BION.L Regulatory News (BION)

12 October 2022

BiON plc

("BiON" or the "Company" or, together with BiON Ventures Sdn Bhd, the "Group") 

Final Results and Publication of Annual Report

Restoration of Trading

BiON (AIM: BION) announces its final results for the sixteen-month period ended 30 April 2022.

Financial summary*

· Revenue was RM1.6m (2020: RM103.7m)

· Gross loss was RM6.2m (2020: profit of RM6.3m)

· Operating loss was RM81.9m (2020: RM119.5m)

· Loss before tax was RM86.0m (2020: RM120.3m)

· Cash and cash equivalents as at 30 April 2022 were RM6k (31 December 2020: RM2.3m)

· On 19 April 2022, the operating sub-Group, BiON Ventures Sdn Bhd and its subsidiaries, were sold for a nominal sum, being £1 and accordingly the results in the consolidated statement of profit and loss and other comprehensive income are from discontinued activities

· On 20 April 2022, the Company completed a placing organised by its broker, Optiva Securities, raising £1m (RM5.5m) before expenses. As at 30 April 2022, the placing proceeds were held by the Company's custodian and accordingly are presented within trade and other receivables

* Due to the Company changing its financial year end, as announced on 5 October 2022, the 2022 results cover 16 months ended 30 April 2022 while the comparative 2020 results cover 12 months ended 31 December 2020

Operational summary

· On 19 April 2022, the Company disposed of its operating entity, BiON Ventures Sdn Bhd ("BVSB"), for a nominal sum, being £1

· Accordingly, the Company became an AIM Rule 15 cash shell

· The Company is now focused on making an acquisition that constitutes a reverse takeover under AIM Rule 14

Publication of Annual Report and Accounts

The Company's annual report and accounts for the sixteen months ended 30 April 2022 has been published today and is available on the BiON website in the Investor Relations section under 'Reports and Accounts': www.bionplc.com

Restoration of trading

With effect from 7.30am on 1 July 2022, trading in the Company's ordinary shares was suspended due to the Company being unable to complete and publish the annual report within its financial reporting deadline of 30 June 2022. Given the annual report is now published, trading in the Company's ordinary shares will resume as from 7.30am today, 12 October 2022.

Update on the Company' AIM Rule 15 cash shell status

Although the Company has been actively seeking a suitable reverse candidate and assessing various business opportunities, it is highly unlikely it will be able to complete a reverse takeover within the six-month period from becoming an AIM Rule 15 cash shell. As a result, trading on AIM in the Company's ordinary shares is expected to be suspended at 7.30am on 20 October 2022. From the suspension date, BiON will have six months to complete an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 otherwise admission to trading on AIM will be cancelled.

This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310).

Enquiries:

Chairman's Statement

The period under review, as with that preceding, was challenging for BiON. The COVID-19 pandemic persisted, and the corresponding preventative measures in Malaysia were in place, longer than anticipated. This severely impeded the Group's short and medium-term activity levels. In particular, the restriction of movement in Malaysia significantly impacted its ability to continue with its operations and complete projects. As a result, the prospects for a sustained recovery in activity were limited.

With regards to the Group's operations, the four existing biogas power plants were producing only 1MW out of the 7MW capacity to the electricity grid and the new 3MW plant in Indonesia remained under construction. Global macroeconomic conditions caused by the prolonged pandemic restricted the Group's access to financial support. To upgrade and repair the existing plants would have required approximately RM12m and completion of the Indonesian plant another RM10m. BiON was unable to attract this level of investment.

The Group's indebtedness of some RM80m had hitherto been guaranteed by the major shareholder, Serba Dinamik. However, they were no longer in a position to do so. The general financial difficulties had not only impacted on BiON's ability to conduct its own business but also affected its customers. In particular, the historic debtors remained unpaid as did a majority of the debtors for the more recent contract work the Group had undertaken, in aggregate approximately RM84.8m.

BiON had engaged with various parties with a view to injecting new resources into the existing business. However, this was not achieved. Given the liabilities within the operating business, the unpaid debtors and the operational issues and need for future financing to re-establish its business, the Board concluded that the best that could be achieved would be to sell its operating business, BiON Ventures Sdn Bhd, which occurred on 19 April 2022.

In accordance with AIM Rule 15, the disposal constituted a fundamental change of business of the Group. BiON plc ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. Accordingly, the results in the consolidated statement of profit or loss and other comprehensive income are from discontinued operations and continue to be presented in Ringgit Malaysia ("RM") as trading for the period was predominantly in RM. The functional currency of BiON will be considered in the next reporting period.

BiON plc therefore become an AIM Rule 15 cash shell and, as such, is required to make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 on or before the date falling six months from completion of the disposal or be re-admitted to trading on AIM as an investing company under the AIM Rules. 

In conjunction with the disposal and BiON becoming an AIM Rule 15 cash shell, the Company's broker, Optiva Securities, raised £1m (RM5.5m) before expenses for the Company through a placing of 333,333,333 ordinary shares at a placing price of 0.3 pence per ordinary share. As at 30 April 2022, the placing proceeds were held on behalf of the Company by a custodian and as such are shown within trade and other receivables rather than cash and cash equivalents.

With effect from 7.30am on 1 July 2022, trading in the Company's ordinary shares was suspended due to the Company being unable to complete and publish the annual report within its financial reporting deadline of 30 June 2022. To reflect BiON becoming a Rule 15 cash shell, the Company extended its accounting reference date from 31 December 2021 to 30 April 2022 and on publication of this annual report, it is anticipated that trading in the Company's ordinary shares will resume as from 7.30am on 12 October 2022.

Although the Company has been actively seeking a suitable reverse candidate and assessing various business opportunities, it is highly unlikely it will be able to complete a reverse takeover within the six-month period from becoming an AIM Rule 15 cash shell. As a result, trading on AIM in the Company's ordinary shares is expected to be suspended at 7.30am on 20 October 2022. From the suspension date, BiON will have six months to complete an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 otherwise admission to trading on AIM will be cancelled.

The Directors believe there is an opportunity to generate value, predominantly through capital appreciation, by providing a route to market for a new business, which the Board hopes will be to the advantage and benefit of the existing shareholder base.

I would like to take this opportunity to thank our shareholders for their patience and hope to report progress in due course.

Aditya Chathli

Interim Non-Executive Chairman

Strategic Report

Overview

The Group faced a difficult year in 2021 as the disruption to business caused by restrictions on the movement of people and supplies due to the COVID-19 pandemic continued. In particular, in Malaysia the restrictions were far more severe than those experienced in the UK, for example. These challenges were compounded by the Group's worsening financial position, without access to external funding, and operating issues such as a severe fire at the palm oil mill adjoining the Group's Malpom power plant. Accordingly, the Group was unable to progress its biogas powerplants as planned or conduct the required upgrade work. In addition, due to the difficulties experienced in collecting revenues from the Engineering, Procurement, Construction and Commissioning ("EPCC") projects that it provided in the prior year, which impeded its ability to pay its suppliers thereby impacting its debtor position, management decided to pause its pursuit of further EPCC contracts.

As a result of the delay in the publication of the audited accounts for the year ended 31 December 2020 ("the Accounts") and the unaudited interim results for the period ended 30 June 2021 (the "Interims") while the Company sought a solution to provide a stable financial operating basis that would support its listing and therefore enable the Accounts and the Interims to be published, the Company's ordinary shares were suspended from trading on AIM on 1 October 2021.

The Group's indebtedness had hitherto been guaranteed by the major shareholder, Serba Dinamik. However, they were no longer in a position to do so, which required the Company to find a solution to enable the long-term refinancing of the Group's debt.

Throughout the period from suspension, the Company engaged with various parties with a view to injecting new resources into the existing business and was close to securing an outcome in January 2022. However, this was not achieved, and the Board concluded that, given the liabilities within the operating business, the unpaid debtors and the operational issues and need for future financing to re-establish its business, it would be in the best interests of shareholders to sell the Company's operating business (BVSB, which holds all of the Group's trading subsidiaries) for a nominal sum but without any future recourse or liability to BiON plc. On this basis, the Company's broker advised that it would be able to facilitate the conditional raising of finance to cover the BiON plc creditors and provide future working capital whilst the Company seeks a new business that is capable of sustaining the ongoing listing. The sale of the existing business rather than placing it into an insolvency process, was to better preserve the position of the other stakeholders in the business for whom the Board bear responsibility.

In accordance with AIM Rule 15, the disposal of BVSB constituted a fundamental change of business of the Company and therefore required the passing of an ordinary resolution at a general meeting of shareholders. Accordingly, as announced on 31 March 2022, the Board sought approval of shareholders at a general meeting (the "General Meeting") on 19 April 2022. Approval for the disposal was granted at the General Meeting and the disposal of BVSB was completed on 19 April 2022 following which, the Company ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. The Company therefore became an AIM Rule 15 cash shell as described below.

In conjunction with the disposal and BiON becoming an AIM Rule 15 cash shell, the Company's broker, Optiva Securities, raised £1m (RM5.5m) before expenses for the Company through a placing of 333,333,333 ordinary shares at a placing price of 0.3 pence per ordinary share. As at 30 April 2022, the placing proceeds were held on behalf of the Company by a custodian and as such are shown within trade and other receivables rather than cash and cash equivalents.

Following the completion of the disposal, the Company was able to finalise and publish the accounts to 31 December 2020 and the interims to 30 June 2021 and trading in its ordinary shares on AIM was restored on 20 April 2022. However, as the Company was unable to publish its accounts for the year ended 31 December 2021 by the regulatory deadline of 30 June 2022, the Company's ordinary shares were suspended from trading on AIM on 1 July 2022. The Board also decided to change the Company's accounting reference date from 31 December to 30 April to reflect BiON becoming a new entity. As a result, this annual report and accounts covers the sixteen-month period to 30 April 2022.

Outlook and AIM Rule 15

On 19 April 2022, the Company disposed of its operating business (BVSB) and became an AIM Rule 15 cash shell. The Company's strategy is to acquire a business that is seeking an AIM quoted platform via a reverse takeover. The Directors intend to consider opportunities in a number of sectors and will focus on an acquisition that can create value for shareholders in the form of capital growth and/or dividends.

As an AIM Rule 15 cash shell, the Company is required to make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 (including seeking re-admission as an investing company (as defined under the AIM Rules)) on or before the date falling six months from completion of the disposal of BVSB or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million), failing which the Company's ordinary shares would then be suspended from trading on AIM pursuant to AIM Rule 40. As noted above, although the Company has been actively seeking a suitable reverse candidate and assessing various business opportunities, it is highly unlikely it will be able to complete a reverse takeover within the six-month period from becoming an AIM Rule 15 cash shell. As a result, trading on AIM in the Company's ordinary shares is expected to be suspended at 7.30am on 20 October 2022. From the suspension date, BiON will have six months to complete an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 otherwise admission to trading on AIM will be cancelled.

Operational Review

EPCC - discontinued activity following BVSB disposal

The Group did not undertake any EPCC work during the sixteen months to 30 April 2022. The Group experienced difficulties in collecting revenue for the EPCC projects that it provided in 2022, which impeded its ability to pay its suppliers thereby impacting its debtor position. Accordingly, management decided to pause its pursuit of further EPCC contracts in order to limit the Group's risk exposure at a time when the market was suffering from the prolonged impact of COVID-19 as well as when the Group was unable to access funding to support new projects.

Power Sales - discontinued activity following BVSB disposal

Biogas Power Plants

As a result of the Malaysian government's stringent COVID-19 restrictions combined with political changes in Malaysia that impeded the activities of the regulatory bodies while adjusting to a new regime, progress was delayed across the Group's biogas power plants. The visits from testers and regulators that are required to enable commencement of power sales were cancelled or postponed while some equipment parts and specialist engineers faced delays in arriving from outside Malaysia. These problems were compounded by the Group's financial constraints, which prevented investment in requisite upgrading works. 

A summary of the developments with the Group's biogas power plants during the period is as follows:

· Seberang Perak (2MW) received its Initial Operation Date ("IOD") date in January 2021, which enabled it to commence exporting power to Tenaga National Berhad ("TNB") electricity grid at a reduced Feed-in-Tariff ("FiT") rate. Seberang Perak was awarded the Commercial Operation Date ("COD") in May 2021, enabling it to export electricity to TNB at the full FiT rate, and received the letter of approval from Sustainable Energy Development Authority ("SEDA") in September 2021, which enabled the Group to recognise the revenue generated from power sales (including receiving payment for revenue that had been accrued to date). Accordingly, from May 2021, Seberang Perak was exporting 1MW to TNB - with the reduction compared with the plant's 2MW capacity being due to an insufficient supply of Palm Oil Mill Effluent ("POME") feedstock.

· Malpom (2MW) power sales were temporarily ceased early in the year due to engine downtime and scheduled maintenance while upgrading works continued. From July 2021, the plant was unable to generate power as a fire incident at the neighbouring palm oil mill that supplies the POME feedstock to Malpom forced the plant to shut down. While the mill resumed operations in March 2022, the Group was unable to recommence power production as it did not have the financing available that is required for the process to re-start the plant after a prolonged period of downtime.

· Nasaruddin (1MW) continued to await the granting of the IOD, which was subject to a visit to the site from TNB and, accordingly, was impacted by the government restrictions on travel. This was also further delayed by a shutdown at the neighbouring mill for maintenance work from December 2021 to mid-January 2022.

· Kahang (2MW) recommenced operations in January 2021, but due to the prolonged period of shutdown for upgrading works, it was required to undergo a 'Re-IOD' process to be able to export power to TNB. This did not occur as a result of the government restrictions on travel preventing the regulatory visit and then a visit scheduled for December 2021 needing to be postponed due to an outbreak of COVID-19 among employees at the site. An initial visit occurred in March 2022 and BVSB was awaiting a subsequent visit to complete the re-IOD process as at period end.

In addition, in July 2021, the Group entered into an agreement regarding a 3MW waste-to-energy biogas power plant in Aceh, Tamiang, Indonesia whereby it would provide EPCC services and then receive a shareholding in the plant upon completion. However, due to the financial constraints of the Group and the other parties involved, progress was impeded, with RM10m being required to complete the project. The Group nor the other parties had access to this funding.

Financial Review

Revenue

Revenue for the sixteen months ended 30 April 2022 was RM1.6m (2020: RM103.7m), which was generated by the sale of electricity from the Group's biogas power plant portfolio.

Gross profit

The gross loss for sixteen months ended 30 April 2022 was RM6.2m, (2020: gross profit of RM6.3m).

Operating loss

There was an operating loss for the sixteen months ended 30 April 2022 of RM81.9m (2020: RM119.5m loss). The loss before tax was RM86.0m (2020: RM120.3m loss).

Earnings/(loss) per share

On a consolidated level, the Group's basic loss per share for the sixteen months ended 30 April 2022 was RM0.20 (2020: RM0.29 loss per share) based on the weighted number of ordinary shares.

Receivables

Trade and other receivables amounted to RM5.5m as of 30 April 2022 (31 December 2020: RM17.2m) and principally comprised the placing funds.

Cash flow and financing

Cash and cash equivalents at 30 April 2022 were RM6k (31 December 2020: RM2.3m). This follows the Company raising, during the period, £1m (approx. RM5.5m) before expenses through a placing of new ordinary shares. As at 30 April 2022, these funds were held on behalf of BiON by a custodian and as such are shown within trade and other receivables rather than cash and cash equivalents.

Key Performance Indicators

Following the disposal of its operating business (BVSB), the Company no longer manages its operational performance using Key Performance Indicators ("KPIs"). As a result, performance against KPIs is not presented within these financial statements. The Company's immediate future performance criteria relate to a successful future acquisition/reverse takeover.

Auditor's Report

The audit report on the Company's accounts was one of a disclaimer of opinion on the basis that the Directors were unable to provide sufficient appropriate audit evidence for the full sixteen-month period for which the auditor was engaged to audit as they no longer have access, following the disposal of BVSB, to the systems containing the financial data and supporting information necessary for the audit to be carried out. Consequently, the auditor was unable to determine whether any adjustments might have been found necessary in the elements making up the consolidated financial statements. In addition, the auditor was unable to rely on the work of the previous auditors for the opening balances in the consolidated financial statements as a disclaimer of opinion was given in the audit report for the financial statements for the year ended 31 December 2020.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The notes to the financial statements form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

The notes to the financial statements form an integral part of these financial statements.

*All amounts are derived from discontinued operations.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

The notes to the financial statements form an integral part of these financial statements.

* The issue of shares is recognised net of fundraising cost totaling to RM Nil.

** The capital contribution is recognised for the waiver of interest on loan from related party whom being a significant shareholder in BiON plc.

CONSOLIDATED STATEMENT OF CASH FLOWS

The notes to the financial statements form an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 APRIL 2022

1. GENERAL INFORMATION

BiON plc ("the Company") was incorporated as a public limited company in Jersey with registration number 119200 on 7 August 2015. The registered office of the Company is 12 Castle Street, St. Helier, Jersey JE2 3RT, Channel Islands.

Pursuant to a special resolution ratified at the Extraordinary General Meeting of the Company held on 30 April 2020, the Company changed its name to BiON plc. Accordingly the change of name was taken effective from 1 May 2020, upon receiving the certificate from the Registrar of Companies in Jersey.

The Company is listed on the AIM market of the London Stock Exchange. For the majority of the period under review, the Company's nature of operations was to act as the holding company for a group of subsidiaries that are involved in research and development, provision of professional engineering consultancy and process design services in the areas of industrial biotechnology, pollution control and renewable energy; and engineering, procurement and construction of various waste treatment plants/systems; development, commercialisation, operation and maintenance of renewable energy plants.

Since the Company disposed of the Group's operating entity, BiON Ventures Sdn Bhd (which held the Group's trading subsidiaries) on 19 April 2022, the Company became an AIM Rule 15 cash shell focused on acquiring a business that is seeking an AIM quoted platform via a reverse takeover.

The consolidated financial statements include the financial statements of the Company and its controlled subsidiaries (the "Group") up until the date of disposal as mentioned above, including:

Note 1 - registered address: B-1-15, Block B, 8 Avenue, Jalan Sungai Jernih 8/1, Section 8, 46050 Petaling Jaya, Selangor.

Note 2 - registered address: 3-2, 3rd. Mile Square, No. 151, Jalan Klang Lama, Batu 3 ½, 58100 Kuala Lumpur.

*Disposed of on 19 April 2022 by BiON plc and ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. Therefore, all subsidiaries are no longer owned or controlled by the Company after this date, and the period end balance sheet as at 30 April 2022 is for BiON plc only.

2. BASIS OF PREPARATION

The financial statements have been prepared in accordance with UK adopted International Accounting Standards, including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC").

As permitted by Companies (Jersey) Law 1991 only the consolidated financial statements are presented.

The financial statements are presented in Ringgit Malaysia ("RM") unless otherwise stated and is the currency of the primary economic environment in which the Group operates. All values are rounded to the nearest thousand ringgits ("RM'000") except where otherwise indicated.

Going Concern

At the reporting date, the Company held cash and cash equivalents of RM6k (2020: RM2.3m), had current liabilities of RM3.1m (2020: RM112.8m) and was in a net asset position of RM1.6m (2020: net liability RM61.7m). Shortly prior to the reporting date, on 19 April 2022, the Company disposed of its operating entity, BiON Ventures Sdn Bhd, and became an AIM Rule 15 cash shell company for the purpose of acquiring a business that is seeking an AIM quoted platform via a reverse takeover. Subsequent to the reporting date, the Company received, from its custodian, the proceeds of the £1m (RM5.5m) fundraising (before costs) that it had completed on 20 April 2022 via the placing of new ordinary shares. Following the settlement of outstanding creditors, as at 4 October 2022, the Company held cash and cash equivalents of RM2.61m. Having disposed of its operating business, the Company has minimal ongoing costs, which reflect the costs of administrating its listing on the London Stock Exchange's AIM market.

Based on the current cash availability and predicted expenditure levels, the Directors believe the Company's resources are sufficient to allow the Company to meet its obligations as they fall due for the foreseeable future, and as a minimum for a period of at least 12 months from the date of approval of these financial statements. Consequently, the Directors will continue to prepare the financial statements on a going concern basis.

Details of the Disposal

The Company disposed of its main operational subsidiary, BVSB, which includes its trading group. Under the terms of the Disposal Agreement, Minnos Ventures Inc, acquired the entire issued capital of BVSB for a total consideration of £1.00.

The disposal represented a fundamental change of business for the Company.

3. basis of COnSOLIDATION

The consolidated financial statements comprise the financial information of the Company and its subsidiaries made up to the end of the reporting period. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The consolidated financial statements present the results of the Company and its subsidiaries and joint arrangements as if they formed a single entity. Inter-company transactions and balances between Group companies are therefore eliminated in full. The financial information of subsidiaries is included in the Group's financial statements from the date that control commences until the date that control ceases.

On 6 May 2016, the Company entered into agreements with all of the shareholders of BiON Ventures Sdn Bhd ("Green & Smart Ventures Sdn Bhd") for a share for share exchange regarding the ordinary shares in BiON plc and ordinary shares in BiON Ventures. As a result of this transaction, the ultimate shareholders in the Company received shares in BiON plc in direct proportion to their original shareholdings in BiON Ventures.

The acquisition of BiON Ventures by the Company was that of a re-organisation of entities which were under common control. As such, that combination also falls outside the scope of IFRS 3 'Business Combinations' (Revised 2008). The Directors have, therefore, decided that it is appropriate to reflect the combination using the merger basis of accounting in order to give a true and fair view. No fair value adjustments were made as a result of that combination.

BiON Ventures Sdn Bhd was disposed of on 19 April 2022 by BiON plc meaning the Company ceased to own, control or conduct all or substantially all, of its existing trading business, activities or assets. Therefore, all subsidiaries are no longer owned or controlled by the Company after this date, and the period end balance sheet as at 30 April 2022 is for BiON plc only.

CHANGES IN ACCOUNTING POLICIES

Standards and interpretations adopted during the year

There are several standards, amendments to standards, and interpretations which have been issued by IASB that became effective during the accounting period. The most significant of these are as follows:

o  Amendments to IAS 37 Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) (effective for periods commencing on or after 1 January 2022);

o  Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) (effective for periods commencing on or after 1 January 2022);

o  Annual Improvements to IFRS Standards 2018-2020 (Amendments IFRS 1, IFRS 9, IFRS 16 and IAS 41) (effective for periods commencing on or after 1 January 2022); and

o  References to Conceptual Framework (Amendments to IFRS 3) (effective for periods commencing on or after 1 January 2022).

The standards have no material impact to the Group's financial statements.

Standards, amendments, and interpretations that are not yet effective:

In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to determine whether liabilities are classified as current or non-current. These amendments clarify that current or non-current classification is based on whether an entity has a right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. The amendments also clarify that 'settlement' includes the transfer of cash, goods, services, or equity instruments unless the obligation to transfer equity instruments arises from a conversion feature classified as an equity instrument separately from the liability component of a compound financial instrument. The amendments were originally effective for annual reporting periods beginning on or after 1 January 2022. However, in May 2020, the effective date was deferred to annual reporting periods beginning on or after 1 January 2023.

The Company is currently assessing the impact of these new amendments.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the Group financial statements in conformity with Financial Report Standard requires the use of judgements, estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure made at the date of the financial statements including the amounts of revenue and expenses during the financial year. Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Although these estimates are based on directors and management's best knowledge of current events and actions, actual result may differ from those estimates.

The estimates and judgements that affect the application of the Group accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, revenue and expenses are discussed below:

a) Impairment of assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

b) Impairment of trade and other receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivable financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

c) Construction contracts

As described in note 4.14, the Group's accounting approach where the outcome of a construction contract can be reliably estimated, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs.

Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. Contract costs are recognised as expenses in the year in which they are incurred.

The carrying amounts of the Group's construction contracts due from/(to) customers at the end of the reporting year are disclosed in note 8 including any allowance for impairment if there is a material uncertainty to fully recover costs of each contract.

d) Going Concern

The financial statements are prepared on a basis other than the going concern basis. As stated in note 2, at the reporting date, the Company held cash and cash equivalents of RM6k (2020: RM2.3m), had current liabilities of RM3.1m (2020: RM112.8m) and was in a net asset position of RM1.6m (2020: net liability RM61.7m). Shortly prior to the reporting date, on 19 April 2022, the Company disposed of its operating entity, BiON Ventures Sdn Bhd, and became an AIM Rule 15 cash shell company for the purpose of acquiring a business that is seeking an AIM quoted platform via a reverse takeover. Subsequent to the reporting date, the Company received, from its custodian, the proceeds of the £1m (RM5.5m) fundraising (before costs) that it had completed on 20 April 2022 via the placing of new ordinary shares. Following the settlement of outstanding creditors, as at 4 October 2022, the Company held cash and cash equivalents of RM2.61m. Having disposed of its operating business, the Company has minimal ongoing costs, which reflect the costs of administrating its listing on the London Stock Exchange's AIM market.

Based on the current cash availability and predicted expenditure levels, the Directors believe the Company's resources are sufficient to allow the Company to meet its obligations as they fall due for the foreseeable future, and as a minimum for a period of at least 12 months from the date of approval of these financial statements. Consequently, the Directors will continue to prepare the financial statements on a going concern basis.

e) Revenue Recognition

Revenue is recognised when the amount of revenue and cost incurred or to be incurred can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the Group at the point of transaction. Note 4.11 describes the Group's accounting approach when recognising revenue.

The Directors monitored the outstanding receivable balances arising from recognising the revenue. The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience or in light of new information and the current economic environment.

4.2 FUNCTIONAL AND FOREIGN CURRENCIES

a) Transactions and balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

b) Foreign operations

Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end of the reporting period. Revenues and expenses of foreign operations are translated at exchange rates approximating those ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity under the foreign exchange translation reserve. On the disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that particular foreign operation is reclassified from equity to profit or loss.

4.3 FINANCIAL INSTRUMENTS

4.3.1 Financial Assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss ("FPVL"), held-to-maturity investments, loans and receivables financial assets, or available-for sale financial assets, as appropriate. The Group currently holds financial assets as:

Loans and receivables

These assets are non-derivative financial assets that have fixed or determinable payments that are not quoted in an active market. They arise through the provision of services to customers (trade receivables). They are initially recognised at fair value plus transaction costs that are directly attributable to the acquisition or issue and subsequently carried at amortised cost using the effective interest method less provision for impairment. The effect of discounting on these financial instruments is not considered to be material.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all the amounts due under the term's receivable. The amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the income statement. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

4.3.2 Financial Liabilities

All financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

4.3.3 Equity Instruments

Instruments classified as equity are measured at cost and are not remeasured subsequently.

Ordinary shares

Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds.

4.3.4 Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

4.4 PROPERTY, PLANT AND EQUIPMENT

a) Owned Assets

Items of property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses, if any. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to the location and condition for its intended use.

b) Assets under construction

Assets under construction are items of property, plant and equipment that are yet to be completed or ready for use. These are held at historical cost less any accumulated impairment losses. Historical cost includes expenditure 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.

Depreciation is not provided until such a time that the asset is capable of operating in the manner intended by management. Upon completion of the asset, the assets will be carried at fair value determined annually by the directors.

c) Depreciation

Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straight-line basis to write off the depreciable amount of the assets net of the estimated residual values over their estimated useful lives. Assets under construction are depreciated from the date they are ready for use. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are: -

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment.

d) Subsequent expenditure

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Group is obligated to incur when the asset is acquired, if applicable.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from de-recognition of the asset is recognised in profit or loss.

4.5 INTANGIBLE ASSETS

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and any accumulated impairment losses (Note 5). The useful lives of intangible assets are assessed to be either finite or indefinite.

Intangible assets with a finite life are amortised on straight-line basis over the estimated economic useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each financial year-end.

The amortisation expense on intangible assets with finite useful lives is recognised in the profit or loss in the expense category consistent with the function of the intangible asset.

a) Trademark

Trademarks are stated at cost less accumulated amortisation and any impairment losses (Note 5). Trademarks are tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at cash generating unit level. Trademarks are amortised over a period of ten (10) years.

4.6 IMPAIRMENT

a) Impairment of Financial Assets

The recognition of an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit and loss ("FVPL"). ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is recognised for credit losses expected over the remaining life of the exposure, irrespective of timing of the default (a lifetime ECL).

For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment which could affect debtors' ability to pay.

The Group considers a financial asset in default when contractual payments are past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

b) Impairment of Non-Financial Assets

The carrying values of assets, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value‑in‑use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in profit or loss immediately.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined net of amortisation and depreciation, had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.

4.7 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less.

4.8 LEASES

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities representing the obligations to make lease payments and right-of-use assets representing the right to use the underlying leased assets.

a) 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. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. The accounting policy for impairment is disclosed in note 4.6 (b).

b) 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 and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. 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 lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

c) Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases (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 that are considered to be low value. 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.

4.9 TAXES

Income tax for the period comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting period and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise 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 are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period/year and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year/period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting year/period.

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 the deferred income taxes relate to the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity. Deferred tax arising from a business combination is included in the resulting goodwill or excess of the acquirer's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the business combination costs.

4.10 EMPLOYEE BENEFITS

a) Short-term benefits 

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss and included in the development costs, where appropriate, in the period/year in which the associated services are rendered by employees of the Group.

b) Defined contribution plans

The Group's contribution to defined contribution plans are recognised in profit or loss in the period/year to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

4.11 REVENUE AND OTHER INCOME

Revenue is recognised at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to a customer net of sales taxes and discounts. A performance obligation may be satisfied at a point in time or over time. The amount of revenue recognised is the amount allocated to the satisfied performance obligation.

(i) Revenue from construction contracts

The Group contracts with its customers for construction services. Revenue from construction contracts is recognised over time using the input method, which is based on the actual cost incurred to date on the construction project as compared to the total budgeted cost for the respective construction project.

(ii) Government grants

Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis over the period necessary to match them with the related costs which they are intended to compensate for.

Grants that compensate the Group for the costs of assets are recognised in profit or loss on a systematic basis over the expected life of the related asset.

(iii) Revenue from Sale of Electricity

Revenue from the sale of electricity generated from the renewable energy plant is recognised as and when the electricity is delivered to the off-taker, based on the invoiced value of sale of electricity, computed at a predetermined rate. Accrued unbilled revenues are reversed in the following month when actual billing occurs.

4.12 BORROWING COSTS

Borrowing costs, directly attributable to the acquisition, construction or production of a qualifying asset, are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

All other borrowing costs are recognised in the profit or loss as expenses in the period in which they are incurred. No interest costs were capitalised during the period.

Investment income earned on the temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

4.13 CONTINGENT LIABILITIES

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required, or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

4.14 CONSTRUCTION CONTRACTS

(i) Contract revenue

Revenue from construction contracts is recognised as described in note 4.11 (i).

(ii) Amount due from / (to) customer for contract work

Amount due from / (to) customer for contract work is the net amount of cost incurred for construction and contract-in-progress plus profit attributable to contract-in-progress less foreseeable losses, if any, and progress billings. Contract cost incurred to date include costs directly related to the contract or attributable to contract activities in general and costs specifically chargeable to the customer under the terms of the contract.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

5. INTANGIBLE ASSETS

(a) Trademark

The trademarks "GRASS", "POME-MAS" and "GREENPAK" are registered in Malaysia in respect of patented wastewater and bio-waste treatment technologies. These trademarks have been granted for an indefinite period, however, they were being amortised over ten (10) years in line with Management's best estimate of their expected useful life.

The remaining amortisation period of trademarks is between one (1) to two (2) years, the remaining amortisation period of patents is between two (2) to twelve (12) years.

(b) Impairment Test

Balance at period end is RMNil therefore no impairment test required. All benefits of and rights to the trademarks and patents held were relinquished by the Company upon disposal of the equity interest in BVSB on 19 April 2022.

6. PROPERTY, PLANT AND EQUIPMENT

All benefits of and rights to property, plant and equipment were relinquished by the Company upon disposal of the equity interest in BVSB on 19 April 2022.

a) Assets under construction represents biogas power plant under construction. It is subject to depreciation only when completed and ready for use. No interest was capitalised during the financial year, but total interest capitalised to date included in the industrial building amounts to RM0.54m (2020: RM0.54m).

b) Industrial building with carrying amount of approximately RMNil (2020: RM35.06m) and Assets under construction with carrying amount of approximately RMNil (2020: RM53.42m) are pledged against the banking facility (Note 14).

c) Acquisition of property, plant and equipment:

d) During the year the written off assets were:

Disposal of assets under constructions related to assets that were no longer in progress with no further construction.

7. TRADE AND OTHER RECEIVABLES

a) The Group's normal credit terms range from 90 to 120 days (2020: 90 to 120 days). Other credit terms are assessed and varied on a case-by-case basis.

b) Trade and other receivables that are individually determined to be impaired relate to customers that have defaulted on payments or the amount due from third parties considered irrecoverable.

c) Included in the Trade Receivables is an amount of RM Nil (2020: RM10.51m from CGE, which was fully repaid in April 2021).

d) The amounts in Trade Receivables are analysed as follows:

e) Other receivables and deposits relate primarily to balances, held at period end on behalf of BiON by a custodian, that were raised during the period from the placing of new ordinary shares.

8. DUE FROM CUSTOMERS FOR CONSTRUCTION CONTRACTS

9. AMOUNTS DUE FROM/(TO) RELATED PARTIES

* Relationship

Up until the date of disposal of 19 April 2022:

a) The Group via its subsidiary, BiON Sdn Bhd, held 15% shares in Megagreen Energy Sdn Bhd and Datuk Syed Nazim Syed Faisal was appointed as Director effective 3 July 2020.

b) Mr. Saravanan, who was a director in BiON plc for the year to 31 December 2019 and is a significant shareholder in BiON Plc, is also one of the appointed Directors in Makmur Hydro Sdn Bhd. He resigned as a Director of BiON plc on 31 January 2020.

c) K2M Ventures Sdn Bhd, holds 32.52% of the share's capital in BiON plc.

Amounts due from related parties principally comprise trade debts due from Megagreen Energy Sdn Bhd ("MGE"). The amounts due are collectible in cash, have arisen in the ordinary course of the business of the Group and are subject to credit terms of 30 days. The amounts owing, before impairment, are analysed as follows:

Other than trade debts, the amount due from MGE also arose from non-trade activities. These amounts due are collectible in cash, have arisen in the ordinary course of the business of the Group and are subject to credit terms of 30 days. The amounts owing, before impairment, are analysed as follows:

During 2020, MGE has made repayment totaling to RM18.99m, partly by offsetting some of the balance against the acquisition of two (2) BPPs amounting to RM13.99m and the balance via cash. 

The outstanding amount had been fully written-down as the Company did not expect any recovery of this debt.

10. CASH AND CASH EQUIVALENTS

Cash and cash equivalents included in the cash flow statement comprise the following amounts:

During the period, the Company raised £1m (RM5.5m) before expenses through a placing of new ordinary shares. As at 30 April 2022, these funds were held on of behalf of BiON by a custodian and as such are shown within trade and other receivables.

11. STATED CAPITAL

On 19 April 2022, it was announced that conditional to the passing of the Resolution and Re-trading, the Group raised £1m through the placing of 333,333,333 placing shares at the placing price of 0.3 pence per placing share. Concurrent with the resumption of trading in the Group's ordinary shares, the placing completed and shares were admitted to trading on AIM on 20 April 2022.

12. LEASES

Group as a lessee

The Group has lease contracts for lands. The Group's obligations under these leases are secured by the lessor's title to the leased assets. The Group is restricted from assigning and subleasing the leased assets.

The Group also has certain leases of office equipment with low value. The Group applies the 'lease of low-value assets' recognition exemptions for these leases.

a) Right-of-use assets