Asia Strategic Holdings Limited Results for the period ended 30 September 2023

RNS Number : 5044B

Asia Strategic Holdings Limited

31 January 2024

Asia Strategic Holdings Ltd.

("Asia Strategic", the "Group" or the "Company")

Results for the financial year ended 30 September 2023

Asia Strategic Holdings Ltd. (LSE: ASIA), the independent developer and operator of consumer businesses in Emerging Asia, is pleased to announce its audited results for the financial year ended 30 September 2023 ("FY23" or 2023).

Copies of the annual report and accounts for the financial year ended 30 September 2023 will be made available on the Company's website (www.asia-strategic.com).

HIGHLIGHTS

Financial Highlights

All dates for the reporting period refer to FY23 and the comparative period refers to financial year ended 30 September 2022 ("FY22" or 2022), unless otherwise stated.

The year-on-year ("YOY") growth or decline refers to any change that occurred between FY23 and FY22, or equivalent periods of one year, as applicable.

All figures are reported in United States Dollars ("$"), unless otherwise specified.

· Revenue increased 34% YOY to $24.1 million for FY23 (FY22: $17.9 million), of which 78% derived from Education (FY22: 68%) and 22% from Services (FY22: 32%).

· This marks the sixth consecutive year of double-digit growth in revenue. Contributing factors include (i) Myanmar's Education division surpassing pre-COVID levels with YOY revenue growth of 116% (FY22: 158%), and (ii) the continued expansion of Vietnam's Education division, delivering YOY revenue growth of 16% (FY22: negative 1%). The strong performance in the Education division compensated for the weaker revenue generation in the Services division in Myanmar, which recorded an 8% decline YOY due to adverse economic conditions and the impact of foreign exchange volatility.

· Group gross profit increased 74% YOY for FY23 (FY22: 77%) to $13.9 million, of which the Education division provided a contribution of 90% (FY22: 75%) and the Services division provided 10% (FY22: 25%). The robust growth in gross profit is attributable to (i) strong revenue growth coupled with (ii) margin expansion due to higher utilization and operational efficiency of teaching personnel and facilities across all Education brands, a gradual shift to higher margin products, and prudent spending on other cost of services.

· The Group recorded a moderate improvement in net losses at $5.3 million for FY23 (FY22: $6.0 million loss). Adjusted net losses, excluding the newly launched Kids&Us and Logiscool, were $3.9 million (FY22: $5.7 million loss). Other contributing factors were (i) a foreign exchange loss of $1.1 million (FY22: $1.0 million loss), (ii) a slower recovery at Wall Street English Vietnam, (iii) lower profitability at EXERA, and (iv) an increase in marketing expenses to $2.6 million (FY22: $1.9 million) to build brands for newly launched businesses.

· Group adjusted EBITDA loss amounted to $0.5 million for FY23 (FY22: $1.9 million loss). Higher margins in the Education division resulting from a more profitable sales mix, the maturation of new schools, and successful cost optimisation narrowed the loss.

· At 30 September 2023, the Group's current and non-current deferred revenue, representing cash received in advance of service performance, amounted to $11.0 million and $1.1 million, respectively (30 September 2022: $8.1 million and $1.9 million). Current deferred revenue (representing 46% of FY23 revenue) shall be realised within FY24, while non-current deferred revenue shall be realised in FY25 and FY26.

· The Group recorded positive operating cash flow of $3.7 million for FY23 (FY22: $3.6 million) on the back of strong sales and advance payments in the Education division. If repayment of lease liabilities (including principal and interest) were considered, the Group would have recorded a $1.0 million operating cash flow (FY22: $0.6 million). The Group's strong commercial performance and cash collection should complement the on-going brand building efforts, business expansion and investments in capacity.

· The Group invested $1.7 million in FY23 (FY22: $1.7 million), primarily to establish new schools under its existing brands (inclusive of $0.3 million used for EXERA's relocation to new corporate office). An additional $0.3 million was deployed to acquire the exclusive rights to (i) operate coding schools under the Logiscool brand in Vietnam and Myanmar and (ii) to operate and sub-franchise English schools under the Wall Street English brand in Vietnam and Myanmar.

· The Group maintained a loan facility of $3.0 million with MACAN ("Loan Facility 1"), the Group's largest corporate shareholder, and drew down $1.0 million (net of repayment of $0.4 million) during FY23. The available amount under Loan Facility 1 at 30 September 2023 was $0.4 million.

· As the Group's school portfolio is expanding rapidly, on 12 December 2023, the Group and MACAN agreed to increase Loan Facility 1 from $3.0 million to $4.5 million. Loan Facility 1 matures on 31 December 2027 and bears interest at a rate of 6.0% per annum. At the approval date of this report, the available amount under Loan Facility 1 was $1.1 million. The recent additional loan drawn downs were to fund capital expenditures for new schools in Vietnam.

· The diversification of the Group's operations across multiple countries continues to play an important role in mitigating single-country exposure. Management has determined that there are sufficient mitigating actions within the Group's control to ensure liquidity for at least the next twelve months from the date of this report. These include undertaking a measured expansion of its existing and future businesses, maintaining financial liquidity discipline, accessing the unutilised Loan Facility 1 and further diversifying the Group's capital structure by accessing bank loans.

Operational Highlights

Education

· Revenue from owned Education businesses increased 57% YOY to $18.7 million for FY23 (FY22: $11.9 million). The managed Education business contributed only $25k for FY23 (FY22: $0.2 million), as service delivery to legacy students completed.

· At 30 September 2023, the current and non-current deferred revenue from Education businesses, representing cash received in advance of service performance, were $10.3 million and $1.1 million, compared to $7.9 million and $1.9 million at 30 September 2022.

· The Education division consists of the following operations:

Vietnam

(i) Wall Street English - English language education for adults;

(ii) Kids&Us - English language education for children and teens;

(iii) Logiscool - Coding education for children and teens.

Myanmar

(i) Wall Street English - English language education for adults;

(ii) Kids&Us - English language education for children and teens;

(iii) Logiscool - Coding education for children and teens;

(iv) Yangon American International School - K-12 international school;

(v) Auston - Tertiary education.

· The number of schools and students at the end of each financial year were as follows:

	Number of schools			Number of students
	2023¹	2022	2021	2023	2022	2021

Vietnam	11	8	7	4,039	3,850	3,300
- Wall Street English	7	7	7	3,681	3,800	3,300
- Kids&Us	4	1	-	358	50	-

Myanmar	9	6	6	4,647	3,655	2,000
- Wall Street English	5	4	4	3,696	3,100	1,900
- Kids&Us	1	-	-	98	-	-
- Yangon American²	1	1	1	101	55	50
- Auston	2	1	1	752	500	50

Group	20¹	14	13	8,686	7,505	5,300

¹ As of January 2024, the number of schools has grown to 27, reflecting openings of seven schools (i) in Vietnam Wall Street English 1, Kids&Us 1, Logiscool 2, and (ii) Myanmar Wall Street English 1, Kids&Us 1, Logiscool 1.

² Yangon American secured a new facility next to the existing school to support the Early Years Village and increase overall capacity in FY24.

· In June and August 2023, the Group signed exclusive franchising agreements with Logiscool, kft to establish coding schools for children under the Logiscool brand in Vietnam and Myanmar. Two schools opened between November and December 2023 in Ho Chi Minh City, and Binh Duong in Vietnam, while one Logiscool school opened in December 2023 in Yangon, Myanmar.

· In Vietnam, the number of students increased 5% YOY driven by the enrolments across the four new Kids&Us schools. Wall Street English's number of students dipped slightly as one school relocated, one school was renovated, and no new schools opened.

· In Myanmar, the number of students increased 27% YOY driven by strong growth across all brands. The growth was evenly dispersed as all existing schools added students and new schools increased student numbers. Notably, Kids&Us ended the year with ca. 100 students despite only having one school open for five months in FY23.

Services

· Revenue from owned Services businesses decreased 8% YOY to $5.3 million for FY23 (FY22: $5.8 million).

· Managed Services businesses contributed no revenue for FY23 (FY22: nil).

· At 30 September 2023, the Group's current deferred revenue from Services businesses representing cash received in advance of service performance from EXERA's corporate customers was $0.7 million compared to $0.2 million at 30 September 2022. The increase is due to the growth in advance payments for the provision of integrated security projects.

· The Services division consists of the following operations:

(i) EXERA - Integrated security risk management services; and

(ii) Ostello Bello - Boutique hostels

· EXERA employed an experienced workforce of ca. 1,400 security officers at 30 September 2023 (30 September 2022: 1,600) with ca. 200 sites in Myanmar (30 September 2022: 200). The decline in security officers was driven largely by the exit of certain customers from Myanmar due to the economic and political environment.

· Ostello Bello operates boutique hostels with ca. 140 beds and over 45 rooms across two locations in Bagan and Mandalay.

SIGNIFICANT EVENTS AND TRANSACTIONS

a) Exclusive Master Franchise Agreements for Wall Street English in Vietnam and Myanmar

On 14 April 2023 and 2 August 2023, the Group entered into Master Franchising Agreements ("MFAs") for Vietnam and Myanmar, respectively, revising certain key terms of the previous franchise agreements and adding the rights to sub-franchise. The new MFAs will expire on 30 May 2030 for Vietnam and 30 September 2028 for Myanmar, unless renewed for up to three five-year terms each. The commercial terms of the new MFA remain substantially the same as the previous franchising agreements.

b) Exclusive Agreement for Logiscool in Vietnam and Myanmar

On 27 June 2023 and 2 August 2023, the Group entered into exclusive franchising agreements with Logiscool, kft to develop coding schools for children under the brand "Logiscool" in Vietnam and Myanmar.

Logiscool teaches children coding and digital literacy in fun-based after-school centres. Founded in Budapest, Hungary, in 2014, Logiscool has taught over 185,000 students across more than 170 locations in 35 countries. Logiscool's unique educational platform is developed so users can easily transition from visual coding to text-based programming languages:

· Blox coding: users start their coding education with "building blocks". This unique visual coding method is adjustable to users of all ages and knowledge levels.

· Mix coding: users start writing codes in MIX mode, where they can see both the building block and the text-based languages in parallel.

· Text coding: users learn text-based programming languages, such as Python, Unity, Godot or C#.

Under the terms of this exclusive franchising agreement, the Group shall pay (i) initial fees for both countries and (ii) ongoing service fees determined as a percentage of revenue. These fees are in-line with similar franchising agreements entered into by the Group.

SUBSEQUENT EVENTS

Loan Facility Increased

On 1 July 2019, the Group secured a loan facility up to $3.0 million from MACAN ("Loan Facility 1"). To fund the accelerated expansion of the school network, the Group and MACAN have agreed to increase the loan facility from $3.0 million to $4.5 million. Additionally, the Company and MACAN have agreed to extend the repayment date from 30 June 2024 to 31 December 2027. The loan facility will continue to bear an interest rate of 6.0% per annum.

COUNTRY ECONOMIC UPDATES

The most recent forecast by the Asian Development Bank ("ADB") is for developing Asia GDP growth of 4.2% in 2023 and 4.6% in 2024.

Inflation in developing Asia is expected to be 4.4% in 2023 and 4.2% in 2024. While lower than many global rates, supply disruptions persist driving food and fuel prices higher in the region.

Vietnam

· According to the General Statistics Office of Vietnam ("GSO"), GDP growth for 9M23 was 4.2% YOY, exhibiting strong economic fundamentals and a long-term positive outlook. The ADB forecasts full-year GDP growth rates of 5.8% in 2023 and 6.0% in 2024. This outpaces leading regional peers, such as the Philippines (5.7%), Indonesia (5.0%), Malaysia (4.5%) and Thailand (3.5%).

· ADB forecasts core inflation of 3.8% in 2023, well below targeted inflation of 4.5%. For 2024, ADB forecasts inflation of 4.0%. The slowdown in global inflation and the spillover effect on Vietnam are key factors impacting inflation in Vietnam. Headline inflation is expected to increase due to (i) adverse impacts on oil prices from the wars in the Mediterranean and Ukraine and (ii) rising demand for rice in Asian and African markets.

· The unemployment rate remained at 2.3% for 3Q23 (unchanged from 2Q23) and the labor force participation rate was 68.9% (stable since 4Q22).

· Contrary to global interest rate hikes, the State Bank of Vietnam ("SBV") lowered rates four times in 2023, totaling a 2.0% reduction, to stimulate economic activity and maintain a stable currency. As a result, the VND depreciated only 4.3% against the USD, while several other regional currencies fared much worse.

· In 2023, Vietnam achieved its eighth consecutive year of trade surplus, reaching an estimated $26 billion-a threefold increase from the previous year. The country's total import-export turnover for the year is projected to be $683 billion, with $354.5 billion from exports and $328.5 billion from imports.

· Vietnam is increasingly attractive to global manufacturers as they look to diversify production away from China. S&P Global expects industrial production to continue expanding, bolstered by improving exports. GSO estimates that Vietnam's Index of Industrial Production ("IIP") for October 2023 increased 4.1% YOY.

· Vietnam remains a top destination for foreign investment and an epicenter of growth in the Mekong Region. Total registered FDI exceeded $25.8 billion, reflecting a 14.7% YOY increase. Relocations by manufacturing companies, such as Foxconn, Intel, Foster, Luxshare, and Lego, since 2019 have made Vietnam a leading hub for manufacturing electronics.

· In 2023, Vietnam and the United States ("U.S.") upgraded their diplomatic status to a "strategic comprehensive partnership." Previously, the U.S. reserved this status for only China (2008), Russia (2012), Japan (2014), India (2016) and South Korea (2022). This should be a trigger for Western businesses and capital to flow into the country, further bolstering the economy.

· Vietnam is also experiencing rapid demographic and social change as its population is forecasted to grow from 99.4 million today to 120.0 million by 2050. The GSO estimates that 73.3% of the laborforce is under 50 years old, with a life expectancy of 73.6 years, the highest among countries in the region at similar income levels. Vietnam's emerging middle class is approximately 13% of the population and is expected to reach 26% by 2026.

· According to the EF English Proficiency Index ("EF EPI"), Vietnam is classified as "moderate proficiency" and ranks 58^th globally. In addition, the country falls within the "high" category of the Human Development Index, ranking fourth in ASEAN.

Myanmar

· Despite numerous challenges, Myanmar's economy remains resilient with the World Bank forecasting 1.0% GDP growth in 2024. Recent data and surveys suggest that the industrial and service sectors are expected to experience moderate growth at 1.5% and 2.5%, respectively.

· Myanmar experienced a 6% increase in imports in 2023, driven by improved local demand following economic challenges from the previous year's COVID-19 impact. However, the export sector declined, resulting in a trade deficit. The upcoming year is anticipated to see an overall reduction in total trade volume, influenced by constraints on cross-border financial transactions and disruptions in border trade due to armed conflicts in key regions.

· Despite attempts to stabilize the MMK against the USD, exchange rate volatility persisted between June and December 2023 due to sanctions on state-owned banks, cross-border payment restrictions by international banks, and political instability.

· Rice and fuel prices have remained stable due to price ceiling measures enforced by the Myanmar Rice Federation and restricted selling price ranges for retailers. This suggests an easing of inflation from recent highs ahead.

· According to the World Bank's "State of Education in Myanmar" report, there has been a significant rise in the proportion of household budgets allocated to private tutoring in 2023 to support children's education.

· According to ILO report on Myanmar Labor market, the unemployment rate in Myanmar is about 45.5% in 2022, one of the highest in the region. Labor productivity, as measured by real GDP per worker, declined by 10.0% in 1H22 as skilled workers struggled to find employment.

· Myanmar faces fundamental infrastructure challenges exacerbated by the recent stagnation of FDI, lack of international assistance and severe power cuts during dry season due to heavy reliance on hydropower for electricity. Moreover, approximately 80% of natural gas production is committed through long-term contracts with neighboring nations, resulting in a growing disparity between electricity supply and demand.

· The overall economic outlook remains uncertain, as consumption and business spending are yet to reach pre-COVID levels. Any future recovery in domestic activity will likely be contingent on political improvement, regional and global head- or tailwinds, and continued engagement with the international business communities.

Enrico Cesenni (OSI), Chief Executive Officer of Asia Strategic, commented:

"The financial year ended 30 September 2023 was a pivotal year for Asia Strategic as the Group approached $25 million in revenue, while reorganizing the Group shared service functions for faster and more sustainable growth in the future.

"Group revenue grew 34% to $24.1 million driven by the Education division, where revenue grew 55%. This underlines the strong demand for education even in difficult macroeconomic environments, such as those in Vietnam and Myanmar. The Services division saw revenue decrease 8% as fewer security officers were deployed by EXERA, because of certain customers deciding to leave the country amidst the uncertain political environment. At the same time, we are optimistic that the market is stabilising and our focus on higher value-added services, such as a large integrated security installation set for FY24, will help the Services division return to growth.

"The Group is experiencing strong operational efficiencies as its school portfolio matures. Gross profit margins increased to 58% from 45% last year, driving a 74% increase in gross profit equivalent to $5.9 million.

"With the signing of exclusive franchising agreements with Logiscool for Vietnam and Myanmar, Asia Strategic now operates seven brands across two countries. To support the expected robust growth from these businesses, the Group reorganised its administrative offices into shared service functions to provide higher quality service that is scalable as well as facilitate onboarding and supporting new businesses. The investment in these services, as well as continued spending on brand building, led to the Group's net loss narrowing.

"The future is bright as we continue to invest in new schools that will take a few years to stabilise before providing healthy and sustainable returns. In FY23, we invested $1.7 million and opened six new schools, which could bring our student population beyond 10,000 in FY24.

"Once again, thank you to our valued shareholders for their continued support as well as to all staff members across Asia Strategic for their hard work and commitment throughout these challenging times."

For more information, please visit www.asia-strategic.com or contact:

Asia Strategic Holdings Ltd.

Richard Greer, Independent Non-Executive Chairman

Enrico Cesenni (OSI), Founder and CEO

richard@asia-strategic.com

enrico@asia-strategic.com

Allenby Capital Limited (Broker)

Nick Athanas

Nick Naylor

Lauren Wright

+44 (0)20 3328 5656

Yellow Jersey PR (Financial PR)

Sarah Hollins

Bessie Elliot

+44 (0) 20 3004 9512

Notes to editors

Asia Strategic Holdings Ltd. (LSE: ASIA) is an independent developer and operator of consumer businesses in Emerging Asia, specifically Vietnam and Myanmar, two of the world's fastest-growing economies. The company's portfolio focuses on Education and Services.

Education: the company operates brands in English language learning, coding, K-12 international school, and tertiary education, with 20 schools serving approximately 8,700 students at 30 September 2023.

The company entered into an exclusive agreement with Wall Street English in 2017 for operating rights to Myanmar and secured rights to operate Wall Street English Vietnam through an acquisition in 2020. At September 2023, Wall Street English Myanmar operated five schools and served ca. 3,700 students, while Wall Street English Vietnam operated seven schools and served ca. 3,700 students.

The company also signed an exclusive agreement with Kids&Us in 2022 to offer English language learning for children in Vietnam and Myanmar. At 30 September 2023, Kids&Us Vietnam operated four schools and served ca. 400 students, while Kids&Us Myanmar operated one school and served ca. 100 students.

In 2023, the Group entered into exclusive franchising agreements with Logiscool to develop coding schools for children in Vietnam and Myanmar. The company opened its maiden coding school in November 2023 in Ho Chi Minh City, Vietnam and its second school in December 2023 in Yangon, Myanmar

Yangon American International School launched in August 2019. It is an accredited International Baccalaureate ("IB") Primary Years Programme ("PYP") school and a candidate school for the IB Middle Years Programme ("MYP") accreditation. It offered up to seventh grade in this Academic Year 2023/24 and served ca. 100 students at 30 September 2023.

The company has partnerships with Auston Institute of Management (Singapore) and Liverpool John Moores University (UK) to offer internationally recognised engineering and IT diplomas and degrees. Auston has two campuses in Yangon and Mandalay and had ca. 750 enrolled students at 30 September 2023.

Services: through its acquisition of EXERA in 2018, the Group provides protection of assets, risk management, and secure logistics services. EXERA employs approximately 1,400 well-trained security officers in Myanmar. The company also manages two boutique hotels in core tourist destinations in Myanmar under the brand Ostello Bello.

Deploying an asset-light strategy, Asia Strategic Holdings is well-positioned to offer investors early exposure to the robust fundamentals of Vietnam and Myanmar.

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CHAIRMAN'S STATEMENT

Asia Strategic Holdings celebrated its tenth anniversary in 2023, and it was another year of strong performance. The vision remains "to create economic development and upward social mobility for communities in Emerging Asia, while enabling access to investment opportunities". Thank you for supporting us, and for your continued belief in Asia Strategic Holdings and its vision.

Reflections on Asia Strategic's Performance

Ten years on, there is clear evidence of the Group's strategy working. Two of the Group's earliest investments, Wall Street English Myanmar and Auston, paved the way in FY23 exceeding 100% and 400% revenue growth, respectively. These business successes reflect positively upon the team's depth and breadth, and they are just getting started. Yangon American, which faced the toughest operating environment of our Education businesses, was finally able to finish a school year without interruptions and found its footing as it started the most recent academic year with over 100 students. The success of these businesses portends well for Kids&Us Myanmar and Logiscool Myanmar as they look to establish their brands, expand their footprints and grow rapidly in FY24. Kids&Us Myanmar is already off to a good start, enrolling almost 100 students with only one school open for five months last year.

While the Education division in Myanmar has developed organically, management's acquisition of EXERA in the Services division in 2018 has provided growth and strong cash flow to the Group in a different way. The challenging security environment, after the State Emergency was declared on 1 February 2021, provided a tailwind to the leading security provider in the country. The investment has paid itself back and continues to produce healthy margins. FY23 was a challenging year for EXERA as it faced adverse conditions with certain clients choosing to exit Myanmar; however, the team has consolidated around new leadership and has found traction as it heads into FY24 with a strong base of customers who are engaging responsibly and sustainably with Myanmar.

This past fiscal year marked the third full year Asia Strategic has operated in Vietnam. In that time, I am happy to report, that our management team has turned around a struggling business we had acquired, built strong shared service function teams and launched two additional education brands. This is an impressive couple of years when one considers the severity of COVID lockdowns in the country and the uneven global economic recovery.

FY24 shows considerable promise as the Group will open its first new Wall Street English Vietnam school since taking over, Kids&Us Vietnam will enter its second year looking to grow its collection of four schools, and Logiscool Vietnam will launch with an innovative service that is unmatched in Vietnam.

Solid Foundation

The Asia Strategic portfolio of businesses has grown steadily. The Group now owns and operates seven brands in two countries. To support the myriad needs of these expanding businesses, management consolidated administrative functions into shared service functions that provide expanded capabilities and depth at a reduced cost. This is particularly relevant for start-ups as they access capabilities many competitors would have to boot-strap to reach or forego entirely until a later date.

Environmental, Social and Governance

Expectations for the private sector are rapidly changing. Stakeholders are asking companies to expand their focus to improve society and the environment. Our management has made this an essential part of our job, and this guides all investments and decisions the Group makes. Investments in Education and Services are great examples as they uplift and protect people for the betterment of society. Here are some of the results of the team's commitment in action:

- Over 2,100 jobs for local employees in Vietnam and Myanmar;

- 96% Local workforce participation; and

- 63% Female workforce participation (excluding EXERA's security officers).

Words of Appreciation

I am proud to be on the Board of such an ambitious and focused group, building businesses that contribute positively to the lives of so many people.

At Asia Strategic, our word is our bond and we will continue to do our best to deliver as much value as we can in the year ahead.

Sincerely,

Richard Greer

Independent Non-Executive Chairman

31 January 2024

OPERATIONAL REVIEW

EDUCATION

The Group's objective for its Education division is to become a leading operator and retailer of tech-enabled education services in Emerging Asia.

Revenue from owned Education businesses increased 57% YOY to $18.7 million for FY23 (FY22: $11.9 million). The managed Education business contributed only $25k for FY23 (FY22: $0.2 million) as service delivery to legacy students completed.

At 30 September 2023, the current and non-current deferred revenue from Education businesses, representing cash received in advance of service performance, was $10.3 million and $1.1 million, compared to $7.9 million and $1.9 million at 30 September 2022.

Within its Education division, the Group provides educational products for children, teens and adults through five brands active across Vietnam and Myanmar.

Franchised brands

Wall Street English is a leading English language education provider for adults with over 120,000 students in 30 countries. The flexible and integrated blended learning solution is offered online or through a hybrid online/in-centre approach.

Kids&Us is a leading English language education provider for children starting at age one and operates in nine countries with over 170,000 students across 550 schools. The unique teaching method focuses on natural language acquisition, personalised for each student's age and experiences.

Logiscool is an enrichment program that teaches children coding and digital literacy. Logiscool operates in 35 countries in more than 170 locations with over 210,000 students. Logiscool's unique educational platform is developed so users can easily transition from visual coding to text-based programming languages.

Own brands

Auston is a private higher education school operator in Myanmar that offers internationally recognized engineering and IT diplomas and degrees through partnerships with Liverpool John Moores University in the UK and the Auston Institute of Management in Singapore.

Yangon American International School offers an international K-12 education, is an accredited International Baccalaureate ("IB") Primary Years Programme ("PYP") school and is a candidate to be accredited as an IB Middle Years Programme ("MYP") school.

While each brand has its own unique characteristics and customer base, economies of scope, experience and scale are achieved through common management. One example is the creation of learning centres where multiple brands occupy the same building or are in close proximity, reducing construction and operating costs, while creating one-stop educational experiences for families.

The Group generates student revenue from the businesses it owns and operates. The fees paid by students vary depending on the type and duration of the service as well as when the course begins.

Historically, the Group also generated revenue through management fees from the operations it managed. In FY23, the Group completed service delivery to legacy students of a related party.

Vietnam

Revenue from Education businesses in Vietnam increased 16% YOY to $8.5 million for FY23 (FY22: $7.4 million).

At 30 September 2023, the current and non-current deferred revenue from Education businesses in Vietnam, representing cash received in advance of service performance, was $4.2 million and $0.1 million, compared to $4.3 million and $0.1 million at 30 September 2022.

Wall Street English Vietnam is the largest revenue contributor in Vietnam and for the Group. Revenue from Kids&Us Vietnam will continue to increase as schools grow towards capacity and new schools are opened. Logiscool Vietnam will begin to contribute in FY24, following a similar growth pattern to Kids&Us Vietnam.

Wall Street English Vietnam

· Revenue from Wall Street English Vietnam increased 12% YOY to $8.3 million for FY23 (FY22: $7.4 million).

· Wall Street English Vietnam saw the number of students remain flat across the year due to (i) a difficult macroeconomic environment and (ii) mixed commercial performance.

· At September 2023, Wall Street English Vietnam operated six schools in Ho Chi Minh City and one school in Binh Duong.

· Total investment in facilities for FY23 was $0.3 million, reflecting the relocation of a school in Binh Duong, the refurbishment of a school in Ho Chi Minh City and a new school opening in Ho Chi Minh City in October 2023.

· In October 2023, the eighth school opened in Ho Chi Minh City. This school was opened in the same building as Kids&Us and Logiscool, creating a learning hub and reducing administrative expenses and rent.

· On 14 April 2023, the Group signed a new MFA for Wall Street English Vietnam, granting exclusive franchising and sub-franchising rights in Vietnam and extending the operating term of all existing and new schools until 30 May 2030, unless the MFA is further renewed.

Kids&Us Vietnam

· Revenue from Kids&Us Vietnam was $0.3 million for FY23 (FY22: nil) as service delivery for the first four schools started in October 2023.

· Growth in the number of students was steady throughout the year, with 358 students at 30 September 2023. Additional school openings and better brand recognition will lead to increased numbers of students, which is a leading growth driver.

· At 30 September 2023, Kids&Us Vietnam operated four schools in Ho Chi Minh City.

· Total investment in facilities for FY23 was $0.2 million, the first four schools opened in October 2022 as well as a new school in FY24.

· In October 2023, the fifth school opened in Ho Chi Minh City. This school opened in the same building as Wall Street English and Logiscool, creating a learning hub and reducing administrative expenses and rent.

Logiscool Vietnam

· In June 2023, the Group entered into an exclusive franchising agreement with Logiscool to develop coding schools for children in Vietnam.

· The Group did not record any revenue in FY23 as its maiden school opened in November 2023 in Ho Chi Minh City.

Myanmar

Revenue from Education businesses in Myanmar increased 116% YOY to $10.2 million for FY23 (FY22: $4.7 million).

At 30 September 2023, the current and long-term deferred revenue from Education businesses in Myanmar, representing cash received in advance of service performance, were $6.1 million and $1.0 million, compared to $3.6 million and $1.8 million at 30 September 2022.

Wall Street English Myanmar is the largest English language education provider in Myanmar and the largest contributor to the Group's revenue in Myanmar. Auston revenue grew the fastest among the Group's Education businesses in Myanmar and is expected to continue to be a strong contributor as the length of its programs is longer than at Wall Street English Myanmar. Yangon American International School increased revenue marginally, however, the number of students has surpassed previous highs. Kids&Us Myanmar began service delivery in June 2023, resulting in marginal revenue for FY23. Logiscool Myanmar will begin to contribute in FY24.

Wall Street English Myanmar

· Revenue from Wall Street English Myanmar increased 100% YOY to $6.9 million for FY23 (FY22: $3.4 million) due to a new school opening and continued robust demand for English language training in a market with few alternatives.

· In October 2022, Wall Street English Myanmar opened its fourth school in Yangon (fifth in Myanmar). This is the maiden "community centre," which is a concept leveraging the Global Online Classroom provided by Wall Street English International, hence removing the need for Encounter Classrooms. This results in a smaller unit size as well as fewer dedicated native English speakers reducing the investment cost, operating costs, and rent.

· At 30 September 2023, Wall Street English Myanmar operated four schools in Yangon and one school in Mandalay.

· Total investment in facilities for FY23 was $0.3 million, reflecting the opening of the fifth school and the refurbishment of one school.

· In December 2023, the sixth school was launched in Mandalay near Ostello Bello Mandalay.

· On 2 August 2023, the Group signed a new MFA for Wall Street English Myanmar revising key terms of the previous franchise agreement and extending the operating term until 30 September 2028, unless the MFA is further renewed.

Kids&Us Myanmar

· Revenue from Kids&Us Myanmar was $25k as the maiden school began service delivery in June 2023.

· The number of students was 98 at 30 September 2023 confirming a strong product-market fit and indicating strong growth potential.

· At 30 September 2023, Kids&Us Myanmar operated one school in Yangon.

· Total investment in facilities for FY23 was $0.1 million, reflecting the opening of the schools in Yangon in FY23 and early FY24.

· In October 2023, Kids&Us Myanmar opened its second school at Junction Square in Yangon, which is a proven education hub home to Wall Street English and Auston. The new school is co-located in a building with Logiscool.

Logiscool Myanmar

· In August 2023, the Group entered into an exclusive franchising agreement with Logiscool, for the development of coding schools for children in Myanmar.

· The Group did not record any revenue in FY23 as it opened its maiden school in December 2023 at Junction Square in Yangon co-located in a building with Kids&Us.

Auston

· Revenue from Auston increased 402% YOY to $2.4 million for FY23 (FY22: $0.5 million).

· The robust growth in revenue was driven by a strong commercial performance, reflected in the increase in enrolled students. The expansion in Mandalay also contributed to this growth.

· Additionally, the Auston program design offers students access to higher diplomas and bachelor's degrees providing coursework for almost three years. This long customer lifetime value also experiences price and margin increases as students advance towards graduation.

· Total investment in facilities for FY23 was $0.3 million reflecting the expansion of facilities in Yangon and a new campus in Mandalay.

· A standalone campus in Mandalay will open in F24 and significantly increase capacity there. At 30 September 2023, Auston in Mandalay was co-located in a building with Wall Street English Myanmar.

Yangon American International School

· Revenue from Yangon American International School increased 10% YOY to $0.9 million for FY23 (FY22: $0.8 million).

· The number of students increased 84% to 101 at 30 September 2023 compared to 55 at 30 September 2022. The slight increase in revenue reflected the growing number of students; however, only two months of the new school year were recognised during FY23, with the remainder to be recognised in FY24.

· Total investment in facilities for FY23 was $0.1 million reflecting renovations to open the Junior High.

· A site adjacent to the existing facilities was secured during FY23 and will be refurbished to provide a standalone Early Years Village for students two to four-years old from FY24. A subsequent renovation of the ground floor will be undertaken to improve the current offering, expand capacity and integrate a Logiscool Myanmar school.

SERVICES

The Group's objective is to become one of the leading risk management partners for organisations operating across Emerging Asia.

Revenue from owned Services businesses decreased 8% YOY to $5.3 million for FY23 (FY22: $5.8 million).

At 30 September 2023, the current deferred revenue from Services businesses, representing cash received in advance of service performance, was $0.7 million, compared to $0.2 million at 30 September 2022.

Within its Services division, the Group operates two businesses in Myanmar:

EXERA is the leading provider of risk management, consulting, integrated security, manned guarding, secure logistics, and cash-in-transit services to a wide range of international and local clients across Myanmar. EXERA's security officers are trained extensively in accordance with British Security Industry Association guidelines. EXERA has been awarded ISO 18788, ISO 9001, OHSAS 18000 accreditation.

Ostello Bello is a boutique hostel operator with ca. 140 beds and 45 rooms across Myanmar. Ostello Bello has two locations in the most popular tourist destinations in Myanmar, one in Mandalay and one in Bagan.

The Services division is active only in Myanmar, although EXERA plans to commence operations in Vietnam in early 2024.

EXERA

· Revenue from EXERA decreased 8% YOY to $5.3 million for FY23 (FY22: $5.8 million).

· The decline in revenue was primarily due to (i) the loss of certain customer contracts that exited Myanmar due to the challenging political and economic environment and (ii) the weakening of the Myanmar Kyat ("MMK") against the US Dollar ("USD") as some contracts are denominated in MMK.

· Total investment in facilities for FY23 was $0.3 million reflecting the new state-of-the-art dedicated headquarters at St. John's in Yangon.

Ostello Bello

· Ostello Bello, a managed business in the Services division, operates boutique hostels in Mandalay and Bagan, Myanmar, with ca. 140 beds and 45 rooms. No management fees have been generated in FY23 and FY22 by Ostello Bello's managed operations.

· Due to COVID and the adverse political situation, inbound tourism in Myanmar has been virtually non-existent since 2020. Despite the challenges, Ostello Bello continues to support local communities, providing livelihoods in places such as Bagan.

· Currently, Ostello Bello Mandalay accommodates teachers and security personnel, providing a safe environment and a base from which the Group's Education and EXERA operations can expand in Mandalay.

FINANCIAL REVIEW

RESULTS OF OPERATIONS

Revenue from the owned and managed businesses grew by 34% YOY to $24.0 million (FY22: $17.9 million). The double-digit revenue growth was a result of the strong improvement across the Education businesses in Myanmar (116%) and the recovery in Education businesses in Vietnam (16%). The revenue growth in Vietnam was driven by continued progress of Wall Street English Vietnam's turnaround and four new Kids&Us school openings.

		FY23	FY22	FY21
$	Brand	Audited	Audited	Audited
Owned businesses
Education - Vietnam		8,539,813	7,391,025	7,479,035
- English language learning	Wall Street English	8,254,131	7,391,025	7,479,035
- English language learning	Kids&Us	285,682	−	−

Education - Myanmar		10,162,576	4,485,240	1,331,422
- English language learning	Wall Street English	6,860,636	3,204,937	734,606
- English language learning	Kids&Us	24,632	−	−
- Tertiary education	Auston	2,390,112	475,907	28,834
- International school (K-12)	Yangon American	887,196	804,396	567,982

Education		18,702,389	11,876,265	8,810,457

Services	EXERA	5,327,189	5,794,603	5,664,019

Total owned businesses		24,029,578	17,670,868	14,474,476

Managed businesses
Education (Legacy) - Myanmar		24,969	236,006	497,849
- English language learning	Wall Street English	24,969	235,363	485,819
- Tertiary education	Auston	−	643	12,030

Services	Ostello Bello	−	−	13,712
Total managed businesses		24,969	236,006	511,561

Revenue		24,054,547	17,906,874	14,986,037

Each owned Education business recorded double-digit revenue growth, highlighting strong commercial performance and economic resilience. Across Emerging Asia, families continue to prioritise education and students increasingly seek access to quality products in search of better job opportunities.

The Services division recorded an 8% contraction in revenue due to the loss of certain customer contracts that exited Myanmar and the impact of a weakening Myanmar Kyat ("MMK") against the US Dollar ("USD"), as some contracts are denominated in MMK.

Group gross profit increased 74% YOY for FY23 (FY22: 77%), of which the Education division provided 90% (FY22: 75%) and the Services division provided 10% (FY22: 25%). The robust growth in gross profit is attributable to (i) strong revenue growth coupled with (ii) margin expansion due to (a) higher utilization and operational efficiency of teaching personnel and facilities across all Education brands, (b) a shift to higher margin products, and (c) prudent spending on other cost of services.

	FY23	FY22	FY21
$	Audited	Audited	Audited
Revenue	24,054,547	17,906,874	14,986,037
Cost of services	(10,184,215)	(9,924,470)	(10,466,705)
Gross profit	13,870,332	7,982,404	4,519,332
Gross profit margin	58%	45%	30%

Other income	90,018	80,711	70,350
Foreign exchange loss	(1,134,441)	(972,259)	767,833
Administrative and other operating expenses	(17,098,388)	(12,176,613)	(10,320,565)
Loss from operations	(4,272,479)	(5,085,757)	(4,963,050)
Finance cost	(979,791)	(862,678)	(999,992)
Loss before income tax	(5,252,270)	(5,948,435)	(5,963,042)
Income tax (expense)/credit	(67,414)	(33,646)	114,688
Loss after income tax	(5,319,684)	(5,982,081)	(5,848,354)

Selected non-cash items:
Total depreciation of plant and equipment	826,953	436,363	419,057
Total amortization on of right-of-use asset	2,858,275	2,694,870	2,560,875
Total amortization on of intangible assets	80,498	74,342	113,684
(Reversal of)/impairment on trade and other receivables	(9,514)	15,453	1,004,384
Reversal of impairment of intangible assets	−	(30,000)	−
Finance costs (excluding interest on lease liabilities)	105,748	115,890	243,547
Total interest on lease liabilities	875,405	754,370	756,445
	4,737,365	4,061,288	5,097,992
Adjusted EBITDA ^*	(514,905)	(1,887,147)	(865,050)

Adjusted EBITDA after impact of ROUs ^*	(4,248,585)	(5,336,387)	(4,182,370)

* Key performance indicators for the Group, based on earnings before interest, income tax, depreciation and amortisation (EBITDA) are (i) Adjusted EBITDA (as presented above) and (ii) Adjusted EBITDA less right-of-use assets and interest on lease liabilities ("Adjusted EBITDA after impact of ROUs").

The Group recorded a moderate improvement in net losses at $5.3 million for FY23 (FY22: $6.0 million loss). Adjusted net losses excluding Kids&Us and Logiscool in Myanmar and Vietnam, as they were newly launched, were $3.9 million (FY22: $5.7 million loss). Other contributing factors were (i) net foreign exchange loss of $1.1 million (FY22: $1.0 million loss), (ii) a slower recovery at Wall Street English Vietnam, (iii) lower profitability at EXERA, and (iv) an increase in marketing expenses to $2.6 million (FY22: $1.9 million) to build brands for newly launched businesses.

Group adjusted EBITDA loss narrowed to $0.5 million for FY23 (FY22: $1.9 million loss). Higher margins in the Education division resulting from (i) a more profitable sales mix, (ii) new schools maturing, and (iii) successful cost optimisation narrowed the loss.

Direct and indirect Full Time Employees ("FTEs") decreased to ca. 2,200 at 30 September 2023 (30 September 2022: ca. 2,300). The decrease in headcount, despite the expansion of the school portfolio, was due to a reduced number of security officers deployed at EXERA (ca. 1,400 at 30 September 2023 vs. ca. 1,600 at 30 September 2022). Excluding EXERA's security officers, headcount increased as new schools opened and shared service functions grew to support the new business units.

CASH FLOW EVOLUTION

At 30 September 2023, the Group's cash and cash equivalents position was $1.5 million. The $0.5 million decrease from 30 September 2022 resulted from the combination of (i) $3.7 million inflow from operating activities, (ii) $2.4 million outflow from investing activities, and (iii) $1.8 million outflow from financing activities.

The Group generated positive cash flows from operating activities of $3.7 million for FY23 (FY22: $3.6 million). Operating cash flow before working capital changes improved by $1.7 million as compared to FY22. In particular, lower contract liabilities (negative change of $1.9 million) arising from service delivery to students was offset by higher trade and other payables (positive change of $0.6 million) attributable to the increase in collection of refundable deposits from customers. If repayment of leases liabilities ($2.7 million) were considered, adjusted cash inflow from operating activities would be $1.0 million (FY22: $0.6 million).

The Group incurred cash outflows from investing activities of $2.4 million for FY23 (FY22: $2.3 million), of which, $1.7 million (FY22: $1.7 million) was spent on leasehold improvements for the opening of (i) five schools in Vietnam (Wall Street English 1 / Kids&Us 4), (ii) two schools in Myanmar (Wall Street English 1 / Kids&Us 1), (iii) theAuston campus in Mandalay, (iv) the expansion of the Auston campus and Yangon American campus in Yangon, and (v) the EXERA headquarters office in Yangon. These expansions increased capacity and visibility and ensure the businesses protect and grow market share.

The Group also incurred a cash outflow of $0.1 million for investments in franchises for Wall Street English and Logiscool in Vietnam and Myanmar.

Cash outflow from financing amounted to $1.8 million for FY23 (FY22: $1.4 million), of which, repayment of lease liabilities totaled $2.7 million (FY22: $3.0 million). Cash inflow from financing, net of repayment of lease liabilities, was $0.9 million (FY22: $1.6 million), which comprised (i) net proceeds from shareholder's loans ($1.0 million) utilised mainly to open new schools for existing and new Education brands and (ii) repayment of bank loans ($0.1 million).

To further manage risk, minimal cash balances are maintained in Myanmar to fund working capital and capital expenditures. Whenever possible, excess cash balances are maintained in Singapore to mitigate country and credit risk exposures.

DIVIDENDS

The Board of Directors does not recommend paying dividends for FY23 as the Group needs to conserve cash for working capital and future expansion.

LIQUIDITY MANAGEMENT AND GOING CONCERN

The Board of Directors has reviewed in detail the Group cash flow forecast for the next 24 months. This forecast considered the time needed for new and non-performing businesses to turn profitable. The Group conducted extensive stress testing on various scenarios calibrating the duration it might take for these businesses to recover as well as other items impacting future performance, such as the general macroeconomic environment and initiatives within the management's control.

The Board of Directors determined management has control over sufficient mitigating actions to manage cash outflows, such as prioritising capital expenditures, reducing operational activities of non−performing business divisions and pausing discretionary spending. Other key considerations included:

a) The Group meticulously plans its business expansion and continuously monitors how changes to the political and economic environment may potentially impact its business operations, particularly in Myanmar. From FY22, Myanmar businesses are self-sustainable and no financial support has been required;

b) Positive working capital as tuition fees and certain security services are generally collected up to twelve months in advance of service delivery. Refer to Note 4 for further details;

c) Flexible discretionary capital spending as any capital expenditures in Myanmar would be funded through excess capital earned locally; and

d) Access to unutilised Loan Facility 1 as at date of annual report of $1.1 million as disclosed in Note 18(a) to the financial statements.

Established businesses within the Education and Services divisions in Myanmar generate sufficient capital to support the existing operations and their expansion as well as the establishment of new brands in Myanmar. Management expects this trend to continue for the foreseeable future.

Vietnam operations improved in 2H23 and further improvement is expected given Vietnam's gradual economic recovery from COVID, increasing foreign direct investment and lower inflation relative to other developing countries.

Therefore, at the date of this report, Directors have concluded that the Group has adequate financial resources to cover its working capital needs for the next twelve months.

OUTLOOK

Asia Strategic's integrated operating model leveraging in-house shared service functions is key to delivering on the strategy and producing high, sustainable returns for shareholders. Extensive financial resources and human capital have been invested the past few years to build a competitive portfolio, one that is balanced with profitable mature businesses anchoring the Group's results, while nurturing greenfield projects providing the next leg of growth.

Capital allocation is critical to deliver upon the Group strategy. At the Group level, we choose between investing in our portfolio / projects and strengthening our balance sheet. At the portfolio level, we allocate between countries and existing business units. At the project level, we choose between greenfield developments or acquisitions.

In the past two fiscal years, the Group has secured partnerships with leading international brands such as Kids&Us and Logiscool. Together with its Wall Street English businesses, the Group will grow the footprint of these three franchised brands creating a strong organic revenue runway. While the focus will remain on growing existing businesses, the Group will continue to evaluate investment opportunities, particularly those that fit strategically with existing businesses or provide desired exposure to key areas, such as healthcare.

Despite the difficult macroeconomic conditions faced in FY23, the Board and management remain positive on the long-term growth prospects of ASEAN as well as the markets in which its businesses operate.

OTHER INFORMATION

Asia Strategic Holdings Limited (the "Company" or "Asia Strategic") is listed on the London Stock Exchange and incorporated and domiciled in Singapore. Its registered office address is 80 Raffles Place #32−01, UOB Plaza, Singapore 048624.

The financial information set out in this announcement does not constitute the Company's statutory accounts for FY23. The financial information for FY23 is derived from Asia Strategic's statutory accounts for FY23, which will be delivered to the Accounting and Corporate Regulatory Authority in Singapore. The auditors reported on those accounts; their report was unqualified. The statutory accounts for FY23 will be finalized based on the financial information presented by the Board of Directors in this earnings announcement and will be delivered to the Accounting and Corporate Regulatory Authority in Singapore following the Company's Annual General Meeting.

This announcement was approved by the Directors on 31 January 2024.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023


$	Note	2023	2022


Revenue	4	24,054,547	17,906,874

Cost of services		(10,184,215)	(9,924,470)

Gross profit		13,870,332	7,982,404

Other income	5	90,018	80,711

Administrative and other operating expenses		(18,232,829)	(13,148,872)


Loss from operations		(4,272,479)	(5,085,757)

Finance costs	7	(979,791)	(862,678)

Loss before income tax	8	(5,252,270)	(5,948,435)

Income tax expense	9	(67,414)	(33,646)

Loss after income tax		(5,319,684)	(5,982,081)

Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations		141,287	152,095

Items that will not be reclassified subsequently to profit or loss:
Changes in fair value of equity instruments at FVOCI	14	(107,699)	(157,063)

Other comprehensive income for the year, net of tax		33,588	(4,968)

Total comprehensive income		(5,286,096)	(5,987,049)

Loss for the year attributable to:
Owners of the parent		(5,319,684)	(5,936,622)
Non−controlling interest		-	(45,459)
		(5,319,684)	(5,982,081)

Total comprehensive income attributable to:
Owners of the parent		(5,286,096)	(5,941,590)
Non−controlling interest		-	(45,459)
		(5,286,096)	(5,987,049)

Loss per share attributable to the owners of the Company ($)
- Basic and diluted	24	(1.80)	(2.04)

The accompanying notes form an integral part of these financial statements.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AT 30 SEPTEMBER 2023


$	Note	2023	2022


ASSETS
Non−current assets
Plant and equipment	10	2,846,539	2,032,390
Intangible assets	11	6,705,035	6,681,443
Right-of-use assets	12	11,383,340	11,275,139
Financial assets at FVOCI	14	49,363	157,062
Trade and other receivables	16	1,828,771	1,542,501
Total non-current assets		22,813,048	21,688,535

Current assets
Inventories	15	222,395	165,891
Trade and other receivables	16	2,481,989	1,628,965
Cash and cash equivalents	17	1,489,812	1,980,232
Total current assets		4,194,196	3,775,088
Total assets		27,007,244	25,463,623

LIABILITIES AND EQUITY
Liabilities
Non−current liabilities
Contract liabilities	4	1,096,763	1,872,423
Lease liabilities	12	9,869,397	9,142,979
Shareholder's loans	18	2,577,181	1,500,000
Total non-current liabilities		13,543,341	12,515,402

Current liabilities
Contract liabilities	4	10,996,568	8,093,625
Bank loan	19	-	115,530
Trade and other payables	20	5,840,468	3,636,898
Lease liabilities	12	2,251,819	1,961,444
Tax payables		7,368	16,229
Total current liabilities		19,096,223	13,823,726
Total liabilities		32,639,564	26,339,128

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AT 30 SEPTEMBER 2023


$	Note	2023	2022


Equity
Share capital	21	21,639,638	21,439,638
Convertible notes	22	5,730,000	5,730,000
Accumulated losses		(33,544,541)	(28,224,857)
Other reserves	23	542,583	179,714
Total equity		(5,632,320)	(875,505)
Total liabilities and equity		27,007,244	25,463,623

The accompanying notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023

$	Note	Share capital	Convertible notes	Accumulated losses	Equity reserves	Share option reserve	Fair value reserve	Foreign exchange reserve	Other reserves total	Total equity



Balance as at 1 October 2022		21,439,638	5,730,000	(28,224,857)	(212,271)	968,819	(605,692)	28,858	179,714	(875,505)

Total comprehensive income for the financial year:
Loss for the financial year		-	-	(5,319,684)	-	-	-	-	-	(5,319,684)
Other comprehensive income		-	-	-	-	-	(107,699)	141,287	33,588	33,588
		-	-	(5,319,684)	-	-	(107,699)	141,287	33,588	(5,286,096)

Contribution by owners of the Company
Issuance of shares in lieu of bonus	21	200,000	-	-	-	-	-	-	-	200,000
Recognition of share-based payments	23	-	-	-	-	329,281	-	-	329,281	329,281
		200,000	-	-	-	329,281	-	-	329,281	529,281
Balance as at 30 September 2023		21,639,638	5,730,000	(33,544,541)	(212,271)	1,298,100	(713,391)	170,145	542,583	(5,632,320)

The accompanying notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023

$	Note	Share capital	Convertible notes	Accumulated losses	Equity reserves	Share option reserve	Fair value reserve	Foreign exchange reserve	Other reserves total	Equity attributable to owners of the Company	Non- controlling interests	Total equity


Balance as at 1 October 2021		20,799,638	-	(22,288,235)	(128,362)	774,102	(448,629)	(123,237)	73,874	(1,414,723)	(38,449)	(1,453,172)

Total comprehensive income for the financial year:
Loss for the financial year		-	-	(5,936,622)	-	-	-	-	-	(5,936,622)	(45,459)	(5,982,081)
Other comprehensive income		-	-	-	-	-	(157,063)	152,095	(4,968)	(4,968)	-	(4,968)
		-	-	(5,936,622)	-	-	(157,063)	152,095	(4,968)	(5,941,590)	(45,459)	(5,987,049)

Contribution by owners of the Company
Issuance of shares in lieu of bonus	21	640,000	-	-	-	-	-	-	-	640,000	-	640,000
Issuance of convertible notes	22	-	5,730,000	-	-	-	-	-	-	5,730,000	-	5,730,000
Recognition of share-based payments	23	-	-	-	-	194,717	-	-	194,717	194,717	-	194,717
		640,000	5,730,000	-	-	194,717	-	-	194,717	6,564,717	-	6,564,717

Changes in ownership interest in a subsidiary
Acquisition of non-controlling interest		-	-	-	(83,909)	-	-	-	(83,909)	(83,909)	83,908	(1)

Balance as at 30 September 2022		21,439,638	5,730,000	(28,224,857)	(212,271)	968,819	(605,692)	28,858	179,714	(875,505)	-	(875,505)

The accompanying notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023


$	Note	2023	2022

Operating activities
Loss before income tax		(5,252,270)	(5,948,435)

Adjustments for:
Interest income	5	(23,608)	(21,589)
Share−based compensation	6	329,281	194,717
Interest on shareholder's loans	7	105,748	115,890
Plant and equipment written off	8	-	12,271
Loss on disposal of plant and equipment	8	1,154	837
Depreciation of plant and equipment	10	826,953	436,363
Reversal of impairment of intangible assets	11	-	(30,000)
Intangible assets written off	11	-	2,972
Amortisation of intangible assets	11	80,498	74,342
Amortisation of right-of-use assets	12	2,858,275	2,694,870
Lease concession	12	(139,978)	(161,774)
Interest on lease liabilities	12	875,405	754,370
(Reversal)/Impairment loss on trade and other receivables	16	(9,514)	15,453
Unrealised foreign exchange loss		348,430	191,438
Operating cash flows before working capital changes		374	(1,668,275)

Working capital changes:
Trade and other receivables		(565,342)	(358,925)
Inventories		(56,504)	(65,533)
Trade and other payables		2,248,570	1,656,544
Contract liabilities		2,127,283	4,073,958
Cash provided from / (used in) operations		3,754,381	3,637,769
Interest received		23,608	21,589
Income tax paid		(76,275)	(83,147)
Net cash provided from operating activities		3,701,714	3,576,211

Investing activities
Purchase of plant and equipment	10	(1,725,841)	(1,684,196)
Purchase of intangible assets	11	(94,889)	(245,580)
Advances to a related party		(564,438)	(395,516)
Net cash used in investing activities		(2,385,168)	(2,325,292)

The accompanying notes form an integral part of these financial statements.

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023


$	Note	2023	2022

Financing activities
Acquisition of equity interest from non-controlling interest		-	(1)
Repayment of lease liabilities	12	(1,921,275)	(2,235,413)
Interest paid on lease liabilities	12	(752,974)	(754,370)
Movement in fixed deposits pledged to bank		-	100,625
Proceeds from shareholder's loans	18	1,325,000	250,000
Repayment of shareholder's loans	18	(350,000)	(1,750,000)
Interest on shareholder's loans	18	(3,567)	(359,437)
(Repayment of)/proceeds from bank loan	19	(115,530)	115,530
Proceeds from convertible notes	22	-	3,230,000
Net cash used in financing activities		(1,818,346)	(1,403,066)

Net changes in cash and cash equivalents		(501,800)	(152,147)
Effect of exchange rate changes on cash and cash equivalents		11,380	(32,878)
Cash and cash equivalents at beginning of year		1,980,232	2,165,257
Cash and cash equivalents at end of year	17	1,489,812	1,980,232

The accompanying notes form an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL YEAR ENDED 30 SEPTEMBER 2023

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. General

Asia Strategic Holdings Limited (the "Company" or "Asia Strategic") (Registration Number 201302159D), is a public company limited by shares incorporated and domiciled in Singapore with its principal place of business and registered office at 80 Raffles Place #32−01, UOB Plaza, Singapore 048624. The Company was listed on the Main Market of London Stock Exchange on 22 August 2017.

The principal activities of the Company consist of developing, managing, operating and investing in businesses across Emerging Asia, including services to its subsidiaries. The principal activities of the subsidiaries are set out in Note 13 to the financial statements. Related companies in these financial statements refer to members of the Group.

2. Significant accounting policies

2.1 Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union and are prepared under the historical cost convention, except as disclosed in the accounting policies below.

The individual financial statements of each Group entity are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the Group and the statement of financial position of the Company are presented in United States dollar ("US$" or "$") which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

The preparation of financial statements in compliance with IFRS requires management to make judgements, estimates and assumptions that affect the Group's application of accounting policies and reported amounts of assets, liabilities, revenue and expenses. Although these estimates are based on management's best knowledge of current events and actions, actual results may differ from those estimates. The areas where such judgements or estimates have significant effect on the financial statements are disclosed in Note 3 to the financial statements.

Myanmar political and economic situation

Myanmar's political and economic situation is evolving daily. The outcome and long-term effects remain unclear at this stage. The business environment remains challenging due to (i) frequent electricity and telecommunication outages, (ii) sudden regulatory changes, (iii) stringent foreign exchange control measures, (iv) disruption of the global and local supply chain and the weakening of the Myanmar Kyat against foreign currencies, in particular USD resulting in inflationary pressures, and (v) increased security risks.

Despite these uncertainties, the economic activity and the business environment in Myanmar experienced gradual improvement over the past quarters, particularly in the key urban cities where the Group operates such as Yangon and Mandalay. The Group continuously monitors and applies appropriate mitigating actions to ensure the Group's operations in Myanmar remain flexible and adaptable to the current market environment. Over the last three years, during Covid-19 movement restrictions, the Group has gained valuable experience and is prepared to switch its delivery of all education services from in-centre to online, if required to avoid any business disruptions and ensure business continuity. Its security services business remained integral to secure embassies, customer premises and national infrastructure.

Accordingly, as part of risk management, minimal cash balances in Myanmar are maintained to the extent of its cash flow requirement in any given month. Excess cash balances are maintained in Singapore to mitigate country and credit risk exposures.

While the Group remains focused on expanding its current operations in Vietnam which are expected to exceed Myanmar over time, the contribution from both markets remains an important diversification strategy to mitigate the overall geographical risk exposure of the Group.

The Group has considered the current market environment in the respective countries in which it operates as at the reporting date and notes that there are no indicators that warrant material adjustments to the key estimates and judgements on the recoverability of the assets. The significant estimates and judgements applied are as disclosed in Note 3 to the financial statements.

Going concern assumption

The Group recorded loss for the year of $5,319,684 (2022: $5,982,081). As at reporting date, the Group's current liabilities and total liabilities exceeded its current assets and total assets amounting to $14,902,027 (2022: $10,048,638) and $5,632,320 (2022: $875,505), respectively. The Group's net cash generated from operating activities amounted to $3,701,714 (2022: $3,576,211) during the financial year.

The Board of Directors have carried out a detailed review of the Group cash flow forecast for 24 months from the financial year ended 30 September 2023.

The cash flow forecast has been prepared and stress-tested taking into consideration the timing of capital expenditures, the general political and macroeconomic environment and other information available at the end of the reporting period. The Directors have evaluated that there are sufficient mitigating actions within their control, such as further optimising the Group's operating costs and prioritising the Group's capital expenditures focusing on multi brand sites driving operational efficiency and synergies.

Other key considerations in the assessment include, among others:

a) The Group meticulously plans its business expansion and continuously monitors how changes to the political and economic environment may potentially impact its business operations, particularly in Myanmar. Since the previous financial year, the Myanmar-based businesses are largely self-sustainable;

b) The Group has access to $1,120,000 in unutilised Loan Facility 1, as disclosed in Note 18(a) to the financial statements;

c) Positive working capital as tuition fees and certain security services are generally collected 1 to 12 months in advance of performance with reference to the terms of the contracts. Refer to Note 4 for further details; and

d) Flexibility over the timing and the size of certain capital expenditures as all expansionary expenditures are discretionary in nature. Any capital expenditures in Myanmar would be funded by the excess capital available locally, if any.

Based on the current market environment in the respective countries the Group operates, there are no indicators that warrant material adjustments to the key assumptions and judgements applied.

The Directors of the Company are of the opinion that, based on past operating cash flows, current forecasts, flexibility in investing activities, cash resources and available loan facilities, no material uncertainty exists has been identified that may give rise to significant doubt over going concern and the going concern basis is appropriate in the preparation of the financial statements.

Changes in accounting policies

New standards, amendments and interpretations effective from 1 October 2022

The standards, amendments to standards, and interpretations that will apply for the first time by the Group do not impact the Group as they are either not relevant to the Group's business activities or require accounting which is consistent with the Group's current accounting policies.

IFRSs issued but not yet effective

At the date of authorisation of these financial statements, the following IASB were issued but not yet effective and have not been early adopted in these financial statements:

Standard or interpretation	Description	Effective date (annual periods beginning on or after)

IAS 1 and IFRS Practice Statement 2 (Amendments)	: Disclosure of Accounting Policies	1 January 2023
Amendments to IAS 12	: Deferred Tax Related to Assets and Liabilities arising from a Single Transaction	1 January 2023
Amendments to IAS 8	: Definition of Accounting Estimates	1 January 2023
Amendments to IAS 7	: Supplier Financing Arrangements	1 January 2024
Amendments to IAS 1	: Classification of Liabilities as Current or Non-current	1 January 2024
Amendments to IFRS 16	: Leases (Liability in a Sale and Leaseback)	1 January 2024
Amendments to IAS 1	: Presentation of Financial Statements (Non-current liabilities with Covenants)	1 January 2024
Amendments to IAS 21	: Lack of Exchangeability	1 January 2025
IFRS 10 and IAS 28 (Amendments)	: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	To be determined

Consequential amendments were also made to various standards as a result of these new or revised standards.

Except as disclosed below, the Group anticipates that the adoption of the above standards issued by the IASB, if applicable, will have no material impact on the financial statements of the Group in the period of their adoption.

Amendments to IAS 21: Lack of Exchangeability

Under IAS 21, the Effects of Changes in Foreign Exchange Rates, in preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency ("foreign currencies") are recorded at the rate of exchange prevailing on the date of the transaction. However, in rare circumstances, it is possible that one currency cannot be exchanged into another. This lack of exchangeability might arise when a government imposes controls on capital imports and exports, for example, or when it provides an official exchange rate but limits the volume of foreign currency transactions that can be undertaken at that rate. Consequently, market participants are unable to buy and sell currency to meet their needs at the official exchange rate and turn instead to unofficial, parallel markets.

Although few jurisdictions are affected by this, it can have a significant accounting impact for those companies affected. Accordingly, IAS 21 was amended to clarify when a currency is exchangeable into another currency and how a company estimates a spot rate when a currency lacks exchangeability.

Under the amendments to IAS 21, an entity is allowed to estimate a spot rate when a currency is not exchangeable. When estimating a spot rate an entity can use an observable exchange rate without adjustment or another estimation technique.

Entities applying this new amended standard will need to provide new disclosures to help users assess the impact of using an estimated exchange rate on the financial statements which includes (i) the nature and financial impacts of the currency not being exchangeable, (ii) the spot exchange rate used, (iii) the estimation process; and (iv) risks to the company because the currency is not exchangeable.

In April 2022, the Central Bank of Myanmar ("CBM") implemented foreign exchange control measures requiring all foreign currency receipts from April 2022 to be converted to Myanmar Kyat ("Kyat"), restricting conversion of foreign currencies and limiting offshore remittance. The foreign exchange regulations in Myanmar remain fluid and subject to unpredictable changes. The Group continuously monitor announcements by the CBM to manage its currency exposures proactively.

The amendments apply to the annual reporting periods beginning on or after 1 January 2025. Earlier application is permitted. The Group is in the process of performing a detailed assessment in respect of classification, measurement and disclosure on the financial statements.

2.2 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. Subsidiaries are entities over which the Group has control. The Group controls an investee if the Group has power over the investee, exposure to variable returns from its involvement with the investee, and the ability to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

Subsidiaries are consolidated from the date on which control commences until the date on which control ceases. Control is reassessed whenever the facts and circumstances indicate that they may be a change in the elements of control.

All intra−group balances and transactions and any unrealised income and expenses arising from intra−group transactions are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides an impairment indicator of the transferred asset.

The financial statements of the subsidiaries are prepared for the same reporting period as that of the Company, using consistent accounting policies. Where necessary, accounting policies of subsidiaries are changed to ensure consistency with the policies adopted by the Group.

Non−controlling interests

Non−controlling interests in subsidiaries relate to the equity in subsidiaries which is not attributable directly or indirectly to the owners of the parent. They are shown separately in the consolidated statements of comprehensive income, consolidated statement of changes in equity and consolidated statement of financial position.

Non−controlling interests in the acquiree that are a present ownership interest and entitle its holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non−controlling interests' proportionate share of the fair value, of the acquiree's identifiable net assets. The choice of measurement basis is made on an acquisition−by−acquisition basis. Subsequent to acquisition, the carrying amount of non−controlling interests is the amount of those interests at initial recognition plus the non−controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non−controlling interests even if this results in the non−controlling interests having a deficit balance.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions (i.e., transactions with owners). The carrying amounts of the Group's interests and the non−controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non−controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.

When the Group loses control of a subsidiary, it derecognises the assets and liabilities of the subsidiary and any non−controlling interest. The profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non−controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e., reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of.

The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 Financial Instruments, or when applicable, the cost on initial recognition of an investment in an associate or joint venture.

2.3 Business combinations

The acquisition of subsidiaries is accounted for using the acquisition method. The consideration transferred for the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition−related costs are recognised in profit or loss as incurred. Consideration transferred also includes any contingent consideration measured at the fair value at the acquisition date. Subsequent changes in fair value of contingent consideration which is deemed to be an asset or liability, will be recognised in profit or loss. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date.

Where a business combination is achieved in stages, the Group's previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e., the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

Goodwill arising on acquisition is recognised as an asset at the acquisition date and initially measured at the excess of the sum of the consideration transferred, the amount of any non−controlling interest in the acquiree and the fair value of the acquirer's previously held equity interest (if any) in the entity over net acquisition−date fair value amounts of the identifiable assets acquired and the liabilities and contingent liabilities assumed.

Goodwill on subsidiary is recognised separately as intangible assets. Goodwill is initially recognised at cost and subsequently measured at cost less any accumulated impairment losses.

2.4 Revenue recognition

Revenue is recognised when a performance obligation is satisfied. Revenue is measured based on the consideration of which the Group expects to be entitled in exchange for transferring promised good or services to a customer, excluding amounts collected on behalf of third parties (i.e., sales-related taxes). The consideration promised in the contracts with customers are derived from fixed price contracts.

Contract liabilities are deferred revenue comprising tuition fees and other advance consideration received from customers and a related party. Deferred revenue is recognised as revenue when performance obligations under its contracts are satisfied.

Tuition fees

Tuition fees are earned through the provision of educational and enrichment programs across the Group's educational businesses, either in person or online. Tuition fees are recognised over the duration of the course and when services are rendered with reference to the terms of the contract on a straight−line basis over the term of the courses. Sale of merchandise and ancillary fees are either recognised at point in time when goods are delivered and over time on a straight−line basis, respectively according to the delivery of the performance obligations.

Service fees

a) Security services

The Group provides a broad range of security, risk management, facility management and security training services to customers over a specified contract period. The performance obligation is satisfied over time as the customer simultaneously receives and consumes the benefits of the Group's performance in providing the security services. As the Group's efforts or inputs are expended throughout the performance period, revenue is recognised on a straight−line basis over the specified contract period.

For certain contracts where the Group supplies security equipment and provides ad−hoc services such as journey management and cash in transit, revenue are recognised at point in time when goods and services are delivered.

b) Management services

Management fees earned from hostels and schools managed by the Group, under long−term contracts with the owners, are recognised over time on a straight-line basis as and when services are rendered with reference to the terms of the contracts. Management fees comprise incentive fees, which are based on the profitability of these business operations and the amount of course modules to be delivered.

2.5 Borrowing costs

Borrowing costs are recognised in profit or loss in the period in which they are incurred using the effective interest method.

2.6 Employee benefits

Statutory contributions

Statutory contributions include defined contribution plans and social benefits as regulated by the countries where the Group operates. These statutory contributions are charged as an expense in the period in which the related service is performed. Defined contribution plans are post−employment benefit plans under which the Group pays fixed contributions into state−managed retirement benefit schemes in Singapore and has no legal and constructive obligation to pay further once the payments are made.

Termination benefits

Termination benefits comprise benefits payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for such benefits. Termination benefits are recognised when the Group is committed to either terminating the employment of current employees based on a formal plan without the possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy.

Initial recognition and subsequent changes to the expense and liability for termination benefits are measured in line with the accounting policies disclosed above for other short-term and long-term employee benefits.

2.7 Share−based payments

The Group issues equity−settled share−based payments to certain employees.

Equity−settled share−based payments are measured at fair value of the equity instruments (excluding the effect of non−market−based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity−settled share−based payments is expensed on a straight−line basis over the vesting period with a corresponding credit to the share−based payment reserve, based on the Group's estimate of the number of equity instruments that will eventually vest and adjusted for the effect of non−market−based vesting conditions. At the end of each financial period, the Group revises the estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss over the remaining vesting period with a corresponding adjustment to the share−based payment reserve.

Fair value of the share options is measured using the Black−Scholes pricing model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non−transferability, exercise restrictions and behavioural considerations.

For cash-settled share-based payments, a liability and a corresponding expense equal to the portion of the goods or services received is recognised at the current fair value determined at the end of each financial year, with movements recognised in profit or loss.

2.8 Taxes

Income tax expense comprise current tax expense and deferred tax expense.

Current income tax

Current income tax expense is the amount of income tax payable in respect of the taxable profit for a period. Current income tax liabilities for the current and prior periods shall be measured at the amount expected to be paid to the taxation authorities, using the tax rates and tax laws in the countries where the Group operates, that have been enacted or substantively enacted by the end of the financial year. Management evaluates its income tax provisions on periodical basis.

Current income tax expenses are recognised in profit or loss, except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax

Deferred tax is recognised on all temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases of asset and liabilities, except when the temporary difference arises from the initial recognition of goodwill or other assets and liabilities that is not a business combination and affects neither the accounting profit nor taxable profit.

Deferred tax liabilities are recognised for all taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the temporary difference can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each financial year and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured using the tax rates expected to apply for the period when the asset is realised or the liability is settled, based on tax rate and tax law that have been enacted or substantially enacted by the end of financial year. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects to recover or settle its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

Deferred tax is recognised in profit or loss, except when it relates to items recognised outside profit or loss, in which case the tax is also recognised either in other comprehensive income or directly in equity, or where it arises from the initial accounting for a business combination. Deferred tax arising from a business combination, is taken into account in calculating goodwill on acquisition.

Sales tax

Revenue, expenses and assets are recognised net of the amount of sales tax except:

· when the sales taxation that is incurred on purchase of assets or services is not recoverable from the taxation authorities, in which case the sales tax is recognised as part of cost of acquisition of the asset or as part of the expense item as applicable; and

· receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

2.9 Foreign currency transactions and translation

In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency ("foreign currencies") are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each financial year, monetary items denominated in foreign currencies are retranslated at the rates prevailing as of the end of the financial year. Non−monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non−monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non−monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non−monetary items in respect of which gains and losses are recognised directly in equity. For such non−monetary items, any exchange component of that gain or loss is also recognised directly in equity.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations (including comparatives) are expressed in United States dollar using exchange rates prevailing at the end of the financial year. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, are recognised initially in other comprehensive income and accumulated in the Group's foreign exchange reserve.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities), and of borrowings and other currency instruments designated as hedges of such investments, are taken to the foreign exchange reserve.

On disposal of a foreign operation, the accumulated foreign exchange reserve relating to that operation is reclassified to profit or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.

2.10 Plant and equipment

All items of plant and equipment are initially recognised at cost. The cost includes its purchase price and any costs 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. Dismantlement, removal or restoration costs are included as part of the cost if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the plant and equipment.

Subsequent expenditure on an item of plant and equipment is added to the carrying amount of the item if it is probable that future economic benefits associated with the item will flow to the Group and the cost can be measured reliably. All other costs of servicing are recognised in profit or loss when incurred.

Plant and equipment are subsequently stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is calculated using the straight-line method to allocate the depreciable amounts over their estimated useful lives on the following basis:

Computers and books	3 - 5 years
Furniture and fittings	3 - 7 years
Motor vehicles	5 - 6 years
Leasehold improvements	3 - 5 years

No depreciation is charged on construction−in−progress as they are not yet ready for their intended use as at the end of the reporting period.

The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

The estimated useful lives, residual values and depreciation methods are reviewed, and adjusted as appropriate, at the end of each financial period.

An item of plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal.

The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.

2.11 Intangible assets

Goodwill

Goodwill arising on the acquisition of a subsidiary or business represents the excess of the consideration transferred, the amount of any non−controlling interests in the acquiree and the acquisition date fair value of any previously held equity interest in the acquiree over the acquisition date fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary recognised at the date of acquisition.

Goodwill on subsidiary is recognised separately as intangible assets. Goodwill is initially recognised at cost and subsequently measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the Group's cash−generating units expected to benefit from the synergies of the combination. Cash−generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash−generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro−rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain or loss on disposal.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination are identified and recognised separately from goodwill if the assets and their fair values can be measured reliably. The cost of such intangible assets is their fair value as at the acquisition date.

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and any accumulated impairment losses, on the same basis as intangible assets acquired separately.

Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method are reviewed at least at each financial period−end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite useful lives is recognised in profit or loss.

An item of intangible asset is derecognised upon disposal or when no future economic benefits are expected from its use of disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the financial period the asset is derecognised.

Area development and centre fees

Area development fees are paid for the exclusive franchising rights to develop and operate in both Vietnam and Myanmar for the (i) English language schools for adults under the brand "Wall Street English", (ii) English language schools for children under the brand "Kids&Us", and (iii) coding schools under the, "Logiscool" brand.

Centre fees are paid for the opening of new "Wall Street English" and "Kids&Us" schools in Vietnam and Myanmar. The area development and centre fees are capitalised and amortised up to 10 years according to the terms of the franchise agreements.

Set−up fee and brand licensing fee

A set−up fee was paid for the exclusive rights to develop and operate the "Auston" college in Myanmar. A brand licensing fee was paid for the exclusive perpetual, irrecoverable, non−transferrable rights of use of the licensed intellectual property and trademark for the operations of Auston Myanmar. The set−up fee is capitalised and amortised over the period of 10 years from the date operation commenced.

Computer software licence

Acquired computer software licences are initially capitalised at cost which includes the purchase price (net of any discounts and rebates) and other directly attributable costs of preparing the software for its intended use. Direct expenditures which enhance or extend the performance of computer software beyond its specifications and which can be reliably measured is added to the original cost of the software. Costs associated with maintaining computer software are recognised as an expense as incurred.

Computer software licences are subsequently carried at cost less accumulated amortisation and accumulated impairment losses. These costs are amortised to profit or loss using the straight−line method over their estimated useful lives of 3 years.

Customer−related assets

Customer−related assets comprise customer contracts and customer relationship arising from business combinations and are initially measured at fair value as at the date of acquisition. These assets are capitalised at fair value as at acquisition date and subsequently measured at cost less any accumulated amortisation and any accumulated losses.

Amortisation is recognised in profit or loss on a straight−line basis over their estimated useful lives of 3 years.

2.12 Impairment of non−financial assets excluding goodwill

At the end of each financial period, the Group reviews the carrying amounts of its non−financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash−generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

The recoverable amount of an asset or cash−generating unit ("CGU") is the higher of its fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre−tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash−generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash−generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash−generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash−generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

2.13 Financial instruments

The Group recognises a financial asset or a financial liability in its statement of financial position when, and only when, the Group becomes party to the contractual provisions of the instrument.

Financial assets

The Group classifies its financial assets into one of the categories below, depending on the Group's business model for managing the financial assets as well as the contractual terms of the cash flows of the financial asset. The Group shall reclassify its affected financial assets when and only when the Group changes its business model for managing these financial assets. The Group's accounting policy for each category detailed below:

Amortised cost

These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method less provision for impairment. Interest income from these financial assets is included in interest income using the effective interest rate method.

Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using the lifetime expected credit losses. During this process, the probability of the non−payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for other receivables are recognised based on a forward−looking expected credit loss. The methodology used to determine the amount of the provision is based on whether at each reporting date, there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

The Group's financial assets measured at amortised cost comprise trade and other receivables (excluding prepayments and sales tax) and cash and cash equivalents in the consolidated statement of financial position.

Equity instruments at fair value through other comprehensive income ("FVOCI")

The Group has strategic investments in the equity securities of listed and unlisted entities which are not accounted for as a subsidiary, associate or jointly controlled entity. For those equity instruments, the Group has made an irrevocable election to classify the investment at fair value through other comprehensive income rather than through profit or loss as the Group considers this measurement to be the most representative of the business model for these assets. They are carried at fair value with changes in fair value recognised in other comprehensive income and accumulated in the fair value through other comprehensive income reserve. Upon disposal, any balance within fair value through other comprehensive income reserve is reclassified directly to retained earnings and is not reclassified to profit or loss.

Dividends are recognised in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment, in which case the full or partial amount of the dividend is recorded against the associated investment carrying amount.

Purchases and sales of financial assets measured at fair value through other comprehensive income are recognised on settlement date with any change in fair value between trade date and settlement date being recognised in the fair value through other comprehensive income reserve.

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. The Company classifies ordinary shares as equity instruments.

Financial liabilities

The Group classifies all financial liabilities as subsequently measured at amortised cost.

Trade and other payables

Trade and other payables, excluding sales taxes, are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, where applicable, using the effective interest method.

Loans from a shareholder

Interest−bearing loans from a shareholder are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost, using the effective interest method.

Convertible notes

The test on the classification of convertible notes as equity or as liability is based on the substance of the contractual arrangement. If there is no unavoidable obligation on the Group to pay cash to the holders or to settle the convertible notes with a variable number of the Company's ordinary shares, they are classified as equity. In all other cases, the instrument is accounted for as a liability. Upon issuance, the convertible notes are measured at the transaction price including qualifying issuance costs. Convertible notes accounted for as equity instruments are subsequently not remeasured. Upon settlement of equity classified convertible notes by issuance of ordinary shares upon conversion or by early redemption at the option of the Company, all amounts are also directly recognised in equity.

The convertible notes issued by the Company are convertible at maturity only into a fixed number of ordinary shares of the Company. The holders have no right to demand repayment of the convertible notes from the Company.

The net proceeds of the convertible notes issued (including any directly attributable transaction costs) are classified entirely as an equity component.

If the convertible notes are redeemed before its maturity date, the difference between any redemption consideration and the carrying amounts of the convertible notes are directly recognised in equity at the date of transaction.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The differences between the carrying amount and the consideration paid is recognised in profit or loss.

2.14 Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise of cash on hand, cash at bank and demand deposits which are readily convertible to known amounts of cash, with a term of less than 3 months, and are subject to insignificant risk of changes in value. For the purposes of the consolidated statement of cash flows, cash and cash equivalents excludes any pledged deposits.

2.15 Inventories

Inventories mainly comprise merchandise and consumables, and are stated at the lower of cost and net realisable value. Costs comprise direct materials and other directly attributable costs that have been incurred in bringing the inventories to their present location and condition. Cost is calculated using the first−in first−out ("FIFO") method. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

2.16 Leases

As lessee

All leases are accounted for by recognising a right−of−use asset and a lease liability except for:

· leases of low value assets; and

· leases with a duration of twelve months or less.

The payments for leases of low value assets and short−term leases are recognised as an expense on a straight−line basis over the lease term.

Initial measurement

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the Group's incremental borrowing rate on commencement of the lease is used.

Variable lease payments are only included in the measurement of the lease liability if it is depending on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.

On initial recognition, the carrying amount of lease liabilities also includes:

· amounts expected to be payable under any residual value guarantee;

· the exercise price of any purchase option granted in favour of the Group if it is reasonably certain to assess that option; and

· any penalties payables for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised.

Right−of−use assets are initially measured at the amount of lease liabilities, reduced by any lease incentives received and increased for:

· lease payments made at or before commencement of the lease;

· initial direct costs incurred; and

· the amount of any provision recognised where the Group is contractually required to dismantle, remove or restore the leased asset.

The Group presents the right−of−use assets and lease liabilities separately from other assets and other liabilities in the consolidated statement of financial position.

Subsequent measurement

Right−of−use assets are subsequently measured at cost less any accumulated amortisation, any accumulated impairment loss and, if applicable, adjusted for any remeasurement of the lease liabilities. The right−of−use assets under cost model are amortised on a straight−line basis over the shorter of either the remaining lease term or the remaining useful life of the right−of−use assets using the straight−line method, on the following bases:

	Years

International school building	10
Office premises and education campuses	1 - 10
Motor vehicles	2.5 - 3

If the lease transfers ownership of the underlying asset by the end of the lease term or if the cost of the right−of−use asset reflects that the Group will exercise the purchase option, the right−of−use assets are depreciated over the useful life of the underlying asset.

The carrying amount of right−of−use assets are reviewed for impairment when events or changes in circumstances indicate that the right−of−use asset may be impaired. The accounting policy on impairment is as described in Note 2.12 to the financial statements.

Subsequent to initial measurement, lease liabilities are adjusted to reflect interest charged at a constant periodic rate over the remaining lease liabilities, lease payment made and if applicable, account for any remeasurement due to reassessment or lease modifications.

After the commencement date, interest on the lease liabilities and variable lease payments not included in the measurement of the lease liabilities are recognised in profit or loss, unless the costs are eligible for capitalisation in accordance with other applicable standards.

When the Group revises its estimate of any lease term (i.e., probability of extension or termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments over the revised term. The carrying amount of lease liabilities is similarly revised when the variable element of the future lease payment dependent on a rate or index is revised. In both cases, an equivalent adjustment is made to the carrying amount of the right−of−use assets. If the carrying amount of the right−of−use assets is reduced to zero and there is a further reduction in the measurement of lease liabilities, the remaining amount of the remeasurement is recognised directly in profit or loss.

When the Group renegotiates the contractual terms of a lease with the lessor, the accounting treatment depends on the nature of the modification:

· If the renegotiation results in one or more additional assets being leased for an amount commensurate with the standalone price for the additional right−of−use obtained, the modification is accounted for as a separate lease in accordance with the above policy;

· In all other cases where the renegotiation increases the scope of the lease (i.e., extension to the lease term, or one or more additional assets being leased), the lease liability is remeasured using the discount rate applicable on the modification date, with the right−of−use asset being adjusted by the same amount;

· If the renegotiation results in a decrease in scope of the lease, both the carrying amount of the lease liability and right−of−use asset are reduced by the same proportion to reflect the partial or full termination of the lease with any difference being recognised in profit or loss. The lease liability is then further adjusted to ensure its carrying amount reflects the amount of the renegotiated payments over the renegotiated term, with the modified lease payments discounted at the rate applicable on the modification date. The right−of−use asset is adjusted by the same amount.

For lease contracts that convey a right to use an identified asset and require services to be provided by the lessor, the Group has elected to allocate any amount of contractual payments to, and account separately for, any services provided by the lessor as part of the contract.

In financial year ended 30 September 2021, the Group had early adopted and applied the practical expedient introduced by the amendments to IFRS 16 (issued in May 2020), extending the practical expedient in order to permit lessees to apply it to rent concessions for which reductions in lease payments affect payments originally due on or before 30 June 2022. In the previous financial year, additional rent concessions that satisfied the criteria were accounted by remeasuring the lease liability to reflect the revised consideration using the original discount rate and the effect of change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

Rent concessions beyond 30 June 2022 are not eligible for the application of the practical expedient are accounted as lease modifications. The effect of applying the practical expedient is disclosed in Note 12 to the financial statements expedient.

2.17 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the financial period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The increase in the provision due to the passage of time is recognised in the statement of comprehensive income as finance expense.

Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss when the changes arise.

2.18 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision−maker. The chief operating decision−maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Group Chief Executive Officer.

3. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in Note 2 to the financial statements, management made judgements, estimates and assumptions about the carrying amounts of assets and liabilities that were not readily apparent from other sources. The estimates and associated assumptions were based on historical experience and other factors that were considered to be reasonable under the circumstances. Actual results may differ from these estimates.

These estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

3.1 Critical judgements made in applying the entity's accounting policies

The following are the critical judgements, apart from those involving estimations (see below) that management has made in the process of applying the Group's accounting policies and which have a significant effect on the amounts recognised in the financial statements.

Determine the lease term

The Group leases schools, offices and motor vehicles. Included in these lease arrangements, there are extension and termination options held and exercisable only by the Group. In determining the lease term, management considers the likelihood of either to exercise the extension option, or not to exercise the termination option. Management considers all facts and circumstances that create an economic incentive to extend and economic penalty or costs relating to the termination of lease.

The assessment on lease terms are reviewed at the end of each reporting date if there is a significant change in the Group's intentions, business plan or other circumstances unforeseen since it was first estimated.

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the financial period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

i) Loss allowance for trade and other receivables

The Group uses the simplified approach to calculate expected credit losses ("ECLs") for trade receivables. The provision rates are based on various customers' historical observed default rates.

The Group will consider and evaluate the historical credit loss experience with forward−looking information. For instance, if forecast economic conditions are expected to deteriorate over the next year which can lead to an increased number of defaults in the customers, the historical default rates are adjusted. At the end of each financial year, the historical observed default rates are updated and changes in the forward−looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. The Group's historical credit loss experience and forecast of economic conditions may also not be representative of customer's actual default in the future.

Other than trade receivables, the Group assesses the credit risk of other receivables at each financial year on an individual basis, to determine whether or not there have been significant increases in credit risk since the initial recognition of these assets. To determine whether there is a significant increase in credit risks, the Group considers factors such as whether the debtors are facing significant financial difficulties, any default or significant delay in payments. Where there is a significant increase in credit risk, the Group determines the lifetime expected credit loss by considering the loss given default, the probability of default and exposure at default assigned to each counterparty. These financial assets are written off either partially or in full when there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amount subject to the write−offs.

The carrying amounts of the trade and other receivables as at the end of the financial date are disclosed in the Note 16 to the financial statements.

ii) Impairment of goodwill

The management determines whether goodwill is impaired at least on an annual basis and as and when there is an indication that goodwill may be impaired. This requires an estimation of the value−in−use of the cash−generating units to which the goodwill is allocated. Estimating the value−in−use requires the Group to make an estimate of the expected future cash flows from the cash−generating unit and also to choose a suitable growth rate and discount rate in order to calculate the present value of those cash flows.

The Group's carrying amount of intangible assets as at 30 September 2023 and details of the impairment assessment and key assumptions used were disclosed in Note 11 to the financial statements.

iii) Impairment of non-financial assets (including plant and equipment, intangible assets excluding goodwill and right−of−use assets ("ROU"))

The Group carries out impairment assessment for non-financial assets when there is indication of an impairment. Other intangible assets are assessed for indicators of impairment at the end of the financial year. In carrying out the impairment assessment, management has identified the cash−generating units ("CGUs") to which the non-financial assets belong and determined the recoverable amounts of the CGUs by estimating the expected discounted future cash flows over the remaining useful lives of the non-financial assets. Estimating the recoverable amounts requires the Group to determine a suitable sales growth rate, discount rate and to make an estimate of the expected future cash flows from the cash−generating unit in order to calculate the present value of those cash flows.

The carrying amounts of plant and equipment, intangible assets and right−of−use assets as at 30 September 2023 are as disclosed in Note 10, Note 11 and Note 12, respectively to the financial statements.

iv) Measurement of lease liabilities

Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term. The Group has determined the discount rates with reference to the respective lessee's incremental borrowing rates when the rate inherent in the lease is not readily determinable. The Group obtains the relevant market interest rates after considering the applicable currency of the lease payments and the geographical location where the lessee operates as well as the term of the lease. Management considers its own credit spread information from its recent borrowings, industry data available as well as any security available in order to adjust the market interest rate obtained from similar economic environment, term and value of the lease.

The incremental borrowing rate applied to lease liabilities as at 30 September 2023 ranges from 8% to 10% (2022: 8% to 10%). The carrying amount of lease liabilities as at 30 September 2023 is as disclosed in Note 12 to the financial statements.

If the incremental borrowing rate had been 1% (2022: 1%) higher or lower than management's estimates, the Group's lease liabilities would have been lower or higher by approximately $121,000 (2022: $172,000).

4. Revenue

Disaggregation of revenue

The Group has disaggregated revenue into various categories in the following table which is intended to:

• depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors; and

• enable users to understand the relationship with revenue segment information provided in Note 27 to the financial statements.

	Education		Services		Total
$	2023	2022	2023	2022	2023	2022


Tuition fees	18,702,389	11,876,265	-	-	18,702,389	11,876,265
Service fees	-	-	5,327,189	5,794,603	5,327,189	5,794,603
Management fees	7,121	218,159	-	-	7,121	218,159
New centre fee	17,848	17,847	-	-	17,848	17,847
	18,727,358	12,112,271	5,327,189	5,794,603	24,054,547	17,906,874

Timing of transfer of services
Over time	18,717,038	12,087,207	5,178,851	5,333,005	23,895,889	17,420,212
Point in time	10,320	25,064	148,338	461,598	158,658	486,662
	18,727,358	12,112,271	5,327,189	5,794,603	24,054,547	17,906,874

The timing of revenue recognition affects the amount of revenue and deferred revenue recognised as at the reporting date in the consolidated statement of financial position.


$	2023	2022

Contract liabilities
Deferred revenue	12,093,331	9,966,048

Analysed as:
Current	10,996,568	8,093,625
Non−current	1,096,763	1,872,423
	12,093,331	9,966,048

a) Significant changes in contract liabilities are as detailed below:


$	2023	2022


At 1 October	9,966,048	5,892,090
Cash received in advance of performance and not recognised as revenue
- Additions	21,141,695	16,213,749

Revenue recognised during the financial year:
- On contract liabilities balances at beginning of financial year	(9,802,821)	(4,928,924)
- On cash received in advance during financial year	(9,069,965)	(7,027,948)
	(18,872,786)	(11,956,872)
Foreign exchange difference	(141,626)	(182,919)
At 30 September	12,093,331	9,966,048

b) Remaining performance obligations

Non−current deferred revenue are in respect of cash received in advance of performance which will be recognised according to the following:

(i) The Group recognised new centre fees for the Education businesses, which were collected in advance of the performance obligations in prior years.

(ii) Student fees are generally collected 1 to 12 months (2022: same) and more than 12 months for certain students who prepaid in advance of performance with reference to the individual terms of the student contracts.

(iii) Fees in relation to certain security services are collected 6 to 12 months (2022: same) in advance of performance with reference to the individual terms of the customer contracts.

Deferred revenue from student fees are recognised over the duration of the respective course and the remaining contract period ranging from 1 to 5 (2022: 1 to 6) years.

The amount of revenue that will be recognised in future periods on these contracts when those remaining performance obligations will be satisfied is analysed as follows:

$	Within 1 year	Within 2 to 3 years	More than 4 years	Total

2023
Tuition fees	10,314,577	1,056,773	39,990	11,411,340
Service fees	681,991	-	-	681,991
	10,996,568	1,056,773	39,990	12,093,331

2022
New centre fees	17,847	-	-	17,847
Tuition fees	7,899,098	1,832,433	39,990	9,771,521
Service fees	176,680	-	-	176,680
	8,093,625	1,832,433	39,990	9,966,048

5. Other income


$	2023	2022


Interest income from bank deposits	23,608	21,589
Others	66,410	59,122
	90,018	80,711

6. Employee benefits expense


$	2023	2022


Wages and salaries	12,826,065	10,833,804
Statutory contributions and defined contribution plans	525,175	423,896
Share−based compensation:
- Share bonus	280,000	200,000
- ESOS (Note 23(d))	329,281	194,717
	609,281	394,717
Staff accommodation and welfare	411,990	248,357
Staff insurance and medical expenses	209,581	122,543
Termination benefits	22,142	29,659
Other	200,583	167,333
	14,804,817	12,220,309

Total employee benefit expenses comprise:
- Cost of services	6,351,489	7,018,505
- Administrative and other operating expenses	8,453,328	5,201,804

Included in salaries and bonus are Directors' fees and remuneration as disclosed in Note 25 to the financial statements.

Total bonuses to key management personnel of $330,000 (2022: $305,000) have been accrued in the consolidated statement of financial position, of which $250,000 (2022: $175,000) will be satisfied through the issuance of ordinary shares and remaining balance of $80,000 (2022: $130,000) in cash subsequent to the reporting date.

Annual bonuses for certain key management personnel accrued in the previous financial year amounting to $200,000 were paid in the current financial year through the issuance of 40,000 ordinary shares as detailed in Note 21 to the financial statements.

7. Finance cost


$	2023	2022

Interest expense:
- Lease liabilities (Note 12)	874,043	746,788
- Loans from a shareholder (Note 18)	105,748	115,890
	979,791	862,678

8. Loss before income tax

Depreciation and amortisation expenses relating to plant and equipment, right-of-use assets and intangible assets directly attributable to provision of services and for operating activities are included in the "cost of services" and "Administrative and other operating expenses", respectively in the consolidated statement of comprehensive income.

In addition to the charges disclosed elsewhere in the financial statements, the loss before income tax includes the following charges:


$	2023	2022

Cost of services:
Academic expenses	1,778,598	1,352,827
Security service expenses	351,075	196,791
Hotel services expenses	9,992	94,856
Depreciation of plant and equipment	108,590	83,159
Amortisation of right-of-use assets	60,605	98,479
Amortisation of intangible assets	3,147	5,308
Interest expense on lease liability	1,362	7,582

Administrative and other operating expenses:
Marketing expenses	2,556,041	1,887,367
Professional fees	679,037	707,640
Travelling expenses	310,998	187,014
Foreign exchange loss, net	1,134,441	972,259
Loss on disposal of plant and equipment	1,154	837
Intangible assets written off	-	2,972
Plant and equipment written off	-	12,271
Depreciation of plant and equipment	718,363	353,204
Amortisation of right-of-use assets	2,797,670	2,596,391
Amortisation of intangible assets	77,351	69,034
(Reversal of)/loss allowance on trade and other receivables	(9,514)	15,453
Reversal of impairment loss on intangible assets	-	(30,000)

9. Income tax expense


$	2023	2022

Current income tax
- Current financial year	-	33,646
- Under provision in previous financial year	67,414	-
Total income tax recognised in profit or loss	67,414	33,646

The corporate income tax rate applicable to the Company and its subsidiaries in Singapore is at 17% (2022: 17%).

The Group has significant operations in Myanmar and Vietnam, for which the corporate income tax rate applicable are 22% (2022: 22%) and 20% (2022: 20%), respectively.

Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

The reconciliation between income tax expense and the product of accounting losses multiplied by the applicable corporate tax rates of the respective countries where the Group operates, are as follows:


$	2023	2022


Loss before income tax	(5,252,270)	(5,948,435)

Tax at the domestic rates applicable to profits in the country concerned	(994,569)	(1,219,166)
Tax effect of non−allowable expenses	964,878	618,771
Deferred tax assets not recognised	377,569	634,041
Utilisation of previously unrecognised deferred tax	(347,878)	-
Under provision of prior year income tax	67,414	-
Total income tax expense recognised in profit or loss	67,414	33,646

Deferred tax assets have not been recognised in respect of the following items:

	2023			2022
$	Singapore	Myanmar	Vietnam	Singapore	Myanmar	Vietnam


Unutilised tax losses	5,974,204	3,530,046	5,652,873	5,823,730	6,581,916	4,770,970
Other temporary differences	81,053	-	-	100,212	-	-
	6,055,257	3,530,046	5,652,873	5,923,942	6,581,916	4,770,970
Unrecognised deferred tax assets on the above temporary differences	1,029,394	776,610	1,130,575	1,007,070	1,448,022	954,194

The unutilised tax losses above are subject to the agreement by the Myanmar, Vietnam and Singapore tax authorities. Deferred tax assets have not been recognised as it is uncertain that there will be sufficient future taxable profits either available for offset by these losses or to realise these future benefits. Accordingly, these deferred tax assets have not been recognised in the financial statements of the Group in accordance with the accounting policy in Note 2.8 to the financial statements.

The unutilised tax losses of Myanmar and Vietnam subsidiaries may be carried forward for a maximum period of 3 and 5 years, respectively and the unutilised tax losses of Singapore subsidiaries may be carried indefinitely subject to the conditions imposed by law.

The expiry dates of the Myanmar and Vietnam unutilised tax losses are as follows:

	2023		2022
$	Myanmar	Vietnam	Myanmar	Vietnam


Expiring in first year	1,294,395	-	2,608,484	131,247
Expiring in second year	490,542	-	2,264,908	1,710,032
Expiring in third year	1,745,109	163,533	1,708,524	-
Expiring in fourth year	-	2,496,482	-	169,468
Expiring in fifth year	-	2,992,858	-	2,760,223
	3,530,046	5,652,873	6,581,916	4,770,970

The unutilised tax losses for the previous financial reporting period have been revised for (i) Singapore from $5,923,942 to $5,411,558 (including other temporary differences of $80,671) (ii) Myanmar from $6,581,916 to $5,111,312 and (iii) Vietnam from $4,770,970 to $4,312,177 based on the latest approved tax assessment of the Inland Revenue of Singapore, Myanmar and General Department of Taxation of Vietnam respectively.

10. Plant and equipment

$	Computers and books	Furniture and fittings	Motor vehicles	Leasehold improvements	Construction in-progress	Total


Cost
Balance as at 1 October 2022	456,344	687,989	40,243	1,506,659	422,166	3,113,401
Additions	426,776	280,376	23,819	563,339	431,531	1,725,841
Transfers	81,981	(4,764)	-	522,168	(599,385)	-
Disposals	(3,513)	(10,009)	-	-	-	(13,522)
Foreign exchange difference	(6,161)	(32,004)	(612)	(31,528)	(10,392)	(80,697)
Balance as at 30 September 2023	955,427	921,588	63,450	2,560,638	243,920	4,745,023

Accumulated depreciation
Balance as at 1 October 2022	232,166	308,408	20,181	520,256	-	1,081,011
Depreciation for the year	236,373	119,697	4,129	466,754	-	826,953
Disposals	(3,513)	(8,855)	-	-	-	(12,368)
Foreign exchange difference	(3,536)	18,113	(17)	(11,672)	-	2,888
Balance as at 30 September 2023	461,490	437,363	24,293	975,338	-	1,898,484

Net carrying amount
Balance as at 30 September 2023	493,937	484,225	39,157	1,585,300	243,920	2,846,539

$	Computers and books	Furniture and fittings	Motor vehicles	Leasehold improvements	Construction in-progress	Total


Cost
Balance as at 1 October 2021	257,866	382,552	40,243	884,289	162,321	1,727,271
Additions	225,930	174,076	-	241,424	1,042,766	1,684,196
Transfers	8,020	134,387	-	600,881	(743,288)	-
Reclassifications	-	166,828	-	(166,828)	-	-
Disposals	-	(1,507)	-	-	-	(1,507)
Write-offs	(29,586)	(160,676)	-	(20,712)	-	(210,974)
Foreign exchange difference	(5,886)	(7,671)	-	(32,395)	(39,633)	(85,585)
Balance as at 30 September 2022	456,344	687,989	40,243	1,506,659	422,166	3,113,401

Accumulated depreciation
Balance as at 1 October 2021	182,167	202,679	16,713	456,723	-	858,282
Depreciation for the year	84,750	109,111	3,468	239,034	-	436,363
Reclassifications	-	153,855	-	(153,855)	-	-
Disposals	-	(670)	-	-	-	(670)
Write-offs	(29,648)	(155,230)	-	(13,825)	-	(198,703)
Foreign exchange difference	(5,103)	(1,337)	-	(7,821)	-	(14,261)
Balance as at 30 September 2022	232,166	308,408	20,181	520,256	-	1,081,011

Net carrying amount
Balance as at 30 September 2022	224,178	379,581	20,062	986,403	422,166	2,032,390

During the financial year ended 30 September 2023 and 2022, certain education businesses incurred accounting losses, which may indicate that the plant and equipment, intangibles (excluding goodwill) and right-of-use assets ("non-financial assets") may be impaired. Management performed impairment assessments on these non-financial assets for education businesses to determine their recoverable amounts based on the value-in-use ("VIU") calculations.

In carrying out the impairment assessment, management has identified and allocated the non-financial assets to the respective cash generating units ("CGUs"). Accordingly, the recoverable amounts of the CGUs are determined by estimating the expected discounted future cash flows. The details of the key assumptions used are disclosed in Note 11 to the financial statements.

11. Intangible assets

$	Area development and centre fees	Set−up fee and brand licensing fees	Computer software license	Customer− related assets	Goodwill	Total


Cost
Balance as at 1 October 2022	622,393	40,000	122,999	273,913	6,173,822	7,233,127
Additions*	249,889	-	-	-	-	249,889
Foreign exchange difference	(14,129)	-	(460)	-	(134,137)	(148,726)
Balance as at 30 September 2023	858,153	40,000	122,539	273,913	6,039,685	7,334,290

Accumulated amortisation and impairment
Balance as at 1 October 2022	170,240	16,000	91,531	273,913	-	551,684
Amortisation for the year	65,369	3,000	12,129	-	-	80,498
Foreign exchange difference	(2,727)	-	(200)	-	-	(2,927)
Balance as at 30 September 2023	232,882	19,000	103,460	273,913	-	629,255

Net carrying amount
Balance as at 30 September 2023	625,271	21,000	19,079	-	6,039,685	6,705,035

* Additions during the year of $155,000 remains payable.

$	Area development and centre fees	Set−up fee and brand licensing fees	Computer software license	Customer− related assets	Goodwill	Total


Cost
Balance as at 1 October 2021	398,780	40,000	121,653	273,913	6,376,406	7,210,752
Additions	219,053	-	26,527	-	-	245,580
Write-offs	(1,347)	-	(6,115)	-	-	(7,462)
Reclassification	18,306	-	(18,306)	-	-	-
Foreign exchange difference	(12,399)	-	(760)	-	(202,584)	(215,743)
Balance as at 30 September 2022	622,393	40,000	122,999	273,913	6,173,822	7,233,127

Accumulated amortisation and impairment
Balance as at 1 October 2021	107,312	40,000	93,044	273,913	-	514,269
Amortisation for the year	54,736	6,000	13,606	-	-	74,342
Reversal of impairment for the year	-	(30,000)	-	-	-	(30,000)
Write-offs	(1,347)	-	(3,143)	-	-	(4,490)
Reclassifications	11,770	-	(11,770)	-	-	-
Foreign exchange difference	(2,231)	-	(206)	-	-	(2,437)
Balance as at 30 September 2022	170,240	16,000	91,531	273,913	-	551,684

Net carrying amount
Balance as at 30 September 2022	452,153	24,000	31,468	-	6,173,822	6,681,443

The carrying amounts of significant intangible assets allocated to the respective cash-generating units which have been grouped to the following segments:

	Education				Security Services
	Myanmar		Vietnam		Myanmar
$	2023	2022	2023	2022	2023	2022


Goodwill	-	-	4,600,695	4,734,832	1,438,990	1,438,990
Area development and centre fees^(a)(b)(c)	219,451	195,798	405,820	256,355	-	-

(a) Wall Street English: the area development fee was paid for the exclusive right to develop and operate the "Wall Street English" language schools in Myanmar and Vietnam, while the centre fees were paid for the opening of each new "Wall Street English" language school in Vietnam and Myanmar for a period of 10 years from the date operation commences and when the new centre commences operations, respectively.

On 14 April 2023 and 2 August 2023, the Group entered into Master Franchising Agreements ("MFAs") for Vietnam and Myanmar, respectively, revising certain key terms of the previous franchise agreements and adding the rights to sub-franchise. The new MFAs are set to expire on 30 September 2028 for Myanmar and 30 May 2030 for Vietnam and include renewal options for up to three five-year terms each.

The remaining useful lives of the area development and centre fees ranges between 5 and 6.6 years (2022: 4 and 8).

(b) Kids&Us: on 25 April 2022 and 15 August 2022, the Group entered into exclusive franchising agreements with Kids&Us English, S.L.U ("Kids&Us") for the development of English language centres for children under the brand "Kids&Us School of English" in Myanmar and Vietnam, respectively for a period of 10 years.

The remaining useful lives range between 8.5 and 8.9 years (2022: 9.5 and 9.9).

(c) Logiscool: on 27 June 2023 and 2 August 2023, the Group entered into exclusive franchising agreements with Logiscool, KFT. ("Logiscool") for the development of coding schools for children under the brand "Logiscool" in Vietnam and Myanmar, respectively for a period of 10 years.

The remaining useful lives range between 9.7 and 9.8 years.

Impairment testing of goodwill and non-financial assets

Goodwill acquired in a business combination is allocated to the CGUs that are expected to benefit from that business combination, which is also the reportable operating segment. The management determines whether goodwill is impaired at least on an annual basis and as and when there is an indication that goodwill may be impaired. Non-financial assets are assessed for indicators of impairment at the end of the financial year.

The recoverable amounts of the CGUs are determined from value-in-use calculations based on cash flow forecasts derived from the most recent financial budgets approved by management for the next 5 years. The use of this method requires the estimation of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows.

During the financial year, management determined that no impairment was required for any of its CGUs. In the previous financial year, the recoverable amount of Auston's CGU had exceeded the carrying amounts of the operating assets of the CGU. This resulted in a reversal of impairment of $30,000 (Note 8) recognised in the profit or loss in respect of the set-up fee and brand licensing fees for Auston.

The key assumptions for these value-in-use calculations are those regarding the discount rates, revenue growth rates and terminal growth rate which consider the current economic and business environment.

KEY ASSUMPTIONS USED IN THE VALUE-IN-USE CALCULATIONS

The calculations of value−in−use for all the CGUs are most sensitive to the following assumptions:

Pre−tax discount rates - Discount rates are based on the Group's pre-tax weighted average cost of capital are benchmarked to externally available data such as country risk premium, equity risk premium and beta adjusted to reflect the CGUs geographical location of operations and management's assessment of specific risks related to each of the cash generating units. These discounts are applied to the cash flow projections.

Revenue growth rates - The forecasted revenue growth rates are based on management's estimates with reference to the historical trend as well as the forecasted economic condition over the budgeted period of 5 years. For Education, a key growth driver is the increasing student enrolment.

Terminal growth rate - The terminal growth rate is based on management's expected long-term sustainable growth, taking into consideration the economic and political environment of the countries these CGUs are located and operating. It does not exceed the expected long-term inflation in the relevant countries.

Key assumptions used in the value−in−use calculations are as follows:

	Education				Services
	Vietnam		Myanmar		Myanmar
%	2023	2022	2023	2022	2023	2022

Pre-tax discount rate	16 - 17	21	25 - 33	25 - 30	34	29
Revenue growth rate	15 - >100^#	5 - 70	3 - >100^#	5 - 61	2 - 25	10 - 15
Terminal growth rate	4	1	4	5	4	5

^{# -} Certain yearly growth rates in the Education division exceed 100% due to a low comparative base. The related intangible assets are immaterial.

Sensitivity to changes in the key assumptions

Based on the sensitivity analysis performed for the impairment assessment, the variations in the key assumptions would not cause the carrying amounts of the CGUs and the related goodwill to exceed their recoverable amount except for Yangon American International School and Wall Street English Vietnam. A more in-depth analysis have been conducted for these CGUs, whereby (i) reduction of 9% and 5% in revenue growth respectively, or (ii) increase in discount rate by 18% and 9% respectively would result in the recoverable amount being equal to the carrying amount.

12. Leases

The Group enters into long-term leases arrangements for its offices and schools which are secured by the lessor's title to the leased assets. Generally, these leases have terms between 1 and 10 years with options exercisable by the Group to renew and terminate. Unless permitted by the landlord, the Group is restricted from assigning and sub-leasing. These salient terms are negotiated to optimise operational flexibility in terms of managing the assets used in the Group's operations to align with the Group's business requirements.

The Group also has certain leases of motor vehicles, signage and employee residences with lease terms of less than one year. The Group applied the 'short−term lease' and 'lease of low-value assets' recognition exemption for these leases.

As at 30 September 2023, the Group has $250,000 (2022: $211,000) of aggregate undiscounted commitments for short−term leases.

(a) Right-of-use assets

$	International school	Offices and schools	Motor vehicles	Total


At 1 October 2022	2,104,659	9,109,875	60,605	11,275,139
Additions	121,215	2,853,315	-	2,974,530
Amortisation charge	(344,566)	(2,453,104)	(60,605)	(2,858,275)
Write-offs	-	802	-	802
Lease modification	-	164,655	-	164,655
Foreign exchange difference	-	(173,511)	-	(173,511)
At 30 September 2023	1,881,308	9,502,032	-	11,383,340


At 1 October 2021	2,714,989	7,171,674	207,628	10,094,291
Additions	-	4,854,227	-	4,854,227
Amortisation charge	(346,179)	(2,250,212)	(98,479)	(2,694,870)
Lease modification	(264,151)	(417,486)	(48,544)	(730,181)
Foreign exchange difference	-	(248,328)	-	(248,328)
At 30 September 2022	2,104,659	9,109,875	60,605	11,275,139

(b) Lease liabilities

$	International school	Offices and schools	Motor vehicle	Total


At 1 October 2022	1,990,492	9,049,374	64,557	11,104,423
Additions	121,215	2,853,315	-	2,974,530
Interest expense (Note 7)	126,227	747,816	-	874,043
Interest expense (Note 8)	-	-	1,362	1,362
Lease modification	-	164,655	-	164,655
Lease concession	-	(139,978)	-	(139,978)
Lease payments in cash:
- Principal portion	(11,821)	(1,844,897)	(64,557)	(1,921,275)
- Interest portion	(3,797)	(747,815)	(1,362)	(752,974)
Foreign exchange differences	-	(183,570)	-	(183,570)
At 30 September 2023	2,222,316	9,898,900	-	12,121,216

$	International school	Offices and schools	Motor vehicle	Total


At 1 October 2021	2,600,122	6,957,119	213,938	9,771,179
Additions	-	4,854,227	-	4,854,227
Interest expense (Note 7)	134,520	612,268	-	746,788
Interest expense (Note 8)	1	-	7,581	7,582
Lease modification	(264,151)	(425,288)	(40,742)	(730,181)
Lease concession	-	(161,774)	-	(161,774)
Lease payments in cash
- Principal portion	(345,479)	(1,781,295)	(108,639)	(2,235,413)
- Interest portion	(134,521)	(612,268)	(7,581)	(754,370)
Foreign exchange differences	-	(393,615)	-	(393,615)
At 30 September 2022	1,990,492	9,049,374	64,557	11,104,423

The maturity analysis of lease liabilities of the Group at each reporting date are as follows:

$	2023	2022


Contractual undiscounted cash flows
Not later than a year	2,859,626	2,589,378
Between one and two years	2,939,302	3,577,548
Between two and five years	6,973,350	5,348,376
More than five years	2,296,659	1,968,165
	15,068,937	13,483,467
Less: Future interest expense	(2,947,721)	(2,379,044)
Present value of lease liabilities	12,121,216	11,104,423

Presented in consolidated statement of financial position
- Current	2,251,819	1,961,444
- Non−current	9,869,397	9,142,979
	12,121,216	11,104,423

As at 30 September 2023, the net carrying amounts of ROU and lease liabilities arising from lease of offices and schools from a related party (refer to entities where a Director of certain Group's subsidiaries has beneficial interests) of the Group amounted to $3,543,472 and $3,332,125 (2022: $2,799,850 and $2,343,608), respectively. These related party transactions were at terms agreed between the respective parties.

The currency profile of lease liabilities of the Group at each reporting date are as follows:

$	2023	2022


United States Dollar	2,131,498	2,073,626
Myanmar Kyat	3,441,518	2,343,607
Vietnamese Dong	6,548,200	6,687,190
	12,121,216	11,104,423

$	2023	2022


Amortisation of right−of−use assets	2,858,275	2,694,870
Interest expense on lease liabilities	875,405	754,370
Lease concession	(139,978)	(161,774)
Variable lease payment	-	(16,265)
Lease expense not capitalised in lease liabilities:
- Expense relating to short−term leases	346,080	213,712
Total amount recognised in profit or loss	3,939,782	3,484,913

The Group had total cash outflows for leases of $3,020,329 (2022: $3,203,495) which includes expense relating to short-term lease of $346,080 (2022: $213,712).

13. Investments in subsidiaries

The following are all the subsidiaries of the group that have been included in the consolidated financial statements. Their particulars are as detailed below:

Name of Company (Country of incorporation and principal place of business)	Principal activities	Effective interest held by Company %		Proportion of ownership held by non−controlling interests %
		2023	2022	2023	2022

Held by the Company
MS Exera Pte Ltd ("MS Exera")^{(1) 7)} (Singapore)	Holding company, provision of management and security related services	100	100	-	-

MS Leisure Pte Ltd ("MS Leisure")⁽¹⁾ (Singapore)	Holding company and provision of management services	100	100	-	-

MS English Pte. Ltd. ("MS English")⁽¹⁾ (Singapore)	Holding company and provision of management services	100	100	-	-

MS Auston Pte. Ltd. ("MS Auston")⁽¹⁾ (Singapore)	Holding company and provision of management services	100	100	-	-

AS Coding 1 Pte. Ltd. ("AS Coding 1")⁽¹⁾ ⁽⁴⁾ (Singapore)	Holding company and provision of management services	100	-	-	-

MS English 2 Pte. Ltd. ("MS English 2")⁽¹⁾ (Singapore)	Holding company and provision of management services	100	100	-	-

AS English 3 Pte. Ltd. ("AS English 3")⁽¹⁾ (Singapore)	Holding company and provision of management services	100	100	-	-

AS Coding 2 Pte. Ltd. ("AS Coding 2")⁽¹⁾ ⁽⁴⁾ (Singapore)	Holding company and provision of management services	100	-	-	-

American International Partners Limited ("AIP")⁽²⁾ (Myanmar)	Operation of an international school in Myanmar	100	100	-	-

Held through MS Exera
EXERA Myanmar Limited ("EXERA Myanmar")⁽²⁾ (Myanmar)	Provision of integrated security services	100	100	-	-

Name of Company (Country of incorporation and principal place of business)	Principal activities	Effective interest held by Company		Proportion of ownership held by non−controlling interests
		2023	2022	2023	2022
		%	%	%	%
Held through MS Leisure
L Partners Limited ("L Partners")⁽²⁾ (Myanmar)	Operation and management of Kids&Us English language schools and Ostello Bello hostels	100	100	-	-

Held through MS English
E Partners Limited ("E Partners")⁽²⁾ (Myanmar)	Operation and management of Wall Street English language schools	100	100	-	-

Held through MS Auston
A Partners Limited ("A Partners")⁽²⁾ (Myanmar)	Operation and management of Auston	100	100	-	-

Held through AS Coding 1
C Partners Limited ("C Partners")⁽²⁾ ⁽⁵⁾ (Myanmar)	Operation and management of Logiscool coding schools	100	-	-	-

Held through MS English 2
Wall Street English Limited Liability Company ("WSE Vietnam")⁽³⁾ (Vietnam)	Operation and management of Wall Street English language schools	100	100	-	-

Held through AS English 3
AS English Vietnam Company Limited ("AS Vietnam")⁽³⁾ (Vietnam)	Operation and management of Kids&Us English language schools	100	100	-	-

Held through AS Coding 2
AS Coding Vietnam Company Limited ("ASC Vietnam")^(3) (6) (Vietnam)	Operation and management of Logiscool coding schools	100	-	-	-

⁽¹⁾ Audited by BDO LLP, Singapore.

⁽²⁾ Audited by BDO Consulting (Myanmar) Co. Ltd, for consolidation purposes.

⁽³⁾ Audited by BDO Audit Services Co., Ltd. (Vietnam) for consolidation purposes and for statutory reporting in Vietnam.

⁽⁴⁾ On 25 April 2023, AS Coding 1 Pte Ltd and AS Coding 2 Pte Ltd were incorporated in Singapore.

⁽⁵⁾ On 8 June 2023, C Partners Limited was incorporated in Myanmar.

⁽⁶⁾On 7 June 2023, AS Coding Vietnam Company Limited was incorporated in Vietnam.

⁽⁷⁾ On 19 December 2023, MS Exera Pte Ltd incorporated a subsidiary in Vietnam, Exera Vietnam Company Limited

14. Financial assets at fair value through other comprehensive income ("FVOCI")


$	2023	2022


At 1 October	157,062	314,125
Fair value recognised in other comprehensive income	(107,699)	(157,063)
At 30 September	49,363	157,062

Detail of the investment is as follows:

Listed equity instrument
- London Stock Exchange (AIM Market)	49,363	157,062

The Group designated the investment as quoted equity security to be measured at FVOCI. The Group intends to hold the investment for long−term appreciation in value as well as strategic investment purposes.

The investment in listed equity instrument has no fixed maturity date nor coupon rate. The fair value of the equity instrument is based on quoted bid market price on the last market day of the financial year.

The FVOCI are denominated in United States dollar as at reporting date.

15. Inventories

Inventories of the Group consist of consumables, security accessories, uniform, raw materials, fabric, merchandise and academic materials.

16. Trade and other receivables


$	2023	2022

Current
Trade receivables
Third parties, gross	660,423	663,789
Less: Loss allowances	(5,939)	(15,453)
Third parties, net	654,484	648,336
Accrued receivables	14,990	6,913
Total trade receivables	669,474	655,249

Other receivables
Third parties	-	280,327
Less: Loss allowances	-	(280,327)
	-	-

Rental deposits	179,924	77,619
Prepayments for enrolment expenses	641,498	490,258
Other prepayments	958,507	349,364
Sales tax	32,586	56,475
Total other receivables	1,812,515	973,716
Total trade and other receivables (current)	2,481,989	1,628,965


$	2023	2022

Non−current
Related party
- Trade	1,049,735	1,042,614
- Non-trade	4,814,313	4,256,996
Less: Loss allowances	(4,400,124)	(4,400,124)
	1,463,924	899,486
Rental deposits	361,778	545,296
Prepayments for enrolment expenses	3,069	97,719
Total trade and other receivables (non−current)	1,828,771	1,542,501

Total trade and other receivables	4,310,760	3,171,466
Less: Prepayments	(1,603,074)	(937,341)
Less: Sales tax	(32,586)	(56,475)
Add: Cash and cash equivalents (Note 17)	1,489,812	1,980,232
Financial assets at amortised cost	4,164,912	4,157,882

Trade and other receivables

Trade receivables are non−interest bearing and are generally on 15 to 60 (2022: 15 to 60) days credit term. They are measured at their original invoice amounts which represent their fair value on initial recognition.

Non-current amounts due from related party are trade and non-trade in nature and are not expected to be repaid in the next 12 months. The non-trade balance is unsecured and interest free.

Expected credit loss allowances

i) Trade receivables - Third party

A one-off loss allowance of $15,453 was made for a third-party trade debtor determined to be credit-impaired in the previous year as the likelihood of recovery is remote. During the financial year, $9,514 was recovered and accordingly reversal of loss allowance was recognised in the profit or loss.

ii) Other receivables - Third party

In prior years, allowance for impairment of receivables from third parties of $280,327 was made in respect of advances to the owners of the hostels under management as two of the hostels under management experienced continuous losses and recoverability is in doubt.

The Group may commit to provide annual or monthly advances to the owners of the managed hostels pursuant to each operation and management agreement. If the managed hostels do not meet the agreed performance measures, such advances are recognised as hostel related operating expenses in the profit or loss.

During the financial year, the Group no longer operates these hostels, and therefore these impaired receivables of $280,237 were fully written-off.

iii) Non-current receivables - Related party (Note 25)

Loss allowances of $4,400,124 were made in previous years on the trade and non−trade amounts due from a related party in respect of payments made on behalf and advances for the operation of the managed operations of Wall Street English and Auston in Myanmar. The loss allowance was made based on the financial information of the related party and the expected repayment from the provision of property management services at cost plus mark-up to the Group. At the end of the reporting period, the total carrying amount of trade and non-trade receivables due from the related party net of loss allowance is $Nil and $1,463,924 (2022: $Nil and $899,486) respectively.

The expected recovery of the amounts due from a related party falls more than 12 months after the end of the reporting period.

The Group's trade and other receivables balances are denominated in the following currencies:


$	2023	2022


United States dollar	2,285,735	2,186,608
Myanmar Kyat	1,076,949	379,259
Vietnamese Dong	928,236	579,710
Singapore dollar	19,840	4,187
Euro	-	21,702
	4,310,760	3,171,466

17. Cash and cash equivalents


$	2023	2022


Cash at bank	1,105,897	986,400
Cash at financial institutions	18,717	47,980
Cash on hand	365,198	945,852
	1,489,812	1,980,232

Cash at bank earns interest at floating rates based on daily bank deposit rates.

Cash and cash equivalents are denominated in the following currencies:


$	2023	2022


United States dollar	373,220	1,142,830
Singapore dollar	48,950	209,294
Myanmar Kyat	854,985	430,909
Vietnamese Dong	211,256	151,097
Euro	1,401	46,102
	1,489,812	1,980,232

18. Shareholder's loans

The changes in shareholder's loan balances (interest and principal) arising from financing activities as listed below:


$	2022	Drawdown of loan	Repayment of loan and interest	Subscription of convertible notes	Interest expense	2023


Facility 1	1,500,000	1,325,000	(353,567)	-	105,748	2,577,181


$	2021	Drawdown of loan	Repayment of loans and interest	Subscription of convertible notes	Interest expense	2022


Facility 1	3,151,576	250,000	(2,004,725)	-	103,149	1,500,000
Facility 2	2,591,971	-	(104,712)	(2,500,000)	12,741	-
	5,743,547	250,000	(2,109,437)	(2,500,000)	115,890	1,500,000

(a) Loan Facility 1

On 1 July 2019, the Group entered into an unsecured loan facility of up to $3,000,000 with its shareholder, Macan Pte. Ltd. ("MACAN") ("Loan facility 1"). On 1 September 2023, MACAN had granted an extension of the loan maturity to 31 December 2027.

On 12 December 2023, the Group and MACAN agreed to increase Loan Facility 1 from $3,000,000 to $4,500,000 to accelerate the Group's expansion plan of the Education businesses. The loan facility matures no later than 31 December 2027 and continues to bear interest rate of 6% per annum. As at the date of approval of the financial statements, the Group has a remaining unutilised credit facility of $1,120,000.

As at reporting date, MACAN has undertaken that it will not demand repayment within the next 12 months from the date of the audited financial statements of the Group for the financial year ended 30 September 2023.

(b) Loan Facility 2

On 23 March 2020, MACAN granted the Group an additional loan facility of up to $4,000,000 ("Loan Facility 2"). On 20 October 2021, the Company entered into a loan re-organisation with MACAN for the following:

i) Subscribed a total amount of $3,500,000 Zero Coupon Convertible Notes (Note 22) of the Company satisfied through cash consideration of $1,000,000 and the conversion of Macan's Loan Facility 2 amounting to $2,500,000; and

ii) Terminated Loan Facility 2 agreement with effect from 31 October 2021 subsequent to the repayment of all accrued interest under Loan Facility 2 on 31 October 2021.

19. Bank loan

On 25 January 2022, the Group secured a short-term interest free bank loan from a third-party bank, the Vietnam Bank for Social Policies amounting to approximately $115,530. The loan, denominated in Vietnamese Dong, was repayable in 11 months from the date of disbursement of the loan and any overdue balances bore interest of 12% per annum. The loan of $115,530 has been repaid in cash in December 2022.

20. Trade and other payables


$	2023	2022

Trade payables
Third parties	907,038	940,798
Accrued enrolment expenses	-	116,103
Total trade payables	907,038	1,056,901

Other payables
Third parties	583,316	59,162
Accruals - others	1,016,009	1,039,572
Accruals - wages and salaries	878,710	703,330
Refundable deposits from customers	2,427,593	735,513
Sales tax	27,802	42,420
Total other payables	4,933,430	2,579,997

Total trade and other payables	5,840,468	3,636,898
Add: Lease liabilities (Note 12)	12,121,216	11,104,423
Add: Shareholder's loans (Note 18)	2,577,181	1,500,000
Add: Bank loan (Note 19)	-	115,530
Less: Sales tax	(27,802)	(42,420)
Financial liabilities carried at amortised cost	20,511,063	16,314,431

Trade amounts due to third parties are unsecured, non−interest bearing and is on 15 to 60 (2022: 15 to 60) days credit term.

The non−trade amounts due to third parties are unsecured, interest−free and repayable on demand.

Trade and other payables are denominated in the following currencies:


$	2023	2022


United States dollar	773,798	1,641,267
Singapore dollar	91,004	72,002
Myanmar Kyat	3,546,451	1,092,685
Vietnamese Dong	1,249,166	644,812
Pound Sterling	169,861	183,336
Euro	10,188	2,796
	5,840,468	3,636,898

21. Share capital


	2023	2022	2023	2022
	Shares		$	$
Issued and fully paid ordinary shares:
Ordinary shares
At 1 October	2,925,920	2,845,920	21,439,638	20,799,638
Shares issued during the financial year	40,000	80,000	200,000	640,000
At 30 September	2,965,920	2,925,920	21,639,638	21,439,638

The Company issued 40,000 ordinary shares at $5.00 per share (2022: 80,000 ordinary shares at $8.00 per share) in lieu of payment for accrued employee bonus of $200,000 (2022: $640,000), in respect of employment services rendered for financial year to certain key management personnel as detailed in Note 6 to the financial statements.

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares have no par value and carry one vote per share without restriction.

22. Convertible notes


$	2023	2022


Recognised in equity (Note 2.13): At 1 October	5,730,000	-
Issued and paid during the financial year:
- Cash	-	3,230,000
- Shareholder's loans (Note 18)	-	2,500,000
At 30 September	5,730,000	5,730,000

In the previous financial year, the Group launched a Convertible Notes Programme to raise up to $10 million for working capital and future investments. The convertible notes ("CN") holders have an option to subscribe to either (i) a 10% coupon option ("10% Coupon Convertible Notes") or (ii) a zero−coupon option ("Zero Coupon Convertible Notes"). The proceeds from the convertible notes were limited to 50% for activities in Myanmar and the rank is pari passu to all present and future unsecured obligations.

The CNs are mandatorily convertible into shares of the Company at the date falling on the earlier of the maturity date (30 October 2024) or when the Qualifying Event is satisfied ("Conversion Date"). On the Conversion Date, the CNs are converted based on the stipulated conversion price and are paid-up in full to the note holders entirely (interest and principal) through the issuance of ordinary shares of the Company.

The convertible notes were issued on 1 November 2021 and the Group's existing shareholders subscribed $5,730,000 comprising:

(i) Zero−Coupon Convertible Notes of $5,230,000 (including subscription by MACAN amounting to $3,500,000 of which $1,000,000 was in cash and the rest was from conversion of a loan from MACAN as detailed in Note 18 of the financial statements); and

(ii) 10% Coupon Convertible Notes amounting to $500,000.

Both the Zero-Coupon and 10% Coupon convertible notes met the fixed for fixed criteria and the entire amount is recognised within equity.

The convertible notes are denominated in United States dollar.

The salient features of the convertible notes are as follows:

Type	Zero-Coupon Convertible Notes	10% Coupon Convertible Notes

Tenure	Up to 3 years	Up to 3 years
Maturity	30 October 2024	30 October 2024
Coupon	Zero-coupon	10% annual
Conversion price	The higher of: (i) Floor Subscription Price; and (ii) the Discounted Subscription Price.	The higher of: (i) $15.00 per Share; and (ii) 90% of the subscription price per Share for a Qualifying Event
Discount	Between 2.0% and 20.5% based on conversion schedule	10% vs. subscription price for a Qualifying Event
Floor conversion price	$11.9 per share (based on the maximum discount listed above)	$15.0 per share
Conversion date	The date falling on the earlier of: (i) the Maturity Date; and (ii) the Qualifying Event.	The date falling on the earlier of: (i) the Maturity Date; and (ii) the Qualifying Event.
Qualifying event	Share issuance in excess of $5 million.	Share issuance in excess of $5 million.
Use of proceeds	· Development of business · Working capital	· Development of business · Working capital
Limitation to use of proceeds	Max. 50% of the proceeds for activities in Myanmar	Max. 50% of the proceeds for activities in Myanmar
Rank	Pari passu to all present and future unsecured obligations	Pari passu to all present and future unsecured obligations

23. Other reserves


$	2023	2022


Share option reserve	1,298,100	968,819
Fair value reserve	(713,391)	(605,692)
Equity reserve	(212,271)	(212,271)
Foreign exchange reserve	170,145	28,858
At 30 September	542,583	179,714

(a) Equity reserves

The equity reserve represents the effects of changes in ownership interests in subsidiaries when there is no change in control.

(b) Foreign exchange reserve

The foreign exchange reserve of the Group represents foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group's presentation currency. This is non−distributable and the movements in this account are set out in the statements of changes in equity.


$	2023	2022


At 1 October	(605,692)	(448,629)
Changes in fair value during the year (Note 14)	(107,699)	(157,063)
At 30 September	(713,391)	(605,692)

Fair value reserve represents the cumulative fair value changes, net of tax, of financial assets measured at FVOCI until they are derecognised. Upon derecognition, the cumulative fair value changes will be transferred to retained earnings.

(d) Share option reserve


$	2023	2022


At 1 October	968,819	774,102
Share option expense (Note 6)	329,281	194,717
At 30 September	1,298,100	968,819

Share option reserve represents the equity−settled share options granted to employees. The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity−settled share options and is reduced by the forfeiture of the share options.

(d) Share option reserve

Employee Share Option Schemes ("ESOS 2016") and ("ESOS 2022")

At an Extraordinary General Meeting held on 25 October 2016, the shareholders approved the Employee Share Option Scheme granting share options to certain Directors, senior management and key employees and consultants of the Group. The Remuneration Committee comprising all the Independent Non−Executive Directors, are responsible for administering the ESOS 2016 and ESOS 2022.

At the Annual General Meeting held on 4 March 2022, in order to incentivise existing and new management and employees, the Company's shareholders approved a new share option scheme ("ESOS 2022"), whereby share options in respect of up to 200,000 ordinary shares in the capital of the Company may be granted to certain individuals at an exercise price of $11.00 per share.

The Group had on 23 May 2017, 1 December 2017, 17 October 2018, 21 July 2020, 5 July 2022 and 6 February 2023 entered into share option agreements with the employees and Directors of the Group to allot and issue 117,000, 13,000, 72,000, 61,500, 135,000 and 43,000 share options, respectively.

Statutory and other information regarding ESOS 2022 are set out below:

(i) Consideration payable by each option holder for the grant is $1.00.

(ii) Exercise price is $11.00 per ordinary share.

(iii) Options are valid during the period commencing on the grant date and terminating on the tenth anniversary of the grant date for up to 200,000 ordinary shares with no par value in the capital of the Company ("Option Shares").

(iv) Options granted will vest with effect as follows:

(a) from the first anniversary in respect of 40 percent of the Option Shares.

(b) from the second anniversary in respect of a further 40 percent of the Option Shares.

(v) Options will only be exercisable in respect of Option Shares that have already vested.

(vi) If the participants cease to be director or employee of the Company and its subsidiaries at any time, then the Option will only be exercisable in respect of the Option Shares that have vested prior to the date of termination.

Statutory and other information regarding ESOS 2016 are set out below:

(i) Consideration payable by each option holder for the grant is $1.00.

(ii) Exercise price is $11.00 per ordinary share.

(iv) Options granted will vest with effect as follows:

(a) from the second anniversary in respect of 50 percent of the Option Shares.

(b) from the third anniversary in respect of a further 30 percent of the Option Shares.

(v) Options will only be exercisable in respect of Option Shares that have already vested.

The weighted average fair value of the share options granted during the financial year is $4.08. These granted share options have a weighted average contractual life of 6.30 years.

These fair values were calculated using the Black−Scholes pricing model using the following assumptions:

Grant date	23 May 2017	1 December 2017	17 October 2018	21 July 2020	5 July 2022	6 February 2023
Fair value at grant date ($)	4.48	7.09	5.17	5.13	3.02	3.04
Grant date share price ($)	10.00	13.00	10.00	10.00	6.50	6.00
Exercise price ($)	11.00	11.00	11.00	11.00	11.00	11.00
Expected volatility	33.91%	36.07%	38.43%	42.92%	44.87%	48.96%
Option life	10 years	10 years	10 years	10 years	10 years	10 years
Risk−free annual interest rate	2.28%	2.36%	3.21%	0.60%	2.88%	3.63%

Expected volatility was determined by calculating the historical volatility share price over a period of ten years of comparable companies in similar industries. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non−transferability, exercise restrictions and behavioural considerations.

The Group recognised total expenses of $329,281 (2022: $194,717) related to equity−settled share−based payment transactions during the financial year.

The following reconciles the share options outstanding at the start and at end of the financial year.

	2023		2022
	Number	Weighted average exercise Price ($)	Number	Weighted average exercise Price ($)


At 1 October	328,500	11.00	193,500	11.00
Granted	43,000	11.00	135,000	11.00
Forfeited	(3,000)		-
At 30 September	368,500		328,500	11.00

As at 30 September 2023, 233,100 (2022: 164,700) shares options are exercisable.

24. Loss per share

The calculation of the basic and diluted loss per share attributable to the ordinary equity holders of the Company is based on the following data:

	2023	2022
Numerator
Loss for the financial year attributable to the owners of the Company ($)	(5,319,684)	(5,936,622)

Denominator
Weighted average number of ordinary shares for the purposes of basic and diluted loss per share	2,952,550	2,910,619

Loss per share ($)
Basic and diluted	(1.80)	(2.04)

Diluted loss per share and basic loss per share are the same as neither the exercise of the share option or the conversion of the mandatory convertible notes would result in an increase of the loss per share.

25. Significant related party transactions

During the financial year, in addition to the information disclosed elsewhere in these financial statements, the Group entered into the following significant transactions with related parties at rates and terms agreed between the parties:


$	2023	2022

Related party^#:
Management fees (Note 4)	7,121	218,159
Advances to	564,438	395,516

Corporate shareholder^*:
Interest on shareholder's loans (Note 7)	105,748	115,890
Shareholder's loans (Note 18)	1,325,000	1,500,000
Subscription of convertible notes (Note 22)	-	3,500,000

Director of the subsidiaries:
Professional fees	21,000	42,000

^# Related party refer to entities where a Director of certain Group's subsidiaries has beneficial interests.

^* Corporate shareholder refer to MACAN, a substantial shareholder.

The outstanding balances as at reporting date with related parties are disclosed in Notes 12, 16, 18 and 20 to the financial statements, respectively.

Key management personnel remuneration

Key management personnel are those individuals having the authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly. Key management personnel are the Directors of the Company and other key management personnel.

The details of their remuneration are as follows:


$	2023	2022

Wages and salaries	738,557	742,390

Other employment benefits	148,936	148,175
Share−based compensation:
- Share bonus	250,000	175,000
- Share option	301,723	160,215
	551,723	335,215
Director fees	62,441	66,733
Total	1,501,657	1,292,513

26. Commitment

At each reporting date, commitments in respect of capital expenditure, are as follows:


$	2023	2022

Capital expenditure contracted but not provided for
- Property, plant and equipment	292,132	296,219

27. Segment information

Management has determined the operating segments based on the reports reviewed by the chief operating decision maker (Note 2.18).

Management monitors the Group's operations from both a geographic and sector perspective.

Geographically, management manages and monitors the business in these primary geographic areas: Singapore, Vietnam and Myanmar.

For management purposes, the Group is organised into business units based on its services, and has three reportable operating segments as follows:

a) Education - Operation of education businesses ranging from early years to tertiary education and including vocational training, consultancy, advisory and project management services in the education sector in Vietnam and Myanmar;

b) Services - Provision of integrated security services, consultancy, advisory and project management services in the security and hospitality sectors in Myanmar. This reportable segment has been formed by aggregating the relevant operating entities, which are regarded by management to exhibit similar economic characteristics; and

c) Corporate - Corporate services, management support and certain shared services to subsidiaries of the Group.

The "Corporate" operating segment includes the Group's minor trading and investment holding activities which are not included within reportable segments as (i) they are not separately reported to the chief operating decision maker, and (ii) they contribute immaterial amounts of revenue to the Group.

The Group's reportable segments are strategic business units that are organised based on their function and targeted customer groups. They are managed separately because each business unit requires different skill sets and marketing strategies.

Management monitors the operating results of the segments separately for the purposes of making decisions about resources to be allocated and assessing performance. Segment performance is evaluated based on operating profit or loss which is similar to the accounting profit or loss. Income taxes are managed by the management of respective entities within the Group.

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies. There is no asymmetrical allocation to reportable segments. Management evaluates performance on the basis of profit or loss from operations before income tax expense not including non−recurring gains and losses and foreign exchange gains or losses. There is no change from prior periods in the measurement methods used to determine reported segment profit or loss.

Income taxes are managed by the management of respective entities within the Group.

The key management personnel assess the performance of the operating segments based on, among others, measure of earnings before interest, income tax, depreciation and amortisation (EBITDA), (i) Adjusted EBITDA (as presented below) and (ii) Adjusted EBITDA less amortisation of right-of-use assets and interest on lease liabilities ("Adjusted EBITDA after impact of ROUs").

These measurements basis excludes the effects of expenditure from the operating segments such as impairments and reversal of impairments that are not expected to recur regularly in every period and are separately analysed.

All income and expenses are allocated to the respective operating segments based on the entities within each operating segment, except for interest expenses which as this type of activity is managed centrally.

Business segments

$	Education	Services	Corporate	Total

2023
Revenue	18,727,358	5,327,189	-	24,054,547
Cost of services	(6,240,011) *	(3,944,204) *	-	(10,184,215)
Gross profit	12,487,347	1,382,985	-	13,870,332
Other income	81,820	5,809	2,389	90,018
Foreign exchange loss	(820,457)	(291,528)	(22,456)	(1,134,441)
Administrative and other operating expenses	(13,110,149) **	(1,499,217)	(2,489,022) ^#	(17,098,388)
Loss from operations	(1,361,439)	(401,951)	(2,509,089)	(4,272,479)
Finance cost	(846,714)	(27,329)	(105,748)	(979,791)
Segment loss before tax	(2,208,153)	(429,280)	(2,614,837)	(5,252,270)
Income tax expense	(202)	(67,212)	-	(67,414)
Loss after income tax	(2,208,355)	(496,492)	(2,614,837)	(5,319,684)

$	Education	Services	Corporate	Total

2023
Other non-cash items:
Total depreciation of plant and equipment	775,582	50,990	381	826,953
Total amortisation of right-of-use asset	2,659,632	198,643	-	2,858,275
Total amortisation of intangible assets	80,165	333	-	80,498
Reversal of loss allowance on trade and other receivables	-	(9,514)	-	(9,514)
Finance costs (excluding interest on lease liabilities)	-	-	105,748	105,748
Total interest on lease liabilities	846,714	28,691	-	875,405
	4,362,093	269,143	106,129	4,737,365

Adjusted EBITDA	2,153,940	(160,137)	(2,508,708)	(514,905)

Adjusted EBITDA after impact of ROUs	(1,352,406)	(387,471)	(2,508,708)	(4,248,585)

Reportable segment assets	23,463,580	3,417,508	76,793	26,957,881
Financial assets at FVOCI	-	-	49,363	49,363
Total Group's assets	23,463,580	3,417,508	126,156	27,007,244

Included in the segment assets:
Additions:
- Plant and equipment	1,430,823	295,018	-	1,725,841
- Right−of−use assets	2,974,530	-	-	2,974,530
- Intangibles	249,889	-	-	249,889

Reportable segment liabilities representing total Group's liabilities	(27,978,838)	(1,448,661)	(3,212,065)	(32,639,564)

* Cost of services arising from "Education" and "Services" segments comprise mainly employee benefits expenses of $2,991,385 and $3,360,104, respectively.

** Includes marketing expenses of $2,548,044.

^# Includes employee benefits expenses and professional fees of $1,909,261 and $394,117, respectively.

$	Education	Services	Corporate	Total

2022
Revenue	12,112,271	5,794,603	-	17,906,874
Cost of services	(6,103,995) *	(3,820,475) *	-	(9,924,470)
Gross profit	6,008,276	1,974,128	-	7,982,404
Other income	20,539	48,868	11,304	80,711
Foreign exchange (loss)/gain, net	(901,889)	(85,078)	14,708	(972,259)
Administrative and other operating expenses	(9,539,048) **	(1,289,239)	(1,348,326) ^#	(12,176,613)
(Loss)/profit from operations	(4,412,122)	648,679	(1,322,314)	(5,085,757)
Finance cost	(708,281)	(38,507)	(115,890)	(862,678)
Segment (loss)/profit before tax	(5,120,403)	610,172	(1,438,204)	(5,948,435)
Income tax expense	-	(33,646)	-	(33,646)
(Loss)/profit after income tax	(5,120,403)	576,526	(1,438,204)	(5,982,081)

$	Education	Services	Corporate	Total

2022
Other non-cash items:
Total depreciation of plant and equipment	401,164	34,373	826	436,363
Total amortization of right-of-use asset	2,496,729	198,141	-	2,694,870
Total amortization of intangible assets	70,504	3,838	-	74,342
Impairment of trade and other receivables	-	15,453	-	15,453
Reversal of impairment of intangible assets	(30,000)	-	-	(30,000)
Finance costs (excluding interest on lease liabilities)	-	-	115,890	115,890
Total interest on lease liabilities	708,281	46,089	-	754,370
	3,646,678	297,894	116,716	4,061,288

Adjusted EBITDA	(1,473,725)	908,066	(1,321,488)	(1,887,147)

Adjusted EBITDA after impact of ROUs	(4,678,735)	663,836	(1,321,488)	(5,336,387)

Reportable segment assets	21,782,026	3,228,058	296,477	25,306,561
Financial assets at FVOCI	-	-	157,062	157,062
Total Group's assets				25,463,623

Included in the segment assets:
Additions:
- Plant and equipment	1,656,265	27,931	-	1,684,196
- Right−of−use assets	4,562,213	292,014	-	4,854,227
- Intangibles	245,580	-	-	245,580

Reportable segment liabilities representing total Group's liabilities	(23,440,701)	(943,810)	(1,954,617)	(26,339,128)

* Cost of services arising from "Education" and "Services" segments comprise mainly employee benefits expenses of $3,653,927 and $3,364,578, respectively.

**Includes marketing expenses of $1,899,581.

^# Include employee benefits expenses and professional fees of $842,765 and $317,977, respectively.

Geographical segments

The Group operates in three main geographical areas. Revenue is recorded in the country in which the customers are located. Segmental non−current assets consist primarily of non−current assets other than financial instruments and deferred tax assets. Segment non−current assets are shown by geographical area in which the assets are located.


$	2023	2022

Revenue
Singapore	312	33,079
Myanmar	15,514,422	10,482,770
Vietnam	8,539,813	7,391,025
	24,054,547	17,906,874

Segment non−current assets
Singapore	21,652	25,450
Myanmar	8,736,631	7,554,647
Vietnam	12,176,631	12,408,875
	20,934,914	19,988,972

Non−current assets consist of plant and equipment, intangible assets and right−of−use assets in the consolidated statements of financial position of the Group.

28. Financial instruments and financial risks

The Group's activities have exposure to credit risks, market risks (including foreign currency risks, interest rates risks and equity price risk) and liquidity risks arising in the ordinary course of business. The Group's overall risk management strategy seeks to minimise adverse effects from the volatility of financial markets on the Group's financial performance.

The Board of Directors are responsible for setting the objectives and underlying principles of financial risk management for the Group. The Group's management then establishes the detailed policies such as risk identification and measurement, exposure limits and hedging strategies, in accordance with the objectives and underlying principles approved by the Board of Directors.

There has been no change to the Group's exposure to these financial risks or the manner in which the risks are managed and measured, except for those key estimates and judgements applied in Note 3 to the financial statements.

The Group does not hold or issue derivative financial instruments for trading purposes or to hedge against fluctuations, if any, in interest rates and foreign exchange rates.

28.1 Credit risks

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults or requiring partial or full advance payments from customers. The Group performs ongoing credit evaluation of its counterparties' financial condition and generally do not require collaterals.

The Board of Directors has established a credit policy under which each new customer is analysed individually for creditworthiness before the Group's standard payment and delivery terms and conditions are offered.

The Board of Directors determines concentrations of credit risk by quarterly monitoring the creditworthiness rating of existing customers and through a monthly review of the trade receivables' ageing analysis.

Excluding the amounts due from a related party, the Group has significant credit exposure arising from 2 (2022: 1) trade receivables amounting to $138,948 (2022: $104,430), representing 21% (2022: 16%) of the total trade receivables from third parties.

The Group has significant credit exposure arising from non-current receivables due from a related party amounting $1,463,924 (2022: $899,486), representing 34% (2022: 28%) of the total trade and other receivables.

As the Group do not hold any collateral, the maximum exposure to credit risk to each class of financial instruments is the carrying amount of that financial instruments presented in the consolidated statement of financial position.

Expected credit loss assessment for trade receivables from third parties

The Group applies the simplified approach to measure the expected credit losses for trade receivables. To measure expected credit losses on a collective basis, trade receivables are grouped based on similar credit risk and ageing.

The expected loss rates are based on the Group's historical credit losses experienced. The historical loss rates are then adjusted for current and forward−looking information on macroeconomic factors affecting the Group's customers.

The following table provides information about the exposure to credit risk and expected credit loss for the Group's trade receivables from third parties as at 30 September 2023.

$	2023	2022


Current	544,053	533,758
Past due 1 to 30 days	26,031	28,768
Past due 31 to 60 days	78,175	62,005
Past due over 60 days	21,215	30,718
	669,474	655,249

The Group has assessed that the trade receivables due from third parties are subject to immaterial expected credit losses.

Expected credit loss assessment for trade and other receivables due from a related party

Movement in the loss allowance for trade and other receivables are as follows:


$	2023	2022


At 1 October	4,695,904	4,680,451
(Reversal of)/loss allowance	(9,514)	15,453
Write-off	(280,327)	-
At 30 September	4,406,063	4,695,904

For amount due from a related party (Note 16), the Board of Directors has taken into account information that it has available internally about the related party's past, current and expected operating performance and cash flow position. Board of Directors monitors and assess at each reporting date on any indicator of significant increase in credit risk on the amount due from a related party, by considering their performance and any default in external debts.

The loss allowances are measured at an amount equal to lifetime expected credit losses.

Based on the Board of Director's review, no further loss allowance on the amount due from a related party is required.

Other receivables due from third parties

For other receivables, the Board of Directors adopt a policy of dealing with high credit quality counterparties. Board of Directors monitor and assess at each reporting date on any indicator of significant increase in credit risk on these other receivables. Other than those impaired as detailed in Note 16 to the financial statements, other receivables are measured at 12−month expected credit loss and subject to immaterial credit loss.

Cash and cash equivalents

Cash and cash equivalents are mainly deposits with reputable banks with high credit ratings assigned by international credit rating agencies.

The cash and cash equivalents are held with banks which are rated Baa2 to Aaa, based on Moody's rating. The Board of Directors monitors the credit ratings of counterparties regularly. Impairment on cash and cash equivalents have been measured on the 12−month expected loss. At the reporting date, the Group did not expect any credit losses from non−performance by the counterparties.

The cash and cash equivalents are categorised under the following countries:


$	2023	2022


Myanmar	1,068,128	1,303,696
Singapore	179,740	468,118
Vietnam	241,944	208,418
	1,489,812	1,980,232

28.2 Market risks

Market risk arises from the Group's use of interest bearing, tradable and foreign currency financial instruments. It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates (currency risk), interest rates (interest rate risk) or other market factors (equity price risk).

Foreign currency risks

Foreign exchange risk arises when individual entities within the Group enters into transactions denominated in a currency other than their functional currency.

The currencies that give rise to this risk of the Group are primarily Myanmar Kyat ("MMK") and Vietnamese Dong ("VND").

There is an exposure to Myanmar Kyat as the Myanmar subsidiaries have USD as functional currency.

The Group has not entered into any currency forward exchange contracts as at the end of the reporting period.

The Group's material exposure from foreign currency denominated financial assets and financial liabilities as at the end of the reporting period is as follows:

	USD	MMK	VND	Others	Total

2023 ($)
Financial assets	2,220,883	1,192,156	682,634	69,239	4,164,912
Financial liabilities	(5,492,772)	(6,960,250)	(7,797,366)	(260,675)	(20,511,063)
Net financial position	(3,271,889)	(5,768,094)	(7,114,732)	(191,436)	(16,346,151)
Add: Net financial liabilities/(assets) denominated in the respective entities' functional currencies	3,594,588	8,582,372	7,114,732	(10,378)	19,281,314
Net financial position, adjusted for financial assets/(liabilities) denominated in the respective entities' functional currencies	322,699	2,814,278	-	(201,814)	2,935,163

2022
Financial assets	3,486,500	810,168	730,807	281,285	5,308,760
Financial liabilities	(5,214,893)	(3,436,292)	(7,447,532)	(258,134)	(16,356,851)
Net financial position	(1,728,393)	(2,626,124)	(6,716,725)	23,151	(11,048,091)
Add: Net financial liabilities/(assets) denominated in the respective entities' functional currencies	(2,584,579)	(79,376)	6,429,565	214,305	3,979,915
Net financial position, adjusted for financial assets/(liabilities) denominated in the respective entities' functional currencies	(4,321,972)	(2,705,500)	(287,160)	237,456	(7,068,176)

Foreign currency sensitivity analysis

The following table details the Group's sensitivity to 30% (2022: 30%) change in Myanmar Kyat against United States dollar. The sensitivity analysis assumes an instantaneous change in the foreign currency exchange rates from the end of the reporting dated, with all variables held constant.

	Gain/(Loss)
$	2023	2022

- Kyat
Strengthen against United States dollar	844,000	(812,000)
Weaken against United States dollar	(844,000)	812,000

Interest rate risk

The Group is not exposed to any significant interest rate risk as at reporting date as it does not have significant variable interest bearing financial assets and liabilities. The Group is primarily exposed to fixed rate interest bearing loans from a shareholder. Accordingly, interest rate risk sensitivity analysis disclosure is deemed not necessary.

Equity price risk

The Group holds strategic equity investments in other companies where those complement the Group's operations (see Note 14 to the financial statements). The directors believe that the exposure to market price risk from this activity is acceptable in the Group's circumstances. Accordingly, equity price risk sensitivity analysis disclosure is deemed not necessary.

28.3 Liquidity risks

Liquidity risk arises from the Group's management of working capital and the finance charges and principal repayments on its debt instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The following table details the Group's remaining contractual maturity for its non−derivative financial liabilities. The table has been drawn up based on undiscounted cash flows of financial liabilities based on the earlier of the contractual date or when the Group is expected to pay. The table includes both expected interest and principal cash flows.

$	Less than 1 year	Between 1 and 2 years	Between 2 and 5 years	Over 5 years	Total


2023
Trade and other payables (excluding sales tax)	5,812,666	-	-	-	5,812,666
Loans from a shareholder	-	-	2,957,625	-	2,957,625
Lease liabilities	2,859,626	2,939,302	6,973,350	2,296,659	15,068,937
	8,672,292	2,939,302	9,930,975	2,296,659	23,839,228

2022
Trade and other payables	3,594,478	-	-	-	3,594,478
Bank loan	115,530	-	-	-	115,530
Loans from a shareholder	-	1,657,500	-	-	1,657,500
Lease liabilities	2,589,378	3,577,548	5,348,376	1,968,165	13,483,467
	6,299,386	5,235,048	5,348,376	1,968,165	18,850,975

28.4 Financial instruments and measurements

Financial instruments not measured at fair value

Financial instruments not measured at fair value include cash and cash equivalents, current trade and other receivables (excluding prepayments and sales taxes), long term rental deposits and trade and other payables. Due to their short−term nature, the carrying amount of these current financial assets and financial liabilities measured at amortised costs approximates their fair value.

The carrying amounts of the bank loan and loans due to a shareholder approximate its fair value as their interest rates approximate market interest rates for such liabilities.

The carrying amounts of non-current receivables and non-current rental deposits approximate their fair value due to insignificant effects of discounting.

Financial instruments measured at fair value

The financial instruments as disclosed in Note 14 to the financial statements included in Level 1 of the fair value hierarchy, are traded in active market and their fair values are based on quoted market prices at the reporting date.

There were no transfers between levels during the financial year.

There have been no changes in the valuation techniques of the various classes of financial instruments during the financial year.

29. Capital risk management policies and objectives

The Group manages its capital to continue as a going concern, maintain an optimal capital structure and maximise shareholder value. The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may issue new shares and enter into new debt arrangements.

The capital structure of the Group consists of equity attributable to the equity holders of the Company comprising issued capital, other reserves and loans from a shareholder and convertible notes.

The Group's management reviews the capital structure on an annual basis. As part of this review, management considers the cost of capital and the risks associated with each class of capital. The Group's overall strategy remains unchanged from 30 September 2022.

The Group is not subject to externally imposed capital requirements for the financial year ended 30 September 2023 and 30 September 2022.

Management monitors capital based on a gearing ratio. The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as shareholder's loans, lease liabilities, bank loan less cash and cash equivalents. Total capital is calculated as equity plus net debt.


$	2023	2022

Net debt (excl. shareholder's loans)	10,631,404	9,239,721
Shareholder's loans (Note 18)	2,577,181	1,500,000
Total equity	(5,632,320)	(875,505)
Total capital	7,576,265	9,864,216

Gearing ratio	174%	109%
Adjusted gearing ratio *	140%	94%

* MACAN has indicated that it will not demand repayment within the next 12 months from the date of approval of the annual report.

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