Results for the period ended 30 September 2020

RNS Number : 0870U

Myanmar Strategic Holdings Ltd

31 March 2021

Myanmar Strategic Holdings Ltd.

("MSH" or the "Company")

Results for the 18-month period ended 30 September 2020

Myanmar Strategic Holdings Ltd. (LSE: SHWE), the independent developer and operator of consumer businesses located in Myanmar and Vietnam, is pleased to announce its audited results for the 18-month period ended 30 September 2020.

Copies of the annual report and accounts for the 18-month period ended 30 September 2020 will be posted to shareholders shortly and an electronic copy will shortly be made available on the Company's website (www.ms-holdings.com).

HIGHLIGHTS

Financial Highlights

All dates for the reporting period refer to the 18-month financial period ended 30 September 2020 ("FPE2020"), unless otherwise stated. The comparative period refers to the 12-month financial year ended 31 March 2019 ("2019"). The period on period ("POP") growth or decline refers to any change that occurred between FPE2020 and 2019.

· Group revenues for FPE2020 increased 130% vs. 2019 to US$10.2 million, of which 58% derived from Services, 41% from Education and 1% from Hospitality.

· The Group expanded into the education sector in Vietnam, following the successful acquisition of Wall Street English Vietnam ("WSE Vietnam"), the leading provider of adult English language training. Since the completion of its acquisition on 14 July 2020, WSE Vietnam has generated revenues to the Group of ca. US$2.0 million.

· Adjusted EBITDA loss was US$4.2 million, primarily due to the losses incurred within Yangon American and the impact of the Covid-19 pandemic across the Group.

· Net loss for the financial period widened to US$8.7 million (2019: US$2.5 million). This included ca. US$3.4 million loss allowances on trade and other receivables and US$0.2 million in transaction costs for the acquisition of WSE Vietnam.

· Net comprehensive loss for the period was US$8.9 million (2019: US$2.5 million).

· Underlying revenues, an indicator of the volume of business generated by the managed and owned businesses, increased 102% vs. 2019 to ca. US$14.7 million of which 40% derived from Services, 53% from Education and 7% derived from Hospitality.

· The Company issued 326,879 new shares at a price of US$20 per share for a cumulative value of US$6.5 million as part of its share issuance programme announced in May 2020. The majority of these funds were raised in conjunction with the acquisition of WSE Vietnam and have supported the working capital requirements of the Group as well as the acquisition of a minority stake in Myanmar Investments International Limited ("MIL") in September 2020.

· The Covid-19 pandemic has significantly affected the Group resulting in (i) the temporary closure of in-person operations across both its Education and Hospitality divisions and (ii) higher operating costs in its Services division. The global Covid-19 situation remains very fluid and the Group cannot reasonably project the full extent of the Covid-19 impact going forward.

· The state of emergency, declared by the Myanmar military in February 2021, is also expected to further impact the operational and financial prospects of the Group in Myanmar. As at the date of this report, the state of emergency remains in place and management cannot fully project the full extent on the Group's operating and financial performance going forward. At the date of this report all boutique hostels are closed while the Group's education businesses in Myanmar are selling and delivering educational content online. The diversification of the Group's operations between Myanmar and Vietnam should help mitigate the overall Covid-19 and single-country exposure of the Group.

· The Company maintains a loan facility of up to US$7.0 million with MACAN, the former immediate holding company, and has drawn down US$4.5 million at the date of this report (US$3.0 million as at 30 September 2020). Management believes that the Group has enough liquidity for its working capital requirements for the next 12 months from the date of this report given the additional headroom offered by the loan facility.

Operational Highlights

Education

· Group revenues from the management of the education businesses for FPE2020 were US$1.5 million (2019: US$0.9 million).

· Group revenues from owned education businesses for FPE2020 were US$2.6 million (2019: Nil).

· Through its Education division, the Group is currently active in (i) English language learning (Wall Street English), (ii) higher education (Auston College Myanmar) and (iii) K-12 international school (Yangon American International School).

· Following the acquisition of Wall Street English Vietnam in July 2020, the Group manages 11 retail Wall Street English ("WSE") language centres and one corporate centre. As at 30 September 2020, WSE served ca. 8,000 registered students across its retail and corporate centres and has established itself as a leading private adult English language education provider in its markets.

· The Group continues to seek opportunities to expand the WSE franchise as it holds the exclusive rights to develop a further six WSE retail centres (up to a total of ten) in Myanmar over the next six years.

· Within its higher education portfolio, MSH manages Auston University Myanmar ("Auston"), a private school offering foundation and diploma programmes in engineering. The maiden campus opened in Yangon in May 2018, spans over three floors and covers 700 sqm. Auston has also entered a partnership with the Liverpool John Moores University ("LJMU") to provide high quality engineering training programmes in Myanmar.

· Finally, MSH owns and operates the Yangon American International School ("Yangon American"), a Myanmar Investment Commission-approved international school operating on a campus of over 3,000 sqm. Its planned capacity is 400 students and its enrolment for academic year 2020-2021 was ca. 70 students.

· During FPE2020, the education businesses generated underlying revenues of US$7.8 million (2019: US$2.6 million).

Services

· Group revenues from its services businesses for FPE2020 were US$5.9 million.

· Through its Services division, the Group provides a range of integrated security, risk management, journey management and cash in transit services under the EXERA brand.

· Acquired by the Group in May 2018, EXERA is an internationally managed provider of security and risk management services, operating exclusively in Myanmar. With an experienced workforce of over ca. 1,300 security officers as at 30 September 2020, EXERA provides guarding, protective services, transportation, training, and nationwide risk consulting, to a wide range of international and local clients.

· Its customer base includes multi-national corporations, large oil and gas companies, established local businesses and governmental bodies and international organisations such as WFP, UNHCR, UNICEF, the Embassy of the Republic of Singapore and the EU mission.

· EXERA follows international process standards like ISO 9001, OHSAS 18000, and ANSI/ASIS PSC 1, and is the only company in Myanmar accredited to the ISO 18788 Management System for Private Security Operations.

Hospitality

· Management and technical assistance fees to the Group for the period were US$135,000 (2019: US$105,000). The low level of fees was due to a continued decline in tourist arrivals in Myanmar linked to (i) the political uncertainty and conflict in Rakhine State and (ii) the Covid-19-related travel restrictions imposed globally since February 2020.

· Under its Hospitality division, the Group manages four boutique hostels across three of the most popular tourist destinations in Myanmar. Following the opening of its fourth boutique hostel, Ostello Bello Bagan Pool, the Group raised the number of beds under management to 474, spread over 108 rooms in four locations across Bagan, Mandalay and Nyaung Shwe.

· During FPE2020, the number of beds sold amounted to 61,923 (2019: 65,763) and the underlying revenues of the Group's managed businesses were US$1.0 million (2019: US$1.2 million).

· The Group's main focus is to maintain a strong operating performance and generate operational synergies to offset the currently challenging operating environment in the Myanmar tourism sector.

· In July 2019, Bagan was approved for inclusion on UNESCO's World Heritage List. This strong vote of confidence was expected to drive an increase in overall tourism inflows. However, both the Covid-19 restrictions and the state of emergency declared in February 2021 will severely impact the prospects of Myanmar's tourism sector in the short to medium term.

· Management maintains a positive outlook on the long-term prospects of the Myanmar tourism sector as demonstrated by the successful development of the tourism sector in neighbouring countries.

Others and New Business Development

· MSH continues to develop its business network and expand its pipeline within the Company's existing sectors (e.g. Services, Education and Hospitality) and new sectors (e.g. Technology). As the Group gradually builds a stronger presence on the ground in Vietnam, more opportunities to diversify the Group's geographical revenue mix may arise.

· Management will also routinely conduct in-depth studies of new sectors (e.g. Healthcare, Retail and Financial Services) and determine whether to allocate additional human and financial resources to selected initiatives.

· The Group's minority investments include:

o NEXLABS : in May 2018, MSH agreed to a strategic minority investment of US$150,000 in NEXLABS, one of Myanmar's leading digital consulting firms. The firm was founded in 2013 in Yangon by Ye Myat Min, one of Forbes Asia's 30 under 30 in 2016 and employs over 80 experienced professionals. In 2020, NEXLABS won the Silver award as Digital Agency of the Year (Cambodia, Laos and Myanmar) and Bronze award as Creative Agency of the Year (Cambodia, Laos and Myanmar).

o MYANMAR INVESTMENTS INTERNATIONAL LIMITED ("MIL") : in September 2020, further to MSH's proposal suggesting a combination of MSH and MIL, MSH opted to purchase a minority stake of 897,500 shares in MIL at an average price of US$0.68 per MIL ordinary shares for a total consideration of US$0.61 million, of which US$0.46million was satisfied in cash and US$0.16 million through the issuance of 7,629 new MSH shares. MIL is an AIM-quoted Myanmar-focused investment company with investments in the telecommunications and financial sectors.

POST PERIOD END EVENTS

State of Emergency

On 1 February 2021, the Myanmar military announced that it had declared a state of emergency for a period of up to one year.

The announcement stated that the Commander-in-Chief of the Defence Services, Min Aung Hlaing, shall be in power for the duration of the state of emergency, while Vice President U Myint Shwe shall serve temporarily as President. It was reported in the Myanmar Times that, early on 1 February 2021, State Counsellor Daw Aung San Suu Kyi, President U Win Myint and other National League for Democracy ("NLD") officials across the country were detained by the military, ahead of the first parliamentary sessions, scheduled to take place later in the day. As at the date of this report, the military remains in power.

From a business perspective, the Group's schools will continue to deliver their education services online and offline while its security services company will remain key to safeguarding embassies, NGOs and national infrastructure. The Company's Ostello Bello boutique hostels remain closed, pursuant to the active Covid-19 restrictions in Myanmar.

As Myanmar's state of emergency remains in place as at the date of issuance of these financial statements, the Group cannot reasonably project the full extent of the probable impact of the state of emergency disruptions on its operating and financial performance for the financial year ending 30 September 2021.

It is worth noting that, further to the acquisition of Wall Street English Vietnam completed in July 2020, more than 50% of MSH's revenues on an annualised run rate basis are now generated in Vietnam, providing diversification to MSH's shareholders and mitigating the legacy single-country exposure of the Group.

The Directors and management of MSH remain very concerned about the violence and casualties among the demonstrators in Myanmar and condemn, to the greatest extent, the use of lethal force against peaceful protesters.

The Company continues to closely monitor the situation and will provide further updates as appropriate.

Extraordinary General Meeting

On 2 December 2020, the Company held an Extraordinary General Meeting to approve two resolutions. In relation to the first resolution, the Directors sought to update the Company's constitution so that any references to the AIM Market operated by the London Stock Exchange ("LSE") are removed and to ensure that the necessary amendments to reflect that the Company is listed on the Main Market of the LSE are included. In relation to the second resolution, there was a proposed increase in Directors' fees. Both resolutions were approved unanimously.

MYANMAR MACROECONOMIC AND POLITICAL HIGHLIGHTS

The World Bank projects global economic output to expand 4% in 2021, well below its pre-pandemic trend. The global economic recovery from the pandemic is projected to be slow due to the lockdowns implemented across the various regions and countries.

The World Bank expects Myanmar's economy to contract by 10% in 2020/21 due to the economic disruptions caused by the pandemic and the political turmoil. However, the medium-term growth prospects are positive. Due to new investments in urban development projects, road and urban infrastructure, growth is projected to recover to 7% on average in the coming years.

According to the Asian Development bank, Myanmar's GDP is expected to grow 1.8% in 2020 and 6.0% in 2021, while core inflation is expected to remain stable at 6.0% in both 2020 and 2021.

In April 2020, the government of Myanmar launched its Covid-19 Economic Relief Plan ("CERP"). The CERP comprises 7 goals, 10 strategies, 36 action plans and 76 actions, each with an estimated timeline and designated authority in charge, covering a range of fiscal and social measures. The government of Myanmar expects the CERP to cost at least US$2.0 billion which will be funded by the re-allocated budget and foreign aid. Management does not envisage any significant financial impact on the Group linked to the CERP as the plan is mainly directed at small and medium enterprises ("SMEs") in Myanmar.

In April 2020, the Myanmar government launched a significant loan programme with reduced interest rate provided for SMEs as a part of the CERP. The Myanmar Economic Bank (MEB) and the Myanmar Agriculture Development Bank (MADB) merger process is also paving the way for consolidation of the state-owned banks. The insurance sector has been liberalised by allowing foreign insurers to offer life insurance products and to buy stakes in local insurance companies. Moreover, the Central Bank of Myanmar (CBM) has set up a clear timeline for the local banks to enter the transition to International Reporting Standards (IFRS) regulations by the end of the fiscal year 2023.

Travel restrictions due to the pandemic continue to be updated monthly and remain in place at the date of this report. International tourism arrivals are temporarily suspended, together with any visas on arrivals.

Democratic elections were completed in November 2020 with a landslide victory for Aung San Suu Kyi's National League for Democracy ("NLD"). Over the course of December 2020 and January 2021, The Union Solidarity and Development Party ("USDP") alleged voter fraud and challenged the result of the election.

Enrico Cesenni, Chief Executive Officer of Myanmar Strategic Holdings, commented:

" I am pleased to report that over the 18-month period ended 30 September 2020, despite the prolonged impact of the Covid-19 pandemic, we have made great strides regarding the main areas of our focus, notably growing the Group's education division, strengthening EXERA's provision of security services, and improving systems, processes and organisational structures to drive growth, find operational efficiencies and unlock transformational opportunities across all of MSH's operations.

"In our Education division, we were delighted to successfully launch Yangon American, the Group's first international school, in June 2019, with an initial enrolment of over 50 students. We are now in the process of increasing student enrolment towards capacity. Through the acquisition of Wall Street English Vietnam in July 2020, the Group has now become a regional operator and manages 11 retail Wall Street English language centres, serving ca. 8,000 registered students. The encouraging revenues to the Group of ca. US$2.0 million, since completion of the acquisition, is a testament to the strategic direction that this acquisition represents for the Group.

"Through the diversification of our educational services into Vietnam, more than 50% of the Group's revenues on an annualised run rate basis are now generated from Vietnam, providing MSH's shareholders exposure to two countries with robust growth prospects in ASEAN and mitigating single-country risk. We intend to further capitalise upon the opportunities within our existing Education portfolio by reorganising WSE Vietnam's operations and evaluate opportunities to expand the WSE franchise in Vietnam in a similar fashion to how we have successfully in Myanmar. Pursuant to the active Covid-19 restrictions and the current state of emergency in Myanmar, the Group's schools were quick to act and, as such, are currently delivering services online.

"Our Services division, under the EXERA brand, which provides a range of integrated security and risk management services exclusively in Myanmar, continues to operate effectively and efficiently and accounted for 58% of the Group's revenues for FPE2020. EXERA is seeking to grow organically and through acquiring other businesses that will enable it to service customers in key growth sectors such as Oil and Gas, Mining and Telecoms. The business is also currently in discussion with a number of financial institutions to evaluate transformational outsourcing opportunities in relation to cash management and movement services. Following the declaration of a state of emergency, announced by the Myanmar military in February 2021, EXERA has and will continue to remain key to the safeguarding of embassies, NGOs and national infrastructure in Myanmar. EXERA's security information reports have also been instrumental for its customers' decision-making in the current political and economic environment.

"The hospitality division has been the most affected by the Covid-19 pandemic during this period, and the Group's Ostello Bello boutique hostels remain closed, pursuant to the active Covid-19 restrictions in Myanmar. The Group's focus remains to maintain a strong operating performance through the generation of operational synergies, to counter the challenging operating environment that currently exists in the Myanmar tourism sector. It is worth nothing that the hospitality division accounted for only 1% of the Group's revenues for FPE2020.

"The Group reacted quickly to the Covid-19 pandemic, highlighting the operational resilience of our core businesses and the adaptability that all staff have shown during this challenging period. The Group's Education and Service businesses are now in expansion phases and we remain confident that our growth will continue organically and through acquisitions. To support this growth, key appointments have been made across the organisation, including Jonathan Kolb as Chief Financial Officer, Alain Thibault as Chief Operating Officer, Michael Hall as Group Chief Human Resources Officer and Anurag Sharma as General Counsel.

"Myanmar's continued state of emergency is of great concern to Management and several shareholders. We remain very concerned about the use of violence against protestors and condemn, to the greatest extent, the use of lethal force against the people of Myanmar. Supported by all staff, Management has put in place significant cost reduction initiatives to preserve the Group's financial resources, and ensure that its Myanmar businesses can weather a prolonged period of political instability. The Company continues to closely monitor the situation and will provide further updates as appropriate.

"The Board remains confident in the Group's strategy for delivering growth and value to shareholders and the long-term economic prospects for both Myanmar and Vietnam. We would like to take this opportunity to thank shareholders for their continued support and all members of staff across the Group for their hard work through these challenging and uncertain times. At its core, MSH has always focused on the delivery of services that can improve the livelihoods of the populations it serves and acting as a responsible operator and investor in the markets in which it works. We believe that this is more important now than ever before.

"We look forward to updating shareholders on our continued progress in due course."

For more information please visit www.ms-holdings.com or contact:

Myanmar Strategic Holdings Ltd.

Richard Greer, Independent Non-executive Chairman

Enrico Cesenni, Founder and CEO

richardgreer@me.com

enrico@ms-holdings.com

Allenby Capital Limited (Broker)

Nick Athanas

Nick Naylor

+44 (0)20 3328 5656

Yellow Jersey PR (Financial PR)

Henry Wilkinson

Matthew McHale

+44 (0) 7951 402 336

CHAIRMAN'S STATEMENT

Strategy

Myanmar Strategic Holdings' vision is to become a leading developer and manager of consumer businesses while maintaining an asset light strategy.

Since the Company's inception, our focus has been on building committed and experienced management teams capable of starting and growing businesses, while benefiting from the growth of ASEAN economies. While the Group's Hospitality operations have been severely affected by the Covid-19 pandemic, I am very pleased to report that the Education and Service businesses that we manage and operate are in their expansion phase and are generating synergies across the respective products and divisions. We are confident that our growth will continue both organically and through acquisitions.

Focused diversification is and will remain at the core of our strategy as it allows MSH to stabilise its expected growth while simultaneously capitalising on the opportunities currently available in Myanmar and neighbouring markets. In line with this strategy, in May 2018, MSH concluded the acquisition of EXERA, one of Myanmar's leading providers of security and risk management services, and in July 2020 concluded the acquisition of Wall Street English Vietnam, the leading adult English language learning provider in Vietnam.

While the 2020 global pandemic has presented and continues to present significant challenges to the Group, the transformational acquisition of WSE Vietnam is a key strategic milestone for MSH as it provides geographical diversification and exposure to one of the most attractive and fast-growing markets in ASEAN. Over the course of the next 12 months, MSH will focus on reorganising WSE Vietnam's operations and building solid foundations to capitalise on its presence in Vietnam. With MSH's successful growth of the WSE brand in Myanmar to date, we are confident in our ability to leverage synergies to pursue similar growth in Vietnam.

Board's Responsibility

The Board is fully aware of its responsibility to ensure that all of our businesses operate in a manner that reflects our corporate and social responsibility to all of our stakeholders. We target sectors that positively contribute to the overall development of the countries in which we operate, enabling jobs and alleviating poverty, and within these sectors we aim to build businesses that embody the best terms of business, environmental, social and governance practices.

The recent political upheaval has once again brought to light the importance of responsible business dealings. Since its inception, the Group has not worked with individuals or companies who, at any time, have been sanctioned. Before engaging with any customer, the Group conducts extensive diligence checks on the counterpart's activities, ownership and business associates. Group-wide know-your-client ("KYC") and anti-bribery trainings are conducted routinely and for all new employees.

Throughout the Covid-19 pandemic, our team remained on the ground in Myanmar and implemented several initiatives aimed at containing the potential spread while continuing to successfully service our customers across ca. 170 sites. Furthermore, MSH's Management facilitated the sharing of best practices and medical knowledge between Myanmar's front-line medical personnel and an international task force composed of Italian and American doctors.

Certain employees agreed to voluntary reductions in salaries to support the Group's businesses and protect the surrounding communities. I am proud that the disruption to our employees' livelihood was limited.

The pandemic has presented an opportunity to improve our systems and processes and digitalise our infrastructure to facilitate the ability for employees to work from home. Throughout 2020 and until the date of this report most of our non-essential employees in Myanmar have been working and teaching from home, ensuring continuity of service throughout very challenging times.

The Board and the Group's Management actively promote sustainability and diversity as we believe it is a core strategic advantage that will enable the Group to maintain its leading competitive position in the future. Equal opportunities are promoted across the Group and we are proud to report that female representation across our workforce is over 60% (excluding EXERA).

Training programmes are being implemented across the Group to foster an environment where talent can emerge and flourish. We are proud to report that the local workforce represents over 95% of MSH's workforce.

Reporting Period

As announced on 23 March 2020, to conform with the need to change and align the Company's year-end with the new Myanmar government mandated year end of 30 September, the Company issued six-month interim accounts for the period to 30 September 2019 (announced on 18 December 2019) and six-month interim accounts for the period to 31 March 2020 (announced on 29 June 2020).

Therefore, this report with a full audited set of financial statements comprises the 18-month period from 1 April 2019 (the last full audited set of financial statements) to 30 September 2020. The comparative period refers to the financial year ended 31 March 2019.

Outlook

In FPE2020, MSH focused on (i) the growth of its education division, both organically and through the acquisition of WSE Vietnam, (ii) the strengthening of EXERA and (iii) the improvement of systems, processes and organisational structures across the Group.

To support these changes, key appointments have been made across the organisation, including Jonathan Kolb as Chief Financial Officer, Alain Thibault as Chief Operating Officer, Michael Hall as Group Chief Human Resources Officer and Anurag Sharma as General Counsel.

The expansion of our business portfolio and the growth of our management team has resulted in the widening of the Group's net losses. This trend may revert in 2020/2021 driven by (i) the successful reorganisation of Wall Street English Vietnam, (ii) a peaceful evolution from Myanmar's state of emergency and (iii) a gradual recovery from Covid-19 and the related restrictions.

Subject to further developments in Myanmar's democratic transition, MSH intends to further grow its influence in Myanmar by adding complementary products (e.g. English for children) and capabilities (e.g. facilities management) to MSH's portfolio.

While we are acutely aware of its complex political and social environment, we continue to maintain an optimistic stance on Myanmar's economic prospects, and we aim to contribute to its positive development as a responsible investor in the region. As Myanmar's economy continues to develop, Management will increasingly focus on businesses targeting the population's primary needs such as education, security and healthcare.

MSH's management has gained valuable knowledge and experience as a result of the adversities faced in 2020 and I can confidently claim that Myanmar Strategic Holdings is building one of the most committed and aligned management teams in Myanmar and now in Vietnam.

This will enable us to evaluate and approach investment opportunities with a unique strategic and data-driven angle, leveraging groupwide capabilities and further differentiating MSH from the other providers of capital and / or technical expertise in those countries.

Our management depth will also enable the Group to evaluate its involvement in minority investment opportunities in which it could play a significant role as a strategic shareholder. As local companies evolve, the Board expects more sophisticated and structured companies to approach the market looking for strategic investors.

In 2020, we further diversified our shareholder base, welcoming Verlinvest as a key shareholder in Myanmar Strategic Holdings. We are grateful that we benefit from an investor base of committed long-term shareholders who have significant experience in investing in emerging markets and appreciate the long-term prospects of the Company and the countries in which we operate.

The Board would like to take this opportunity to thank our shareholders, for their continued support and encouragement, and our staff, partners and customers for their relentless commitment, effort and support throughout these unprecedented times.

Richard Greer

Independent Non-executive Chairman

31 March 2021

OPERATIONAL REVIEW

Education

The Group's objective is to become one of the leading private operators of educational institutions in ASEAN through the identification of opportunities and expansion in the sector, focusing initially on English language learning and higher education.

Within its Education division, the Group is currently active in (i) English language learning (Wall Street English), (ii) higher education (Auston College) and (iii) K-12 international school (Yangon American International School).

The Group generates revenues through management fees, technical assistance fees, royalty fees and other one-off fees ("Fees to the Group") from the operations it manages. These fees are variable in nature and typically linked to the operating performance and, ultimately, the revenue generation of the underlying managed operations (hereby reported as "Underlying Revenues").

Furthermore, the Group generates student revenues from the businesses it owns and operates. These fees are typically variable depending on the type / duration of services purchased by the customer. All student fees for Yangon American and WSE Vietnam are reported as revenues of the Group.

Wall Street English Myanmar

During FPE2020, Wall Street English Myanmar ("WSE Myanmar") managed four English language retail centres and one corporate centre under the well-established Wall Street English brand. As at 30 September 2020, total registered students amounted to ca. 2,000.

The flagship WSE centre opened in Yangon at the Junction Square Shopping Centre in February 2017 and spans five floors over 800 sqm. The second WSE centre opened in Yangon at City Mall St. John in December 2017 and is located on an open floor of ca. 600 sqm. A third WSE centre opened in Yangon at Myanmar Plaza in August 2018 and is located on an open floor of 350 sqm. A fourth WSE centre opened in Mandalay at Mingalar Mandalay Mall in February 2020 and is located in a stand-alone building over 600 sqm.

Pursuant to a strategic partnership with MCTA:RVi Academy Mandalay ("MCTA") announced in July 2018, WSE provided English language training within the premises of MCTA's Mandalay campus. The provision of services was successfully completed in December 2020.

Over FPE2020, WSE Myanmar generated underlying revenues of US$5.0 million (2019: US$2.6 million) with fees and royalties to the Group of US$1.5 million (2019: US$0.9 million).

From an operational perspective, we are proud to report that Myanmar currently ranks as one of the top countries in the Wall Street English network in terms of student progress: student satisfaction is key to establishing Wall Street English as the leading English language education provider in Myanmar.

Management continues to assess further growth opportunities for WSE Myanmar in order to meet the average development targets stated under the area development agreement with Wall Street English International of approximately one new centre per year up to a total of ten centres. Further sub-franchising opportunities in Myanmar will be evaluated in due course.

As a response to the Covid-19 restrictions, Wall Street English quickly adapted to the new environment and launched the Wall Street English online solution and digital classroom. While instrumental during lockdown periods, these solutions will further expand the addressable market through nationwide coverage.

Wall Street English Vietnam

In July 2020, the Group completed the acquisition of Wall Street English Vietnam ("WSE Vietnam") for a nominal consideration, resulting in goodwill of US$4.5 million and an increase of contract liabilities of US$4.5 million representing student fees in advance. Similar to WSE Myanmar, WSE Vietnam caters to the premium English Language Training market, focusing exclusively on adult learning, and offers its services through a flexible and integrated blended learning solution that can be delivered entirely online.

During FPE2020, WSE Vietnam owned seven English language retail centres in Ho Chi Minh City and Binh Duong. As at 30 September 2020, total registered students amounted to ca. 6,000. The centres will continue to operate under 10-year Centre Franchise Agreements with Wall Street English International on terms similar to those in place for WSE Myanmar.

Since the completion of its acquisition on 15 July 2020, WSE Vietnam generated revenues to the Group of ca. US$2.0 million (US$19.4 million of revenue would have been expected to have been recognised in FPE2020 if the acquisition had taken place at the beginning of the financial period).

Auston College Myanmar

Auston College ("Auston") is the result of a strategic collaboration signed in April 2018 between Myanmar Strategic Holdings (70% equity interest) and Auston Institute of Management (30% equity interest), an operator of private schools in Singapore and Sri Lanka that prepares students for careers in Engineering, IT Technology and Project Management through higher education learning.

The first campus opened in Yangon in May 2018, spans over three floors and covers 700 sqm. The initial product portfolio includes foundation programs and diplomas in Infrastructure & Networks, Mechanical Engineering, Engineering Technology and Construction Project Management.

In January 2021, Auston finalised a partnership with the Liverpool John Moores University ("LJMU") to provide high quality engineering training programmes in Myanmar. This is key to position Auston as a quality provider of international degree programmes in Myanmar.

Auston has also partnered with WSE Myanmar providing Auston's students a platform to achieve a high level of English proficiency and ensure they are qualified for leading roles at local and international companies.

Over FPE2020, Auston generated underlying revenues of US$0.13 million (2019: US$0.08 million) with no fees and royalties to the Group as the business is still in its ramp-up phase.

Yangon American

In December 2018, the Group announced its intention to launch its first international school, Yangon American International School ("Yangon American").

In April 2019, the Group received an investment permit from the Myanmar Investment Commission ("MIC"). The permit is granted under the 2016 Investment Law, following the issue of MIC Notification No. 7 of 2018 for carrying out investment activities in education services and private international school(s) and allows the Group to directly own and operate the School business.

Yangon American officially opened on schedule and on budget in June 2019. Operations commenced in August 2019 with student enrolment of over 50 for Academic Year 2019/2020 and 70 for Academic Year 2020/2021.

The first Yangon American campus, with planned capacity of up to 400 students, is positioned as a leading K-12 school. The school is centrally located and only 4 km from MSH's educational hub of WSE Myanmar and Auston in Junction Square.

It has 17 classrooms spread over 2,000 sqm, plus a multi-use playground of more than 1,000 sqm. In its first year of operation, Yangon American operated classes from nursery through the third grade, serving students from the age of 2 to 8 with revenues for MSH being generated from student fees, admission fees and ancillary services.

Yangon American is an International Baccalaureate Primary Years Programme ("IB PYP") candidate and is on track to receive full accreditation within 2021. Yangon American is also proceeding with its application to receive the Western Association of Schools and Colleges ("WASC") certification.

For FPE2020, Yangon American generated revenues of US$0.65 million and incurred net losses of US$2.2 million. Yangon American is expected to continue to incur operating losses for the next 18-24 months as the student enrolment increases towards capacity.

Services

The Group's objective is to become the leading provider of integrated security, risk and facility management services in Myanmar.

Founded in 2012 and acquired by the Group in May 2018 for US$2.2 million, resulting in goodwill of US$1.4 million and other intangibles of US$0.3 million. EXERA provides risk management, consulting, integrated security, manned guarding, secure logistics and cash in transit services to a wide range of international and local clients across Myanmar. EXERA is seeking to grow organically and through acquiring other businesses that will build its capacity and ability to service customers in key growth sectors, such as Oil and Gas, Mining, Energy and Telecoms.

As the business is fully owned, the Group generates revenues through the provision of security services to its clients. Typical contracts have a term of 1-3 years with predictable monthly revenues, particularly for core manned guarding services.

Risk management services are also provided on a consulting basis. EXERA publishes Security Information Reports ("SIRs") that support the security-related decision making of its customers. The circulation of SIRs has increased exponentially as a result of Covid-19 and the recently announced state of emergency.

For FPE2020, EXERA generated revenues of US$5.9 million (US$3.4 million from the completion of the acquisition at the end of May 2018 to 31 March 2019).

Security Officers and Manned Guarding Services

Through an experienced network of ca. 1,300 security officers active across ca. 170 sites as at 30 September 2020, EXERA is the largest provider of security services in Myanmar.

EXERA's customer base includes multi-national corporations, large oil and gas companies, established local businesses and governmental bodies and international organisations such as WFP, UNHCR, UNICEF, the Embassy of the Republic of Singapore and the EU mission.

EXERA's Security Officers are highly trained in accordance with the guidelines from the British Security Industry Association. Furthermore, EXERA strives to achieve excellence in its systems and processes and has been awarded ISO 9001, OHSAS 18000 and ASNSI/ASIS PSC 1 accreditations. EXERA is also the only company in Myanmar accredited to "ISO 18788 Management System for Private Security Companies". These accreditations are the hallmark of a company intent on delivering high quality services for the benefit of our customers.

Secured Logistics and Cash in Transit Services

EXERA provides a number of customers with English speaking security trained drivers and vehicles on a long-term contract basis. Our services include emergency management and crisis intervention designed to help our clients in the event of a serious accident, medical emergency or natural disaster.

EXERA was one of the very first international providers of cash in transit ("CIT") services in Myanmar. EXERA's CIT services are fully insured from pick-up to drop-off and are executed by a highly trained team including an operations manager and Cash Escort Officers.

Our CIT operations are continuously monitored by EXERA's 24/7 command centre. This combination of international standards with local expertise and knowledge makes our team perfectly tailored to conduct CIT operations in Myanmar. The team's training and knowledge spans all elements of CIT services, including equipment and vehicle use, standard operating procedures and fail-safe systems designed to prevent theft and thwart any attempted robberies.

EXERA is currently in discussion with a number of financial institutions to evaluate transformational outsourcing opportunities in relation to cash management and movement services.

Facilities Management and New Services

EXERA's strategy is to develop new services that differentiate it from its competitors, build barriers to entry and provide a wider range of support services to existing and new customers. As part of this strategy, EXERA is developing a comprehensive facilities management capability. EXERA is now providing Facility Management services to Yangon American International School, selected embassies and businesses within the wider MSH Group.

Summary

During the 18-month period ended 30 September 2020, the Group has experienced transformative growth while enduring the external and prolonged shock of Covid-19.

In the second half of 2019, the Group successfully launched Yangon American, its K-12 international school, with an initial enrolment of over 50 students. In the first half of 2020, the Group announced its expansion into education in Vietnam through the acquisition of WSE Vietnam. Following the acquisition, the Group is expected to generate more than 70% of its revenues from the education sector and 50% of its revenues from Vietnam.

This significant organic and external growth could not have occurred without having (i) reinforced the systems and processes that are foundational to the Group and (ii) aligned the Group's organisational structure. From a talent management perspective, the Group has a competent and committed management team with key appointments including Jonathan Kolb as Chief Financial Officer, Alain Thibault as Chief Operating Officer, Michael Hall as Chief Human Resources Officer and Anurag Sharma as General Counsel.

The global volatility of 2018/2019 brought about by trade wars and Brexit continued in 2019/2020, mainly due to the impact of the Covid-19 pandemic and the multiple lockdowns experienced across ASEAN. As the world recovers from the Covid-19 pandemic, the Asian Development Bank estimates Vietnam and Myanmar's economies to grow respectively by 6.3% and 6.0% in 2021. While Vietnam's successful response to and the ongoing management of Covid-19 may further accelerate growth, Myanmar's growth may be impacted by the recent political instability related to the state of emergency announced by the military in February 2021.

MSH continues to maintain a positive outlook on the growth of its business operations in ASEAN. As certain competitors retreat from these non-core markets, MSH will continue to establish high quality brands and operations in both Vietnam and Myanmar, growing a committed and aligned management team and driving synergies across its divisions.

MSH continues to target profitability across its existing businesses, although losses may persist for the next 12-18 months depending on the recovery from Covid-19 and Myanmar's political instability. The Group is supported by its core investors and has sufficient financial and human resources to sustain its operations and further growth for the foreseeable future.

SUSTAINABILITY AND DIVERSITY

Since its foundation Myanmar Strategic Holdings has focused on creating sustainable businesses and developing a local skilled workforce. The Group has identified a range of focus areas that are closely aligned to the Sustainable Development Goals ("SDGs") of the 2020 Agenda for Sustainable Development and the Ten Principles of the UN Global Compact ("UNGC").

Myanmar Strategic Holdings supports the following SDGs within its operations:

SDG 1 - No Poverty

The businesses managed and owned by the Group provides ca. 2,000 jobs to local employees in Myanmar and Vietnam. All employees are paid at least the statutory minimum wage and benefit from fair working conditions and shift patterns. Throughout its presence across over 170 sites, the Group supports local businesses, job creation and entrepreneurship.

SDG 4 - Quality Education

Through our education division, the Group ensures inclusive and equitable education and promotes lifelong learning opportunities for all. In 2020 as a response to the Covid-19 restrictions and lockdown, all our education businesses adopted remote learning technologies, providing academic advancement opportunities at affordable prices for ca. 8,000 students. Several scholarships were also offered across both Wall Street English and Auston.

SDG 5 - Gender Equality

Female representation exceeded 60% of the total workforce (excluding EXERA), a remarkable achievement for a market at this stage of development and an improvement vs. 2019 (less than 50%). While female participation is lower in MSH's integrated security services business, Management encourages higher female participation through targeted hiring initiatives. At this stage we are not aware of any gap between the pay of male and female employees.

SDG 8 - Decent Work and Economic Growth

Across over 170 sites, the Group ensures fair working conditions and standards for all its employees. The Group follows the principles of the UK Modern Anti-Slavery Act 2015 and prohibits child labour across all of its business operations and projects, and there were no cases of child labour reported in the 18-month period ended 30 September 2020.

FINANCIAL REVIEW

The revenues generated by the Group in relation to the businesses owned and managed were US$10.2 million for FPE2020 (2019: US$4.4 million), an increase of ca. 130% over the prior period including the impact of the consolidation of WSE Vietnam and a longer reporting period.

The revenues generated by the Group in relation to the businesses owned were US$8.5 million for 2020 (2019: US$3.4 million), an increase of ca. 148% over the prior period. This was mainly due to the consolidation of WSE Vietnam following its acquisition in July 2020, the expansion of Yangon American and a longer reporting period.

The revenues generated by the Group in relation to the businesses managed were US$1.6 million for 2020 (2019: US$1.0 million), an increase of ca. 66% over the prior period. This was mainly due to the increase in underlying revenues and management fees generated by the Education division for a longer reporting period.

RESULTS OF OPERATIONS

The Group's Adjusted EBITDA loss, which excludes expenditure of a one-off nature, therefore providing a clearer picture of the performance of the operations, increased to US$4.2 million for FPE2020, due to the impact of Covid-19.

The Group's net loss amounted to US$8.7 million for 2020 (2019: US$2.5 million net loss), including US$3.4 million in allowances for impairments and US$0.2 million in transaction costs related to the acquisition of WSE Vietnam.

While Group revenues increased by 130% vs. the prior period, employee benefits expenses increased at a slightly lower rate of 126% vs. the prior period, reflecting the longer period and the Management's efforts to contain costs during the Covid-19 pandemic.

IFRS 16 requires amortisation to be charged on the right-of-use assets and interest expense on lease liabilities instead of operating lease expenses which was required by the previous accounting standard for leases, IAS 17, to be charged to the profit and loss. For 2020, the Group recognised expenses of ca. US$1.4 million in relation to the right-of-use-asset, of which US$0.9 million was amortisation expense and US$0.4 million was finance cost.

Depreciation expense over the period increased significantly to U$0.4 million (2019: US$0.06 million) due to the additional depreciation in relation to WSE Vietnam and the refurbishment and fit-out of Yangon American.

A loss allowance of US$3.4 million, as disclosed in the financial statements, was made in FPE2020 for an amount due from a related party in respect of payments made on behalf and advances for the operation of the managed language centres in Myanmar as these centres experienced continuous losses and the likelihood of recovery is in doubt considering the current economic environment and the renegotiation of certain commercial terms with the related party.

Direct and indirect Full Time Employees ("FTEs") increased to ca. 2,000 (2019: ca. 1,400), of which ca. 250 FTEs (2019: 300) were employed within the operations under management and ca. 1,750 FTEs (2019: 1,100) were employed in the owned operations. The growth was mainly due to the acquisition of WSE Vietnam, the launch of the fourth WSE Myanmar English language centre in Mandalay and the expansion of EXERA's operations.

	Audited	Unaudited	Audited
	18 months ended	12 months ended	Year ended
	30 September 2020	31 March 2020	31 March 2019
	US$	US$	US$

Revenue	10,156,856	5,353,468	4,424,892
Other income	147,400	18,551	4,932
Employee benefits expense	(8,702,024)	(4,821,310)	(3,847,090)
Other expenses (Excl. one-off expenses pursuant to the deal-related expenses and loss on write-off)	(4,472,510)	(2,640,875)	(2,638,392)

Adjusted EBITDA before Impact of Right-of-Use Asset	(2,870,278)	(2,090,166)	(2,055,658)
Amortisation expense on right-of-use asset	(937,703)	(374,481)	-
Finance cost on lease liabilities	(422,228)	(240,599)	-

Adjusted EBITDA	(4,230,209)	(2,705,246)	(2,055,658)
One-off expenses pursuant to the deal-related expenses and loss on write-off	(334,159)	(95,037)	(321,523)
Loss allowance on trade and other receivables	(3,395,740)	-	-
Depreciation expense	(374,451)	(263,941)	(61,484)
Finance cost	(218,207)	(108,342)	-
Amortisation expense	(193,086)	(128,433)	(128,229)

Loss before income tax	(8,745,852)	(3,300,999)	(2,566,894)
Income tax	38,693	21,018	30,330
Loss for the period/year	(8,707,159)	(3,279,981)	(2,536,564)

Other comprehensive income for the period/year, net of tax	(145,894)	-	-

Total Comprehensive Income	(8,853,053)	(3,279,981)	(2,536,564)

Loss for the period/year attributable to:
Owners of the Company	(8,683,164)	(3,273,616)	(2,534,646)
Non-controlling interests	(23,995)	(6,365)	(1,918)

	(8,707,159)	(3,279,981)	(2,536,564)

Loss per share
- Basic and diluted (US$)	(3.40)	(1.31)	(1.03)

UNDERLYING REVENUES

The Underlying Revenues are an indicator of the total volume of business generated in each division. The operating businesses managed and owned by the Group generated revenues ("Underlying Revenues") of US$14.7 million for 2020 (2019: US$7.3 million), an increase of ca. 101% over the period.

The 61% POP growth of the businesses managed by the Group was driven by the further expansion of WSE Myanmar, following the opening of the fourth English learning centre in February 2020.

The 148% growth of the businesses owned by the Group was mainly driven by the acquisition of WSE Vietnam and ramp-up of Yangon American.

	Unaudited	Unaudited	Unaudited
	18 months ended	12 months ended	Year ended
	30 September 2020	31 March 2020	31 March 2019
Underlying revenues	US$	US$	US$

Managed Businesses
Hospitality (Ostello Bello)	1,031,325	1,019,717	1,209,258
Education (WSE Myanmar, Auston)	5,148,989	3,112,961	2,618,741
Total managed businesses	6,180,314	4,132,678	3,827,999

Owned Businesses
Services (EXERA)	5,891,462	3,790,492	3,445,155
Education (WSE Vietnam and Yangon American)	2,638,139	360,673	-
Total owned businesses	8,529,601	4,151,165	3,445,155

Total underlying revenues	14,709,915	8,283,843	7,273,154

GROUP REVENUES

Group revenues include the fees generated by the managed businesses and the revenues generated by the owned businesses. Group revenues for the 18-month financial period ended 30 September 2020 amounted to US$10.2 million (2019: US$4.4 million), an increase of ca. 130% over the period, and were composed of US$8.5 million in revenues generated by the owned businesses and US$1.6 million in fees generated by the managed businesses.

	Audited	Unaudited	Audited
	18 months ended	12 months ended	Year ended
	30 September 2020	31 March 2020	31 March 2019
Fees generated by managed businesses	US$	US$	US$

Hospitality (Ostello Bello)	135,000	135,000	105,000
Education (WSE, Auston)	1,492,254	1,067,303	874,737

Fees generated by managed businesses	1,627,254	1,202,303	979,737

LIQUIDITY AND CAPITAL RESOURCES

During FPE2020, the Group's operating cash outflow increased significantly to US$3.7 million (2019: US$2.3 million), mainly due to a longer reporting period and a deterioration of the cash flow generated by the operations owned and managed by the Group and the consolidation of WSE Vietnam.

With regards to investing activities, the Group advances funds to the owners of the relevant managed operations to fund refurbishment expenses, improvements and general working capital. Such advances are unsecured and interest free and there is a risk that the Group may not be repaid some or all of these monies. In FPE 2020, the Group advanced US$1.0 million to related parties.

As a result of the Covid-19 outbreak resulting in a deterioration of the overall trading conditions in Myanmar, the Group is in the process of reviewing the key terms of its operating and management agreement with TED Limited, a related party. The outcome of the renegotiation may include changes to the existing operating and management and technical assistance agreements which could result in E Partners Limited owning, operating and managing the Wall Street English language learning centres in Myanmar. TED Limited would remain as a real estate partner and related party to the Group. All receivables from TED Limited shall remain outstanding. The Group has made certain allowances for impairment of US$3.4 million.

During FPE2020, the net cash used in investing activities amounted to US$1.7 million (2019: US$3.4 million), including outflows of ca. US$0.6 million for purchase of plant and equipment and US$0.5 million in purchase of financial assets at FVOCI.

With regards to the Group's financing activities, the Group's principal sources of liquidity in the 18-month period ended 30 September 2020 have been (i) proceeds from issuance of ordinary shares totalling US$6.4 million and (ii) a loan of US$3.0 million from the former immediate holding company, MACAN Pte. Ltd..

As at 30 September 2020, the entire initial loan facility of US$3.0 million was drawn down. In March 2020, the Company and MACAN Pte. Ltd. agreed to increase the loan facility from US$3.0 million to US$7.0 million. The Loan Facility has a tenure of up to three years, bears an interest rate of 6.0% per annum and is repayable on demand although MACAN has confirmed that no repayment is due for at least 12 months from the date of this report. As at the date of this report, US$4.5 million in loans were drawn down.

During FPE2020, the Group's financing cash inflow amounted to US$8.4 million (2019: US$3.1 million) net of US$0.5 million in repayment of lease liabilities and US$0.4 million in interest paid on lease liabilities.

DIVIDENDS

Based on the above, the Directors do not recommend payment of a dividend at this time.

CHANGE OF YEAR END

The Myanmar government had announced that all Myanmar companies must change their financial year end to 30 September of each year, commencing in 2019. As such, all of the Company's subsidiary companies changed their year end and the Company did the same. Therefore, the Company issued interim accounts for the six months to 30 September 2019 (announced on 18 December 2019) and also for the six months to 31 March 2020 (announced on 29 June 2020). As a consequence, this report, with a full audited set of financial statements, comprises the 18-month period from 1 April 2019 (the last full audited set of financial statements) to 30 September 2020.

WORKING CAPITAL

As of the date of this report, the Group has adequate financial resources to cover its working capital needs for the next 12 months.

OUTLOOK

The Company's ambition has grown into becoming a leading developer and manager of consumer businesses in ASEAN, rather than just Myanmar.

In line with this vision, Management is looking at opportunities to grow the Group through both organic and acquisitive means, in sectors which target primary needs. The Group will continue to pursue an asset light strategy and increase the portfolio of businesses owned and under management.

The acquisition of WSE Vietnam represents a pivotal moment as the Group has expanded its presence to a second ASEAN country and increased the share of revenues generated by education businesses. Following a swift turnaround, the WSE Vietnam business has the potential to be profitable in 2020/2021, driving profitability at scale for the Group.

As the Group's owned and managed operations grow in size, the Group may decreasingly rely on external financing and instead finance its organic growth through the profits earned by the owned businesses and the Fees to the Group generated by the managed operations.

Management will also continue to build and train the relevant human resources to sustain and accelerate the Group's growth. Operational and financial sustainability are key strategic priorities communicated throughout all levels within the organisation.

Notwithstanding the recent political and economic uncertainty, the Board and management continue to remain positive on the overall macroeconomic environment underpinning the broader investment opportunity across ASEAN, with Vietnam and Myanmar as key contributors.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL PERIOD ENDED FROM 1 APRIL 2019 TO 30 SEPTEMBER 2020

	Financial period from 1 April 2019 to 30 September 2020	Financial year ended 31 March 2019
	US$	US$

Revenue	10,156,856	4,424,892

Other income	147,400	4,932

Employee benefits expense	(8,702,024)	(3,847,090)

Depreciation expense	(374,451)	(61,484)

Amortisation expense	(1,130,789)	(128,229)

Other expenses	(4,806,669)	(2,959,915)

Loss allowance on trade and other receivables	(3,395,740)	-

Finance cost	(640,435)	-

Loss before income tax	(8,745,852)	(2,566,894)

Income tax credit	38,693	30,330

Loss for the period/year	(8,707,159)	(2,536,564)

Other comprehensive income:
Items that may be reclassified subsequently to profit or loss:
Exchange difference in translation of foreign operations	(58,714)	-

Items that will not be reclassified subsequently to profit or loss:
Changes in fair value of equity instruments at FVOCI	(87,180)	-

Other comprehensive income for the period/year, net of tax	(145,894)	-


Total comprehensive income for the period/year, net of tax	(8,853,053)	(2,536,564)

Loss for the period/year attributable to:
Owners of the parent	(8,683,164)	(2,534,646)
Non-controlling interest	(23,995)	(1,918)
	(8,707,159)	(2,536,564)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE FINANCIAL PERIOD ENDED FROM 1 APRIL 2019 TO 30 SEPTEMBER 2020

	Financial period from 1 April 2019 to 30 September 2020	Financial year ended 31 March 2019
	US$	US$
Total comprehensive income attributable to:
Owners of the parent	(8,829,058)	(2,534,646)
Non-controlling interests	(23,995)	(1,918)
	(8,853,053)	(2,536,564)

Loss per share attributable to the owners of the Company (US$)
- Basic and diluted	(3.40)	(1.03)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2020

	30 September 2020	31 March 2019
	US$	US$
ASSETS
Non-current assets
Plant and equipment	1,157,024	536,556
Intangible assets	6,733,180	1,839,608
Right-of-use assets	9,310,027	-
Financial assets at FVOCI	675,574	150,000
Other receivables	520,892	-
Total non-current assets	18,396,697	2,526,164

Current assets
Inventories	33,498	-
Trade and other receivables	2,393,068	4,166,647
Cash and cash equivalents	3,941,413	777,847
Total current assets	6,367,979	4,944,494
Total assets	24,764,676	7,470,658

LIABILITIES AND EQUITY
Liabilities
Non-current liabilities
Contract liabilities	282,650	57,291
Loan from former immediate holding company	3,218,207	-
Lease liabilities	7,384,391	-
Deferred tax liabilities	245,731	46,196
Total non-current liabilities	11,130,979	103,487

Current liabilities
Trade and other payables	2,363,108	783,766
Contract liabilities	4,898,069	173,692
Lease liabilities	1,960,731	-
Total current liabilities	9,221,908	957,458
Total liabilities	20,352,887	1,060,945

Equity
Share capital	20,553,638	14,016,058
Accumulated losses	(16,517,220)	(7,860,436)
Other reserves	346,782	201,507
Equity attributable to owners of the Company	4,383,200	6,357,129
Non-controlling interests	28,589	52,584
Total equity	4,411,789	6,409,713
Total liabilities and equity	24,764,676	7,470,658

The financial statements were authorised and approved by the Board on 30 March 2021 and signed on their behalf by

Enrico Cesenni

Director and Chief Executive Officer

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL PERIOD ENDED FROM 1 APRIL 2019 TO 30 SEPTEMBER 2020

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

30 September 2020


Balance as at 1 April 2019, as previously stated	14,016,058	(118,061)	319,568	-	-	(7,860,436)	6,357,129	52,584	6,409,713
Effect of transition to IFRS 16	-	-	-	-	-	26,380	26,380	-	26,380
Balance as at 1 April 2019, as restated	14,016,058	(118,061)	319,568	-	-	(7,834,056)	6,383,509	52,584	6,436,093

Total comprehensive income for the financial period:
Loss for the financial period	-	-	-	-	-	(8,683,164)	(8,683,164)	(23,995)	(8,707,159)
Other comprehensive income	-	-	-	(87,180)	(58,714)	-	(145,894)	-	(145,894)
	-	-	-	(87,180)	(58,714)	(8,683,164)	(8,829,058)	(23,995)	(8,853,053)

Contribution by owners of the Company
Issuance of shares	6,537,580	-	-	-	-	-	6,537,580	-	6,537,580

Recognition of share-based payments	-	-	291,169	-	-	-	291,169	-	291,169
	6,537,580	-	291,169	-	-	-	6,828,749	-	6,828,749

Balance as at 30 September 2020	20,553,638	(118,061)	610,737	(87,180)	(58,714)	(16,517,220)	4,383,200	28,589	4,411,789

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL PERIOD ENDED FROM 1 APRIL 2019 TO 30 SEPTEMBER 2020

	Share capital	Equity reserves	Share option reserve	Accumulated losses	Equity attributable to owners of the Company	Non- controlling interests	Total equity
	US$	US$	US$	US$	US$	US$	US$

31 March 2019


Balance as at 1 April 2018	10,746,042	(37,457)	180,893	(5,325,790)	5,563,688	(26,322)	5,537,366

Loss for the financial year, representing total comprehensive income for the financial year	-	-	-	(2,534,646)	(2,534,646)	(1,918)	(2,536,564)

Contribution by owners of the Company
Issuance of shares	3,270,016	-	-	-	3,270,016	-	3,270,016

Recognition of share-based payments	-	-	138,675	-	138,675	-	138,675
	3,270,016	-	138,675	-	3,408,691	-	3,408,691
Changes in ownership interest in a subsidiary
Issuance of shares	-	(60,541)	-	-	(60,541)	60,841	300

Acquisition of non-controlling interest	-	(20,063)	-	-	(20,063)	19,983	( 80 )

Balance as at 31 March 2019	14,016,058	(118,061)	319,568	(7,860,436)	6,357,129	52,584	6,409,713

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE FINANCIAL PERIOD ENDED FROM 1 APRIL 2019 TO 30 SEPTEMBER 2020

	Financial period from 1 April 2019 to 30 September 2020	Financial year ended 31 March 2019
	US$	US$

Operating activities
Loss before income tax	(8,745,852)	(2,566,894)

Adjustments for:
Interest income	(16,228)	(2,099)
Interest on lease liabilities	422,228	-
Interest on loan from former immediate holding company	218,207	-
Gain on liquidation of a subsidiary	-	(1,663)
Share-based compensation	291,169	138,675
Bad debts written off	-	28,657
Impairment loss on trade and other receivables	3,395,740	-
Impairment loss on intangible assets	30,000	-
Loss on disposal of plant and equipment	-	1,015
Lease concession	(237,130)	-
Plant and equipment written off	60,012	19,801
Depreciation of plant and equipment	374,451	61,484
Amortisation expense	1,130,789	128,229
Unrealised exchange difference	(17,768)	-
Operating cash flows before working capital changes	(3,094,382)	(2,192,795)

Working capital changes:
Trade and other receivables	(538,478)	(344,546)
Deferred revenue	6,436	184,525
Inventories	(33,498)	-
Trade and other payables	5,277	139,077
Cash used in operations	(3,654,645)	(2,213,739)
Interest received	90	2,099
Income tax paid	(830)	(51,512)
Net cash used in operating activities	(3,655,385)	(2,263,152)

Investing activities
Purchase of plant and equipment	(564,934)	(480,279)
Purchase of intangible assets	(44,198)	(90,000)
Advances to related parties	(974,447)	(770,811)
Advances to third parties	112,282	29,112
Acquisition of subsidiaries, net of cash acquired	262,316	(1,937,040)
Purchase of financial asset, at FVOCI	(460,174)	(150,000)
Net cash used in investing activities	(1,669,155)	(3,399,018)

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE FINANCIAL PERIOD ENDED FROM 1 APRIL 2019 TO 30 SEPTEMBER 2020

	Financial period from 1 April 2019 to 30 September 2020	Financial year ended 31 March 2019
	US$	US$

Financing activities
Acquisition of equity interest from non-controlling interests	-	(80)
Proceeds from subscription of shares by non-controlling interests	-	300
Proceeds from issuance of ordinary shares	6,385,000	3,070,000
Loan from former immediate holding company	3,000,000	-
Repayment of lease liabilities	(519,098)	-
Interest paid on lease liabilities	(422,228)	-
Net cash generated from financing activities	8,443,674	3,070,220

Net changes in cash and cash equivalents	3,119,134	(2,591,950)
Effect of exchange rate changes on cash and cash equivalents	44,432	-
Cash and cash equivalents at beginning of period/year	777,847	3,369,797
Cash and cash equivalents at end of period/year	3,941,413	777,847

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FINANCIAL PERIOD ENDED FROM 1 APRIL 2019 TO 30 SEPTEMBER 2020

General

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

The financial information set out in this document does not constitute the Group's statutory accounts for the period ended 30 September 2020 or the year ended 31 March 2019.

Statutory accounts for the year ended 31 March 2019 have been filed with the Singapore Registrar of Companies and those for the period ended 30 September 2020 will be delivered to the Registrar in due course; both have been reported on by independent auditors. The independent auditors' report for the period ended 30 September 2020 and the year ended 31 March 2019 is unmodified.

The principal activities of the Company are investments and trading in Myanmar and Vietnam related projects. The principal activities of the subsidiaries are set out in the financial statements.

Until 29 September 2020, the Company's immediate and ultimate holding company is Macan Pte. Ltd. ("Macan"), a company incorporated and domiciled in Singapore. Related companies in these financial statements refer to the members of the Macan Group. On 30 September 2020, Macan ceased to administer the voting rights over the 151,500 ordinary shares held in the name of an individual shareholder. Accordingly, Macan has lost control over the Company and is now a corporate shareholder of the Company and former immediate and ultimate holding company.

The Company's subsidiaries in Myanmar changed their financial year end from 31 March to 30 September to be in line with the directives issued by the Myanmar Internal Revenue Department that all companies incorporated in Myanmar must change their financial year end to 30 September. As the Group has significant operations in Myanmar, the Company had changed its financial year end from 31 March to 30 September to be aligned with its subsidiaries in Myanmar.

The current financial period of the Group's financial statements covers a period of 18 months from 1 April 2019 to 30 September 2020 while the comparative financial year ended 31 March 2019 covers a period of 12 months from 1 April 2018 to 31 March 2019. As a result, the amounts presented in the financial statements are not entirely comparable.

Significant accounting policies

Basis of preparation

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

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

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

Coronavirus ("Covid-19") Impact

On 30 January 2020, the World Health Organisation ("WHO") declared the outbreak a Public Health Emergency of International Concern and was subsequently characterised as a pandemic on 11 March 2020. In response to the pandemic, governments from different countries around the world have implemented containment measures to varying degrees in a bid to curb the spread of the virus. As a result, there has been disruption to global trade due to restrictions for cross-border movement and reduced demand in discretionary activities.

The Covid-19 pandemic has affected almost all countries of the world, and resulted in border closures, production stoppages, workplace closures, movements controls and other measures imposed by the various governments. The Group's significant operations are in Myanmar, Vietnam and Singapore all of which have been affected, by the spread of Covid-19 in 2020.

Set out below is the impact of Covid-19 on the Group's financial performance reflected in this set of financial statements for the financial period ended from 1 April 2019 to 30 September 2020.

· In 2020, border closures, production stoppages and workplace closures resulted in periods where the Group's operations were temporarily suspended to adhere to the movement control measures imposed by the governments of Myanmar and Vietnam. These negatively impacted business operations in 2020, resulting in a negative impact on the Group's financial performance.

· The Group has considered the market conditions including the impact of Covid-19 as at the reporting date, in making estimates and judgements on the recoverability of the assets as at 30 September 2020. The significant estimates and judgements applied are disclosed in the financial statements.

The recovery of the Group's operations and results is highly dependent on the containment of the Covid-19 locally and internationally and the timing of the availability of the vaccine. The diversification of the Group's operations between Myanmar and Vietnam should help mitigate the overall Covid-19 exposure of the Group.

As the global Covid-19 situation remains very fluid as at the date of issuance of these financial statements, the Group cannot reasonably ascertain the full extent of the probable impact of the Covid-19 disruptions on its operating and financial performance for the financial year ending 30 September 2021.

Going concern assumption

The Group recorded a net loss and net cash used in operating activities of US$8,707,159 and US$3,655,385, respectively for the financial period ended 1 April 2019 to 30 September 2020. The Group's net current liabilities were US$2,853,929.

The Board of Directors of the Company have carried out a detailed review of the 12 months cash flow forecast from the date of approval of the audited financial statements for the financial period ended from 1 April 2019 to 30 September 2020 of the Group.

The 12 months cash flow forecast was prepared based on a multiple scenarios with consideration of the continuous effects of Covid-19, Myanmar's state of emergency impact as detailed in the financial statements and other available information about the future. Given the high level of uncertainty that these events creates, the Group conducted extensive stress-testing on the various possible impacts on the financial performance and cash flows of the Group and the length of time it will take for operational activities to recover from these effects according to business segments and countries the Group operates. One of the critical analysis applied is the worst case scenario of prolonged impact on certain business segments on the Group's operations in Myanmar including temporary cessation of business operations for the period under review.

The Directors have evaluated that there are sufficient mitigating actions within their control, such as significant reduction of operational activities of non-profitable business segments and reduction of discretionary expenditures to manage operational cost. The Directors of the Company are also satisfied that there are adequate credit facilities, including the drawing of existing unutilised credit facilities to fund its operations.

The former immediate holding company has undertaken not to demand repayment of the loan within the next 12 months from the date of approval of the financial statements for the financial period ended from 1 April 2019 to 30 September 2020.The Directors of the Company are of the opinion that no material uncertainty exists and the going concern basis is appropriate in the preparation of the financial statements.

Changes in accounting policies

New standards, amendments and interpretations effective from 1 April 2019

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

IFRS 16 Leases

IFRS 16 supersedes IAS 17 Leases and IFRIC 4 Determining whether an Arrangement Contains a Lease. IFRS 16 provides a single lessee accounting model which eliminates the distinction between operating and finance leases for lessees. IFRS 16 requires lessee to capitalise all leases on the consolidated statement of financial position by recognising a 'right-of-use' asset and a corresponding lease liability for the present value of the obligation to make lease payments, except for certain short-term leases and leases of low-value assets. Subsequently, the right-of-use assets will be amortised and the lease liabilities will be measured at amortised cost.

The Group applied IFRS 16 using the modified retrospective approach with the cumulative effect of initially applying this standard and adjustment to the opening accumulated losses as at 1 April 2019 (the "date of initial application"). The Group elected to apply the practical expedient to not reassess whether a contract is, or contains a lease at the date of initial application. Contracts entered into before the transition date that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed. The definition of lease under IFRS 16 was applied only to contracts entered into or changed on or after 1 April 2019.

In applying the modified retrospective approach, the Group has taken advantage of the following practical expedients:

· Leases with a remaining term of twelve months from the date of initial application have been accounted for as short-term leases (i.e. not recognised on consolidated statement of financial position) even though the initial term of the leases from lease commencement date may have been more than twelve months; and

· For the purpose of measuring the right-of-use asset, hindsight has been used. Therefore, it has been measured based on prevailing estimates at the date of initial application and not retrospectively by making estimates and judgements (such as lease terms) based on circumstances on or after the lease commencement date.

As a lessee, the Group previously classified leases as finance or operating lease based on its assessment of whether the lease transferred substantially all the risks and rewards of ownership. Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for most leases. For those low-value assets based on the value of the underlying asset when new and leases with a lease term of 12 months or less, the Group has elected not to recognise right-of-use assets and lease liabilities for these leases.

On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to lease of international school building which had previously been classified as operating leases.

Lease liabilities from operating leases under the principles of IAS 17 were measured at the present value of the remaining lease payments, discounted using the Group's incremental borrowing rate as at 1 April 2019. The incremental borrowing rate applied to lease liabilities on 1 April 2019 was 6%.

The right-of-use assets were measured as follows:

(a) Properties: right-of-use assets are measured had IFRS 16 applied on commencement of the lease except that it is discounted using the lessee's incremental borrowing rate as at 1 April 2019, adjusted by the amount of any prepaid or accrued lease payments.

(b) All other leases: the carrying amount is determined as if IFRS 16 being applied from the commencement date of the leases, subject to the practical expedients listed above.

The effect of adopting IFRS 16 as at 1 April 2019 was as follows:

	Increase/(decrease)
	US$
Assets
Right-of-use assets	3,651,192
Prepayment	(120,000)

Liabilities
Lease liabilities	3,504,812

Equity
Accumulated losses	26,380

The aggregate lease liabilities recognised in the consolidated statement of financial position as at 1 April 2019 and the Group's operating lease commitment as at 31 March 2019 can be reconciled as follows:

	US$

Operating lease commitment as at 31 March 2019	720,000
Add: Effect of extension options reasonably certain to be exercised	3,840,000
	4,560,000
Effect of discounting using the incremental borrowing rate as at date of initial application	(1,055,188)
Lease liabilities as at 1 April 2019	3,504,812

Amendment to IFRS 16 Leases: Covid-19-Related Rent Concessions

On 9 October 2020, the EU adopted the amendments to IFRS 16 Covid-19 rent concessions to take effect from 1 June 2020, the Group has adopted these amendments early. The amendment provides a practical expedient for lessees accounting for rent concessions that arise as a direct consequence of the Covid-19 pandemic and satisfy the following criteria:

(a) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

(b) The reduction is lease payments affects only payments originally due on or before 30 June 2021; and

Rent concessions that satisfy these criteria may be accounted for in accordance with the practical expedient, which means the lessee does not need to assess whether the rent concession meets the definition of a lease modification.

The Group has elected to apply the practical expedient for all rent concessions that meet the criteria. The practical expedient has been applied retrospectively, meaning it has been applied to all rent concessions that satisfy the criteria, which in the case of the Group, occurred from the Vietnam subsidiary. The impact of rent concession is netted off against rental expenses amounted to US$237,130.

IFRSs issued but not yet effective

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

		Effective date (annual periods beginning on or after)

IAS 1 and IAS 8 (Amendments)	: Definition of Material	1 January 2020
IAS 1 (Amendments)	: Classification of Liabilities as Current or Non-current	1 January 2023
IFRS 3 (Amendments)	: Definition of a Business	1 January 2020
IFRS 3 (Amendments)	: Reference to the Conceptual Framework	1 January 2022
IFRS 4 (Amendments)	: Extension of the Temporary Exemption from Applying IFRS 9	1 January 2023
IFRS 9, IAS 39 and IFRS 7 (Amendments)	: Interest Rate Benchmark Reform	1 January 2020
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Amendments)	: Interest Rate Benchmark Reform - Phase 2	1 January 2021
IFRS 17	: Insurance Contracts	1 January 2023
IFRS 17 (Amendments)	: Various amendments	1 January 2023
IAS 16 (Amendments)	: Property, Plant and Equipment - Proceeds before Intended Use	1 January 2022
IFRS 10 and IAS 28 (Amendments)	: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	To be determined
IAS 37 (Amendments)	: Onerous Contracts - Cost of Fulfilling a Contract	1 January 2022
Various amendments	: References to the Conceptual Framework in IFRS Standards	1 January 2020
Various amendments	: Annual improvements to IFRSs 2018-2020	1 January 2022

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

The Group expect that the adoption of the above IFRSs, if applicable, will have no material impact on the financial statements in the period of initial application.

Basis of consolidation

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

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

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

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

Non-controlling interests

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

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

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

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

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

Business combinations

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

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

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

If, after reassessment, the net fair value of the acquiree's identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of the acquirer's previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase.

Revenue recognition

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

Contract liabilities are deferred revenue comprising management fees, students' fees, new centre fee and other advance consideration received from customers and a related party. Deferred revenue is recognised as revenue when performance obligations under its contracts are satisfied.

Rendering of services

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

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

Technical support service fees

Technical support service fees earned from hostels and language centres managed by the Group are recognised over time on a straight-line basis and when services are rendered with reference to the terms of the contracts.

Management fees

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

Royalty income

Royalty income is recognised over time on an accrual basis with reference to the terms of the "Wall Street English" Centre Franchise Agreement. Royalty is determined based on the agreed royalty rate and the annual total gross revenue of the managed language centres in Myanmar.

New centre fee

New centre fee for the opening of new "Wall Street English" language centre in Myanmar is recognised over the exclusive rights to develop and operate for a period of 10 years, the revenue of which is recognised on a straight-line basis.

Student fees

Student fees include the tuition fees and ancillary fees earned from the provision of Wall Street English language training in Vietnam and kindergarten to primary school education in Myanmar. Tuition fees are recognised over the duration of the course and when services are rendered with reference to the terms of the contract on a straight-line basis over the term of the courses. Ancillary fees are recognised at point in time when goods are delivered and over time on a straight-line basis, respectively according to the delivery of the performance obligations.

Employee benefits

Retirement benefit costs

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund and Myanmar Social Security Benefit, are dealt with as payments to defined contribution plans where the Group's obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

Employee leave entitlements

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated undiscounted liability for annual leave expected to be settled wholly within 12 months from the reporting date as a result of services rendered by employees up to the end of the financial period.

Share-based payments

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

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

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

Taxes

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

Current income tax

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

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

Deferred tax

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

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

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

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

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

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

Sales tax

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

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

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

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

Foreign currency transactions and translation

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

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

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

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

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

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

Plant and equipment

All items of plant and equipment are initially recognised at cost. The cost includes its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Dismantlement, removal or restoration costs are included as part of the cost if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the plant and equipment.

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

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

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

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

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

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

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

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

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

Intangible assets

Goodwill

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

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

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

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

Intangible assets acquired in a business combination

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

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

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

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

Area development and centre fees

An area development fee is paid for the exclusive rights to develop and operate the "Wall Street English" language centres in Myanmar while the centre fee is required to be paid in respect for the opening of a new "Wall Street English" language centre in Myanmar and Vietnam. The area development and centre fees are capitalised and amortised over the period of 10 years from the date operation commences and when the new centre commences operations respectively.

Set-up fee and brand licensing fee

Set-up fee is paid for the exclusive rights to develop and operate the "Auston" college in Myanmar. Brand licensing fee is paid for the exclusive, irrecoverable, non-transferrable rights of use of the licensed intellectual property and trademark for the operations of the Auston college. The set-up and brand licensing fees are capitalised and amortised over the period of 10 years from the date operation commences.

Computer software licence

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

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

Customer-related assets

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

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

Impairment of non-financial assets excluding goodwill

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

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

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

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

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

Financial instruments

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

Financial assets

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

Amortised cost

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

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

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

The Group's financial assets measured at amortised cost comprise trade and other receivables (excluding prepayment and advances for hostel operations), loan receivables and cash and cash equivalents in the consolidated statement of financial position.

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

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

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

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

Derecognition of financial assets

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

Financial liabilities and equity instruments

Classification as debt or equity

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

Equity instruments

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

Financial liabilities

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

Trade and other payables

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

Loans from former immediate holding company

Interest-bearing loans from former immediate holding company is initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost, using the effective interest method.

Derecognition of financial liabilities

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

Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise of cash on hand, cash at bank and demand deposits which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.

Leases

As lessee

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

· leases of low value assets; and

· leases with a duration of twelve months or less.

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

Initial measurement

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

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

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

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

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

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

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

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

· initial direct costs incurred; and

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

The Group presents the right-of-use assets (excluding those which meet the definition of investment property) and lease liabilities separately from other assets and other liabilities in the consolidated statement of financial position.

Subsequent measurement

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

	Years

International school building	10
Office premises and language centres	1 - 8
Motor vehicles	2.5 - 3

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

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

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

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

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

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

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

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

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

For lease contracts that convey a right to use an identified asset and require services to be provided by the lessor, the Group has elected to account for the entire contract as a lease. The Group does not allocate any amount of contractual payments to, and account separately for, any services provided by the lessor as part of the contract.

Accounting policy prior to 1 April 2019

As lessee

Operating leases

Rentals payable under operating leases (net of any incentives received from lessors) are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

Provisions

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

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

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

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

Segment reporting

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

Loss per share

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

	30 September 2020	31 March 2019
Numerator
Loss for the financial period/year attributable to the
owners of the parent (US$)	(8,683,164)	(2,534,646)

Denominator
Weighted average number of ordinary shares for the
purposes of basic and diluted loss per share	2,554,397	2,453,229

Loss per share (US$)
Basic and diluted	(3.40)	(1.03)

In the current financial period and previous financial year, diluted loss per share is the same as the basic loss per share because the dilutive potential ordinary shares to be exercised are anti-dilutive as the effect of the shares conversion would be to decrease the loss per share.

Subsequent events

a) Renegotiation of commercial terms with a related party

As a result of the Covid-19 outbreak and the worsening of the overall trading conditions in the education sector, the Group is also in the process of reviewing the key terms of its operating and management agreement with its related party, TED Limited.

The outcome of the renegotiation may include changes to the existing Operating and Management and Technical Support Services agreements which could result in E Partners Limited to own, operate and manage the Wall Street English language learning centers in Myanmar. Thereafter, TED Limited will sub-lease the language center premises and provide management services to the Group.

As at reporting date, loss allowances were made for certain trade and other receivables due from related party, TED Limited.

b) Myanmar's State of Emergency Impact

On 1 February 2021, the Myanmar military announced, via the military-owned news channel Myawaddy News, that it had declared a state of emergency for a period of up to one year.

The announcement stated that the Commander-in-Chief of the Defence Services, Min Aung Hlaing, shall be in power for the duration of the state of emergency, while Vice President U Myint Shwe shall serve temporarily as President. It was reported in the Myanmar Times that, earlier in the day, State Counsellor Daw Aung San Suu Kyi, President U Win Myint and other National League for Democracy ("NLD") officials across the country were detained by the military, ahead of the first parliamentary sessions, scheduled to take place later in the day.

From a business perspective, the Group's American International School and language centers continue to deliver their education services online and offline while its security services business segment remains integral to secure embassies, NGOs and national infrastructure. The Group's Ostello Bello boutique hostels remain closed, pursuant to the active Covid-19 restrictions in Myanmar.

As part of the Group's geographical and economic risk management, the Group has mitigated these risks by diversifying through the acquisition of Wall Street English Limited Liability Company, a company incorporate in Vietnam in the business of provision of education services under the franchise of Wall Street English which will contribute significantly to the Group's estimated revenues for financial year ending 30 September 2021.

As Myanmar's state of emergency remains in place as at the date of issuance of these financial statements, the Group cannot reasonably ascertain the full extent of the probable impact of the State of Emergency disruptions on its operating and financial performance for the financial year ending 30 September 2021. The diversification of the Group's operations between Myanmar and Vietnam should help mitigate the overall Covid-19 and geographical risk exposure to the Group.

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END

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Companies

Asia Strategic Holdings Limited NPV (DI) (ASIA)

Friday, 15th November 2024

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