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PHOENIX GROUP PLC — Interim / Quarterly Report 2024
May 14, 2024
66581_rns_2024-05-14_6b3267e0-81e1-4d8a-b8d6-aea907d04f6a.pdf
Interim / Quarterly Report
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
REVIEW REPORT AND CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS PERIOD ENDED 31 MARCH 2024
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Directors’ report and condensed consolidated interim financial statements for three months period ended 31 March 2024
| Contents | Pages |
|---|---|
| Directors’ report | 1 |
| Report on review of condensed consolidated interim financial statements | 2 |
| Condensed consolidated interim statement of financial position | 3 - 4 |
| Condensed consolidated interim statement of profit or loss | 5 |
| Condensed consolidated interim statement of comprehensive income | 6 |
| Condensed consolidated interim statement of changes in equity | 7 |
| Condensed consolidated interim statement of cash flows | 8 - 9 |
| Notes to the condensed consolidated interim financial statements | 10 - 24 |
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Directors’ report
for the three months period ended 31 March 2024
The Directors have the pleasure in submitting this report, together with the reviewed condensed consolidated interim financial statements of the Phoenix Group PLC (the “Company”) and its subsidiaries (collectively referred to as the “Group”) for the three months period ended 31 March 2024.
Principal activities
The Group is a technology conglomerate bringing cutting-edge blockchain solutions to an expansive market. The Group offers a comprehensive range of services, from high-performance computing machines trading and data centre hosting. The Group develops, operates, and manages highly specialised data centres, hosting highperformance computing power for digital asset across the UAE, Oman, US and Canada. Additionally, the Group also hosts, operates and maintains equipment within its existing data centres and enables investment opportunities within cloud mining.
The Group is the exclusive distributor of industry-leading equipment manufacturer MicroBT and prominent distributor of Digital wallet Ledgers and CoolWallets, across the Middle East. The Group has four business verticals including trading, hosting, mining and investments.
Results for the period
For the three months period ended 31 March 2024, the Group reported revenue of USD 68,932,065 (31 March 2023 (unreviewed): USD 81,948,208) and profit after tax for the period attributable to the shareholders of USD 66,150,454 (31 March 2023 (unreviewed): USD 24,877,477).
Going concern
The attached condensed consolidated interim financial statements have been prepared on a going concern basis. While preparing the condensed consolidated interim financial statements, the management has made an assessment of the Group's ability to continue as a going concern. The management has not come across any evidence that causes it to believe that material uncertainties related to the events or conditions existed, which may cast significant doubt on the Group's ability to continue as a going concern.
Transactions with related parties
Related party transactions are carried out as part of our normal course of business and in compliance with applicable laws and regulations. Related party transactions are disclosed in note 13 of the condensed consolidated interim financial statements.
Directors
-
H.E Tareq Abdulraheem Ahmed Rashed Alhosani
-
Elham Alqasim
-
Fady M Y Dahalan
-
Seyedmohammad Alizadehfard
-
Munaf Ali
Independent auditors
RAI LLP was appointed as the external auditors for the financial year 2024, in the annual general meeting held on 24 April 2024.
On behalf of the Board of Directors
H.E. Tareq Abdulraheem Al Hosani Chairman of the board
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REPORT ON REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
To: The Shareholders of Phoenix Group PLC
Introduction
We have reviewed the accompanying condensed consolidated interim statement of financial position of Phoenix Group PLC (referred to as the “Company”) and its subsidiaries (referred to as the “Group”) as at 31 March 2024 and the related condensed consolidated interim statements of profit or loss, other comprehensive income, changes in equity and cash flows for the three-month period then ended and explanatory notes.
Management is responsible for the preparation and presentation of this condensed consolidated interim financial statement in accordance with International Accounting Standard 34 – Interim Financial Reporting (referred to as “IAS 34”) . Our responsibility is to express a conclusion on this condensed consolidated interim financial statement based on our review.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity . A review of condensed consolidated interim financial statement consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Other Matter
The Condensed Consolidated Interim Financial Statements of the Group for the three months period ended 31 March 2023 were not reviewed.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statement is not prepared, in all material respects, in accordance with IAS 34.
For RAI, LLP,
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Ashraf Eradhun 13 May 2024 Abu Dhabi, United Arab Emirates
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RAI LLP, Registration No. 000006218. Registered in Abu Dhabi Global Market, P.O. Box 46617, 14 Floor, WeWork Hub71, Al Khatem Tower, ADGM Square, Al Marya Island, Abu Dhabi, UAE +971 2222 2236 -
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Condensed consolidated interim statement of financial position As at 31 March 2024
| Notes | As at 31 March |
As at 31 December |
|---|---|---|
| 2024 USD (unaudited) |
2023 USD (audited) |
|
| ASSETS Non-current assets Property and equipment 5 Right-of-use asset Intangible assets Investment in associates 6 Current assets Digital assets 7 Inventories 8 Trade receivables 9 Advances, deposits and other receivables 10 Due from related parties 13 Cash and short-term deposits 11 Total assets EQUITY AND LIABILITIES Equity Share capital 12(i) Share premium 12(i) Other reserve 12(ii) Contribution from shareholders Statutory reserve Retained earnings Total equity LIABILITIES Non-current liabilities Lease liability Employees' end of service benefits 14 Interest-bearing loans 15 |
112,604,499 622,503 31,857 67,888,339 181,147,198 273,249,928 83,397,933 36,450,327 289,622,388 72,400 15,360,498 698,153,474 879,300,672 164,705,882 345,882,353 60,632,794 - 13,615 203,162,486 774,397,130 366,230 919,330 3,511,738 4,797,298 |
103,968,923 680,484 35,165 120,310,026 |
| 224,994,598 | ||
| 140,000,124 73,261,697 33,061,633 164,519,371 2,550 198,164,555 |
||
| 609,009,930 | ||
| 834,004,528 | ||
| 164,705,882 345,882,353 24,511,190 24,994,908 13,615 137,012,032 |
||
| 697,119,980 | ||
| 356,991 858,965 3,556,500 4,772,456 |
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Condensed consolidated interim statement of financial position As at 31 March 2024
| Notes | As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|---|---|---|
| Current liabilities Lease liability Due to related parties 13 Interest-bearing loans 15 Trade payables Provision for taxation 26 Other liabilities 16 Total liabilities Total equity and liabilities |
272,294 687,346 12,438,471 936,900 6,689,736 79,081,497 100,106,244 104,903,542 879,300,672 |
272,294 54,710,583 165,487 575,497 - 76,388,231 |
| 132,112,092 | ||
| 136,884,548 834,004,528 |
These condensed consolidated interim financial statements were authorised for issue on 13 May 2024 and signed by:
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H.E. Tareq Abdulraheem Al Hosani Chairman of the Board
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Seyed Mohammad Alizadehfard Group CEO and Board Member
Munaf Ali Group Managing Director & Board Member
The notes 1 to 26 form an integral part of these condensed consolidated interim financial statements.
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Condensed consolidated interim statement of profit or loss For the three months period ended 31 March 2024
| Notes | Three months period ended 31 March (Unaudited) |
Three months period ended 31 March (Unaudited) |
|---|---|---|
| 2024 USD |
2023 USD |
|
| Revenue from contract with customers 19 Direct costs 20 Gross profit General and administrative expenses 22 Selling and distribution expenses Provision on inventory 8 Foreign exchange loss Other income 21 Operating profit |
68,932,065 (45,654,006) 23,278,059 (6,407,133) (229,824) (18,839,058) (13,332) 5,967,242 3,755,954 |
81,948,208 (53,350,824) |
| 28,597,384 (3,173,313) (93,653) - (3,312) 1,480,539 |
||
| 26,807,645 | ||
| Share of results from associates 6 |
2,774,929 | (1,825,103) |
| Gain/(loss) on digital assets at FVTPL 7 Gain on sale of digital assets Finance income Finance costs 24 Profit before tax for the period Income tax expense 26 Profit after tax for the period attributable to the shareholders Earnings per share Basic and diluted (USD) 23 |
73,131,396 270,000 1,106,134 (8,345,606) 72,692,807 (6,542,353) 66,150,454 0.011 |
(15,893) - - (89,172) |
| 24,877,477 - |
||
| 24,877,477 | ||
| 0.005 |
The notes 1 to 26 form an integral part of these condensed consolidated interim financial statements.
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Condensed consolidated interim statement of comprehensive income For the three months period ended 31 March 2024
| Notes | Three months period ended 31 March (Unaudited) |
Three months period ended 31 March (Unaudited) |
|---|---|---|
| 2024 USD |
2023 USD |
|
| Profit after tax for the period Other comprehensive income/(loss) Items that may be reclassified to profit or loss in subsequent periods: Exchange loss on retranslation of foreign subsidiaries Items that will not be reclassified to profit or loss in subsequent periods: Share of other comprehensive income of associate – net of tax 6 Gain on revaluation of digital assets – net of tax 7 Other comprehensive income/(loss) for the period Total comprehensive income for the period attributable to the shareholders |
66,150,454 (378) 34,631,392 1,490,590 36,121,604 102,272,058 |
24,877,477 (24,889) - - |
| (24,889) 24,852,588 |
The notes 1 to 26 form an integral part of these condensed consolidated interim financial statements.
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Condensed consolidated interim statement of changes in equity For the three months period ended 31 March 2024
| At 1 January 2023 (unaudited) Profit for the period Other comprehensive income Total comprehensive income for the period Repayment of capital contribution Movement during the period At 31 March 2023 (unaudited) At 1 January 2024 (audited) Profit for the period Other comprehensive income Total comprehensive income for the period Repayment of capital contribution At 31 March 2024 (unaudited) |
Share capital Share Premium Statutory Retained Other reserves Shareholders current Contribution from Total Note 12(i) Note 12(i) reserve earnings Note 12(ii) account shareholders equity USD USD USD USD USD USD USD USD 10,000 - 13,615 82,182,560 11,354,664 9,019,377 4,015,995 106,596,211 |
|---|---|
| - - - 24,877,477 - - - 24,877,477 |
|
| - - - - (24,889) - - (24,889) |
|
| - - - 24,877,477 (24,889) - - 24,852,588 |
|
| - - - - - - (2,242,721) (2,242,721) |
|
| - - - - - 16,277,520 - 16,277,520 |
|
| 10,000 - 13,615 107,060,037 11,329,775 25,296,897 1,773,274 145,483,598 |
|
| 164,705,882 345,882,353 13,615 137,012,032 24,511,190 - 24,994,908 697,119,980 |
|
| - - - 66,150,454 - - - 66,150,454 |
|
| - - - - 36,121,604 - - 36,121,604 |
|
| - - - 66,150,454 36,121,604 - - 102,272,058 |
|
| - - - - - - (24,994,908) (24,994,908) |
|
| 164,705,882 345,882,353 13,615 203,162,486 60,632,794 - - 774,397,130 |
Note: Capital contribution from shareholder was repaid during the quarter ended 31 March 2024.
The notes 1 to 26 form an integral part of these condensed consolidated interim financial statements.
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Condensed consolidated interim statement of cash flows For the three months period ended 31 March 2024
| Notes | Three-months period ended 31 March (Unaudited) |
Three-months period ended 31 March (Unaudited) |
|---|---|---|
| 2024 USD |
2023 USD |
|
| Operating activities Profit before tax for the period Adjustments for: Depreciation and amortization on property and equipment, intangible assets and right-of-use asset 22 Share of results from associates 6 Gain on digital assets at FVTPL 7 Provision of inventory 8 Inventory written off 22 Employees’ end of service benefits provision 14 Gain on sale of digital assets Finance costs 24 Finance income Changes in working capital: Inventories Trade receivables Advances, deposits and other receivables Due from a related party Digital assets Trade payables Other liabilities Due to related parties Employees’ end of service benefits paid Finance income received Net cash used in operating activities Investing activities Purchase of property and equipment 5 Investment for acquisition in an associate Net cash flows used in investing activities |
72,692,807 257,560 (2,774,929) (73,131,396) 18,839,058 25,525 60,950 (270,000) 8,345,606 (1,106,134) 22,939,047 (29,000,819) (3,388,694) (125,103,017) (69,851) 46,366,332 361,405 2,693,266 (54,023,237) (139,225,568) (585) 1,106,134 (138,120,019) (8,831,848) (2,668,176) (11,500,024) |
24,877,477 178,094 (1,825,103) (15,893) - - (170,483) - 89,172 - |
| 23,133,264 (618,295) (40,641,061) 6,441,961 4,111,586 1,132,836 682,507 (5,343,966) (2,519,695) |
||
| (13,620,863) | ||
| - - |
||
| (13,620,863) | ||
| (3,841,431) 3,650,206 |
||
| (191,225) |
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Condensed consolidated interim statement of cash flows For the three months period ended 31 March 2024
| Notes | Three-months period ended 31 March (Unaudited) |
Three-months period ended 31 March (Unaudited) |
|---|---|---|
| 2024 USD |
2023 USD |
|
| Financing activities Repayment of interest-bearing loans Finance cost paid Funds repaid to shareholder on current account Funds received as contribution from shareholders (net) Net cash flows from / (used in) financing activities Net (decrease) / increase in cash and cash equivalents Net foreign exchange difference Cash and cash equivalents at 1 January Cash and cash equivalents at 31 March 11 Significant non-cash transactions |
(40,501) (8,148,227) - (24,994,908) (33,183,636) (182,803,679) (378) 198,164,555 15,360,498 |
(87,276) (89,172) 16,277,520 (2,242,721) |
| 13,858,351 | ||
| 46,264 (24,889) 442,871 |
||
| 464,246 | ||
| Loan from M2 Capital Holding Limited in form of BTC 7 |
12,080,583 | - |
| Dividend from associate 6 |
92,496,184 | - |
The notes 1 to 26 form an integral part of these condensed consolidated interim financial statements.
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
1 Corporate information
Phoenix Group PLC (formerly known as Phoenix Group Ltd) (the “Company”) was incorporated on 2 August 2022, as a Private Company Limited by Shares in Abu Dhabi Global Market – Abu Dhabi, United Arab Emirates. The registered address of the Company is 3412 ResCo-work10, 34 Floor, Al Maqam Tower, Regus ADGM Square, Al Maryah Island, Abu Dhabi, United Arab Emirates.
The Group is a technology conglomerate bringing cutting-edge blockchain solutions to an expansive market. The Group offers a comprehensive range of services, from high-performance computing machines trading and data centre hosting. The Group develops, operates, and manages highly specialised data centres, hosting high- performance computing power for digital asset across the UAE, Oman, US and Canada. Additionally, the Group also hosts, operates and maintains equipment within its existing data centres and enables investment opportunities within cloud mining.
The Group is the exclusive distributor of industry-leading equipment manufacturer MicroBT and prominent distributor of Digital wallet Ledgers and CoolWallets, across the Middle East. The Group has four business verticals including trading, hosting, mining and investments.
These condensed consolidated interim financial statements include the financial performance and position of the Company, its subsidiaries (collectively referred to as the “Group”) and the Group’s interest in its equity-accounted investees.
2 Summary of material accounting policies
The principal accounting policies applied by the Group in the preparation of these condensed consolidated interim financial statements are consistent with those applied by the Group in the annual consolidated financial statement for the year ended 31 December 2023, except for the changes in accounting policies explained in Note 2.2.
2.1 Basis of preparation
Statement of compliance
These condensed consolidated interim financial statements for the three-months period ended 31 March 2024 have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) and comply where appropriate, with the Articles of Association, the applicable requirements of Abu Dhabi Global Market (“ADGM”) Companies Regulations 2020.
These condensed consolidated interim financial statements should be read in conjunction with the Group’s last annual consolidated financial statements as at and for the year ended 31 December 2023 (‘last annual financial statements’). They do not include all of the information required for a complete set of financial statements prepared in accordance with Accounting Standards IFRS. However, selected explanatory notes are included to explain event and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual financial statements.
The condensed consolidated interim financial statements of the Group have been prepared on a going concern basis given that there are no significant doubts about the Group’s ability to continue its business activities.
Basis of measurement
These condensed consolidated interim financial statements have been prepared on the historical cost basis, except for investment at fair value through profit or loss, digital assets and building, which are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
Going concern assumption
These condensed consolidated interim financial statements of the Group have been prepared on a going concern basis given that there are no significant doubts on the Group’s ability to continue its business activities. In assessing the going concern, the management has performed an assessment of the Group’s ability to continue as a going concern by preparing a detailed business plan and cash flow forecast taking into consideration the current financial performance and condition of the Group’s business, the degree to which it is affected by external factors and the current liquidity position, including debt repayment obligations.
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
-
2 Summary of material accounting policies (continued)
-
2.2 Changes in accounting policies and disclosures
-
(a) New and amended standards adopted by the Group
The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after 1 January 2024. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective:
-
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
-
Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants (Amendments to IAS 1)
-
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
These standards and amendments had no significant impact on the condensed consolidated interim financial statements of the Group.
- (b) Standards issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s condensed consolidated interim financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.
-
Presentation and Disclosure in Financial Statements (New standard IFRS 18)
-
Lack of exchangeability (Amendments to IAS 21)
-
Sale or contribution of assets between and investor and its associate or joint venture (Amendments to IFRS 10 and IAS 28)
The Group does not expect that the adoption of these new and amended standards and interpretations will have a material impact on its condensed consolidated interim financial statements.
2.3 Consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Control is achieved when the Company has all of the following elements:
-
power over the investee, i.e. the investor has existing rights that give it the ability to direct the relevant activities (the activities that significantly affect the investee’s returns)
-
exposure, or rights, to variable returns from its involvement with the investee
-
the ability to use its power over the investee to affect the amount of the investor’s returns.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.
The condensed consolidated interim financial statements comprise the financial statements of the Company and of its subsidiaries as disclosed in the annual audited financial statements for the year ended 31 December 2023. The financial year end for the subsidiaries is the same as that of the Group.
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
2 Summary of material accounting policies (continued)
2.4 Commodity contract
A contract to buy or sell a commodity that can be settled net in cash or another financial instrument, or by exchanging financial instruments, as if the contract was a financial instrument, may be irrevocably designated as measured at fair value through profit or loss even if it was entered into for the purpose of the receipt or delivery of a commodity in accordance with the entity’s expected purchase, sale or usage requirements. This designation is available only at inception of the contract and only if it eliminates or significantly reduces a recognition inconsistency that would otherwise arise from not recognising that contract.
3 Significant accounting judgements, estimates and assumptions
In preparing these condensed consolidated interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the last annual consolidated financial statements.
4 Fair value estimation
The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Consequently, differences can arise between carrying values and the fair value estimates.
While the Group prepares its condensed consolidated interim financial statements under the historical cost convention except for measurement at fair value of derivatives, in the opinion of management, the carrying values and fair values of those financial assets and liabilities that are not carried at fair value in the condensed consolidated interim financial statements are not materially different, since assets and liabilities are either short term in nature or frequently repriced.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
The below table shows the hierarchy used by the Group for the assets and liabilities that are measured at fair value or for which fair value information is disclosed as at 31 March 2024 and 31 December 2023:
| Level 1 USD |
Level 2 USD |
Level 3 USD |
Total USD |
|
|---|---|---|---|---|
| 31 March 2024 (unaudited) Assets which are at fair value Building (Note 5) Digital assets (Note 7) 31 December 2023 (audited) Assets which are at fair value Building (Note 5) Digital assets (Note 7) |
- 273,249,928 273,249,928 - 140,000,124 140,000,124 |
21,704,138 - 21,704,138 21,704,138 - 21,704,138 |
- - - - - - |
21,704,138 273,249,928 |
| 294,954,066 | ||||
| 21,704,138 140,000,124 161,704,262 |
On a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. During the period between 31 March 2024 and 31 December 2023, there are no transfers within the levels of fair value measurements.
12
DocuSign Envelope ID: D2ED27CA-E3F8-4C81-8FBE-8A276BF96107DocuSign Envelope ID: 915D54BE-7E49-403E-B82B-F2EDB47B352EDocuSign Envelope ID: 06D33E84-C8E3-4E79-977C-35CBFE6F547C
Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
5 Property and equipment
| 5 Property and equipment |
||||||
|---|---|---|---|---|---|---|
| Building USD |
Furniture and fixtures **USD ** |
Office equipment USD |
Capital work-in- progress **USD ** |
Total USD |
||
| Cost: At 1 January 2023(unaudited) Additions At 31 December 2023(audited) Additions Transfer from CWIP At 31 March 2024 Accumulated depreciation: At 1 January 2023(unaudited) Charge for the year At 31 December 2023(audited) Charge for the period At 31 March 2024 Net carrying amount: At 31 March 2024(unaudited) At 31 December 2023 (audited) |
21,704,138 - 21,704,138 - - 21,704,138 258,102 258,102 516,204 64,525 580,729 |
2,095,933 2,993 2,098,926 372,611 275,398 2,746,935 228,867 419,796 648,663 118,728 **767,391 ** |
95,871 63,142 159,013 26,252 - 185,265 35,776 39,573 75,349 13,018 **88,367 ** |
50,582,914 30,664,147 81,247,061 8,432,985 (275,398) 89,404,648 - - - - - |
74,478,856 30,730,282 |
|
| 105,209,138 8,831,848 - |
||||||
| 114,040,986 | ||||||
| 522,745 717,471 |
||||||
| 1,240,216 196,271 |
||||||
| 1,436,487 | ||||||
| 21,123,409 21,187,934 |
1,979,544 1,450,263 |
96,898 83,664 |
89,404,648 81,247,061 |
112,604,499 103,968,923 |
The fair values were determined with reference to market-based evidence, based on active market prices and relevant enquiries and information as considered necessary, and adjusted for any difference in nature, location or condition of the specific properties. The fair value of said lands falls under level 2 of fair value hierarchy (i.e. significant observable inputs).
Capital work-in-progress pertains to data centers which are under construction at USA and Oman. The management of the Group expect the projects relating to capital work-in-progress to completed by 2025.
13
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
6 Investment in associates
The balance of investment in associates in the condensed consolidated interim statement of financial position are as follows:
| 31 March 2024 USD (unaudited) |
31 December 2023 USD (audited) |
|
|---|---|---|
| Investment in Citadel Technologies Group LLC, UAE (Citadel) Investment in Bitzero Blockchain Inc. (Bitzero) Investment in M2 Holdings Limited, UAE (M2) Investment in Lyvely FZE (Lyvely) |
65,148,089 - - 2,740,250 67,888,339 |
117,569,776 - - 2,740,250 120,310,026 |
The Group’s interest in the associates are accounted for using the equity method in the condensed consolidated interim financial statements, and the movement is as follows:
| 31 March 2024 USD (unaudited) |
31 December 2023 USD (audited) |
|
|---|---|---|
| At 1 January Additions Citadel M2 Lyvely Dividends issued Citadel Share of results Share of other comprehensive income Provision for impairment of investment At 31 March /31 December 7 Digital assets |
120,310,026 2,668,176 - - (92,496,184) 2,774,929 34,631,392 - 67,888,339 31 March 2024 USD (unaudited) |
28,976,795 104,966,600 1,277,457 3,000,000 - (6,013,789) 13,199,451 (25,096,488) 120,310,026 31 December 2023 USD (audited) |
| Digital assets – inventory_(a) Digital assets – intangibles(b)_ |
221,186,979 52,062,949 273,249,928 |
136,710,000 3,290,124 140,000,124 |
(a) Accounted for using inventory methodology
The Group has determined that its holding of certain digital asset should be accounted for under IAS 2 Inventories, as it meets the definition of a commodity broker-trader. Under IAS 2, digital assets are measured at fair value less cost to sell, with changes in fair value recognized in consolidated statement profit or loss. In accordance with IAS 2, commodity broker-traders are those who buy or sell commodities for others or on their own account. The inventories held by commodity broker-traders are principally acquired for the purpose of selling in the future and generating a profit from fluctuations in price or broker-traders’ margin. As these inventories are measured at fair value less costs to sell, they are excluded from only the measurement requirements of IAS 2.
14
DocuSign Envelope ID: D2ED27CA-E3F8-4C81-8FBE-8A276BF96107DocuSign Envelope ID: 915D54BE-7E49-403E-B82B-F2EDB47B352EDocuSign Envelope ID: 06D33E84-C8E3-4E79-977C-35CBFE6F547C
Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
7 Digital assets (continued)
By applying the principles of IAS 2, the Group treats its digital assets as inventory, measured at fair value less cost to sell. Consequently, any changes in fair value are recognized in the consolidated statement of profit or loss. Management believes that recognizing digital assets at fair value through the profit and loss accurately reflects the economic substance of their trading activities and is in line with the Group's overall strategic vision for holding these assets.
| As at 31 March As at 31 December |
|
|---|---|
| 2024 2023 USD USD (unaudited) (audited) |
|
| At the beginning of the period/year Additions Additions as commodity contract* Disposals Change in fair value At the end of the period/year |
136,710,000 - - 37,200,000 12,080,583 - (735,000) - 73,131,396 99,510,000 221,186,979 136,710,000 |
*During the period, the entity has entered into a financing transaction with M2 Capital Limited (“associate”), where finance amount is invested in the Bitcoins (BTC) as commodity contract. The total of 236.16 BTC were purchased through this finance. The total finance amount was USD 12.08 million. These 236.16 BTC’s are kept as collateral with M2 Capital Limited against the finance amount (note 15).
(b) Accounted for using intangible asset methodology
The Group carries out mining of digital assets and recognizes revenue in relation to assets through mining activity with corresponding recognition of intangible assets under IAS 38, Intangible Assets. Such intangible assets have an indefinite useful life, initially measured at cost, deemed to be the fair value upon receipt, and subsequently measured under the revaluation model. Under the revaluation model, increases or decreases in the digital asset’s carrying amount is recognized in consolidated statement of comprehensive income and the revaluation reserve in equity, unless it reverses valuation deficit of the same asset previously recognised in consolidated statement of profit or loss. A revaluation deficit is recognised in consolidated statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset recognised in the revaluation reserve.
| 31 March 31 December 2024 2023 USD USD (unaudited) (audited) |
|
|---|---|
| Digital assets* | 52,062,949 3,290,124 |
- Out of the digital assets, 100 BTC’s are kept as collateral with M2 Capital Limited against the finance amount (note 15).
(c) Accounted for Gain/(loss) on digital assets
| Three months period ended 31 March (Unaudited) 2024 2023 USD USD |
Three months period ended 31 March (Unaudited) 2024 2023 USD USD |
|
|---|---|---|
| Gain/(loss) Digital assets – inventory Gain/(loss) Digital assets – intangibles |
73,131,396 1,637,973 74,769,369 |
(15,893) - (15,893) |
15
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
8 Inventories
Inventories are measured at the lower of cost and net realisable value.
Cost includes expenditure incurred in acquiring the inventories and other costs incurred in bringing them to their existing location and condition. The cost of inventories is based on the weighted average cost method.
Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
| As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|
|---|---|---|
| Finished goods Consumables items Stock in transit Provision of inventory |
102,236,991 - - (18,839,058) 83,397,933 |
59,495,074 126,500 13,640,123 - 73,261,697 |
9 Trade receivables
| As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|
|---|---|---|
| Trade receivables | 36,450,327 36,450,327 |
33,061,633 33,061,633 |
Out of the above balance of trade receivables, USD 20,372,102 (2023: USD 4,801,515) relates to a related party (note 13(i)(a)).
Management performed the expected credit loss assessment and there is no material impact on the condensed consolidated interim financial statements as of 31 March 2024.
10 Advances, deposits and other receivables
| 10 Advances, deposits and other receivables |
||
|---|---|---|
| As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|
| Advance to suppliers (i) Deposits Accrued income VAT receivable Prepaid expenses Other receivables (ii) Staff loans and advances |
201,071,173 30,825,939 - 1,754,232 1,397,715 54,529,661 43,668 289,622,388 |
132,110,576 31,664,170 273,151 183,191 171,587 108,545 8,151 164,519,371 |
(i) This includes balance of USD 131,905,826 (2023: USD 46,316,976) given to related parties (Note 13(i)(d)).
(ii) This includes a receivable amount of USD 54,421,116 (2023: nil) from a key management personnel which was fully recovered in April 2024 (Note 13(i)(a)).
16
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
11 Cash and short-term deposits
| 11 Cash and short-term deposits |
||
|---|---|---|
| As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|
| Cash at bank and on hand Short-term deposits – less than three months original maturity |
15,360,498 - 15,360,498 |
23,164,555 175,000,000 198,164,555 |
The expected credit loss on bank balances is estimated to be immaterial as the Group only deals with reputable banks with good ratings.
12 Share capital, share premium and other reserves.
| (i) Share Capital and Share premium |
As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|---|---|---|
| Authorised issued and fully paid: 6,048,823,529 shares of USD 0.027 each (2023 (audited): 6,048,823,529 shares of USD 0.027 each) Share premium |
164,705,882 345,882,353 510,588,235 |
164,705,882 345,882,353 510,588,235 |
(ii) Other reserves
| Revaluation reserve (Note a) USD |
Foreign currency translation reserve(Note b) USD |
Fair value through OCI (Note c) USD |
Total USD |
|
|---|---|---|---|---|
| At 1 January 2023 Movement for the period At 31 December 2023(audited) Movement for the period At 31 March 2024 |
11,380,058 - 11,380,058 - 11,380,058 |
(25,394) (87,198) (112,592) (378) (112,970) |
- 13,243,724 13,243,724 36,121,982 49,365,706 |
11,354,664 13,156,526 |
| 24,511,190 36,121,604 60,632,794 |
(a) Revaluation reserve
This reserve relates to the revaluation gain recognised on the fair valuation of building. Any incremental depreciation charge on the revalued amount compared to the cost is charged to this reserve with corresponding adjustment in the retained earnings.
- (b) Foreign currency translation reserve
This reserve relates to the translation of foreign operations of the Group.
- (c) Fair value through other comprehensive income reserve
This reserve relates to the Group’s share of other comprehensive income from associate and fair value gain on the digital assets held as intangible assets.
17
DocuSign Envelope ID: D2ED27CA-E3F8-4C81-8FBE-8A276BF96107DocuSign Envelope ID: 915D54BE-7E49-403E-B82B-F2EDB47B352EDocuSign Envelope ID: 06D33E84-C8E3-4E79-977C-35CBFE6F547C
Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
13 Related party transactions and balances
The Group, in the ordinary course of business, enters into transactions, at agreed terms and conditions, with other business enterprises or individuals that fall within the definition of related party contained in IAS 24 Related Party. Related parties represent the shareholder, directors and key management personnel of the Group and entities controlled, jointly controlled or significantly influences by such parties. Pricing policies and terms of their transactions are approved by the Group’s management and the board of directors.
i. Related party balances
Balances with related parties included in the condensed consolidated statement of financial position are as follows:
(a) Due from related parties included in the trade and other receivables
| Relationship | As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|---|---|---|
| Seyedmohammed Alizadehfard, UAE Director M2 Global Wealth limited Associate Munaf Ali., UAE Director Total |
59,217,749 15,005,311 570,158 74,793,218 |
4,017,864 - 783,651 4,801,515 |
(b) Due from related parties
| Relationship | As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|
|---|---|---|---|
| Phoenix Technology Solutions B.V., Amsterdam Common directorship Phoenix Pyramids Re Holding Limited, UAE Common directorship Phoenix Cleo Re Holding Limited, UAE Common directorship M2 Holdings Limited, UAE Associate (c) Due to related parties Relationship |
64,320 2,722 2,723 2,635 72,400 As at 31 March 2024 USD (unaudited) |
- - - 2,550 2,550 As at 31 December 2023 USD (audited) |
|
| WAS Four Investment - Sole Proprietorship L.L.C(“WAS”), UAE Affiliates of major shareholder Citadel Technologies Group LLC, UAE Associate Phoenix Technology Consultants Common directorship Total |
674,722 12,254 370 687,346 |
54,698,329 12,254 - 54,710,583 |
18
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
- 13 Related party transactions and balances (continued)
| (d) Advances to related parties |
As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|---|---|---|
| Cypher Capital Technology LLC, UAE Common directorship Falcon Group Limited Common directorship Total |
121,905,826 10,000,000 131,905,826 |
46,316,976 - 46,316,976 |
These amounts are included in advance to suppliers (Note 10). The Group has entered into contracts with entities controlled by key management personnel for the purchase of equipments on its behalf.
- (e) Advances from associates
| (e) | Advances from associates | |||
|---|---|---|---|---|
| As at 31 | ||||
| Relationship | As at 31 March | December | ||
| 2024 | 2023 | |||
| USD | USD | |||
| (unaudited) | (audited) | |||
| M2 | Global wealth Limited, UAE | Affiliate of associate | 10,305,839 | 18,279,651 |
This amount is included in advance from customers (Note 16).
ii. Related party transactions
Transactions included in the condensed consolidated statement of profit or loss with its related parties are as follows:
| Three months period ended | Three months period ended | ||
|---|---|---|---|
| 31 March (Unaudited) | |||
| Revenue | |||
| Relationship | 2024 | 2023 | |
| USD | USD | ||
| Cypher Capital Technology LLC | Common directorship | 2,256,779 | 4,237,464 |
| M2 Global wealth Limited | Associate | 19,370,556 | - |
| Munaf Ali., UAE | Director | 1,652,029 | 2,145,566 |
| Seyedmohammed Alizadehfard | Director | 860,263 | 4,967,540 |
| Expense | Relationship | 2024 | 2023 |
| USD | USD | ||
| Interest on loan: | |||
| WAS Four Investment - Sole Proprietorship | Affiliates of major | ||
| L.L.C(“WAS”), UAE | shareholder | 8,071,114 | - |
| M2 Capital Holding | Associate | 188,140 | - |
19
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
- 13 Related party transactions and balances (continued)
ii. Related party transactions (continued)
Other transactions
| Other transactions | ||
|---|---|---|
| 31 March | 31 December | |
| 2024 | 2023 | |
| USD | USD | |
| (unaudited) | (audited) | |
| Repayment of capital contribution | 24,994,908 | - |
| Investment in Lyvely FZE | - | 3,000,000 |
| Investment in Citadel Technologies Group LLC | 2,668,176 | 104,966,600 |
| Investment in M2 Holdings Ltd | - | 1,277,457 |
| Acquisition of digital asset – MMX | - | 37,200,000 |
| Loan from M2 Capital Ltd. | 12,080,583 | - |
iii. Compensation of key management personnel
The remuneration of key management personnel are as follows:
| Three months period ended 31 March (Unaudited) 2024 2023 USD USD |
Three months period ended 31 March (Unaudited) 2024 2023 USD USD |
|
|---|---|---|
| Salaries and other benefits End of service benefits Number of key management personnel 14 Employees’ end of service benefits |
776,038 22,263 798,301 2 |
245,065 6,953 |
| 252,018 2 |
The movement in the employee’s end of service benefit is as follows:
| As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|
|---|---|---|
| At 1 January Charge for the period /year Paid during the period/year At 31 March/ December 15 Interest-bearing loans |
858,965 60,950 (585) 919,330 |
170,483 697,947 (9,465) 858,965 |
The amounts recognised in the condensed consolidated interim statements of financial position is as follows:
| As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|
|---|---|---|
| Non-current Current |
3,511,738 12,438,471 15,950,209 |
3,556,500 165,487 3,721,987 |
20
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
15 Interest-bearing loans (continued)
The movement in interest-bearing loans is as follows:
| As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) 3,928,417 - (206,430) 3,721,987 As at 31 December 2023 USD (audited) |
|||
|---|---|---|---|---|
| At 1 January Additions Payments made At 31 March/December Interest rate Maturity |
3,721,987 12,268,723 (40,501) 15,950,209 |
|||
| As at 31 March 2024 USD (unaudited) |
||||
| FAB loan EIBOR+3% 06-Oct-2036 Loan from M2 Capital Limited (i) 15% 23-Aug-2024 |
3,681,486 12,268,723 |
3,721,987 - |
During the period, the Group entered into a USD 12.08 million loan agreement in order to finance the commodity contract purchase of BTC with M2 Capital Limited. The rate of interest on the loan is at a fixed rate. The loan along with accured interest is fully repayable on 23[rd] August 2024.
Loan to value (LTV) is 80%. If the LTV reaches 95% a margin call will be issued by the lender. The Group is not in breach of the key terms and covenants of the facility for the period ended and as at 31 March 2024.
16 Other liabilities
| 16 Other liabilities |
||
|---|---|---|
| As at 31 March 2024 USD (unaudited) |
As at 31 December 2023 USD (audited) |
|
| Advances received from customers (i) Deferred income (ii) Provision for expenses Deposit received Provision for leave salary Other payables |
20,704,783 31,055,030 20,526,671 5,820,284 954,725 20,004 79,081,497 |
29,550,448 20,441,040 20,257,625 5,268,150 850,964 20,004 76,388,231 |
(i) This includes amount of USD 10,305,839 (2023: USD 18,279,651) which is from a related party (Note 13(i)(e)) (ii) Deferred income pertains to credit received from supplier for future purchases.
21
DocuSign Envelope ID: D2ED27CA-E3F8-4C81-8FBE-8A276BF96107DocuSign Envelope ID: 915D54BE-7E49-403E-B82B-F2EDB47B352EDocuSign Envelope ID: 06D33E84-C8E3-4E79-977C-35CBFE6F547C
Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
17 Commitments
At 31 March 2024, the Group and its associates had no capital commitments and outstanding letters of guarantees (2023 (audited): USD Nil).
18 Contingencies
At 31 March 2024, the Group and its associates had no contingent liabilities (2023 (audited): USD Nil).
19 Revenue from contracts with customers
| (a) Type of revenue |
Three months period ended 31 March (Unaudited) 2024 2023 USD USD 27,669,825 62,642,281 19,515,937 13,383,962 21,599,865 5,901,596 146,438 20,369 68,932,065 81,948,208 2024 2023 USD USD 68,779,653 81,792,691 152,412 155,517 68,932,065 81,948,208 2024 2023 USD USD 27,669,825 62,642,281 41,262,240 19,305,927 68,932,065 81,948,208 Three months period ended 31 March (Unaudited) 2024 2023 USD USD 73,261,697 41,389,135 45,143,412 38,829,302 (102,236,991) (42,007,399) 16,168,118 38,211,038 18,382,290 11,787,299 11,080,273 3,329,702 23,325 22,785 45,654,006 53,350,824 |
|---|---|
| Revenue from contracts with customers: Trading revenue Sales of ASICs, wallets, and equipment Hosting revenue Mining revenue Service income (b) Geographical markets |
27,669,825 19,515,937 21,599,865 146,438 68,932,065 2024 USD |
| Outside UAE Within UAE (c) Timing of revenue recognition |
68,779,653 152,412 68,932,065 2024 USD |
| At a point in time Over time 20 Direct costs |
|
| Inventory – as at 1 January Add: purchases and other direct costs Less: Inventory – as at 31 March Cost of inventory consumed Hosting electricity costs Mining expenses* Warehouse expenses |
73,261,697 45,143,412 (102,236,991) 16,168,118 18,382,290 11,080,273 23,325 45,654,006 |
*Represents electricity expenses incurred in operation of mining machines.
22
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Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
21 Other income
| 21 Other income |
|
|---|---|
| Three months period ended 31 March (Unaudited) 2024 2023 USD USD - 1,392,000 5,898,796 - 68,446 88,539 5,967,242 1,480,539 |
|
| Coupon sale Rebate income Miscellaneous income |
- 5,898,796 68,446 5,967,242 |
22 General and administrative expenses
| 22 General and administrative expenses |
||
|---|---|---|
| Three months period ended 31 March (Unaudited) 2024 2023 USD USD |
||
| Staff costs Site expenses Legal and professional fees Management fee (Note 13) Depreciation (Note 5) Travelling and entertainment Bank charges Office expenses Insurance Amortization of right-of-use assets Rent Recruitment Expenses Inventory written off Auditor’s remuneration Utility and communication expenses Other expenses Printing & stationery Repair and maintenance Amortization of intangible assets Taxes paid Compensation |
2,673,970 1,282,834 830,318 798,301 196,271 146,567 81,320 80,266 63,891 57,981 54,763 50,026 25,525 21,033 18,254 11,822 5,376 4,143 3,308 750 414 6,407,133 |
992,049 1,053,025 406,997 252,018 178,094 63,355 5,110 101,107 36,995 - 39,546 - - - 16,937 3 4,413 23,664 - - - 3,173,313 |
23
DocuSign Envelope ID: D2ED27CA-E3F8-4C81-8FBE-8A276BF96107DocuSign Envelope ID: 915D54BE-7E49-403E-B82B-F2EDB47B352EDocuSign Envelope ID: 06D33E84-C8E3-4E79-977C-35CBFE6F547C
Phoenix Group PLC (formerly known as Phoenix Group Ltd)
Notes to the condensed consolidated interim financial statements (continued) For the three months period ended 31 March 2024
23 Earnings per share
The basic and diluted earnings per share is calculated by dividing the profit attributable to equity shareholders by the weighted average number of shares in issue.
| Three months period ended 31 March (Unaudited) 2024 2023 USD USD 66,146,592 24,877,477 6,048,823,529 5,140,031,000 0.011 0.005 Three months period ended 31 March (Unaudited) 2024 2023 USD USD 265,253 68,750 8,071,114 20,422 9,239 - 8,345,606 89,172 |
|
|---|---|
| Profit for the period Weighted average number of ordinary shares in issue Basic and diluted earnings per share 24 Finance costs |
|
| Interest on interest-bearing loans Interest expense Interest on leases |
265,253 8,071,114 9,239 8,345,606 |
The interest cost includes amount of USD 8,259,254 (2023: USD Nil) which is paid / accrued to related party (Note 13(ii))
25 Segment reporting
All sales of the Group comprise of sale of crypto mining machines, host mining services and mining.
All non-current assets of the Group at the end of the current and preceding year were located in United Arab Emirates, Canada, USA and Oman.
Sales to two major customers of the Group are around 57% of the Group’s total sales during the three months ended 31 March 2024 (31 March 2023: 70%).
26 Income Tax
The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings. The major components of income tax expense in the interim condensed consolidated statement of profit or loss are:
| Three months period ended 31 March (Unaudited) 2024 2023 USD USD 6,542,353 - 147,383 - 6,689,736 - |
|
|---|---|
| Current income tax expense Current income tax expense on other comprehensive income* |
6,542,353 147,383 6,689,736 |
*This amount is netted off in the condensed consolidated interim statement of comprehensive income.
24