TIDMBION

RNS Number : 1253D

Bion PLC

26 October 2020

26 October 2020

BiON plc

("BiON" or the "Company" or the "Group")

Interim Results

BiON (AIM: BION), an environmental engineering, wastewater treatment and renewable energy solutions company, announces its interim results for the six months ended 30 June 2020.

Financial Summary

   --    Revenue increased to RM27.2m (H1 2019: RM1.9m) 
   --    Gross profit of RM0.7m (H1 2019: RM0.1m loss) 
   --    Operating loss reduced to RM2.8m (H1 2019: RM3.7m loss) 
   --    Loss before tax reduced to RM2.7m (H1 2019: RM4.4m) 
   --    Cash and cash equivalents at 30 June 2020 were RM0.3m (31 December 2019: RM0.08m) 

Operational Summary

-- Completed engineering, procurement, construction and commissioning ("EPCC") contracts for wastewater treatment and infrastructure projects despite disruption to operations caused by COVID-19 pandemic

-- Progressed upgrading and engineering works at fully-owned Kahang and Malpom biogas power plants

-- Post period, conditionally acquired two further biogas power plants with a combined installed capacity of 3.0MW

Syed Nazim bin Syed Faisal, Chief Executive Officer, said: "I am pleased that we were able to complete our EPCC projects to ensure a significant increase in revenue over the first half of last year, despite COVID-19 and the public lockdown. We also continued to progress our Kahang and Malpom biogas power plants and, post period, acquired two further plants, bringing our installed capacity to 7.0MW. Our focus is now on commencing commercial operations at our two new plants, which, subjec t to receiving regulatory approval, we expect to achieve by year end . We look forward to reporting on our progress and delivering sustainable growth."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the EU Market Abuse Regulation (596/2014).

Enquiries:

 
 BiON plc 
 Syed Nazim bin Syed Faisal, Chief 
  Executive Officer 
  Fakrizzaki Ghazali, Chief Financial 
  Officer                                     +603 6413 1085 
 
 Beaumont Cornish (Nominated Adviser) 
 Roland Cornish, Felicity Geidt             +44 20 7628 3396 
 
 Optiva Securities (Broker) 
 Vishal Balasingham                         +44 20 3137 1903 
 
 Luther Pendragon (Financial PR Adviser) 
 Claire Norbury                             +44 20 7618 9100 
 

Operational Review

The Group is one of Malaysia's leading environmental engineering, renewable energy and green technology solutions providers. Currently, its business focus is to construct, operate and own biogas power generation plants in Malaysia, derived namely from the treatment of palm oil mill effluent (POME) and other wastes produced in the processing of palm oil at palm oil mills. The biogas generated (i.e. methane) is converted into electricity to be sold to the Malaysian national grid under a long-term renewable energy power purchase agreement. Aside from this, the Group provides similar services to third parties through EPCC contracts.

During the first half of 2020, the Group continued to source and procure EPCC projects. This included providing hydraulic and water supply-related engineering and technology services at a wastewater treatment plant in Terengganu, Malaysia. The Group also continued with the upgrading works at its fully-owned biogas power plants at Kahang and Malpom to enable full operations to recommence. However, progress was hindered during the period by the onset of the COVID-19 pandemic and associated government restrictions on the movement of goods and people as described below.

Post period end, through its subsidiary, BiON Sdn Bhd, the Group conditionally acquired two biogas power plants, at Nasarudin and Seberang Perak, from Megagreen Energy Sdn Bhd ("MGE"), an associate company of the Group. The plants, with a combined installed capacity of 3.0MW, are under the Malaysian FiT programme with 16-year power purchase agreements with Tenaga Nasional Berhad, the country's largest integrated electricity company. The construction of these plants is complete. They are now pending testing by the authorities to enable interconnection with the electricity grid and, following verification, the receipt of regulatory approval to commence commercial operations. The Group expects this to occur by year end, subject to government restrictions related to the COVID-19 pandemic.

COVID-19 Update

Following the outbreak of COVID-19, on 18 March 2020 the Government of Malaysia implemented a Movement Control Order ("MCO"), which was the lockdown and restriction of movement for all civilians and non-essential businesses, including a ban on interstate travel. This required the Group to cease its construction activities at the various project sites as supplies, materials and equipment were not transportable or obtainable.

As of 4 May 2020, the Government of Malaysia transitioned the MCO to a Conditional Movement Control Order ("CMCO"), which allowed certain business sectors and companies to resume operations within continued strict parameters regarding social distancing. Consequently, the Group commenced resuming its operations in a phased manner. However, interstate border control was still in place and so, while employees were permitted to travel to the project sites with a letter of authority from the Group, the movement of resources, materials and equipment to sites or offices progressed slowly. The CMCO subsequently transitioned to a Recovery Movement Control Order ("RMCO") on 10 June 2020, under which interstate travel was allowed and most sectors were permitted to reopen while adhering to the government's pandemic-related Standard Operating Procedures. Post period end, on 14 October, the Malaysian government introduced a new CMCO for much of the country, which is expected to last a minimum of two weeks. While permitting most business sectors to remain open, the CMCO has instated the requirement for employees to have a letter of authority to be able to travel between districts or states.

The Group implemented a number of mitigating measures to support cash flows during this period of reduced trading. This included participating in the Social Security Organisation's Wage Subsidy Programme, which was introduced under the Government of Malaysia's Prihatin Rakyat Economic Stimulus package to help businesses affected by the COVID-19 outbreak by paying towards employees' wages. The Group is working with its creditors or suppliers to revise and renegotiate payment terms, in a manner acceptable to all parties, either through postponing payments, devising a staggered payment plan or revising the existing payment plan. The Group is also engaging with its customers to address any issues regarding payment procedures. The Group has continued financial support from Serba Dinamik Sdn Bhd ("Serba"), which will be called upon if required to continue to meet its liabilities.

Financial Review

Revenue for the six months ended 30 June 2020 significantly increased to RM27.2m (H1 2019: RM1.9m), which was generated by the provision of EPCC services. Gross profit was RM0.7m compared with a gross loss of RM0.1m for the same period of the prior year, which reflects the higher revenue for the first half of 2020.

Operating loss for the period was reduced to RM2.8m (H1 2019: RM3.7m loss) due to the greater revenue. The Group recognised a net finance income of RM0.08m (H1 2019: net finance costs of RM0.8m). As a result, loss before tax was reduced to RM2.7m (H1 2019: RM4.4m loss). The Group was not subject to tax due to it being lossmaking and, therefore, loss after tax was also RM2.7m (H1 2019: RM4.4m loss).

On a consolidated level, basic loss per share for the six months ended 30 June 2020 was RM0.006 (H1 2019: RM0.012 loss per share) based on the weighted number of ordinary shares.

Cash and cash equivalents at 30 June 2020 were RM0.3m (31 December 2019: RM0.08m; 30 June 2019: RM0.06m).

On 24 January 2020, the Group converted a loan of approximately RM8.40m into ordinary shares of BiON plc. The loan had been procured during 2019, for working capital purposes, from a director of the Company, Syed Nazim Syed Faisal.

During the period, the Group continued to maintain its repayment arrangements that were structured with MGE and Concord Green Energy Sdn Bhd ("CGE"). However, the amounts outstanding from both accounts have remained long overdue. Discussions are taking place with CGE to re-negotiate the terms of repayment and in the meantime, Serba and one of the executive directors have guaranteed the value of the debt. The amount due from MGE was partly recovered from the Group's purchase of two biogas power plants from the Company as announced on 22 September 2020. The Group's management continue to be in talks with both parties to arrive at an amicable settlement for the remaining amounts.

Outlook

For the second half of the year, BiON is focused on progressing the two recently acquired biogas power plants, which it expects to commence commercial operations by year end subject to the receipt of the required regulatory approvals and COVID-19 disruption. The Group has comple ted a further EPCC projec t during the second half and anticipates delivering another contract before the end of the year. BiON also intends to continue work on its Kahang and Malpom plants, which, following the reinstatement of certain lockdown restrictions, the Group expects to complete early next year.

Looking further ahead, while continuing to develop POME-based biogas power plants, the Board intends to expand its business activities into complementary renewable energy sectors. The Board believes in creating waste-to-value and that there are abundant opportunities in eco-friendly sustainable ventures such as biomass, solar, industrial and wastewater treatment, landfill biogas, livestock waste and more. The Group intends to target these opportunities by leveraging its significant experience and track record in waste-to-energy and environmental engineering as well as by pursuing strategic partnerships, joint ventures and acquisitions, including expanding its EPCC offer to other countries in Southeast Asia.

As a result, and wi th the ongoing financial support from Serba, the Board continues to look to the future with confidence and to delivering sustainable grow th .

BiON plc (Formerly known as Green & Smart Holdings plc)

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 
 
                                                Unaudited                Unaudited                Audited 
                                               30.06.2020                30.06.2019              31.12.2019 
 ASSETS                           Note           RM'000                    RM'000                  RM'000 
 NON-CURRENT ASSETS 
 Intangible assets                 9                         749                      804                    776 
 Investment in associates                                      -                        -                      - 
 Property, plant and equipment     10                     44,742                   40,713                 44,781 
                                   17 
 Right-of-use assets               (a)                     4,534                        -                  4,760 
 Total non-current assets                                 50,025                   41,517                 50,317 
                                        ------------------------  -----------------------  --------------------- 
 
 CURRENT ASSETS 
 Trade and other receivables       11                     35,016                   16,282                 17,060 
 Amount owing by contract 
  customers                        12                        401                      401                    401 
 Amount owing by related 
  parties                          13                     62,544                   31,660                 59,654 
 Cash and cash equivalents         14                        319                       55                     83 
 Total current assets                                     98,280                   48,398                 77,198 
                                        ------------------------  -----------------------  --------------------- 
 
 Total assets                                            148,305                   89,915                127,515 
                                        ------------------------  -----------------------  --------------------- 
 
 EQUITY 
 Stated capital                    15                     69,458                   61,052                 61,052 
 Foreign translation reserve                             (2,463)                  (2,421)                (2,683) 
 Retained loss                                           (7,146)                  (7,754)                (4,448) 
 Merger reserve                                          (4,028)                  (4,028)                (4,028) 
 Total shareholders' equity                               55,821                   46,849                 49,893 
 Non-controlling interests                                   163                       41                    163 
 Total equity                                             55,984                   46,890                 50,056 
                                        ------------------------  -----------------------  --------------------- 
 
 CURRENT LIABILITIES 
 Trade and other payables          16                     68,160                   21,036                 53,922 
                                   17 
 Lease liabilities                 (b)                       334                        -                    317 
 Short-term borrowings             18                      5,865                   11,949                 15,125 
 Income tax liabilities                                      544                        -                    544 
 Total current liabilities                                74,903                   32,985                 69,908 
                                        ------------------------  -----------------------  --------------------- 
 
 NON-CURRENT LIABILITY 
 Government grant income                                      89                      102                     96 
 Amount owing to related 
  parties                          13                          -                    4,199                      - 
                                   17 
 Lease liabilities                 (b)                     5,352                        -                  5,523 
 Long-term borrowings              18                     10,512                      341                    295 
 Amount owing to directors         27                        834                    5,398                  1,006 
 Deferred taxation                                           631                        -                    631 
 Total non-current liabilities                            17,418                   10,040                  7,551 
                                        ------------------------  -----------------------  --------------------- 
 
 Total liabilities                                        92,321                   43,025                 77,459 
 
 Total liabilities and 
  equity                                                 148,305                   89,915                127,515 
                                        ------------------------  -----------------------  --------------------- 
 

BiON plc (Formerly known as Green & Smart Holdings plc)

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended

 
 
                                               Unaudited                 Unaudited 
                                               30.06.2020               30.06.2019 
                                  Note           RM'000                   RM'000 
 
 Revenue                           21                    27,212                     1,907 
 Cost of sales                                         (26,489)                   (2,026) 
 Gross profit/(loss)                                        723                     (119) 
 
 Other income                      22                       580                         6 
 Less: operating expenses 
 Administrative expenses                                (4,076)                   (3,560) 
 Other expenses                                               -                       (2) 
                                                        (4,076)                   (3,562) 
 
 Operating loss                                         (2,773)                   (3,675) 
 
 Finance income                    23                       928                         - 
 Finance cost                      24                     (853)                     (729) 
                                        -----------------------  ------------------------ 
 Loss before taxation                                   (2,698)                   (4,404) 
 
 Income tax expense                                           -                         - 
 Loss for the period                                    (2,698)                   (4,404) 
                                        -----------------------  ------------------------ 
 
 Other comprehensive income/(loss) 
 Exchange difference on translation 
  of foreign operations                                     220                        78 
 Total comprehensive loss                               (2,478)                   (4,326) 
                                        =======================  ======================== 
 
 Loss for the period attributable to: - 
 - Owners of the company                                (2,698)                   (4,404) 
 - Non-controlling interest                                   -                         - 
                                                        (2,698)                   (4,404) 
                                        =======================  ======================== 
 
 Total comprehensive loss attributable to: - 
 - Owners of the company                                (2,478)                   (4,326) 
 - Non-controlling interest                                   -                         - 
                                                        (2,478)                   (4,326) 
                                        =======================  ======================== 
 Loss per share: 
 Basic (RM, cents)                 25                   (0.006)                   (0.012) 
 Diluted (RM, cents)               25                   (0.006)                   (0.012) 
 

BiON plc (Formerly known as Green & Smart Holdings plc)

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 
                                                        Foreign                                                                 Attributable 
                                                       translation                                        Retained                to owners            Non- controlling           Total 
                            Share capital                reserve              Merger reserve               profit               of the company             interest               equity 
                 Note           RM'000                   RM'000                   RM'000                   RM'000                  RM'000                   RM'000               RM'000 
 
 Balance as at 1 
  January 2019                      61,502                    (2,499)                  (4,028)                    (3,350)                  51,175                       41            51,216 
 
 Effects on 
  adoption 
  of IFRS 16                                 -                        -                        -                    (911)                   (911)                        -             (911) 
 Loss for the 
  year                                       -                        -                        -                    (187)                   (187)                      122              (65) 
 Translation of 
  foreign operations                         -                    (184)                        -                        -                   (184)                        -             (184) 
 Total comprehensive 
  loss                                       -                    (184)                        -                  (1,098)                 (1,282)                      122           (1,160) 
                       -----------------------  -----------------------  -----------------------  -----------------------  ----------------------  -----------------------  ---------------- 
 
 Transactions with 
 owners 
 Issuance of placing 
 shares                                      -                        -                        -                        -                       -                        -                 - 
 
 Balance at 31 
  December 2019                         61,052                  (2,683)                  (4,028)                  (4,448)                  49,893                      163            50,056 
                       -----------------------  -----------------------  -----------------------  -----------------------  ----------------------  -----------------------  ---------------- 
 
 Loss for the 
  period                                     -                        -                        -                  (2,698)                 (2,698)                                    (2,698) 
 Translation of 
  foreign operations                         -                      220                        -                        -                     220                        -               220 
 Total comprehensive 
  loss                                       -                      220                        -                  (2,698)                 (2,478)                        -           (2,478) 
                       -----------------------  -----------------------  -----------------------  -----------------------  ----------------------  -----------------------  ---------------- 
 
 Transactions 
 with owners 
 Issuance of 
  placing 
  shares          15                     8,406                        -                        -                        -                   8,406                        -             8,406 
 
 Balance at 30 June 
  2020                                  69,458                  (2,463)                  (4,028)                  (7,146)                  55,821                      163            55,984 
                       -----------------------  -----------------------  -----------------------  -----------------------  ----------------------  -----------------------  ---------------- 
 

BiON plc (Formerly known as Green & Smart Holdings plc)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

For the six months ended

 
 
 
                                                               Unaudited                   Unaudited 
                                                              30.06.2020                   30.06.2019 
                                               Note             RM'000                       RM'000 
 CASH FLOW FROM OPERATING 
  ACTIVITIES 
 Loss before taxation                                                     (2,698)                    (4,404) 
 Adjustments for: 
 Amortisation of intangible assets                                             27                         27 
 Depreciation of right-of-use assets                                          226                          - 
 Depreciation of equipment                                                  1,144                      1,007 
 Government grant income                                                      (7)                        (6) 
 Gain on disposal of PPE                                                     (53)                          - 
 Interest expenses                                                            280                        724 
 Interest expenses - lease liabilities                                        313                          - 
 Interest income                                                            (928)                          - 
                                                     ---------------------------- 
 Cash flow from operating activities before 
  working capital changes                                                 (1,696)                    (2,652) 
 Decrease/(Increase) in trade and other 
  receivables                                                            (17,956)                      5,493 
 (Decrease)/Increase in trade and other 
  payables                                                                 14,238                   (10,103) 
 (Decrease)/Increase in amount owing by 
  related parties                                                         (3,062)                      2,975 
 Cash flow used in operating activities                                   (8,476)                    (4,287) 
 Interest paid                                                              (412)                        (7) 
 Interest received                                                            928 
 NET CASH FLOW USED IN OPERATING ACTIVITIES                               (7,960)                    (4,294) 
                                                     ----------------------------  ------------------------- 
 
 CASH FLOW FROM INVESTING 
  ACTIVITIES 
 Proceeds from disposal of property, plant 
  and equipment                                                               130                          - 
 Purchase of property, plant and equipment                                (1,182)                      (113) 
 NET CASH FLOW USED IN INVESTING ACTIVITIES                               (1,052)                      (113) 
                                                     ----------------------------  ------------------------- 
 
 CASH FLOW FROM FINANCING 
  ACTIVITIES 
 Issuance of new ordinary shares                                            8,406                          - 
 Convertible short-term loan to ordinary 
  shares                                                                  (8,406)                          - 
 Advances from related parties                                                  -                        227 
 Advances from directors                                                        -                      1,507 
 Repayment of hire purchase obligations                                     (236)                       (43) 
 Drawdown of hire purchase                                                    462                          - 
 Drawdown of term loans                                                    10,000                      4,800 
 Principal elements of lease liabilities                                    (467)                          - 
 Repayment of term loans                                                    (731)                    (2,500) 
 NET CASH FLOW FROM FINANCING ACTIVITIES                                    9,028                      3,991 
                                                     ----------------------------  ------------------------- 
 
 Net increase/(decrease) in cash and cash 
  equivalents                                                                  16                      (416) 
 Effects on foreign exchange translation                                      220                          - 
 Cash and cash equivalents at the beginning 
  of the period                                                                83                        471 
 Cash and cash equivalents at the end 
  of the period                                 14                            319                         55 
                                                     ----------------------------  ------------------------- 
 

BiON plc (Formerly known as Green & Smart Holdings plc)

NOTES TO THE FINANCIAL STATEMENT

For the six months ended 30 June

   1.   GENERAL INFORMATION 

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

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

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

The consolidated financial statements include the financial statements of the Company and its controlled subsidiaries (the "Group") as follows:

 
                      Place of       Registered 
 Name               incorporation      address     Principal activity      Effective interest 
                                                                         30.06.2020   31.12.2019 
                  ----------------  ------------  --------------------  -----------  ----------- 
 BiON Ventures 
  Sdn Bhd (fka 
  Green & Smart 
  Ventures Sdn 
  Bhd)             Malaysia          Note 1        Holding company          100%         100% 
                  ----------------  ------------  --------------------  -----------  ----------- 
 BiON Sdn Bhd 
  (fka Green 
  & Smart Sdn                                      IPP & EPCC 
  Bhd)             Malaysia          Note 1         contractor              100%         100% 
                  ----------------  ------------  --------------------  -----------  ----------- 
 Our Energy 
  Group (M) Sdn 
  Bhd              Malaysia          Note 2        IPP                      51%          51% 
                  ----------------  ------------  --------------------  -----------  ----------- 
 

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

Note 2 - registered address: 3-2, 3rd. Mile Square, No. 151, Jalan Klang Lama, Batu 3 1/2 , 58100 Kuala Lumpur.

   2.   basis of preparation 

The consolidated financial information for the six-month period ended 30 June 2020 has been prepared in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS") issued by the International Accounting Standards Board ("IASB"), including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC").

The consolidated financial information is unaudited and does not constitute statutory financial statements. The interim financial information has been prepared on a historical cost basis, and fair value method will be used if it is relevant.

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

A copy of the audited consolidated financial statements for the year ended 31 December 2019 is available on the Company's website.

The interim financial information for the six months ended 30 June 2020 was approved by the Directors on 23 October 2020.

Going Concern

The interim financial information has been prepared on the going concern basis unless it is inappropriate to do so.

The Directors, having considered "Going Concern and Liquidity Risk: Guidance for Directors of UK Companies" issued by The Financial Reporting Council in 2016, consider the going concern basis of preparation to be appropriate in preparing the interim financial information. The key conclusions are summarised below.

The Group made a loss for the period of RM2.7m (H1 2019: loss of RM4.4m) and recorded a net cash outflow from operating activities of RM7.9m (H1 2019: inflow of RM4.3m). At 30 June 2020, the Group held cash and cash equivalents of RM0.32m (H1 2019: RM0.06m) and had current liabilities of RM75.0m (H1 2019: RM33.0m).

As described in note 11, a trade receivable amount of RM10.51m (H1 2019: RM10.51m) was due from Concord Green Energy Sdn Bhd ("CGE") as at 30 June 2020. Due to the repayment plan not being upheld, subsequent discussions are taking place to re-negotiate the terms of repayment and in the meantime, Serba Dinamik Sdn. Bhd. and one of the executive directors, have guaranteed the value of the debt.

As described in note 13, an amount of RM66.30m (H1 2019: RM35.36m) was due from Megagreen Energy Sdn Bhd ("MGE") as at 30 June 2020. During the financial reporting period, the Group via its subsidiary, BiON Sdn Bhd, entered into sale and purchase agreements on 8 April 2020 to acquire three biogas power plant units located in Perak for consideration of RM45,990,000.00. The completion of the sale took place in Q3 2020, where 30% of the sales proceeds have been offset against the amount due and the balance of 70% was paid in cash, financed by bank borrowings. Further negotiations are taking place to acquire an additional three biogas power plants and is expected to be finalised upon satisfactory outcome from the due diligence exercise.

The Directors consider the amounts owing to be recoverable in full as a result of negotiations being undertaken.

The Group has also received a letter of support from one of its largest shareholders, Serba Dinamik Sdn. Bhd., giving its willingness to continue to fund the Group.

COVID-19 has been identified as having a significant impact on the Group in the 2020 financial year due to public lockdown. However, as restrictions have been eased and activity is increasingly resuming, the Directors continue to believe that the Group remains viable for the foreseeable future.

The Directors prepared financial projections and plans for a period of at least 12 months from the date of approval of these financial statements. On assessment of the Group's future cash flows, the new financing arrangements that have been made available from the SME Bank loan as well as the agreed letter of support from Serba Dinamik Sdn. Bhd. and an assessment of their willingness to perform under this, the Directors believe the Group has the ability to continue as a going concern for at least 12 months from the date of approval of these financial statements.

   3 .   SEASONAL OR CYCLICAL FACTORS 

There are no seasonal factors that materially affect the operations of any company in the Group.

   4.   ITEMS OF AN UNUSUAL NATURE 

There were no other unusual items affecting assets, liabilities, equity, net income or cash flows due to their nature, size or incidence for the financial period ended 30 June 2020.

   5.   MATERIAL CHANGES IN ACCOUNTING ESTIMATES 

The preparation of unaudited interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses for the current and its corresponding financial period under review. Actual results may differ from these estimates.

In preparing the unaudited interim financial information, the significant judgements made by the management in applying the Group's accounting policies and the sources of estimation uncertainty were consistent with those applied to the 2019 Audited Financial Statements.

There were no changes in estimates of amounts of the Group that may have a material effect on the financial period ended 30 June 2020.

   6.   DIVIDS 

No interim dividend was recommended by the Directors during the financial period under review.

   7.   SEGMENTAL REPORTING 

Operating segments are prepared in a manner consistent with the internal reporting provided to the management as its chief operating decision maker in order to allocate resources to segments and to assess their performance. Currently the Group operates under two operating segments, providing consulting and contract services to customers in the renewable energy sector and the supply of power to the National Grid.

Information on geographical segments is not presented as the Group operates wholly in Malaysia where all of its assets and liabilities are located.

The information provided to management for the reportable segments during each six-month period/year are as follows:

 
                                        Consulting                          Head 
 Business Segments                      & contract          Power          office         Total 
                                          RM'000            RM'000         RM'000        RM'000 
 Six months ended 30 
  June 2020 
 Contract revenues                              27,212              -              -        27,212 
 Power sold                                          -              -              -             - 
 Group revenues                                 27,212              -              -        27,212 
 
 
 Gross profit/(loss)                             2,870        (2,147)              -           723 
 Net loss                                      (2,670)           (28)              -       (2,698) 
 
 
 Segment assets                                 92,782         51,861          3,662       148,305 
 Segment liabilities                            34,371         21,264         36,686        92,321 
 Capital expenditure                                 -          1,182              -         1,182 
 Depreciation and amortisation                       -          1,276            121         1,397 
 
 
                                        Consulting                          Head 
 Business Segments                       & contract          Power          office        Total 
                                          RM'000            RM'000         RM'000         RM'000 
 Six months ended 30 
  June 2019 
 Contract revenues                                   -              -              -             - 
 Power sold                                          -          1,907              -         1,907 
                                   -------------------  -------------  -------------  ------------ 
 Group revenues                                      -          1,907              -         1,907 
 
 
 Gross loss                                          -          (119)              -         (119) 
 Net loss                                            -        (4,404)              -       (4,404) 
 
 
 Segment assets                                 34,195         52,035          3,685        89,915 
 Segment liabilities                             5,431         12,206         25,388        43,025 
 Capital expenditure                                 -            113              -           113 
 Depreciation and amortisation                       -            885            149         1,034 
 
 
                                            Consulting                          Head 
                                            & contract          Power         office         Total 
 Business Segments                              RM'000         RM'000         RM'000        RM'000 
 
 Year ended 31 December 
  2019 
 Contract revenues                              21,602              -              -        21,602 
 Power sold                                          -          2,459              -         2,459 
                                   -------------------  -------------  -------------  ------------ 
 Group revenues                                 21,602          2,459              -        24,061 
 
 Gross profit/(loss)                             4,511        (1,459)              -         3,052 
 Net profit/(loss)                               1,720        (1,785)              -          (65) 
 
 Segment assets                                 72,432         52,652          2,431       127,515 
 Segment liabilities                            27,105         19,374         30,980        77,459 
 Capital expenditure                                 -          5,434              -         5,434 
 Depreciation and amortisation                       -          2,553            243         2,796 
 Impairment loss on 
  receivables                                        -              -            868           868 
 
   8.   TAXATION 

The Company is regarded as resident for tax purposes in Jersey and on the basis that the Company is neither a financial service company nor a utility company for the purpose of the Income Tax (Jersey) Law 1961, as amended, the Company is subject to income tax in Jersey at a rate of zero per cent.

   9.   INTANGIBLE ASSETS 
 
                                              Trademarks                 Patents                   Total 
                                                 RM'000                   RM'000                  RM'000 
            Cost 
            At 1 January 2019                            1,319                         8                   1,327 
            Addition                                         -                         -                       - 
            At 30 June 2019                              1,319                         8                   1,327 
            Addition                                         -                         -                       - 
                                        ----------------------  ------------------------  ---------------------- 
            At 31 December 2019                          1,319                         8                   1,327 
            Addition                                         -                         -                       - 
            At 30 June 2020                              1,319                         8                   1,327 
                                        ----------------------  ------------------------  ---------------------- 
 
 
                                              Trademarks                 Patents                   Total 
                                                 RM'000                   RM'000                  RM'000 
            Accumulated depreciation 
            At 1 January 2019                              490                         6                     496 
            Charge for the period                           27                         -                      27 
            At 30 June 2019                                517                         6                     523 
            Charge for the period                           27                         1                      28 
                                        ----------------------  ------------------------  ---------------------- 
            At 31 December 2019                            544                         7                     551 
            Charge for the period                           27                         -                      27 
            At 30 June 2020                                571                         7                     578 
                                        ----------------------  ------------------------  ---------------------- 
 
 
            Net book value 
            At 30 June 2019                                802                         2                     804 
                                        ----------------------  ------------------------  ---------------------- 
            At 31 December 2019                            775                         1                     776 
                                        ----------------------  ------------------------  ---------------------- 
            At 30 June 2020                                748                         1                     749 
                                        ----------------------  ------------------------  ---------------------- 
 
 

Trademark

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

The remaining amortisation period of trademarks is between one to two years. The remaining amortisation period of patents is between three to 10 years.

   10.             PROPERTY, PLANT AND EQUIPMENT 
 
 
                                                                                                                   Capital 
                                      Furniture                                            Office                   Work in                Industrial 
                                      & Fittings               Renovation                 Equipment                Progress                 Building              Motor Vehicle               Total 
                                        RM'000                    RM'000                   RM'000                   RM'000                   RM'000                   RM'000                  RM'000 
            At Cost 
            At 1 January 2020                      159                       344                      167                    7,542                   40,896                      807                 49,915 
            Addition                                45                         -                        8                      515                       63                      551                  1,182 
            Disposal                                 -                         -                        -                        -                        -                    (577)                  (577) 
            At 30 June 2020                        204                       344                      175                    8,057                   40,959                      781                 50,520 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 
            Accumulated 
            Depreciation 
            At 1 January 2020                       68                       136                      122                        -                    4,204                      604                  5,134 
            Charge for the 
             period                                  9                        17                       15                        -                    1,023                       80                  1,144 
            Disposal                                 -                         -                        -                        -                        -                    (500)                  (500) 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
            At 30 June 2020                         77                       153                      137                        -                    5,227                      184                  5,778 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 
            Carrying Amount 
            At 30 June 2020                        127                       191                       38                    8,057                   35,732                      597                 44,742 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 
 
                                                                                                                   Capital 
                                      Furniture                                            Office                   Work in                Industrial 
                                      & Fittings               Renovation                 Equipment                Progress                 Building              Motor Vehicle               Total 
                                        RM'000                    RM'000                   RM'000                   RM'000                   RM'000                   RM'000                  RM'000 
            At Cost 
            At 1 January 2019                      159                       344                      167                   21,418                   21,587                      807                 44,482 
            Addition                                 -                         -                        -                      113                        -                        -                    113 
            Adjustment                               -                         -                        -                     (29)                        -                        -                   (29) 
            Reclassification                                                                                              (13,847)                   13,847                        -                      - 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
            At 30 June 2019                        159                       344                      167                    7,655                   35,434                      807                 44,566 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 
            Accumulated 
            Depreciation 
            At 1 January 2019                       53                       102                       90                        -                    2,159                      442                  2,846 
            Charge for the 
             period                                  8                        17                       15                        -                      886                       81                  1,007 
            At 30 June 2019                         61                       119                      105                        -                    3,045                      523                  3,853 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 
            Carrying Amount 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
            At 30 June 2019                         98                       225                       62                    7,655                   32,389                      284                 40,713 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 
 
                                                                                                                   Capital 
                                      Furniture                                            Office                   Work in                Industrial 
                                      & Fittings               Renovation                 Equipment                Progress                 Building              Motor Vehicle               Total 
                                        RM'000                    RM'000                   RM'000                   RM'000                   RM'000                   RM'000                  RM'000 
            At Cost 
            At 1 January 2019                      159                       344                      167                   21,418                   21,587                      807                 44,482 
            Addition                                 -                         -                        -                        -                    5,434                        -                  5,434 
            Reclassification                         -                         -                        -                 (13,876)                   13,875                        -                    (1) 
            At 31 December 
             2019                                  159                       344                      167                    7,542                   40,896                      807                 49,915 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 
            Accumulated 
            Depreciation 
            At 1 January 2019                       53                       102                       90                        -                    2,159                      442                  2,846 
            Charge for the 
             year                                   15                        34                       32                        -                    2,045                      162                  2,288 
            At 31 December 
             2019                                   68                       136                      122                        -                    4,204                      604                  5,134 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 
            Carrying Amount 
            At 31 December 
             2019                                   91                       208                       45                    7,542                   36,692                      203                 44,781 
                               -----------------------  ------------------------  -----------------------  -----------------------  -----------------------  -----------------------  --------------------- 
 

a) Included in the assets of the Group at the end of the reporting period were motor vehicles with a total net book value of RM0.59m that were acquired under hire purchase terms.

b) Assets under construction represents biogas power plant under construction. It is subject to depreciation only when completed and ready for use. No interest was capitalised during the period.

c) Industrial building with carrying amounts of approximately RM36.7m are pledged against the banking facility (note 20).

   d)    Acquisition of plant and equipment: - 
 
                                     Unaudited    Unaudited     Audited 
                                     30.06.2020   30.06.2019   31.12.2019 
                                       RM'000       RM'000       RM'000 
 
 Cash paid to acquire property, 
 plant and equipment                      1,182          113        5,434 
                                    -----------  -----------  ----------- 
 

11. TRADE AND OTHER RECEIVABLES

 
                                                    Unaudited    Unaudited     Audited 
                                                    30.06.2020   30.06.2019   31.12.2019 
                                                      RM'000       RM'000       RM'000 
 
            Trade receivables                           33,173       14,652       16,130 
            Less: allowance for impairment 
             loss                                      (1,435)      (1,575)      (1,435) 
                                                   -----------               ----------- 
                                                        31,738       13,077       14,695 
                                                   -----------  -----------  ----------- 
 
            Other receivables and deposits               4,649        3,708        3,736 
            Less: allowance for impairment 
             loss                                      (1,371)        (503)      (1,371) 
                                                   -----------  -----------  ----------- 
                                                         3,278        3,205        2,365 
                                                   -----------  -----------  ----------- 
 
                                                        35,016       16,282       17,060 
                                                   -----------               ----------- 
 
            Allowance for impairment losses 
            Opening balance - trade receivables        (1,435)      (1,575)      (1,575) 
            Allowance written back                           -                       140 
            Allowance for the period/year                    -            -            - 
                                                                             ----------- 
                                                       (1,435)      (1,575)      (1,435) 
                                                   -----------  -----------  ----------- 
 
 
            Opening balance - other receivables        (1,371)        (503)        (503) 
            Allowance for the period/year                    -            -        (868) 
                                                   -----------  -----------  ----------- 
                                                       (1,371)        (503)      (1,371) 
                                                   -----------  -----------  ----------- 
            Closing balance                            (2,806)      (2,078)      (2,806) 
                                                   -----------  -----------  ----------- 
 
 
 

a) The Group's normal credit terms range from 90 to 120 days (H1 2019: 90 to 120 days). Other credit terms are assessed and varied on a case-by-case basis.

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

   c)     Included in the trade receivables is an amount of RM10.51m due from CGE (H1 2019: 10.51m). 
   d)    The amounts in trade receivables are analysed as follows: 
 
     Unaudited      Unaudited       Audited 
     30.06.2020     30.06.2019     31.12.2019 
       RM'000         RM'000         RM'000 
 
 
              Not past due                           11,171    1,907        2 
              Past due by less than 3 months          6,233        -        - 
              Past due by less than 3 - 6 months          -        -      162 
              Past due by 6 months and above         15,769   12,745   15,966 
                                                    -------           ------- 
                                                     33,173   14,652   16,130 
                                                    -------  -------  ------- 
 

12. AMOUNT OWING BY CONTRACT CUSTOMERS

 
 
                                                Unaudited               Unaudited           Audited 
                                               30.06.2020              30.06.2019          31.12.2019 
                                                 RM'000                  RM'000              RM'000 
 
            Aggregate cost incurred 
             to date                                     52,669                  52,669         52,669 
            Add: attributable profits                    18,386                  18,386         18,386 
                                                         71,055                  71,055         71,055 
            Less: progress billings                    (70,654)                (70,654)       (70,654) 
                                         ----------------------  ----------------------  ------------- 
                                                            401                     401            401 
                                         ----------------------  ----------------------  ------------- 
 
            Represented by: 
 
            Amount due from customer 
             contracts                                      401                     401            401 
 
 
 

13. AMOUNTS OWING BY/(TO) RELATED PARTIES

 
         Party          Relationship*      Trade Receivables        Other Receivables          Other Payables               Total 
                                                 RM'000                   RM'000                   RM'000                   RM'000 
         30.06.2020 
         Megagreen 
          Energy        Related 
          Sdn Bhd        party                           51,497                   14,800                        -                   66,297 
         Less: allowance for 
          impairment loss                               (3,762)                        -                        -                  (3,762) 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
                                                         47,735                   14,800                        -                   62,535 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
 
 
         K2M Ventures 
                        Related 
         Sdn Bhd         party                                -                        9                        -                        9 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
                                                         47,735                   14,809                        -                   62,544 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
 
 
           30.06.2019 
         Megagreen 
          Energy        Related 
          Sdn Bhd        party                           31,087                    4,269                        -                   35,356 
         Less: allowance 
          for impairment 
          loss                                          (3,762)                        -                        -                  (3,762) 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
                                                         27,325                    4,269                        -                   31,594 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
 
         Makmur Hidro 
          Sdn           Related 
          Bhd            party                                -                       66                        -                       66 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
                                                         27,325                    4,335                        -                   31,660 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
 
         K2M Ventures 
                        Related 
         Sdn Bhd         party                                -                        -                  (4,199)                  (4,199) 
 
                                                         27,325                    4,335                  (4,199)                   27,461 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
 
 
 
         31.12.2019 
         Megagreen 
          Energy        Related 
          Sdn Bhd        party                           51,497                   11,853                        -                   63,350 
         Less: allowance 
          for impairment 
          loss                                          (3,762)                        -                        -                  (3,762) 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
                                                         47,735                   11,853                        -                   59,588 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
 
         Makmur Hidro 
          Sdn           Related 
          Bhd            party                                -                       66                        -                       66 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
                                                         47,735                   11,919                        -                   59,654 
                                        -----------------------  -----------------------  -----------------------  ----------------------- 
 

* Relationship

a) The Group via its subsidiary, BiON Sdn Bhd, holds 15% shares in Megagreen Energy Sdn Bhd and Syed Nazim Syed Faisal, being the Executive Director of BiON plc, was appointed as Director effective 3 July 2020.

b) Mr. Saravanan, who was a director in BiON plc for the year to 31 December 2019 and during the period until his resignation on 31 January 2020 and is a significant shareholder in BiON plc, is also one of the appointed Directors in Makmur Hydro Sdn Bhd.

c) K2M Ventures Sdn Bhd holds 26.02% of the share capital in BiON plc at the end of reporting period.

14. CASH AND CASH EQUIVALENTS

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

 
                                   Unaudited    Unaudited     Audited 
                                   30.06.2020   30.06.2019   31.12.2019 
                                     RM'000       RM'000       RM'000 
 
         Cash and bank balances           319           55           83 
                                  -----------  -----------  ----------- 
 

15. STATED CAPITAL

 
                                           No. of shares          RM'000 
 Issued and Fully Paid-Up 
 1 January 2020                              345,375,812                 61,052 
 Issuance of shares                           86,343,953                  8,406 
 Less: transaction costs                               -                      - 
 30 June 2020                                431,719,765                 69,458 
                             ---------------------------  --------------------- 
 
 

On 24 January 2020, the Group announced that, at the Extraordinary General Meeting ("EGM"), the Resolution placed in respect of the approval of the waiver under Rule 9 of the City Code and taken by Independent Shareholders on a poll was approved in regards to loan conversion to ordinary shares.

On 27 January 2020, upon relevant approved application, a loan of RM8.4m from Syed Nazim Syed Faisal, Executive Director, was converted into 86,343,953 new Ordinary Shares representing 20% of the enlarged share capital of the Group at an effective share price of approximately 1.85 pence.

16. TRADE AND OTHER PAYABLES

 
                                Unaudited         Unaudited               Audited 
                                30.06.2020        30.06.2019            31.12.2019 
                                  RM'000            RM'000                RM'000 
 
 Trade payable                      45,232                 12,134                35,780 
 Other payable and accruals         22,928                  8,902                18,142 
                                    68,160                 21,036                53,922 
                               -----------  ---------------------  -------------------- 
 

The normal credit terms granted to the Group by the suppliers are 90 days (H1 2019: 90 days) from invoice date.

17. LEASES

Group as a lessee

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

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

a) Right-of-use assets

 
                              Land    Total 
                             RM'000   RM'000 
 
  Cost at 1 January 2019      6,979    6,979 
  Additions                       -        - 
                            -------  ------- 
  At 31 December 2019         6,979    6,979 
  Additions                       -        - 
                            -------  ------- 
  At 30 June 2020             6,979    6,979 
                            -------  ------- 
 
 
  Accumulated depreciation at 1 
   January 2019                     1,766   1,766 
  Charge for the year                 453     453 
                                   ------  ------ 
  At 31 December 2019               2,219   2,219 
  Charge for the period               226     226 
                                   ------  ------ 
  At 30 June 2020                   2,445   2,445 
                                   ------  ------ 
 
 
  Net carrying amount at 31 December 
   2019                                  4,760   4,760 
                                        ------  ------ 
  Net carrying amount at 30 June 
   2020                                  4,534   4,534 
                                        ------  ------ 
 

b) Lease liabilities

The carrying amount of lease liabilities is as follows: -

 
                                     30.06.2020   31.12.2019 
                                       RM'000       RM'000 
  Current liabilities 
   - Not later than one year                334          317 
 
  Non-current liabilities: 
   - Later than one year and not 
   later than five years                  1,764        1,671 
  - Later than five years                 3,588        3,852 
                                          5,686        5,840 
                                    -----------  ----------- 
 

c) Amounts recognised in profit or loss

 
                                             30.06.2020   31.12.2019 
                                               RM'000       RM'000 
 
  Depreciation of right-of-use 
   assets                                           226          453 
  Interest expenses on lease liabilities            313          651 
  Lease expenses not capitalised 
   in lease liabilities: 
   - Expenses related to low value 
   assets                                             2           11 
  - Expenses related to short-term 
   lease                                            185          486 
                                                    726        1,601 
                                            -----------  ----------- 
 

d) Total cash outflow

The Group had a total cash outflow for leases of RM0.47m during the period.

18. BORROWINGS

a) Short-term borrowings

 
                                                 Unaudited             Unaudited               Audited 
                                                30.06.2020            30.06.2019              31.12.2019 
                                                  RM'000                RM'000                  RM'000 
 
              Mezzanine loan                                 -                   6,668                  9,269 
            Hire purchase payables (note 
             19)                                           101                      89                     92 
            Term loans (note 20)                         5,764                   5,192                  5,764 
                                                         5,865                  11,949                 15,125 
                                            ------------------  ----------------------  --------------------- 
 
 
              b) Long-term borrowings 
 
                                                     Unaudited               Unaudited                Audited 
                                                    30.06.2020              30.06.2019             31.12.2019 
                                                        RM'000                  RM'000                 RM'000 
 
            Hire purchase payables (note 
             19)                                           512                     341                    295 
            Term loans (note 20)                        10,000                       -                      - 
                                            ------------------  ----------------------  --------------------- 
                                                        10,512                     341                    295 
                                            ------------------  ----------------------  --------------------- 
 

19. HIRE PURCHASE PAYABLES

 
                                                   Unaudited      Unaudited          Audited 
                                                  30.06.2020      30.06.2019        31.12.2019 
                                                    RM'000          RM'000            RM'000 
            Minimum hire purchase payments: 
             - Not later than one year                      136          110                    110 
            - Later than one year and 
             not later than five years                      540          335                    318 
            - Later than five years                          25           41                      4 
                                               ----------------  -----------  --------------------- 
                                                            701          486                    432 
            Less: future finance charges                   (88)         (56)                   (45) 
                                               ----------------  -----------  --------------------- 
                                                            613          430                    387 
                                               ----------------  -----------  --------------------- 
 
            Current 
             - Not later than one year                      101           89                     92 
 
            Non-current 
            - Later than one year and 
             not later than five years                      488          302                    291 
            - Later than five years                          24           39                      4 
                                               ----------------  -----------  --------------------- 
                                                            512          341                    295 
                                               ----------------  -----------  --------------------- 
                                                            613          430                    387 
                                               ----------------  -----------  --------------------- 
 
 

The hire purchase payables of the Group at the end of the reporting period bare effective interest rates ranging from 5.20% to 5.36% (H1 2019: 5.20% - 5.36%).

20. TERM LOAN

 
                                  Unaudited    Unaudited          Audited 
                                  30.06.2020   30.06.2019        31.12.2019 
                                    RM'000       RM'000            RM'000 
            Current (note 18) 
             Term loan 1               4,742        4,170                  4,742 
            Term loan 2                1,022        1,022                  1,022 
            Term loan 3               10,000            -                      - 
                                 -----------  -----------  --------------------- 
                                      15,764        5,192                  5,764 
                                 -----------  -----------  --------------------- 
 
 

Term loan 1 & 2

The term loans are secured against: -

   (i)            Fixed and floating charges over the present and future assets. 

(ii) Assignment of all rights, interest and benefits and the proceeds from the sales of the electricity.

   (iii)         Assignment of all rights, benefits interest and title under industrial building. 
   (iv)          A guarantee by Credit Guarantee Corporation Berhad (term loan 1 only). 
   (v)           Joint and severally guaranteed by the Directors of the Company. 

Term loan 1 bears an effective interest rate of 8% (H1 2019: 8%) per annum and term loan 2 bears effective interest rate of 5% (H1 2019: 5%) per annum.

During the financial period, due to delayed repayment and the lender being in a position to declare the term loan outstanding as immediately due and payable, the entire term loan was reclassified as a current liability. Thereafter, the term loan was fully repaid on 3 July 2020.

Term loan 3

On 6 February 2020, the Group via its subsidiary, BiON Sdn Bhd (Borrower), entered in to a facility agreement with Serba Dinamik Sdn Bhd (Lender), to obtain a loan of RM10m for working capital purposes.

The Group unconditionally agreed to pay profit for this facility at the rate of 5% per annum for a term of 54 months commencing from 6 August 2020.

21. REVENUE

All revenues are derived from Malaysia.

 
                         Unaudited    Unaudited 
                         30.06.2020   30.06.2019 
                           RM'000       RM'000 
 Contract revenue            27,212            - 
 Sale of electricity              -        1,907 
                             27,212        1,907 
                        -----------  ----------- 
 

22. OTHER INCOME

 
                                       Unaudited    Unaudited 
                                       30.06.2020   30.06.2019 
                                         RM'000       RM'000 
 Deferred grant income                          6            6 
 Gain on disposal of plant, 
  property and equipment                       53            - 
 Insurance claim                              452            - 
 Realised gain on foreign exchange              -            - 
 Unrealised gain on foreign 
  exchange                                      -            - 
 Rental income                                  7            - 
 Wage subsidy                                  62            - 
                                              580            6 
                                      -----------  ----------- 
 

23. FINANCE INCOME

The finance income recognised is in relation to the interest charged for advances given to a related party, at a rate of 18% per annum (1.5% per month) (see note 27 for detail).

24. FINANCE COSTS

 
                                   Unaudited    Unaudited 
                                   30.06.2020   30.06.2019 
                                     RM'000       RM'000 
 Bank charges                               3            4 
 Factoring charges                        258            - 
 
 Bank interest                              -            1 
 Hire purchase interest                    10            9 
 Short-term loan interest                  54          715 
 Term loan interest                       215            - 
                                  -----------  ----------- 
                                          279          725 
                                  -----------  ----------- 
 
 Interest on lease liabilities            313            - 
                                  -----------  ----------- 
                                          853          729 
                                  -----------  ----------- 
 

25. E ARNINGS PER SHARE

The calculation of earnings per share is based on the following earnings and number of shares:

 
                                       Unaudited              Unaudited                Audited 
                                       30.06.2020             30.06.2019              31.12.2019 
 
 Loss attributable to 
  the owners of the company 
  (RM'000)                                    (2,698)                  (4,404)                  (187) 
 
 Weighted average shares 
  in issue for basic earnings 
  per share                               345,375,812              345,375,812            345,375,812 
 
 
 Adjustment for: 
 Warrants instruments                       7,232,013                7,232,013              7,232,013 
 
 
 Weighted average shares in 
  issue for diluted earnings 
  per share                               352,607,825              352,607,825            352,607,825 
                                  -------------------  -----------------------  --------------------- 
 
 Basic earnings per share (RM, 
  cents)                                      (0.006)                  (0.012)                (0.001) 
                                  -------------------  -----------------------  --------------------- 
 
   Diluted earnings per share 
   (RM, cents)                                (0.006)                  (0.012)                (0.001) 
                                  -------------------  -----------------------  --------------------- 
 
 

Earnings per share has been calculated by dividing the profit or loss for the period attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the period.

The diluted number of shares includes those reserved under warrants (note 28).

26. CONTINGENCIES

No provisions are recognised on the following matters as it is not probable that a future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement: -

 
                                Unaudited    Unaudited     Audited 
                                30.06.2020   30.06.2019   31.12.2019 
                                  RM'000       RM'000       RM'000 
 
 Corporate guarantee given 
  to licensed banks for 
  credit facilities granted 
  to a related party                10,080       32,883       32,489 
                               -----------  -----------  ----------- 
 

The Group has provided MGE with a corporate guarantee in support of a loan facility. As the Group has only a 15% interest in MGE, it has no effective control over whether any claim may be made under this guarantee. Credit Guarantee Corporation Malaysia Berhad has confirmed that repayment of the 60% of the amount borrowed by Megagreen under the facility is guaranteed by Credit Guarantee Corporation Malaysia Berhad up to June 2025 pursuant to the Green Technology Financing Scheme - established by the Malaysian government. On that basis, the Directors expect the exposure of the Group under the guarantee to be limited to approximately RM4.0m.

27. RELATED PARTY TRANSACTIONS

In addition to the information detailed in note 13, the Group also carried out the following significant transactions with related parties during the period:

 
                                      Unaudited    Unaudited     Audited 
                                      30.06.2020   30.06.2019   31.12.2019 
                                        RM'000       RM'000       RM'000 
 
 Megagreen Energy Sdn. Bhd. 
 - Contract revenue                            -            -       20,539 
 - Interest income                           928            -        2,265 
 - Amounts owing from                     62,535       31,594       59,588 
 
 K2M Ventures Sdn Bhd 
 - Other income (waive of debts)               -            -        1,633 
 - Amount owing from/(to)                      9      (4,199)            - 
 
 Makmur Hidro Sdn Bhd 
 - Amount owing from                           -           66           66 
 
 Saravanan Rasaratnam 
 - Director fees due                           -        (393)            - 
 - Director advance                            -      (2,691)            - 
 - Director fees                               -           32           63 
 - Other income (waive of debts)               -            -        3,595 
 
 Navindran Balakrishnan 
 - Director fees due                           -        (393)            - 
 - Director advance                            -        (976)            - 
 - Director fees                               -           32           63 
 - Other income (waive of debts)               -            -        1,101 
 
 Serba Dinamik group of companies 
 - Term loan                            (10,000)            -            - 
 - Amount owing to                      (15,253)            -     (10,078) 
 - Services rendered (nett)                (429)        (460)      (8,397) 
 
 
 Syed Nazim Syed Faisal 
 - Mezzanine loan                       -   (4,800)   (8,406) 
 - Director advance               (1,152)         -   (1,305) 
 - Director fees due                (110)      (47)      (81) 
 - Director fees                       32        32        64 
 
 Datuk Dr. Hj. Radzali Hassan 
 - Director fees due                (418)     (354)     (242) 
 - Director fees                       32        32        64 
 
 Aditya Chathli 
 - Director fees due                (268)     (204)     (242) 
 - Director fees                       32        32        63 
 
 Sivadas Kumar 
 - Director fees due                 (17)     (333)     (228) 
 

Related parties: -

   i)     The Group via its subsidiary, BiON Sdn Bhd, hold 15% shares in Megagreen Energy Sdn Bhd. 
   ii)    K2M Ventures Sdn Bhd holds 26.02% shares in BiON plc. 

iii) Mr. Saravanan was a Director and shareholder in BiON plc for the year ended 31 December 2019 and during the period until 31 January 2020, and is also one of the appointed Directors in Makmur Hydro Sdn Bhd.

iv) Mr. Navindran was a Director and shareholder in BiON plc for the year ended 31 December 2019 and during the period until 31 January 2020.

v) Serba Dinamik group of companies is one of the significant shareholders in BiON plc for the period ended 30 June 2020.

vi) Syed Nazim Syed Faisal is an Executive Director in BiON plc for the period ended 30 June 2020.

vii) Aditya Chathli is a Non-Executive Director in BiON plc for the period ended 30 June 2020.

viii) Datuk Dr. Hj. Radzali Hassan is a Non-Executive Director in BiON plc for the period ended 30 June 2020.

ix) Sivadas Kumar was an Executive Director in BiON plc (formerly as Green & Smart Holdings plc) until 25 October 2018.

28. WARRANT INSTRUMENTS

 
 
                          Average exercise        Number 
                          price per warrants    of warrants 
 
 At 1 January                         0.092p      7,232,013 
 Granted during the 
  period                                   -              - 
 Exercised during 
  the period                               -              - 
 Forfeited during 
  the period                               -              - 
 As at 30 June                        0.092p      7,232,013 
                        --------------------  ------------- 
 

On 6 May 2016, the Company granted 1,383,333 warrants to S.P. Angel Corporate Finance LLP, the Company's previous nominated adviser, at the exercise price of 9 pence each, which were exercisable immediately upon grant, with an expiring date of 5 May 2021.

On 19 June and 28 June 2017, the Company issued 5,848,680 warrants, at the exercise price of an average closing bid price at three trading days prior to the day of notice to exercise, to subscribers to a private placing arranged by Charles Street Securities Europe LLP ("CSS"), and to CSS as part of the fee arrangements for arranging the placement. Of the total warrants issued, 2,777,778 were issued to CSS as fees payable in connection with that placement. The warrants issued to subscribers are outside the scope of IFRS 2. In accordance with IFRS 2, the fair value of the warrants issued as fees for the placement services provided has been estimated as RM220,000. This has been recognised within the stated capital component of equity as the costs were directly incurred in raising the related equity funds.

There was no movement during the period ended 30 June 2020.

29. SUBSEQUENT EVENTS

Management is not aware of any significant events that occurred subsequent to the consolidated balance sheet date but prior to the filing of this report that would have a material impact on the consolidated financial statements.

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END

IR FLFITIILEFII

(END) Dow Jones Newswires

October 26, 2020 03:00 ET (07:00 GMT)

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