VCI (VCIG) - 2024 Q2 - Quarterly Report

Interim Condensed Consolidated Statements of Financial Position This section presents the Group's financial position, detailing assets, liabilities, and equity as of June 30, 2024, and December 31, 2023 Assets As of June 30, 2024, the company's total assets significantly increased to RM268 million (USD56.8 million), a 127% rise from RM118 million (USD25.72 million) on December 31, 2023, driven by substantial growth in trade and other receivables and loan receivables Assets Overview | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---| | Non-Current Assets | | | | | | Financial assets (FVTOCI) | 38,368,829 | 8,360,497 | 44,375,928 | 9,407,260 | | Financial assets (FVTPL) | 72,793 | 15,861 | 74,599 | 15,814 | | Property and equipment | 3,198,123 | 696,865 | 3,765,783 | 798,309 | | Right-of-use assets | 1,203,941 | 262,337 | 871,692 | 184,790 | | Intangible assets | 4,700,894 | 1,024,316 | 7,838,734 | 1,661,734 | | Loan receivables | 21,198,300 | 4,619,070 | 39,239,492 | 8,318,386 | | Deferred tax assets | 339,650 | 74,009 | 339,650 | 72,002 | | Total Non-Current Assets | 69,082,530 | 15,052,955 | 96,505,878 | 20,458,295 | | Current Assets | | | | | | Trade and other receivables | 28,949,592 | 6,308,063 | 142,013,987 | 30,105,568 | | Loan receivables | 15,378,236 | 3,350,889 | 23,538,832 | 4,990,001 | | Cash and bank balances | 4,637,279 | 1,010,455 | 5,872,715 | 1,244,958 | | Total Current Assets | 48,965,107 | 10,669,407 | 171,425,534 | 36,340,527 | | Total Assets | 118,047,637 | 25,722,362 | 267,931,412 | 56,798,822 | - As of June 30, 2024, total assets reached RM268 million (USD56.8 million), a 127% increase from December 31, 2023[1] - Trade and other receivables within current assets significantly increased from RM28.95 million (USD6.31 million) on December 31, 2023, to RM142 million (USD30.11 million) on June 30, 2024[1] Liabilities and Equity As of June 30, 2024, total liabilities slightly increased to RM31.13 million (USD6.6 million), while total equity significantly grew to RM237 million (USD50.2 million), primarily due to increased share capital and retained earnings Liabilities and Equity Overview | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Current Liabilities | | | | | | Trade and other payables | 19,383,929 | 4,223,722 | 21,026,860 | 4,457,488 | | Warrant liabilities | 1,964,335 | 428,025 | 7,614,909 | 1,614,286 | | Lease liabilities | 710,367 | 154,788 | 638,683 | 135,395 | | Bank and other borrowings | 677,277 | 147,577 | 707,726 | 150,031 | | Income tax payable | 251,212 | 54,739 | 706,171 | 149,701 | | Total Current Liabilities | 22,987,120 | 5,008,851 | 30,694,349 | 6,506,901 | | Non-Current Liabilities | | | | | | Lease liabilities | 544,973 | 118,749 | 265,342 | 56,250 | | Bank and other borrowings | 245,322 | 53,455 | 170,444 | 36,132 | | Amounts due to related parties | 1,300,359 | 283,346 | - | - | | Total Non-Current Liabilities | 2,090,654 | 455,550 | 435,786 | 92,382 | | Total Liabilities | 25,077,774 | 5,464,401 | 31,130,135 | 6,599,283 | | Equity | | | | | | Share capital | 44,009,131 | 9,589,508 | 171,586,028 | 36,374,551 | | Capital reserve | 6,532,560 | 1,423,433 | 6,532,560 | 1,384,838 | | Fair value reserve | 1,676,880 | 365,389 | (5,341,945) | (1,132,440) | | Translation reserve | 2,696,335 | 587,526 | 5,488,773 | 1,163,566 | | Retained earnings | 42,147,317 | 9,183,823 | 64,505,004 | 13,674,424 | | Attributable to owners of the Company | 97,062,223 | 21,149,679 | 242,770,420 | 51,464,939 | | Non-controlling interests | (4,092,360) | (891,718) | (5,969,143) | (1,265,400) | | Total Equity | 92,969,863 | 20,257,961 | 236,801,277 | 50,199,539 | | Total Liabilities and Equity | 118,047,637 | 25,722,362 | 267,931,412 | 56,798,822 | - Total equity significantly increased from RM92.97 million (USD20.26 million) on December 31, 2023, to RM237 million (USD50.2 million) on June 30, 2024, driven by an increase in share capital[1] - Warrant liabilities increased from RM1.96 million (USD0.43 million) on December 31, 2023, to RM7.61 million (USD1.61 million) on June 30, 2024[1] Interim Condensed Consolidated Statements of Comprehensive Income (Unaudited) This section provides an overview of the Group's financial performance, including profit or loss and other comprehensive income, for the six months ended June 30, 2024, and 2023 Profit and Loss For the six months ended June 30, 2024, total revenue grew to RM64.75 million (USD13.73 million), a 45.6% increase year-over-year, with both profit before tax and profit for the period rising, though total comprehensive income decreased due to fair value adjustments and disposal of equity instruments in other comprehensive income Profit and Loss Overview | Indicator | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Revenue | 44,463,195 | 9,525,310 | 61,483,330 | 13,033,862 | | Revenue from related parties | - | - | 3,268,262 | 692,839 | | Total Revenue | 44,463,195 | 9,525,310 | 64,751,592 | 13,726,701 | | Other income | 1,054,906 | 225,992 | 491,401 | 104,172 | | Cost of services | (6,049,234) | (1,295,922) | (3,981,563) | (844,052) | | Depreciation | (274,425) | (58,790) | (510,568) | (108,235) | | Directors' fees | (5,435,664) | (1,164,477) | (10,672,584) | (2,262,483) | | Employees benefit expenses | (7,770,225) | (1,664,608) | (7,705,426) | (1,633,475) | | Impairment loss on trade receivables | - | - | (368,459) | (78,110) | | Rental expenses | (149,951) | (32,124) | (269,160) | (57,059) | | Legal and professional fees | (1,473,823) | (315,736) | (3,531,157) | (748,571) | | Finance cost | (15,875) | (3,401) | (28,786) | (6,102) | | Other operating expenses | (3,668,557) | (785,912) | (11,935,191) | (2,530,143) | | Profit Before Tax | 20,680,347 | 4,430,332 | 26,240,099 | 5,562,643 | | Income tax expense | (626,143) | (134,138) | (826,402) | (175,189) | | Profit for the Period | 20,054,204 | 4,296,194 | 25,413,697 | 5,387,454 | | Attributable to owners of the Company | 21,203,387 | 4,542,382 | 27,909,404 | 5,916,519 | | Non-controlling interests | (1,149,183) | (246,188) | (2,495,707) | (529,065) | | Earnings Per Share - Basic and Diluted | 0.55 | 0.12 | 0.36 | 0.08 | - Total revenue increased by 45.6% from RM44.46 million (USD9.53 million) for the six months ended June 30, 2023, to RM64.75 million (USD13.73 million) for the same period in 2024[3] - Profit before tax increased by 27.8% from RM20.68 million (USD4.43 million) to RM26.24 million (USD5.56 million)[3] - Basic and diluted earnings per share decreased from RM0.55 (USD0.12) to RM0.36 (USD0.08)[3] Other Comprehensive Income For the six months ended June 30, 2024, other comprehensive income was negative RM12.56 million (negative USD2.67 million), primarily due to fair value adjustments of financial assets and disposal of equity instruments, a stark contrast to the positive RM1.27 million (USD0.27 million) in the prior year Other Comprehensive Income Overview | Indicator | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Exchange differences arising from consolidation | 1,272,834 | 272,678 | - | - | | Fair value adjustment of financial assets (FVTOCI) | - | - | (5,536,577) | (1,173,700) | | Transferred out on disposal of equity instruments | - | - | (7,018,825) | (1,487,922) | | Total Comprehensive Income for the Period | 21,327,038 | 4,568,872 | 12,858,295 | 2,725,832 | | Attributable to owners of the Company | 22,476,221 | 4,815,060 | 15,354,002 | 3,254,897 | | Non-controlling interests | (1,149,183) | (246,188) | (2,495,707) | (529,065) | - Total comprehensive income for the period decreased by 39.7% from RM21.33 million (USD4.57 million) for the six months ended June 30, 2023, to RM12.86 million (USD2.73 million) for the same period in 2024[3] - Fair value adjustments of financial assets (FVTOCI) and disposal of equity instruments resulted in negative other comprehensive income of negative RM5.54 million (negative USD1.17 million) and negative RM7.02 million (negative USD1.49 million) respectively in H1 2024[3] Interim Condensed Consolidated Statements of Changes in Equity (Unaudited) This section details the changes in the Group's equity components, including share capital, reserves, and retained earnings, for the periods presented Equity Changes As of June 30, 2024, total equity significantly increased to RM237 million (USD50.2 million), primarily driven by substantial share capital issuance, despite reductions in fair value reserves and retained earnings due to certain adjustments Equity Changes Overview | Indicator | Jan 1, 2023 (RM) | Jun 30, 2023 (RM) | Jan 1, 2024 (RM) | Jun 30, 2024 (RM) | |:---|:---|:---|:---|:---|\n| Share capital | 13,127,427 | 37,069,050 | 44,009,131 | 171,586,028 | | Capital reserve | 6,532,560 | 6,532,560 | 6,532,560 | 6,532,560 | | Fair value reserve | - | 1,272,834 | 1,676,880 | (5,341,945) | | Translation reserve | - | - | 2,696,335 | 5,488,773 | | Retained earnings | 6,255,851 | 27,459,238 | 42,147,317 | 64,505,004 | | Total attributable to owners of the Company | 25,915,838 | 72,333,682 | 97,062,223 | 242,770,420 | | Non-controlling interests | (1,641,324) | (2,790,507) | (4,092,360) | (5,969,143) | | Total Equity | 24,274,514 | 69,543,175 | 92,969,863 | 236,801,277 | - As of June 30, 2024, share capital increased from RM44.01 million on January 1, 2024, to RM172 million, primarily due to new share issuances[5][6] - Fair value reserve changed from RM1.68 million on January 1, 2024, to negative RM5.34 million, reflecting fair value losses on financial assets[5][6] - Retained earnings increased from RM42.15 million on January 1, 2024, to RM64.51 million, mainly due to profit for the period[5][6] Interim Condensed Consolidated Statements of Cash Flows (Unaudited) This section outlines the Group's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2024, and 2023 Cash Flow Activities For the six months ended June 30, 2024, net cash outflow from operating activities was RM19.51 million (USD4.14 million), net cash outflow from investing activities was RM21.76 million (USD4.61 million), and net cash inflow from financing activities was RM40.34 million (USD8.55 million), resulting in a net decrease of RM0.93 million (USD0.2 million) in cash and cash equivalents Cash Flow Overview | Indicator | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Net cash outflow from operating activities | (17,180,181) | (3,680,494) | (19,508,769) | (4,135,668) | | Net cash inflow from/(outflow from) investing activities | 12,955,089 | 2,775,357 | (21,757,285) | (4,612,331) | | Net cash inflow from financing activities | 15,612,580 | 3,344,669 | 40,336,915 | 8,551,030 | | Net decrease/(increase) in cash and cash equivalents | 11,387,488 | 2,439,532 | (929,139) | (196,969) | | Cash and bank balances at beginning of period | 3,995,995 | 856,058 | 4,637,279 | 1,010,455 | | Cash and bank balances at end of period | 15,328,861 | 3,283,888 | 5,872,715 | 1,244,958 | - Net cash outflow from operating activities increased from RM17.18 million (USD3.68 million) in H1 2023 to RM19.51 million (USD4.14 million) in H1 2024[8] - Investing activities shifted from a net cash inflow of RM12.96 million (USD2.78 million) in H1 2023 to a net cash outflow of RM21.76 million (USD4.61 million) in H1 2024, primarily due to financial asset acquisitions and intangible asset purchases[8] - Net cash inflow from financing activities significantly increased from RM15.61 million (USD3.34 million) in H1 2023 to RM40.34 million (USD8.55 million) in H1 2024, driven by share capital issuance[8] Notes to the Unaudited Interim Condensed Consolidated Financial Statements This section provides detailed explanatory notes to the unaudited interim condensed consolidated financial statements, covering organizational information, significant accounting policies, key judgments, and specific financial instrument details 1 Organization and Principal Activities VCI Global Limited, incorporated on April 29, 2020, in the British Virgin Islands, primarily engages in business strategy consulting and technology development solutions consulting, with a group structure encompassing various operating subsidiaries in corporate finance, IT development, education, and AI services - VCI Global Limited was incorporated on April 29, 2020, in the British Virgin Islands, with its headquarters in Malaysia[11] - The Group's principal activities involve providing business strategy consulting and technology development solutions consulting services[17] - Group subsidiaries operate across diverse sectors including corporate finance, information technology development, education and training, real estate advisory, and artificial intelligence software services[14][15][16] 2 Summary of Significant Accounting Policies This section outlines the key accounting policies adopted for the unaudited interim condensed consolidated financial statements, including historical cost basis, IFRS compliance, consolidation principles, financial instrument classification, asset depreciation, revenue recognition, and risk management, ensuring transparency and consistency in financial reporting - Financial statements are prepared on a historical cost basis and comply with International Financial Reporting Standards (IFRS)[18] - The Group fully consolidates all controlled entities and eliminates all significant intercompany balances and transactions[20][21] - Financial assets are classified as measured at Fair Value Through Other Comprehensive Income (FVTOCI), Fair Value Through Profit or Loss (FVTPL), and amortized cost[28] Principal activities The company, as a holding company, and its subsidiaries primarily provide business strategy consulting and technology development solutions consulting services - The company is a holding company, with principal activities focused on providing business strategy consulting and technology development solutions consulting[17] Basis of Accounting The unaudited interim condensed consolidated financial statements are prepared on a historical cost basis in compliance with International Financial Reporting Standards (IFRS), with fair value determined by market participants' transaction prices at the measurement date - Financial statements are prepared on a historical cost basis and comply with International Financial Reporting Standards (IFRS)[18] - Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date[19] Basis of Consolidation The Group fully consolidates all controlled entities, eliminating significant intercompany balances and transactions, and treats internal reorganizations under common control accounting without recognizing new goodwill - The Group fully consolidates all controlled entities and eliminates all significant intercompany balances and transactions[20][21] - Acquisitions of entities under common control reorganization are accounted for using merger accounting, with no new goodwill recognized and assets and liabilities consolidated at pre-combination carrying amounts[22] Convenience Translation Malaysian Ringgit amounts in the financial statements are translated into US Dollars solely for reader convenience, using the noon buying rate of 1 USD = 4.7172 RM published by the US Federal Reserve Board H.10 statistical release as of June 30, 2024 - Malaysian Ringgit amounts are translated into US Dollars for convenience only, using the noon buying rate of 1 USD = 4.7172 RM as of June 30, 2024[27] Financial Assets The Group classifies financial assets as measured at Fair Value Through Other Comprehensive Income (FVTOCI), Fair Value Through Profit or Loss (FVTPL), and amortized cost, depending on the business model and contractual cash flow characteristics, with FVTOCI equity instruments initially measured at fair value plus transaction costs and subsequent fair value changes recognized in other comprehensive income - Financial assets are classified as FVTOCI, FVTPL, and amortized cost, depending on the business model and contractual cash flow characteristics[28] - FVTOCI equity instruments are initially measured at fair value plus transaction costs, with subsequent fair value changes recognized in other comprehensive income[29] Financial Liabilities and Equity Instruments The Group classifies debt and equity instruments as financial liabilities or equity based on the substance of contractual arrangements, recognizing equity instruments at proceeds net of direct issuance costs, and subsequently measuring financial liabilities (excluding derivatives) at amortized cost - Debt and equity instruments are classified as financial liabilities or equity based on the substance of contractual arrangements[32] - Equity instruments are recognized at proceeds net of direct issuance costs, while financial liabilities (excluding derivative financial instruments) are subsequently measured at amortized cost[32][33] Property and Equipment Property and equipment are initially recognized at cost and subsequently measured at cost less accumulated depreciation and impairment losses, with depreciation applied using the straight-line method and residual values, useful lives, and depreciation methods regularly reviewed - Property and equipment are initially recognized at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment losses[35] - Depreciation is applied using the straight-line method, with residual values, estimated useful lives, and depreciation methods regularly reviewed[37][38] Intangible Assets Software development costs are capitalized as intangible assets when specific criteria are met and amortized on a straight-line basis over three to five years, while development costs not meeting capitalization criteria are expensed as incurred - Software development costs are capitalized when conditions such as technical feasibility, management intention, ability to use, economic benefits, adequate resources, and reliable measurement are met[40] - Capitalized development costs are amortized on a straight-line basis over three to five years, with useful lives and amortization methods reviewed at each reporting period end[41] Trade and Other Receivables Receivables are recognized when the Group has an unconditional right to consideration, with trade receivables initially measured at transaction price and other receivables at fair value plus transaction costs, both subsequently measured at amortized cost and subject to credit loss provisions - Receivables are recognized when the Group has an unconditional right to consideration[42] - Trade receivables are initially measured at transaction price, while other receivables are initially measured at fair value plus transaction costs, both subsequently measured at amortized cost and subject to credit loss provisions[42] Impairment of Non-Financial Assets Property and equipment are tested for impairment when objective evidence suggests potential impairment, with the recoverable amount determined as the higher of fair value less costs to dispose or value in use for the asset or cash-generating unit, and impairment losses recognized in profit or loss - Property and equipment are tested for impairment when objective evidence suggests potential impairment[43] - The recoverable amount is determined as the higher of fair value less costs to dispose or value in use for the asset or cash-generating unit, with impairment losses recognized in profit or loss[43] Trade and Other Payables Trade and other payables represent the Group's liabilities for goods and services received but not yet paid for by the end of the financial year, initially recognized at fair value and subsequently measured at amortized cost - Trade and other payables represent liabilities for goods and services received but not yet paid for[45] - They are initially recognized at fair value and subsequently measured at amortized cost[45] Contract Liabilities Contract liabilities are recognized when customers pay non-refundable consideration but the Group has not yet recognized the related revenue, and are subsequently recognized as revenue when the Group satisfies its performance obligations - Contract liabilities are recognized when customers pay non-refundable consideration but the Group has not yet recognized the related revenue[46] - Contract liabilities are recognized as revenue when the Group satisfies its performance obligations[46] Bank and Other Borrowings Borrowings are initially recognized at fair value net of transaction costs and subsequently measured at amortized cost, with borrowing costs directly attributable to qualifying assets capitalized - Borrowings are initially recognized at fair value net of transaction costs and subsequently measured at amortized cost[48] - Borrowing costs directly attributable to qualifying assets are capitalized[49] Leases As a lessee, the Group recognizes right-of-use assets and lease liabilities at the commencement date of a contract, with right-of-use assets measured at cost and depreciated on a straight-line basis, and lease liabilities measured at the present value of lease payments - As a lessee, the Group recognizes right-of-use assets and lease liabilities at the commencement date of a contract[50] - Right-of-use assets are measured at cost and depreciated on a straight-line basis, while lease liabilities are measured at the present value of lease payments[50] Employee Benefits Employee benefits are recognized as an expense when incurred, unless they qualify for capitalization, and include the recognition of defined contribution plans and employee annual leave entitlements - Employee benefits are recognized as an expense when incurred, unless they qualify for capitalization[53] - This includes the recognition of defined contribution plans and employee annual leave entitlements[53][54] Provisions Provisions are recognized when the Group has a present obligation from a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made, with the provision amount being the best estimate of the consideration required to settle the present obligation - Provisions are recognized when the Group has a present obligation from a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made[55] - The provision amount is the best estimate of the consideration required to settle the present obligation[55] Revenue Recognition The Group recognizes revenue using a five-step approach: identifying the contract, identifying performance obligations, determining the transaction price, allocating the transaction price, and recognizing revenue when performance obligations are satisfied, with the timing of recognition depending on how control of services transfers to the customer - The Group recognizes revenue using a five-step approach: identifying the contract, identifying performance obligations, determining the transaction price, allocating the transaction price, and recognizing revenue when performance obligations are satisfied[57] - The timing of revenue recognition depends on whether control of services transfers to the customer over time or at a point in time[58] Cash and Cash Equivalents Cash and cash equivalents include cash on hand, bank balances, and other deposits with financial institutions that are subject to an insignificant risk of changes in value - Cash and cash equivalents include cash on hand, bank balances, and other deposits with financial institutions that are subject to an insignificant risk of changes in value[67] Share Capital Ordinary shares are classified as equity, with direct issuance costs of new ordinary shares deducted from the share capital account - Ordinary shares are classified as equity, and direct issuance costs of new ordinary shares are deducted from the share capital account[68] Income Tax Current and prior period income tax is recognized based on the expected tax payable or receivable, while deferred income tax is recognized for all temporary differences between the carrying amounts of assets and liabilities and their tax bases - Current and prior period income tax is recognized based on the expected tax payable or receivable[69] - Deferred income tax is recognized for all temporary differences between the carrying amounts of assets and liabilities and their tax bases[70] Foreign Currency Transactions The Group uses Malaysian Ringgit as its functional and presentation currency, translating foreign currency transactions at exchange rates on the transaction date with exchange differences recognized in profit or loss, and translating financial statements of Group entities with different functional currencies at reporting date exchange rates for assets and liabilities and average rates for income and expenses - The Group uses Malaysian Ringgit as its functional and presentation currency[73] - Foreign currency transactions are translated at exchange rates on the transaction date, with exchange differences recognized in profit or loss[74] - Financial statements of Group entities are translated at reporting date exchange rates for assets and liabilities, and average rates for income and expenses[75] Related Parties Related parties include individuals and their close family members who have control, joint control, or significant influence over the Group, as well as entities that are members of the same group, associates, or joint ventures, or are controlled or significantly influenced by the same party as the Group - Related parties include individuals and their close family members who have control, joint control, or significant influence over the Group[77] - Related entities include members of the same group, associates or joint ventures, and entities controlled or significantly influenced by the same party[77] Earnings Per Share Basic and diluted earnings per share are calculated by dividing profit or loss attributable to ordinary equity holders by the weighted average number of ordinary shares, with diluted earnings per share also adjusted for the effect of all dilutive potential ordinary shares - Basic earnings per share are calculated by dividing profit or loss attributable to ordinary equity holders by the weighted average number of ordinary shares[78] - Diluted earnings per share are also adjusted for the effect of all dilutive potential ordinary shares[78] Dividends Dividends payable to the company's shareholders are recognized when approved for payment - Dividends payable to the company's shareholders are recognized when approved for payment[79] Segment Reporting Operating segments are determined based on financial information regularly provided to the chief operating decision-maker for resource allocation and performance assessment, with reporting segments categorized by service type and not aggregated - Operating segments are determined based on financial information regularly provided to the chief operating decision-maker for resource allocation and performance assessment[80] - Reporting segments are categorized by service type and are not aggregated[80] 3 Critical Accounting Judgements and Key Sources of Estimation Uncertainty Management exercises judgment, estimates, and assumptions in applying accounting policies, based on historical experience and relevant factors, with key estimation uncertainties including fair value measurement of unlisted equities, expected credit loss provisions for trade and loan receivables, and depreciation of property and equipment - Management exercises judgment, estimates, and assumptions in applying accounting policies, these estimates are based on historical experience and relevant factors[81] - Key estimation uncertainties include the fair value measurement of unlisted equities, whose valuation may rely on unobservable inputs requiring significant judgment[82][83] - Expected Credit Loss (ECL) provisions for trade and loan receivables are estimated based on a provision matrix and forward-looking information, sensitive to changes in economic conditions[83][84] - Depreciation of property and equipment depends on estimated useful lives and residual values, which may be affected by usage levels and technological developments[85] 4 Financial Assets Measured at Fair Value Through Other Comprehensive Income As of June 30, 2024, financial assets measured at fair value through other comprehensive income totaled RM44.38 million (USD9.41 million), an increase from December 31, 2023, with listed equity securities of YY Group Holding Limited and unlisted equity securities of Fintech Scion Limited being major components Financial Assets Measured at Fair Value Through Other Comprehensive Income | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Listed Equity Securities | | | | | | Treasure Global Inc. | 36 | 8 | 13 | 3 | | YY Group Holding Limited | - | - | 2,449,441 | 519,257 | | Unlisted Equity Securities | | | | | | Sagtec Global Limited | 7,746,738 | 1,688,000 | 7,962,634 | 1,688,000 | | YY Group Holding Limited | 23,738,105 | 4,895,100 | - | - | | GlobexUS Holdings Corp | 6,883,950 | 1,500,000 | 7,075,800 | 1,500,000 | | Fintech Scion Limited | - | - | 26,888,040 | 5,700,000 | | Total | 38,368,829 | 8,360,497 | 44,375,928 | 9,407,260 | - As of June 30, 2024, total financial assets measured at FVTOCI were RM44.38 million (USD9.41 million), an increase from RM38.37 million (USD8.36 million) on December 31, 2023[87] - YY Group Holding Limited's equity securities are now listed equity securities following its successful NASDAQ listing in April 2024[88] - A new unlisted equity investment in Fintech Scion Limited of RM26.89 million (USD5.70 million) was added in H1 2024[87] 5 Financial Assets Measured at Fair Value Through Profit and Loss As of June 30, 2024, financial assets measured at fair value through profit and loss totaled RM0.0746 million (USD0.0158 million), primarily comprising unlisted equity investments in Zero Carbon Farms Ltd and Unique Fire Holdings Berhad, whose valuations are classified as Level 3 in the fair value hierarchy Financial Assets Measured at Fair Value Through Profit and Loss | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Beginning balance | 72,295 | 15,760 | 72,793 | 15,431 | | Exchange adjustment | 498 | 109 | 1,806 | 383 | | Ending balance | 72,793 | 15,861 | 74,599 | 15,814 | - As of June 30, 2024, total financial assets measured at FVTPL were RM0.0746 million (USD0.0158 million)[92] - These primarily include investments in 5% equity of Zero Carbon Farms Ltd (UK) and 0.1% equity of Unique Fire Holdings Berhad (Malaysia)[93] - These valuations are classified as Level 3 in the fair value hierarchy, sensitive to unobservable inputs[93] 6 Property, Plant and Equipment As of June 30, 2024, the carrying value of property, plant and equipment increased to RM3.77 million (USD0.798 million) from RM3.20 million (USD0.697 million) on December 31, 2023, mainly due to new investments and an increase in capital work-in-progress Carrying Value of Property, Plant and Equipment | Indicator | Dec 31, 2023 (RM) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|\n| Office equipment | 245,706 | 349,990 | 74,273 | | Furniture and fittings | 223,788 | 195,700 | 41,490 | | Office renovation | 1,773,926 | 1,756,800 | 372,644 | | Electrical and software | 241,444 | 256,000 | 54,377 | | Capital work-in-progress | 713,259 | 1,205,362 | 255,525 | | Total Carrying Value | 3,198,123 | 3,765,783 | 798,309 | - As of June 30, 2024, the carrying value of property, plant and equipment was RM3.77 million (USD0.798 million), a 17.7% increase from RM3.20 million (USD0.697 million) on December 31, 2023[94][95] - New investments of RM0.7467 million (USD0.1583 million) were made in H1 2024, primarily for capital work-in-progress[94] 7 Right-of-Use Assets As of June 30, 2024, the carrying value of right-of-use assets decreased to RM0.8717 million (USD0.1848 million) from RM1.2039 million (USD0.2623 million) on December 31, 2023, primarily due to depreciation and amortization Carrying Value of Right-of-Use Assets | Indicator | Dec 31, 2023 (RM) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|\n| Office properties | 955,953 | 637,481 | 135,140 | | Motor vehicles | 247,988 | 234,211 | 49,650 | | Total Carrying Value | 1,203,941 | 871,692 | 184,790 | - As of June 30, 2024, the carrying value of right-of-use assets was RM0.8717 million (USD0.1848 million), a 27.6% decrease from RM1.2039 million (USD0.2623 million) on December 31, 2023[95] - Depreciation expense for H1 2024 was RM0.3322 million (USD0.0704 million)[95] 8 Intangible Assets As of June 30, 2024, the cost of intangible assets significantly increased to RM7.84 million (USD1.66 million) from RM4.70 million (USD1.02 million) on December 31, 2023, primarily for AI-powered travel platform software and smart sales management systems Cost of Intangible Assets | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Beginning balance | - | - | 4,700,894 | 1,024,316 | | Additions | 4,700,894 | 1,024,316 | 3,009,940 | 638,078 | | Exchange adjustment | - | - | 127,900 | 27,113 | | Foreign exchange impact | - | - | - | (27,773) | | Ending balance | 4,700,894 | 1,024,316 | 7,838,734 | 1,661,734 | - As of June 30, 2024, the cost of intangible assets was RM7.84 million (USD1.66 million), a 66.8% increase from RM4.70 million (USD1.02 million) on December 31, 2023[96] - Intangible assets primarily include AI-powered travel platform software, smart sales management platform, retention management system, lending management system, and donation management system[96] 9 Deferred Tax Assets As of June 30, 2024, deferred tax assets remained stable at RM0.3397 million (USD0.072 million), consistent with December 31, 2023 Deferred Tax Assets | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Beginning/Ending balance | 339,650 | 74,009 | 339,650 | 72,002 | - As of June 30, 2024, deferred tax assets remained stable at RM0.3397 million (USD0.072 million), consistent with December 31, 2023[99] 10 Trade and Other Receivables As of June 30, 2024, total trade and other receivables significantly increased to RM142 million (USD30.11 million), a 390% rise from December 31, 2023, primarily driven by prepayments and other receivables, with expected credit loss provisions for trade receivables fully written off in H1 2024 Trade and Other Receivables | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Trade receivables - Third parties | 11,310,279 | 2,466,000 | 27,995,076 | 5,934,681 | | Trade receivables - Related parties | 2,499,319 | 544,700 | 5,531,955 | 1,172,720 | | Less: Expected credit loss provision | (2,518,122) | (548,500) | - | - | | Deposits | 4,122,755 | 898,000 | 4,518,326 | 957,841 | | Prepayments | 466,629 | 101,700 | 84,991,054 | 18,017,267 | | Other receivables | 13,068,732 | 2,848,000 | 18,977,576 | 4,023,059 | | Total | 28,949,592 | 6,308,063 | 142,013,987 | 30,105,568 | - As of June 30, 2024, total trade and other receivables were RM142 million (USD30.11 million), a 390% increase from RM28.95 million (USD6.31 million) on December 31, 2023[100] - Prepayments significantly increased from RM0.4666 million (USD0.1017 million) on December 31, 2023, to RM85 million (USD18.02 million) on June 30, 2024[100] - Expected credit loss provisions for trade receivables were fully written off in H1 2024, resulting in a zero balance at period-end[100][106] 11 Loan Receivables As of June 30, 2024, total loan receivables increased to RM63.42 million (USD13.44 million), a 72.2% rise from December 31, 2023, with a significant increase in loans to related parties and a corresponding increase in expected credit loss provisions for loan receivables Loan Receivables | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Personal loans | 2,912,547 | 634,400 | 3,482,771 | 738,313 | | Term loans | 43,339,398 | 9,446,000 | 40,241,358 | 8,530,772 | | Loans to related parties | 2,819,450 | 614,400 | 20,112,762 | 4,263,708 | | Less: Unearned interest | (12,222,634) | (2,665,000) | (417,883) | (88,587) | | Less: Expected credit loss provision | (272,225) | (59,300) | (640,684) | (135,819) | | Total | 36,576,536 | 7,970,000 | 62,778,324 | 13,308,387 | | Of which: Current assets | 15,378,236 | 3,350,889 | 23,538,832 | 4,990,001 | | Of which: Non-current assets | 21,198,300 | 4,619,070 | 39,239,492 | 8,318,386 | - As of June 30, 2024, total loan receivables were RM62.78 million (USD13.31 million), a 71.6% increase from RM36.58 million (USD7.97 million) on December 31, 2023[110] - Loans to related parties significantly increased from RM2.82 million (USD0.61 million) on December 31, 2023, to RM20.11 million (USD4.26 million) on June 30, 2024[110] - Expected credit loss provisions increased from RM0.2722 million (USD0.0593 million) on December 31, 2023, to RM0.6407 million (USD0.1358 million) on June 30, 2024[110][116] 12 Cash and Bank Balances As of June 30, 2024, cash and bank balances increased to RM5.87 million (USD1.24 million) from RM4.64 million (USD1.01 million) on December 31, 2023, though USD-denominated cash balances decreased Cash and Bank Balances | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Cash and bank balances | 4,637,260 | 1,010,455 | 5,872,715 | 1,244,958 | | Cash in stockbroking accounts | 19 | - | - | - | | Total | 4,637,279 | 1,010,455 | 5,872,715 | 1,244,958 | - As of June 30, 2024, cash and bank balances were RM5.87 million (USD1.24 million), a 26.6% increase from RM4.64 million (USD1.01 million) on December 31, 2023[117] - USD-denominated cash balances decreased from RM1.38 million (USD0.30 million) on December 31, 2023, to RM0.6662 million (USD0.1412 million) on June 30, 2024[119] 13 Trade and Other Payables As of June 30, 2024, total trade and other payables slightly increased to RM21.03 million (USD4.46 million) from December 31, 2023, with a significant rise in sundry payables and the full settlement of advances from directors Trade and Other Payables | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Trade payables | 2,326,371 | 507,000 | 1,699,707 | 360,321 | | Accruals | 6,901,199 | 1,505,000 | 2,783,291 | 590,031 | | Sundry payables | 2,592,465 | 565,000 | 16,543,862 | 3,507,136 | | Advances from directors - Subsidiaries | 7,563,894 | 1,649,000 | - | - | | Total | 19,383,929 | 4,223,722 | 21,026,860 | 4,457,488 | - As of June 30, 2024, total trade and other payables were RM21.03 million (USD4.46 million), an 8.5% increase from RM19.38 million (USD4.22 million) on December 31, 2023[120] - Sundry payables significantly increased from RM2.59 million (USD0.565 million) on December 31, 2023, to RM16.54 million (USD3.51 million) on June 30, 2024[120] - Advances from directors - subsidiaries were fully settled as of June 30, 2024, compared to RM7.56 million (USD1.65 million) on December 31, 2023[120] 14 Lease Liabilities As of June 30, 2024, total lease liabilities decreased to RM0.904 million (USD0.1916 million) from RM1.2553 million (USD0.2661 million) on December 31, 2023, primarily due to lease payments. Lease contracts are mainly for 3-year office leases Lease Liabilities | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Beginning balance | 744,959 | 162,300 | 1,255,340 | 266,120 | | Additions | 886,093 | 193,200 | - | - | | Finance cost | 30,288 | 6,600 | 24,327 | 5,157 | | Payments | (406,000) | (88,500) | (375,642) | (79,632) | | Ending balance | 1,255,340 | 273,600 | 904,025 | 191,645 | | Of which: Due within one year | 732,498 | 159,600 | 664,284 | 140,823 | | Of which: Due between one and five years | 564,483 | 123,100 | 280,467 | 59,456 | - As of June 30, 2024, total lease liabilities were RM0.904 million (USD0.1916 million), a 28% decrease from RM1.2553 million (USD0.2661 million) on December 31, 2023[123] - The weighted average incremental borrowing rate for lease liabilities is 4.31%[124] 15 Bank and Other Borrowings As of June 30, 2024, total bank and other borrowings slightly decreased to RM0.8782 million (USD0.1862 million) from December 31, 2023, with bank borrowings comprising three loans at interest rates between 3.50% and 5.00% with various collateral, and other borrowings representing redeemable preference shares issued by a subsidiary Bank and Other Borrowings | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Bank borrowings - Current | 77,277 | 16,800 | 107,726 | 22,837 | | Bank borrowings - Non-current | 245,322 | 53,500 | 170,444 | 36,132 | | Total Bank Borrowings | 322,599 | 70,300 | 278,170 | 58,969 | | Other borrowings - Current | 600,000 | 130,700 | 600,000 | 127,194 | | Total Borrowings | 922,599 | 201,000 | 878,170 | 186,163 | - As of June 30, 2024, total bank and other borrowings were RM0.8782 million (USD0.1862 million), a 4.8% decrease from RM0.9226 million (USD0.201 million) on December 31, 2023[127] - Bank borrowings include three loans with interest rates ranging from 3.50% to 5.00%, secured by corporate guarantees, third-party company guarantees, personal guarantees from directors, and life insurance policy pledges[128] - Other borrowings represent redeemable preference shares issued by a subsidiary with a nominal value of RM0.6 million[129] 16 Warrant Liabilities As of June 30, 2024, total warrant liabilities significantly increased to RM7.61 million (USD1.61 million) from RM1.96 million (USD0.416 million) on December 31, 2023, primarily due to new warrant issuances, despite some warrants being exercised Warrant Liabilities | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Beginning balance | - | - | 1,964,335 | 416,420 | | Additions | 1,964,335 | 416,420 | 13,043,907 | 2,765,180 | | Exercised | - | - | (7,448,077) | (1,578,919) | | Exchange adjustment | - | - | 54,744 | 11,605 | | Ending balance | 1,964,335 | 416,420 | 7,614,909 | 1,614,286 | - As of June 30, 2024, total warrant liabilities were RM7.61 million (USD1.61 million), a 287% increase from RM1.96 million (USD0.416 million) on December 31, 2023[130] - On January 17, 2024, the company issued 2.2 million warrants A and warrants B to shareholders, with an exercise price of USD1.25 per share[131] - Warrants are classified as derivative financial liabilities and their fair value is estimated using the Black-Scholes pricing model[131][132] 17 Share Capital As of June 30, 2024, share capital significantly increased to RM172 million (USD36.37 million), a 290% rise from RM44.01 million (USD9.33 million) on December 31, 2023, primarily due to multiple rounds of new share issuances in H1 2024, including follow-on public offerings, warrant exercises, and shares issued for services and collateral Share Capital | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Beginning balance | 13,127,427 | 2,861,000 | 44,009,131 | 9,329,503 | | Shares issued in 2023 | 30,881,704 | 6,730,000 | - | - | | Shares issued in 2024 | - | - | 127,576,897 | 27,045,048 | | Ending balance | 44,009,131 | 9,589,508 | 171,586,028 | 36,374,551 | - As of June 30, 2024, share capital was RM172 million (USD36.37 million), a 290% increase from RM44.01 million (USD9.33 million) on December 31, 2023[134] - Multiple rounds of new share issuances occurred in H1 2024, including follow-on public offerings, warrant exercises, and shares issued for services and collateral[135] 18 Capital Reserve Capital reserve is related to merger reserve, representing the effect of changes in ownership interests in subsidiaries without loss of control, reflecting the economic substance of combined entities under common control - Capital reserve is related to merger reserve, representing the effect of changes in ownership interests in subsidiaries without loss of control[136] - Merger reserve reflects the economic substance of combined entities under common control[136] 19 Fair Value Reserve Fair value reserve represents the cumulative fair value changes (net of tax) of financial assets measured at fair value through other comprehensive income, which are distributable upon disposal - Fair value reserve represents the cumulative fair value changes (net of tax) of financial assets measured at fair value through other comprehensive income[137] - This reserve is distributable upon disposal of the financial assets[137] 20 Translation Reserve Translation reserve includes all foreign exchange differences arising from the translation of financial statements of foreign operations whose functional currency is different from the Group's presentation currency, and is non-distributable - Translation reserve includes all foreign exchange differences arising from the translation of financial statements of foreign operations whose functional currency is different from the Group's presentation currency[138] - This reserve is non-distributable[138] 21 Revenue For the six months ended June 30, 2024, total revenue increased to RM64.75 million (USD13.73 million), a 45.6% rise year-over-year, driven by significant growth in business strategy consulting services, while revenue from technology development, solutions, and consulting services decreased Revenue Composition | Revenue Source | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Business strategy consulting | 20,789,179 | 4,454,000 | 52,647,479 | 11,160,748 | | Technology development, solutions and consulting | 19,733,018 | 4,229,000 | 8,250,188 | 1,748,959 | | Interest income | 1,118,641 | 240,000 | 3,193,950 | 677,086 | | Others | 2,822,357 | 605,000 | 659,975 | 139,908 | | Total | 44,463,195 | 9,525,310 | 64,751,592 | 13,726,701 | - Total revenue increased by 45.6% from RM44.46 million (USD9.53 million) in H1 2023 to RM64.75 million (USD13.73 million) in H1 2024[139] - Revenue from business strategy consulting services significantly increased by 153% from RM20.79 million (USD4.45 million) to RM52.65 million (USD11.16 million)[139] - Revenue from technology development, solutions, and consulting services decreased by 58.2% from RM19.73 million (USD4.23 million) to RM8.25 million (USD1.75 million)[139] 22 Other Income For the six months ended June 30, 2024, other income decreased to RM0.4914 million (USD0.1042 million), a 53.4% decline year-over-year, primarily due to the absence of gains from disposal of financial assets present in the prior period Other Income Composition | Income Source | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Interest income | 942 | 202 | 3,771 | 799 | | Gain on disposal of financial assets (FVTOCI) | 780,319 | 167,167 | - | - | | Foreign exchange gain | 158,801 | 34,000 | 352,100 | 74,642 | | Reimbursement of expenses income | 104,839 | 22,500 | 44,377 | 9,408 | | Reversal of impairment loss on trade receivables | - | - | 64,384 | 13,649 | | Others | 10,005 | 2,100 | 26,769 | 5,674 | | Total | 1,054,906 | 225,992 | 491,401 | 104,172 | - Other income decreased by 53.4% from RM1.05 million (USD0.226 million) in H1 2023 to RM0.4914 million (USD0.1042 million) in H1 2024[140] - H1 2023 included RM0.78 million (USD0.167 million) in gains from disposal of financial assets, which was absent in H1 2024[140] 23 Cost of Services For the six months ended June 30, 2024, cost of services decreased to RM3.98 million (USD0.844 million), a 34.2% decline year-over-year, primarily due to reduced consulting and IT fees Cost of Services Composition | Cost Item | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Consulting fees | 5,676,167 | 1,216,000 | 3,465,205 | 734,589 | | IT expenses | 180,669 | 38,700 | 42,003 | 8,904 | | Training costs | 192,398 | 41,200 | 47,635 | 10,098 | | Others | - | - | 426,720 | 90,461 | | Total | 6,049,234 | 1,295,922 | 3,981,563 | 844,052 | - Cost of services decreased by 34.2% from RM6.05 million (USD1.30 million) in H1 2023 to RM3.98 million (USD0.844 million) in H1 2024[142] - Consulting fees decreased from RM5.68 million (USD1.22 million) to RM3.47 million (USD0.7346 million)[142] 24 Employees Benefit Expenses For the six months ended June 30, 2024, employee benefit expenses slightly decreased to RM7.71 million (USD1.63 million), with salaries and wages being the main component, and directors' remuneration and benefits also included Employee Benefit Expenses Composition | Expense Item | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Salaries and wages | 6,860,747 | 1,470,000 | 7,064,194 | 1,497,540 | | Defined contribution plans | 514,817 | 110,300 | 593,912 | 125,904 | | Other short-term benefits | 394,661 | 84,600 | 47,320 | 10,031 | | Total | 7,770,225 | 1,664,608 | 7,705,426 | 1,633,475 | - Employee benefit expenses slightly decreased by 0.8% from RM7.77 million (USD1.66 million) in H1 2023 to RM7.71 million (USD1.63 million) in H1 2024[143] - Directors' remuneration and benefits slightly increased from RM1.88 million (USD0.403 million) in H1 2023 to RM1.89 million (USD0.4015 million) in H1 2024[144] 25 Finance Cost For the six months ended June 30, 2024, finance cost increased to RM0.0288 million (USD0.006102 million), an 81.3% rise year-over-year, primarily due to increased interest expenses on bank borrowings and operating lease obligations Finance Cost Composition | Cost Item | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Interest expense on bank borrowings | 1,246 | 267 | 4,446 | 942 | | Interest expense on operating lease obligations | 14,629 | 3,133 | 24,327 | 5,157 | | Bank charges on investment securities | - | - | 13 | 3 | | Total | 15,875 | 3,401 | 28,786 | 6,102 | - Finance cost increased by 81.3% from RM0.0159 million (USD0.003401 million) in H1 2023 to RM0.0288 million (USD0.006102 million) in H1 2024[146] - Interest expense on bank borrowings increased from RM0.001246 million (USD0.000267 million) to RM0.004446 million (USD0.000942 million)[146] 26 Other Operating Expenses For the six months ended June 30, 2024, other operating expenses significantly increased to RM11.94 million (USD2.53 million), a 225% rise year-over-year, with marketing, travel, and office expenses being the main drivers of this growth Other Operating Expenses Composition | Expense Item | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Regulatory compliance and statutory costs | 103,237 | 22,100 | 77,577 | 16,446 | | Regulatory advisory fees | - | - | 776,000 | 164,504 | | Marketing expenses | 419,013 | 89,800 | 4,162,840 | 882,481 | | Travel expenses | 512,997 | 109,900 | 1,164,755 | 246,917 | | Office expenses | 561,345 | 120,300 | 1,406,833 | 298,235 | | Total | 3,668,557 | 785,912 | 11,935,191 | 2,530,143 | - Other operating expenses significantly increased by 225% from RM3.67 million (USD0.786 million) in H1 2023 to RM11.94 million (USD2.53 million) in H1 2024[147] - Marketing expenses increased from RM0.419 million (USD0.0898 million) to RM4.16 million (USD0.8825 million)[147] - Travel expenses increased from RM0.513 million (USD0.1099 million) to RM1.16 million (USD0.2469 million)[147] 27 Profit Before Income Tax For the six months ended June 30, 2024, profit before income tax increased to RM26.24 million (USD5.56 million), a 27.8% rise year-over-year, achieved after deducting legal and professional fees and directors' fees Profit Before Income Tax Related Expenses | Expense Item | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Legal and professional fees | 1,473,823 | 315,736 | 3,531,157 | 748,571 | | Directors' fees | 5,435,664 | 1,164,477 | 10,672,584 | 2,262,483 | - Profit before income tax increased by 27.8% from RM20.68 million (USD4.43 million) in H1 2023 to RM26.24 million (USD5.56 million) in H1 2024[151] - Legal and professional fees increased from RM1.47 million (USD0.3157 million) to RM3.53 million (USD0.7486 million)[149] - Directors' fees increased from RM5.44 million (USD1.16 million) to RM10.67 million (USD2.26 million)[149] 28 Income Tax Expenses For the six months ended June 30, 2024, income tax expenses increased to RM0.8264 million (USD0.1752 million), a 32% rise year-over-year, with a difference between profit before tax and theoretical tax at Malaysia's standard rate primarily influenced by non-taxable income and non-deductible expenses Income Tax Expenses | Indicator | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Current income tax expense | 800,000 | 171,300 | 826,402 | 175,189 | | Over-provision in prior years | (173,857) | (37,200) | - | - | | Total Income Tax Expenses | 626,143 | 134,138 | 826,402 | 175,189 | - Income tax expenses increased by 32% from RM0.6261 million (USD0.1341 million) in H1 2023 to RM0.8264 million (USD0.1752 million) in H1 2024[150] - The difference between profit before tax and theoretical tax at Malaysia's standard rate of 24% is primarily influenced by non-taxable income and non-deductible expenses[151] 29 Operating Lease For the six months ended June 30, 2024, short-term lease expenses increased to RM0.2692 million (USD0.0571 million) year-over-year, as the Group opts not to recognize right-of-use assets and lease liabilities for short-term leases with a term of 12 months or less Short-Term Lease Expenses | Indicator | Jun 30, 2023 (RM) | Jun 30, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Short-term leases | 149,951 | 32,124 | 269,160 | 57,059 | - For the six months ended June 30, 2024, short-term lease expenses were RM0.2692 million (USD0.0571 million), a 79.5% increase from RM0.15 million (USD0.0321 million) in the prior year[151] - The Group opts not to recognize right-of-use assets and lease liabilities for short-term leases with a term of 12 months or less[151] 30 Significant Related Party Transactions As of June 30, 2024, total amounts due from related parties significantly increased to RM25.64 million (USD5.44 million), primarily due to loans and financing services to Reveillon Group Sdn Bhd and XVI Troika Sdn Bhd, while amounts due to related parties were fully settled Related Party Balances | Indicator | Dec 31, 2023 (RM) | Dec 31, 2023 (USD) | Jun 30, 2024 (RM) | Jun 30, 2024 (USD) | |:---|:---|:---|:---|:---|\n| Amounts Due From Related Parties | | | | | | Trade receivables | 2,499,319 | 544,700 | 5,531,955 | 1,172,720 | | Loans, advances and financing | 2,819,450 | 614,400 | 20,112,762 | 4,263,708 | | Total Amounts Due From Related Parties | 5,318,769 | *