AIQ LIMITED
(incorporated and registered under the Companies Law (as revised) of The Cayman Islands and registered
number 327983.)
Annual Report and Consolidated Financial Statements
For the year ended 31 October 2023
AIQ Limited
Contents
Strategic Report – Chairman’s Statement
Strategic Report – Executive Director’s Statement
Directors’ Report
Corporate Governance Report
Statement of Directors’ Responsibilities
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Company Information
Annual Report 2023
Page Number
1
2
6
10
17
18
24
25
26
27
29
51
AIQ Limited
Annual Report 2023
STRATEGIC REPORT – CHAIRMAN’S STATEMENT
It was a challenging year for AIQ as the environment for non-fungible tokens (“NFTs”) and other blockchain-
based projects came under pressure, which was compounded by the difficult economic conditions experienced
globally. While we were awarded two new contracts during the year, the level of revenue associated with these
projects was low. Accordingly, to further reduce our expenditure, we resolved to consolidate our operations in
Malaysia with those in Hong Kong. We vacated our premises during the year and formally closed our Malaysian
subsidiary at year end.
We are currently completing a contract to develop a gaming application, and the customer has indicated that
we will receive follow-on work for a further phase of development. This was the first project that we have
undertaken in game development, and we are seeking to leverage this experience by identifying other
prospective customers to whom we can provide this service. While we are hopeful of securing further contracts
in this area, it is very difficult to forecast with any certainty in the current climate.
Accordingly, the Board continues to closely monitor the cash position and is keeping all its strategic options
open should the markets not turn favourable in the near-term.
On behalf of the Board, I would like to thank all of our shareholders for their continued support and we hope to
be able to provide an update on progress in due course.
Harry Chathli
Non-Executive Chairman
27 February 2024
1
AIQ Limited
Annual Report 2023
STRATEGIC REPORT – EXECUTIVE DIRECTOR’S STATEMENT
Below I review the Group’s operational and financial performance for the year ended 31 October 2023.
Operational Review
During the year to 31 October 2023, AIQ completed the delivery of a contract to supply an NFT platform. It has
been built to enable art schools and education centres in Hong Kong assist their students in publishing NFTs
on a blockchain platform.
The Group delivered a feasibility study into building a virtual data centre on three different non-cryptocurrency
public blockchains, in accordance with the customer's requirements.
It also commenced a project, which has continued into the current year, to develop a gaming application. The
Group assisted the customer with the concept for the video game app and its technical development.
In each of these projects, the Group performed the role of project manager and subcontracted the technical
delivery (such that the net benefit to the Group is the margin earned on the contract).
During the year, the Board resolved to not renew the lease on its Malaysian office, which was due to expire in
July 2023, and formally closed its Malaysian subsidiary. The Group's business has been primarily conducted
from Hong Kong since the establishment of Alcodes International in Hong Kong and the divestment of the
Group's Malaysia-based e-commerce business.
Financial Review
Revenue for the year to 31 October 2023 was £207,209 for continuing operations, compared with £496,296
for the previous year. The revenue was primarily based on the delivery of the feasibility study into building a
virtual data centre and from gaming app development. As discussed in the Chairman’s Statement above, the
reduction in revenue reflects the challenges the Group faced in securing new contracts owing to the difficult
economic environment.
The Group recognised a gross profit of £133,509 compared with £139,754 for the previous year from continued
operations. This reflects the lower revenue, which offset the significantly higher margins and lower staff costs
directly engaged on projects.
Administrative expenses were marginally lower at £605,884 for all operations (2022: £682,722). The expenses
were split between continuing operations in the amount of £580,246 (2022: £534,366) and discontinued
operations of £25,638 (2022: £148,356). The Group recognised a net loss on foreign exchange of £31,230 on
continuing operations (2022: £62,728 gain).
The operating loss for the Group as a whole of £499,354 (2022: £616,245 loss) was down on last year. This
was broken down to £478,201 (2022: £319,682) for continuing operations and £21,153 (2022: £296,563) for
discontinued operations. The 2022 loss for discontinued operations included a £134k impairment charge.
Net finance costs for continuing operations were £24,997 compared with £17,056 for the previous year. The
increase was due to a full year’s interest on loan notes in the year under review.
Loss before tax for the year for all operations was £526,277 (2022: £640,906 loss), comprising £503,198 for
continuing operations (2022: £336,731) and £23,079 (2022: £304,175) for discontinued operations. The loss
per share for continuing operations is 0.8 pence (2022: 0.5 pence loss per share).
The Group had cash and cash equivalents of £135,445 at 31 October 2023 (31 October 2022: £636,459). The
loan notes remain in place and are classified as non-current liabilities as the noteholders have confirmed to
the Company that they do not intend to convert, and do not expect repayment of, the loan notes in the next 12
months.
2
AIQ Limited
Key Performance Indicators
Annual Report 2023
The following key performance indicators (“KPIs”) have been selected as the most appropriate measures of
strategy execution for the Group. The Directors review the KPIs on an ongoing basis to ensure they remain
relevant:
• Revenue
Reflects the element of billings generated and recognised during the period from all operations and
measures the Group’s overall performance at a sales level. Revenues for the year to 31 October 2023 for
continuing operations totalled £207,209 (2022: £496,296). The reduction reflects the challenging
environment for NFT and other block-chain based projects as a result of the impact of macro-economic
conditions and volatility in the crypto markets.
•
•
Pipeline sales
The Group tracks the number of qualified sales opportunities (that is, the prospective buyer has a credible
intent to purchase) and projected sales value. As the Group is at an early stage in the development of its
business, the number of new opportunities is an important indicator of the potential success of its strategy.
The projected sales value represents the health of that pipeline. As at the date of the signing of these
financial statements, the Group’s pipeline is larger in value than at the same point in the prior year, but
continues to be based on a very small number of potential projects.
Administrative expenses
Indirect expenditure on running the business, which reflects cost effectiveness and cost management and
which is of key importance while the Group is developing its revenue streams. Administrative expenses
for the year for continuing and discontinued operations were lower at £605,884 (2022: £682,722).
• Cash
The Group’s cash balance provides a measure of the Group’s financial strength and self-sufficiency to
support operations while revenue streams are still in development. As at year end, cash and cash
equivalents were £135,445 (31 October 2022: £636,459), which reflects the Group’s losses.
Going Concern
The Group incurred losses of £527k during the year and experienced operating cash outflows of £419k. As at 31
October 2023, the Group had net current assets of £20k and cash of £135k. The Group’s cash position was
approximately £127k at 31 January 2024.
In assessing whether the going concern assumption is appropriate, the Directors take into account all available
information for the foreseeable future, in particular for the 12 months from the date of approval of the financial
statements. This information includes management prepared cash flows forecasts for the Group.
The Directors have assessed that to meet its forecasted cash requirements, the Group is dependent on cash
generated from the new revenue contracts, continued support from the loan note holders and/or obtaining further
funding in the form of debt/equity. The Group is currently bidding for new revenue contracts, discussing with loan
note holders for further extension of maturity and evaluating different options of fund raising. The Directors believe
that the actions required to maintain the going concern position of the Group can be achieved as successfully
demonstrated in the past. As a result, the Board continues to adopt the going concern basis of accounting in
preparing the financial statements.
The uncertainty around management estimation of winning new revenue contracts and/or obtaining additional
funding gives rise to a material uncertainty that may cast significant doubt on the Group’s ability to continue as a
going concern. Therefore, the auditors make reference to going concern by way of material uncertainty within their
audit report.
3
AIQ Limited
Principal Risks and Uncertainties
Annual Report 2023
The Directors consider the principal risks and uncertainties facing the Group and a summary of the key
measures taken to mitigate those risks are as follows:
Financial
The key financial risk is that of funding the continued development of the business with the current cash
reserves whilst protecting shareholder value. The Board manages this risk by maintaining close oversight of
the cash position to enable it to take action as necessary. Taking its cash position into account and the
forecasts and projections, as well as possible mitigating actions available to the Group, the Directors are
satisfied that the Company and the Group has adequate resources to continue in operational existence for the
foreseeable future and for a period of not less than 12 months from the date of signing the financial statements.
Further discussion of the Group’s financial risk management can be found in Note 22 to the financial
statements.
Strategy
The success of the Group’s business strategy is dependent on growing the Group’s initiative to be an IT
solutions provider to creators of NFTs and decentralised finance companies. If the decentralised finance and
NFT market does not grow as expected, this would have a detrimental impact on the Group’s ability to deliver
its strategy. To mitigate this risk, the Group continues to seek opportunities through partnerships and
association outside of the NFT sector.
Legal and regulatory
The legal and regulatory treatment of decentralised finance and NFT issuance continues to evolve and could
evolve to render them a commercially unviable business proposition should governments deem the risk to the
capital of their citizens too high a price to pay and increase regulations. To mitigate this risk, the Group intends
to operate its business in territories where there are already robust laws in place that could be applied to this
nascent market.
Competition
The success of the Group is dependent on its ability to secure and deliver IT consultancy projects. The key
risk to these activities is competition from other IT service providers, which may prevent the Group from winning
business and/or result in pricing pressure.
The Group manages this risk through its business development and product functions tracking the activities of
its competitors and this insight is used by management to quickly adapt the go-to-market strategy. The Group
always seeks to differentiate itself from the competition and has increased its focus on product marketing,
pricing and packaging to support this. In addition, the Group intends to continue to enhance its service provision
and product portfolio through a mix of internal development, forming partnerships and making acquisitions.
Suppliers
Another key operational risk is non-supply by a major supplier. Some of the Group’s technical infrastructure
and software is sourced from third-party suppliers and partners. The removal from the market of one or more
of these third-party suppliers or interruption in supply could quickly and adversely affect the Group’s operations
and result in the loss of revenue or additional expenditure. To mitigate this risk, the Group’s business
development and management teams work strategically to prevent over reliance on any one key supplier.
Suppliers are carefully selected to minimise risk of supplier failure or insolvency and the Group ensures that
team members are aware of supplier requirements or restrictions to minimise the risk of loss of a supplier due
to a breach of contractual obligations. In addition, the Group is seeking to form business partnerships to
enhance its offerings but also help to ensure its ‘production capability’.
People
The key risk to the Group’s ability to deliver IT consultancy projects is ineffective succession planning and
failure to retain skills. The Group operates in very competitive markets and the skills that its employees possess
are attractive to other employers. Not having the right people and skills could negatively impact the Group’s
ability to service its customers and grow the business. It is important that the Group maintains high levels of
employee engagement to ensure that it is able to retain and attract the best talent. Employee engagement is
monitored along with attrition rates in order to identify issues and, where necessary, take restorative action.
4
AIQ Limited
Annual Report 2023
Task Force on Climate-Related Financial Disclosures
The Taskforce on Climate-related Financial Disclosures (“TCFD”) disclosure framework is structured around
four thematic areas that are core to how organisations operate: governance, strategy, risk management and
metrics and targets. There are 11 recommended disclosures under these four themes that support the building
of transparent and accurate reporting, the management of risk and a strategic planning approach that takes
into consideration climate-related issues.
Below the Group has provided certain disclosures in accordance with the TCFD framework. Based on the very
limited nature of the Group’s operations during the period under review, the very limited resources at the
Group’s disposal and the very difficult market environment, which challenged the Group’s newly adopted
strategy, climate change was not considered a principal risk or uncertainty for the year end 31 October 2023.
For these reasons, the Group has not made full disclosures in line with the recommendations and
recommended disclosures of the TCFD.
Should conditions improve and operations scale up in the current year, the Board is committed to enhancing
the Group’s processes to consider its impact on the environment and the risks it faces, and opportunities
provided by, climate change and to making fuller disclosures in the annual report for the year ended 31 October
2025. If resources allow, the Board would also engage specialist ESG consultants to support this endeavour.
Should the markets not turn favourable in the near-term, as noted in the Chairman’s Statement, the Board is
keeping all its strategic options open, and would seek to incorporate climate-related planning into that process
as applicable.
Governance and risk management
• Based on the limited nature of the Group’s operations, all risks and opportunities are assessed and
managed together – rather than a separate process for climate-related matters. Management is
responsible for day-to-day and operational risk assessment and management, and will raise key risks and
opportunities with the board who will then monitor as required.
• As described above, climate change was not regarded as a key risk or opportunity in the year under
review, but the Board is committed to enhancing its processes – including introducing a more formalised
risk management process – and making full disclosures, commensurate with the size of its operations, in
the annual report for the year ending 31 October 2025.
Strategy
• For the year under review and to date, climate-related risks and opportunities have not been considered
material to the Group’s strategy, business or financial planning. The Board acknowledges that as an IT
solutions provider to NFT, blockchain and other digital-based industries, floods, storms and extreme heat
threaten the resilience of the digital infrastructure that the Group relies on to deliver its services. In
addition, supplier energy price rises could impact the Group’s margins and those of its customers, which
could reduce the market appetite. However, based on the Group’s current status, and the challenges that
its strategy has faced, these climate-related risks are not currently material.
• The Group has not conducted climate-related scenario analysis. The Board does not expect to be in a
position to be able to meaningfully do this in the current financial year, but should the Group’s prospects
improve and its strategy and business become stabilised, it would appoint ESG consultants to advise on
this topic to be able to make the requisite disclosures in the annual report for the year ending 31 October
2025.
Metrics and Targets
• Given the very limited nature of its operations and resources during the year under review, it has not been
practical to measure the Group’s greenhouse gas (“GHG”) emissions. The Group has also not adopted
metrics to measure climate-related risks and opportunities and, accordingly, cannot set targets.
• As a specialist area, an ESG consultant would be appointed when resources allow to assist in measuring
the Group’s GHG emissions as well as advise on appropriate metrics and targets for climate-related risks,
opportunities and performance measurement.
Li Chun Chung
Executive Director
27 February 2024
5
AIQ Limited
DIRECTORS’ REPORT
Annual Report 2023
The Directors present their report on the Group, together with the audited consolidated financial statements of
the Group, for the year ended 31 October 2023.
Principal activities
The principal activity of the Group is an information technology (IT) solutions provider, currently focused on
the delivery of blockchain and digital assets platforms in Asia through the provision of IT consultancy.
Results and dividends
The results of the Group are set out in detail in the financial statements.
The Directors do not propose to recommend a dividend for the year ended 31 October 2023. Given the losses
incurred to date, it is unlikely that the Board will recommend a dividend in the near-term.
Business review and future developments
Details of the business activities and developments made during the period can be found in the Strategic
Report.
Financial instruments and risk management
Disclosures regarding financial instruments are provided within the Strategic Report and Note 22 to the
financial statements.
Capital structure and issue of shares
Details of the Company’s share capital are set out in Note 18 to the financial statements. The Company has
one class of ordinary shares, which carry no right to fixed income.
Post balance sheet events
There are no significant or disclosable post balance sheet events.
Directors
The Directors of the Company who have served during the year and to the date of this report (unless otherwise
stated) are:
Director
Role
Date of
appointment
Board
Committee
Harry Chathli*
Dwight Mighty
Charles Yong Kai Yee
Li Chun Chung
Independent Non-Executive Chairman
Independent Non-Executive Director
Executive Director
Executive Director
09/01/2018
06/10/2022
26/03/2020
30/12/2020
N/A/R
N/A/R
* Assumed the role of Chairman of the Company on 6 October 2022, having previously been a Non-Executive Director
Board Committee abbreviations: N = Nomination Committee; A = Audit Committee; R = Remuneration
Committee
6
AIQ Limited
Annual Report 2023
The Board comprises two executive and two non-executive directors. Details of the current Directors are:
Harry Chathli, Independent Non-Executive Chairman
Mr Chathli is a capital markets specialist with significant experience in advising global companies,
organisations and government agencies. Currently, he is a director of Gracechurch Group, an independent
communications consultancy, and a number of early-stage businesses.
For over 25 years he has been advising public companies listed on the London Stock Exchange’s Main Market
and on AIM as well as on NASDAQ and other international bourses. This includes working on international
M&A deals, IPOs, MBOs, crisis communications as well as financial PR starting in 1998 at Brunswick Group,
a global partnership advising on business critical issues to companies worldwide. In 2004, he established a
financial PR company, Corfin, which was acquired by Luther Pendragon in 2011. After eight years at Luther,
he conducted an MBO to set up the company now trading as Gracechurch Group. Prior to his career in financial
PR, Harry worked for Adam Smith International, a global advisory and consulting business, advising
governments in emerging nations with their economic reform policies.
Li Chun Chung, Executive Director
Mr Li has over 20 years’ experience in assisting companies with their strategic growth. As an experienced
investment consultant and Certified Financial Planner, he began his career working for several financial
planning and wealth management consultancies based in Hong Kong. Since 2016, Mr Li has provided
business advisory and mentorship services to companies across a range of industries related to e-commerce
and digital business primarily in Australia and China. This includes helping companies prepare for the public
market; overseeing development such as through business model construction and optimisation, company
reorganisation and recruitment; fundraising; and assisting with establishing a digital business presence.
Charles Yong Kai Yee, Executive Director
Charles Yong Kai Yee is Chief Executive Officer and Founder of Alchemist Codes. He founded Alchemist
Codes in 2018 and his initial efforts were focused around the development of an enterprise messaging
applications for corporate users. Prior to founding Alchemist Codes, Charles was the lead developer of MM
Intelligence Technology Sdn Bhd where he headed a CMS system project and was responsible for managing
and leading a team of mobile and backend developers and performing Research & Development on related
new technologies. In 2012, Charles was the Senior Design Engineer at Itrimech Technology (M) Sdn Bhd
where he was actively involved in leading and delivering large scale Internet of Things applications for multiple
institutions and corporations in Malaysia, including Taylor University and Sunway Group. Charles obtained a
Bachelor’s degree in Engineering with First Class Honours in Electrical Engineering from the University of
Bradford, UK.
Dwight Mighty, Independent Non-Executive Director
Mr Mighty holds an MBA in Finance from Henley Management College and is an Associate of the Chartered
Institute of Bankers in England. Dwight specialises in private company and private equity advisory, with a focus
of the leisure/sport and media sectors. He has spent over 15 years in the private equity sector, latterly as a
senior director with Gresham Private Equity and prior to this with HSBC Private Equity. He was one of the
founders of AIM-listed company, TLA Worldwide plc, a sports marketing and management business, where he
was Chief Operating Officer until 2019.
Directors’ interests in shares
Directors’ interests in the shares of the Company as at 31 October 2023 and as at the date of this report are
disclosed below. There are no requirements for Directors to hold shares in the Company.
Director
Ordinary Shares held
% held
Harry Chathli
Charles Yong Kai Yee
Li Chun Chung
Dwight Mighty
-
1,679,755
1,425,500
-
-
2.59
2.20
-
In addition, Li Chun Chung holds convertible loan notes worth £250,000. If converted, based on the Company’s
share price prevailing as at 21 February 2024, being the last practicable date prior to the signing of the financial
7
AIQ Limited
Annual Report 2023
statements, Li Chun Chung would be issued with 6,250,000 ordinary shares, which would result in his
shareholding increasing to 7,675,500 ordinary shares, representing 11.9% of the Company’s enlarged issued
share capital. Further details on the loan notes can be found in Note 21 to the financial statements.
Substantial interests
Name
Number of ordinary shares
Percentage of issued share
capital
GBS Infinity Holding Ltd1
ML Infinity Holding Ltd2
Soctech Capital Fund3
Securities Services Nominees Ltd
James Brearley Crest Nominees Ltd
11,766,650
11,766,650
8,398,876
6,392,017
3,425,500
18.17
18.17
12.97
9.87
5.29
1 GBS Infinity Holding Ltd is wholly and beneficially owned by Soon Beng Gee. In addition, Soon Beng Gee holds convertible
loan notes worth £125,000, which if converted as at 21 February 2024, would result in him being issued with 3,125,000
ordinary shares, bringing his total holding to 14,891,650 ordinary shares representing 23.0% of the Company’s enlarged
issued share capital.
2 ML Infinity Holding Ltd is wholly and beneficially owned by Lee Chong Liang. In addition, Lee Chong Liang holds
convertible loan notes worth £125,000, which if converted as at 21 February 2024, would result in him being issued with
3,125,000 ordinary shares, bringing his total holding to 14,891,650 ordinary shares representing 23.0% of the Company’s
enlarged issued share capital.
3 Soctech Capital Fund is wholly and beneficially owned by Teon Tiek Wah, who, combined with holdings in his own name,
has a total interest in the Company of 8,786,516 ordinary shares representing 13.57% of the Company’s issued share
capital.
Except as referred to above, the Directors are not aware of any person who, as at the date of this report, was
interested in 3% or more of the issued share capital of the Company or could directly or indirectly, jointly or
severally, exercise control.
Donations
No political or charitable donations have been made in the period.
Provision of information to auditors
Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
•
so far as that Director is aware, there is no information relevant to the audit of which the Company's
auditors are unaware; and
• each Director has taken all the steps that ought to have been taken as a director in order to be aware
of any information needed by the Company's auditors in connection with preparing their report and to
establish that the Company's auditors are aware of that information.
Independent auditors
A resolution for the appointment of PKF Littlejohn LLP as auditor of the Company is to be proposed at the next
Annual General Meeting.
Duty to promote the success of the Company
The likely consequences of any decisions in the long-term
In making its decisions, the Board considers its priority of making the Group profitable alongside the interests
of our staff and the need to keep pace with market initiatives and technological changes so the business is
appropriately positioned to take best advantage of market conditions and remain viable for the long-term.
Engagement with employees
The Group's policy is to consult and engage with employees, by way of meetings and through personal contact
by Executive Directors and other senior executives, on matters likely to affect employees' interests. Information
on matters of concern to employees is given in meetings, handouts, letters and reports, which seek to achieve
a common awareness on the part of all employees on the financial and economic factors affecting the Group's
performance. We maintain oversight of their performance through a development review process. We value
our employees’ thoughts and ideas and two-way communication is actively sought and encouraged.
8
AIQ Limited
Annual Report 2023
Business relationships with customers, suppliers and others
Our customers, suppliers and business partners are key to the long-term success of our business. We seek to
maintain and grow our relationships with all parties through regular dialogue as a means of enhancing our
reputation and to help us achieve our growth ambitions. We set out our relationship with our business partners
in terms of business or service level agreements. We maintain oversight of these arrangements as well as
making sure our customers receive appropriate levels of feedback.
The impact of the Company’s operations on the community and environment
AIQ seeks to be a responsible member of its community and take its environmental impact into account.
The desirability of the Company maintaining a reputation for high standards of business conduct
We communicate with shareholders through financial results on a yearly and half-yearly basis. We also provide
the required press releases to ensure compliance with the Listing Rules.
Annual General Meeting
The Company will issue notice of its Annual General Meeting for 2024 in due course.
Signed by order of the Board
Li Chun Chung
Executive Director
27 February 2024
9
AIQ Limited
Annual Report 2023
CORPORATE GOVERNANCE REPORT
The Board of AIQ Limited considers sound governance to be a critical component of the Company’s success
and understands that it is the Board’s job to ensure that, through good decision-making, the Company is
managed for the long-term benefit of all its stakeholders.
The Board has endeavoured to establish financial controls and reporting procedures that are appropriate given
the size, early stage and structure of the Group. The Board reviews these controls regularly and adjusts as
required.
The Board meets regularly throughout the year (either in person or by video conference call). Additionally,
special meetings will take place or other arrangements will be made when Board decisions are required in
advance of regular meetings.
During the year ended 31 October 2023, a total of 11 Board meetings were held. All Directors were in
attendance at these meetings, either in person or by video conference call, except for two meetings where
Charles Yong Kai Yee was absent and one meeting where Li Chun Chung was absent.
Corporate Governance Code
The Company is not required to adopt the UK Corporate Governance Code (the “Code”), as a company with
a standard listing. The Company has not adopted the Code, but has chosen to follow certain guidelines of the
Code that the Directors consider are appropriate for the size of the Group at present.
The corporate governance structures and practices will be kept under review and communicated to
shareholders as changes are required and made.
The Directors consider each of Harry Chathli and Dwight Mighty to be independent. Whilst the business has
been at early stage, it has not been considered appropriate to appoint a full-time FD/CFO.
The Board has an audit committee, remuneration committee and nomination committee with formally
delegated duties and responsibilities, as described below.
Board of Directors
The Board is responsible for formulating, reviewing and approving the Group’s strategy, budgets and corporate
actions.
In accordance with the early stage of the Group’s development, the Board conducts an informal evaluation of
its performance, which includes identifying the Board’s ability to assess the operating environment, think
strategically and adapt as necessary. As the Group develops and its operations expand, the Board intends to
adopt a more comprehensive and formal performance evaluation process.
It is the responsibility of the Chairman and the Company Secretary to ensure that Board members receive
sufficient and timely information regarding corporate and business issues to enable them to discharge their
duties.
The Board considers that there is an appropriate balance between the Executive and Non-Executive Directors
and that no individual or small group dominates the Board’s decision making. The Board’s members have a
wide range of expertise.
The Company requires each Director to devote as much time to their duties and responsibilities as is necessary
to conduct those duties and responsibilities on behalf of the Company. Li Chun Chung, Executive Director, is
full-time and the Non-Executive Directors provide their services on a part-time basis. Charles Yong Kai Yee,
Executive Director, was full-time until June 2021 and subsequently provides his services on a part-time basis
as required.
Ensuring that between them the Directors have the necessary up-to-date experience, skills and capabilities
The Directors also expect to receive technical updates, compliance and governance training as needed by
attending courses and relevant events to stay up to date in terms of regulatory changes and technological
developments.
The Board is satisfied that, between the Directors, it has an appropriate balance of up-to-date skills and
experience for the Group’s stage of development. Additional experience will be added as and when it is
considered necessary. Biographical details of the Directors are included in the Directors’ Report above.
10
AIQ Limited
Annual Report 2023
Appointment, removal and re-election of Directors
The Board makes decisions regarding the appointment and removal of Directors, and there is a formal
procedure for appointments.
In accordance with the Company’s Articles of Association, there is no requirement for Directors to retire from
office by rotation.
There is a minimum requirement of two Directors who have the power to fill a vacancy on the Board, or to add
another Board member.
The Executive Directors were appointed for a minimum period of twenty-four months, after which the service
agreement may be terminated by either party giving not less than three months’ prior written notice. The Non-
Executive Directors have signed service agreements that contain notice periods of three months. There are
no financial provisions for termination.
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary,
at the Company’s expense. In addition, the Directors have direct access to the advice and services of the
Company Secretary.
Directors’ responsibilities
The Board comprises two executive and two non-executive directors. All Directors bring a wide range of skills
and international experience to the Board. The Non-Executive Directors may hold meetings without the
Executive Directors present. The Non-Executive Chairman is primarily responsible for the working of the Board
of the Company and oversight of Corporate Governance. The Executive Directors are primarily responsible for
the running of the business and implementation of the Board's strategy and policy.
High-level strategic decisions are discussed and taken by the full Board. Investment decisions are taken by
the full Board. Operational decisions are taken by the Executive Directors within the framework approved in
the annual financial plan and within a framework of Board-approved authorisation levels.
The Board regulations define a framework of high-level authorities that map the structure of delegation below
Board level, as well as specifying issues that remain the Board’s preserve. The Board typically tries to meet at
least each month (either in person or by conference call), with the Company Secretary in attendance, to
consider a formal schedule of matters including the operating performance of the business and to review the
Group’s financial plan and business model.
It is the responsibility of the Chairman and the Company Secretary to ensure that Board members receive
sufficient and timely information regarding corporate and business issues to enable them to discharge their
duties.
Strategy and business model
The Group is focused on the provision of IT consultancy for the delivery of blockchain platforms and in
technology areas such as digital assets. The Group is targeting the Asian, Indian and Australasian markets
where the Directors believe that blockchain platforms and digital assets are most developed and where the
Group can capitalise on the lack of IT solutions providers specialising in these technology areas. The Group
performs the role of project manager for its contracts, with the technical delivery being subcontracted.
Meeting shareholders’ needs and expectations
The Directors seek to build on a mutual understanding of objectives between the Company and its
shareholders by offering meetings to discuss long-term issues and receive feedback, and issuing updates to
the market as appropriate. The Board also seeks to use the Annual General Meeting to communicate with its
shareholders, who are encouraged to attend, and to meet and ask questions of Directors and to discuss the
development of the business.
The Company operates a website at www.aiqhub.com. The website contains details of the Company and its
activities; regulatory announcements; interim financial statements, preliminary statements and Annual
Reports.
Shareholder relations are managed primarily by the Chairman with the support of Gracechurch Group. The
Board is also kept informed of shareholder views and concerns through its Financial Adviser, Guild Financial
Advisory Limited.
Each of the Directors is available to meet with shareholders (in person or via video conference) if required to
discuss issues of importance or concern.
11
AIQ Limited
Our stakeholders
Annual Report 2023
Our key stakeholders include shareholders, suppliers, regulators and creditors. The principal ways in which
their feedback is gathered are via one-to-one meetings and conversations with stakeholders with an open
dialogue. In particular, shareholders may communicate directly with the Chairman and the Directors. In all
cases, the Company’s ethos is to act on feedback and to respond in a timely manner.
The Board does not support discrimination of any form, positive or negative, and all appointments are based
solely on merit.
Risk management – Internal controls
In applying the principle that the Board should maintain a system of internal control to safeguard shareholders’
investment and the Group’s assets, the Directors recognise that they have overall responsibility for ensuring
that the Group maintains systems to provide them with reasonable assurance regarding effective and efficient
operations, internal control and compliance with laws and regulations and for reviewing the effectiveness of
those systems. However, there are inherent limitations in any system of control and accordingly even the most
effective system can provide only reasonable and not absolute assurance against material misstatement or
loss, and that the system is designed to manage rather than eliminate the risk of failure to achieve the business
objectives.
The key features of the internal control system are described below:
- Financial controls
The Board takes responsibility for reviewing and approving all financial budgets and business plans. These
are reviewed and updated where necessary to reflect changes in the business environment or internal strategy
changes.
The Group has implemented control procedures designed to ensure complete and accurate accounting for
financial transactions and to limit the exposure to loss of assets and fraud.
The Board is supported by the Audit Committee in respect of its responsibilities to prepare financial reports to
shareholders. This includes an assessment of the appropriateness of key accounting policies, internal controls
and regulatory compliance.
- Non-financial controls
Non-financial controls are considered as important as financial controls and these encompass risk
management and fraud, IT and business continuity, regulatory compliance, health and safety and corporate
social responsibility.
The key elements of these non-financial controls are set out below:
• Control environment: the Group is committed to high standards of business conduct and there are also
processes in place to provide Board oversight of business conduct.
• Risk identification: Management is responsible for the identification and evaluation of key risks
applicable to their areas of business. These risks are assessed on a continual basis – however, a
formal risk register is not currently maintained – and may be associated with a variety of internal and
external sources, including investment risk and regulatory requirements.
The Audit Committee reviews the scope and scale of any non-audit services undertaken by the auditors in
order to ensure that their independence and objectivity is safeguarded.
Market Abuse Regulations
The Board recognises the importance of complying with the Market Abuse Regulations (“MAR’’) relating to the
disclosure of inside information and disclosure of deals by persons discharging managerial responsibilities
(“PDMR”) and persons closely associated (“PCA”). The Company has adopted an appropriate share dealing
policy.
Anti-Corruption and Bribery Policy
The Board recognises the importance of having and operating effective anti-corruption and bribery practices
and safeguards.
The Group’s internal control processes are reviewed at least annually as a means of ensuring they remain fit
for purpose as the business evolves.
12
AIQ Limited
Relations with shareholders
Annual Report 2023
The Directors seek to build on a mutual understanding of objectives between the Company and its
shareholders by being available to meet to discuss long-term issues and receive feedback. The Board also
seeks to use the Annual General Meeting to communicate with its shareholders.
Fair, balanced and understandable assessment of position and prospects
The Board is committed to presenting fair, balanced and comprehensible assessments of the Group’s position
and prospects. The Board has applied the principles of good governance relating to Directors’ remuneration
as described below. The Board has determined that there are no specific issues that need to be brought to the
attention of shareholders.
Board Committees
The Board maintains three standing committees, being the Audit, Remuneration and Nomination Committees.
The minutes of all sub-committees are circulated for review and consideration by all relevant Directors,
supplemented by oral reports from the Committee Chairmen at Board meetings.
Audit Committee
The Audit Committee comprises Dwight Mighty, who chairs the Committee, and Harry Chathli. The Committee
held four meetings during the year ended 31 October 2023, which were held to approve the annual report for
the period ended 31 October 2022 and interim report for the six months ended 30 April 2023 and for the
purpose of appointing the new auditors and discussing timing of the audit. Further details on the Audit
Committee are provided below in the Report of the Audit Committee.
Remuneration Committee
The Remuneration Committee comprises Harry Chathli, who chairs the committee, and Dwight Mighty. There
were no meetings of the Remuneration Committee held during the financial year. Further details on the
Remuneration Committee are provided below in the Report of the Remuneration Committee.
Nomination Committee
The Nomination Committee comprises Harry Chathli, who chairs the Committee, and Dwight Mighty. There
were no meetings of the Nomination Committee held during the financial year. Further details on the
Nomination Committee are provided below in the Report of the Nomination Committee.
Report of the Audit Committee
The Audit Committee has written terms of reference and provides a mechanism through which the Board can
maintain the integrity of the financial statements of the Group and any formal announcements relating to its
financial performance; to review the Group’s internal financial controls and its internal control and risk
management systems; and to make recommendations to the Board in relation to the appointment of the
external auditor, their remuneration both for audit and non-audit work, the nature, scope and results of the
audit and the cost effectiveness, independence and objectivity of the auditors. Provision is made by the Audit
Committee to meet the auditors at least twice a year.
The Group is still at an early stage of its development and is reliant on the Audit Committee to perform various
reporting requirements particularly with regards the preparation of supporting accounting papers for audit
purposes.
During the year, the Audit Committee reviewed, considered and agreed the scope and methodology of the
audit work to be undertaken by the external auditors and fees and agreed the terms of engagement for the
audit of the financial statements for the year ended 31 October 2023.
Significant matters considered by the Audit Committee during the year included change in auditor and the
auditor’s scope and methodology for the audit of the financial statements, in particular determining the areas
at greatest risk of material misstatement (whether or not due to fraud or poor internal controls). This included
consideration of risks that might impact results for the period, the going concern assessment, net assets at the
end of the period and the disclosures in the financial statements.
Following the Audit Committee’s recommendation, the Board considers the internal control system to be
adequate for the Group. The Audit Committee reviews the scope and scale of the non-audit services
undertaken by the auditors in order to ensure that their independence and objectivity is safeguarded. The
Directors recognise the business will increase in complexity as it grows and they will review the internal control
system to ensure it responds to any change.
13
AIQ Limited
Annual Report 2023
Report of the Remuneration Committee
The Remuneration Committee monitors the remuneration policies of the Group to ensure that they are
consistent with its business objectives. Its terms of reference include the recommendation and execution of
policy on Director and executive management remuneration and for reporting decisions made to the Board.
The Committee determines the individual remuneration package of the executive management of the Board.
The duties of the Committee are to:
• determine and agree with the Board the framework or broad policy for the remuneration of the
Chairman, Executive Directors, Non-Executive Directors and any employees that the Board delegates
to it;
• within the terms of the agreed policy, determine individual remuneration packages including bonuses,
incentive payments, share options, pension arrangements and any other benefits;
• determine the contractual terms on termination and individual termination payments, ensuring that the
duty of the individual to mitigate loss is fully recognised;
•
in determining individual packages and arrangements, give due regard to the comments and
recommendations of the Listing Rules;
• be told of and be given the chance to advise on any major changes in employee benefit structures in
the Group; and
•
recommend and monitor the level and structure of remuneration for senior managers below Board
level as determined.
The Committee is authorised by the Board to:
•
seek any information it requires from any employee of the Group in order to perform its duties;
• be responsible for establishing the selection criteria and then for selecting, appointing and setting the
terms of reference for any remuneration consultants providing advice to the Committee, at the Group’s
expense; and
• obtain, at the Group’s expense, outside legal or other professional advice where necessary in the
course of its activities.
The Group’s Remuneration Policy is designed to provide remuneration packages to motivate and retain high-
calibre executives and to attract new talent as required. The Committee takes into account the principles of
sound risk management when setting pay and takes action to ensure that the remuneration structure at AIQ
Limited does not encourage undue risk. The Remuneration Policy is unaudited.
Executive Directors’ fees
Purpose – a core element of remuneration, used to attract and retain executive directors of the calibre required
to develop and deliver our business strategy.
Operation and opportunity – fees for executive directors are reviewed annually, although an out-of-cycle review
may be conducted if the Remuneration Committee determines it appropriate. A review may not necessarily
lead to an increase in fees.
Performance measures or basis of payment – whilst there are no formal performance measures to determine
fee levels, general individual and business performance are taken into account. For the executive directors,
changes to fees may be made under certain circumstances such as increase in the scope or responsibility of
an individual’s role.
Non-Executive Directors’ fees
Purpose – core element of remuneration paid for fulfilling the relevant role.
Operation – non-executive directors receive a basic fee, paid quarterly in arrears, in respect of their board
duties. Further fees may be paid for chairmanship or membership of board committees. Additional fees may
be paid for travelling regularly from overseas to board and committee meetings. Non-executive directors are
not eligible for annual bonus or other benefits. Expenses incurred directly in performance of non-executive
duties for the Group may be reimbursed or paid directly on their behalf.
Opportunity – fees are set at a level which is considered appropriate to attract or retain non-executive directors
of the calibre required by the Group. Fee levels are normally set by reference to amounts paid to non-executive
14
AIQ Limited
Annual Report 2023
directors serving on the boards of similar sized UK-listed companies, taking into account the size, responsibility
and time commitment of the role.
Termination
The Executive Directors were appointed for a minimum period of twenty-four months, after which the service
agreement may be terminated by either party giving not less than three months’ prior written notice to the other
party.
Each of the Non-Executive Directors were appointed for a minimum period of twelve months, after which the
service agreement may be terminated by either party giving not less than three months’ prior written notice to
the other party.
There are no additional financial provisions for termination.
Annual remuneration
The remuneration of the Directors for the year ended 31 October 2023 was as follows:
Executive Directors
Li Chun Chung
Charles Yong Kai Yee
Non-executive Directors
Harry Chathli
Dwight Mighty1
Graham Duncan2
1 Appointed on 6 October 2022
2 Resigned on 6 October 2022
Year ended
31 October
2023
£
Year ended
31 October
2022
£
19,320
16,547
25,760
31,200
25,460
24,753
-
86,080
23,000
1,827
25,670
95,457
All of the above amounts comprised fees paid in accordance with each Director’s service agreement. There
were no changes to the Executive Directors’ fees during the year. The reduction in the remuneration of the
Executive Directors reflects the lower levels agreed to during the prior year. The Non-executive Director
remuneration remained consistent with the prior year’s levels and reflects Harry Chathli being appointed
Chairman in prior years and Dwight Mighty serving as a Director for a full twelve months in 2023 compared
with less than one month in the prior year. No pension contributions or other allowances were paid. None of
the above remuneration was performance related. There are no additional financial provisions for termination.
None of the Directors were entitled to any other cash or non-cash benefits or pension entitlements. There were
outstanding monies owed at the year end to directors of £5,947 (2022: £6,420).
Details of Directors’ shareholdings are disclosed in the Directors’ Report.
In addition to the remuneration above, other costs incurred in relation to services provided by related parties
of Directors (as detailed in Note 24 on related party transactions) were as follows:
- A total of £37,350 (2022: £38,631) was paid during the year to Gracechurch Group for financial PR
services, a company in which Harry Chathli is a director and shareholder.
- A total of £18,000 (2022: £16,500) was paid to Ever Billions International Limited for general
management services, a company in which Li Chun Chung is a director.
There were no outstanding monies owed in relation to services provided by related parties of directors at the
year end (2022: £Nil).
15
AIQ Limited
Annual Report 2023
Report of the Nomination Committee
The function of the Nomination Committee is to provide a formal, rigorous and transparent procedure for the
appointment of new directors to the Board. In carrying out its duties, the Nomination Committee is primarily
responsible for:
•
identifying and nominating candidates to fill Board vacancies;
• evaluating the structure and composition of the Board with regard to the balance of skills, knowledge
and experience and making recommendations accordingly;
•
reviewing the time requirements of Non-Executive Directors;
• giving full consideration to succession planning; and
•
reviewing the leadership of the Group.
As noted above, there were no meetings of the nomination committee during the year.
Signed by order of the Board
Li Chun Chung
Executive Director
27 February 2024
16
AIQ Limited
Annual Report 2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the annual report and the consolidated financial statements in
accordance with applicable law and regulations.
The Directors of the Group are responsible for preparing the financial information in accordance with UK
adopted internal accounting standards (IFRSs).
The Directors must not approve the financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing these
financial statements, the Directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•
state whether they have been prepared in accordance with IFRSs; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that
the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Group.
They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets
of the Group and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information
included on the Company’s website. Legislation in the Cayman Islands governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
Directors’ Responsibility Statement Pursuant to Disclosure and Transparency Rules
The Directors confirm to the best of their knowledge:
•
•
the financial statements have been prepared in accordance with IFRSs and give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group; and
the management report includes a fair review of the development and performance of the business and
the financial position of the Group, together with a description of the principal risks and uncertainties that
they face.
Signed by order of the Board
Li Chun Chung
Executive Director
27 February 2024
17
AIQ Limited
Annual Report 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AIQ LIMITED
Opinion
We have audited the financial statements of AIQ Limited (the ‘group’) for the year ended 31 October
2023 which comprise the Consolidated Statement of Comprehensive Income, the Consolidated
Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Consolidated
Statement of Cash Flows and notes to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and UK-adopted international accounting standards. In our opinion, the financial
statements:
• give a true and fair view of the state of the group’s affairs as at 31 October 2023 and of its loss
for the year then ended; and
• have been properly prepared in accordance with UK-adopted international accounting
standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of
the group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 3(c) in the financial statements, which indicates that the group is not currently
generating substantial revenues and therefore an operating loss and operating cash outflows have
been reported. New contract wins, cost management, continued support from the convertible loan note
holders and/or further funding in the form of debt/equity are required to meet liabilities as they fall due.
Whilst management are confident that these will occur and are in active discussions to secure new
revenue contracts, secure further funding and negotiate the maturity/terms with the convertible loan
note holder, there is no guarantee that these conditions will come to a fruition within the required
timelines. As stated in note 3(c), these events or conditions, along with the other matters as set forth
in note 3(c), indicate that a material uncertainty exists that may cast significant doubt on the group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s ability to continue to adopt the going concern
basis of accounting included:
•
•
•
•
•
reviewing management’s going concern memorandum and assessment and discussing
with management the future strategic plans of the group and availability of funding;
reviewing the cash flow forecasts covering at least twelve months from the date of approval
of these financial statements and assessment thereof;
obtaining corroborative supporting evidence for the key assumptions and inputs used in the
cashflow forecast;
performing a sensitivity analysis on the cash flow forecast prepared by management and
challenging the reasonableness of the key assumptions and inputs included thereto; and
reviewing the adequacy and completeness of disclosures in the financial statements.
18
AIQ Limited
Annual Report 2023
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
Our application of materiality
For the purposes of determining whether the financial statements are free from material misstatement,
we define materiality as a magnitude of misstatement, including omission, that makes it probable that
the economic decisions of a reasonably knowledgeable person, relying on the financial statements,
would be changed, or influenced. We have also considered those misstatements including omissions
that would be material by nature and would impact the economic decisions of a reasonably
knowledgeable person based our understanding of the business, industry and complexity involved.
We apply the concept of materiality both in planning and throughout the course of audit, and in evaluating
the effect of misstatements. Materiality is used to determine the financial statements areas that are included
within the scope of our audit and the extent of sample sizes during the audit.
We also determine a level of performance materiality which we use to assess the extent of testing needed
to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole.
In determining materiality and performance materiality, we considered the following factors:
the change in the level of judgement required in respect of the key accounting estimates;
• our cumulative knowledge of the group and its environment;
•
• significant transactions during the year;
•
•
the stability in key management personnel; and
the level of misstatements identified in prior periods.
The materiality and performance materiality for the significant components are calculated considering
the same factors as for group.
Materiality for the financial statements was set at £28,600 (2022: £14,300). This was calculated as a
percentage of loss before tax. Using our professional judgement, we have determined this to be the
principal benchmark within the financial statements as the principal focus of the stakeholders is
profitability as the group is currently undertaking activities to successfully implement its business
strategy by closely monitoring costs.
Materiality for the significant components of the group ranged from £15,900 to £27,000 (2022: £8,000
to £10,000) calculated as a percentage of group materiality.
Performance materiality for the financial statements was set at £20,000 (2022: £10,000) being 70% of
materiality for the financial statements as a whole. 70% is considered appropriate based on our
assessment that there is low to medium risk that the financial statements could be materially misstated.
The performance materiality for the significant components is calculated on the same basis as group
materiality.
We agreed to report to those charged with governance all corrected and uncorrected misstatements
we identified through our audit with a value in excess of £1,400 (2022: £715) for the group. We also
agreed to report any other audit misstatements below that threshold that we believe warranted
reporting on qualitative grounds.
No significant changes have come to light during the audit which required a revision to our materiality
for the financial statements as a whole.
Our approach to the audit
Our audit was risk based and was designed to focus our efforts on the areas at greatest risk of material
misstatement, aspects subject to significant management judgement as well as greatest complexity,
risk and size. In designing our audit, we determined materiality, as above, and assessed the risk of
material misstatement in the financial statements.
19
AIQ Limited
Annual Report 2023
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an
opinion on the financial statements, considering the structure of the group.
The group includes the listed parent company, AIQ Limited, and its subsidiaries, Alchemist Codes Sdn.
Bhd (“Alchemist Codes”) and Alcodes International Limited (“Alcodes”), with AIQ Limited and Alcodes
being the significant components of the group due to identified risk and size. The group’s accounting
function is based in Hong Kong.
We performed full scope audit on the significant components. The work on all significant components
of the group has been performed by us as group auditor. We have performed specific review
procedures on the non-significant component.
The scope of our audit was based on significance of operations and materiality. Each component was
assessed as to whether they were significant or not to the group by either their size or risk. The parent
company and the one subsidiary were considered to be significant due to identified risk and size.
In designing our audit approach, we considered those areas which were deemed to involve significant
judgement and estimation by the directors, such as the key audit matter surrounding the revenue
recognition. Other judgemental area was management assessment of going concern. We also
addressed the risk of management override of controls, including evaluating whether there was
evidence of bias by the directors that represented a risk of material misstatement due to fraud.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current period and include the most significant assessed risks
of material misstatement (whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In addition to the matter described in the Material Uncertainty Related to
Going Concern section we have determined the matter described below to be the key audit matter to
be communicated in our report.
Key Audit Matter
How the scope of our audit responded to the
key audit matter
Revenue recognition (Accuracy and Cut-off)
Our work in this area included:
(Refer Note 3(d) and 5)
Under ISA (UK) 240 there is a rebuttable
presumption that revenue recognition is a
fraud risk.
The group generates
from
developing IT projects wherein revenue is
recognised based on the percentage of work
completed.
revenue
There is a risk of incorrect treatment of
revenue under
IFRS 15- Revenue from
contracts with customers. Specifically, there
is a risk surrounding the accuracy and cut-
off of revenue at the year-end relating to
projects which were ongoing as at 31
October 2023.
• Obtaining
the
information systems and related controls relevant
to revenue recognition;
understanding
an
of
• Performing a walkthrough test over revenue
to understand the point of recognition of the
revenue and ensuring that the revenue is being
the agreed
in accordance with
recognised
contract and IFRS 15;
• Obtaining and reviewing signed contracts to
agree performance obligations and terms;
• For contracts that were in progress as at the
year-end, reviewing the revenue recognised by
revenue computations and
obtaining
corroborating them to acceptance/certificates
from customers where applicable to ensure that
the
20
AIQ Limited
Revenue Recognition is considered to be a
significant risk and key audit matter due to:
the performance milestones
recognise revenue had been met;
required
to
Annual Report 2023
1. The material nature of account balance;
2. The level of subjectivity and complexity
involving estimates and judgements used for
revenue recognition; and
3. The risk of onerous contracts arising due
to delays in delivery.
• obtaining an understanding and reviewing
estimates made in regards to revenue recognition
and challenging management thereon;
• Reviewing contract margins
to ensure
profitability and whether or not any onerous
contracts existed; and
• Reviewing disclosure and presentation in the
financial statements.
Based on the above procedures, we have
obtained reasonable assurance on the revenue
recognised and disclosure and presentation in
the financial statement.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If
we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
21
AIQ Limited
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
Annual Report 2023
•
•
•
•
•
•
We obtained an understanding of the group and the sector in which it operates to identify
laws and regulations that could reasonably be expected to have a direct effect on the
financial statements. We obtained our understanding in this regard through discussions
with management, application of cumulative audit knowledge and experience of the sector.
We also selected a specific audit team based on experience with auditing entities within
the information technology industry facing similar audit and business risks.
We determined the principal laws and regulations relevant to the group in this regard to be
those arising from:
o London Stock Exchange Rules;
o UK-adopted international accounting standards;
o Disclosure Guidance and Transparency Rules of the FCA;
o Local company, tax and employment laws and regulations applicable in Cayman Island
and Hong Kong; and
o Data Protection Act.
The audit team remained alert to instances of non-compliance with laws and regulations
throughout the audit.
We designed our audit procedures to ensure the audit team considered whether there were
any indications of non-compliance by the group with those laws and regulations. These
procedures included, but were not limited to:
o Making enquiries of management;
o Obtaining confirmation from AIQ Limited’s company secretary on compliance with laws
and regulations, where applicable;
o Reviewing Board minutes;
o Reviewing the nature of legal professional fees; and
o Reviewing Regulatory News Service announcements.
We also identified the risks of material misstatement of the financial statements due to
fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising
from management override of controls, that the potential for management bias was
identified in relation to the revenue recognition and we addressed this by challenging the
assumptions and judgements made by management when auditing these significant
accounting estimates (refer to the key audit matter section).
As in all of our audits, we addressed the risk of fraud arising from management override of
controls by performing audit procedures, which included, but were not limited to: the testing
of journals, reviewing accounting, key judgement and estimates for evidence of bias (refer
to the key audit matter section) and evaluating the business rationale of any significant
transactions that are unusual or outside the normal course of business.
Our review of non-compliance with laws and regulations incorporated the listed parent
company and significant component. The risk of actual or suspected non-compliance was
not sufficiently significant to our audit to result in our response being identified as a key
audit matter.
22
AIQ Limited
Annual Report 2023
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or regulation is removed from the
events and transactions reflected in the financial statements, as we will be less likely to become aware
of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud
rather than error, as fraud involves intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with our engagement
letter dated 13 December 2022. Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone, other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Joseph Archer (Engagement Partner)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
27 February 2024
15 Westferry Circus
Canary Wharf
London E14 4HD
23
AIQ Limited
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
Revenue from continuing operations
Cost of sales from continuing operations
Gross profit from continuing operations
(Loss)/other income
Administrative expenses
Note
5
7
(Losses)/gain on foreign exchange
Operating
operations
from
loss
continuing
Finance income
Finance costs
Loss before taxation from continuing
operations
Taxation
Loss for the year from continuing
operations
Loss on discontinued operation net of tax
9
12
Loss attributable to equity holders of
the Company from continuing and
discontinued operations
Other comprehensive income/(loss) (as
may be reclassified to profit and loss in
subsequent periods, net of taxes):
Exchange difference on translating foreign
operations from continuing operations
loss attributable
Comprehensive
to
equity holders of the Company from
discontinued
continuing
operations
and
Annual Report 2023
Year ended
31 October
2023
Year ended
31 October
2022
£
207,209
(73,700)
133,509
£
496,296
(356,542)
139,754
(234)
12,202
(580,246)
(534,366)
(31,230)
(478,201)
-
(24,997)
(503,198)
-
(503,198)
(23,079)
62,728
(319,682)
7
(17,056)
(336,731)
-
(336,731)
(304,175)
(526,277)
(640,906)
(430)
(2,902)
(526,707)
(643,808)
Earnings per share basic and diluted (£)
10
(0.008)
(0.010)
The accompanying notes form an integral part of these consolidated financial statements.
24
AIQ Limited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 OCTOBER 2023
Annual Report 2023
Assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Note
11
13
Current assets
Trade and other receivables 14
Cash and cash equivalents
15
Total current assets
Total assets
Equity and liabilities
Capital and reserves
Share capital
Share premium
Share warrant reserve
Foreign currency translation
reserve
Accumulated losses
Total equity
Liabilities
Current liabilities
18
20
19
Accruals and other payables 16
17
Lease restoration provision
Lease liabilities 13
Total current liabilities
Non-current liabilities
Convertible loan notes
Total non-current liabilities
Total equity and liabilities
21
As at
31 Oct 2023
£
As at
31 Oct 2022
£
6,884
-
6,884
12,270
73,026
85,296
41,718
135,445
177,163
184,047
66,408
636,459
702,867
788,163
647,607
6,019,207
12,000
647,607
6,019,207
12,000
5,998
(7,157,583)
(472,771)
6,428
(6,631,306)
53,936
156,818
-
-
156,818
500,000
500,000
184,047
137,714
18,500
78,013
234,227
500,000
500,000
788,163
The accompanying notes form an integral part of these consolidated financial statements. The financial
statements were approved and authorised for issue by the Board of Directors on 27 February 2024 and signed
on its behalf by:
Li Chun Chung,
Executive Director
25
AIQ Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
Annual Report 2023
Share
capital
Share
premium
Foreign
currency
translation
reserve
Share
warrant
reserve
Accumulated
losses
Total
equity
£
£
£
£
£
£
Balance as at 31 October
2021
647,607 6,019,207
Total comprehensive
loss for the year
Share warrant
reserve
Balance at 31 October
2022
Total comprehensive
loss for the year
Balance at 31 October
2023
-
-
9,330
(5,990,400)
685,744
(2,902)
(640,906)
(643,808)
12,000
-
-
12,000
-
-
-
-
647,607 6,019,207
12,000
6,428
(6,631,306)
53,936
-
-
-
(430)
(526,277)
(526,707)
647,607 6,019,207
12,000
5,998
(7,157,583)
(472,771)
Share premium – Represents amounts received in excess of the nominal value on the issue of share capital
less any costs associated with the issue of shares.
Accumulated losses – The accumulated losses reserve includes all current and prior periods retained profits
and losses.
Share warrant reserve – Amount arising on the issue of warrants during the year.
Translation reserve – The translation reserves includes foreign exchange movements on translating the
overseas subsidiaries records, denominated MYR and HK$, to the presentational currency, GBP.
The accompanying notes form an integral part of these consolidated financial statements.
26
AIQ Limited
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 OCTOBER 2023
Annual Report 2023
Cash flows from operating activities
Loss before taxation from continuing operations
Loss before taxation from discontinued operations
Loss before taxation
Adjustments for:-
Depreciation
Impairment charge
Loss on disposal of fixed assets
Share based payment charge
Write off tax receivable
Lease restoration cost
Interest income
Interest expense
Foreign exchange
Operating loss before working capital changes
Decrease in receivables
Decrease in payables
Year ended
31 October
2023
£
Year ended
31 October
2022
£
(503,198)
(23,079)
(526,277)
69,920
-
2,981
11,000
-
-
-
26,924
7,162
(408,290)
13,690
(24,395)
(336,731)
(304,175)
(640,906)
123,272
133,682
10,467
1,000
24,493
18,500
(273)
24,934
(16,891)
(321,722)
103,115
(108,025)
Net cash used in operating activities from
continued and discontinued operations
(418,995)
(326,632)
Cash flows from investing activities
Acquisition of plant and equipment
Proceeds from sale of fixed assets
Interest received
Net cash (used in)/generated from investing
activities from continued and discontinued
operations
Cash flows from financing activities
Proceeds from issue of convertible loan notes
Interest on lease liability
Repayment of lease liabilities
(1,651)
-
-
(1,651)
-
(1,924)
(78,013)
-
512
273
785
500,000
(7,879)
(91,476)
Net cash (outflow)/inflow in financing activities
from continued and discontinued operations
(79,937)
400,645
Net (decrease)/increase
in cash and cash
equivalents from continued and discontinued
operations
Cash and cash equivalents at beginning of the year
Effect of exchange rates on cash and cash
equivalents
Cash and cash equivalents at end of the year
from continued and discontinued operations
(500,583)
636,459
74,798
581,618
(431)
(19,957)
135,445
636,459
27
AIQ Limited
The non-cash movement from financing activities is £36,000 (2022: £18,055) on account of accrual of interest
on loan notes £25,000 (2022: £17,055) (refer to Note 21) and share-based payment charge £11,000 (2022:
£1,000) (refer to Note 20).
The accompanying notes form an integral part of these consolidated financial statements.
Annual Report 2023
28
AIQ Limited
Annual Report 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
AIQ Limited (“The Company”) was incorporated and registered in The Cayman Islands as a public limited
company on 11 October 2017 under the Companies Law (as revised) of The Cayman Islands, with the
name AIQ Limited, and registered number 327983.
The Company’s registered office is located at 5th Floor Genesis Building, Genesis Close, PO Box 446,
Cayman Islands, KY1-1106.
On 20 March 2020, the Company completed the acquisition of the entire issued share capital of Alchemist
Codes Sdn Bhd (“Alchemist Codes”), (together, the “Group”), a Malaysian incorporated information
technology solutions developer focusing on the e-commerce sector.
The Company has a standard listing on the London Stock Exchange.
The consolidated financial statements include the financial statements of the Company and its controlled
subsidiaries (the “Group”) as follows:
Name
Place of
incorporation
Registered address Principal activity
Effective interest
Alchemist
Codes Sdn Bhd
Malaysia
Hong Kong
Alcodes
International
Limited*
Design and
development of
software
2-9, Jalan Puteri
4/8, Bandar Puteri,
47100 Puchong,
Selangor Darul
Ehsan
Malaysia
Room 47, Smart-
Space
FinTech,
Level 4, Core E,
Cyberport 3, 100
Road,
Cyberport
Hong Kong
Software and
app design and
development
through the
provision of IT
consultancy
31.10.2023 31.10.2022
100%
100%
100%
100%
* Held by Alchemist Codes Sdn Bhd during the year.
On 31 October 2023, the Company commenced the strike off process to dispose of its subsidiary
Alchemist Codes Sdn Bhd. Alcodes International Limited is now owned directly by the parent company
AIQ Limited.
2. PRINCIPAL ACTIVITIES
The principal activities of the Group currently comprise the delivery of information technology (IT) solutions
for clients through the provision of IT consultancy.
29
AIQ Limited
3. ACCOUNTING POLICIES
a) Basis of preparation
Annual Report 2023
The financial statements have been prepared in accordance with UK adopted international accounting
standards (IFRSs).
As permitted by Companies Law (as revised) of The Cayman Islands only the consolidated financial
statements are presented.
The financial statements are presented in Pound Sterling (“GBP”) which is the functional currency of
the Company. The functional currencies of the subsidiaries are Malaysian Ringgit and HK Dollar and
they have been converted to GBP as explained in note 3(e). All values are rounded to the nearest
pound, except where otherwise indicated.
The results for 31 October 2023 are prepared for a 12-month period.
During the year, the Group discontinued its operation in Malaysia as part of its consolidation strategy
to save cost and focus on operations in Hong Kong and therefore the comparative in the consolidated
statement if comprehensive income pertaining to discontinued operations were restated in line with
IFRS 5- Non-current assets held for sale sand discontinued operations
New interpretations and revised standards effective for the year ended 31 October 2023
The accounting policies adopted are consistent with those of the previous financial year except for the
following new and amended standards and interpretations during the year that are applicable to the
Group.
Other Standards
New standards and interpretations that have been adopted in the annual financial statements for the
year ended 31 October 2023, but have not had a significant effect on the Group are:
• Amendments to IAS 16: Property, Plant and Equipment
• Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets
These standards did not have a significant effect on the Group.
Standards and interpretations in issue but not yet effective
There are a number of standards, amendments to standards, and interpretations which have been
issued by the International Accounting Standards Board (IASB) that are effective in future accounting
periods that the Group has decided not to adopt early. The most significant of these are as follows:
• Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2:
Disclosure of Accounting Policies
• Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as
Current or Non-current
• Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors –
Definition of Accounting Estimates
• Amendments to IAS 12: Income Taxes – Deferred Tax related to Assets and Liabilities arising
from a Single Transaction
• Amendments to IAS 1 Presentation of Financial Statements: Non-current Liabilities with
Covenants
The Directors do not anticipate the adoption of any of these standards issued by IASB to have a material
impact on the financial statements of the Group.
30
AIQ Limited
b) Basis of consolidation
Annual Report 2023
The consolidated financial statements incorporate the financial statements of the Company and its
subsidiaries made up to the end of the reporting period. 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 the investee, and the ability to use its power to affect those variable returns.
The consolidated financial statements present the results of the Company and its subsidiaries as if they
formed a single entity. Inter-company balances and transactions between Group companies are therefore
eliminated in full. The financial information of subsidiaries is included in the Group’s financial statements
from the date that control commences until the date that control ceases.
c) Going concern
The Group incurred losses of £527k during the year and experienced operating cash outflows of £419k.
As at 31 October 2023, the Group had net current assets of £20k and cash of £135k. The Group’s cash
position was approximately £127k at 31 January 2024.
In assessing whether the going concern assumption is appropriate, the Directors take into account all
available information for the foreseeable future, in particular for the 12 months from the date of approval
of the financial statements. This information includes management prepared cash flows forecasts for the
Group.
The Directors have assessed that to meet its forecasted cash requirements, the Group is dependent on
cash generated from the new revenue contracts, continued support from the loan holders and/or obtaining
further funding in the form of debt/equity. The Group is currently bidding for new revenue contracts,
discussing with loan note holders for further extension of maturity and evaluating different options of fund
raising. The Directors are confident that the actions required to maintain the going concern position of the
Group can be achieved as successfully demonstrated in the past. As a result, the Board continues to
adopt the going concern basis of accounting in preparing the financial statements.
The uncertainty around management estimation of winning new revenue contracts and/or obtaining
additional funding gives rise to a material uncertainty that may cast significant doubt on the Group’s ability
to continue as a going concern. Therefore, the auditors make reference to going concern by way of
material uncertainty within their audit report.
d) Revenue
Revenue is recognised at an amount that reflects the consideration to which the entity expects to be
entitled in exchange for transferring goods or services to a customer net of sales taxes and discounts.
A performance obligation may be satisfied at a point in time or over time. The amount of revenue
recognised is the amount allocated to the satisfied performance obligation. The Board believes that
Group has one primary source of revenue from operations - software development income. The Group
also earned sub-letting income from sub-leasing office space. The sources of income can be broken
down further into distinct revenue streams:
(i)
(ii)
Sub-letting income
Income received from sub-letting is netted off against administrative expenses.
Software development income
The Group earns project management and coordination revenues. In the current year, these
primarily related to blockchain platform development and digital business platform IT solutions
for clients. Revenue is recognised progressively over time based on milestones and
customers’ acceptance by using the input method and output method.
The performance obligations extend over several months with milestone obligations over the
term of the service agreement.
In most cases, the measurement of revenue (when recognised over time) will not be the same
as amounts invoiced to a customer. In these circumstances, the Group will recognise either a
contract asset (accrued income) or a contract liability (deferred income) for the difference
31
AIQ Limited
between cumulative revenue recognised and cumulative amounts billed for that contract. For
income recognised over time for open contracts, management estimates the percentage of
work completed by reference to each customer.
Annual Report 2023
e) Foreign currency transactions and translation
Functional and presentational currencies
The presentational currency of AIQ Limited and the Group is Pound Sterling. The functional currency
of the Company and Group is also Pound Sterling. This is based on the principal currency of
expenditure and the Company’s fundraising activities, all being in Sterling.
The functional currency of Alchemist Codes Sdn Bhd is Malaysian Ringgit, being the currency in which
the majority of the company’s transactions are denominated.
The functional currency of Alcodes International Limited is the Hong Kong dollar, being the currency
in which the majority of the company’s transactions are denominated.
In preparing the financial statements of the individual entities, transactions in currencies other than the
entity’s functional currency 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 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.
In order to satisfy the requirements of IAS 21 with respect to presentation currency, the consolidated
financial statements have been translated into Pound Sterling using the procedures outlined below:
•
•
•
Assets and liabilities where the functional currency is other than Pounds were translated into
Pounds at the relevant closing rates of exchange;
non-Sterling trading results were translated into Pounds at the relevant average rates of
exchange; and
differences arising from the retranslation of the opening net assets and the results for the period
are recognised in other comprehensive income and taken to the foreign currency translation
reserve.
f) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment losses.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items of property, plant and equipment.
Depreciation is charged to the income statement on a straight-line basis over the estimated useful
lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:
Computers
5 years
Office equipment
5 years
Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.
g) Research and development expenditure
Research expenditure is recognised as an expense when it is incurred.
32
AIQ Limited
Development expenditure is recognised as an expense except that costs incurred on development
projects are capitalised as long-term assets to the extent that such expenditure is expected to generate
future economic benefits. Development expenditure is capitalised if, and only if an entity can
demonstrate all of the following:
Annual Report 2023
its ability to measure reliably the expenditure attributable to the asset under development;
the product or process is technically and commercially feasible;
(i)
(ii)
(iii) its future economic benefits are probable;
(iv) its ability to use or sell the developed asset; and
(v)
the availability of adequate technical, financial and other resources to complete the asset under
development.
Capitalised development expenditure is measured at cost less accumulated amortisation and
impairment losses, if any. Development expenditure initially recognised as an expense is not
recognised as assets in subsequent periods.
h) Impairment of financial assets
IFRS 9 “Financial Instruments” requires an expected credit loss model as opposed to an incurred credit
loss model under IAS 39 “Financial Instruments: Recognition and Measurement”. The expected credit
loss (ECL) model requires the Group to account for expected credit losses and changes in those
expected credit losses at each reporting date to reflect changes in credit risk since initial recognition
of the financial assets. The credit event does not have to occur before credit losses are recognised.
IFRS 9 “Financial Instruments” allows for a simplified approach for measuring the loss allowance at an
amount equal to lifetime expected credit losses for trade receivables and contract assets.
The Group’s financial assets are subject to the expected credit loss model.
The Group recognises a loss allowance for expected credit losses on receivables. The amount of
expected credit losses is updated at each reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument.
The expected credit losses are estimated using a provision based on the Group’s historical credit loss
experience, adjusted for factors that are specific to the debtors, general economic conditions and an
assessment of both the current as well as the forecast direction of conditions at the reporting date,
including time value of money where appropriate.
As the Group is at an early stage and the volume of sales is very low, it does not have significant
amounts of historic information on credit losses. Accordingly, only specific provisions are made if
required. To analyse and adjust for any expected credit loss would likely skew the reported results for
the year.
The Group considers a financial asset in default when contractual payments are between 30 to 180
days past due. However, in certain cases, the Group may also consider a financial asset to be in
default when internal or external information indicates that the Group is unlikely to receive the
outstanding contractual amounts in full before taking into account any credit enhancements held by
the Group. A financial asset is written off when there is no reasonable expectation of recovering the
contractual cash flows.
i) Impairment of non-financial assets
At each reporting date, the Directors assess whether indications exist that an asset may be impaired.
If indications do exist, or when annual impairment testing for an asset is required, the Directors
estimate the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or
cash-generating unit’s fair value less costs to sell and its value-in-use, and is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets. Where the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the Directors consider the asset impaired and write the subject asset
down to its recoverable amount. In assessing value-in-use, the Directors discount the estimated future
cash flows to their present value using a pre-tax discount rate that reflects current market assessments
33
AIQ Limited
Annual Report 2023
of the time value of money and the risks specific to the asset. In determining fair value less costs to
sell, the Directors consider recent market transactions, if available. If no such transactions can be
identified, the Directors utilise an appropriate valuation model.
When applicable, the Group recognises impairment losses of continuing operations in the “Statements
of Profit or Loss and Other Comprehensive Income” in those expense categories consistent with the
function of the impaired asset.
j) Right of use assets
A right of use asset is recognised at the commencement date of a lease. The right of use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable,
any lease payments made at or before the commencement date net of any lease incentives received,
any initial direct costs incurred, and an estimate of costs expected to be incurred for dismantling and
removing the underlying asset, and restoring the site or asset.
Right of use assets are depreciated on a straight-line basis over the unexpired period of the lease or
the estimated useful life of the asset, whichever is the shorter. Right of use assets are subject to
impairment or adjusted for any re-measurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
k) Financial instruments
Financial assets and financial liabilities are recognised in the Consolidated Statement of Financial Position
when the Group becomes a party to the contractual provisions of the instruments. Financial assets and
financial liabilities are initially measured at fair value.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added
to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition.
Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other receivables, security deposits, cash and
cash equivalents, convertible loan notes, lease liabilities and trade and other payables.
Convertible loan notes (CLNs)
Each component of the loan note (principal/ interest and conversion feature) are assessed separately.
The management has assessed the entire instrument as financial liability. Based on that, convertible
loan notes are recorded at their issue price and are carried at their face value. Subsequently, the CLN
is accounted for at amortised cost. Any interest due on these CLNs is recorded on accrual basis. On
conversion/redemption, the face value of converted CLNs is reduced from the total carried value.
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are
measured at amortised cost using the effective interest method, less any impairment losses.
Trade and other payables
Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are
measured at amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits.
34
AIQ Limited
l) Financial assets
(i) Initial recognition and measurement
Annual Report 2023
The Group classifies its existing financial assets as financial assets carried at amortised cost. The
classification depends on the nature of the assets and the purpose for which the assets were acquired.
Management determines the classification of its financial assets at initial recognition and this designation
at every reporting date.
Financial assets carried at amortised cost
Financial assets carried at amortised cost are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are presented as current assets, except for those
expected to be realised later than twelve months after the reporting date which are classified as non-
current assets. They include cash and bank balances, trade and other receivables and a rental deposit.
Subsequent to initial recognition, these assets are measured at amortised cost using the effective interest
rate method, less impairment.
Impairment of financial assets is considered using a forward-looking expected credit loss (ECL) review.
(ii) De-recognition
Financial assets are de-recognised when the contractual rights to receive cash flows from the financial
assets have expired or have been transferred and the Group has transferred substantially all the risks and
rewards of ownership. On de-recognition of a financial asset in its entirety, the difference between the
carrying amount and the sum of the consideration received and any cumulative gain or loss that had been
recognised in other comprehensive income is recognised in profit or loss.
m) Financial liabilities
The Company's financial liabilities include trade and other payables, accruals and convertible loan notes.
Financial liabilities are recognised when the Group becomes a party to the contractual provision of the
instrument. All financial liabilities are recognised initially at their fair value, net of transaction costs, and
subsequently measured at amortised cost, using the effective interest method, unless the effect of
discounting would be insignificant, in which case they are stated at cost.
The Group derecognises financial liabilities when, and only when, the Company's obligations are
discharged, cancelled or they expire.
n) Share capital
Proceeds from issuance of ordinary shares are classified as equity. Amounts in excess of the nominal
value of the shares issued are recognised as share premium.
Transaction costs that are directly attributable to the issue of share capital are deducted from share
premium.
o) Taxation
Current tax
Current tax is the expected amount of income taxes payable in respect of the taxable profit for the
reporting period and is measured using the tax rates that have been enacted or substantively enacted
at the end of the reporting period, and any adjustment to tax payable in respect of previous financial
years.
Deferred tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the Group’s Financial Statements.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted
by the reporting date and expected to apply when the related deferred tax is realised or the deferred
liability is settled.
35
AIQ Limited
Annual Report 2023
Deferred tax assets are recognised to the extent that it is probable that the future taxable profit will be
available against which the temporary differences can be utilised.
p) Cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits and other short-term highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
q) Finance income and expense
Finance income comprises interest receivable on funds invested.
Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest
method.
r) Employee benefits
Short-term benefits
Short-term employee benefit obligations; wages, salaries, paid annual leave, sick leave, bonuses and
non-monetary benefits, are measured on an undiscounted basis and are expensed in the profit or loss as
the related service is provided. A liability is recognised for the amount expected to be paid under short-
term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay
this amount as a result of past service provided by the employee and the obligation can be estimated
reliably.
Long-term benefits
Defined contribution plans
The income statement expense for the defined contribution pension plans operated represents the
contributions payable for the year. As required by law, companies in Malaysia make contributions to the
state pension scheme, the Employees Provident Fund (“EPF”), which is charged to profit or loss in the
year to which they relate. Once the contributions have been paid, the Group has no further liabilities in
respect of the defined contribution plans.
s) Earnings per share
Basic earnings per share is computed using the weighted average number of shares outstanding during
the period. Diluted earnings per share is computed using the weighted average number of shares during
the period plus the dilutive effect of dilutive potential ordinary shares outstanding during the period.
t) Share warrants
Equity-settled share-based payments against services received are measured at fair value at the date
of grant (i.e. date of agreement) by reference to the fair value of the services received. The fair value
determined at the grant date is expensed on a straight-line basis over the service period. A
corresponding adjustment is made to equity as share warrant reserve and accounts receivable as
prepaid expense.
4. ACCOUNTING ESTIMATES AND JUDGEMENTS
Preparation of financial information in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about carrying values of assets
and liabilities that are not readily apparent from other sources.
The key estimates and underlying assumptions concerning the future and other key sources of estimation
uncertainty at the statement of financial position date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial period are reviewed
36
AIQ Limited
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.
During the year, the management estimates and judgements were involved in revenue recognition
from software development projects and cashflow forecast for going concern assessments.
Annual Report 2023
5. REVENUE
Software development income
Total
All revenues were generated in Asia.
Year
ended
31 October
2023
£
Year
ended
31 October
2022
£
207,209
207,209
496,296
496,296
During the year ended 31 October 2023, one customer accounted for £132,911 (64%) (2022: one
customer accounted for £438,824 (88%)) of the Group’s revenues. There were three customers in all
during the year and the second highest customer accounted for 24% of the turnover.
An analysis of revenue by the timing of the delivery of goods and services to customers for 2023 is as
follows:
31 October
2023
Services
transferred
over time
£
207,209
31 October
2022
Services
transferred
over time
£
496,296
Software development income
Total
207,209
496,296
6. SEGMENT REPORTING
IFRS 8 defines operating segments as those activities of an entity about which separate financial
information is available and which are evaluated by the Board of Directors to assess performance and
determine the allocation of resources. The Board of Directors is of the opinion that under IFRS 8 the Group
has only one operating segment, information technology product and services. In addition, the Group is
only trading in Asia and therefore there is only one geographical segment. The Board of Directors
assesses the performance of the operating and geographical segments using financial information that is
measured and presented in a manner consistent with that in the Financial Statements. Segmental
reporting will be reviewed and considered in light of the development of the Group’s business over the
next reporting period.
37
AIQ Limited
7. OPERATING LOSS BEFORE TAXATION
Loss from continuing operations has been arrived at after charging and (crediting):
Annual Report 2023
Auditor’s remuneration:
- Audit of the financial statements
- Current auditor – accrued fees
-
-
- Predecessor auditor
- Other services – predecessor auditor (included
under professional fees)
Cost of sales:
Purchases
Administrative expenses:
Directors’ remuneration
Wages and salaries
Consultancy fees
Depreciation of tangible fixed assets
Office costs
Professional fees
Regulatory fees
Property costs
Secretarial fees
Audit fees
Travel. Subsistence and Entertainment
Other costs
Year
ended
31 October
2023
£
Year
ended
31 October
2022
£
56,670
-
-
55,873
43,500
3,500
Year
ended
31 October
2023
£
73,700
Year
ended
31 October
2022
£
356,542
73,700
356,542
Year
ended
31 October
2023
£
88,906
148,645
54,750
1,848
10,985
82,142
35,164
17,778
32,606
56,670
15,882
34,870
Year
ended
31 October
2022
£
95,457
106,964
50,500
1,869
3,821
37,911
37,269
11,503
35,407
98,500
26,602
28,563
580,246
534,366
38
AIQ Limited
8. STAFF COSTS AND KEY MANAGEMENT EMOLUMENTS
Staff costs:
Wages and salaries
Social security costs
Post-employment benefits
Annual Report 2023
Year
ended
31 October
2023
£
233,355
5
6,646
Year
ended
31 October
2022
£
242,556
437
1,440
240,006
244,433
The wages and salaries includes staff cost pertaining to discontinued operations amounting to £2,454
(2022: £42,012).
Key management personnel are considered to be the directors and three senior members of staff. Their
remuneration was as follows:
Key management personnel:
Wages and salaries (including directors
as detailed in the Directors’ Remuneration
Report on page 15)
Social security costs
Post-employment benefits
Year
ended
31 October
2023
£
133,419
Year
ended
31 October
2022
£
162,559
5
349
113
913
133,773
163,585
Included within accruals is £5,891 (2022: £6,420), which relates to Directors’ remuneration yet to be paid.
The average monthly number of employees during the year ended 31 October 2023 was as follows:
Management
Administrative
Operations
Year
ended
31 October
2023
No.
5
2
6
Year
ended
31 October
2022
No.
6
3
6
13
15
39
AIQ Limited
9. TAXATION
Annual Report 2023
The Company is incorporated in the Cayman Islands, and its activities are subject to taxation at a rate of
0%. Loss before taxation is £465,815
The income tax rate in Malaysia is calculated at the Malaysian statutory tax rate of 24% of the chargeable
income for the year, except for companies with paid-up capital of RM2.5million (approximately £460,000)
and below at the beginning of the basis period and gross income from source of business not exceeding
RM50million (approximately £9.4 million), the first RM600,000 (approximately £110,000) of chargeable
income is subject to tax at a rate of 17%.
A reconciliation of income tax applicable to the loss before taxation at the statutory tax rate to the
income tax at the effective tax rate of Alchemist Codes is as follows:
Loss before taxation
Tax calculated at the standard rate of tax
applicable to Alchemist Codes of 24% (2022: at
24%)
Tax effects of:
Non-deductible expenditure
Taxable profit relieved against tax losses
brought forward
Unrelieved tax losses carried forward
Tax charge/(credit)
Year
ended
31 October
2023
£
(23,079)
Year
ended
31 October
2022
£
(304,175)
(5,539)
(73,002)
20,527
20,442
(14,988)
-
-
-
52,560
-
The income tax rate used excludes that of Alcodes International due to the scaling of Hong Kong tax
rates making any estimation of tax rates used difficult to apply. The loss before taxation for Alcodes
International is £37,383 and are unrelieved tax losses carried forward.
The Group has not recognised deferred tax assets on carried forward tax losses as the management
is not certain that it will generate sufficient taxable profits in the near future to absorb such carried
forward tax losses. The unused tax losses carried forward for Alcodes International amount to
£101,733 and for Alchemist Codes Sdn Bhd £795,655.
40
AIQ Limited
10. EARNINGS PER SHARE
Annual Report 2023
The Group presents basic and diluted earnings per share information for its ordinary shares. Basic
earnings per share is calculated by dividing the loss attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares in issue during the reporting period. Diluted earnings
per share are determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary
shares.
There is no difference between the basic and diluted earnings per share, as the warrants and loan
notes are anti dilutive in nature and therefore the diluted loss per share has not been presented.
Loss attributable to ordinary shareholders (£)
Continuing operations
Discontinuing operations
Year ended
31 October
2023
Year ended
31 October
2022
(503,198)
(336,731)
(23,079)
(304,175)
Basic - Weighted average number of shares
64,760,721
64,760,721
Basic earnings per share (expressed as £ per
share)
from continuing operations
from discontinued operations
(0.008)
(0.0004)
(0.005)
(0.005)
41
AIQ Limited
11. PROPERTY PLANT AND EQUIPMENT
Annual Report 2023
Fixtures and
fittings
Office
equipment
Computer
equipment
Leasehold
improvements
£
£
£
£
Total
£
Cost
At 1 November 2021
71,450
Additions
Disposals
Currency translation
differences
As at 31 October 2022
At 1 November 2022
Additions
Disposals
Currency translation
differences
As at 31 October 2023
Accumulated
depreciation
At 1 November 2021
Depreciation for the
year
Impairment
Disposals
Currency translation
differences
As at 31 October 2022
At 1 November 2022
Depreciation for the
year
Disposals
Currency translation
differences
As at 31 October 2023
Carrying amounts
At 31 October 2023
At 31 October 2022
-
-
3,076
74,526
74,526
-
(74,329)
(5)
192
8,413
7,432
58,279
-
402
74,526
13,610
-
(547)
1,688
14,751
14,751
1,149
(5,062)
(597)
10,241
2,657
2,400
-
(136)
484
5,405
33,282
-
(28,815)
1,421
5,888
5,888
502
(4,043)
(109)
2,238
93,081
211,423
-
-
-
(29,362)
3,979
10,164
97,060
192,225
97,060
-
(97,060)
192,225
1,651
(180,494)
-
-
(711)
12,671
13,685
11,461
36,216
6,906
-
(18,247)
620
2,964
9,657
26,395
75,403
133,682
-
(18,383)
539
2,045
97,060
179,955
74,526
5,405
2,964
97,060
179,955
-
(74,329)
(5)
192
2,307
(2,081)
(53)
5,578
-
-
4,663
9,346
1,042
(3,839)
(150)
17
2,221
2,924
-
(97,060)
3,349
(177,309)
-
-
-
-
(208)
5,787
6,884
12,270
42
AIQ Limited
Annual Report 2023
12. DISPOSAL OF SUBSIDIARY
On 31 October 2023, the Company commenced the strike off process to dispose of its subsidiary Alchemist
Codes Sdn Bhd.
The loss on discontinued operation, net of tax was:
Revenue
Cost of Sales
Gross Profit
Other Income
Administrative Expenses
Directors’ remuneration
Wages and salaries
Loss on disposal of fixed assets
Depreciation of tangible fixed assets
Depreciation of right of use assets
Lease restoration costs
Office costs
Professional fees
Property costs
Secretarial fees
Audit fees
Travel. Subsistence and Entertainment
Other costs
Sub-letting income
Impairment charge
Gain on foreign exchange
Finance costs
Loss on discontinued operation net of tax
Cashflow from discontinued operating activities
Cashflow from discontinued investing activities
Cashflow (used in) discontinued financing activities
Year
ended
31 October
2023
£
Year
ended
31 October
2022
£
-
-
-
2,092
(27,920)
(25,828)
2,821
-
(2,146)
(308)
(2,981)
(459)
(66,571)
(13,839)
(2,881)
(484)
(2,053)
(535)
-
(543)
(4,339)
71,501
-
(36,591)
(10,467)
(17,618)
(96,877)
(18,500)
(3,190)
(737)
(4,052)
(502)
(873)
(73)
(26,786)
67,910
(25,638)
(148,356)
-
(133,682)
1,664
(1,926)
11,303
(7,612)
(23,079)
(304,175)
57,283
51,064
-
-
(79,937)
(99,355)
43
AIQ Limited
Annual Report 2023
13. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
Cost
At 1 November 2021
Currency translation differences
As at 31 October 2022
At 1 November 2022
Disposals
Currency translation differences
As at 31 October 2023
Accumulated amortisation
At 1 November 2021
Depreciation for the year
Currency translation differences
As at 31 October 2022
At 1 November 2022
Depreciation for the year
Disposals
Currency translation differences
As at 31 October 2023
Carrying amounts
At 31 October 2023
At 31 October 2022
Land and
buildings
£
Total
£
280,131
280,131
11,971
11,971
292,102
292,102
292,102
292,102
(280,131)
(280,131)
(11,971)
(11,971)
-
-
116,721
116,721
96,877
5,478
96,877
5,478
219,076
219,076
219,076
66,571
(291,125)
5,478
219,076
66,571
(291,125)
5,478
-
-
-
-
73,026
73,026
Future minimum lease payments associated with these leases were as follows:
Not later than one year
Later than one year and not later than five years
Total minimum lease payments
Less future finance charges
Present value of minimum lease payments
Current liability
Non-current liability
As at
31 Oct 2023
As at
31 Oct 2022
£
-
-
-
-
-
-
-
-
£
88,690
-
88,690
(10,677)
78,013
78,013
-
78,013
44
AIQ Limited
The lease expired in July 2023 and the option to extend it was not taken up.
The interest paid on lease liability is £1,926 (2022: £7,879). The lease rental paid on short-term leases is
£17,778 (2022: £12,875).
Annual Report 2023
14. TRADE AND OTHER RECEIVABLES
Trade receivables
Rental deposits
Prepayments and other receivables
As at
31 October
2023
£
-
-
41,718
41,718
As at
31 October
2022
£
773
31,109
34,526
66,408
The rental deposit was taken against the final liability settled on the expiry of the lease.
15. CASH AND CASH EQUIVALENTS
Fixed deposits held with bank
Cash at bank
Cash in hand
As at
31 October
2023
£
-
135,332
113
135,445
Cash at bank earns interest at floating rates based on daily bank deposit rates.
16. ACCRUALS AND OTHER PAYABLES
Trade Payables
Other creditors
Accruals
Deferred revenue
Taxes and social security
As at
31 October
2023
£
2,000
113
101,708
51,740
1,257
156,818
As at
31 October
2022
£
12,872
623,004
583
636,459
As at
31 October
2022
£
-
32,975
96,825
6,979
935
137,714
Included within accruals is £5,891 (2022: £6,420), which relates to Directors’ remuneration yet to be paid
and interest on loan notes of £42,055 (2022:17,055). All the deferred income in the previous year was
recorded in the current year and the entire deferred revenue at the current year end will be recognised
next year.
45
AIQ Limited
17. LEASE RESTORATION PROVISION
Balance b/f
Provision used
Balance c/f
Annual Report 2023
As at
31 October
2023
£
18,500
(18,500)
-
As at
31 October
2022
£
-
18,500
18,500
The lease expired in July 2023, and the Group made a provision in the year to 31 October 2022 for 50% of
the estimated costs of restoring its Malaysian office to its original specification amounting to £18,500. The
balance of the remaining actual costs were expensed in the year to 31 October 2023 as the Company did
not renew its lease and the Malaysian subsidiary was closed down.
18. SHARE CAPITAL
Authorised
Ordinary shares of £0.01 each
Number Nominal
value
£
800,000,000
8,000,000
As at 31 October 2023
64,760,721
647,607
As at beginning of year
Issued during the year
As at end of year
As at
31 Oct 2023
£
647,607
-
647,607
As at
31 Oct 2022
£
647,607
-
647,607
The holders of ordinary shares are entitled to receive dividends as may be declared from time to time and
are entitled to one vote per share at meetings of the Company.
19. FOREIGN CURRENCY TRANSLATION RESERVE
The foreign currency translation reserve represents cumulative foreign exchange differences arising from
the translation of the financial statements of foreign subsidiaries and is not distributable by way of
dividends.
20. SHARE WARRANT RESERVE
On 3 October 2022 the Company granted 300,000 warrants to Guild Financial Advisory (“GFA”), the
Company’s corporate adviser, exercisable at a price of £0.01 for a period of up to ten years. The warrants
were granted in return in part for their corporate financial services carried out for a period of 12 months
whereby it was agreed that GFA would provide services for an amount of £24,000 with £12,000 being
settled in cash and the balance of £12,000 represented by the issue of the warrants. As a result of this
the fair value of the warrants was deemed to be £12,000 spread evenly over the 12-month period of
46
AIQ Limited
the contract, £1,000 was expensed in October 2022 and £11,000 has been expensed during the
current year to October 2023 and £12,000 taken to a warrant reserve in October 2022.
Annual Report 2023
21. CONVERTIBLE LOAN NOTES
On 25 January 2022, the Company entered into an unsecured convertible loan note agreement for a
total subscription of £500,000 (the “Loan Notes”). Pursuant to this instrument, the Company
immediately raised £500,000 through the issue of unsecured convertible loan notes to several existing
investors (together the “Noteholders”), including an Executive Director of the Company.
On 31 July 2023 the Company came to an agreement to amend certain terms of the convertible loan
note instrument whereby the expiration date of the convertible loan notes was extended by a period of
12 months from 24 January 2024 to 24 January 2025. All other details of the Convertible Loan Note
Facility remained unchanged, namely and the loan notes can be repaid, in part or in full, by the
Company on 31 December in any year prior to the Expiration Date by giving not less than 14 days'
written notice to the Noteholders. All outstanding Loan Notes attract interest at a rate of 5% per annum
from the date of issue (25 January 2022) to the date of repayment or conversion and is payable on the
anniversary of the issue of the Loan Notes.
The Loan Notes shall be convertible into new ordinary shares of the Company at the lesser of 11 pence
per ordinary share or the Volume Weighted Average Price of the Company's ordinary shares on the
London Stock Exchange in the seven-day period prior to the date on which the Loan Note is converted
into ordinary shares. The Loan Notes shall be convertible, in part or in full, at any time from the date
of issue until the Expiration Date at the option of the Noteholders by giving to the Company at least
one week's written notice.
The Loan Notes have been issued to the Noteholders as follows:
a. £250,000 to Li Chun Chung, an Executive Director of the Company and who has an interest
in 1,425,500 ordinary shares in the Company, representing 2.2% of the Company’s issued
share capital
b. £125,000 to Soon Beng Gee who has an interest in 11,766,650 ordinary shares, representing
18.2% of the Company’s issued share capital
c. £125,000 to Lee Chong Liang who has an interest in 11,766,650 ordinary shares,
representing 18.2% of the Company’s issued share capital
Accrual of interest on loan notes was £42,055 at year end.
47
AIQ Limited
22. FINANCIAL RISK MANAGEMENT
a) Categories of financial instruments
Annual Report 2023
The carrying amounts and fair value of the Group’s financial assets and liabilities as at the end of the
reporting period are as follows:
Financial assets:
Trade receivables
Rental deposits
Prepayments and other receivables
Cash and cash equivalents
Financial liabilities at amortised cost:
Convertible loan notes
Trade payables
Accruals and other payables
Provisions
Finance leases
As at
31 October
2023
£
-
-
41,718
135,445
As at
31 October
2022
£
773
31,109
34,526
636,459
177,163
702,867
As at
31 October
2023
£
500,000
2,000
154,818
-
-
As at
31 October
2022
£
500,000
-
137,714
18,500
78,013
656,818
734,227
The financial assets and financial liabilities maturing within the next 12 months approximate their fair
values due to the relatively short-term maturity of the financial instruments. The convertible loan notes
mature post 12 months.
b) Financial risk management objectives and policies
The Group is exposed to a variety of financial risks: market risk (including interest rate risk and currency
risk), credit risk and liquidity risk. The risk management policies employed by the Group to manage these
risks are discussed below. The primary objectives of the financial risk management function are to
establish risk limits, and then ensure that exposure to risk stays within these limits. The operational and
legal risk management functions are intended to ensure proper functioning of internal policies and
procedures to minimise operational and legal risks.
i)
Interest rate risks
Certain cash holdings and cash equivalents are held in accounts with variable rates. If interest rates were
to increase or decrease by 2%, the effect would not be material.
ii)
Currency risks
The Group is exposed to exchange rate fluctuations as certain transactions are denominated in foreign
currencies.
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to
changes in foreign exchange rates.
48
AIQ Limited
Annual Report 2023
The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to its financing
activities (when cash balances are denominated other than in a company’s functional currency).
Most of the Group’s transactions are carried out in Pounds, Malaysian Ringgit (‘RM’) Hong Kong Dollar
(‘HK$’) and United States Dollar (‘US$’). Foreign currency risk is monitored closely on an ongoing basis
to ensure that the net exposure is at an acceptable level.
The Group maintains a natural hedge whenever possible, by matching the cash inflows (revenue stream)
and cash outflows used for purposes such as capital and operational expenditure in the respective
functional currencies.
At 31 October 2023 the Group had £66,345 (2022: £288,357) of cash and cash equivalents in United
States Dollar accounts. At 31 October 2023, had the exchange rate between the Pound Sterling and
United States Dollar increased/decreased by 10%, the effect on the result in the period would be a gain
of £7,372 (2022: £28,836) / loss of £6,031 (2022: £26,214).
iii)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. Credit allowances are made for estimated losses that have been incurred by the
reporting date. No such amounts have been made to date.
Concentrations of major credit risk exist to the extent that the equivalent of £60,441 of the Group's bank
balances were held with DBS Bank Limited in Singapore and the equivalent of £62,490 was held with
Standard Chartered Bank in Hong Kong. There are bank balances with other banks totalling to £12,514
were the credit risk is relatively low.
S&P Global Ratings affirmed on 31 October 2023 the issuer credit ratings of DBS Bank Limited at AA-
and Standard Chartered at A+.
Accordingly, the Group considers that the credit risk in relation to its cash holding to be low.
iv)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with
its financial liabilities. The Group's approach to managing liquidity is to ensure, as far as possible, that it
will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Group's reputation.
The Group's financial liabilities are primarily the convertible loan notes and trade and other payables. For
terms of convertible loan notes refer Note 21. The trade and other payables are unsecured, interest-free
and repayable on demand. Details of trade payables are found in Note 16.
23. CAPITAL MANAGEMENT
The Group manages its capital to ensure that it will be able to continue as a going concern while
maximising the return to shareholders through the optimisation of the balance between debt and equity.
The capital structure of the Group as at 31 October 2023 consisted of ordinary shares and equity
attributable to the shareholders of the Company, totalling £(484,771) (2022: £41,936) (disclosed in the
statement of changes in equity excluding share warrants reserve).
The capital structure is reviewed on an ongoing basis. As part of this review, the Directors consider
the cost of capital and the risks associated with each class of capital.
49
AIQ Limited
24. RELATED PARTY TRANSACTIONS
Annual Report 2023
The remuneration of the Directors of the Company is set out in the Report of the Remuneration
Committee.
Included within accruals is £5,947 (2022: £6,420), which relates to Directors’ remuneration
outstanding.
In addition to the remuneration, other costs incurred in relation to services provided by related parties
of Directors were as follows:
A total of £37,350 (2022: £38,632) was paid during the year to Gracechurch Group for financial PR
services, a company in which Harry Chathli is a director and shareholder.
A total of £18,000 (2022: £16,500) was paid to Ever Billions International Limited for general
management services, a company in which Li Chun Chung is a director.
Revenue from AI Sport Asia for project management services, a company in which Ng Chun Fai, a
Senior Manager of the Group, is a director, of £Nil (2022: £4,484) was recognised during the year.
Revenue from Consortium Family Office Ltd for project management services, a company in which Ng
Chun Fai is a director, of £Nil (2022: £4,931) was recognised during the year.
There were no outstanding monies owed at the year end (2022: £Nil).
25. MATERIAL SUBSEQUENT EVENTS
There are no significant or disclosable post-balance sheet events.
26. ULTIMATE CONTROLLING PARTY
As at 31 October 2023, no one entity or individual owns greater than 50% of the issued share capital,
or holds significant control over the Company. Therefore, the Directors have determined the Company
does not have an ultimate controlling party.
50
AIQ Limited
Directors
Company Secretary
Registered office of the Company
Financial Adviser
Auditors
Registrars
Principal Bankers
Financial PR
Annual Report 2023
COMPANY INFORMATION
Harry Chathli, Independent Non-Executive Chairman
Charles Yong Kai Yee, Executive Director
Li Chun Chung, Executive Director
Dwight Mighty, Independent Non-Executive Director
MSP Secretaries Limited
27/28 Eastcastle Street
London W1W 8DH
Genesis Building, 5th Floor
Genesis Close, PO Box 446
Cayman Islands, KY1-1106
Guild Financial Advisory Limited
382 Russell Court
Woburn Place
London WC1H 0NH
PKF Littlejohn LLP
15 Westferry Circus
London E14 4HD
Computershare Investor Services (Cayman) Limited
The R&H Trust Co. Ltd.
Winward 1, Regatta Office Park
West Bay Road Grand Cayman KY1-1103
Cayman Island
DBS Bank (Hong Kong) Limited
18th Floor, The Center
99 Queen’s Road Central
Central Hong Kong
Bank of China (Hong Kong) Limited
Bank of China Tower
1 Garden Road
Central Hong Kong
Gracechurch Group
48 Gracechurch Street
London EC3V 0EJ
Company Website
www.aiqhub.com
51