and MobilityOne Sdn. Bhd. owed One Trazact Sdn. Bhd. £1,001,978 (2016: £616,215), and Netoss Sdn. Bhd. owed LMS Technology Distribution Sdn. Bhd., a company related to a Director (Dato' Hussian @ Rizal bin A. Rahman), £14,955 (2016: £14,831). The amounts owing to or from the subsidiary companies and related parties are repayable on demand and are interest free.
On 1 March 2017, MobilityOne Sdn Bhd entered into a tenancy agreement 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 one year (from 1 March 2017 to 28 February 2018) for RM2,500 (c. £460) a month.
29. ULTIMATE CONTROLLING PARTY
In the opinion of the Directors, as at 31 December 2017, the ultimate controlling party in the Company is Dato' Hussian @ Rizal bin A. Rahman by virtue of his shareholding.
30. 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 | ||||
| 2017 | 2016 | |||
| £ | £ | |||
| Limited of guarantees | ||||
| Corporate guarantee given to a licensed bank by the Company for credit facilities granted to a subsidiary company | 3,983,808 | 2,460,162 | ||
| Amount utilised | ||||
| Banker's guarantees in favour of third parties | 189,332 | 55,041 | ||
31. SHARE BASED PAYMENTS
During the year ended 31 December 2017, 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.
32. 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 [email protected] or visit www.rns.com.
END
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