Half-year Report

MobilityOne Limited

29 September 2023

 

29 September 2023

MobilityOne Limited

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

Unaudited interim results for the six months ended 30 June 2023

MobilityOne (AIM: MBO), the e-commerce infrastructure payment solutions and platform provider, announces its unaudited interim results for the six months ended 30 June 2023.

Highlights:

·           Revenue increased by 7.2% to £121.5 million (H1 2022: £113.4 million) due to higher sales for the Group's mobile phone prepaid airtime reload and bill payment business in Malaysia;

·           Profit after tax of £5,117 (H1 2022: profit after tax of £0.34 million);

·           Cash and cash equivalents (including fixed deposits) at 30 June 2023 of £3.42 million (30 June 2022: £4.72 million);

·           The Group is cautious on the outlook for the remainder of 2023, taking into consideration rising interest rates and expenses including, but not limited to, higher administrative expenses, higher infrastructure and marketing costs as well as lower gross profit margins for the Group's products and services; and

·           For future growth, the Group will continue to invest and enhance its research and development capabilities as well as form partnerships or to undertake acquisitions in complementary businesses, as applicable.

For further information, contact:

MobilityOne Limited                                                                                  [phone]

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

[e-mail]

Allenby Capital Limited

(Nominated Adviser and Broker)                                                               [phone]

Nick Athanas / Vivek Bhardwaj

About the Group:

MobilityOne is one of the leading virtual distributors of mobile prepaid reload and bill payment services in Malaysia. With connections to various service providers across industries such as banking, telecommunications, utilities, government agencies, and transportation, the Group operates through multiple distribution channels including mobile wallets, e-commerce sites, EDC terminals, automated teller machines, kiosks, and internet & mobile banking. Holding licenses in regulated spaces including acquiring, e-money, remittance and lending, the Group offers a range of services to the market, including wallet, internet, and terminal-based payment services, white label e-money, remittance, lending, and custom fintech ecosystems for communities. The Group's flexible, scalable technology platform enables cash, debit card, and credit card transactions from multiple devices while providing robust control and monitoring of product and service distribution.

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

Chairman's statement

The Group's revenue increased by 7.2% to £121.5 million (H1 2022: revenue of £113.4 million) in the first six months of 2023 as a result of higher sales from the Group's main products and services in Malaysia, namely the mobile phone prepaid airtime reload and bill payment business through the Group's banking channels (i.e. mobile banking and internet banking), electronic data capture ("EDC") terminals and third parties' e-wallet applications. Notwithstanding the higher sales, the Group registered a lower profit after tax of £5,117 in the first six months of 2023 (H1 2022: profit after tax of £0.34 million) mainly due to a reduction in gross profit margin in the period under review to 5.08% (H1 2022: gross profit margin of 5.52%), higher administrative expenses and higher finance costs.

The Group's other businesses such as its international remittance services, EDC terminals sales and services, e-money and lending in Malaysia as well as the e-payment solutions activities in Brunei continued to remain small. The Group did not record any sales in the Philippines in the first six months of 2023.

As at 30 June 2023, the Group had cash and cash equivalents (including fixed deposits) of £3.42 million (30 June 2022: cash and cash equivalents of £4.72 million) while the secured loans and borrowings from financial institutions increased to £4.14 million (30 June 2022: £2.89 million). 

Current trading and outlook

The Group's business activities are still predominately concentrated in Malaysia. Other than the Group's main business activities of mobile phone prepaid airtime reload and bill payment in Malaysia, the Group's other businesses are expected to remain insignificant in 2023. As reported by the Central Bank of Malaysia in August 2023, the Malaysian economy grew by 2.9% in the second quarter of 2023 weighed mainly by slower external demand. Domestic demand remained the key driver of growth, supported by private consumption and investment. With the challenging global environment, the Malaysian economy is projected to expand close to the lower end of the 4.0% to 5.0% range in 2023. Growth will continue to be supported by domestic demand amid improving employment and income as well as implementation of multi-year projects. 

As part of the Group's business plans for long-term growth, the Group has the following initiatives:

(1)        Proposed disposal of OneShop Retail Sdn Bhd ("1Shop") and proposed joint venture with Super Apps Holdings Sdn Bhd ("Super Apps")

On 19 October 2022, MobilityOne Sdn Bhd ("M1 Malaysia"), the Group's wholly-owned subsidiary in Malaysia, entered into a Share Sale Agreement with Super Apps for the proposed disposal by M1 Malaysia of a 60% shareholding in the Group's wholly-owned non-core subsidiary 1Shop to Super Apps (together the "Proposed Disposal").  Concurrently, M1 Malaysia entered into a Joint-Venture cum Shareholders Agreement with Super Apps and 1Shop (together the "Proposed Joint Venture"). The Proposed Disposal and Proposed Joint Venture are inter-conditional in order to establish a new joint venture to expand the Group's e-products and services business initially in Malaysia.

The Proposed Disposal is subject to the completion of a merger exercise between Technology & Telecommunication Acquisition Corporation ("TETE") and Super Apps (together the "Merger Exercise").

Pursuant to the terms of the Proposed Disposal and subject to the completion of the Merger Exercise, the Group is expected to receive cash proceeds of RM40.0 million (c. £7.53 million) and RM20.0 million (c. £3.76 million) within 14 days and 180 days respectively of completion of the Merger Exercise.

A draft proxy statement has been filed by Tete Technologies Inc, a wholly-owned subsidiary of TETE, on 2 August 2023 ("TETE Proxy Filing") with the United States Securities and Exchange Commission ("SEC"). An extraordinary general meeting will be convened in due course by TETE once the TETE Proxy Filing is in complete form and approved by the SEC. The Company will release further announcements as and when appropriate.

There can be no guarantee that the Proposed Disposal and Proposed Joint Venture can be completed as they are conditional on the completion of the Merger Exercise, which is out of the Group's control. The completion of the Proposed Disposal and Proposed Joint Venture are expected to positively contribute to the future growth of the Group.

(2)        Money transfer business via SWIFT network

To expand the Group's money transfer business via the Society for Worldwide Interbank Financial Telecommunication ("SWIFT") network, the Group continues to work with a bank in Malaysia on the integration process due to the migration of messaging standards within the SWIFT network while waiting for the Central Bank of Malaysia's approval, the timings of which continue to remain uncertain. The Company will make the relevant announcement on the arrangement with SWIFT as and when is appropriate.

(3)        UK electronic money institution application

On 11 May 2023, the Company announced that M1 Tech Limited ("M1 Tech"), the Group's wholly-owned subsidiary in the UK, had withdrawn its application to the Financial Conduct Authority (the "FCA"), the financial regulatory body in the UK, for authorisation as an electronic money institution to provide e-money services in the UK (the "FCA Application"). This follows receipt of further feedback from the FCA requesting further information in relation to certain disclosures relating to M1 Tech's proposed business plan. The Group is reviewing its proposed business plan to expand its business in the UK and its options in relation to submitting a further revised FCA application in due course which addresses the FCA's latest feedback. The Company will release further announcements as and when appropriate.  

(4)        New joint venture to explore business opportunities from the Kingdom of Saudi Arabia

On 26 June 2023, M1 Malaysia entered into a joint venture cum shareholders agreement with Syed Faisal Algadrie Bin Syed Hassan to incorporate Qube Nexus Sdn Bhd, Malaysia to explore any suitable business opportunities from the Kingdom of Saudi Arabia. Any material developments in relation to new business opportunities will be announced in due course.  

(5)        Proposed acquisition of Hati International Sdn Bhd ("Hati") via Sincere Acres Sdn Bhd ("Sincere")

On 29 September 2023, M1 Malaysia entered into a share sale agreement with United Flagship Development Sdn Bhd ("Vendor") to acquire a 49% equity interest in Sincere for a total cash consideration of RM30.0 million (c. £5.217 million) to be paid to the Vendor in two tranches (the "Proposed Acquisition"). The first tranche, representing RM2.0 million (c. £0.348 million), has been paid to the Vendor using M1 Malaysia's existing cash resources. The second tranche, representing the balance of RM28.0 million (c. £4.869 million) (the "Second Tranche"), is required to be paid by M1 Malaysia by 8 March 2024 (the "Second Tranche Payment Date"). It is envisaged that the Second Tranche will be paid by the Group using M1 Malaysia's existing cash resources.

While the Second Tranche Payment Date can be extended for up to a further 6 months ("Extended Second Tranche Payment Date"), any payment in relation to the Second Tranche made after the Second Tranche Payment Date will be subject to an interest charge of 10% per annum. The balance amount payable for the Second Tranche (including any interest charge if the payment is made after the Second Tranche Payment Date) shall be reduced by RM1.0 million (c. £0.174 million) when the payment is made by the Extended Second Tranche Payment Date.

While the Proposed Acquisition is not subject to any conditions precedent, both parties have agreed to complete the Proposed Acquisition by 4 October 2023.

Sincere is an investment holding company with its sole business activity comprising of owning a 100% equity interest in Hati, an operating company in Malaysia. Hati is a healthcare information systems provider in Malaysia focused on healthcare software development and information technology. Through the use of cloud service platforms and software system solutions, Hati has developed a product suite comprising of hospital information systems, clinical information systems, business intelligence platforms and Internet of Things (IoT)/Artificial Intelligence (AI) enabled platforms.

The Proposed Acquisition will result in a number of synergistic benefits for both the Group and Hati. The Proposed Acquisition is anticipated to enable the Group to vertically integrate its existing electronic payment systems and services with Hati's suite of existing products to support payment methods such as credit cards, debit cards and eWallets via online payments and over the counter payments. In addition, the Proposed Acquisition will result in Hati being able to utilise the Group's infrastructure and engineering know-how to automate electronic billing and invoicing. 

Following completion of the Proposed Acquisition, and as part of the Group's long-term growth strategy, the Group intends to develop a payment system that integrates the Group's e-claims and e-payments services with insurance companies thereby resolving cash flow issues typically faced by hospitals and clinics. The Group also intends to explore potential collaborations with the Group's telecommunication partners in order to enable Hati's real-time IoT/AI enabled healthcare devices to operate over 5G cellular networks.  The above proposed developments will also contribute to the Group expanding its customers base for its existing electronic payment systems and services.

In addition, the Proposed Acquisition will enable the Group to amongst other benefits, diversify its existing business activities into the growing healthcare information systems industry. 

Further details on the Proposed Acquisition can be found in the announcement released by the Group on 29 September 2023.

Notwithstanding that the Malaysia economy is expected to grow in 2023 as well as the demand for the Group's mobile phone prepaid products, the Group is cautious on the outlook for the remainder of 2023, taking into consideration rising interest rates and expenses including, but not limited to, higher administrative expenses, higher infrastructure and marketing costs as well as other related expenses. In addition, in order to maintain or grow the Group's businesses, the Group's gross profit margins for its products and services have been impacted. For future growth, the Group will continue to invest and enhance its research and development as the backbone to support the business and technology advancement as well as to form partnerships or to undertake acquisitions in complementary businesses, as applicable.

Abu Bakar bin Mohd Taib (Chairman)

29 September 2023

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2023

	Six months		Six months		Financial year
	Ended		Ended		Ended
	30 June 2023		30 June 2022		31 Dec 2022
	Unaudited		Unaudited		Audited
CONTINUING OPERATIONS	£		£		£
Revenue	121,529,982		113,355,113		233,761,671
Cost of sales	(115,358,166)		(107,103,390)		(221,010,827)
GROSS PROFIT	6,171,816		6,251,723		12,750,844
Other operating income	40,165		92,839		183,426
Administration expenses	(5,914,978)		(5,549,417)		(11,940,311)
Other operating expenses	(174,821)		(209,083)		(304,196)
Net loss on financial instruments	-		-		(273,642)
OPERATING PROFIT	122,182		586,062		416,121
Finance costs	(116,268)		(63,501)		(137,143)
PROFIT BEFORE TAX	5,914		522,561		278,978
Tax	(797)		(184,356)		(262,350)
PROFIT FROM CONTINUING OPERATIONS	5,117		338,205		16,628
Attributable to:
Owners of the parent	1,056		338,842		23,857
Non-controlling interest	4,061		(637)		(7,229)
	5,117		338,205		16,628
EARNINGS PER SHARE
Basic earnings per share (pence)	0.001		0.319		0.022
Diluted earnings per share (pence)	0.001		0.301		0.021
PROFIT FOR THE PERIOD/YEAR	5,117		338,205		16,628
OTHER COMPREHENSIVE PROFIT/(LOSS)
Foreign currency translation	(624,236)		296,985		354,322
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR THE PERIOD/YEAR	(619,119)		635,190		370,950
Total comprehensive profit/loss attributable to:
Owners of the parent	(624,438)		636,224		378,832
Non-controlling interest	5,319		(1,034)		(7,882)
	(619,119)		635,190		370,950

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2023

		At		At		At
		30 June 2023		30 June 2022		31 Dec 2022
		Unaudited		Unaudited		Audited
		£		£		£
Assets
Non-current assets
	Intangible assets	192,622		421,863		214,180
	Property, plant and equipment	900,093		1,180,684		1,122,194
	Right-of-use assets	144,414		191,759		182,935
	Development cost	280,379		-		-
	Trade and other receivables	905,758		-		228,050
	Other investment	11,045		12,144		12,281
		2,434,311		1,806,450		1,759,640
Current assets
	Inventories	2,280,346		3,162,123		3,189,901
	Trade and other receivables	3,277,551		3,015,416		2,179,785
	Tax recoverable	254,391		169,179		183,321
	Fixed deposits	1,604,051		1,603,471		1,768,584
	Cash and cash equivalents	1,813,504		3,114,703		3,246,588
		9,229,843		11,064,892		10,568,179
Total Assets		11,664,154		12,871,342		12,327,819
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	422,188		990,089		1,047,682
	Accumulated profit/ (losses)	(92,710)		221,219		(93,766)
Shareholders' equity		4,605,371		5,487,201		5,229,809
Non-controlling interest		(9,792)		(8,263)		(15,111)
Total Equity		4,595,579		5,478,938		5,214,698
Liabilities
Non-current liabilities
	Loans and borrowings - secured	195,166		225,171		221,697
	Lease liabilities	15,007		74,047		98,450
	Deferred tax liabilities	13,926		44,782		15,484
		224,099		344,000		335,631
Current liabilities
	Trade and other payables	2,775,077		4,063.714		2,947,056
	Amount due to directors	2,403		176,457		66,855
	Loans and borrowings - secured	3,943,085		2,668,243		3,647,482
	Lease liabilities	123,063		108,810		105,316
	Tax payables	848		31,180		10,781
		6,844,476		7,048,404		6,777,490
Total Liabilities		7,068,575		7,392,404		7,113,121
Total Equity and Liabilities		11,664,154		12,871,342		12,327,819

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2023

		Non-Distributable				Distributable
					Foreign
				Reverse	Currency			Non-
	Share	Share		Acquisition	Translation	Accumulated		Controlling	Total
	Capital	Premium		Reserve	Reserve	Profit/(Losses)	Total	Interest	Equity
	£	£		£	£	£	£	£	£
As at 1 January 2022	2,657,470	909,472		708,951	692,707	(117,623)	4,850,977	(7,229)	4,843,748
Foreign currency translation	-	-		-	297,382	-	297,382	(397)	296,985
Profit for the period	-	-		-	-	338,842	338,842	(637)	338,205
As at 30 June 2022	2,657,470	909,472		708,951	990,089	221,219	5,487,201	(8,263)	5,478,938
As at 1 July 2022	2,657,470	909,472		708,951	990,089	221,219	5,487,201	(8,263)	5,478,938
Foreign currency translation	-	-		-	57,593	-	57,593	(256)	57,337
Profit/(Loss) for the period	-	-		-	-	(314,985)	(314,985)	(6,592)	(321,577)
As at 31 Dec 2022	2,657,470	909,472		708,951	1,047,682	(93,766)	5,229,809	(15,111)	5,214,698
As at 1 January 2023	2,657,470	909,472		708,951	1,047,682	(93,766)	5,229,809	(15,111)	5,214,698
Foreign currency translation	-	-		-	(625,494)	-	(625,494)	1,258	(624,236)
Profit for the period	-	-		-	-	1,056	1,056	4,061	5,117
As at 30 June 2023	2,657,470	909,472		708,951	422,188	(92,710)	4,605,371	(9,792)	4,595,579

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 2023

	Six months		Six months		Financial year
	Ended		Ended		ended
	30 June 2023		30 June 2022		31 Dec 2022
	Unaudited		Unaudited		Audited
	£		£		£
Cash flows used in operating activities
Cash used in operations	(816,961)		(205,386)		(614,763)
Interest paid	(116,414)		(63,501)		(137,143)
Interest received	14,580		11,221		35,933
Tax paid	(99,165)		(287,340)		(421,991)
Tax refund	-		5,470		5,532
Net cash used in operating activities	(1,017,960)		(539,536)		(1,132,432)
Cash flows used in investing activities
Purchase of property, plant and equipment	(9,876)		(306,614)		(390,056)
Addition in right-of-use assets	(23,641)		-		-
Addition in other investment	-		-		(12,281)
Increase in development cost	(280,379)		-		-
Proceeds from disposal of property, plant & equipment	163		8,370		8,465
Net cash used in investing activities	(313,733)		(298,244)		(393,872)
Cash flows from financing activities
Net change of banker acceptance	662,713		607,556		1,562,937
Repayment of lease liabilities	(45,186)		(53,825)		(111,144)
Repayment of term loan	(4,218)		(4,038)		(9,615)
Net cash from financing activities	613,309		549,693		1,442,178
Decrease in cash and cash equivalents	(718,384)		(288,087)		(84,126)
Effect of foreign exchange rate changes	(879,233)		340,737		433,774
Cash and cash equivalents at beginning of period/year	5,015,172		4,665,524		4,665,524
Cash and cash equivalents at end of period/year	3,417,555		4,718,174		5,015,172

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1.	Basis of preparation
	The Group's interim financial statements for the six months ended 30 June 2023 were authorised for issue by the Board of Directors on 29 September 2023. 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 2022 Annual Report, will be included in the audited financial statements for the year ending 31 December 2023.
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 2023.
3.	Nature of financial information The unaudited interim financial information for the six months ended 30 June 2023 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 2022 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 2023 5.88 5.50 Period ended 30 June 2022 5.35 5.54 Year ended 31 December 2022 5.29 5.43

5.	Segmental analysis
	The Group has three operating segments as follows: (a)   Telecommunication services and electronic commerce solutions; (b)   Hardware and services; and (c)   Remittance services and others. 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 and services Remittance services and others Elimination Total 6 months ended 30 June 2023 £      £ £ £ £ Segment revenue: Sales to external customers 121,242,999 279,339 92,511 (84,867) 121,529,982  121,242,999   279,339  92,511 (84,867) 121,529,982 Profit before tax 5,914 - - - 5,914 Tax  (797) - - -  (797) Profit for the period  5,117 - - -  5,117 Non-cash expenses/(income)* Depreciation of property, plant and equipment 127,350 - - - 127,350 Amortisation of intangible assets - - - - - Amortisation of right-of-use assets 47,471 - - - 47,471 Unrealised loss on forex 2,707 - - - 2,707 177,528 - - - 177,528 Group 6 months ended 30 June 2022 Segment revenue: Sales to external customers 112,494,543 959,051 56,692 (155,173) 113,355,113 112,494,543 959,051 56,692 (155,173) 113,355,113 Profit before tax 522,561 - - - 522,561 Tax (184,356) - - (184,356) Profit for the period 338,205 - - - 338,205 Non-cash expenses/(income)* Depreciation of property, plant and equipment 132,115 - - - 132,115 Amortisation of intangible assets 33,384 - - - 33,384 Amortisation of right-of-use assets 43,584 - - - 43,584 209,083 - - - 209,083 Group Financial year ended 31 Dec 2022 Segment revenue: Sales to external customers 230,754,843 3,296,531 - (289,703) 233,761,671 230,754,843 3,296,531 - (289,703) 233,761,671 Profit before tax 278,978 - - - 278,978 Tax (262,350) - - - (262,350) Profit for the period 16,628 - - - 16,628 Non-cash expenses/(income)* Depreciation of property, plant and equipment 282,260 - - - 282,260 Amortisation of intangible assets 68,051 - - - 68,051 Amortisation of right-of-use assets 132,580 - - - 132,580 Bad debt written off 5,622 - - - 5,622 488,513 - - - 488,513 *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 2023 of £1,056 (30 June 2022: profit of £338,842 and year ended 31 December 2022: profit of £23,857) attributable to owners of the parent by the number of ordinary shares outstanding at 30 June 2023 of 106,298,780 (30 June 2022: 106,298,780 and 31 December 2022: 106,298,780). The diluted earnings per share for the six month period ended 30 June 2023 is calculated using the number of shares adjusted to assume the exercise of all dilutive potential ordinary shares of 112,623,648- 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. Share options of 2,000,000 shares have lapsed due to resignation of employees and no options have been exercised.
8.	Reconciliation of profit before tax to cash generated from operations Six months Six months Financial year ended Ended ended 30 June 2023 30 June 2022 31 Dec 2022 Unaudited Unaudited Audited £ £ £ Cash flow from operating activities Profit before tax 5,914 522,561 278,978 Adjustments for: Amortisation of intangible assets - 33,384 68,051 Amortisation of right-of-use assets 47,471 43,584 132,580 Bad debt written off - - 5,622 Depreciation of property, plant and equipment 127,350 132,115 282,260 Gain on disposal of property, plant & equipment (156) (8,090) (8,464) Impairment loss on trade receivables - - 282,535 Impairment loss on others receivables - - 3,403 Impairment loss on goodwill - - 177,546 Interest expenses 116,414 63,501 137,143 Interest income (14,580) (11,221) (35,933) Reversal on impairment loss on trade receivable - - (5,061) Unrealised loss/(gain) on forex 2,707 - (22,279) Operating profit before      working capital changes 285,120 775,834 1,296,381 (Increase)/Decrease in inventories 909,555 (43,552)              (71,330) (Increase)/Decrease in receivables (1,775,475) 150,139                474,252 Increase in amount due to Directors &      Shareholder - - (121,754) Amount due to/by related company - 52,030 - Decrease in payables (236,161) (1,139,837) (2,192,312) Cash used in operations (816,961) (205,386) (614,763)
9.	Contingent liabilities
	In the period under review, corporate guarantees of RM27.0 million (£4.59 million) (H1 2022: RM27.0 million (£5.04 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 2022 except for the adoption of new and amended reporting standards, which are effective for periods commencing on or after 1 January 2023. Various amendments to standards and interpretations of standards are effective for periods commencing on or after 1 January 2023 as detailed in the 2022 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-

 

END