TechFinancials Inc. - Annual Report for the year ended 31 December 2023

TechFinancials Inc.

("TechFinancials" or the "Company")

Annual Report for the year ended 31 December 2023

Financial Highlights

·   No revenues in 2023 as expected as the Company has moved to being an investment entity.

·   Pre-tax loss attributable to shareholders of US$0.166 million (2022: loss of US$0.269 million)

·   Cash position of US$0.37million as at 31 December 2023 (2022: US$0.55 million)

·   Basic earnings per share ('EPS') (US$0.0019) (2022: (US$0.0032))

·   In 2022 and 2023, the Company acquired shares to take minority holdings in a number of companies listed on the Nasdaq, LSE and AIM (Note 7)

Operational Cost Reduction

·   The Company closed all of its subsidiaries.

Investment Activities

·   The Company used its cash to invest small amounts in several listed entities in 2023. This activity resulted in an unrealised profit of approximately US$10 thousand in the year. The Company also sold some investments, which resulted in realised profit of US$11 thousand in the year.

Chairman's Statement

2023 was a year in which the Company focused on looking for new ways to increase its value for shareholders.

The Board decided to continue to invest some of its cash in listed companies. The Company continues to look for new ways to increase its value.

Dividends

The Board will not be recommending a final dividend to the shareholders of the Company for the year ended 2023 (2022: $nil).

Outlook and current trading

This year we focused on seeking new investment opportunities to increase the value of the Company.

The Company will continue to look for investment opportunities to maximise the Company's value, leveraging its available cash.

I would like to thank our shareholders for their continued support in what has been a year of consolidation.

We look forward to updating the market on our progress in due course.

Eitan Yanuv

Independent Non-Executive Chairman

27 June 2024

Extract from the auditor opinion:

"Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the company's ability to continue to adopt the going concern basis of accounting included ascertaining the company's latest cash position and obtaining, reviewing and challenging cashflow forecasts provided by the directors covering the 12 months from the approval date of the financial statements. Upon review it was concluded that the company's cash reserves significantly exceeded the committed costs and the expected costs over this period.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue."

The directors of the Company accept responsibility for the contents of this announcement.

For further information:

Statement of Comprehensive Income

For the year ended 31 December 2023

The Notes on pages 23 to 42 are an integral part of these financial statements.

Statement of Financial Position

As at 31 December 2023

The Financial Statements were approved by the Board of Directors and authorised for issue on 27/06, 2024 and are signed on its behalf by:

…………………………………………

Director

The Notes on pages 23 to 42 are an integral part of these financial statements.

Statements of changes in equity

For the year ended 31 December 2023

The Notes on pages 23 to 42 are an integral part of these financial statements.

Statements of cash flows

For the year ended 31 December 2023

The Notes on pages 23 to 42 are an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

1.      General Information

TechFinancials Inc., (the "Company") were engaged until the end of 2020 in the development of blockchain-based digital assets solutions and licensing of financial trading platforms to businesses. Since the beginning of 2021 the Company is looking for business and investment opportunities to maximize the Company's value and leveraging its available cash. The Financial Statements presents the results of the for each of the years ended 31 December 2023 and 2022.

TechFinancials Inc. (formerly Mika Holdings Inc.) incorporated in the British Virgin Islands on 16 June 2009 under the BVI Business Companies Act, 2004. The Company is currently listed solely on the Aquis Stock Exchange.

The registered offices for the company is as follows:

TechFinancials, Inc.: Craigmuir Chambers, PO Box 71, Road Town, VG1110 Tortola, British Virgin Islands.

2.     Basis of preparation

2.1.   Basis of preparation

The Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union issued by the International Accounting Standards Board ("IASB") including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC").

The Financial Statements have been prepared under the historical cost convention, as modified by the revaluation of certain financials assets and liabilities at fair value through the statement of profit and loss.

The preparation of Financial Statements in conformity with IFRS require the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumption and estimation are significant to the Financial Statements are considered in Note 3(o).

New standards and amendments are effective since 2022, however that has no material effect on the financial statements, see Note 4.

2.2.   Basis of reporting

The financial statements of the company is prepared using consistent accounting policies.

Control is achieved where the Company is exposed, or has rights, to variable returns from its involvement with the investee entity and has the ability to affect these returns through its power over the investee. Control is lost when the Company no longer has rights to variable returns from its involvement with an investee entity and no longer has the ability

to affect those returns as it no longer has power over the investee.

3.   Summary of significant accounting policies

(a)  Currency translation

(i)    Transactions and balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those

ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non‑monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

(ii)   Foreign operations

Assets and liabilities of foreign operations are translated to USD at the rates of exchange ruling at the end of the reporting period. Revenues and expenses of foreign operations are translated at exchange rates approximating those ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity under the foreign exchange translation reserve. On the disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that particular foreign operation is reclassified from equity to profit or loss.

(b)  Current versus non-current classification

The company presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is:

(i)    Expected to be realised or intended to be sold or consumed in the normal operating cycle;

(ii)   Held primarily for the purpose of trading;

(iii) Expected to be realised within twelve months after the reporting period; or

(iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

(i)    it is expected to be settled in the normal operating cycle;

(ii)   it is primarily for the purpose of trading;

(iii) it is due to be settled within twelve months after the reporting period; or

(iv) there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

Significant accounting policies (continued)

(c)  impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Company makes an estimate of the asset's recoverable amount.

An asset's recoverable amount is the higher of an asset's or CGU's fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely dependent on those from other assets.

Where the carrying amount of an asset or cash‑generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows expected to be generated by the asset 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. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

Impairment losses are recognised in profit or loss in those expense categories consistent with the function of the impaired asset, except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case,

the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset's or cash generating unit's recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount of an asset since the last impairment loss was recognised.

If that is the case, the carrying amount of the asset is increased to its recoverable amount. This increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit and loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

(d)  Financial assets

(i)      Initial recognition and measurement

The Company applies IFRS 9 "Financial Instruments" and elected the simplified approach method.

The Company classifies its financial assets in the following categories: loans and receivables. The classification depends on the nature of the assets and the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition and this designation at every reporting date.

Significant accounting policies (continued)

Investments

Investments, which include equity and debt investments, are designated on initial recognition as financial assets at fair value through profit or loss. This measurement basis is consistent with the fact that the Company's performance in respect of its portfolio investments is evaluated on a fair value basis in accordance with an established investment strategy. When investments are recognised initially, they are measured at fair value.

(ii)     De‑recognition

Financial assets are de-recognised when the contractual rights to receive cash

flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. On de‑recognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

The Company applies IFRS 9 "Financial Instruments" and elected the simplified approach method, measuring the loss allowance in an amount equal to the lifetime expected credit losses.  An impairment loss on debt instruments measured at amortised cost is recognized in profit or loss with a corresponding loss allowance that is offset from the carrying amount of the financial asset.

At the end of each reporting period, the Company assesses whether there is objective evidence that a financial instrument has been impaired, if so, the Company performs a detailed impairment calculation to determine whether an impairment loss should be recognised. A financial asset, or a group of financial assets, is impaired, and impairment losses are incurred, only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a "loss event"), and that loss event (or events) has an impact on the estimated future cash flows of the financial asset, or group of financial assets, that can be reliably estimated.

Evidence of impairment may include indications that the receivables or a group of receivables is experiencing significant financial difficulty, default or delinquency in interest or principal repayments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For the loans and receivables category, the amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred), discounted at the financial asset's original effective interest rate.  The asset's carrying amount is reduced, and the loss is recognized in the income statement.

Significant accounting policies (continued)

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal of the previously recognised impairment loss is recognised in the income statement.

(e)  Financial Liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities and include trade and other payables and borrowings. Financial liabilities are initially measured at fair value, net of transaction costs.

Financial liabilities are subsequently measured at amortised cost using effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payment through the expected life of financial liability, or, where appropriate, a shorter period.

(f)  Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred.  Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings, using the effective interest method.

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.

Borrowing costs are recognised as an expense in the period in which they are incurred except borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period to get ready for its intended use or sale. In this case the borrowing costs are capitalised as part of the cost of such a qualifying asset.

(g)  Provisions

A provision is recognised when the Company has a present obligation, legal or constructive, as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made.

Significant accounting policies (continued)

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. Where the effect of the time value of money is material, provisions are discounted using a current pre‑tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as an interest expense.

(h)  Share capital

Ordinary shares are classified as shareholders' equity, net of transaction costs.

Proceeds from issuance of ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares or options are shown in equity as a deduction from the proceeds.

(i)   Share-based payments

Certain employees of the Company received remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are given in Note 11.

That cost is recognised in employee benefits expense, together with a corresponding increase in equity (other capital reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period).

The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Company's best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

Significant accounting policies (continued)

No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original

terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee.

Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note 13).

(j)  Current income tax and Deferred tax

Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the comprehensive income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible.

The Company's liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where its subsidiaries operate by the end of the financial period.

Deferred tax is recognised on the differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in

the computation of taxable profit and are accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Significant accounting policies (continued)

Deferred tax liabilities are recognised on taxable temporary differences arising on investment in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

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

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the financial year.

Deferred tax is charged or credited to the comprehensive income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity, or where they arise from the initial accounting

for a business combination. In the case of a business combination, the tax effect is taken into account in calculating goodwill or determining the excess of the acquirer's interest in the net fair value of the acquirer's identifiable assets, liabilities and contingent liabilities over cost.

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 Company intends to settle its current tax assets and liabilities on a net basis.

(k)  Cash and Cash equivalents

Cash and cash equivalents comprise of cash at bank and in hand and short-term deposits with an original maturity of 3 months or less.

(l)   Going Concern

The Financial Statements have been prepared under the going concern assumption, which presumes that the Company will be able to meet its obligations as they fall due for at least the next twelve months from the date of the signing of the Financial Statements.

The Financial Statements do not include any adjustments that may be required should the Company be unable to continue as a going concern.

(m)   Fair value measurements

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 under current market conditions

Significant accounting policies (continued)

The fair value of investments is first based on quoted prices, where available. Where quoted prices are not available, the fair value is estimated using consistent valuation techniques across periods of measurement.

In accordance with IFRS 13, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety.

These are described as follows:

Level 1 - Quoted market prices

Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Valuation Techniques using observable inputs

Fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly.

Level 3 - Valuation techniques using significant unobservable inputs

Fair value measurements are those derived from inputs that are not based on observable market data.

(n)  Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the operating director.

The operating director who is responsible for allocating resources and performance of operating segments, during the year was Asaf Lahav.

All operations and information are reviewed together so that at present there is only one reportable operating segment this year as a result of the cessation of trade. No comparatives have been included.

.

(o)  Critical accounting judgement and areas of key estimation and uncertainty

In the process if applying the entity's accounting policies, management makes estimates and assumptions that have an effect on the amounts recognised in the financial information. Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. The management do not consider there to be any critical accounting estimates or judgements made in the preparation of these financial statements.

4.      Changes in account policies and disclosures

i.    New standards and amendments adopted by the Company

The IASB issued various amendments and revisions to UK IAS and IFRSIC interpretations which include IFRS 3 - Reference to Conceptual Framework, IAS 37 - Onerous Contracts, IAS 16 - Proceeds before intended use, IAS 8 - Accounting estimates, IAS 12 - Deferred Tax and Annual Improvements - 2018 - 2020 Cycle. The amendments and revisions were applicable for the period ended 31 December 2023 but did not result in any material changes to the financial statements.

ii.   New standards and amendments and interpretations in issue but not yet effective or not early adopted

Standards, amendments and interpretations that are not yet effective and have not been early adopted are as follows:

The Company is evaluating the impact of the new and amended standards above which are not expected to have a material impact on the results or shareholders' funds.

5.       Expenses by nature from continuing operations:

6. Trade and other receivables

The carrying amounts of trade and other receivables approximate their fair values.

7.          Short-term investment

Short-term investments are in securities traded in Nasdaq, LSE and AIM stock exchanges. The investments are presented at their market value as at the date of the financial position.

All short-term investments are valued at Level 1 of the Fair value Hierarchy.

8.       Cash and cash equivalents

9. Trade and other payables

10.    Share capital

Share Capital - Amount subscribed for share at nominal value.

Share Premium - Amount subscribed for share capital in exercise of nominal value.

Share-based payment reserve - The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to employees, including key management personnel, as part of their remuneration.

This estimated fair value was calculated by applying a Black-Scholes option pricing model. In the absence of a liquid market for the share capital of the Company the expected volatility of its share price is difficult to calculate. Therefore, the Directors have considered the expected volatility used by listed entities in similar operating environments to calculate the expected volatility.

The expense and equity reserve arising from share-based payment transactions recognised in the year ended 31 December 2023 USD$ nil (2022: nil)

11.     Share - based payment transactions

The Company has one share-based payment arrangements ("2014 plan") which is summarised below.

Employee Stock Option Plan: 

11.1 Number of options exercised during the period

No options were exercised during the period.

11.2 Outstanding Options

The details of the outstanding options are set out below. The options were issued in 2017.

The grant date fair valuation of $0.06 per share was done in 2017 using the Black Scholes model. The model inputs were:

(i) Share price at grant date;

(ii) Weighted average exercise price;

(iii) Expected volatility;

(iv) Contractual life of 10 years; and

(v) Risk fee rate interest rate of 3.85%

12. Income tax expenses

A reconciliation of income tax expense applicable to the profit before taxation at the statutory tax rate to the income tax expense/(release) at the effective tax rate of the Company is as follows:

13. Earnings per share

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

Dilutive earnings per share are the same as basic earnings per share as all options currently issues are antidilutive in the current year

14. CEDEX Group

CEDEX Holdings Ltd. was incorporated on 30 November 2017 in Gibraltar.

On October 4th 2021 TechFinancials sold its 99.84% owned subsidiary, Cedex Holdings Limited ("Cedex"), to Lem Management Limited ("Buyer"). According to the terms of the Agreement, the Company will be entitled to future consideration upon the Buyer succeeding to raise US$20 million in a single or series of related transactions, for the future operation of Cedex, or selling Cedex for a minimum of US$2 million. In certain circumstances of a sale of Cedex, or the assets of Cedex, by the Buyer, the Company will be entitled to receive 50% of that consideration above US$ 2 million. Between US$5 million and US$50 million, the Company will be entitled to receive US$1.6 million out of the first US$5 million and 4% out of the remainder, but no more than US$2 million. US$50 million and above, the Company will be entitled to receive 4% of the proceeds.

15. Ultimate controlling party  

The Company considers that there is no ultimate controlling party of the Company

16. Related party balances and transactions   

Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party in making financial and operating decisions.

Some of the transactions and arrangements are with related parties and the effect

of these, on the basis determined between the parties, is reflected in these Financial Statements. The balances are unsecured, interest-free and repayable on demand unless otherwise stated.

During the period under review, in addition to those disclosed elsewhere in these Financial Statements, the following significant transactions took place at terms agreed between the parties:

16.1    Receivables / Payables balances

Balances with shareholders/ Directors employed by the Company are analysed as follows:

The loans bear no interest and were, subject to certain conditions, repayable in three equal instalments, out of which two were paid during July 2016 and February 2017. The remaining loans balance become repayable when the Company has operating cash inflow of $1million for two consecutive quarters. Based upon the current trading position of the company, it is not considered these will become repayable within a year.

The following was included in trade and other payables:

Fees due to key management:

Fees due to the directors:

17. Key Management Personnel  

The compensation for key management and/or Shareholders'/Directors employed by the Company is analysed as follows, and is further broken down in Note 18:

18. Key management and directors' remuneration  

Details of the nature and amount of each element of the emoluments of the directors for the years ended 31 December 2023 and 31 December 2022 were as follows:

        *Invoiced.

** Payment received through Implement Ltd company being a non-Executive chairman of board.

19.     Financial risks management

The Company is exposed to credit risk, liquidity risk, currency risk and high-risk investments. The risk management policies employed by the Company to manage these risks are discussed below:

19.1 Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company's major classes of financial assets are cash and bank balances, and high-risk investments.

As at the end of each financial year, the Company's maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position.

The carrying amount of financial assets represents the maximum credit exposure.

The maximum exposure to credit risk at the reporting date of the Company is as follows:

Cash and cash equivalents

As at 31 December 2023 and 2022, substantially all the cash and bank balances as detailed in Note 10 to the Financial Statements are held in financial institutions which are regulated and located in Singapore and England, which the management believes are of high credit quality.

The management does not expect any losses arising from non-performance by these counterparties.

The Company has no significant concentrations of credit risk. Cash is placed with established financial institutions. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.

19.2 Currency risk

Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Company's measurement currency. The Company is exposed to foreign exchange risk arising from various currency exposures primarily with respect to the Euro and GBP. The Company's management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.

The following sensitivity analysis shows the effects on net profit of a 5% and 10% increase/decrease in exchange rates versus closing exchange rates at 31 December 2023 and 31 December 2022.

The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

19.3   Liquidity risk

Liquidity risk arises from the Company's management of working capital. It is the risk that the Company will encounter difficulty in meeting its financial obligations as they fall due.

The Company's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. Trade and other payables are all payable within 12 months.

Trade and other payables

Trade payables and other payables that are not impaired are as follows:

19.4   Capital Risk

The Board's objectives when managing capital are to safeguard the Company's ability to continue as a going concern, to enable the Company to continue its investments and to maintain an optimal capital structure to reduce the cost of capital. The Company has no external borrowing and thus capital consist entirely of equity.

20.     Commitments

No capital or other commitments as at 31 December 2023.

21.     Financial assets and Liabilities:

22.     Contingencies

No contingencies as of 31 December 2023.

23.     Guarantees and lien

No guaranties for the as of 31 December 2023.

24.     Subsequent events

None.