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MobilityOne Limited - Half-year Report

RNS Number : 9101C
MobilityOne Limited
22 October 2020
 

 

22 October 2020

MobilityOne Limited

("MobilityOne", the "Company" or the "Group")

 

Unaudited interim results for the six months ended 30 June 2020

 

MobilityOne (AIM: MBO), the e-commerce infrastructure payment solutions and platform provider, announces its unaudited interim results for the six months ended 30 June 2020.

 

Highlights:

 

·          Revenue increased by 51.9% to £119.9 million (H1 2019: £78.9 million) contributed by strong growth in the Group's mobile phone prepaid airtime reload and bill payment business in Malaysia and an increase in e-payment transactions resulting from the COVID-19 pandemic;

 

·          Profit after tax of £1.07 million (H1 2019: profit after tax of £0.42 million);

 

·          Cash and cash equivalents (including fixed deposits) at 30 June 2020 of £5.92 million (30 June 2019: £4.99 million);

 

·          The Group intends to continue to enhance its product offering and payment systems including online payment gateways and to explore venturing into complementary businesses such as moneylending business in Malaysia; and

 

·          The Group remains confident on the outlook for the remainder of 2020, taking into consideration the improved financial performance in the first six months of 2020 for the Group's existing businesses as well as the prospects for the new initiatives being pursued.

 

 

 

For further information, contact:

 

MobilityOne Limited                                                                                  +6 03 89963600

Dato' Hussian A. Rahman, CEO                                                               www.mobilityone.com.my

har@mobilityone.com.my

 

Allenby Capital Limited

(Nominated Adviser and Broker)                                                               +44 20 3328 5656

Nick Athanas /James Hornigold

 


About the Group:

 

MobilityOne provides e-commerce infrastructure payment solutions and platforms through its proprietary technology solutions. The Group has developed an end-to-end e-commerce solution which connects various service providers across several industries such as banking, telecommunication and transportation through multiple distribution devices including EDC terminals, mobile devices, automated teller machines ("ATM") and internet banking. The Group's technology platform is flexible, scalable and designed to facilitate cash, debit card and credit card transactions from multiple devices while controlling and monitoring the distribution of different products and services.

 

For more information, refer to our website at www.mobilityone.com.my

                                        



Chairman's statement

 

The Group's revenue continued its growth trend in the period under review increasing by 51.9% to £119.9 million (H1 2019: revenue of £78.9 million) in the first six months of 2020.  The higher revenue was mainly contributed by the strong growth of mobile phone prepaid airtime reload and bill payment business activities in Malaysia through the Group's banking channels (i.e. mobile banking and internet banking) with 10 banks and third parties' e-wallet applications. In addition, the COVID-19 pandemic has encouraged more e-payment transactions which has contributed to the revenue growth. As a result of the substantial increase in revenue in the period under review, the Group recorded a profit after tax of £1.07 million in the first six months of 2020 (H1 2019: profit after tax of £0.42 million).

 

The Group's other businesses, including the international remittance services in Malaysia and its e-payment solutions activities in the Philippines and Brunei, remained small and did not make significant contributions to the Group in the period under review.

 

As at 30 June 2020, the Group had cash and cash equivalents (including fixed deposits) of £5.92 million (30 June 2019: cash and cash equivalents of £4.99 million) and the secured loans and borrowings from financial institutions amounted to £3.47 million (30 June 2019: £4.08 million).  The Group has shown strong cash generation from operations in the period under review which has strengthened the Group's financial position as at 30 June 2020.

 

Current trading and outlook

 

For future growth, the Group intends to continue to enhance its product offering and payment systems including online payment gateways which cover the acceptance of credit cards and payment wallets. In addition, the Group intends to explore venturing into complementary businesses such as moneylending business in Malaysia by the first quarter of next year following demand from individuals and small businesses such as the Group's existing and new merchants. 

 

Recently, the Company has announced the following developments:

 

(i)         the Company's wholly-owned subsidiary in the United Kingdom, M-One Tech Limited, is in the midst of preparing the necessary application to the Financial Conduct Authority to seek its approval for the Group to commence businesses such as payment aggregation, electronic payments and e-remittance services in the United Kingdom, areas in which the Group already has the operational experience in Malaysia;   

 

(ii)        the Company's 50%-owned remittance company, OneTransfer Remittance Sdn Bhd ("OTR"), has, since 25 September 2020, been acting as one of MoneyGram Payment Systems, Inc. ("MoneyGram") correspondence remittance companies in Malaysia enabling the customers of OTR to send and receive money via MoneyGram's global platform which connects to more than 200 countries worldwide; and

 

(iii)       the Company's wholly-owned subsidiary, MobilityOne Sdn Bhd, entered into an Alipay service contract with Alipay.com Co., Ltd ("Alipay") in August 2020 to offer Alipay's payment acceptance service to the Group's merchants in Malaysia. The Group intends to, via an e-platform, provide payment processing, authorisation and settlement services to its merchants who provide goods and services directly to Alipay users to enable such merchants to accept payments from Alipay users. The Group intends to deploy the service to the market by the end of this year.

 

The Group remains confident on the outlook for the full year of 2020, taking into consideration the improved financial performance in the first six months of 2020 for the Group's existing businesses as well as the prospects for the new initiatives being pursued.

 

 

 

Abu Bakar bin Mohd Taib

Chairman

 

22 October 2020

 


 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2020

 


Six months


Six months


Financial year


Ended


Ended


Ended


30 June 2020


30 June 2019


31 Dec 2019


Unaudited


Unaudited


Audited

CONTINUING OPERATIONS

£


£


£







Revenue

119,909,734


78,920,618


169,412,664

Cost of sales

(112,615,797)


(73,676,744)


(158,641,222)







GROSS PROFIT

7,293,937


5,243,874


10,771,442







Other operating income

54,024


59,822


192,515

Administration expenses

(5,701,502)


(4,610,647)


(9,253,270)

Distribution costs

-


(384)


-

Other operating expenses

(155,027)


(124,664)


(377,143)

Share of associate result

-


-


22,684







OPERATING PROFIT

1,491,432


568,001


1,356,228







Finance costs

(68,905)


(144,002)


(273,052)







PROFIT BEFORE TAX

1,422,527


423,999


1,083,176







Tax                                                          

(356,510)


(2,813)


(108,674)

PROFIT FROM CONTINUING OPERATIONS

 

1,066,017


 

421,186


 

974,502







Gain on disposal of subsidiary

-


-


1,105,535

 

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

-


-


(208,039)







PROFIT FOR THE PERIOD/YEAR

1,066,017


421,186


1,871,998


 

Attributable to:






Owners of the parent

1,066,435


786,931


1,508,874

Non-controlling interest

(418)


(365,745)


363,124


1,066,017


421,186


1,871,998







EARNINGS PER SHARE






Basic earnings per share (pence)

1.003


0.740


1.419

Diluted earnings per share (pence)

0.912


0.677


1.291







PROFIT FOR THE PERIOD/YEAR

1,066,017


421,186


1,871,998







OTHER COMPREHENSIVE PROFIT/(LOSS)






Foreign currency translation

52,686


11,718


(43,083)







TOTAL COMPREHENSIVE PROFIT FOR THE PERIOD/YEAR

 

1,118,703

 


 

432,904


 

1,828,915

 

Total comprehensive profit attributable to:






Owners of the parent

1,118,970


445,693


1,465,622

Non-controlling interest

(267)


(12,789)


363,293


1,118,703


432,904


1,828,915



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020



At


At


At

 



30 June 2020


30 June 2019


31 Dec 2019

 



Unaudited


Unaudited


Audited

 



£


£


£

 

Assets






 

Non-current assets






 


Intangible assets

192,685


268,501


222,731

 


Property, plant and equipment

701,369


1,855,510


721,079

 


Deferred tax assets

-


193,251


-

 


Right-of-use assets

396,736


-


455,168

 



1,290,790


2,317,262


1,398,978

 

Current assets






 


Inventories

2,328,897


1,317,318


1,564,160

 


Trade receivables

4,129,100


3,040,250


3,769,016

 


Other receivables

551,494


1,399,891


644,173

 


Amount due from an associate

175,363


-


145,095

 


Tax recoverable

131,866


142,591


81,353

 


Fixed deposits

2,912,833


-


2,763,029

 


Assets held for sale

-


63,740


-

 


Cash and cash equivalents

3,011,312


4,994,352


1,660,034

 



13,240,865


10,958,142


10,626,860

 







 

Total Assets

14,531,655


13,275,404


12,025,838

 







 

Shareholders' equity






 







 

Equity attributable to equity holders of the Company






 


Called up share capital

2,657,470


2,657,470


2,657,470

 


Share premium

909,472


909,472


909,472

 


Reverse acquisition reserve

708,951


708,951


708,951

 


Foreign currency translation reserve

891,945


894,229


839,259

 


Accumulated losses

(2,182,717)


(3,968,077)


(3,249,152)

 

Shareholders' equity

2,985,121


1,202,045


1,866,000

 

Non-controlling interest

(11,946)


(1,681,855)


(11,261)

 

Total Equity

2,973,175


(479,810)


1,854,739

 







 

Liabilities






 

Non-current liabilities






 


Loans and borrowings - secured

268,449


269,651


265,585

 


Lease liabilities

45,114


-


151,565

 


Deferred tax liabilities

62,274


472


60,873

 


Amount due to directors

-


1,911,200


-

 


375,837


2,181,323


478,023

 

Current liabilities






 


Trade payables

1,732,505


1,816,034


1,266,150

 


Other payables

5,884,717


5,772,848


4,920,913

 


Amount due to directors

123,991


174,598


107,827

 


Loans and borrowings - secured

3,199,201


3,805,908


3,161,178

 


Lease liabilities

236,547


-


232,228

 


Tax payables

5,682


4,503


4,780

 



11,182,643


11,573,891


9,693,076

 

Total Liabilities

11,558,480


13,755,214


10,171,099

 







 

Total Equity and Liabilities

14,531,655


13,275,404


12,025,838

 


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2020

 



Non-Distributable

Distributable





Foreign








Reverse

Currency



Non-



Share

Share

Acquisition

Translation

Accumulated


Controlling

Total


Capital

Premium

Reserve

Reserve

Losses

Total

Interest

Equity


£

£

£

£

£

£

£

£

As at 1 January 2019

2,657,470

909,472

708,951

882,511

(4,755,008)

403,396

(1,303,321)

(899,925)

Effect of adopting IFRS16

-

-

-

-

(3,018)

(3,018)

-

(3,018)

As at 1 January 2019, restated

2,657,470

909,472

708,951

882,511

(4,758,026)

400,378

(1,303,321)

(902,943)










Foreign currency translation

-

-

-

11,718

-

11,718

(12,789)

(1,071)

Profit/(Loss) for the period

-

-

-

-

786,931

786,931

(365,745)

421,186

As at 30 June 2019

2,657,470

909,472

708,951

894,229

(3,971,095)

1,199,027

(1,681,855)

(482,828)










As at 1 July 2019

2,657,470

909,472

708,951

894,229

(3,971,095)

1,199,027

(1,681,855)

(482,828)

Foreign currency translation

-

-

-

(54,970)

-

(54,970)

12,958

(42,012)

Profit/(Loss) for the period

-

-

-

-

721,943

721,943

728,869

1,450,812


2,657,470

909,472

708,951

839,259

(3,249,152)

1,866,000

(940,028)

925,972










Transaction with owners:









Disposal of a subsidiary company

-

-

-

-

-

928,767

928,767

As at 31 Dec 2019

2,657,470

909,472

708,951

839,259

(3,249,152)

1,866,000

(11,261)

1,854,739










As at 1 January 2020

2,657,470

909,472

708,951

839,259

(3,249,152)

1,866,000

(11,261)

1,854,739

Foreign currency translation

-

-

-

52,686

-

52,686

(267)

52,419

Profit for the period

-

-

-

-

1,066,435

(418)

1,066,017

As at 30 June 2020

2,657,470

909,472

708,951

891,945

(2,182,717)

2,985,121

(11,946)

2,973,175

 

 

 

Share capital is the amount subscribed for shares at nominal value.

 

Share premium represents the excess of the amount subscribed for share capital over the nominal value of the respective shares net of share issue expenses.

 

The reverse acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance with IFRS 3.

 

The Company's assets and liabilities stated in the Statement of Financial Position were translated into Pound Sterling (£) using the closing rate as at the Statement of Financial Position date and the income statements were translated into £ using the average rate for that period. All resulting exchange differences are taken to the foreign currency translation reserve within equity.

 

Retained earnings represent the cumulative earnings of the Group attributable to equity shareholders.

 

Non-controlling interests represent the share of ownership of subsidiary companies outside the Group.

 


CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2020


Six months


Six months


Financial year


Ended


Ended


ended


30 June 2020


30 June 2019


31 Dec 2019


Unaudited


Unaudited


Audited


£


£


£

Cash flows from operating activities






Cash generated from operations

1,634,969


1,117,239


1,428,219

Interest paid

(68,906)


(144,002)


(287,587)

Interest received

45,890


41,725


97,617

     Tax paid

(133,882)


(2,813)


(184,491)

     Tax refund

-


-


196,205

Net cash generated from operating activities

1,478,071


1,012,149


1,249,963







Cash flows (used in)/from investing activities






Purchase of property, plant and equipment

(32,719)


(39,716)


(70,294)

Decrease/(Increase) in asset held for sale

-


55,699


-

Proceeds from disposal of property, plant and equipment

-


-


1,890

Net cash outflow for disposal of subsidiary company

-


-


(80,486)

Addition investment in associate company

-


-


(47,258)

Net cash (used in)/from investing activities

(32,719)


15,983


(196,148)







Cash flows used in financing activities






Net change of banker acceptance

(27,017)


(2,671)


(398,175)

Repayment of lease liabilities

(118,702)


(87,381)


(317,999)

Repayment of term loan

(3,250)


(10,634)


(6,824)

Net cash used in financing activities

(148,969)


(100,686)


(722,998)







Increase in cash and cash equivalents

1,296,383


927,446


330,817







Effect of foreign exchange rate changes

204,699


(41,412)


(16,072)







Cash and cash equivalents at beginning of period/year

4,423,063


4,108,318


4,108,318







Cash and cash equivalents at end of period/year

5,924,145


4,994,352


4,423,063



                                                                                                             

NOTES TO THE INTERIM FINANCIAL STATEMENTS

 

1.

Basis of preparation


 

The Group's interim financial statements for the six months ended 30 June 2020 were authorised for issue by the Board of Directors on 22 October 2020.

 

The interim financial statements are unaudited and have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the International Accounting Standards Board (IASB), as adopted by the European Union, and with those parts of the Companies (Jersey) Law 1991 applicable to companies preparing their financial statements under IFRS. It has been prepared in accordance with IAS 34 "Interim Financial Reporting" and does not include all of the information required for full annual financial statements. The financial statements have been prepared under the historical cost convention.

 

Full details of the accounting policies adopted, which are consistent with those disclosed in the Company's 2019 Annual Report, will be included in the audited financial statements for the year ending 31 December 2020.

 

2.

Basis of consolidation


 

The consolidated statement of comprehensive income and statement of financial position include financial statements of the Company and its subsidiaries made up to 30 June 2020.

 

3.

Nature of financial information

 

The unaudited interim financial information for the six months ended 30 June 2020 does not constitute statutory accounts under the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 31 December 2019 are extracted from the audited statutory financial statements. Full audited financial statements of the Group in respect of that financial year prepared in accordance with IFRS, which we received an unqualified audit opinion, have been delivered to the Registrar of Companies.

 

4.

Functional and presentation currency

 

(i)         Functional and presentation currency

 

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The functional currency of the Group is Ringgit Malaysia (RM). The consolidated financial statements are presented in Pound Sterling (£), which is the Company's presentational currency as this is the currency used in the country in which the entity is listed.

 

Assets and liabilities are translated into Pound Sterling (£) at foreign exchange rates ruling at the Statement of Financial Position date. Results and cash flows are translated into Pound Sterling (£) using average rates of exchange for the period.

 

(ii)        Transactions and balances

 

Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year/period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

 

              The financial information set out below has been translated at the following rates:


 

Exchange rate (RM: £)


At Statement of Financial Position date

Average for year/

Period

Period ended 30 June 2020

5.26

5.36

Period ended 30 June 2019

5.24

5.33

Year ended 31 December 2019

5.38

5.29

 

 



 

5.

Segmental analysis

 


The Group has two operating segments as follows:

 

(a)   Telecommunication services and electronic commerce solutions; and

(b)   Hardware

 

No segmental analysis of assets and capital expenditure are presented as they are mostly unallocated items which comprise corporate assets and liabilities. No geographical segment information is presented as more than 95% of the Group's revenue was generated in Malaysia.

 

 

 

Group

Telecommunication services and electronic commerce solutions

 

 

Hardware

 

 

Elimination

 

 

Total

 

6 months ended 30 June 2020

£

     £

£

£

 

Segment revenue:





 

Sales to external customers

118,573,581

1,492,294

(156,141)

119,909,734

 


118,573,581

1,492,294

(156,141)

119,909,734

 

Profit before tax

1,422,527

-

-

1,422,527

 

Tax

(356,510)

-

-

(356,510)

 

Profit for the period

1,066,017

-

-

1,066,017

 

Non-cash expenses/(income)*






Depreciation of property, plant and equipment

68,166

-

-

68,166

 

Amortisation of intangible assets

34,507

-

-

34,507

 

Amortisation of right-of-use assets

67,601

-

-

67,601

 


170,274

-

-

170,274

 






 

Group





 

6 months ended 30 June 2019





 

Segment revenue:





 

Sales to external customers

77,709,967

     1,375,889

(165,238)

78,920,618

 


77,709,967

1,375,889

(165,238)

78,920,618

 

Profit before tax

423,999

    -

-

423,999

 

Tax

(2,813)

    -

-

(2,813)

 

Profit for the period

421,186

-

-

421,186

 

Non-cash expenses/(income)*






 

Depreciation of property, plant and equipment

      90,422

-

-

90,422

 

Amortisation of intangible assets

34,672

-

-

34,672

 

Amortisation of right-of-use assets

-

-

-

-

 


125,094

  -

-

            125,094

 

 

Group





 

Financial year ended 31 Dec 2019





 

Segment revenue:





 

Sales to external customers

166,796,343

    2,907,507

(291,186)

169,412,664

 


166,796,343

2,907,507

(291,186)

169,412,664

 

Profit before tax

1,083,176

    -

-

1,083,176

 

Tax

(108,674)

    -

-

     (108,674)

 

Profit for the year

974,502

-

-

       974,502

 

Non-cash expenses/(income)*






Depreciation of property, plant and equipment

     151,255

-

-

151,255

 

Amortisation of intangible assets

   69,897

-

-

69,897

 

Amortisation of right-of-use assets

109,067

-

-

109,067

 

Impairment loss on goodwill

4,130

-

-

4,130

 


334,349

  -

-

      334,349

 

*The disclosure for non-cash expenses has not been split according to the different segments as the cost to obtain such information is excessive and provides very little by way of information.

 

6.

Taxation

 


Taxation on the income statement for the financial period comprises current and deferred tax. Current tax is the expected amount of taxes payable in respect of the taxable profit for the financial period and is measured using the tax rates that have been enacted at the Statement of Financial Position date.

 

Deferred tax is recognised on the liability method for all temporary differences between the carrying amount of an asset or liability in the Statement of Financial Position and its tax base at the Statement of Financial Position date. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

            

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted by the Statement of Financial Position date. The carrying amount of a deferred tax asset is reviewed at each Statement of Financial Position date and is reduced to the extent that it becomes probable that sufficient future taxable profit will be available.

 

Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

 

7.

Earnings per share

 


The basic earnings per share is calculated by dividing the profit in the six month period ended 30 June 2020 of £1,066,435 (30 June 2019: profit of £786,931 and year ended 31 December 2019: profit of £1,508,874) attributable to owners of the parent by the number of ordinary shares outstanding at 30 June 2020 of 106,298,780 (30 June 2019: 106,298,780 and 31 December 2019: 106,298,780).

 

The diluted earnings per share for the six month period ended 30 June 2020 is calculated using the number of shares adjusted to assume the conversion of all dilutive potential ordinary shares of 116,898,780 (on 5 December 2014, the Company granted share options of 10,600,000 shares at 2.5p to directors and certain employees of the Group).

                 

 

 



 

8.

Reconciliation of profit before tax to cash generated from operations

 




Six months

Six months

Financial year




ended

ended

ended




30 June 2020

30 June 2019

31 Dec 2019




Unaudited

Unaudited

Audited




£

£

£

Cash flow from operating activities











Profit before tax


1,422,527 

423,999

1,980,672







Adjustments for:






Amortisation of intangible assets


34,507

34,672

69,897


Amortisation of right-of-use assets


67,601


109,067


Impairment of goodwill


-

-

4,130


Depreciation of property, plant and equipment


68,166

90,422

151,255


Gain on disposal of subsidiary company


-

-

(1,105,535)


Gain on disposal of property, plant and

     equipment


-

-

(779)


(Gain)/Loss on foreign exchange - unrealised


(9,831)

-

301


Impairment investment in an associate

     company


-

-

69,941


Interest expenses


68,906

144,002

287,587


Inventories written off


-

-

351


Interest income


(45,890)

(41,725)

(97,617)


Property, plant and equipment written

     off


-

-

7,657


Share of profit in associated


-

-

(22,684)


Waiver of payable


 -

   -

(34,692)


Operating profit before

     working capital changes


1,605,986

651,370

1,419,551


(Increase)/Decrease in inventories


(728,728)

63,788

(367,596)


Increase in receivables


(319,033)

(180,055)

(662,199)


Increase in amount due to Directors &

     Shareholder


16,102

208,794

142,023


Amount due to/by related company


-

-

(130,353)


Increase in payables


 1,060,642

373,342

1,026,793


Cash generated from operations


 1,634,969

1,117,239

1,428,219

 

 

9.

Contingent liabilities

 


In the period under review, corporate guarantees of RM21.1 million (£4.01 million) (H1 2019: RM21.1 million (£4.03 million) were given to a licensed bank by the Company for credit facilities granted to a subsidiary company.

 

 

10.

Significant accounting policies

 


 

The interim consolidated financial statements have been prepared applying the same accounting policies that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2019 except for the adoption of new and amended reporting standards, which are effective for periods commencing on or after 1 January 2020. Various amendments to standards and interpretations of standards are effective for periods commencing on or after 1 January 2020 as detailed in the 2019 Annual Report, none of which have any impact on reported results.

 



 




Amortisation of intangible assets

 

Software is amortised over its estimated useful life. Management estimated the useful life of this asset to be within 10 years. Changes in the expected level of usage and technological development could impact the economic useful life therefore future amortisation could be revised.

 

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash generating units ("CGU") to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimation of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.

 

The research and development costs are amortised on a straight-line basis over the life span of the developed assets. Management estimated the useful life of these assets to be within 5 years. Changes in the technological developments could impact the economic useful life and the residual values of these assets, therefore future amortisation charges could be revised.

 


Impairment of goodwill on consolidation

 

The Group's cash flow projections include estimates of sales. However, if the projected sales do not materialise there is a risk that the value of goodwill would be impaired.

 

The Directors have carried out a detailed impairment review in respect of goodwill. The Group assesses at each reporting date whether there is an indication that an asset may be impaired, by considering cash flows forecasts. The cash flow projections are based on the assumption that the Group can realise projected sales. A prudent approach has been applied with no residual value being factored. At the period end, based on these assumptions there was no indication of impairment of the value of goodwill or of development costs.

 


Research and development costs

 

All research costs are recognised in the income statement as incurred.

 

Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditures which do not meet these criteria are expensed when incurred.

 

Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised through other operating expenses in the income statement using the straight-line basis over the commercial lives of the underlying products not exceeding 5 years. Impairment is assessed whenever there is an indication of impairment and the amortisation period and method are also reviewed at least at each Statement of Financial Position date.



11.

Dividends


 

The Company has not proposed or declared an interim dividend.

 

12.

Interim report






This interim financial statement will, in accordance with Rule 26 of the AIM Rules for Companies, be available shortly on the Company's website at www.mobilityone.com.my.


 

-Ends-

 

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