TIDMNTLG
RNS Number : 3820Y
New Trend Lifestyle Group plc
08 September 2020
8 September 2020
RNS ANNOUNCEMENT: The information communicated in this
announcement contains inside information for the purposes of
Article 7 of Regulation 596/2014.
NEW TR LIFESTYLE GROUP PLC
("NTLG" or "the Company" or "the Group")
FINAL RESULTS FOR THE YEARED 31 DECEMBER 2020
CHAIRMAN'S & CEO'S STATEMENT, INCLUDING FINANCIAL REVIEW
Background and summary of trading performance
The Group's trading performance was in line with the prior year,
with the sales and marketing initiatives implemented continuing to
have effect. This, together with the tight control of costs,
resulted in the group reporting a reduced loss for the year.
Trading
Sales in the year were SGD 6,670k (2018: SGD 6,491k), which is
in line with the prior year. The Group loss before tax from
continuing operations showed an improvement on the prior year at
SGD 11k (2018: loss SGD 390k), as a result of the increase in
sales, and also due to the cost reductions and tight control
achieved by the Board during the year.
In the Company balance sheet, the Company recognised an
impairment against the investment in subsidiary of SGD 2,661k.
Balance sheet
Net inventories increased to SGD 791k (2018: SGD 723k).
Cash flow
Cash in hand at the year-end was SGD 1,157k (2018: SGD 1,216k),
and the Group continues to manage its cash within its available
resources.
CURRENT TRADING AND OUTLOOK
Revenue in the first quarter of 2020 has been in line with the
same period in the prior year, at SGD1,818k (2018Q1: SGD1,858k).
However, the onset of the COVID-19 pandemic has had a major adverse
impact on the Group's operations, as a result of the closure of
retail outlets and gatherings on 7 April 2020. The outlets, and
head office, remained closed until 19 June 2020, when the retail
outlets re-opened, although the head office remains closed. Trading
at the outlets remains subdued due to the ongoing effect of the
pandemic. It is uncertain as to when the trading conditions will
return to some normality.
POST BALANCE SHEET EVENTS
The Board has received an offer from Master Phang to acquire the
main trading subsidiary, New Trend Lifestyle Pte Ltd ("NTL"), from
the Company. The proposal would involve the disposal of NTL, the
raising of new finance by way of a placing of new shares, and the
conversion of the Company into a Rule 15 cash shell in accordance
with the AIM rules. The Company would then seek a reverse takeover
target.
The Board have considered the trading outlook for the Group, the
short and medium term liquidity position as a result of the
COVID-19 pandemic, and the lack of progress in the search for a new
acquisition, and have reached the conclusion that these proposals
would be in the best interest of remaining shareholders. The
Company has issued a circular to shareholders to dispose of NTL to
Master Phang, and raise GBP1,000,000 by way of a placing of new
shares. These proposals are conditional on receiving shareholder
approval at the General Meeting as described in an announcement
made today and a circular to shareholders which will be published
and sent to shareholders, together with the Report and Accounts
(together with the appropriate Meeting Notices for a General
Meeting and the Annual General Meeting of the Company to be held on
1 October 2020) later today.
The Annual Report and Accounts, together with the Notice of
Annual General Meeting, and the circular to shareholders mentioned
herein (together with the Notice of General Meeting) will also be
made available on the Company's website
www.newtrendlifestylegroup.com later today.
Gregory Collier Phang Song Hua
CHAIRMAN CHIEF EXECUTIVE
For further information:
New Trend Lifestyle Group Plc
Gregory Collier, Non-Executive Chairman +44 (0) 7830 182501
SPARK Advisory Partners Limited (NOMAD) +44 (0) 20 3368
Mark Brady/Neil Baldwin 3550
Peterhouse Capital Limited (Broker) +44 (0) 20 7496
Heena Karani/Lucy Williams 0930
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2019
Notes Year ended Year ended
Continuing operations 31 December 31 December
2019 2018
SGD'000 SGD'000
---------------------------------- ----- ----------------- -----------------
Revenue from contracts with
customers 5 6,670 6,491
----------------- -----------------
Direct purchases and costs (1,620) (1,545)
Personnel expenses 7 (2,824) (3,044)
Depreciation and amortisation
expenses (980) (310)
Finance expenses 8 (305) (97)
Commission expenses (80) (20)
Advertising and promotional
expenses (100) (320)
Bank charges (198) (156)
Other operating expenses 9 (1,228) (1,871)
Loss on Disposal - (8)
Other income 6 654 520
Loss before tax (11) (360)
Income tax (charges) / credits 10 - -
----------------- -----------------
Loss from continuing operations (11) (360)
----------------- -----------------
Discontinued operations
Loss from discontinued operations - (30)
Loss for the year from continuing
and discontinued operations (11) (390)
Other comprehensive income - -
----------------- -----------------
Loss and total comprehensive
income for the year (11) (390)
================= =================
Attributable to:
- Owners of the parent (114) (390)
- Non-controlling interest 103 -
----------------- -----------------
(11) (390)
----------------- -----------------
Basic and diluted loss per
share SGD SGD
From continuing operations 11 (0.0006) (0.0026)
From discontinued operations 11 (0.0000) (0.0002)
----------------- -----------------
(0.0006) (0.0028)
The notes to the accounts are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2019
Notes 31 December 31 December
2019 2018
SGD'000 SGD'000
-------------------------------------- ----------- -----------
ASSETS
Non-current assets
Property, plant and equipment 15 2,127 1,280
Investment property 14 1,848 1,904
Intangible assets 16 - -
3,975 3,184
----------- -----------
Current assets
Inventories 17 791 723
Trade and other receivables 18 373 428
Cash and cash equivalents 19 1,157 1,216
----------- -----------
2,321 2,367
----------- -----------
Total assets 6,296 5,551
----------- -----------
EQUITY and LIABILITIES
Capital and reserves attributable
to
equity shareholders
Share capital 23 419 333
Share premium 23 3,301 3,033
Other reserves 208 295
Group reorganisation reserve 2,845 2,845
Currency translation reserve - (61)
Accumulated deficit (7,088) (7,027)
----------- -----------
Total Equity attributable to
owners of the parent (315) (582)
----------- -----------
Non-Controlling interest 203 -
----------- -----------
Total equity (112) (582)
Non-current liabilities
Provision for restoration costs 22 15 55
Other financial liabilities 21 3,604 2,715
----------- -----------
3,619 2,770
----------- -----------
Current liabilities
Trade and other payables 20 1,187 2,427
Other financial liabilities 21 1,538 912
Provision for restoration costs 22 64 24
----------- -----------
2,789 3,363
----------- -----------
Total equity and liabilities 6,296 5,551
----------- -----------
The notes to the accounts are an integral part of these
consolidated financial statements.
The financial statements were approved by the Board of directors
and authorised for issue on 8 September 2020. They were signed on
its behalf by:
Greg Collier
Director
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
Notes Year ended Year ended
31 December 31 December
2019 2018
SGD'000 SGD'000
----------------------------------------------- ------------ ------------
Cash flows from operating activities
Loss before income tax (11) (390)
Adjustments for:
Depreciation and amortisation expense 980 310
Interest expense 305 97
Provision for restoration costs - (13)
Loss on write-off of property,
plant & equipment 5 54
Movement in stock provision (85) (50)
1,194 8
Changes in working capital:-
Decrease in inventories 16 17
Decrease in receivables 55 71
Decrease in payables (887) (45)
Cash generated from operations 378 51
Net cash inflow from operating
activities 378 51
Cash flows from investing activities
Purchase of property, plant and
equipment 15 (7) (171)
Net cash outflow from investing
activities (7) (171)
Cash flows from financing activities
Net proceeds from borrowings 21 1,094 -
Net proceeds from share issue 100 -
Repayment of borrowings (357) (376)
Redemption of convertible loans (250) (170)
Principal elements of lease payments (739) (55)
Interest paid (278) (182)
------------ ------------
Net cash outflow from financing
activities (430) (783)
Net decrease in cash and cash equivalents (59) (903)
Cash and cash equivalents at start
of year 1,216 2,119
Cash and cash equivalents at end
of year 19 1,157 1,216
------------ ------------
Cash and cash equivalents (which are presented as a single class
of assets on the face of the balance sheet) comprise cash at bank
and other short-term highly liquid investments with maturity of
three months or less, as adjusted for any bank overdrafts.
The notes to the accounts are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2019
Note Group Currency
Share Share Accumulated Other recognition translation Non-controlling Total
Capital premium deficit reserves reserve reserve Total interests equity
SGD'000 SGD'000 SGD'000 SGD'000 SGD'000 SGD'000 SGD'000 SGD'000 SGD'000
At 1 January 2018 243 2,221 (6,637) 303 2,845 (61) (1,086) - (1,086)
Comprehensive income
(Loss) for the year - - (390) - - - (390) - (390)
-------- -------- ------------ --------- ------------ ------------ -------- ---------------- --------
Total Comprehensive income for the year - - (390) - - - (390) - (390)
Share issued in the year 90 812 - - - - 902 - 902
Convertible loan notes - - - (8) - - (8) - (8)
At 31 December 2018 333 3,033 (7,027) 295 2,845 (61) (582) - (582)
-------- -------- ------------ --------- ------------ ------------ -------- ---------------- --------
At 1 January 2019 333 3,033 (7,027) 295 2,845 (61) (582) - (582)
Comprehensive income
(Loss) for the year - - (114) - - - (114) 103 (11)
-------- -------- ------------ --------- ------------ ------------ -------- ---------------- --------
Total Comprehensive income for the year - - (114) - - - (114) 103 (11)
Share issued in the year 86 268 - - - - 354 - 354
Effect of adopting IFRS 16 Lease - - (38) - - - (38) - (38)
Non-Controlling Interest - - - - - - - 100 100
Foreign exchange reserve movement - - (61) - - 61 - - -
Expiry of warrants - - 153 (153) - - - - -
Convertible loan notes - - - 66 - - 66 - 66
-------- -------- ------------ --------- ------------ ------------ -------- ---------------- --------
At 31 DECEMBER 2019 419 3,301 (7,088) 208 2,845 - (315) 203 (112)
-------- -------- ------------ --------- ------------ ------------ -------- ---------------- --------
Share capital Amount subscribed for shares at nominal value.
Share premium Amount subscribed for share capital in excess of
nominal value.
Other reserves Cumulative amounts charged in respect of share-based
payments for unsettled warrants issued and the
equity portion of convertible loans issued.
Group reorganisation Effect on equity of the group reorganisation. See
reserve Note 2.
Currency translation The currency translation reserve represents historic
reserve foreign exchange differences on consolidation.
Accumulated deficit Cumulative deficit of the Group attributable to
equity shareholders.
The notes to the accounts are an integral part of these consolidated
financial statements.
COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2019
Notes 31 December 2019 31 December 2018
SGD'000 SGD'000
--------------------------------------- ---------------- ----------------
ASSETS
Non-current assets
Investments in subsidiaries 13 700 3,361
700 3,361
---------------- ----------------
Current assets
Trade and other receivables 18 6 9
Cash and cash equivalents - -
6 9
---------------- ----------------
Total assets 706 3,370
---------------- ----------------
EQUITY and LIABILITIES
Capital and reserves attributable
to equity shareholders
Share capital 23 419 333
Share premium 23 3,301 3,033
Other reserves 8 162
Merger relief reserve 545 5,069
Accumulated deficit (4,751) (6,517)
---------------- ----------------
Total equity (478) 2,080
---------------- ----------------
Current liabilities
Trade and other payables 20 1,164 1,270
Financial liabilities 21 20 20
1,184 1,290
---------------- ----------------
Total equity and liabilities 706 3,370
---------------- ----------------
The Company has taken advantage of the exemption allowed under
section 408 of the Companies Act 2006 and has not presented its own
Statement of Comprehensive Income in these financial statements.
The Company's loss for the year was SGD 2,912k (2018: SGD
357k).
The notes to the accounts are an integral part of these
financial statements.
The financial statements were approved by the Board of directors
and authorised for issue on 8 September 2020. They were signed on
its behalf by:
Greg Collier
Director
COMPANY STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
Notes Year ended Year ended
31 December 2019 31 December 2018
SGD'000 SGD'000
---------------------------------------- ----------------- -----------------
Cash flows from operating activities
Loss before income tax (2,912) (357)
Adjustment for:
Reversal of interest expense - (141)
Impairment of investments 2,661 139
----------------- -----------------
(251) (359)
Changes in working capital:-
Decrease/(increase) in receivables 4 (4)
Increase in payables 247 338
----------------- -----------------
Cash generated/(expended) by operations - (25)
Net cash flow from operating activities - (25)
Cash flows from financing activities
Proceeds from issues of share capital - -
----------------- -----------------
Net cash from financing activities - -
Net increase/(decrease) in cash and
cash equivalents - (25)
Cash and cash equivalents at start
of year - 25
----------------- -----------------
Cash and cash equivalents at end of -
year -
----------------- -----------------
Cash and cash equivalents (which are presented as a single class
of assets on the face of the balance sheet) comprise cash at bank
and other short-term highly liquid investments with maturity of
three months or less, as adjusted for any bank overdrafts.
The notes to the accounts are an integral part of these
financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2019
Share Share Accumulated Other Merger relief Total
capital premium deficit reserves reserve
Notes SGD'000 SGD'000 SGD'000 SGD'000 SGD'000 SGD'000
-------------------- ------ --------- --------- ------------ ---------- -------------- ----------
At 1 January 2018 243 2,221 (6,160) 162 5,069 1,535
Loss for the year - - (357) - - (357)
Issue of shares 90 812 - - - 902
Convertible Loan
notes - - - - - -
At 31 December
2018 333 3,033 (6,517) 162 5,069 2,080
--------- --------- ------------ ---------- -------------- ----------
At 1 January 2019 333 3,033 (6,517) 162 5,069 2,080
Loss for the year - - (2,912) - - (2,912)
Issue of shares 23 86 268 - - - 354
Merger relief - - 4,524 - (4,524) -
Expiry of warrants - - 153 (153) - -
Convertible Loan
notes - - - - -
At 31 December
2019 419 3,301 (4,751) 8 545 (478)
--------- --------- ------------ ---------- -------------- ----------
Share capital Amount subscribed for shares at nominal value.
Share premium Amount subscribed for share capital in excess
of nominal value.
Other reserves Cumulative amounts charged in respect of share-based
payments for unsettled warrants issued and the
equity portion of convertible loans issued.
Merger relief reserve Arises from the 100% acquisition of NTL in June
2013 whereby the excess of the fair value of
the issued share capital over the nominal value
of the shares was transferred to this reserve
in accordance with Section 612 of the Companies
Act 2006. Cumulative impairments recognised
to date on this investment have been transferred
to profit and loss reserves.
Accumulated deficit Cumulative deficit of the Company attributable
to equity shareholders.
The notes to the accounts are an integral part of these financial
statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
New Trend Lifestyle Group Plc ("the Company") is a public
limited company incorporated in England on 21 March 2012 under the
Companies Act 2006 but domiciled in Singapore. It was listed on the
AIM market on 28 June 2012. The address of the registered office is
given at the start of the annual report. The nature of the Group's
operations and its principal activities are set out in the
Chairman's Statement on page 2.
2. Basis of preparation and significant accounting policies
The consolidated financial statements of New Trend Lifestyle
Group Plc have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union
(IFRS's as adopted by the EU), IFRS Interpretations Committee and
the Companies Act 2006 applicable to companies reporting under
IFRS. The consolidated financial statements have been prepared
under the historical cost convention, available-for-sale financial
assets, and financial assets and financial liabilities (including
derivative instruments) at fair value through profit or loss.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated
financial statements are disclosed in Note 3.
Going concern
These financial statements have been prepared on the assumption
that the Group is a going concern.
When assessing the foreseeable future, the directors have looked
at a period of twelve months from the date of approval of this
report. The forecast cash-flow requirements of the business are
contingent upon the ability of the Group to generate future
sales.
The COVID-19 outbreak has had a significant impact on the
Group's operations since April 2020, when the Singapore Government
announced the closure of all retail businesses and social
gatherings. These restrictions were relaxed in June 2020, but there
remains reduced levels of activity in the retail outlets, and still
no corporate events at Head Office. This disruption is likely to
continue for the remainder of 2020 and should hopefully ease when
the pandemic eventually concludes.
With the proposed disposal and new placing, the directors
believe that the Group will have 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.
Applic ation of new and revised International Financial
Reporting Standards (IFRSs)
(a) New and amended standards adopted by the Group
The Group adopted IFRS 16 for the first time during the
financial year using the modified retrospective approach. This
resulted in the Group recognising right-of-use assets and lease
liabilities at 1 January 2019 of SGD 1,001k and SGD 1,039k
respectively. Consequently, a transition adjustment increasing the
Group's accumulated deficit of SGD 38k arose.
There are no other IFRSs or IFRIC interpretations that are
effective for the first time for the financial year beginning on or
after 1 April 2019 that would be expected to have a material impact
on the Company.
The new IFRSs adopted during the year areas as follows:
- IFRS 16 - Leases
- Amendments to IFRIC 23 - Uncertainty over income tax treatments
Standards, interpretations and amendments to published standards
that are not yet effective.
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
financial year beginning 1 January 2020 and have not been early
adopted:
Reference Title Summary Application date Application
of standard date of
Company
---------- ----------- ------------------------------ ------------------- -----------
IFRS 17 Insurance Applies a model that combines Periods commencing 1 January
Contracts a current balance sheet on or after 1 2021
measurement of insurance January 2021
contracts with recognition
of profit over the period
that services are provided.
---------- ----------- ------------------------------ ------------------- -----------
IAS 23 Borrowing Annual Improvements 2015-2017 Periods commencing 1 January
Costs Cycle on or after 1 2020
January 2020
---------- ----------- ------------------------------ ------------------- -----------
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31(st) 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.
On acquisition, the assets and liabilities and contingent
liabilities of a subsidiary are measured at their fair values at
the date of acquisition. Any excess of the cost of acquisition over
the fair values of the identifiable net assets acquired is
recognised as goodwill. Any deficiency of the cost of acquisition
below the fair values of the identifiable net assets acquired (i.e.
discount on acquisition) is credited to profit and loss in the year
of acquisition. The interest of minority shareholders is stated at
the minority's proportion of the fair values of the assets and
liabilities recognised. Subsequently, any losses applicable to the
minority interest in excess of the minority interest are allocated
against the interests of the Parent Company. See also accounting
policy on group reorganisation for acquisitions categorised as
group reorganisation.
-All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the Group.
Group reorganisation accounting
The Company acquired its 100% interest in New Trend Lifestyle
Pte Ltd ("NTL") in 2012 by way of a share for share exchange. This
is a business combination involving entities under common control
and the consolidated financial statements are issued in the name of
the Group but they are a continuance of those of NTL. Therefore,
the assets and liabilities of NTL have been recognised and measured
in these consolidated financial statements at their pre combination
carrying values. The retained earnings and other equity balances
recognised in these consolidated financial statements are the
retained earnings and other equity balances of the Company and NTL.
The equity structure appearing in these consolidated financial
statements (the number and the type of equity instruments issued)
reflect the equity structure of the Company including equity
instruments issued by the Company to affect the consolidation.
The difference between consideration given and net assets of NTL
at the date of acquisition is included in a group reorganisation
reserve.
Functional and presentation currency
The individual financial statements of each entity are measured
using the currency of the primary economic environment in which the
entity operates ("functional currency").
The consolidated financial statements are presented in Singapore
dollars (SGD), which is the functional currency of the trading
entity within the group.
2019 2018
------------------- -------------------
Year End Average Year End Average
--------- -------- --------- --------
GBP to SGD 1.79 1.74 1.73 1.81
--------- -------- --------- --------
Transactions and balances
Transactions in a currency other than the functional currency
("foreign currency") are measured in the respective functional
currencies and are recorded on initial recognition in the
functional currencies at exchange rates approximating those ruling
at the transaction dates. Monetary assets and liabilities
denominated in foreign currencies are translated at the rate of
exchange ruling at balance sheet date. Non-monetary items that are
measured in terms of historical cost in a foreign currency are
translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the
date when the fair value was determined.
Exchange differences arising on the settlement of monetary items
or on translating monetary items at the balance sheet date are
recognised in profit or loss except for exchange differences
arising on monetary items that form part of the Company's net
investment in foreign operations, which are recognised initially in
other comprehensive income and accumulated under foreign currency
translation reserve in equity in the consolidated financial
statements. The foreign currency translation reserve is
reclassified from equity to profit or loss of the Group on disposal
of the foreign operation.
Revenue recognition
Group companies recognise revenue from contracts with customers
when (or as) the group company satisfies a performance obligation
by transferring a promised good or service (i.e. an asset) to a
customer. An asset is transferred when (or as) the customer obtains
control of that asset. When (or as) a performance obligation is
satisfied, the company recognises as revenue the amount of the
transaction price (which includes estimates of variable
consideration that are constrained in accordance with IFRS 15) that
is allocated to that performance obligation.
Further details of the group company's revenue and other income
recognition policies are as follows:
Service income is recognised as income on a straight-line based
over the term unless another systematic basis is more
representative of the time pattern of the user's benefit.
Rental income arising from operating leases is recognised on a
straight-line basis over the lease terms.
Interest income is recognised on a time-proportion basis using
the effective interest method. When a loan and receivable is
impaired, the group reduces the carrying amount to its recoverable
amount, being the estimated future cash flow discounted at the
original effective interest rate of the instrument, and continues
unwinding the discount as interest income. Interest income on
impaired loan and receivables is recognised using the original
effective interest rate.
Government grants
Government grants are recognised at their fair value where there
is reasonable assurance that the grant will be received and all
terms and conditions relating to the grants have been complied
with. When the grant relates to an asset, the fair value is
recognised as deferred capital grant on the balance sheet and is
amortised to profit or loss over the expected useful life of the
relevant asset by equal annual instalments.
Where the grant relates to income, the government grant shall be
recognised in profit or loss on a systematic basis over the periods
in which the Group recognises as expenses the related costs for
which the grants are intended to compensate. Grants related to
income may be presented as a credit in profit or loss, either
separately or under a general heading such as "Other income".
Alternatively, they are deducted in reporting the related
expenses.
Employees' benefits
i) Retirement benefits
The Group participates in the national schemes as defined by the
laws of the countries in which it has operations.
Singapore
The Group makes contributions to the Central Provident Fund
(CPF) Scheme in Singapore, a defined contribution pension
schemes.
Obligations for contributions to defined contribution retirement
plans are recognised as an expense in the period in which the
related service is performed.
(ii) Employee leave entitlement
Employee entitlements to annual leave are recognised when they
accrue to employees. A provision is made for the estimated
liability as a result of services rendered by employees up to the
balance sheet date.
Borrowing costs
Borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity
incurs in connection with the borrowing of fund.
Property, plant and equipment
All items of property, plant and equipment are initially
recorded at cost. The cost of an item of property, plant and
equipment initially recognised includes its purchase price and any
cost that is directly attributable to bringing the asset to the
location and condition necessary for it to be capable of operating
in the manner intended by management. The cost of an item of
property, plant and equipment including subsequent expenditure is
recognised as an asset if, and only if, it is probable that future
economic benefits associated with the item will flow to the Group
and the cost of the item can be measured reliably.
When significant parts of property, plant and equipment are
required to be replaced in intervals, the Group recognises such
parts as individual assets with specific lives and depreciation,
respectively. Likewise, when a major inspection is performed, its
cost is recognised in the carrying amount of the plant and
equipment as a replacement if the recognition criteria are
satisfied. All other repair and maintenance expenses are recognised
in profit or loss when incurred.
After initial recognition, property, plant and equipment is
stated at cost less accumulated depreciation and any accumulated
impairment loss.
All items of property, plant and equipment are depreciated or
amortised using the straight-line method to
write-off the cost of the assets over their estimated useful lives as follows: -
Useful lives (Years)
Computer equipment 3
Electrical equipment 5
Furniture and fittings 3
Motor vehicles 5 to 6
Office equipment 3
Leasehold property 41
Renovation Over the lease
term
The estimated useful life and depreciation method are reviewed,
and adjusted as appropriate, at each balance sheet date to ensure
that the amount, method and period of depreciation are consistent
with the expected pattern of economic benefits from items of
property, plant and equipment. Fully depreciated assets are
retained in the financial statements until they are no longer in
use.
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected from its
use or disposal. The gain or loss on retirement or disposal is
determined as the difference between any sales proceeds and the
carrying amounts of the asset and is recognised in the profit or
loss within "Other income (expenses)" and the asset revaluation
reserve related to those asset, if any, is transferred directly to
retained earnings.
Investment properties
Investment properties are properties that are either owned by
the Group or leased under a finance lease in order to earn rentals
or for capital appreciation, or both, rather than for use in the
production or supply of goods or services, or for administrative
purposes, or in the ordinary course of business. Investment
properties comprise completed investment properties and properties
that are being constructed or developed for future use as
investment properties. Properties held under operating leases are
classified as investment properties when the definition of
investment properties is met and they are accounted for as finance
leases.
Investment properties are initially measured at cost, including
transaction costs. The carrying amount includes the cost of
replacing part of an existing investment property at the time that
cost is incurred if the recognition criteria are met. Subsequent to
initial recognition, investment properties are measured at cost
less depreciation (depreciation of investment properties is
calculated using the straight-line method to allocate the
depreciable amount over the estimated useful life of 41 years).
Investment properties are derecognised when either they have
been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from
its disposal. The gain or loss on the retirement or disposal of an
investment property is determined as the difference between any
sales proceeds and the carrying amounts of the asset and is
recognised in profit or loss in the year of retirement or disposal
within "Other income (expenses)".
Intangible assets
Externally acquired intangible assets are initially recognised
at cost and subsequently amortised on a straight-line basis over
their useful economic lives.
The significant intangibles recognised by the Group and their
useful economic lives are as follows:
Useful lives (Years)
Software development costs 3
Financial instruments
A financial instrument is recognised when the Group becomes a
party to the contractual provisions of the instrument. Financial
assets are derecognised if the Group's contractual rights to the
cash flows from the financial assets expire or if the Group
transfers the financial assets to another party without retaining
control or substantially all risks and rewards of the asset.
Regular purchases and sales of financial assets are accounted for
at trade date, i.e. the date that the Group commits itself to
purchase or sell the asset. Financial liabilities are derecognised
if the Group's obligations specified in the contract expire or are
discharged or cancelled.
Fair values
The carrying amounts of the financial assets and liabilities
such as cash and cash equivalents, receivables and payables of the
Group at the balance sheet date approximated their fair values, due
to the relatively short-term nature of these financial
instruments.
The Company provides financial guarantees to licensed banks for
credit facilities extended to a subsidiary company. The fair value
of such financial guarantees is not expected to be significantly
different as the probability of the subsidiary company defaulting
on the credit lines is remote.
Financial assets
Initial recognition and measurement
Financial assets are recognised on the balance sheet when, and
only when, the Group becomes a party to the contractual provisions
of the financial instrument. Financial assets are initially
recognised at fair value plus, in the case of financial assets
classified as held-to-maturity, directly attributable transaction
costs.
The Group classifies its financial assets in the following
categories: financial assets at fair value through profit or loss,
loans and receivables, held-to-maturity investments and
available-for-sale financial assets. The classification depends on
the nature of the assets and the purpose for which the assets were
acquired. Management determines the classification of its financial
assets at initial recognition and for held-to-maturity investments,
re-evaluates this designation at every balance sheet date. As at
the balance sheet date, the Group has no financial assets in the
category of held-to-maturity investments and available-for-sale
financial assets.
Subsequent measurement
(i) Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for
trading, and those designated at fair value through profit or loss
at inception. A financial asset is classified as held for trading
if they are acquired principally for the purpose of selling or
repurchasing in the short term. This category includes derivative
financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships as defined
by IAS 39. Derivatives, including separated embedded derivatives
are also classified as held for trading unless they are designated
as effective hedging instruments. Financial assets designated at
fair value through profit or losses are those that are managed and
their performance is evaluated on a fair value basis, in accordance
with the Group's investment policy. Assets in this category are
presented as current assets if they are either held for trading or
are expected to be realised within 12 months after the balance
sheet date.
Subsequent to initial recognition, financial assets at fair
value through profit or loss are measured at fair value. Any gains
and losses arising from changes in fair value of the financial
assets are recognised in profit or loss. Net gains or net losses on
financial assets at fair value through profit or loss include
exchange differences, interest and dividend income.
Derivatives embedded in host contracts are accounted for as
separate derivatives and recorded at fair value if their economic
characteristics and risks are not closely related to those of the
host contracts and the host contracts are not held for trading or
designated at fair value through profit or loss. These embedded
derivatives are measured at fair value with changes in fair value
recognised in profit or loss. Reassessment only occurs if there is
a change in the terms of the contract that significantly modifies
the cash flows that would otherwise be required.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are presented as current assets, except for those
expected to be realised later than 12 months after the balance
sheet date which are classified as non-current assets. Loans and
receivables comprise cash and cash equivalents, trade and other
receivables. Subsequent to initial recognition, loans and
receivables are measured at amortised cost using the effective
interest rate method, less impairment. Gains and losses are
recognised in profit or loss when the loans and receivables are
derecognised or impaired, and through the amortisation process.
Derecognition
Financial assets are derecognised when the contractual rights to
receive cash flows from the financial assets have expired or have
been transferred and the Group has transferred substantially all
the risks and rewards of ownership. On derecognition of a financial
asset in its entirety, the difference between the carrying amount
and the sum of the consideration received and any cumulative gain
or loss that had been recognised in other comprehensive income is
recognised in profit or loss.
All regular way purchases and sales of financial assets are
recognised or derecognised on the trade date, i.e. the date that
the Group commits to purchase or sell the asset. Regular way
purchases or sales are purchases or sales of financial assets that
require delivery of the assets within the period generally
established by regulation or convention in the marketplace
concerned.
Impairment of financial assets
The Group assesses at each balance sheet date whether there is
any objective evidence that a financial asset or group of financial
assets is impaired.
(i) Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first
assesses whether objective evidence of impairment exists
individually for financial assets that are individually
significant, or collectively for financial assets that are not
individually significant. If the Group determines that no objective
evidence of impairment exists for an individually assessed
financial asset, whether significant or not, it includes the asset
in a group of financial assets with similar credit risk
characteristics and collectively assesses them for impairment.
Assets that are individually assessed for impairment and for which
an impairment loss is, or continues to be recognised are not
included in a collective assessment of impairment.
An impairment loss is recognised in profit or loss when there is
objective evidence that the asset is impaired, and is measured as
the difference between the asset's carrying amount and the present
value of estimated future cash flows discounted at the financial
asset's original effective interest rate. If a loan has a variable
interest rate, the discount rate for measuring any impairment loss
is the current effective interest rate. The carrying amount of the
asset is reduced through the use of an allowance account. The
impairment loss is recognised in the profit or loss.
When the asset becomes uncollectible, the carrying amount of
impaired financial assets is reduced directly or if an amount was
charged to the allowance account, the amounts charged to the
allowance account are written off against the carrying value of the
financial asset.
To determine whether there is objective evidence that an
impairment loss on financial assets has been incurred, the Group
considers factors such as the probability of insolvency or
significant financial difficulties of the debtor and default or
significant delay in payments.
If in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously
recognised impairment loss is reversed to the extent that the
carrying amount of the asset does not exceed its amortised cost at
the reversal date. The amount of reversal is recognised in profit
or loss.
(ii) Financial assets carried at cost
If there is objective evidence (such as significant adverse
changes in the business environment where the issuer operates,
probability of insolvency or significant financial difficulties of
the issuer) that an impairment loss on financial assets carried at
cost has been incurred, the amount of the loss is measured as the
difference between the asset's carrying amount and the present
value of estimated future cash flows discounted at the current
market rate of return for a similar financial asset. Such
impairment losses are not reversed in subsequent periods.
Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the
Group becomes a party to the contractual provisions of the
financial instrument. The Group determines the classification of
its financial liabilities at initial recognition. Financial
liabilities are recognised initially at fair value, plus, in the
case of financial liabilities not at fair value through profit or
loss, directly attributable transaction costs. As at the balance
sheet date, the Group did not have any financial liabilities in the
category of financial liabilities at fair value through profit or
loss.
Subsequent measurement
Financial liabilities are subsequently measured at amortised
cost using the effective interest rate method. Gains and losses are
recognised in profit or loss when liabilities are derecognised, and
through the amortisation process.
Derecognition
A financial liability is derecognised when the obligation under
the liability is discharged, cancelled or expires. When an existing
financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or
modification is treated as a derecognition of the original
liability and the recognition of a new liability, and the
difference in the respective carrying amounts is recognised in the
profit or loss.
Provisions
A provision is recognised when the Group has a present
obligation, legal or constructive, as a result of a past event and
it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation. Provisions
are reviewed at each balance sheet date and adjusted to reflect the
current best estimate. If it is no longer probable that an outflow
of economic resources will be required to settle the obligation,
the provision is reversed. Where the effect of the time value of
money is material, provisions are discounted using a current pre
tax rate that reflects, where appropriate, the risks specific to
the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance
cost.
Borrowings
Borrowings are presented as current liabilities unless the Group
has an unconditional right to defer settlement for at least 12
months after the balance sheet date, in which case they are
presented as non-current liabilities.
Borrowings are initially recorded at fair value, net of
transaction costs and subsequently carried for at amortised costs
using the effective interest method. Any difference between the
proceeds (net of transaction costs) and the redemption value is
recognised in profit or loss over the period of the borrowings
using the effective interest method. Borrowings which are due to be
settled within twelve months after the balance sheet date are
included in current borrowings in the balance sheet even though the
original term was for a period longer than twelve months and an
agreement to refinance, or to reschedule payments, on a long-term
basis is completed after the balance sheet date and before the
financial statements are authorised for issue.
Taxation
Income tax expense represents the sum of the tax currently
payable and deferred tax.
Current income tax for current and prior periods is recognised
at the amount expected to be paid to or recovered from the tax
authorities, using tax rates and tax laws that have been
substantively enacted by the balance sheet date in the countries
where the Group operates and generates taxable income. Current
income taxes are recognised in profit or loss except to the extent
that the tax relates to items recognised outside profit or loss,
either in other comprehensive income or directly in equity.
Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred tax is recognised on differences between the carrying
amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable
profit, is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will
not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be utilised. Unrecognised deferred tax
assets are reassessed at each balance sheet date and are recognised
to the extent that it has become probable that future taxable
profit will allow deferred tax assets to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset
realised, based on tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. Deferred tax is
charged or credited to profit or loss, except when it relates to
items charged or credited directly to other comprehensive income or
equity, in which case the deferred tax is also dealt with in other
comprehensive income or equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its
current tax assets and liabilities on a net basis.
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when an annual impairment assessment for an asset is
required, the Group makes an estimate of the asset's recoverable
amount.
An asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely dependent on those
from other assets. Where the carrying amount of an asset or cash
generating unit exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows expected
to be generated by the asset 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. In determining fair value less costs to sell, recent
market transactions are taken into account, if available. If no
such transactions can be identified, an appropriate valuation model
is used. These calculations are corroborated by valuation multiples
or other available fair value indicators.
Impairment losses are recognised in profit or loss in those
expense categories consistent with the function of the impaired
asset, except for assets that are previously revalued where the
revaluation was taken to other comprehensive income. In this case,
the impairment is also recognised in other comprehensive income up
to the amount of any previous revaluation.
An assessment is made at each reporting date as to whether there
is any indication that previously recognised impairment losses may
no longer exist or may have decreased. If such indication exists,
the Group estimates the asset's or cash-generating unit's
recoverable amount. A previously recognised impairment loss is
reversed only if there has been a change in the estimates used to
determine the recoverable amount of an asset since the last
impairment loss was recognised. If that is the case, the carrying
amount of the asset is increased to its recoverable amount. This
increase cannot exceed the carrying amount that would have been
determined, net of depreciation, had no impairment loss been
recognised previously. Such reversal is recognised in the profit
and loss unless the asset is measured at revalued amount, in which
case the reversal is treated as a revaluation increase.
Inventories
Inventories comprise finished goods held for resale and are
stated at the lower of cost and net realisable value. Cost is
determined using the weighted average method and comprises all
costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and
condition.
Net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of completion and
estimated costs necessary to be incurred for selling and
distribution.
Assets classified as held for sale
Non-current assets (or disposal groups) classified as held for
sale are measured at the lower of carrying amount and fair value
less costs to sell. Non-current assets and disposal groups are
classified as held for sale if their carrying amount will be
recovered through a sale transaction rather than through continuing
use. This condition is regarded as met only when the sale is highly
probable and the asset (or disposal group) is available for
immediate sale in its present condition. Management must be
committed to the sale which should be expected to qualify for
recognition as a completed sale within one year from the date of
classification.
Cash and cash equivalents
In the consolidated statement of cash flows, cash and cash
equivalents includes cash in hand, deposits held at call with banks
and other short-term highly liquid investments with original
maturities of three months.
Share Capital
Ordinary shares are classified as equity. Proceeds from issuance
of ordinary shares are classified as equity. Incremental costs
directly attributable to the issuance of new ordinary shares are
deducted against share capital.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less, where
appropriate, provisions for impairment.
Leases
The Group applies, for the first time, IFRS 16 Leases, that does
not require restatement of previous financial statements.
Several other amendments and interpretations apply for the first
time in 2019, but do not have an impact on the Consolidated
Financial Statements of the Group.
IFRS 16 Leases
IFRS 16 was issued in January 2016 and it replaces IAS 17
Leases, IFRIC 4 Determining whether an arrangement contains a
Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the
Substance of Transactions Involving the Legal Form of a Lease. IFRS
16 sets out the principles for the recognition, measurement,
presentation and disclosure of leases and requires lessees to
account for all leases under a single on-balance sheet model
similar to the accounting for finance leases under IAS 17. The
standard includes two recognition exemptions for lessees - leases
of 'low-value' assets (e.g. personal computers) and short-term
leases (i.e. leases with a lease term of twelve months or less). At
the commencement date of a lease, a lessee will recognise a
liability to make lease payments (i.e. the lease liability) and an
asset representing the right to use the underlying asset during the
lease term (i.e. the right-of-use asset).
Lessees will be required to separately recognise the interest
expense on the lease liability and the depreciation expense on the
right-of-use asset.
Lessees will be also required to remeasure the lease liability
upon the occurrence of certain events (e.g., a change in the lease
term, a change in future lease payments resulting from a change in
an index or rate used to determine those payments). The lessee will
generally recognise the amount of the remeasurement of the lease
liability as an adjustment to the right--of--use asset.
IFRS 16, which is effective for annual periods beginning on or
after 1 January 2019, requires lessees and lessors to make more
extensive disclosures than under IAS 17.
Transition to IFRS 16
The Group adopted IFRS 16 using the simplified retrospective
method of adoption with the date of initial application of 1
January 2019. The Group elected to use the transition practical
expedient allowing the standard to be applied only to contracts
that were previously identified as leases applying IAS 17 and IFRIC
4 at the date of initial application. The Group also elected to use
the recognition exemptions for lease contracts that, at the
commencement date, have a lease term of 12 months or less and do
not contain a purchase option ('short-term leases'), and lease
contracts for which the underlying asset is of low value
('low-value assets').
The effect of adoption of IFRS 16 is as follows:
Impact on the statement of financial position as at 31 December
2018:
31 December
2018
SGD'000
Assets
Property, plant and equipment (right-of-use
assets) 1,001
Liabilities
Lease liabilities (1,039)
-------------------------------------------------------------------------- ------------
Net impact on equity (38)
-------------------------------------------------------------------------- ------------
The cumulative impact on equity to 31 December 2018 can be reconciled
as follows:
SGD'000
------------------------------------------------------------------------- ----------------
Depreciation expense (412)
Rent expense 433
-------------------------------------------------------------------------- ----------------
Net impact on profit from operations 21
Finance costs (59)
-------------------------------------------------------------------------- ----------------
Net impact on loss for the period (38)
-------------------------------------------------------------------------- ----------------
Cumulative impact on the statement of cash flows to 31 December
2018 is as follows:
GBP'000
---------------------------------------------------- -------------
Net cash flows from operating
activities 374
Net cash flows from financing
activities (374)
----------------------------------------------------- -------------
Summary of new accounting policies
Right of use assets
The Group recognises right of use assets at the commencement
date of the lease (i.e., the date the underlying asset is available
for use). Right of use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right of use
assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Unless the
Group is reasonably certain to obtain ownership of the leased asset
at the end of the lease term, the recognised right of use assets
are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term. Right of use assets are
subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in-substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating a lease, if the
lease term reflects the Group exercising the option to terminate.
The variable lease payments that do not depend on an index or a
rate are recognised as expense in the period on which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group
uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily
determinable. The weighted average lessee's incremental borrowing
rate applied to the lease liabilities on 1 January 2019 was 5.75%.
After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the
lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in
the lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
its short-term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to
leases of office equipment that are considered of low value (i.e.,
below $5,000). Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a straight-line basis
over the lease term.
Amounts recognised in the statement of financial position
Right of use assets Lease liabilities
SGD'000 SGD'000
------------------------------- -------------------- ------------------
As at 1 January 2019 1,001 1,216
Additions 768 768
Depreciation expense (702) -
Interest expense (included in
finance costs) - 77
Payments - (816)
-------------------------------- -------------------- ------------------
As at 31 December 2019 1,067 1,245
-------------------------------- -------------------- ------------------
Current - 687
Non-current 1,067 558
-------------------------------- -------------------- ------------------
Maturity of leases
31 December
2019
SGD'000
--------------------------- -----------
Within one year 6 87
Between one and two years 424
Between two and five years 134
1, 245
--------------------------- -----------
i As lessee
For any new contracts entered into on or after 1 January 2019,
the Group considers whether a contract is, or contains a lease. A
lease is defined as 'a contract, or part of a contract, that
conveys the right to use an asset (the underlying asset) for a
period of time in exchange for consideration'.
At lease commencement date, the Group recognises a right-of-use
asset and a lease liability on the balance sheet. The right-of-use
asset is measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct costs
incurred by the Group, an estimate of any costs to dismantle and
remove the asset at the end of the lease, and any lease payments
made in advance of the lease commencement date (net of any
incentives received).
The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease
term. The Group also assesses the right-of-use asset for impairment
when such indicators exist.
At the commencement date, the Group measures the lease liability
at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease if that
rate is readily available or the Group's incremental borrowing
rate.
Lease payments included in the measurement of the lease
liability are made up of fixed payments (including in substance
fixed), variable payments based on an index or rate, amounts
expected to be payable under a residual value guarantee and
payments arising from options reasonably certain to be
exercised.
Subsequent to initial measurement, the liability will be reduced
for payments made and increased for interest. It is remeasured to
reflect any reassessment or modification, or if there are changes
in in-substance fixed payments.
When the lease liability is remeasured, the corresponding
adjustment is reflected in the right-of-use asset, or profit and
loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and
leases of low-value assets using the practical expedients. Instead
of recognising a right-of-use asset and lease liability, the
payments in relation to these are recognised as an expense in
profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have
been included in property, plant and equipment and lease
liabilities have been included in other financial liabilities.
ii. As lessee
Operating leases
As explained above, the Group has changed its accounting policy
for leases where the Group is
the lessee. The new policy and the impact of the change are
described above.
Until 31 December 2018 the determination of whether an
arrangement was a lease was based on
the substance of the arrangement at the inception of the lease.
The arrangement was a lease if
fulfilment of the arrangement was dependent on the use of a
specific asset and the arrangement
conveyed a right to use the asset, even if that asset was not
explicitly specified in an arrangement.
Rentals payable under operating leases were charged to expense
on a straight-line basis over the
term of the relevant lease. Contingent rentals arising under
operating leases were recognised as
an expense in the period in which they were incurred.
In the event that lease incentives were received to enter into
operating leases, such incentives were
recognised as a liability. The aggregate benefit of incentives
was recognised as a reduction of rental
expense on a straight-line basis over the lease term, except
where another systematic basis was
more representative of the time pattern in which economic
benefits from the leased asset were
consumed.
Leases in which the company does not transfer substantially all
the risks and rewards incidental to ownership of an asset are
classified as operating leases. Rental income arising from
operating leases on the Company's investment properties is
accounted for on a straight-line basis over the lease terms.
Initial direct costs incurred in negotiating and arranging an
operating lease are added to the same basis as rental income.
Contingent rents are recognised as revenue in the period in which
they are earned.
Rental 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 any
incentives received from the lessor) are charged to the income
statement.
3. Critical accounting estimates and judgements
Estimates, assumptions and judgements are continually evaluated
and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable
under the circumstances.
i. Critical accounting estimates and assumptions.
The Group makes estimates and assumptions concerning the future.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are discussed below.
(a) Useful lives of freehold building and investment property
The cost of freehold building is depreciated on a straight-line
basis over the estimated economic useful lives. Management
estimates the useful lives of the freehold building to be 50 years.
This is a common life expectancy applied in the industry. Changes
in the physical conditions of the freehold building and/or expected
level of usage and technological developments could impact the
economic useful life of the asset. Therefore, future depreciation
charges could be revised. As at 31 December 2019, there are no
indications that the remaining economic useful life of the asset is
significantly lower than the remaining useful life. The carrying
amount of the Group's freehold building at the balance sheet date
is disclosed in Note 15 to the financial information.
Depreciation of investment properties is calculated using the
straight-line method to allocate the depreciable amount over the
estimated useful life of 41 years. The residual value, useful life
and depreciation method of investment properties are
reviewed, and adjusted as appropriate, at the end of each
reporting period. The effects of any revision are included in
profit or loss when the changes arise.
(b) Impairment of inventories
An impairment review is made periodically on inventory for
excess inventory, obsolescence and declines in net realisable value
below cost and an allowance is recorded against the inventory
balance for any such declines. These reviews require management to
estimate future demand for the products. Possible changes in these
estimates could result in revisions to the valuation of inventory.
The carrying amount of inventories as at 31 December 2019 is
disclosed in Note 17 to the financial information.
(c) Fair value measurement of the derivative financial
instrument and convertible loan
Where the fair values of financial instruments recorded on the
balance sheet cannot be derived from active markets, they are
determined using valuation techniques including the discounted cash
flow model. The inputs to these models are derived from observable
market data where possible, but where this is not feasible, a
degree of judgement is required in establishing fair values. The
determination of the fair value is based on a probability -
weighted expected outcome for the conversion right and taking into
consideration of certain parameters such as the issuer's
probability of listing on AIM from inception until the maturity of
the convertible loan note and the expected return based on the
issuer's estimated credit rating. Changes in assumptions about
these factors could affect the reported fair value of the
derivative financial instrument and convertible loan.
The basis of estimates and the carrying amounts of the
derivative financial instrument and convertible loan as at 31
December 2019 are disclosed in Note 21 to the financial
information.
(d) Impairment of investment in subsidiaries
Investments are held as non-current assets at cost less any
provision for impairment. Where the recoverable amount of the
investment is less than the carrying amount, impairment is
recognised.
3. Critical accounting estimates and judgements (continued)
ii. Critical judgement in applying the entity's accounting policies
In the opinion of the management, there are no critical
judgements made in applying the Group's accounting policies, apart
from those involving estimations, which has a significant effect on
the amounts recognised in the financial statements.
4. Segmental reporting
In the opinion of the Directors the Group has one class of
business, being the provider of Feng Shui services in
Singapore.
The Group's primary reporting format is determined by the
geographical segment according to the location of its
establishments. There is currently one geographic reporting
segment.
2019 2018
------------------------------------------ ----------------
Singapore Other Total Singapore Other Total
SGD SGD SGD SGD SGD SGD
'000 '000 '000 '000 '000 '000
--------------------- ---------- -------- -------- ---------- ------ --------
Income Statement
Revenues
from external
customers 6,670 - 6,670 6,491 - 6,491
Other income 654 - 654 550 - 550
Interest - - - - - -
expense
Depreciation
and amortisation (980) - (980) (310) - (310)
Impairment - - - - - -
of assets
Gain on disposal - - - - - -
of property,
plant and
equipment
Direct and
operating
costs (3,547) (2,912) (6,459) (6,824) (357) (7,181)
Group profit
/ (loss)
before tax 2,797 (2,912) (114) (33) (357) (390)
--------------------- ---------- -------- -------- ---------- ------ --------
Assets and Liabilities
Segment assets 5,590 706 6,296 5,541 10 5,551
Segment liabilities (6,271) (137) (6,408) (6,027) (106) (6,133)
--------------------- ---------- -------- -------- ---------- ------ --------
(681) 569 (112) (486) (96) (582)
--------------------- ---------- -------- -------- ---------- ------ --------
Segment revenue reported above represents revenue generated from
external customers. There were no inter-segment sales in the
current year (2018: nil).
5. Revenue
2019 2018
SGD'000 SGD'000
Sale of products 2,890 2,743
Services rendered 3,780 3,748
---------- ----------
6,670 6,491
______ ______
6. Other income
2019 2018
SGD'000 SGD'000
Government grants 46 73
Rental income 414 396
Others 194 51
---------- ----------
Total other income 654 520
______ ______
7. Personnel expenses and staff numbers (including Directors)
Group Company
------------- -------------------------------------------
2019 2018 2019 2018
Number Number Number Number
The average number of
employees in the year
were:
* Directors 3 3 3 4
* Operations 41 49 - -
---------- ---------- ---------- ----------
44 52 3 4
______ ______ ______ ______
SGD'000 SGD'000 SGD'000 SGD'000
The aggregate payroll
costs for these persons
were:
* Salaries, wages and bonuses 2,414 2,728 - 127
* Pension contribution 317 236 - -
* Employee benefits 93 80 - -
------------ ------------ ------------ ------------
Total personnel expense 2,824 3,044 - 127
______ ______ ________ ________
7. Personnel expenses and staff numbers (including Directors) (continued)
Directors' Year ended 31 December 2019 Year ended 31 December
remuneration 2018
Salaries Pension Total Salaries Pension Total
and fees contri-butions and fees contri-butions
SGD'000 SGD'000 SGD'000 SGD'000 SGD'000 SGD'000
Hillary Phang
Song Hua 593 15 608 593 17 610
Ajay Kumar
Rajpal
* 93 - 93 85 - 85
Gregory Collier 26 - 26 27 - 27
Leung Chi Chiu 1 - 1 13 - 13
Leung Bo Yee
Nancy - - - 18 - 18
-------------- -------------- -------------- -------------- -------------- ------------
713 15 728 736 17 753
_________ _________ _________ _________ ________ ________
*Includes consultancy fees charged
8. Finance expenses, net
2019 2018
SGD'000 SGD'000
Finance income: Over-accrued Convertible loan Interest - 141
---------- ----------
- 141
Less Finance costs
- Lease obligations 77 13
- Term loans 177 136
- Convertible loan 51 89
---------- ----------
305 238
---------- ----------
Finance costs, net 305 97
______ ______
9. Other operating expenses
2019 2018
SGD'000 SGD'000
Auditors' fees: - Audit 21 31
Professional fees 143 204
Printing and stationery 21 1
Repairs and maintenance 19 -
Stamp duties 6 -
Telephone and insurance 68 -
Operating lease expenses 411 1,219
Travelling and transportation 68 10
Other 471 406
------------ ------------
Total other expenses 1,228 1,871
________ ________
10. Taxation
The major components of income tax (credit)/expense recognised
in profit or loss for the year
ended 31 December 2019 and 2018 were as follows:
2019 2018
SGD'000 SGD'000
Current income tax
- Under / (Overprovision) in respect - -
of previous years
Deferred tax:
- Benefits from previously unrecognised - -
tax losses
-------------- --------------
Total tax charge / (credit) recognised - -
in the profit and loss
_________ _________
The reconciliation of the tax expense and the product of
accounting profit multiplied by the
effective rate is as follows:
2019 2018
SGD'000 SGD'000
Accounting profit/(loss) (11) (390)
-------------- --------------
Tax at the effective tax rate of Singapore
of 17% (2018: 17%) (2) (66)
Unrecognised tax losses
carried forward 2 66
-------------- --------------
Income tax (credit) / expenses - -
_________ _________
The Company is incorporated in the UK but is treated as a
Singapore resident for tax purposes.
The Singapore Government has announced that for Years of
Assessment ("YA") 2020, all companies will receive a 25% Corporate
Income Tax ("CIT") Rebate that is subject to a cap of $15,000 per
YA, Years of Assessment ("YA") 2019, all companies will receive a
40% Corporate Income Tax ("CIT") Rebate that is subject to a cap of
$15,000 , Years of Assessment ("YA") 2018, all companies will
receive a 40% Corporate Income Tax ("CIT") Rebate that is subject
to a cap of $15,000.
Unrecognised tax losses and capital allowances
Deferred income tax assets are recognised for tax losses and
capital allowances carried forward to the extent that realisation
of the related tax benefits through future taxable profits is
probable.
The Group has unrecognised tax losses of SGD 218k (2018: SGD
1,433k) and capital allowances of SGD nil (2018: nil) at the
reporting date which can be carried forward and used to offset
against future taxable income subject to meeting certain statutory
requirements. The tax losses and capital allowances have no expiry
date.
11. Loss per share
Loss per share data is based on the Group loss for the year and
the weighted average number of shares in issue.
Year ended Year ended
31 December 2019 31 December 2018
---------------- ----------------
Basic and diluted loss per share SGD SGD
from continuing and discontinued (0.00058) (0.00264)
operations
---------------- ----------------
Loss from continuing operations
for the purposes of basic and
diluted profit per share (114,290) (390,152)
---------------- ----------------
Number of shares No. No.
Weighted average number of ordinary
shares for the purposes of basic
earnings per share 196,780,822 147,876,712
---------------- ----------------
Year ended Year ended
31 December 2019 31 December 2018
---------------- ----------------
Basic and diluted loss per share SGD SGD
from continuing and operations (0.00058) (0.00243)
---------------- ----------------
Loss from continuing operations
and discontinued for the purposes
of basic and diluted profit per
share (114,290) (359,682)
---------------- ----------------
Number of shares No. No.
Weighted average number of ordinary
shares for the purposes of basic
earnings per share 196,780,822 147,876,712
---------------- ----------------
Year ended Year ended
31 December 2019 31 December 2018
---------------- ----------------
Basic and diluted loss per share SGD SGD
from discontinued operations - (0.00021)
---------------- ----------------
Loss from discontinued for the
purposes of basic and diluted
profit per share - (30,470)
---------------- ----------------
Number of shares No. No.
Weighted average number of ordinary
shares for the purposes of basic
earnings per share 196,780,822 147,876,712
---------------- ----------------
12. Discontinued operations
Discontinued operations refers to the closure of the operation
in Singapore. Analysis of the operations is as follows:
2018 2018 2018
Continuing operations Discontinued Total
operations
SGD'000 SGD'000 SGD'000
------------------------------ --------------------- ------------ -------
Revenue 6,491 74 6,565
--------------------- ------------ -------
Direct purchases and costs (1,545) (18) (1,563)
Personnel expenses (2,917) (41) (2,958)
Depreciation and amortisation
expenses (310) (18) (328)
Finance expenses (97) - (97)
Commission expenses (20) - (20)
Advertising and promotional
expenses (320) - (320)
Bank charges (156) (2) (158)
Operating lease expenses (1,219) (11) (1,230)
Loss on disposal (652) (19) (701)
Other operating expenses (8) - (8)
Other income 520 5 555
Directors' remuneration (127) - (127)
------------
Loss before tax (360) (30) (390)
13. Investment in subsidiary undertakings
Company 2019 2018
SGD'000 SGD'000
Cost
At 1 January 5,225 5,225
-------------- --------------
At 31 December 5,225 5,225
-------------- --------------
Impairment
At 1 January 1,864 1,725
Impairment recognised in the
year 2,661 139
-------------- --------------
At 31 December 4,525 1,864
-------------- --------------
-------------- --------------
Net Carrying Amount at 31 December 700 3,361
_________ _________
The company held the following subsidiaries as at 31 December
2019:
Name of companies Principal Country of incorporation Proportion
activities and place of business (%) of
equity interest
2019 and 2018
%
Held by the Company
New Trend Lifestyle Feng Shui services Singapore 85.7 [2018
Pte and products : 100]
Limited
14. Investment property
Group 2019 2018
SGD'000 SGD'000
Balance Sheet:
Cost
As at the beginning of the year 2,273 2,273
-------------- --------------
As at the end of the year 2,273 2,273
-------------- --------------
Amortisation
As at the beginning of the year 369 314
Charge for the year 56 55
-------------- --------------
As at the end of the year 425 369
-------------- --------------
Net carrying amount at 31 December 1,848 1,904
-------------- --------------
Income statement: 2019 2018
SGD'000 SGD'000
Rental income from investment property:
Minimum lease payments 414 396
-------------- --------------
Direct operating expenses (including
repairs and maintenance) arising from:
Rental generating property expenses 55 71
-------------- --------------
Transfer from property, plant and equipment
On 21 May 2013, the Group transferred a leasehold building that
was held as owner-occupied property to investment property.
The investment property held by the Group as at 31 December 2019
is as follows;
Description Existing Tenure Floor area Fair Value
use
--------------------- --------- ----------- ---------------- ---------------
No. 22 Kaki Bukit Offices Leasehold 1,011.5 square SGD 4,714,504
Crescent, metre
Kaki Bukit Techpark (2018: SGD
I, 5,313,344)
Singapore 416253
At the end of the reporting period, the market value of the
investment property is valued at SGD 4,714,504 (2018: SGD
5,313,344). In 2018 and 2019, the valuation was determined by
management based on the quoted prices for similar properties in
active markets whereas the the valuation for 2016 was determined
based on the properties' highest and best use by an external and
independent professional valuer, Dennis Wee Realty Pte Ltd, using
the Comparable Sales Method, under which the property is assessed
having regards to the recent transactions within the development
and around the vicinity. Appropriate adjustments have been made
between comparables and the subject property to reflect the
differences in size, tenure, location, condition, prevailing
marketing and all other factors affecting their value. The fair
value measurement is categorised under Level 2 of the fair value
hierarchy.
Property pledged as security
Group borrowings are secured against Investment property (Note
21).
15. Property, plant and equipment
Leasehold Computer Electrical
property equipment equipment
SGD'000 SGD'000 SGD'000
Cost
As at 1 January 2018 927 439 248
Additions - - 9
Disposals - - -
-------------- -------------- ------------
As at 31 December 2018 927 439 257
Effect of adopting - - -
IFRS 16
-------------- -------------- ------------
As at 1 January 2019 927 439 257
Additions - 2 -
Disposals/written off - - (3)
-------------- -------------- ------------
As at 31 December 2019 927 441 254
-------------- -------------- ------------
Accumulated Depreciation
As at 1 January 2018 128 395 212
Charge for the year 23 24 25
Disposals - - -
-------------- -------------- ------------
As at 31 December 2018 151 419 237
Effect of adopting - - -
IFRS 16
-------------- -------------- ------------
As at 1 January 2019 151 419 237
Charge for the year 23 22 14
Disposals/written off (1) - (2)
-------------- -------------- ------------
As at 31 December 2019 173 441 249
-------------- -------------- ------------
Net book values
At 31 December 2019 754 - 5
-------------- -------------- ------------
At 31 December 2018 776 20 20
-------------- -------------- ------------
Furniture Outlet
and fittings Motor Office Renovation
vehicles equipment Total
SGD'000 SGD'000 SGD'000 SGD'000 SGD'000 SGD'000
Cost
At 1 January 2018 218 538 - 1,130 - 3,500
Additions - - - 161 - 170
Disposals/written
off - - - (25) - (25)
-------------- ------------ -------------- -------------- ------------ ------------
As at 31 December
2018 218 538 - 1,266 - 3,645
Effect of adopting
IFRS 16 - - 298 - 1,115 1,413
-------------- ------------ -------------- -------------- ------------ ------------
As at 1 January 2019 218 538 298 1,266 1,115 5,058
Additions - - - 5 768 775
Disposals/written
off - - - (220) - (223)
-------------- ------------ -------------- -------------- ------------ ------------
As at 31 December
2019 218 538 298 1,051 1,883 5,610
-------------- ------------ -------------- -------------- ------------ ------------
Accumulated
Depreciation
and Amortisation
As at 1 January 2018 215 189 - 1,019 - 2,158
Charge for the year 3 86 - 71 - 232
Disposals/ written
off - - - (25) - (25)
-------------- ------------ -------------- -------------- ------------ ------------
As at 31 December
2018 218 275 - 1,065 - 2,365
Effects of adopting
IFRS 16 - - 100 - 312 412
-------------- ------------ -------------- -------------- ------------ ------------
As at 1 January 2019 218 275 100 1,065 312 2,777
Charge for the year - 81 59 83 643 925
Disposals/ written
off - - - (216) - (219)
-------------- ------------ -------------- -------------- ------------ ------------
As at 31 December
2019 218 356 159 932 955 3,483
-------------- ------------ -------------- -------------- ------------ ------------
Net book values
At 31 December 2019 - 182 139 119 928 2,127
-------------- ------------ -------------- -------------- ------------ ------------
At 31 December 2018 - 263 - 201 - 1,280
-------------- ------------ -------------- -------------- ------------ ------------
Included in the above line items are right-of use assets over
the following:
SGD'000
Outlet 928
Office equipment 139
--------
1,067
========
Assets held under hire purchase agreements
The carrying amount of office equipment, motor vehicles and
renovation held under finance leases at the balance sheet date was
2018: SGD 248,557.
Leased assets are pledged as security for the lease obligations
(Note 21).
Assets pledged as security
In addition to assets held under finance leases, the group's
leasehold building with a carrying amount of SGD 753,631 (2018: SGD
776,240) is mortgaged to secure the Group's bank loans (Note
21).
16. Intangible assets
Software
development
costs
SGD'000
Cost
At 1 January 2018 75
Additions -
Disposals/written off -
--------------
As at 31 December 2018 75
As at 1 January 2019 75
Additions -
Disposals/written off -
Currency translation differences -
--------------
As at 31 December 2019 75
--------------
Accumulated Depreciation and Amortisation
At 1 January 2018 52
Charge for the year 23
Disposals/written off -
Currency translation differences -
--------------
As at 31 December 2018 75
As at 1 January 2019 75
Charge for the year -
Disposals/ written off -
Currency translation differences -
--------------
As at 31 December 2019 75
--------------
Net book values
At 31 December 2019 -
--------------
At 31 December 2018 -
--------------
17. Inventories
2019 2018
SGD'000 SGD'000
Finished goods 1,328 1,345
Less: Allowance for inventories obsolescence (537) (622)
-------------- --------------
791 723
_________ _________
The cost of inventories recognised as expense and included in
'direct purchase and costs' amounted to SGD 869,529 (2018: SGD
864,370).
The reversal of write-down of inventories amounting to SGD
84,505 (2018: SGD 52,752) was made as the related inventories were
sold above their carrying amounts. The reversal was included in
'direct purchase and costs'.
18. Trade and other receivables
Group Company
2019 2018 2019 2018
SGD'000 SGD'000 SGD'000 SGD'000
Deposits* 297 273 - -
Prepayments 34 153 6 9
Other receivables (non-trade)** 42 2 - -
-------------- -------------- -------------- --------------
373 428 6 9
________ ________ ________ ________
* Included in deposits are refundable rental deposits, amounting to SGD 241,259 (2018: SGD 254,000) paid in respect of office premises and retail outlets.
** This amount is as a result of a loan to the Temple partner (Zue Zuen Ge Enterprise)
19. Cash and cash equivalents
2019 2018
SGD'000 SGD'000
Cash and bank balances 1,157 1,216
Fixed deposits - -
-------------- --------------
Cash and bank balances
as presented in balance
sheets 1,157 1,216
Less: Pledged fixed deposits - -
-------------- --------------
Cash and cash equivalents
as presented in consolidated
statement of cash flows 1,157 1,216
_________ _________
20. Trade and other payables
Group Company
2019 2018 2019 2018
SGD'000 SGD'000 SGD'000 SGD'000
Trade payables 388 989 - -
Other payables:
* Due to a subsidiary (non-trade)* - - 1,027 1,164
* Accrued expenses ** 697 1,421 35 106
- 17 - -
* Customers' deposits
* Others 102 - 102 -
-------------- -------------- ------------ ------------
1,187 2,427 1,164 1,270
_________ _________ ________ ________
* These amounts are unsecured, interest-free and repayable on demand.
** Included in the accrued expenses of the Group as at 31
December 2019 mainly is an amount of SGD 494,501 (2018: SGD
514,631) which relates to audit fees and accruals that are payable
to its Group's personnel subsequent to the year end.
21. Financial liabilities
Group Company
2019 2018 2019 2018
SGD'000 SGD'000 SGD'000 SGD'000
Current liabilities
Lease liabilities 687 60 - -
Bank loan 267 385 - -
Convertible loan 585 467 20 20
-------------- -------------- -------------- --------------
1,538 912 20 20
_________ _________ _________ _________
Non-current liabilities
Lease liabilities 558 117 - -
Bank loan 3,046 2,192 - -
Convertible Loan - 406 - -
-------------- -------------- -------------- --------------
3,604 2,715 - -
_________ _________ _________ _________
Group Minimum lease Interest Present
payments value of
payments
SGD'000 SGD'000 SGD'000
2019
Not later than one
year 732 (45) 687
Later than one year
and not later than
five years 577 (19) 558
-------------- -------------- --------------
1,309 (64) 1,245
_________ _________ _________
Minimum lease Interest Present
payments value of
payments
SGD'000 SGD'000 SGD'000
2018
Not later than one
year 69 (9) 60
Later than one year
and not later than
five years 125 (8) 117
-------------- -------------- --------------
194 (17) 177
_________ _________ _________
Lease obligations are secured by the following:
(a) Motor vehicles of the Group (Note 15);
(b) Personal guarantee by Master Phang, amounting to the total lease liability.
The weighted average effective interest rate for finance leases
is 6.53% (2018: 6.53%) per annum. The carrying amounts of the
Group's finance lease liabilities are approximate their fair
value.
Bank loan
Group 2019 2018
SGD'000 SGD'000
Term loan 1 - 969
Term loan 2 - 1,558
Term loan 3 - 49
Term loan 4 3,313 -
-------------- --------------
3,313 2,576
_________ _________
Terms loans of the Group are secured by the following:
(a) a personal guarantee by Master Phang; and
(b) a mortgage on the Group's investment property (Note 14) and
leasehold building (Note 15).
The borrowings are denominated in Singapore Dollar. As at 31
December 2019, the weighted effective interest rate for borrowings
was 5.75% (2018: 3.76%) per annum.
Bank loan
The repayment terms of the term loans are as follows:
(a) Term loan 1 is repayable over 96 monthly instalments which
commenced in December 2014 and bears interest at the rate of n/a
(2018: 4.75% to 5.25%) per annum at the end of the reporting
period. It was fully repaid October 2019.
(b) Term loan 2 is repayable over 180 monthly instalments which
commenced in December 2014 and bears interest at the rate of n/a
(2018: 4.75% to 5.25%) per annum at the end of the reporting
period. It was fully repaid July 2019.
(c) Term loan 3
Term loan 3 is repayable over 48 monthly instalments which
commenced in October 2015 and bears interest at the rate of n/a
(2018: 10.28%) per annum at the end of the reporting period. It was
fully repaid in July 2019.
(d) Term loan 4
Term Loan 4 is repayable over 120 monthly instalments commencing
from August 2019 and bears interest at the rate of 5.75% (2018:
n/a) per annum at the end of the reporting period.
Convertible loan
Group and company 2019 2018
SGD'000 SGD'000
Liability portion of convertible
loan notes 565 854
Equity portion of convertible
loan notes 20 20
-------------- --------------
Total convertible loan
notes 585 874
_________ _________
The subsidiary issued SGD 470,000 and SGD50,000, 3% and 5%
unsecured convertible loan notes in 2018 and repayable on 31
December 2020. The convertible loans entitle the holders to convert
them into ordinary shares of the subsidiary (unless previously
redeemed, Converted or cancelled), subject to and in accordance
with the terms and conditions of the Notes Agreement.
The convertible loan notes contain two components, liability and
equity elements. The equity
element is presented in equity heading "Other reserve". The
effective interest rate of the liability
component is 10.88% (2018: 10.88%) per annum.
22. Provision for Restoration Costs
Group 2019 2018
SGD'000 SGD'000
Not later than one
year 64 24
Later than one year
and not later than
five years 15 55
-------------- --------------
79 79
_________ _________
The movement in provision for restoration costs is as
follows:
2019 2018
SGD'000 SGD'000
At 1 January 79 93
Provision made - 15
Provision utilised - (29)
-------------- --------------
79 79
_________ _________
Provision for restoration costs relate to the estimated cost of
dismantling, removing and restoring the premises to their original
conditions upon expiration of the leases. The provision is expected
to be recognised after one year but within three years from the
balance sheet date.
23. Share capital and share premium
Group and 2019 2019 2018 2018
company
SGD'000 SGD'000 SGD'000 SGD'000
Share Capital Share premium Share Capital Share premium
At the
beginning 333 3,033 243 2,221
Issued
during
the year 86 268 90 812
-------------- -------------- -------------- --------------
At the end
of
the year 419 3,301 333 3,033
_________ _________ _________ _________
During the accounting period 50,000,000 ordinary shares of 0.1p
were issued at a price of 1p per share in settlement of a creditor
in New Trend Lifestyle Pte Limited. This is referred to in note
26.
The issued share capital as at 31 December 2019 was 225,000,000
Ordinary Shares of 0.1p each.
24. Warrants
Weighted
average
remaining
Number Exercise contractual
of warrants price life
At 1 January 2019 3,000,000 8p 3.6 years
Warrants issued in the year - - -
Warrants expired (3,000,000) - -
At 31 December 2019 -
The fair value of the warrants issued in a previous year was
GBP0.026 and was derived using
the Black Scholes model. The following assumptions were used in
the calculation:
Bid price discount 25%
Risk-free rate 0.67%
Volatility 60%
25. Share options
Weighted
average
remaining
Number Exercise contractual
of options price life
At 1 January 2019 and 31 December
2019 600,000 8p 3.4 years
The fair value of the share options issued in a previous year is
GBP0.009 and was derived using the Black Scholes model. The
following assumptions were used in the calculation:
Bid price discount 25%
Risk-free rate 0.67%
Volatility 60%
Expected life 3 years
Expected volatility was determined by calculating the historical
volatility of the Company's share price over the last four years.
The expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations.
There were no share options which lapsed or were exercised
during the year.
26. Related-party transactions
Some of the arrangements with related parties (as defined in
Note 2) and the effects of these bases determined between the
parties are reflected elsewhere in this report. Details of
transactions between the Group and related parties are disclosed
below:
2019 2018
SGD'000 SGD'000
Key management personnel
compensation
Directors' remuneration
- Salaries, wages and
bonuses 593 593
- Pension contributions 15 17
- Directors' fees 120 143
- Share based payment - -
Related parties comprise mainly companies which are controlled
or jointly controlled by Master Phang and his close family
members.
Key management personnel are those persons having the authority
and responsibility for planning, directing and controlling the
activities of the entity.
During the year, SGD 93,154 (2018: SGD 85,000) was paid to NAS
Corporate Services Limited for non-executive directors fees and
consultancy fees in relation to Ajay Kumar Rajpal.
Of this amount, SGD 30,193 (2018: SGD 33,750) was charged to the
Company and SGD 62,961 (2018: SGD 51,210) was charged to New Trend
Lifestyle Pte Ltd.
During the year, SGD 26,132 (2018: SGD 27,000) was paid to
Gregory Collier for non-executive directors fees and consultancy
fees.
During the year the Company successfully completed an issue of
50,000,000 new ordinary shares of 0.1p each ("New Ordinary Shares")
at a price of 0.42p per share (the "Issue") in full settlement of a
debt owed by the Group to a trade creditor as at 30 April 2019. The
issue price represents a significant premium to the mid-market
closing price of 0.2p on 25 July 2019.
The Issue is the result of discussions with Zishange Capital
Management Pte Ltd ("ZSG"), a creditor of New Trend Lifestyle Pte
Ltd ("NTLSG"), the Company's subsidiary in Singapore. As at 30
April 2019 ZSG was owed SGD353,317 by NTLSG and has agreed to
accept 50,000,000 New Ordinary Shares, as full payment against this
debt, at an issue price of GBP0.0042 per share (SGD0.00707 per
share). As a result, ZSG will own approximately 22.22 per cent. of
the enlarged issued share capital of the Company and has also
entered into a Relationship Agreement with the Company and the
Company's Nominated Adviser which regulates the shareholder's
relationship with the Company. The group had the following
transactions with this related party:
-- Rent paid by Zue Zuen Ge Enterprise to New Trend Lifestyle
Pte Limited amounted to
SGD 413,598 (2018: SGD 396,000).
-- Services provided to New Trend Lifestyle Pte Limited amounted
to SGD 87,707 (2018: SGD 545,475).
-- Purchases provided by New Trend Lifestyle Pte Limited
amounted to SGD nil (2018: SGD 545,745).
-- The balance owed at the year end to Zue Zuen Ge Enterprise by
New Trend Lifestyle Pte Limited amounted to SGD 2,288 (2018: SGD
794,100) in respect of trade payables and SGD 95,151 (2018: SGD
652,932) in respect of non-trade payables.
27. Operating lease commitments
IFRS 16 was issued in January 2016 and it replaces IAS 17
Leases, IFRIC 4 Determining whether an arrangement contains a
Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the
Substance of Transactions Involving the Legal Form of a Lease. IFRS
16 sets out the principles for the recognition, measurement,
presentation and disclosure of leases and requires lessees to
account for all leases under a single on-balance sheet model
similar to the accounting for finance leases under IAS 17. The
standard includes two recognition exemptions for lessees - leases
of 'low-value' assets (e.g. personal computers) and short-term
leases (i.e. leases with a lease term of twelve months or
less).
Lessees will be required to separately recognise the interest
expense on the lease liability and the depreciation expense on the
right-of-use asset.
IFRS 16, which is effective for annual periods beginning on or
after 1 January 2019, requires lessees and lessors to make more
extensive disclosures than under IAS 17.
(i) Where the Group is the lessee
The Group leases certain retail outlets and premises under
non-cancellable lease agreements. From 1 January 2019, these
agreements have been recognised as lease liabilities under IFRS 16,
so the Group no longer has any non-cancellable lease commitments
other than those recognised in the Statement of Financial
Position.
The future aggregate minimum leases payments under
non-cancellable operating leases contracted for at the balance
sheet date but not recognised as liabilities are as follows:
2019 2018
SGD'000 SGD'000
Not later than one year - 899
Later than one year and
not later than five years - 596
-------------- --------------
- 1,495
_________ _________
(ii) Where the Group is the lessor
The future aggregate minimum lease payments receivable under
non-cancellable operating leases contracted for at the reporting
date but not recognised as receivables are as follows:
2019 2018
SGD'000 SGD'000
Not later than one year 178 165
Later than one year and - -
not later than five years
-------------- --------------
178 165
_________ _________
28. Financial instruments
Financial risk management objectives and policies
The Group is exposed to financial risks arising from its
operations and the use of financial instruments. The key financial
risks are market risks (including foreign exchange risk and
interest rate risk), liquidity risk and credit risk. The Director
reviews and agrees policies and procedures for the management of
these risks.
It is the Group's policy not to trade in derivative
contracts.
(a) Market risk
i) Foreign currency risk
The Group is exposed to movement in foreign currency exchange
rates arising from normal trading transactions that are denominated
in currencies other than the respective functional currencies of
the Group entities. The group does not have a policy to hedge its
exposure to foreign currency exchange risk.
2019 GBP Total
SGD' 000 SGD' SGD' 000
000
Financial assets
Financial assets at
fair value through
profit or loss
Other receivables 339 - 339
Cash and bank balances 1,157 - 1,157
------------ ------------ ------------
1,496 - 1,496
_______ _______ ________
Financial liabilities
Trade and other
payables 23 1,164 1,187
Lease obligations 1,127 - 1,127
Borrowings, secured 3,431 - 3,431
Convertible loans 585 20 605
------------ ------------ ------------
5,166 1,184 6,350
_______ _______ ________
Net financial
assets/(liabilities) (3,670) (1,184) (4,854)
Less: Net financial
assets
denominated in the
respective
entities' functional
currencies 3,670 1,184 4,854
Foreign currency - - -
exposure
28. Financial instruments (continued)
2018 GBP Total
SGD' 000 SGD' 000 SGD' 000
Financial assets
Financial assets at
fair value through
profit or loss
Other receivables 419 10 429
Cash and bank balances 1,216 - 1,216
------------ ------------ ------------
1,635 10 1,645
_______ _______ ________
Financial liabilities
Trade and other
payables 2,321 106 2,427
Lease obligations 176 - 176
Borrowings, secured 2,576 - 2,576
Convertible loans 854 20 874
------------ ------------ ------------
5,927 126 6,053
_______ ________ ________
Net financial
assets/(liabilities) (4,116) (116) (4,232)
Less: Net financial
assets
denominated in the
respective
entities' functional
currencies 4,116 116 4,232
Foreign currency - - -
exposure
Foreign exchange risk sensitivity
The following table details the sensitivity to a 10% increase
and decrease in the Singapore Dollars against the relevant foreign
currencies. The sensitivity analysis includes only outstanding
foreign currency denominated monetary items and adjusts their
translation at the period end for a 10% change in foreign currency
rates.
If the foreign currencies strengthen by 10% against the relevant
functional currencies, with all other variables held constant
profit or loss and other equity will increase (decrease) by:
2019
SGD '000 SGD '000
Profit (Loss)/Other comprehensive - -
income
2018
SGD '000 SGD '000
Profit (Loss)/Other comprehensive
income 20 1
_________ _________
A 10% weakening of foreign currencies against the respective
functional currencies at the balance sheet date would have had the
equal but opposite effect on the above currencies to the amount
shown above, on the basis that all other variables remains
constant.
(ii) Interest rate risk
The Group obtains additional financing through bank borrowings
(interest bearing). The Group's policy to obtain the most
favourable interest rates available without increasing its foreign
currency exposure. The Group constantly monitors its interest rate
risk and does not utilise interest rate swap or other arrangements
for trading or speculative purposes. As at 31 December 2019, there
were no such arrangements, interest rate swap contracts or other
derivative instruments outstanding.
Summary quantitative data of the Group's interest-bearing
financial instruments can be found in part (b) of this note.
Interest in financial instruments subject to floating interest
rates is repriced regularly. The other financial instruments of the
Group that are not included in the above table are not subject to
interest rate risks.
The sensitivity analyses below have been determined based on the
exposure to interest rates for non-derivative instruments at the
balance sheet date and the stipulated change taking place at the
beginning of the financial year and held constant throughout the
reporting periods in the case of instruments that have floating
rates. A 100 basis point increase or decrease is used as it
represents management's assessment of the possible change in
interest rates.
Interest risk sensitivity
If the interest rates had been 100 basis point higher or lower
and all other variables were held constant, the Group's profit for
the year ended 31 December 2019 would decrease or increase by SGD
27,500 (2018: SGD 25,000).
(b) Liquidity risk
The Group monitors its liquidity risk and maintains a level of
cash and cash equivalents deemed adequate by management to finance
the Group's operations and to mitigate the effects of fluctuations
in cash flows. Typically, the Group ensures that it has sufficient
cash on demand to meet expected operational expenses including the
servicing of financial obligations. Management monitors the Group's
liquidity reserve, comprising cash and cash equivalents (Note 20)
on the basis of expected cash flows.
The following tables detail the remaining contractual maturity
for non-derivative financial liabilities. The tables have been
drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the Group can be
required to pay.
b) Liquidity risk (continued)
2019 Weighted On demand Later Later than
average or not later than 1 5 years
interest than 1 year year and
rate not later
than 5
years
% SGD'000 SGD'0000 SGD'0000
Trade and other - -
payables 1,050
Lease obligations
(Fixed rates) 6.52 732 576 -
Borrowings,
secured
(Fixed rates) 5.75 450 1,802 2,065
Convertible loans 3 616 - -
Provision for - -
restoration
costs -
-------------- ------------ --------------
2,849 2,378 2,065
_________ ________ _________
2018
Trade and other - -
payables 989
Lease obligations
(Fixed rates) 6.52 59 117 -
Borrowings,
secured
(Floating rates) 3.76 385 2,192 -
Convertible loans 3 467 406 -
Provision for
restoration
costs 24 55 -
-------------- ------------ --------------
1,924 2,770 -
_________ ________ _________
(c) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. The carrying amounts of other receivables and cash and bank
balances represent the Company's maximum exposure to credit risk in
relation to financial assets. No other financial assets carry a
significant exposure to credit risk.
As the Group and Company does not hold any collateral, the
maximum exposure to credit risk for each class of financial
instrument is the carrying amount of that class of financial
instruments presented on the balance sheet.
Cash and bank balances, including fixed deposits are placed with
reputable financial institutions.
(d) Financial instruments by category
The following table sets out the financial instruments as at the
statement of balance sheet date:
2019 2018
SGD'000 SGD'000
Financial assets at fair - -
value through profit
or loss
Loans and receivables
(including cash and cash
balances) 2,201 1,491
-------------- --------------
2,201 1,491
_________ _________
Financial liabilities
at amortised cost 6,173 4,632
_________ _________
Capital risk management policies and objectives
The Group's policy is to maintain adequate capital based on
ensure continuity as a going concern while maximising the return to
shareholder through the optimisation of the debts and equity
balance.
The capital structure of the Company consists of equity,
comprising issued capital and retained earnings as disclosed in the
financial statements. The Group's overall strategy remains
unchanged since 2015.
29. Ultimate controlling party
The Group has no controlling party.
30. Post balance sheet events
The Company has issued a circular to shareholders to dispose of
NTL to Master Phang, and raise GBP1,000,000 by way of a placing of
new shares. These proposals are conditional on receiving
shareholder approval at the General Meeting as described in the
circular.
ENDS
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FR KKFBNQBKDBCK
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