Annual Report 2019

Contents

4 At a glance

5 Message from our Chairman

8 Message from our CEO

12 Corporate governance

36 Financial report 2019

38 Consolidatedstatementoffinancialposition

40 Consolidatedstatementofprofitorlossandothercomprehensiveincome

41 Consolidated statement of changes in equity

42 Consolidatedstatementofcashflows

43 Notestotheconsolidatedfinancialstatements

82 Independent auditor’s report

86 Contact and imprint

At a glance

Unique users per month

Number of employees

Revenue per month in USD

2.0+ million unique users annually

Jakarta office: 20Seoul office: 4Zurich office: 3Global: 11

USD 6.5+ million annually

Experiencing steady growth

across Asia

Our partners are spread over Indonesia, China, Hong Kong, Taiwan and South Korea

Transactions

Partner merchants

100,000+

38

500,000+

650,000+

150+

5

Dear Shareholders,

Iamproudtopresentourfirstannualreportfollowingthe

listingofAchikoLimitedonSIX,theSwissStockExchange,

in November 2019.

WhenIwasinvitedtojointheBoardofDirectors,Ididso

becauseIsawanenormousopportunityinofferingmuch

neededfintechservicesinmarketsthathavelargelybeen

ignoredbysomeoftheworld’slargestplayersinthisfield.

Achiko’s current addressable market of South-East Asia and

Indiaconsistsofapopulationofapproximatelytwobillion

people,manyofwhomhavenotusedfintechservicesor

haveanyrelationshipswithbanks.

Thisgrowing,enthusiastic,engagedpopulationofmobile

internet users is not tethered to computers or tempted by

traditional banking services. Many of them are reluctant or

are too remote to set foot in a traditional bank. As a result,

Achiko’ssuiteofproductswillbethefirstexperiencewith

fintechservicesformanyofthemandperhapstheironly

one.AsAchikocontinuestobuildoutitsextensibleandmul-

tifaceted platform for payments, entertainment and com-

munity,thoseconsumerswillbeabletogetthefinancial

andotherservicestheywantfromasingleplatform–when-

evertheyneedthemandwherevertheymaybe.

A year of transformation

LastyearwasatransformativeyearforAchiko.In2019,in

additiontoworkingonitspaymentbusiness,thecompany

focussed on creating an end-to-end solution that could dis-

rupt the market by evolving from a largely single-product

payments business focussed on Indonesia to a global, mul-

tifaceted payments, entertainment and community plat-

form business targeting South-East Asia and India. Progress

wasperhapsmostvisibleinthemobilewalletplatformthe

companycreatedlastyear,whichwassubsequentlypro-

gressedbytheMoUthatwesignedwithHypothekarbank

LenzburgAGandinIndonesiawiththeMoUthatwesigned

withDOKU(formerlyknownasPTNusaSatuIntiArtha).In

2020,weexpectthecompanytoaddarangeofsynergistic

servicestoitsextensibleplatform,includingpayments,con-

sumer credit, savings, loans, e-commerce, gaming, commu-

nity and chat offerings.

Achikoisapracticalinnovator.BythatImeanthatAchiko

innovates by taking proven solutions and business mod-

els from developed markets such as the USA and Europe

andthentailoringthosesolutionstothespecificneedsof

customers in each of the company’s target markets in Asia.

Achiko differentiates its products for the cultural and taste

preferencesofeachcountryandregioninwhichitoperates.

Thecompanydoesnotbelieveinthe‘onesizefitsall’ap-

proachthatmanyinternetcompaniesadopt,whichgivesit

a strong competitive advantage in successfully responding

to the important demographic, technological and regula-

tory changes happening across Asia. These changes have

createdanamazingopportunityforAchikoasourextensible

platformallowsustocreateuniqueappsandexperiences

forconsumerswhilecreatingvalueforourshareholdersand

partners.

Looking ahead

Despitetheexpectedheadwindsofthecomingyear,pri-

marilyasaresultoftheCOVID-19pandemic,Ibelievethat

Message from our Chairman

Allen Wu, Chairman

6 Message from our Chairman

2020willbeaseminalyearforAchiko.Thequalityandexpe-

rience of the management team has enabled us to build a

more resilient company and to strengthen our foundations.

Thecompany’sstrategyalignswithtwoimportanttrends.

Thefirsttrendistheemergenceofathrivingmiddleclass

inourtargetmarkets,whichhasgivenconsumersalarger

disposableincomeandwithitagreaterneedforfintech

services. The second trend is the mass adoption of smart-

phones,whichisincreasingdemandforleisureservicessuch

asgamingandsocialnetworkingasusershavemovedparts

of their lives to the online sphere.

Ibelievethatourexpectedsalessuccesswillalsoresult

fromourrelationshipswiththosebusinesspartners,some

ofwhicharealsoshareholders.MNCGroup(PTMediaNu-

santaraCitraTbk)isSouth-EastAsia’slargestandmostin-

tegratedmediagroupandalsoasignificantshareholderin

Achiko.MNCwillbeprovidingairtimeandmediaplacement

in Indonesia for Achiko to promote our products and servic-

es.MNCwasalreadyamajorshareholderwhenwelistedour

sharesonSIXSwissExchangelastyearanditisarealvoteof

confidencethatMNChasrecentlyelectedtoinvestanother

USD2millioninourcompany.

Addressable market

Europe addressable market – 600mn – E-commercemarket>USD621bnin2019. – LeverageSwitzerlandasaninnovation centreforfintechservices

– Developoperationaltemplatefordigital financialservicesplatformwith Swissbank(HBL)

– Subsequent rollout to South-East Asia and then Europe

Emerging addressable markets (South Asia, South-East Asia) – 2bnGeographicalexpansionto: – Thailand – Philippines – Vietnam – Myanmar

Indonesia addressable market – 260mn – Transformation of Mimopay to AchikoPay – Rollout of community and e-commerce services – Deliveryofsocialappandintegrateddigitalwallet – E-commercemarketin2019was>USD5.8bn.Broaderplatformisaimingtocapture>1%ofthatmarketoverthenext24months

2020

2021 – 2022

2022 – 2023

Beyond

Prioritisation:

7Message from our Chairman

Your support is key

Thiscompanywouldnotbewhereitistodaywithoutthe

determination of our team and the support of our partners,

shareholdersandcustomers.OnbehalfoftheBoardofDi-

rectors,Iwouldliketothankeveryonewhohasplayedapart

intheevolutionofthisbusiness.Asnotedearlier,2019wasa

yearoftransformationforAchiko–atransformationmade

possiblebecauseofthepeoplewhobelievedinourcapabili-

ty and the management team’s dedication to ensuring that

the company succeeds.

Iamproudtosaythatin2020,thepotentialthatIsaw

inthebeginningofmytenurewithAchikoLimitedhas

startedtobecomeareality.Ihaveneverbeenasexcited

about the future of this company as I am today. There is

stillplentyofworktobedone,butIamproudofwhatwe

haveachievedandlookforwardtoheadingintothefuture

alongsidesuchanexceptionalandinspiringteam.

Allen Wu

Non-ExecutiveChairman

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8

Kenneth Ting, CEO

Dear Shareholders,

When my co-founder, Steven Goh, and I founded Achiko

Limitedin2018,wesawaglobalopportunitypresentedby

demographic, technological and regulatory changes hap-

pening across Asia. The burgeoning middle class in Asia

nowhasagrowingamountofdisposableincomeandthus

aneedforinnovativefintechservicestohelpthembet-

ter manage their money. Moreover, the mass adoption of

smartphones and the accompanying technological changes

haveledtoanexplosionindemandforleisureservicessuch

asgamingandsocialnetworking.Yetthereiscurrentlyno

unifiedpayments,entertainmentandcommunityplatform

in many parts of Asia.

Achiko intends to become that platform. Recent regulatory

changesinmanyAsiancountriesmakeitpossibleforfin-

techcompaniestoprovidebankingserviceswithouthaving

millions of dollars of paid-up capital in reserve. This develop-

ment has given us a clear and promising direction for the

future. Over the past year, Achiko has invested considerable

time and effort in building a versatile payment, entertain-

ment and community platform. This platform is built on a

solid foundation of established and secure payment tech-

nologies,anexperiencedmanagementteam,skilledtal-

entandinvaluablestrategicrelationships.ThenewAchiko

platformtobelaunchedin2020willallowustoservethe

approximatelytwobillionpeoplewhoresideinSouth-East

Asia and India by capitalising on synergistic offerings. Those

offerswillincludepayments,consumercredit,savings,loans,

e-commerce, gaming, community and chat services that are

increasinglyvitaltotheengaged,enthusiasticandgrowing

numberofunbankedandunderbankedmobileuserswho

virtually live online.

MESSAGE FROM OUR CEO

A unique place to pay, play and stay

Our strategy of building Achiko into a multifaceted pay-

ments, entertainment and community platform business

involvesextendingandexpandingonthecompany’sfintech

experienceasagamespaymentgatewaytocreateaunique

“pay, play and stay” platform.

Technology advances and regulatory changes have created

anopportunityforustoprovideinnovativenon-bankingfi-

nancial services. To monetise our users and add value for our

partnersandshareholders,wewillofferusersmanywaysto

pay for a variety of products and services, both on and off our

platform. This building process started in 2019 and has con-

tinuedinQ1of2020.Consumercredit,savingsandwealth

managementproductswillbeaddedinQ2andQ3of2020.

Additionally,AchikoID,whichisasinglesign-onregistra-

tionsystem,willbelaunchedinQ2of2020.AchikoIDwill

allowAchikouserstoeasilyregisteronpartnerappswithout

disclosingtheirAchikopasswordandallowuserstoshare

in-app information securely across the Achiko ecosystem.

Thisintegrationpointwillnotonlymakeiteasyforusersto

paywithourplatformbutalsoallowourplatformtointeract

withpartnerappsbyprovidinguserswithrewardpointsand

gifts,leaderboardsandothergamificationopportunities

basedonfactorssuchastheusersprofileandin-appactivity.

Theextensibleplatformencouragesfrequentusage,provid-

ingouruserswithwaystoplayandconnectingthemwith

compellingapplicationsandexperiencesthatwilldrivesales

andgrowthecompany’soperatingmargin.

The maturity in digital services means that consumers are

nowchoosingservicesthathavecommunityandsocialele-

9Message from our CEO

ments.Toscaletheplatformtomillionsofusers,wewillen-

sure our platform is a highly engaging place that offers uses

many reasons to stay on our platform. The Achiko platform

willbealivelyandappealingenvironmentforconnecting

withfriends,familyandcommunitymembers.Socialand

gamingfeatureswillbeaddedtotheplatforminQ3andQ4

of2020,extendinginto2021.

Financial highlights

AshighlightedbyourChairmanAllenWu,2019wasayearof

transformationforAchiko.Inthepastyear,asidefromwork-

ing on improving the game payment business and listing at

SIXSwissExchange,managementfocusedonevolvingthe

payment platform into a multifaceted platform business.

Despitethedifficulttradingconditionsin2019,Iampleased

that the cash-constrained Mimopay business acquired in

2018wassuccessfullyrebrandedtoAchikoPayinDecember

2019andprovidesuswithasolidbaseforgrowthin2020.

A lotofprogresswasmade in2019onsecuringstrate-

gicpartnershipsandbuildingthesoftwareplatform.As

planned,thenewproductsandservicesthatcomefrom

thoseeffortsareexpectedtobelaunchedin2020.Asare-

sult,thefinancialhighlightsbelowlargelyreflecttheresults

from the AchikoPay business only.

TheAchikoPaybusinesssawintensepricecompetitionin

2019.Basedonacomparisonofthe2019revenueassetout

intheconsolidatedstatementofprofitorlossandother

comprehensiveincomefortheyearended31December

ACHIKO servicesCustomerandmerchantservicesincluding: – e-commerce – Billpayments – Payroll advance – e-sports – UserIDandverification(KYC)

Partner services – Buynow,paylater – Games & e-sports – Micro-insurance – Cashwithdrawals – Media and other content

MOX/SOSV builds strategic partnerships betweenitsecosystemofinvesteecompanieswhichcreates valuable synergies in South-East Asia and beyond

Digital Financial Services Platform

Achiko services

Play

ID

Wallet

EarlyPay

Chat

Payment methods

Partner services

The new Achiko platform

DOKU

10 Message from our CEO

2019 compared to the 2018 revenue as set out in the table

forGrouprevenueandGroupprofitandlossonacombined

basisinNote4oftheconsolidatedfinancialstatementsfor

theyearended31December2018,revenuedecreasedby

14%toUSD6.47mfromUSD7.48m.Duetofundingcon-

straintsduringmostof2019,wewereunabletoeffectively

competefornewbusinessandlostsomelargeandhigh-

erprofitmargincustomerstobetterfundedcompetitors

because they could offer superior payment terms. This re-

sultedinadecreaseingrossmarginonrevenuefrom8%to

4%andgrossprofitdecreasedby50%toUSD0.29m1 from

USD0.58m2.Thisandthehigherexpensesduetotransform-

ing the business and becoming listed on SIX also meant

thatearningsbeforeinterestandtax(EBIT)(corresponding

tolossfromoperation)decreasedby94%toUSD −6.29m3

fromUSD  −3.23m4 and net loss after interest and tax

(correspondingtolossfortheyear)increasedby117%in2019

toUSD−6.92m5fromUSD−3.18m6.

Operatingexpensesincreasedby72%toUSD6.58m7 from

USD3.81m8, largely due to the increase in salary cost to sup-

portthetransitionofthebusiness.Therewerealsosignifi-

cant restructuring and administrative costs related to the

stock market listing of Achiko in 2019. Further, in 2019, Achiko

settled its obligations under a promissory note agreement

(seeNote18).IfEBIT(correspondingtolossfromoperation)is

“normalised” by adding back one-off listing and restructuring

costsofapproximatelyUSD2.62mandtheincreaseinsalaries

ofUSD0.78min2019,thentheEBIT(correspondingtoloss

fromoperation)beforeone-offcostsandtheincreaseinsal-

ariesis-USD2.88m.Thisrepresentsanimprovementof11%.

Ourbalancesheetstrengthenedconsiderablyin2019.Based

ontheconsolidatedstatementoffinancialposition,total

equityimprovedby405%toUSD1.90mfrom-USD0.63m.

Trade creditors and trade payables and other payables re-

mainedrelativelyconstant.Cashprovidedbyfinancingac-

tivitiesincreasedby144%toUSD7.89m9fromUSD 3.23m10

and cashonhandand inbanks increasedby 225% to

USD 0.59mfromUSD0.18mbasedontheconsolidated

statementoffinancialposition.

BasedontheheadlinefinancialresultsoftheAchikoPay

business,itmayseemthatAchikohashadasomewhat

rockystartasapubliclylistedcompany.However,wehave

many reasons to be optimistic about the coming year. The

fundingrestraintswehadduringmostoflastyearwerere-

solved shortly before the company’s listing on SIX last No-

vember.Theone-offcostsoutlinedabovewill,bynature,

notaffectthisyear.Beyondthat,wehaveahostofstrong

partnershipsandfutureannouncementsthatreflectthe

value and promise of our business and the fundamental

soundnessofthecompany’snewdirection.

Acquisitions and strategic relationships

Strategicrelationshipswillbeanimportantkeytooursuc-

cessinexpandingthecapabilitiesanduserbaseofthe

Achikoplatform,whichhasitsrootsintheMimopaybusi-

nessweacquiredin2018.Thatacquisitionbroughtusa

gamespaymentgatewaywithabroadreachacrossIndo-

nesiaandstrongrelationshipswithseveraldozengame

publishers.InJune2018,thecompanyacquiredKryptonite

KoreaLtd,aSouthKoreandigitaltechnologycompanywith

deeptechnicalexpertiseinplatformdevelopment,social

entertainment and blockchain payment technologies. Our

ChiefTechnologyOfficer,ChunhyukChongandseveraloth-

ermembersoftheKryptoniteteam,forexample,werein-

volvedintheearlydevelopmentofKakaoTalk,thetopsocial

mediaandpaymentsplatforminSouthKorea,whichisused

monthlybyapproximately85%oftheSouthKoreanpopula-

tion.WeexpecttolaunchAchiko’ssocialnetworkandchat

platformin2020.InAugust2018,wesignedapartnership

agreementwithMOX,amobile-onlytechnologyaccelerator.

This agreement gives Achiko access to the “best of breed”

app and game investee companies in the MOX portfolio.

Partneringwiththesecompanieswillallowustoensureour

customershaveanever-endingstreamofnewandunique

experiencesontheAchikoplatform.

1. Basedonconsolidatedstatementofprofitorlossandothercomprehensiveincome.2. BasedonthetableforGrouprevenueandGroupprofitandlossonacombinedbasisinNote4oftheconsolidatedfinancialstatements.3. Basedonconsolidatedstatementofprofitorlossandothercomprehensiveincome.4. BasedonthetableforgrouprevenueandGroupprofitandlossonacombinedbasisinNote4oftheconsolidatedfinancialstatements.5. Basedonconsolidatedstatementofprofitorlossandothercomprehensiveincome.6. BasedonthetableforGrouprevenueandGroupprofitandlossonacombinedbasisinNote4oftheconsolidatedfinancialstatements.7. Basedonconsolidatedstatementofprofitorlossandothercomprehensiveincome.8. BasedonthetableforGrouprevenueandGroupprofitandlossonacombinedbasisinNote4oftheconsolidatedfinancialstatements.9. Basedontheconsolidatedstatementofcashflows.10. BasedonthetableforGroupcashflowonacombinedbasisinNote4oftheconsolidatedfinancialstatements.

11Message from our CEO

With those important acquisitions and agreements in

place, Achiko signed a memorandum of understanding in

November2019withHypothekarbankLenzburgAG(HBL)

toprogressthedeliveryofAchiko’sdigitalwalletandfinan-

cialservicesappinSwitzerland.HBLisoneofSwitzerland’s

financialinstitutionsengagedintheongoingdigitalisation

offinancialservices.Asaresultofthispartnership,Swiss

usersoftheforthcomingAchikodigitalwalletwillauto-

maticallybecomeHBLcustomersaswellandhaveabank

accountwithHBL.ThisHBLbankaccount,whichwillbe

tailoredtotheAchikodigitalwallet,willgiveusersaccess

toarangeofproductsandservices.Theywillincludeac-

cesstocurrencyheldinauser’sHBLbankaccount,digital

commodities, ‘Achiko’ co-branded debit or prepaid cards

offeredbyHBL,andavarietyofpaymentmechanismsen-

ablingfundstobe‘toppedup’fromtheHBLaccounttoa

user’sAchikowallet.WhilstEuropeisnotourfocalmar-

ketcurrently,Switzerlandservesasagoodtestingground

fortheproductsandservicesthatweintendtolaunchin

South-East Asia and India, due to its smaller size and ma-

turebankingandfintechsector.

InDecember2019,Achikosignedamemorandumofunder-

standingwithEmpatKali(PTEmpatKaliIndonesia),which

willallowAchikotooffer‘buynow,paylater’servicestoitsIn-

donesianusers.EmpatKali’stechnologyenablesconsumers

to buy products and pay for the products later in four equal

instalments. No interest or other fees are charged to cus-

tomers, as the transaction fees are borne by merchants. This

solution is appealing to our overall target market and espe-

ciallywell-suitedtothe85%ofIndonesianMuslimswhomay

haveareluctancetousefinancialproductswhichchargein-

terest. That same month, Achiko also signed an agreement

withDOKU(formerlyknownasPTNusaSatuIntiArtha)to

progressthedeliveryofAchiko’sdigitalwalletinIndonesia

bywhite-labellingthepopularDOKUwalletforusersofthe

Achiko platform.

InMarch2020,weannouncedthememorandumofun-

derstandingAchikosignedwithHuaweiTechInvestment

todrivesalesofUSD15mfortheyearending31December

2020.Achikoisexcitedtobeengagingconsumersacross

IndonesiatogetherwithHuaweithroughHuawei’srelation-

shipswithmajortelecommunicationscompaniesinIndone-

sia. We have planned a series of marketing activities ranging

from the consumption of digital inventories of Indonesia’s

topthreetelecomcompanies,thecreationofexclusivemi-

crosites,across-promotionalcampaignaswellasonlineand

offlineactivities.InApril2020,wesignedaletterofintent

withSonecttoco-operateandfurtheraccelerateourjoint

effortstodeliverstate-of-the-artpaymentsolutionsforSwit-

zerland. Sonect’s technology enables any merchant’s cash

register to become a de facto ATM. Thanks to these efforts,

Achiko’scustomerswillbeabletomakecashwithdrawals

fromtheover2,300shopsinSwitzerlandthathavepart-

neredwithSonect.

Positioned for success

Wehavedoneandwillcontinuetodotheworknecessary

tobroadenthescopeofourcompany,whichwillinturnex-

pandprofitabilitymarginsandrevenue.Movingforward,we

have a clear plan for building on the foundations that have

beenputinplaceover2019.DuetotheCOVID-19pandemic,

2020will,withoutdoubt,beadifficultyearforAchikoand

thebusinessworldasawhole.Thatsaid,asthecompany’s

multifaceted payments, entertainment and community

platformbusinessevolves,weexpectevermoreconsumers

to be attracted to our unique “pay, play and stay” environ-

ment as a safe and engaging place to connect and engage

withfriendsandfamily.

AsIreflectontheresultsofthepastyear,Iamimmensely

proud of our team and grateful for the dedication and col-

lective effort that has been so instrumental in our achieve-

mentstodate.Wewereandremainkeenlyfocusedoncre-

ating long-term shareholder value. To our shareholders, I

say thank you for your ongoing belief in and support for this

company. To our business partners, I say thank you for your

enthusiasticandvitalparticipationinthisexcitingjourney.

AndtotheAchikoBoardofDirectors,managementandem-

ployees, I say thank you for your tremendous efforts over the

past year to transition the company into the ‘pay, play and

stay’ platform that our customers both need and deserve.

KennethTing

ChiefExecutiveOfficer

12

Corporate governance

1. Group structure and shareholders

1.1 Group structureAchikoLimited(the“Company”)isanexemptedcompanywithlimitedliability,incorporated

underthelawsoftheCaymanIslandswithitsregisteredaddressatAndersonSquare,64

SheddenRoad,P.O.Box31325SMB,GrandCaymanKY1-1206.TheCompanyfunctionsasa

holdingcompanywithoutsubstantiveownoperationsasitsbusinessisconductedthrough

subsidiariesandconsolidatedaffiliatedentities.

TheAchikogroup(the“Group”),consistsofthefollowingentities:

1. Globimedia Network Pte. Ltd. (“Globimedia”)

GlobimediaisincorporatedinSingapore,withitsregisteredaddressatSBFCenter

160 Robinson Road #24-09, Singapore

2. Gamespark Interactive Limited (“Gamespark”)

GamesparkisincorporatedinHongKong,withitsregisteredaddressatRoom1405,135

BonhamStrandTradeCentre,CheungWan,HongKong.

3. PT. Progressivmedia Indonesia (“PTPI”)

PTPIisaso-called“VariableInterestEntity”(VIE)1incorporatedinIndonesia,withits

registeredaddressatWismaBaritoPacificTowerA1stFloor,JlLetJendSParmanKav

62 – 63,Jakarta,Indonesia.

4. Kryptonite Korea Co., Ltd. (“Kryptonite”)

KryptoniteisincorporatedinSouthKorea,withitsregisteredaddressat3rd Floor, 38-2,

Eunjo-ro164-gilGangnam-gu,Seoul,RepublicofKorea.

For information regarding the composition of the Group, please refer to Notes 1, 2 and 3 of

theNotestotheConsolidatedFinancialStatementsonpage43–60ofthisAnnualReport.

TheinternalorganisationalstructureoftheCompanyisasfollows:

1. ThelawsandregulationsinIndonesiaplacerestrictionsonforeigninvestmentsinandownershipofentitiesengaged in a number of business activities. Therefore, foreign investments can be held via a VIE structure. In thisrespect,theCompanyownsthePTPIbusinessinIndonesiaindirectlythroughcontractualagreements.Tothisend,theCompanyhasenteredintoaseriesofcontractualarrangementswithPTPI,itsshareholders,whichenablestheCompanyto:(i)exerciseeffectivecontroloverPTPI;(ii)receivesubstantiallyalloftheeconomicbenefitsandabsorblossesofPTPI;and(iii)haveanexclusivecalloptiontopurchaseallorpartoftheequityinterestsinand/orassetsofPTPIifandwhenpermittedundertherelevantlaws.Becauseofthesecontractualarrangements,theCompanyhasthecontrolover,andistheprimarybeneficiaryofPTPI.ThecurrentshareholdersofPTPIaretwoofourtrustedemployees,whomtheCompanyhasprovidedwithloans to acquire shares in PTPI.

13Corporate governance

1.2 Significant shareholdersTheCompanyhasbeenlistedontheSIXSwissExchange(ACHI,ISIN:KYG0101M1024)since

8 November 2019.

Thebelowoverviewsetsoutthesignificantshareholdingsinaccordancewiththeinformation

thathasbeenpublishedonthereportingandpublicationplatformoftheDisclosureOfficeof

SIXSwissExchangepursuanttoArticle120etseqq.oftheFinancialMarketInfrastructureAct.

Directshareholder Ultimatebeneficialowner Shares Percentage

HeraclesInvestmentGroupLimited,SuiteNo.3442, c/o8TemasekBoulevard,#35-03SuntecTower3,Singapore, Singapore Steven Goh 13,671,612 15.25%

PT Media Nusantara Citra – 10,000,000 11.16%

NeuralNetworksLimited,30deCastroStreet,WickhamsCay1,P.O.Box4519,RoadTown,Tortola,BritishVirginIslands KennethTing 5,500,000

6.14%(plus3,000,000optionswithanexerciseratioof1:1,correspondingto3.35%)

SwissMerchantGroupAG,Bahnhofplatz,4th Floor, CH-6300,Zug,Switzerland ChristianMantzkeBeck 7,000,000 7.81%

SimonTheobald,PwC,BrookfieldPlace,Level15, 125StGyeorgesTerrace,Perth,WesternAustralia6000,AustraliaandMelissaHumann,PwC,BrookfieldPlace,Level15,125StGeorgesTerracePerth,WesternAustralia6000,Australia,intheirfunctionastrusteesoftheassetsofA.C.N.059457279. – 2,990,676 3.34%

On26February2020,ObotritiaCapitalKGaA,Potsdam,Germany(ultimatebeneficialowner:

RolfElgeti),acquired3,000,000sharesamountingto3.35%.

CTOChunhyok Chong

COOChris Young

CFOSunil Peter

Headof Operations Asia

Windiaprana Ramelan

Headof Operations Europe

Mikko Tirronen

CEOKenneth Ting

Board of Directors

14 Corporate governance

Lock-up agreement

Alock-upagreementhasbeenenteredintowiththeCompanyand27locked-upholders

ofshares.Thelock-upslastforaperiodoftwelvemonthsfrom8November2019.Inaddi-

tion,exceptfor2,000,000shares,SwissMerchantGroupAG(ultimatebeneficiary:Christian

MantzkeBeck)hasagreedtolockupalloftheother5,000,000ofitssharesunderthesame

conditions(termoftwelvemonthsfrom8November2019)inaseparateagreementwiththe

Company.Thetotalamountoflocked-upholdersofsharesistherefore28,ofwhich23hold

participationsoflessthan3%.Thetotalnumberoflocked-upholdersofsharesis50,713,955,

correspondingto56.58%ofthevotingrights,plus3,000,000(3.35%)optionsasdescribed

above,amountingtoatotalof53,713,955locked-uppurchasepositions(59.93%).

All disclosures of shareholdings, including as regards to the lock-up group and disclosures

madeafterthereportingdate,arepublishedonthewebsiteoftheSIXSwissExchangeDis-

closureOfficeandcanbeaccessedthere(https://www.six-exchange-regulation.com/en/

home/publications/significant-shareholders.html).

1.3 Cross-shareholdingsTherearenocross-shareholdingsexceeding5%ofthecapitalshareholdingsorvotingrights..

2. Capital structure

2.1 CapitalOn31December2019(the“reportingdate”),theCompanyhadanissuedsharecapitalof

91,382,142ordinaryshareswithaparvalueofUSD0.001each,ofwhichtheamountfullypaid

uptotalsasharecapitalofUSD89,632.15.

2.2 Authorised and conditional capital Asatthereportingdate,theauthorisedsharecapitaloftheCompanywasUSD500,000,di-

videdinto500,000,000ordinarysharesofUSD0.001parvalueeach.Thereisnoconditional

sharecapitalunderCaymanIslandscorporatelawasunderSwisslaw.

Out of the Company’s authorised share capital, 21,250,000 shares have been reserved to be

issuedupon(i)theexerciseofoptionsundertheCompany’sstockoptionplan(13,000,000

shares),(ii)theconversionofaconvertiblenote(6,500,000shares)and(iii)sharessubscribed

andtobeissueduponpaymentofthesubscriptionprice(1,750,000shares).

For more information regarding the Company’s stock option plan and the convertible note,

pleaserefertosection2.7Convertiblebondsandoptionsonpage15–17ofthisreport.

2.3 Changes in capitalOnitsincorporation,theauthorisedsharecapitaloftheCompanywasUSD100,000,divided

into100,000,000ordinarysharesofUSD0.001parvalueeach.

15Corporate governance

On25September2018,theCompany–byordinaryresolutionofitsshareholders–increased

itsauthorisedsharecapitalfromUSD100,000toUSD500,000,dividedinto500,000,000

ordinarysharesofUSD0.001parvalueeach.

UponlistingitssharesontheSIXSwissExchangeon8November2019(the“Listing”),the

sharecapitaloftheCompanyamountedto91,382,142ordinaryshares(seealsosections2.1

Capitaland2.2Authorisedandconditionalcapitalonpage14ofthisreport).

Other than the above, there have not been any changes in the share capital of the Company

overthelastthreefinancialyears.

2.4 SharesandparticipationcertificatesTheCompanyhasonlyoneclassofshares(registeredshares)withaparvalueofUSD0.001

pershare.Eachsharecarriesonevoteandequaldividendrights,withnospecialprivileges.

TheCompanyhasnotissuedanyparticipationorprofitsharingcertificates.

2.5 Dividend-rightcertificatesTheCompanyhasnotissuedanydividend-rightcertificates.

2.6 Limitations on transferability and nominee registrationsSharesintheCompanyarenotsubjecttoanyrestrictionsontransfer.

Nominees are also entered in the share register.

2.7 ConvertiblebondsandoptionsConvertible note On10July2019,theCompanyenteredintoaconvertiblenotesubscriptionagreement(gov-

ernedbythelawsoftheCaymanIslands)withMrPrasanSirinnont,toinvestUSD4.5million,

40businessdaysafterthedateofthelistingapprovalandnotesconvertatapriceofUSD 0.70

pershareafter180daysoftheissue,providedListingwouldoccurbefore31December2019.

Upon conversion of the convertible note, Mr Sirinnont’s interest amounts to 6,500,000 shares,

whichisequalto7.25%oftheissuedsharecapital.Theconvertiblenoteisnottransferrable

withouttheconsentoftheCompanyandnointerestispayableinrespectofthisnote.

Employee stock option plan (“ESOP”)Asof31December2019,theCompanyhad14,610,000optionsoutstandingundertheESOP,

entitling its holders to acquire up to 14,610,000 shares in the Company.

TheCompanyhasgranted11,885,000optionstoemployeesoftheGroup.Eachoptionisex-

ercisabletopurchaseoneshare(subscriptionratio:1:1).Oftheseoptions,2,432,863options

havevested,whilsttheremaining9,452,137optionsareunvested.

16 Corporate governance

Oncevested,theoptionscanbeexercisedatanytimeduringtheexerciseperiod.Ifall

optionswereexercised,atotalnumberof11,885,000shareswouldbeissued,thecapital

contributionreserveswouldincreasebyUSD5,307,615andthesharecapitalbyUSD11,885,

equalling13.26%ofthesharecapitalandvotingrightsbasedonthesharecapitaloftheCom-

panyregisteredinthecommercialregisteroftheCaymanIslandsasof31December2019.

Thevestingdate,exerciseperiodandstrikepriceoftheseoptionsaredetailedbelow:

Thevestingdate,exerciseperiodandstrikepriceoftheseoptionsaredetailedbelow:

– 2,800,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon21August2028andastrikepriceofUSD0.075;

– 1,500,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon21August2028andastrikepriceofUSD0.70;

– 1,175,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon14May2029andastrikepriceofUSD0.70;

– 500,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon31May2029andastrikepriceofUSD0.70;

– 2,000,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon7November2029andastrikepriceofUSD0.075;and

– 3,910,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon30November2029andastrikepriceofUSD0.70.

TheCompanyhasgranted2,725,000optionstopersonsprovidingconsultancy,advisoryand

otherservicestotheCompanyinconnectionwithbusinessdevelopmentactivities.Each

optionisexercisabletopurchaseoneshare(subscriptionratio:1:1).Oftheseoptions,608,279

optionshavevested,whilsttheremaining2,116,721optionsareunvested.Oncevested,the

optionscanbeexercisedatanytimeduringtheexerciseperiod.Ifalloptionswereexercised,

atotalnumberof2,725,000shareswouldbeissued,thecapitalcontributionreserveswould

increasebyUSD420,400andthesharecapitalbyUSD2,725,equalling3.04%oftheshare

capital and voting rights based on the share capital of the Company registered in the com-

mercialregisteroftheCaymanIslandsasof31December2019.

Theexerciseprices,vestingdate,exerciseperiodandstrikepriceoftheseoptionsarede-

tailedbelow:

– 1,375,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon21August2028andastrikepriceofUSD0.075;

– 500,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon1May2029andastrikepriceofUSD0.075;

– 250,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon1May2029andastrikepriceofUSD0.70;

– 500,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon7November2029andastrikepriceofUSD0.075;and

– 100,000options,fullyvested,withanexerciseperiodoftenyearsfromthegrantdate

endingon30November2029andastrikepriceofUSD0.70.

17Corporate governance

AssumingthatalloptionsgrantedundertheESOPareexercised,theaggregatenumber

ofsharesissuableuponexerciseoftheoptionsamountsto16.30%ofthesharecapitaland

voting rights of the Company registered in the commercial register of the Cayman Islands

asof31December2019.

As at the reporting date, the Company had no outstanding bonds or other instruments than

those set out above.

3. Board of Directors

3.1 MembersoftheBoardofDirectors

NamePlace of origin/nationality Place of residence Yearofappointment Yearofbirth Position

AllenWuYaoBian USA Laos 2019 1963 Chairman

Steven Goh Australia Australia 2019 1967Member, member of the Risk and Audit Committee

JohnBing-TsungLin USA China 2018 1976 Member

Christophe Laurent France Switzerland 2018 1969Member, member of the Risk and Audit Committee

ThemembersoftheBoardofDirectorsmaybecontactedatthebusinessaddressofthe

Company.

ThebiographicaldetailsofthemembersoftheBoardofDirectorsaresetoutbelow.These

include information on their activities and commitments in addition to their functions at

the Company.

Allen Wu,ChairmanoftheBoardofDirectors,isanAmericancitizenandcurrentlyresides in Vientiane, Laos.

Allenisaserialentrepreneurwithdiverseindustryexperienceacrossthemedical,

pharmaceutical,cosmetic,directsales,mining,infrastructure,energy,power,real

estate,media,financialservices,aviationandtourismindustries.Allenisthefounder

andchairmanofChinaRegentHoldingsLimited,afamilyinvestmentholdingcompany.He

is also the co-founder of CamCan Energy, an oil and gas concession on 12,000 km2 in Lao

PDRandtheCEOofCamergyCo.Ltd.,ajointventurewithOknhaLimBunsour(ing-hold-

ings.com)inCambodia.Furthermore,AllenisChairmanandPresidentofRegentBlock-

chainGroupLtd.(RBG)inthePhilippines.AllenisalsoCEOofBZGAsiaInvestmentLLC,

inajointventurewithH.H.SheikhKhaledbinZayedAlNahyanofZinZayedGroup(BZG).

AllenholdsadoubleBachelorofArtsdegreeinWorldEconomicsandInternationalCultural

ExchangeandaMasterofArtsdegreeinInternationalRelationsfromtheInternationalUni-

versity of Japan Graduate School.

18 Corporate governance

Steven Goh, MemberoftheBoardofDirectors,isanAustraliancitizenandcurrentlyresides in Perth, Australia.

Steven is a serial entrepreneur. He has founded/co-founded three companies that

were leaders in financial services and social networking. Migme (2006) was an early

leader in mobile and social networking and with a reach to tens of millions of feature

phone users. Sanford Securities (1995) was Australia’s first online stockbroker and was a leader

in online financial services in Australia and was recognised globally. Over the past 25 years,

he has had the honour of working with top tier venture capitalists in Silicon Valley and across

Asia, with meaningful strategics (including some of the largest companies in the world),

dozens of incubators and hundreds of other start-ups, stock exchanges, investment banks.

During this time, he has developed extensive experience in developing and com-

mercialising compelling internet services for social, consumers and f inance. He has

worked professionally in chartered accounting, stockbroking and investment bank-

ing and in consulting to a wide range of financial institutions in Australia, Asia and Eu-

rope. He also maintains an avid interest in a range of computing languages and sys-

tems architecture. As a consequence of his professional experience, he has also been

involved in a few hundred capital issues and transactions for over USD 1 billion, includ-

ing raising over USD 100 million for companies that he himself has founded and led.

Steven has won numerous professional and business awards. He has extensive private and

public board experience, is a frequent speaker at conferences in Silicon Valley, Europe, Asia

and Australia and has appeared in the Wall St Journal, Australian Financial Review, CNBC,

Financial Times, the Economist, Bloomberg and many others.

John Bing-Tsung Lin, MemberoftheBoardofDirectors,isaUScitizenandcurrently

residesinHongKong,China..

JohnBing-TsungLinisaMemberoftheBoardofDirectors.Healsoservesasa

director and managing director of PlayStudios Asia Limited, the Asian operation

of PlayStudios Inc and as a developer and operator of the myVEGAS franchise of

social casino games. From 2014 to 2015, he also served as a managing director for Asian

developmentbyPlayStudiosInc(USA).Hehasbeenengagedinthedevelopmentand

marketing of games across social, online and integrated resort formats in Asia, Europe

andtheUnitedStatessince2002.PriortoPlayStudios,hewasaseniordevelopmentex-

ecutiveintheland-basedcasinosectorforLasVegasSands(NYSE:LVS)andBoydGaming

(NYSE:BYD),hehasledgreenfielddevelopment,legislativeandregulatoryinitiatives,acqui-

sitions,strategicpartnerships,aswellasthedesignanddevelopmentofintegratedcasino

resortsfromMacau,SingaporeandtheUKtoregionalUSmarketsandtheLasVegasStrip.

JohnBing-TsungLinholdsaMaster’sdegreeinRealEstateDevelopmentfromColumbia

UniversityandabachelordegreeinarchitecturefromtheUniversityofCaliforniaBerkeley.

19Corporate governance

Christophe Laurent, MemberoftheBoardofDirectors,isaFrenchcitizen,bornin

1969andcurrentlyresidesinSwitzerland.

ChristopheLaurentisaMemberoftheBoardofDirectors.Hehasdecadesofex-

perience in international business across enterprise sales, strategic and opera-

tionalmarketingandcorporatefundraising.ChristophewasmostrecentlyFintech

LeadatKickstart,aSwitzerland-basedopeninnovationprogramme,whichhejoinedaf-

terhistenureasCMOandhavingraisedfundsforaFintechstart-up,whichfocusedon

growingdigitalbankingandfinancialinclusioninvariouspartsoftheworld,afterhespent

a year at Google studying the impact of digitalisation in multiple areas. Prior to that he

held various senior, marketing and business development related positions in England,

theUSA,LiechtensteinandSwitzerland,workingforlistedcompaniessuchasGeneral

ElectricandOerlikon,butalsosmallercompanies,allleadersintheirfield.Hefounded

hisfirststart-upmorethantenyearsagoandhasworkedintwomoreinthemeantime.

Christophe Laurent holds a Master’s degrees in International Management and European

MarketingStrategyfromtheUniversityofSavoyandtheStaffordshireBusinessSchool.

ChristopheisbasedinZurich,Switzerland..

3.2 Other activities and vested interests

Otherthanasdescribedabove,themembersoftheBoardofDirectorsdonotengageinany

otheractivitiesorperformanyotherfunctionswhicharesignificanttotheGroup.

3.3 Rules in the Articles of Association on the number of permitted activities pursuant to Article 12 para. 1 point 1 SwissOrdinanceagainstExcessiveCompensationinListedStock Companies

Not applicable.

3.4 ElectionsandtermsofofficeTheBoardofDirectorshasthepoweratanytime,andfromtimetotime,toappointaperson

asanadditionaldirectororpersonsasadditionaldirectorsandshallhavethepowertoelect

one of their number to be the chairman for such period as they determine and the Company

may also by ordinary resolution of shareholders appoint additional directors from time to

time. A resolution of the Company’s general meeting of shareholders to appoint a director

maybepassedbyasimplemajorityofthevotescast.

PursuanttoArticle86oftheArticlesofAssociation(accessibleviahttps://investor.achiko.

com/articles-of-association-110419/),amemberoftheBoardofDirectorsshallholdoffice

for such term commencing on the date of his or her appointment by ordinary resolution of

shareholdersorresolutionofdirectorsandendingonthedateofthenextannualgeneral

20 Corporate governance

meetingofshareholdersatwhichthedirectorshallresign(oruponprematuredeath,resig-

nationorremoval).Adirectorshallbeeligibleforre‐appointment.

The shareholders may, by ordinary resolution, remove a director at any time and may by ordi-

nary resolution, appoint another person in his or her place. A resolution to remove a director

canbepassedbyasimplemajorityofthevotescast.

Ifnochairmaniselected,orifatanymeetingthechairmanisnotpresentwithinfiveminutes

after the time appointed for holding the meeting, the directors present may choose one of

their number to be chairman of the meeting.

3.5 Internal organisational structureSubjecttotheprovisionsoftheCaymanIslandscompanieslaw(2018revision)(the“Cayman

CompaniesLaw”),theArticlesofAssociationandtoanyresolutionsmadeinageneralmeet-

ingofshareholders,thebusinessoftheCompanyismanagedbytheBoardofDirectors,who

maypayallexpensesincurredinsettingupandregisteringtheCompanyandmayexercise

allpowersoftheCompany.NoresolutionmadebytheCompanyinageneralmeetingof

shareholdersshallinvalidateanyprioractofthemembersoftheBoardofDirectorswhich

wouldhavebeenvalidifthatresolutionhadnotbeenmade.TheBoardofDirectorsmay

furthermoreexerciseallthepowersoftheCompanytoborrowmoneyandtomortgageor

charge its undertaking, property and uncalled capital or any part thereof and to issue deben-

tures,debenturestock,mortgages,bondsandothersuchsecuritieswhetheroutrightoras

security for any debt, liability or obligation of the Company or of any third party.

Moreover,theBoardofDirectorscanfromtimetotimeappointanyperson,whetherornot

adirector,toholdsuchofficeintheCompanyastheBoardofDirectorsmaythinknecessary

fortheadministrationoftheCompany,includingbutnotlimitedto,theofficeofpresident,

one or more vice-presidents, treasurer, assistant treasurer, manager or controller, and for

suchterm,andwithsuchpowersanddutiesastheBoardofDirectorsmaythinkfit.

TheBoardofDirectorsmayalsoappointoneormoreoftheirnumbertotheofficeofman-

aging director upon like terms, but any such appointment shall ipso facto determine if any

managing director ceases from any cause to be a director, or if the Company by ordinary

resolutionofshareholdersresolvesthathistenureofofficebeterminated.

TheBoardofDirectorsisquorateiftwomembersoftheBoardofDirectorsarepresentand

passresolutionswiththemajorityofvotescast.Incaseofatievote,thechairmanhasasec-

ond or casting vote.

PursuanttoArticle103ofArticlesofAssociation(accessibleviahttps://investor.achiko.com/

articles-of-association-110419/),adirectorshallbegivennolessthanthreedays’noticeof

meetingsofdirectors,butameetingofdirectorsheldwithoutthreedays’noticehavingbeen

giventoalldirectorsshallbevalidifallthedirectorsentitledtovoteatthemeetingwhodo

notattendwaivenoticeofthemeeting,andforthispurposethepresenceofadirectorat

ameetingshallconstituteawaiverbythatdirector.Theinadvertentfailuretogivenotice

21Corporate governance

of a meeting to a director, or the fact that a director has not received the notice, does not

invalidate the meeting. Further, a resolution signed by all the directors shall be as valid and

effectual as if it had been passed at a meeting of the directors duly called and constituted.

Any such resolution may consist of several documents in the like form signed by one or more

of the directors and if the counterparts bear different dates, then the resolution shall take

effectonthedateuponwhichthelastdirectorhasconsentedtotheresolutionbysigned

counterparts.

TheBoardofDirectorsmaydelegateanyoftheirpowerstocommitteesconsistingofsuch

memberormembersoftheirbodyastheythinkfit;anycommitteesoformedshallinthe

exerciseofthepowerssodelegatedconformtoanyregulationsthatmaybeimposedonit

bytheBoardofDirectors.

Risk and Audit Committee

ThemembersoftheRiskandAuditCommitteeareappointedbytheBoardofDirectorsfor

atermofofficeofuptooneyearendingatthenextgeneralmeetingofshareholders.The

RiskandAuditCommitteeconsistsofatleastonememberoftheBoardofDirectors.The

members of the Risk and Audit Committee as at the reporting date and as at the date of

thispublicationareStevenGohandChristopheLaurent.ThechairpersonisStevenGoh(for

theirrespectivebiographies,refertosection3.1MembersoftheBoardofDirectorsonpage

17–19ofthisreport).

TheRiskandAuditCommitteehasthefollowinggeneraldutiesandcompetencies:

– assistingtheBoardofDirectorsinfulfillingitsdutiesofsupervisionofmanagementin

organisingtheaccounting,financialcontrolandfinancialplanning;

– reviewingtheannualandinterimfinancialstatementsoftheCompanyandthe

CompanyGroupandrecommendtotheBoardofDirectorswhethertheannual

financialstatementsshouldbeproposedtotheshareholdersforapproval;

– reviewingexternalandinternalauditplansandresultsandmonitoringcorrective

measuresimplementedbymanagement;

– setting the guidelines for the Company’s risk management system and internal control

systemandreviewingtheadequacyandeffectivenessoftheriskmanagementandthe

internalcontrolsystem;

– reviewingtheCompany’scompliancewithfinanciallaws,regulationsandreporting

requirements;

– appointing, retaining, terminating and determining the compensation of the Compa-

ny’sexternalauditorsengagedforthepurposeofpreparingorissuinganauditreportor

performingotheraudit,revieworattestservicesfortheCompany;

– checkingtheindependenceofexternalauditorsaspartoftheappointmentandreten-

tionprocessaswellastheabsenceofanyconflictsofinterest;authorisingpermitted

non-auditservicesandcheckingthatexternalauditorsdonotperformanyservices

whicharenotpermittedunderanyofthelistingorotherruleswhichtheCompanyis

subjectto;

– overseeingtheworkofexternalauditors(includingtheresolutionofdisagreements

betweenmanagementandexternalauditorsregardingfinancialreporting)engaged

22 Corporate governance

forthepurposeofpreparingorissuinganauditreportorperformingotheraudit,review

orattestservicesfortheCompany;

– pre-approvinganynon-auditingservices(includingthecompensationforthese)tobe

performedfortheCompanyand/oranyofitssubsidiariesbytheexternalauditors;

– proposingnewauditors,ifnecessary,totheBoardofDirectorsforelectionby

shareholders;

– establishingproceduresfor(1)thereceipt,retentionandtreatmentofcomplaints

received by the Company regarding accounting, internal accounting controls, or

auditingmattersand(2)theconfidential,anonymoussubmissionbyemployeesofthe

Companyofconcernsregardingquestionableaccountingorauditingmatters;

– reviewingandreassessingperiodicallytheadequacyoftheproceduresestablished

pursuant to paragraph above and adopting any changes to such procedures that the

Committeedeemsnecessaryorappropriate;

– engaging independent counsel and such other advisors it deems necessary or

advisabletocarryoutitsresponsibilitiesandpowersandifsuchcounselorother

advisors are engaged, determining the compensation or fees payable to such counsel

orotheradvisors;

– incurringsuchordinaryadministrativeexpensesasnecessaryorappropriateincarrying

outitsduties;

– performingsuchotherfinancialmattersasassignedbystatutorylaw,theArticlesof

AssociationortheBoardofDirectorsandadvisingtheBoardofDirectorsonsuchother

financialmatters;and

– reviewingatleastonceannuallytheinternalregulationsoftheCompanyand

recommendinganyproposedchangestotheBoardofDirectors.

For the performance of its duties, the Risk and Audit Committee is at all times authorised to

inspectthebooksandrecordsoftheCompanyandtheGroup(includinginternalandexter-

nalauditreports,managementresponsesandfollow-ups)aswellastorequestinformation

fromanymeetingswithallmanagementbodiesandemployeesoftheCompanyaswellas

itsinternalandexternalauditors.TheCommitteemayinviteexternalorinternalauditorsto

attend its meetings.

3.6 DefinitionofareasofresponsibilityTheBoardofDirectorsoverseestheaffairsoftheCompanyandhastheauthoritytodelegate

anypowerstoadirectororcommittee.UnderCaymanlaw,theboardmemberscandelegate

anyoralloftheirpowerstooneormoredirectors,officers,committees(whetherornotsuch

committeescomprisepersonsotherthandirectorsorofficers)orserviceproviders.However,

delegationbytheboardmembersoftheirpowersdoesnotrelievethemoftheirdutiestothe

Companyandeachboardmemberremainsultimatelyresponsibleforexercisingsupervision

and control over the acts of any such delegates.

Althoughthereisnocodificationofdirectors’dutiesunderCaymanIslandslaw,theCay-

manCompaniesLawcontainsnumerousprovisionsrelatingtotheobligationsoftheboard

members and prescribes penalties for breaches of those obligations. The key positive ob-

ligations of board members include, in addition to overseeing the affairs of the Company,

23Corporate governance

maintaining the books of account, minutes of meetings, the statutory registers of members,

beneficialownership,mortgagesandchangesofdirectors(includingalternatedirectors)

andprovidinginformationoraccesstodocumentstospecifiedpersonsasrequiredbythe

CaymanCompaniesLaw.

3.7 Informationandcontrolinstrumentsvis-à-vistheExecutiveCommittee

TheboardmeetingsaretheBoardofDirectors’mainplatformtosuperviseandcontrol

management. Over the reporting year, eleven board meetings have taken place. At these

meetings,theCEO,theCOOandtheCFOreportonthefinancial,commercialandbusiness

developmentactivitieswithintheirparticularfocusandthemainrisksoftheCompanyre-

lated to its key value drivers, respective measures taken and related strategic proposals.2 To

thisend,therecurringagendaincludes,amongstotherthings,riskareas,growthstrategies,

employees,customersandmarketingandpartneringactivities.Totheextentrequired,the

headsofthevariousgeographicalmarketswereoccasionallyinvitedandpresenttoprovide

market-specificupdatesandansweranyquestionsposedbytheBoardofDirectorsfollowing

theirreviewofthedevelopmentsinconnectionwiththerelevantgeographicalmarket.By

wayofprocedure,minutesoftheboardmeetingsarepreparedtosetouttherelevantdeci-

sionstakenbytheBoardofDirectorsandareapprovedateachsubsequentboardmeeting.

4. Executive Committee

4.1 MembersoftheExecutiveCommitteeInaccordancewiththeArticlesofAssociationandsubjecttothoseaffairswhichliewithin

theresponsibilityoftheBoardofDirectors,theBoardofDirectorshasdelegatedtheopera-

tionalmanagementtotheGroup’sexecutivemanagementteam(“Management”),whichis

headedbytheCEO(asdefinedbelow).TheManagementservestheCEOasacoordination

bodyfordecisionmakingwithregardtomakingproposalstotheBoardofDirectorsandthe

implementationofstrategiesanddecisionsoftheBoardofDirectorsortheCEO.

Themanagementconsistsofthefollowingpersons:

– ChiefExecutiveOfficer(“CEO”);

– ChiefFinancialOfficer(“CFO");

– ChiefTechnologyOfficer(“CTO”);

– HeadofOperationsAsia;

– GeneralManagerIndonesia;and

– VicePresidentofCorporateDevelopment.

2. Asof2020,weeklyboardcallshavetakenplacetodiscussthesamematters.TheuptakeinthefrequencyofmeetingsisprimarilyduetothespeedatwhichtheCompanyiscurrentlyaimingtogrowanddevelopitself.

24 Corporate governance

Members of management

Asatthereportingdate,managementcomprisesthefollowingindividuals:

Name Placeoforigin / nationality Joined management in Yearofbirth Position

KennethTing Australia 2018 1972 CEO

Sunil Peter Singapore 2019 1966 CFO

Chunhyok Chong RepublicofKorea 2018 1973 CTO

ChristopherYoung Australia 2019 1963 COO

Windiaprana Ramelan Indonesia 2018 1970 HeadofOperationsAsia

KikiRizki Indonesia 2019 1973 General Manager Indonesia

Shannon Sung Chang* United States 2018 1990Vice President of CorporateDevelopment

*Ms.ChangresignedfromherpositionwithintheCompanyasof28February2020.

The members of management may be contacted at the business address of the Company.

Thebiographicaldetailsofthemembersofmanagementaresetoutbelow.Thisincludesin-

formation on their activities and commitments in addition to their functions at the Company.

Kenneth Ting, CEO, is an Australian citizen and currently resides in Australia and

Malaysia.

Mr.TingistheCEOoftheCompany.Hehasabackgroundinaccounting,law

andinvestmentbankingwithextensiveexperienceinthecommercialisationof

technology,raisingcapitalandM&A.HejoinedDeutscheBankin1997afterwork-

ingfor fouryears inPricewaterhouseCoopers’corporatefinanceandtaxdivision.He

wasavicepresidentoftechnologyinvestmentbankingatDeutscheBankandworked

inDeutscheBank’sSydney,SanFranciscoandLondonoffices,wherehewasinvolved

inoverUSD5billionofcapitalraisingandM&Atransactionsglobally.Mr.Tinghasapas-

sionfortechnologyandhasworkedwithtechnologycompaniesthroughouthiscareer.

In2002,hefoundedBaycallPtyLimited,ane-commerceandtelecommunicationscom-

pany,whichlaterbecameAustralia’s largestonlineinternationalphonecardretailer.

From2009to2017,Mr.TingheldtheofficeofExecutiveDirector,ManagingDirectorand

ChiefExecutiveOfficerofASX-listedcompany,TZLimited,whichisanearlystageInternetof

Thingscompany.Duringhistenure,revenueincreasedsignificantlyasaresultofMr.Ting’s

efforts in securing and negotiating multi-million dollar sales, distribution and licensing

contractswithorganisationssuchasApple,Google,Nike,UPS,SingaporePost,Ricohand

MercedesBenz,forTZ’sIOThardwareandsoftwareproducts.Mr.TingholdsaBachelorof

CommercefromFlindersUniversityandBachelorofLawwithHonoursfromAdelaideUni-

versity and is an Australian Chartered Accountant.

25Corporate governance

Sunil Peter, CFO, is a Singapore citizen and resides in Singapore.

Mr.PeteristheCFOoftheCompany.Hecomeswithover30yearsofworkexperi-

encecoveringSingapore,theUnitedArabEmirates,India,SriLanka,Bangladesh,

MyanmarandVietnam.PriortojoiningtheCompany,hewasworkingasaSenior

VP–FinancewithMySquarLimited,aformerAIMS-listedcompany,overseeingtheir

financialoperationscoveringfiveentitiesintheGroupspreadovermultiplelocations.He

wasalsotheCEOoftheSingaporeIndianChamberofCommerceandIndustryandpriorto

that,hewastheVP–Finance&Operations,IndiaforRafflesEducationCorporationLimited

(REC),acompanylistedontheSingaporeStockExchange.AtREC,hemanagedoperations

atmultiplelocationsinIndia,SriLankaandBangladesh.Beforethis,hewastheCFOofa

medicaldevicecompanyatBio-ScaffoldInternationalLimited(BSI).PriortojoiningBSI,he

waswithMerlinMDPteLtd,amedicalstart-upcompany,wherehewasthefirstemploy-

ee.Workingwiththefounders,heestablishedthefinance,HRandoperationalguidelines

fortheorganisation.BeforecomingtoSingapore,heworkedinDubaiasachiefaccount-

antforagroupofthreecompaniesunderonemanagementteaminthefieldofaircargo,

printing&advertisingandhealthcare.HebeganhisworkingcareerinIndiaworkingfora

sharedserviceorganisation(IMBO)aftercompletinghisarticleshipwithtwoauditfirms.

Mr.Peterhasbeen involved invariousM&Aprojects,businessevaluationsandtheir

subsequent due diligence processes. He has worked for start-ups as well as es-

tablished organisations automating work processes, where required, to tight-

en f inancial controls. He has the exposure of working in a cross border, mul-

ti-currency and multi-cultural environment. He is currently a director of Bishan

Home for the Intellectually Disabled and Rock Management Services Pte Ltd.

Mr.PeterisaqualifiedCharteredAccountantwithabachelor’sdegreeincommerce.

Chunhyok Chong, CTO,isaKoreancitizenandcurrentlyresidesinSeoul,Korea.

Mr.ChongactsasCTOoftheCompany.Hehasextensiveexperienceinengi-

neeringsocialapplicationsformajorindustryplayers,suchasTimeWarnerfor

itsCartoonNetworkandSamsungforitsGalaxydevices.Earlyinhiscareer,he

workedasasoftwaredeveloperforLycosInc.,asanengineerforSoftmax,asachief

technologyofficerforGrigonEntertainmentandasachieftechnologyofficerforGamera

Networks(laterGameraKorea).Mr.ChongwasalsoasoftwaredeveloperatSKTelecom

forthemusic-streamingserviceMelon,whichwaslaterspunoutfromSKTelecomand

re-namedLoenEntertainment.MelonrapidlybecameKorea’smarket-leadingapplication

forLoenEntertainment.PubliclylistedKakaoGrouplateracquiredLoenEntertainment.

AfterMr.Chong’ssuccesswithMelon,hedevelopedthee-commerceblockbusterservice

WeMakePrice,becomingSouthKorea’shighestturnovere-commerceandadvertisingpor-

talshortlyaftergoinglive.Subsequently,helaunchedSouthKorea’ssocialmediaplatform

Wonderpeople,whichafterintegratingintothee-commercegroupportfolio,rapidlygained

26 Corporate governance

auserbasegreaterthan10%ofSouthKorea’sentirepopulation,andactedasitschieftech-

nologyofficer.Ithassinceincreaseditsuserbasetoover10millionsubscribersinSouthKo-

rea–hometo51millioncitizens.AfterhisdeparturefromWonderpeople,Mr.Chongcreated

Kryptoniteandcurrentlyactsasitschiefexecutiveofficer.Heholdsabachelor’sdegreein

aerospaceengineeringfromKonkukUniversity,Korea.

Christopher Young,COO,isanAustraliancitizenandcurrentlyresidesinZurich, Switzerland.

ChristopherYoungactsasCOOoftheCompany.Heisanexecutiveinfinan-

cial services, investmentbankingandwealthmanagementandhasexten-

sive experience in the f ield of core banking, front-to-back trading, riskman-

agement and global regulatory initiatives. Furthermore, Christopher is a certif ied

ProjectManagement Professional (PMP), ScrumMaster and Agile/DevOps Coach.

SinceJune2017,hehasbeentheXSCALEStewardforSwitzerlandandinDecember

2017,hefoundedtheSwissAgileAssociation,ofwhichhehassincebeenapresident.

Hispreviousexperienceincludesseniormanagementandconsultingpositionsfora

numberof leadingfinancialorganisationswithinSwitzerland,AustraliaandtheUK.

ChristopherYounghasanexecutiveMBAfromtheAustralianGraduateSchoolofManage-

ment(2008).Heobtainedhisbachelor’sdegreeofappliedscienceandcomputerscience

in 1994 at RMIT University.

Windiaprana Ramelan,HeadofOperationsAsia,isanIndonesiancitizenandcur-rently resides in Jakarta, Indonesia.

WindiapranaRamelanactsasHeadofOperationsAsiafortheCompany.Hespecial-

isesinbuildingteamsfornewbusinessesandrestructuringinternaloperations.He

hasextensiveexperienceinleadingmulticulturalteamsintheinformation&commu-

nicationtechnology(ICT)industry,utilisinghis15yearsofITconsultingexperiencewithsales

andbusinessdevelopmentskills.Hehasaproventrackrecordtransformingstart-ups,such

asZingmobile(ASX:ZMG),intoaleaderintheindustryandintegratingtheMVASdivisionof

Linktone(NASDAQ:LTON)withMNC(IDX:MNCN)tobecomeatopthreeplayerintheindus-

try.HecurrentlyalsoactsasaChairmanoftheBritishInstituteinIndonesia.From2005to

2017,Mr.RamelanworkedasamanagingdirectorofmigmeIndonesia,hipwee.com,UniSad-

huGuna International Education, as a director of Linktone Indonesia, as a chief commercial

officerofSynergiaMobile,asavicepresidentofvalueaddedservicesforMediaNusantaraCit-

ra(thelargestmediagroupinIndonesia)andasacountrymanagerforZingMobileIndonesia.

Heholdsabachelor’sdegreeincomputerengineeringfromtheGunadarmaUniversity,In-

donesiaandamaster’sdegreeinengineeringscience,telecommunicationandnetworking

from Curtin University of Technology, Western Australia.

27Corporate governance

Kiki Rizki, General Manager Indonesia, is an Indonesian citizen and currently resides

in Jakarta, Indonesia.

KikiRizkiactsasGeneralManagerIndonesiafortheCompanyandisarespected

marketingleaderwithprovenexperienceinthefieldsofmarketing,digital,ad-

vertising, community development, public relations, events and management. She

playedakeyroleinlaunching,leadingandexecutinglong-termmarketinganddigitalstrat-

egiesforGrabacrossallverticals(GrabTaxi,GrabBike,GrabCar,GrabExpressandGrabFood)in

Indonesia;managingandincreasingthecommunitybaseofmigme;launchingMTVIndone-

sia24-hourchannels;launchingthemanystylesofLeviStraussinIndonesiaandmanymore.

ShehasadeepunderstandingandknowledgeoftheIndonesianmass,youthanddigitalmar-

kets,havingworkedinadvertising,marketingandthedigitalindustryformorethan25years.

Kikihasobtainedherbachelor’sdegreeofartsinjournalismattheCaliforniaStateUniversity,

Fresno, California.

Shannon Sung Chang*,VicePresidentofCorporateDevelopment,isaUScitizenand currently resides in San Francisco, California, United States of America.

ShannonSungChangservesastheVicePresidentofCorporateDevelopment

fortheCompany.Hermainactivitiesinvolvedrivingsalesgrowthofsubsidiaries,

developingnewbusinessopportunitiesandfindingnewcompaniesandproducts

toacquirethathaverelevantsynergieswiththeCompany’scorebusiness.SinceSeptember

2017shehasalsoactedasanadvisoratLootcakes,advisingthechiefexecutiveofficerand

foundingteamonpartnershipopportunitieswithAAAgamingcompanies.Ms.Changholds

aBachelorofSciencedegreefromCornellUniversity(Ithaca,NewYork).

*Asof28February2020,Ms.ChanghasresignedfromherfunctionwithintheCompany

4.2 Other activities and vested interestsThemembersofmanagementdonotcarryoutanysignificantactivitiesoutsidetheGroup

otherthanthosespecifiedabove.

4.3 Rules in the Articles of Association on the number of permitted activities pursuant to Article 12 para. 1 point 1 SwissOrdinanceagainstExcessiveCompensationinListedStock Companies

Not applicable.

4.4 Management contracts NoneofthecompanieswithintheGroupnortheCompanyitselfhasconcludedanyman-

agementcontractswithanythirdparties.

28 Corporate governance

5. Compensation, shareholdings and loans

5.1 Content and method of determining the compensation and the shareholding programmes

BackgroundAsanewlypubliclylistedcompany,theCompanyiscurrentlyintheprocessofdraftingits

internalpolicywithrespecttocompensation,whichwill–amongstotherthings–include

theformationofaseparatecompensationcommittee.Thiscommitteewillberesponsible

forpreparingtheproposalsaddressedtotheBoardofDirectorswithrespecttocompen-

sationmatters.Furthermore,thecompensationprinciplesfortheBoardofDirectorsand

management,whicharetobeformallyadoptedaspartoftheinternalcompensationpolicy,

willprimarilyfocusonstrikingadesiredbalancebetweensustainablevaluecreationonthe

onehand,whilstoptimisingtheCompany’sprofitabilityontheother.

Board of DirectorsAs of its formation, the Company has primarily been funded by outside investors. In this re-

gard,thedeterminationofcompensationtotheBoardofDirectorsandManagementhas

been(highly)subjecttoshareholders’influenceandapproval,whichremainedtobethe

case as at the reporting date.

Subjecttoapprovalbyanordinaryresolutionofshareholders,themembersoftheBoard

ofDirectorsreceiveafixedbasicfeeandfixedfeesformembershipsofcommitteesofthe

BoardofDirectorsaswellascompensationforexpensesthataredeterminedbythefull

BoardofDirectorsandaresubjecttoandwithinthelimitsoftheaggregateamountsap-

provedbyanordinaryresolutionofshareholders.Thecompensationisawardedincashand

mayalsobeawardedintheformofsharesintheCompany.Inexceptionalcasesandsubject

toandwithinthelimitsoftheapprovalbytheannualshareholders’meeting,themembers

oftheBoardofDirectorsmaybeawardedanadditionalbonus.

CompensationinUSDoftheBoardofDirectorsofAchikoLtd.forthetwelvemonthsending

31 December2019

Boardmember Function BoardFee Additional fee3Other stock-based compensation Total compensation

Allen Wu Boardmember 16,000.00 NIL NIL 16,000.00

StevenWern-YiGohBoardmember,Risk&AuditCommittee Chairman NIL 300,000.00 NIL 300,000.00

Christophe LaurentBoardmember,Risk&AuditCommittee member 30,600.00 NIL 108,630.19 139,230.19

JohnBing-TsungLin Boardmember 32,903.00 NIL 166,666.67 199,569.67

3. AdditionalfeesrelatetoservicesotherthanboarddutiesrenderedtotheCompanyforUSD20,000p.m.fromOctober2018toDecember2019.

29Corporate governance

Management

Subjecttoapprovalbyanordinaryresolutionofshareholders,thecompensationofthe

membersofmanagement(seeundersection4MembersoftheExecutiveCommittee

onpage23–27ofthisreport)shallconsistofafixedand,optionally,avariablecomponent.

Theamountofthevariableremuneration(ifany)paidtomanagementwoulddependon

thequalitativeandquantitativetargetsandparametersdefinedbytheBoardofDirectors.

TheBoardofDirectorswoulddefineandassessthetargetsandtheirachievement.Varia-

ble remuneration may be paid in cash or in the form of equity instruments, conversion or

option rights or other rights to equity instruments. In addition, members of management

mayreceivereimbursementforexpenses,whicharenotdeemedpartofmanagement’s

compensation.

CompensationinUSDoftheexecutivemanagementofAchikoLtd.forthetwelvemonths

ending31December2019

Boardmember Function Basesalary4Annual incentive

Additional fees5

Stock based compensation

Other compensation6

Total compensation

KennethTing CEO 232,920.00 NIL NIL 1,370,974.00 NIL 1,603,894.00

Michael Anthony Parker CFO 30,000.00 NIL NIL NIL NIL 30,000.00

Sunil Peter CFO 113,696.00 NIL NIL NIL 7,659.50 121,355.50

ChristopherYoung7 COO 110,000.00 NIL NIL NIL NIL 118,470.00

Shareholding programmes

TheCompanyreliestoasignificantdegreeonthequalityandcommitmentofitsmanage-

ment and its employees. In order to combine short- and long-term incentive elements, the

ESOP(seeundersection2.7Convertiblebondsandoptionsonpage15–17ofthisreport)has

been designed to cater for a balanced approach in this respect.

Other than the ESOP, the Company has no share programmes in place.

5.2 Rules in the Articles of Association on compensation (seetheSwissOrdinanceagainstExcessiveCompensationinListedStockCompanies)

Not applicable.

5.3 Remunerationreport(seeSwissOrdinanceagainstExcessiveCompensationinListedStockCompanies)

FortherelevantdisclosuresonpayofthemembersoftheBoardofDirectorsandManage-

ment, please be referred to section 5.1 Content and method of determining the compensa-

tion and the shareholding programmes on page 28 of this report.

4. Basesalarydoesnotincludesocialsecuritycosts.5. AdditionalfeesincludefeespaidforspecialservicesrenderedtotheCompanybyStevenGohforUSD

20,000p.m.fromOctober2018toDecember2019.6. Other compensation includes pension contributions and employer social charges paid by the Company.7. ChristopherYounghasbeenpaidoutinCHF.

30 Corporate governance

6. Shareholders’ participation rights

6.1 Voting rights restrictions and representationEachshareoftheCompanycarriesonevoteatageneralmeetingofshareholders(the

“Shareholders’Meeting”).Votingrightsmaybeexercisedbyshareholdersregisteredinthe

Company’sshareregisterorbyadulyappointedproxyofaregisteredshareholderornom-

inee,whichproxymaynotbeashareholderoftheCompanyuptoaspecificqualifyingday

designatedbytheBoardofDirectors.Theinstrumentappointingaproxyshallbeinwriting

underthehandofanappointororofhisattorneydulyauthorisedinwritingor,iftheap-

pointorisacorporation,eitherundersealorunderthehandofanofficerorattorneyduly

authorised.AproxycannotbeashareholderoftheCompany.

TheArticlesofAssociation(accessibleviahttps://investor.achiko.com/articles-of-associa-

tion-110419/)providethefollowingrestrictionsregardingvotingrights:

– Article72(NoRighttoVoteWhereSumsOverdueonShares):ashareholdershallnot

be entitled to vote at any Shareholders’ Meeting unless all calls or other sums presently

payable by him have been paid.

– Article70(JointOwnership):wheresharesarejointlyowned,iftwoormorejointowners

arepresentinpersonorbyproxyatmeetingsofshareholders,theymustvoteasone.

TherearenoexpressprovisionsintheArticlesofAssociationorundertheCaymanCompa-

niesLawgrantinganyexceptions.

There are no disclosure requirements under the Articles of Association or under Cayman

CompaniesLawonrestrictionstovotingrightsandrulesongrantingexceptionsforinsti-

tutionalproxies.

InordertoremoveArticle72oftheArticlesofAssociation(seeabove),theArticlesofAsso-

ciationwouldneedtobeamendedpursuanttoarticle146(AmendmenttotheArticles)of

theArticlesofAssociationbyaspecialresolutionofshareholders(i.e.amajorityofnoless

thantwo-thirdsofshareholdersentitledtovoteinaccordancewithsection60oftheCay-

manCompaniesLaw).

TheCaymanCompaniesLawfurthermoreprovidesdefaultprovisionsifthearticlesofasso-

ciation of a Cayman Islands company are silent as to voting/participation at general meet-

ings.ThisisnotthecasewithrespecttotheArticlesofAssociation(accessibleviahttps://

investor.achiko.com/articles-of-association-110419/),whichprovideforthefollowingrulesin

thisrespect:

– Article66(Voting):inanyShareholders’Meeting,aresolutionputtothevoteofthe

meetingshallbedecidedonashowofhands(i.e.,everyshareholderpresentinperson

orbyproxyshallhaveonevote),unlessapollis(beforeoronthedeclarationoftheresult

oftheshowofhands)demandedbyoneormoreshareholderspresentinpersonorby

proxyentitledtovote,andunlessapollissodemanded,adeclarationbythechairman

thataresolutionhas,onashowofhands,beencarried,orcarriedunanimously,orbya

particularmajority,orlost,andanentrytothateffectinthebookoftheproceedingsof

31Corporate governance

theCompany,shallbeconclusiveevidenceofthefact,withoutproofofthenumberor

proportion of the votes recorded in favour of, or against, that resolution.

– Article73(VotesonaPoll):onapoll,votesmaybegiveneitherpersonallyorbyproxy.

EveryshareholderwhoisentitledtovoteataShareholders’Meetingandeveryperson

representingsuchashareholderasproxyshallhaveonevoteforeachshareofwhich

suchshareholderortheshareholderrepresentedbytheproxyistheholder.

– Article74(Proxy):theinstrumentappointingaproxyshallbeinwritingunderthe

handoftheappointororofhisattorneydulyauthorisedinwritingor,iftheappointor

isacorporation,eitherundersealorunderthehandofanofficerorattorneyduly

authorised.Aproxyneednotbeashareholder.Theformofaproxymaybeinanyusual

or common form or as the directors may approve.

– Article77(WrittenResolutions):resolutionsofshareholdersmayalsobepassedin

writingsignedbyallshareholders.

6.2 Quorums required by the Articles of AssociationInaccordancewithArticle60(Quorum)oftheArticlesofAssociation(accessibleviahttps://

investor.achiko.com/articles-of-association-110419/),thequorumattheShareholders’Meet-

ingrequirestwoshareholderspresentinpersonorbyproxyandentitledtovoteuponthe

business to be transacted.

Article134(Auditors)oftheArticlesofAssociation(accessibleviahttps://investor.achiko.

com/articles-of-association-110419/)providesthattheCompanymayappointauditorsbut

shall not be required to do so and, if the Company appoints auditors, its accounts shall be

audited in such manner as may be determined from time to time by a special resolution of

shareholders(i.e.amajorityofnotlessthantwo-thirdsofshareholdersentitledtovote)or

failingsuchdeterminationbythedirectors).Inthisrespect,thereisnorequirementunder

theCaymanCompaniesLawfortheaccountstobeauditedinamannerdeterminedbya

special resolution of shareholders.

6.3 Convocation of the general meeting of shareholdersTheCaymanCompaniesLawprovidesdefaultprovisionsifthearticlesofassociationofa

Cayman Islands company are silent as to the convening of general meetings.

TheArticlesofAssociationprovideforthefollowingrulesinthisrespect:

– Article54(AnnualandExtraordinaryGeneralMeetings)oftheArticlesofAssociation

(accessibleviahttps://investor.achiko.com/articles-of-association-110419/):thedirectors

may,whenevertheythinkfit,conveneShareholders’Meetingsatsuchtimesandin

suchmannerandplaceswithinoroutsidetheCaymanIslandsasthedirectorsconsider

necessaryordesirableprovidedthatonceineveryyeartheBoardofDirectorsshall

convene an annual Shareholders’ Meeting.

– Article55(MembersConvene)oftheArticlesofAssociation(accessibleviahttps://

investor.achiko.com/articles-of-association-110419/):theShareholders’Meetingscanalso

beconvenedonthewrittenrequisitionofanyshareholder(s)entitledtoattendandvote

atShareholders’Meetingswhoholdnolessthan10percentofthepaidupvotingshare

capital of the Company.

32 Corporate governance

– Article56(NoDirectors)oftheArticlesofAssociation(accessibleviahttps://investor.

achiko.com/articles-of-association-110419/):ifatanytimetherearenodirectors,anytwo

shareholders(orifthereisonlyoneshareholderthenthatshareholder)entitledtovote

at Shareholders’ Meetings may convene a Shareholders’ Meeting in the same manner

asnearlyaspossibleasthatinwhichmeetingsmaybeconvenedbythedirectors.

6.4 Inclusion of items on the agendaArticle57(Notice)oftheArticlesofAssociation(accessibleviahttps://investor.achiko.com/

articles-of-association-110419/)providesthatatleasttwentydays’noticeofaShareholders’

Meetingbegiven,excludingthedayserviceisdeemedtotakeplacebutincludingtheday

of such meeting specifying the place, the day and the hour of the Shareholders’ Meeting

and, in case of special business, the general nature of that business..

Inaddition,Article58(SpecialBusiness)oftheArticlesofAssociation(accessibleviahttps://

investor.achiko.com/articles-of-association-110419/)providesthatallbusinesscarriedoutat

aShareholders'Meetingshallbedeemedspecialwiththeexceptionof

i. sanctioningadividend;

ii. the consideration of the accounts, balance sheets and any report of the directors or of

theauditors;and

iii. thefixingoftheremunerationoftheauditors.

NospecialbusinessshallbetransactedatanyShareholders’Meetingwithouttheconsent

of all shareholders entitled to receive notice of that meeting unless notice of such special

business has been given in the notice convening that meeting.

6.5 Entries in the share register Article51(RecordDateDetermination)oftheArticlesofAssociation(accessibleviahttps://

investor.achiko.com/articles-of-association-110419/)providesthatforthepurposeofdeter-

mining those shareholders that are entitled to receive notice of, attend or vote at any meet-

ingofshareholdersoranyadjournmentthereof,thedirectorsmayprovidethattheregister

ofmembersbeclosedfortransfersforastatedperiodwhichshallnotexceed45days.Ifthe

register of members shall be so closed for the purpose of determining those shareholders

that are entitled to receive notice of, attend or vote at a meeting of shareholders, the register

of members shall be so closed for at least ten days immediately preceding such meeting

and the record date for such determination shall be the date of the closure of the register

of members.

Article52(AlternateRecordDateDetermination)oftheArticlesofAssociation(accessible

viahttps://investor.achiko.com/articles-of-association-110419/)providesthatinlieuoforapart

fromclosingtheregisterofmembers,thedirectorsmayfixinadvanceadateastherecord

date for any such determination of those shareholders that are entitled to receive notice of,

attend or vote at a meeting of the shareholders.

If neither Article 51 nor Article 52 has been invoked, Article 53 (No Record Date Chosen) of

theArticlesofAssociation(accessibleviahttps://investor.achiko.com/articles-of-associa-

33Corporate governance

tion-110419/)providesthatiftheregisterofmembersisnotclosedandnorecorddateis

fixedforthedeterminationofthoseshareholdersentitledtoreceivenoticeof,attendor

voteatameetingofshareholders,thedateonwhichnoticeofthemeetingispostedshall

be the record date for such determination of shareholders. When a determination of those

shareholders that are entitled to receive notice of, attend or vote at a meeting of sharehold-

ershasbeenmadeasprovidedin(this)Article53,suchdeterminationshallapplytoany

adjournmentthereof.

Therearenorulesthatallowforanyexceptionstotheabove.

7 Changes of control and defence measures

7.1 DutytomakeanofferTherearenoopting-uporopting-outclausesintheArticlesofAssociationwithinthemean-

ingofArticles125and135oftheSwissFinancialMarketInstructureAct..

7.2 ClausesonchangesofcontrolUnder the ESOP, in the event of a change of control, all options held by a participant shall

accelerateandimmediatelyvestandtheparticipantshallhavetherighttoexercisehisop-

tionwhetherornotthevestingrequirementssetforthintheoptionagreementhavebeen

satisfied.Achangeofcontroleventisdescribedasaneventwhich,underapplicablelawor

listingrules,(i)triggersamandatoryofferor(ii)isthelaunchofanyofferforsuchnumberof

sharesoftheCompany,bywhichtheofferortogetherwithanysharesotherwisedirectlyor

indirectlyheldbytheofferorandanyoneactinginconcertwiththeofferor,wouldexceed

themandatoryofferthresholdunderSwisslaw(ifapplicable)of33.33%ofallissuedsharesof

thecompany,provided,thatfollowingsuchofferperiod(Angebotsfrist)(notincludingthe

additionalacceptanceperiod–Nachfrist)suchofferbecomesorisdeclared,subjectonly

toconditionssubsequent(auflösendeoderanderweitigüberdauerndeBedingungen)(if

any),unconditional.

FormoreinformationregardingtheESOP,pleaserefertosection2.7Convertiblebondsand

optionsonpage15–17ofthisreport.

8 Auditors

8.1 DurationofthemandateandtermofofficeoftheleadThestatutoryauditorsoftheCompanyare,andhavesinceitsincorporationbeen,BDO

Indonesia(“BDO”),PrudentialTowerLt.17,JalanJenderalSudirmanKav.79,SetiaBudi,

Setiabudi,RT.2/RW.2,Kuningan,SetiaBudi,KotaJakartaSelatan,DaerahKhususIbukota

Jakarta 12910, Indonesia.

UnderCaymanlaw,thereisnostatutoryobligationtorotatetheleadauditorafteracertain

timeperiodandtheCompanyengagesBDOonayearlybasis.

34 Corporate governance

8.2 Auditing feesThefeespaidtoBDOduringthereportingyearinconnectionwiththemandateasstatutory

auditoroftheCompanyamountedtoUSD98,000(excludingVAT).

8.3 Additional feesInconnectionwiththeListing,PTGrantThorntonConsultingServicesJakartaIndonesia

reviewedtheaccountspreparedinconformitywithIFRSfor30June2019.Forthisservice,

USD8,300(excludingVAT)wascharged.Furthermore,GrantThorntonAustraliaLtd.(Syd-

ney)wasengagedforthepurposeofpreparinganindependentvaluationreportofthe

Companyasrequiredforthelisting.ThefeespaidinthisrespectamountedtoUSD132,307

(excludingVAT).

8.4 InformationinstrumentspertainingtotheexternalauditTheRiskandAuditCommitteeassessestheefficacy,performance,feeandindependence

oftheauditors(seealsoundersection4ExecutiveCommitteeonpage23–27ofthisreport).

TheBoardofDirectorsdoesnotcarryoutanyfurtherassessmentwithoutcause.Inparticular,

theannualfinancialstatements,themanagementletterandthecomprehensivereportto

theBoardofDirectorsarediscussedbetweentheRiskandAuditCommitteeandtheau-

ditors.TheCFOpreparesthesemattersinconjunctionwiththeauditorsfordiscussionby

theRiskandAuditCommitteeandapprovalbytheBoardofDirectorsandimplementsthe

recommended improvements. As regards non-audit services, care is taken to ensure that

nomandatesareplacedwithBDOthatcouldresultinaconflictofinterestwiththeauditing

mandateorimpairitsindependence.TherewerenomeetingsheldbytheRiskandAudit

Committeeduringthereportingyear.ThefirstmeetingoftheRiskandAuditCommittee

meetingwasheldon10February2020.Likewise,noformalboardmeetingswiththeexter-

nalauditorshavetakenplaceduringthereportingyear.Giventravelrestrictionsinthefirst

quarterof2020duetotheCOVID-19pandemic,allmeetingsbetweentheBoardofDirectors

andtheexternalauditorstookplacebywayofvideocalls.

9 Information policy

TheCompanyreleasesitsannualfinancialresultsintheformofanannualreport.Thean-

nualreportispublishedelectronicallywithinfourmonthsofthereportingdate.Inaddition,

theresultsforthefirsthalfofeachfinancialyeararereleasedinelectronicformwithinthree

monthsfollowing30Juneeachyear.

TheCompany’sannualreportandhalf-yearresultswillbeannouncedviapressreleasesand

themedia.Investorsreceiveallinformationinaccordancewitharticle138oftheArticlesof

Association(accessibleviahttps://investor.achiko.com/articles-of-association-110419/).Any

writtennoticeordocumentisannouncedtotheshareholdersorbeneficialownersregis-

tered in person, by facsimile, by e-mail or by post or a recognised courier service to the service

addressonfileintheshareregister.

35Corporate governance

TheCompany’sannualandinterimreportsareavailableat:https://investor.achiko.com/

financials/.

TheCompany’sagendaisavailableat:https://investor.achiko.com/events/.

Copiesofallinformationanddocumentspertainingtopressreleasescanbeviewedand

downloadedfromtheCompany’swebsiteathttps://investor.achiko.com/news/.

Interested parties and persons may also subscribe to the Company’s e-mail announcement

alert service via the same page.

The Company additionally provides investor updates, analyst presentations , stock informa-

tion, recent investor presentations and the Company’s contact information on the investor

relationssectionofitswebsiteathttps://investor.achiko.com/.Thisinformationmayalsobe

requesteddirectlybyinvestors(e-mail:ir@achiko.com).

36 Financial report

We are a platform company.

We provide many ways to pay, play and reasons to stay on our platform.

37Financial report

Financial Report 2019

Achiko limited and its subsidiaries consolidated financial statements for the year ended 31 December 2019 and independent Auditor’s report

38 Financial report

Consolidated statement of financial position 31 December 2019

AssetsNon-current assets

inUSD Notes 2019 2018

Propertyandequipment–net 10 19,923 27,748

Intangibleassets–net 11 – 7,437

Goodwill 4,12 1,559,540 1,559,540

Deferredtaxassets–net 8 96,837 122,155

Other receivables 14 100,000 –

Rental deposit 15,547 2,450

Total non-current assets 1,791,847 1,719,330

Current assets

Prepaidexpensesandadvances 13 816,816 854,498

Prepaidtax 66,167 34,235

Trade and other receivables 14 1,609,823 579,508

Cash on hand and in banks 15 593,157 182,523

Total current assets 3,085,963 1,650,764

TOTAL ASSETS 4,877,810 3,370,094

39Financial report

Consolidated statement of financial position 31 December 2019

Liabilities and equityEQUITY

Equity attributable to owners of the company

inUSD Notes 2019 2018

Share capital 20 91,382 76,356

Share premium 20 11,220,522 3,149,424

Other reserves 20 1,371,718 31,656

Accumulated losses (10,774,111) (3,882,927)

Total equity attributable to owners of the company 1,909,511 (625,491)

Non-controlling interest – –

Total Equity 1,909,511 (625,491)

LIABILITIES

Non-current liabilities

Post-employmentbenefitliabilities 3,19 24,575 54,575

Current liabilities

Trade and other payables 16 2,451,871 2,224,945

Accruedexpenses 17 473,799 198,888

Borrowingfromthirdparty 18 – 1,500,000

Taxpayable 18,054 17,177

Total current liabilities 2,943,724 3,941,010

Total liabilities 2,968,299 3,995,585

TOTAL LIABILITIES AND EQUITY 4,877,810 3,370,094

40 Financial report

inUSD Notes2019

(One year)2018

(Sevenmonths)

Revenue 5 6,467,312 3,124,342

Cost of revenue (6,177,902) (3,759,170)

GROSSPROFIT(LOSS) 289,410 (634,828)

Operating expenses

Marketinganddistributionexpenses (299,733) (70,823)

Administrativeexpenses 6 (5,807,132) (1,764,519)

Researchandproductdevelopmentexpenses (244,782) (189,387)

Otheroperatingexpenses–net 7 (224,828) (1,290,243)

Loss from operations (6,287,065) (3,949,800)

Interestexpense 18 (617,500) (25,000)

Loss before tax (6,904,565) (3,974,800)

Incometaxbenefit(expense) 8 (19,329) (74,368)

LOSS FOR THE YEAR (6,923,894) (3,900,432)

Other comprehensive income

Itemsthatwillnotbereclassifiedsubsequentlytoprofitorloss:

Remeasurementofpost-employmentbenefitliabilities 19 43,613 23,340

Relatedtaxonremeasurementofpost-employmentbenefitliabilities 8 (10,903) (5,835)

Itemthatmaybereclassifiedsubsequentlytoprofitorloss:

Exchangegainarisingfromtranslationofforeignoperations 8,618 7,224

Othercomprehensiveincomefortheyear,netoftax 41,328 24,729

TOTAL COMPREHENSIVE LOSS FOR THE YEAR (6,882,566) (3,875,703)

Lossfortheyearattributableto:

OwnersoftheCompany (6,923,894) (3,900,432)

Non-controlling interest – –

(6,923,894) (3,900,432)

Totalcomprehensivelossattributableto:

OwnersoftheCompany (6,882,566) (3,875,703)

Non-controlling interest – –

(6,882,566) (3,875,703)

Basic loss per share attributable to the owners of the Company 9 (0.08) (0.08)

Consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2019 and for the period 25 May 2018 to 31 December 2018

41Financial report

Consolidated statement of changes in equity for the year ended 31 December 2019 and for the period 25 May 2018 to 31 December 2018

Equity attributable to the owners of the parent company

inUSD NotesShare

capitalShare

premiumOther

reservesAccumulated

losses TotalNon-control-ling interest Total equity

Balance as of inception date – – – – – – –

Issuance of share capital 20 76,356 3,149,424 – – 3,225,780 – 3,225,780

Share options to employees – – 24,432 – 24,432 – 24,432

Loss for the year – – – (3,900,432) (3,900,432) – (3,900,432)

Other comprehensive income – – 7,224 17,505 24,729 – 24,729

Balance as of 31 December2018

76,356 3,149,424 31,656 (3,882,927) (625,491) – (625,491)

Issuance of share capital 12,401 7,876,848 – – 7,889,249 – 7,889,249

Share options to employees – – 1,528,319 – 1,528,319 – 1,528,319

Exerciseofvestedshares 2,625 194,250 (196,875) – – – –

Loss for the year – – – (6,923,894) (6,923,894) – (6,923,894)

Other comprehensive income – – 8,618 32,710 41,328 – 41,328

Balance as of 31 December2019 91,382 11,220,522 1,371,718 (10,774,111) 1,909,511 – 1,909,511

42 Financial report

inUSD Notes2019

(One year)2018

(Sevenmonths)

Cash flows from operating activities

Cash received from customers 5,306,997 3,208,591

Cash paid to employees (2,096,313) (618,586)

Cash paid to suppliers and others (10,680,618) (2,391,702)

NETCASHPROVIDEDBY / (USEDIN)OPERATINGACTIVITIES (7,469,934) 198,303

Cash flows from investing activity

Acquisition of property and equipment 10 (2,447) (2,355)

Payment for acquisition of subsidiaries, net of cash acquired 4 – (566,525)

NET CASH USED IN INVESTING ACTIVITIES (2,447) (568,880)

Cash provided by financing activity

Issuance of share capital 7,889,249 551,172

Net increase in cash on hand and in banks 416,868 180,595

Effectofexchangeratechangesincashonhandandinbanks (6,234) 1,928

CASH ON HAND AND IN BANKS AT BEGINNING OF YEAR 182,523 –

CASH ON HAND AND IN BANKS AT END OF YEAR 593,157 182,523

Consolidated statement of cash flows for the year ended 31 December 2019 and for the period 25 May 2018 to 31 December 2018

43Financial report

Notes to consolidated financial statements for the year ended 31 December 2019

1. General Information

AchikoLimited(theCompany)isapubliclistedcompanyestablishedon25May2018and

whosesharesaretradedontheSIXSwissExchange.

In2018,theCompanyconcludedseveralacquisitions,including:(i)acquisitionoftheMimo-

paypaymentplatformthroughvariouslegalentities–GamesparkInteractiveLimited(“GP”),

GlobimediaNetworkPte.Ltd.(“GMN")andPTProgressivmediaIndonesia(“PTPI”);and(ii)

acquisitionofKryptoniteKoreaCo.,Ltd.(“KN”).

AchikoLimitedanditssubsidiaries(theGroup)providesecurepaymentsolutionsforgame

publishers and application developers to accept various payment methods for any digital

contents and goods through the Mimopay brand.

TheCompany’saddressisatAndersonSquareBuilding,64SheddenRoad,GrandCayman,

Cayman Islands.

ThecompositionoftheCompany’sBoardofDirectorsasof31 December2019and2018is

asfollows:

2019 2018

Director JohnBing-TsungLin Michael Anthony Parker

Director Christophe Laurent KennethHuaIngTing

Director StevenWern-YiGoh JohnBing-TsungLin

Director AllenYaobianWu Christophe Laurent

Asof31 December2019,informationonthesubsidiarieswhichareincludedintotheGroup’s

consolidatedfinancialstatementsisasfollows:

Subsidiary CountryYearof commercial operation

Main business activity

Percentage of directownership

Total assets before elimination

Gamespark Interactive Limited(GP) HongKong 2016

Digitalpayment platform services 100.00% 17,517

GlobimediaNetworkPte.Ltd.(GMN) Singapore 2016

Digitalpayment platform services 100.00% 584,583

PT Progressivmedia Indonesia(PTPI) Indonesia 2011

Digitalpayment platform services 0.00% 717,349

KryptoniteKorea Co.,Ltd.(KN) SouthKorea –

Gamesoftwaredeveloper 100.00% 39,479

44 Financial report

2. Summary of significant accounting policies

A. BASISOFPREPARATIONOFTHEFINANCIALSTATEMENTSTheconsolidatedfinancialstatementshavebeenpreparedinaccordancewithInternational

FinancialReportingStandards(IFRS)asissuedbytheInternationalAccountingStandards

Board(IASB).

Theconsolidatedfinancialstatementshavebeenpreparedunderthehistoricalcostmethod,

exceptforcertainaccountswhicharemeasuredonthebasesasdescribedintherelated

accounting policies.

Theconsolidatedfinancialstatements,exceptfortheconsolidatedstatementofcashflows,

are prepared under the accrual basis of accounting. The consolidated statement of cash

flowsispreparedusingthedirectmethod,withclassificationofcashflowsintooperating,

investingandfinancingactivities.

Thefunctionalandpresentationcurrencyusedinthepreparationoftheconsolidatedfinan-

cialstatementsistheUnitedStatesDollar(USD).

Reclassification of prior year presentation

Certainamountsreportedintheprioryearintheconsolidatedstatementofprofitandloss

andothercomprehensiveincomehavebeenreclassifiedtoconformwiththecurrentyear

presentation.Thesereclassificationshadnoeffectonthereportedresultsofoperations.

B. NEWSTANDARDS,INTERPRETATIONSANDAMENDMENTSEFFECTIVEFROM1JANUARY2019

Thefollowingnewstandards,interpretationsandamendmentseffectivefrom1 January2019,

whichdonotresultinanysubstantialchangestotheGroup’saccountingpoliciesandhad

nomaterialimpactontheconsolidatedfinancialstatements,areasfollows:

i. IFRS 16 “Leases”

Effective1 January2019,IFRS16hasreplacedIAS17LeasesandIFRIC4Determining

whetheranArrangementContainsaLease.

IFRS 16 provides a single lessee accounting model, requiring the recognition of assets

andliabilitiesforallleases,togetherwithoptionstoexcludeleaseswherethelease

termistwelvemonthsorless,orwheretheunderlyingassetisoflowvalue.IFRS

16substantiallycarriesforwardthelessoraccountinginIAS17,withthedistinction

betweenoperatingleasesandfinanceleasesbeingretained.

ii. IFRIC23“UncertaintyoverIncomeTaxTreatments”

IFRIC23providesguidanceontheaccountingforcurrentanddeferredtaxliabilities

andassetsincircumstancesinwhichthereisuncertaintyoverincometaxtreatments.

Theinterpretationrequires:

45Financial report

– TheGrouptodeterminewhetheruncertaintaxtreatmentsshouldbeconsidered

separately,ortogetherasagroup,basedonwhichapproachprovidesbetter

predictionsoftheresolution;

– TheGrouptodetermineifitisprobablethatthetaxauthoritieswillacceptthe

uncertaintaxtreatment;and

– Ifitisnotprobablethattheuncertaintaxtreatmentwillbeaccepted,theGroupis

tomeasurethetaxuncertaintybasedonthemostlikelyamountorexpectedvalue,

dependingonwhichevermethodbetterpredictstheresolutionoftheuncertainty.

This measurement is required to be based on the assumption that each of the

taxauthoritieswillexamineamountstheyhavearighttoexamineandhavefull

knowledgeofallrelatedinformationwhenmakingthoseexaminations.

OthernewandamendedstandardsandinterpretationsissuedbytheIASBthatwillapply

forthefirsttimeinthenextannualconsolidatedfinancialstatementsarenotexpectedto

impact the Group as they are either not relevant to the Group’s activities or require account-

ingwhichisconsistentwiththeGroup’scurrentaccountingpolicies.

C. NEWSTANDARDS,INTERPRETATIONSANDAMENDMENTSISSUEDBUTNOTYETEFFECTIVE

Thereareanumberofstandards,amendmentstostandardsandinterpretationswhichhave

beenissuedbytheIASBthatareeffectiveinfutureaccountingperiodsthattheGrouphas

decidednottoadoptearly.Thefollowingamendmentsareeffectivefortheperiodbegin-

ning1January2020:

i. Revisedconceptualframeworkforfinancialreporting

Therevisedconceptualframeworkintroducesnewconceptsonmeasurement,

presentationanddisclosure,derecognitionandhasupdatedthedefinitionofassets

and liability, and derecognition criteria for assets and liabilities in the consolidated

financialstatements.Therevisedframeworkalsointroducesclarificationonprudence,

stewardship,measurementuncertaintyandsubstanceoverform.

ii. IAS 1 “Presentation of Financial Statements” and IAS 8 “Accounting Policies, Changes in

AccountingEstimatesandErrors(Amendment–DefinitionofMaterial)”

Theamendmentsclarifythecriteriausedtodeterminewhetherliabilitiesareclassified

as current or non- current. These amendments clarify that the current or non-current

classificationisbasedonwhetheranentityhasarightattheendofthereporting

periodtodefersettlementoftheliabilityforatleasttwelvemonthsafterthereporting

period.Theamendmentsalsoclarifythat̒ settlement’includesthetransferofcash,

goods, services, or equity instruments unless the obligation to transfer equity instru-

mentsarisesfromaconversionfeatureclassifiedasanequityinstrumentseparately

fromtheliabilitycomponentofacompoundfinancialinstrument.Theamendments

areeffectiveforannualreportingperiodsbeginningonorafter1 January2022.

iii. IFRS3BusinessCombinations(Amendment – DefinitionofBusiness)

The amendments to IFRS 3 clarify the minimum requirements to be a business,

remove the assessment of a market participant’s ability to replace missing elements

46 Financial report

andnarrowthedefinitionofoutputs.Theamendmentsalsoaddguidancetoassess

whetheranacquiredprocessissubstantiveandaddillustrativeexamples.Anoptional

fairvalueconcentrationtestisintroducedwhichpermitsasimplifiedassessmentof

whetheranacquiredsetofactivitiesandassetsisnotabusiness.

TheGroupiscurrentlyassessingtheimpactofthesenewaccountingstandardsandamend-

ments.TheGroupdoesnotexpectanyotherstandardsissuedbytheIASB,butnotyeteffec-

tive, to have a material impact on the Group.

D. PRINCIPLESOFCONSOLIDATIONSubsidiaries

SubsidiariesareentitieswhichtheGrouphascontrol.ControlexistswhentheGrouphas

poweroverthesubsidiary,isexposed,orhasrights,tovariablereturnsfromitsinvolvement

withthesubsidiary,andhastheabilitytoaffectthosereturnsthroughitspoweroverthe

subsidiary.Asubsidiaryisconsolidatedfromtheacquisitiondate,beingthedatewhenthe

Group obtains control.

De-factocontrolexistsinsituationswheretheCompanyhasthepracticalabilitytodirect

therelevantactivitiesoftheinvesteewithoutholdingthemajorityofthevotingrights.In

determiningwhetherde-factocontrolexists,theCompanyconsidersallrelevantfactsand

circumstancesincluding:

– The size of the Company’s voting rights relative to both the size and dispersion of other

partieswhoholdvotingrights;

– SubstantivepotentialvotingrightsheldbytheCompanyandbyotherparties;

– Othercontractualarrangements;and

– Historicpatternsinvotingattendance.

ChangesintheGroup’sownershipinterestinasubsidiarythatdonotresultinthelossof

control is recognised directly in equity.

IftheGroupceasestocontrolofasubsidiary,theGroupshall,onthedateoflossofcontrol:

– derecognisetheassets(includinggoodwill)andliabilitiesofthesubsidiaryatits

carryingamount;

– derecognisethecarryingamountofanyNCI;

– recognisethefairvalueoftheconsiderationreceivedanddistributionofshares(ifany);

– recognisethefairvalueofanyinvestmentretained;

– reclassifytheGroup’sportionofthecomponentsthatwerepreviouslyrecognisedin

othercomprehensiveincometoprofitorlossorretainedearnings,asappropriate;and

– recogniseanyresultingdifferenceasagainorlossinprofitorlossattributabletothe

Company.

Non-controlling interest

Anon-controllinginterest(NCI)isaportionofsubsidiary’sequitywhichisnotdirectlyattrib-

utable to the Company. An NCI is presented in the equity section of the consolidated state-

mentoffinancialposition,separatefromtheequitysectionattributabletotheCompany.

47Financial report

Theprofitorlossandeachcomponentofothercomprehensiveincomeofthesubsidiaryis

allocatedbetweentheCompanyandNCIbasedontheirrelativeinterestinthesubsidiary,

evenifthisresultsinadeficitbalancefortheNCI.

Transactions eliminated in consolidation

Allassets,liabilities,equity,incomeandexpensesrelatingtotransactionsbetweenentities

oftheGroup,includingunrealisedprofitorlossesthatarerecognisedinassetsandresulting

from intra-group transactions, are fully eliminated.

E. FOREIGNCURRENCYTheconsolidatedfinancialstatementsarepresentedinUnitedStatesDollar(USD),whichis

alsotheCompany’sfunctionalcurrency.EachentityintheGroupdeterminesitsownfunc-

tionalcurrencyanditemsincludedintheconsolidatedfinancialstatementsofeachentity

are measured using that functional currency.

Transactions and balances

Transactions in foreign currencies are recorded in the respective functional currencies of the

entityattheexchangerateprevailingatthedateofthetransaction.Monetaryassetsand

liabilitiesdenominatedinforeigncurrenciesaretranslatedusingtheexchangerateatthe

end of the reporting period. Non-monetary items that are measured in terms of historical

costinaforeigncurrencyaretranslatedusingtheexchangeratesasatthedatesoftheinitial

transactions. Non-monetary items measured at fair value in a foreign currency are translated

usingtheexchangeratesatthedatewhenthefairvaluewasmeasured.

Consolidation of foreign subsidiaries

AllassetsandliabilitiesofforeignsubsidiarieswithafunctionalcurrencyotherthantheUSD

aretranslatedusingtheclosingratesatthedateoftheconsolidatedstatementoffinancial

position.Incomeandexpensesaretranslatedattheexchangeratesprevailingatthedate

of transactions.

Translationdifferencesresultingfromtheapplicationofthismethodareclassifiedunder

other comprehensive income until the disposal of the subsidiary. At the date of disposal, the

cumulatedtranslationdifferencesinothercomprehensiveincomeisrecognisedinprofit

or loss.

Goodwill,assetsacquiredandliabilitiesassumedarisingfromtheacquisitionofsubsidiaries

withafunctionalcurrencyotherthantheUSDarerecognisedintheconsolidatedfinancial

statementsinthefunctionalcurrencyandtranslatedattheexchangerateattheacquisi-

tion date. These balances are translated at subsequent balance sheet dates at the relevant

exchangerate.

F. BUSINESSCOMBINATIONBusinesscombinationsareaccountedforusingtheacquisitionmethod.Identifiableassets

acquired and liabilities are measured initially at their fair values at acquisition date. For each

individual business combination, the Group elects to recognise NCI in the acquiree on the

48 Financial report

acquisitiondate,attheNCI’sproportionateshareoftheacquiree’sidentifiablenetassets.

Other components of NCI are measured at fair value, unless another measurement basis is

requiredbyIFRS.Acquisition-relatedcostsarerecognisedasexpensesintheperiodinwhich

the costs are incurred and the services are received.

Anyexcessofthesumofthefairvalueoftheconsiderationtransferredinthebusinesscom-

bination, the amount of the NCI in the acquiree and the fair value of the Group’s previously

heldequityinterestintheacquiree(ifany),overthenetfairvalueoftheacquiree’sidentifia-

bleassetsandliabilities,isrecordedasgoodwill.Ininstanceswherethefairvalueofthetotal

considerationtransferredislowerthantheidentifiablenetassets,thedifferenceisrecog-

nisedasgainonthebargainpurchaseimmediatelyinprofitorlossonthedateofacquisition.

Goodwillisinitiallymeasuredatcost.Subsequently,goodwillismeasuredatcostlessany

accumulated impairment losses.

G. TRANSACTIONSWITHRELATEDPARTIESA related party is a person or entity that is related to the Group.

1. Apersonoraclosememberofthatperson’sfamilyisrelatedtotheGroupifthatperson:

i. hascontrolorjointcontrolovertheGroup;

ii. hassignificantinfluenceovertheGroup;or

iii. is a member of the key management personnel of the Group or parent of the Group.

2. AnentityisrelatedtotheGroupifanyofthefollowingconditionsapplies:

i. theentityandtheGrouparemembersofthesamegroup;

ii. theentityisanassociateorjointventureoftheGroup(oranassociateorjoint

ventureofamemberofagroupofwhichtheGroupisamember);

iii. theentityandtheGrouparejointventuresofthesamethirdparty;

iv. theentitywhichisajointventureoftheGroupandotherentitywhichisan

associateoftheGroup;

v. theentityisapost-employmentbenefitplanforthebenefitofemployeesofeither

theGrouporanentityrelatedtotheGroup;

vi. theentityiscontrolledorjointlycontrolledbyapersonidentifiedin(1);

vii. apersonidentifiedin(1)(i)hassignificantinfluenceovertheentityorisamemberof

thekeymanagementpersonneloftheentity,(orparentoftheentity);

viii.theentity,oramemberofagrouptowhichtheentityispartoftheGroup,provides

services to the key management personnel of the Group or to the parent entity of

the Group.

Allsignificanttransactionsandbalanceswithrelatedpartiesaredisclosedinthenotesto

consolidatedfinancialstatements.

H. FINANCIALINSTRUMENTSFinancial assets include cash on hand and in banks and trade and other receivables.

Financialliabilitiesincludetradeandotherpayablesandaccruedexpenses.

49Financial report

Initial recognition and measurement – financial assets

Financialinstrumentsarerecognisedwhen,andonlywhen,theGroupbecomespartyto

the contractual provisions of the instruments.

Atinitialrecognition,theGroupmeasuresafinancialinstrumentatitsfairvalueplus,inthe

caseofafinancialinstrumentnotatfairvaluethroughprofitorloss,transactioncoststhat

aredirectlyattributabletotheacquisitionofthefinancialinstrument.Transactioncostsofa

financialinstrumentcarriedatfairvaluethroughprofitorlossareexpensedinprofitorloss.

TradereceivablesaremeasuredattheamountwhichtheGroupisexpectedtoreceivein

exchangeforthegoodsorservicestransferredtoacustomer(excludingamountscollect-

edonbehalfofthirdparties)ifthetradereceivablesdonotcontainasignificantfinancing

component at initial recognition.

Subsequent measurement – financial assets

Oninitialrecognition,afinancialassetisclassifiedasmeasuredat:amortisedcost;fairvalue

throughothercomprehensiveincome(FVOCI)–debtinvestment;FVOCI–equityinvest-

ment;orfairvaluethroughprofitorloss(FVTPL).Theclassificationoffinancialassetsunder

IFRS9isgenerallybasedonthebusinessmodelinwhichafinancialassetismanagedand

itscontractualcashflowcharacteristics.TheGroupconsiderswhetherthecontractualcash

flowsrepresentsolelypaymentsofprincipalandinterestthatareconsistentwithabasic

lendingarrangement.Wherethecontractualtermsintroduceexposuretoriskorvolatility

thatareinconsistentwithabasiclendingarrangement,therelatedfinancialassetsareclas-

sifiedandmeasuredatFVTPL.

i. Amortised cost

Financialassetsthatareheldforthecollectionofcontractualcashflowswherethose

cashflowsrepresentsolelypaymentsofprincipalandinterestaremeasuredatamor-

tised cost. Financial assets are measured at amortised cost using the effective interest

method,lessimpairment.Gainsandlossesarerecognisedinprofitorlosswhenthe

assets are derecognised or impaired, and through the amortisation process.

ii. DebtinvestmentsatFVOC

Financialassetsthatareheldforcollectionofcontractualcashflowsandforselling

thefinancialassets,wheretheassets’cashflowsrepresentsolelypaymentsof

principal and interest, are measured at FVOCI. Financial assets measured at FVOCI are

subsequently measured at fair value. Any gains or losses from changes in fair value

ofthefinancialassetsarerecognisedinothercomprehensiveincome.Impairment

losses,foreignexchangegainsandlosses,andinterestcalculatedusingtheeffective

interestmethodarerecognisedinprofitorloss.Thecumulativegainorlosspreviously

recognisedinothercomprehensiveincomeisreclassifiedfromOCItoprofitorlossasa

reclassificationadjustmentwhenthefinancialassetisderecognised.

iii. Equity investments at FVOCI

On initial recognition of an investment in equity instrument that is not held for

50 Financial report

trading, the Group may irrevocably elect to present subsequent changes in fair value

inOCI.Dividendsfromsuchinvestmentsaretoberecognisedinprofitorlosswhen

the Group’s right to receive payments is established. Any gains or losses on equity

investmentsatFVOCIareneverreclassifiedtoprofitorloss.

iv. FVTPL

Assets that do not meet the criteria for amortised cost or FVOCI are measured at

FVTPL.AnygainorlossonfinancialinstrumentssubsequentlymeasuredatFVTPLis

recognisedinprofitorlossintheperiodinwhichitarises.

Asof31 December2019,theGroupclassifiesitsfinancialassetsatamortisedcost.

Initial recognition and measurement – financial liabilities

Financialliabilitiesarerecognisedwhen,andonlywhen,theGroupbecomesapartytothe

contractualprovisionsofthefinancialinstrument.TheGroupdeterminestheclassification

ofitsfinancialliabilitiesatinitialrecognition.

Allfinancialliabilitiesarerecognisedinitiallyatfairvalueplusinthecaseoffinancialliabilities

notatfairvaluethroughprofitorloss,directlyattributabletransactioncosts.

Subsequent measurement – financial liabilities

Afterinitialrecognition,financialliabilitiesthatarenotcarriedatfairvaluethroughprofit

or loss are subsequently measured at amortised cost using the effective interest method.

Gainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognisedand

through the amortisation process.

Asof31 December2019,theGroupclassifiesitsfinancialliabilitiesatamortisedcost.

Derecognition

TheGroupderecognisesafinancialassetwhenthecontractualrightstothecashflowsfrom

thefinancialassetexpire,orittransferstherightstoreceivethecontractualcashflowsina

transactioninwhichsubstantiallyalloftherisksandrewardsofownershipofthefinancial

assetaretransferred,orinwhichtheGroupneithertransfersnorretainssubstantiallyallof

therisksandrewardsofownershipanditdoesnotretaincontrolofthefinancialasset.The

differencebetweenthecarryingamountandthesumoftheconsiderationreceivedandany

cumulative gain or loss that had been recognised in other comprehensive income for debt

instrumentsisrecognisedinprofitorloss.

Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisdischargedor

cancelledorexpires.Onderecognition,thedifferencebetweenthecarryingamountsand

theconsiderationpaidisrecognisedinprofitorloss.

Offsetting

Financial assets and liabilities are offset and the net amount is presented in the consolidated

statementoffinancialposition,whenandonlywhentheGroupcurrentlyhasalegallyen-

51Financial report

forceable right to offset the recognised amounts and intends either to settle on a net basis

or to realise the asset and settle the liability simultaneously.

I. IMPAIRMENT OF FINANCIAL ASSETSTheGrouprecognisesanallowanceforexpectedcreditlosses(ECLs)foralldebtinstruments

notheldatfairvaluethroughprofitorlossandfinancialguaranteecontracts.ECLsarebased

onthedifferencebetweenthecontractualcashflowsdueinaccordancewiththecontract

andallthecashflowsthattheGroupexpectstoreceive,discountedatanapproximation

oftheoriginaleffectiveinterestrate.Theexpectedcashflowswillincludecashflowsfrom

the sale of collateral held or other credit enhancements that are integral to the contractual

terms.

ECLsarerecognisedintwostages.Forcreditexposuresforwhichtherehasnotbeenasig-

nificantincreaseincreditrisksinceinitialrecognition,ECLsareprovidedforcreditlosses

thatresultfromdefaulteventsthatarepossiblewithinthenexttwelvemonths(atwelve-

monthECL).Forthosecreditexposuresforwhichtherehasbeenasignificantincreasein

creditrisksinceinitialrecognition,alossallowanceisrecognisedforcreditlossesexpected

overtheremaininglifeoftheexposure,irrespectiveoftimingofthedefault(alifetimeECL).

Fortradereceivablesandcontractassets,theGroupappliesasimplifiedapproachincalcu-

lating ECLs. Therefore, the Group does not track changes in credit risk, but instead recog-

nisesalossallowancebasedonlifetimeECLsateachreportingdate.TheGrouphasestab-

lishedaprovisionmatrixthatisbasedonitshistoricalcreditlossexperience,adjustedfor

forward-lookingfactorsspecifictothedebtorsandtheeconomicenvironment.

FordebtinstrumentsatfairvaluethroughOCI,theGroupappliesthelowcreditrisksim-

plification.Ateveryreportingdate,theGroupevaluateswhetherthedebtinstrumentis

consideredtohavelowcreditriskusingallreasonableandsupportableinformationthatis

availablewithoutunduecostoreffort.Inmakingthatevaluation,theGroupreassessesthe

internal credit rating of the debt instrument. In addition, the Group considers that there has

beenasignificantincreaseincreditriskwhenthecontractualpaymentsaremorethan30

days past due.

TheGroupconsidersafinancialassetindefaultwhencontractualpaymentsare90dayspast

due.However,incertaincases,theGroupmayalsoconsiderafinancialassettobeindefault

wheninternalorexternalinformationindicatesthattheGroupisunlikelytoreceivetheout-

standing contractual amounts in full before taking into account any credit enhancements

heldbytheGroup.Afinancialassetiswrittenoffwhenthereisnoreasonableexpectationof

recoveringthecontractualcashflows.

J. PREPAIDEXPENSESPrepaidexpensesareamortisedovertheirbeneficialperiodsusingthestraight-linemethod.

K. PROPERTYANDEQUIPMENTPropertyandequipmentareinitiallyrecordedatcostwhichincludesthepurchaseprice,

52 Financial report

borrowingcosts,andothercostsdirectlyattributabletobringtheassettothepresentloca-

tion and condition necessary for it to be capable of operating in the manner intended by the

management.Subsequentexpensesareincludedinthecostofanassetorrecognisedasa

separateassetonlywhenitisprobablethattheGroupwillobtainfutureeconomicbenefits

associatedwiththeassetsandacquisitioncostofassetscanbemeasuredreliably.Costof

maintenance and repairs that do not meet the recognition criteria is recognised directly in

profitorloss.

Subsequenttoinitialrecognition,theGroupusesacostmodelinwhichpropertyandequip-

ment are measured at cost less accumulated depreciation and accumulated impairment

losses(ifany).

Depreciationofpropertyandequipment,whichcompriseoffurnitureandofficeequipment,

iscomputedusingthestraight-linemethodbasedontheestimatedusefullivesof4−8years.

The estimated useful lives, residual value and depreciation method of property and equip-

mentarereviewedateachyearend,withanychangesaccountedforaschangesinaccount-

ingestimateswhicharerecognisedonaprospectivebasis.

Anitemofpropertyandequipmentisderecognisedupondisposalorwhennofutureeco-

nomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossarisingonderecogni-

tionoftheasset,accountedforasthedifferencebetweenthenetproceedsfromdisposal

andthecarryingamountofpropertyandequipment,isrecognisedinprofitorlossinthe

yearwhentheassetisderecognised.

L. INTANGIBLEASSETAt initial recognition, an intangible asset is measured at cost. Subsequent to initial recognition,

an intangible asset is carried at cost less any accumulated amortisation and any accumulated

impairmentloss.Theusefullifeofintangibleassetisassessedtobeeitherfiniteorindefinite.

Anintangibleassetwithanindefinitelifeisnotamortised.Instead,thisistestedforimpair-

ment annually or more frequently if the events and circumstances indicate that the intan-

gible asset may be impaired.

Research and development costs

Researchcostsareexpensedasincurred.Deferreddevelopmentcostsarisingfromdevel-

opmentexpendituresonanindividualprojectarerecognisedasanintangibleassetwhen

the Group can demonstrate the technical feasibility of completing the intangible asset so

thatitwillbeavailableforuseorsale,itsintentiontocompleteanditsabilitytouseorsell

theasset,howtheassetwillgeneratefutureeconomicbenefits,theavailabilityofresources

tocompleteandtheabilitytomeasurereliablytheexpendituresduringthedevelopment.

Subsequent to initial recognition of deferred development costs as an intangible asset, it

is carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisationoftheintangibleassetbeginswhendevelopmentiscompleteandtheassetis

53Financial report

availableforuse.Deferreddevelopmentcostshaveafiniteusefullifeandareamortisedover

theperiodofexpectedsalesfromtherelatedprojectonastraight-linebasis.

Goodwill

Goodwillarisingfromabusinesscombinationisinitiallymeasuredatitscost,whichisthe

excessofthesumoftheconsiderationtransferred,theamountofanynon-controllingin-

terests in the acquiree and the fair value of the acquirer’s previously held equity interest in

theacquiree(ifany)overthenetoftheacquisition-dateamountsoftheidentifiableassets

acquired and the liabilities assumed.

Afterinitialrecognition,goodwillacquiredinabusinesscombinationismeasuredatcost

lessanyaccumulatedimpairmentlosses.Goodwillisnotamortised.

M. IMPAIRMENTOFNON-FINANCIALASSETSNon-financialassetsaresubjecttoimpairmentwhenevermanagementassessesthatevents

or changes in circumstance indicate that their carrying amounts may not be recoverable. If

suchanindicationexists,theGroupmakesanestimateoftherecoverableamountoftheasset.

Therecoverableamountforanindividualassetisthehigheramountbetweenthefairvalue

less costs to sell and its value-in-use. Where it is not possible to estimate the recoverable

amount of an individual asset, an impairment test is carried out on the cash-generating

unit(CGU)–thesmallestgroupofassetstowhichtheassetbelongsforwhichthereare

separatelyidentifiablecashflows.

In determining fair value less costs to sell, the Group takes into account a market participant’s

abilitytogenerateeconomicbenefitsbyusingtheassetinitshighestandbestuse,orby

sellingittoanothermarketparticipantthatwouldusetheassetinitshighestandbestuse.

The Group may use appropriate valuation techniques to determine the fair value of the asset.

Inassessingvalue-in-use,theestimatednetfuturecashflowsarediscountedtotheirpres-

entvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetime

valueofmoneyandtherisksspecifictotheasset.

Iftheasset’scarryingamountexceedsitsrecoverableamount,theassetisconsideredim-

pairedandiswrittendowntoitsrecoverableamount.Impairmentlossesarerecognisedin

profitorloss.

An assessment is made each reporting period to determine if there is an indication that

previouslyrecognisedimpairmentlossmaynolongerexistormayhavedecreased.Ifsuch

anindicationexists,thecarryingamountoftheassetisincreasedtoitsrecoverableamount.

Thereversalislimitedsothatthecarryingamountoftheassetwillnotexceedtherecover-

able or carrying amount, net of depreciation, had no impairment loss been recognised pre-

viously.Suchareversalisrecognisedinprofitorloss.Afterreversal,thefuturedepreciation

ofassetsisadjustedtoallocatetherevisedcarryingamountofassetsusingthesystematic

basis throughout the remaining useful lives.

54 Financial report

Impairment of goodwill

Goodwillistestedforimpairmentannuallyirrespectiveofwhetherthereisanyindication

of impairment.

Forthepurposeofimpairmenttesting,goodwillisallocatedtoeachCGUthatisexpected

tobenefitfromthesynergiesofthebusinesscombination,irrespectiveofwhetherother

assetsorliabilitiesoftheacquireewereassignedtothoseunitsorgroupsofunits.Eachunit

towhichthegoodwillisallocatedrepresentsthelowestlevelwithintheentityatwhichthe

goodwillismonitoredforinternalmanagementpurposesandisnotlargerthananoperat-

ing segment.

N. POST-EMPLOYMENTBENEFITLIABILITIESInprovidingpost-employmentbenefitliabilitiestoitsemployees,theGroupparticipatesin

thenationalpensionschemesasdefinedbythelawsofthecountriesinwhichithasoper-

ations.Thecalculationofpost-employmentbenefitliabilitiesisbasedontheprojectedunit

credit method.

Theamountrecognisedaspost-employmentbenefitliabilitiesintheconsolidatedstate-

mentoffinancialpositionrepresentsthepresentvalueofthedefinedbenefitobligation.

Servicecostsarerecognisedinprofitorlossandincludecurrentandpastservicecostsas

wellasgainsandlossesoncurtailments.

Netinterestexpenseisrecognisedinprofitorlossandiscalculatedbyapplyingthediscount

rateusedtomeasurethedefinedbenefitobligationatthebeginningoftheperiodtothe

balanceofthenetdefinedbenefitobligation,consideringtheeffectsofcontributionsand

benefitpaymentsduringtheperiod.

Remeasurementsofthedefinedbenefitobligationarerecogniseddirectlywithinequity.

Theremeasurementsinclude:

– actuarialgainsandlosses;

– returnsonplanassets(excludinginterest);and

– anyassetceilingeffects(excludinginterest).

Settlementsofdefinedbenefitobligationsarerecognisedintheperiodinwhichtheset-

tlement occurs.

O. SHARECAPITALANDSHAREISSUANCEEXPENSESProceeds from the issuance of ordinary shares are recognised as share capital in equity. In-

cremental costs directly attributable to the issuance of ordinary shares are deducted against

share capital.

P. SHAREPREMIUMSharepremiumincludesthedifferencebetweentheexcessofpaid-upsharecapitalmade

by shareholders over its par value of the Company’s shares.

55Financial report

Q. SHARE-BASEDPAYMENTSTheGroupgrantsadditionalbenefitstotheemployeesoftheGroupintheformofshare

options.Thecostoftheseequity-settledshare-basedpaymenttransactionswithemployees

ismeasuredbyreferencetothefairvalueoftheoptionsatthedateonwhichtheoptions

aregranted,whichtakesintoaccountmarketconditionsandnon-vestingconditions.The

costisrecogniseddirectlyinprofitorloss,withacorrespondingincreaseintheemployee

shareoptionreserve,overthevestingperiod.Thecumulativeexpenserecognisedateach

reportingdateuntilthevestingdatereflectstheextenttowhichthevestingperiodhasex-

piredandtheGroup’sbestestimateofthenumberofoptionsthatwillultimatelyvest.The

chargeorcredittoprofitorlossfortheperiodrepresentsthemovementinthecumulative

employee share option reserve.

Theemployeeshareoptionreserveistransferredtoretainedearningsuponexpiryofthe

share option.

R. REVENUEANDEXPENSERECOGNITIONRevenueisrecognisedwhentheGroupsatisfiesaperformanceobligationbytransferring

apromisedgoodorservicetothecustomer,whichiswhenthecustomerobtainscontrol

ofthegoodorservice.Aperformanceobligationmaybesatisfiedatapointintimeorover

time.Theamountofrevenuerecognisedpertainstotheportionofsatisfiedperformance

obligation.

RevenueismeasuredbasedontheconsiderationtowhichtheGroupexpectstobeentitled

inexchangefortransferringpromisedgoodsorservicestoacustomer,excludingamounts

collected on behalf of third parties.

Expensesarerecognisedwhenincurredonanaccrualbasis.

S. TAXATIONi. Currentincometax

Thecurrenttax(liability),pertainingtotheamountoftheexpectedrefundfrom(or

payableto)thetaxauthorities,iscalculatedonthebasisoftaxlawapplicableatthe

consolidatedstatementoffinancialpositiondate,inthecountrieswheretheGroup

operatesandgeneratestaxableincome.

Currentincometaxisrecognisedontaxableincomeintheconsolidatedstatementof

profitorlossfortheyear,unlessitrelatestoitemsrecognisedinothercomprehensive

incomedirectlyinequity.Inthiscase,thetaxisrecognisedinothercomprehensiveor

directly in equity.

ii. Deferredtax

Deferredtaxisrecognisedusingtheliabilitymethodontemporarydifferencesarising

betweenthetaxbasesofassetsandliabilitiesandtheircarryingamountforreporting

purposes at the end of the reporting period.

56 Financial report

Deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferences.Deferred

taxassetsarerecognisedforalldeductibletemporarydifferencesonlytotheextent

thatitisprobablythatfuturetaxableprofitisavailableagainstwhichthedeductible

temporarydifferencescanbeutilised.Thecarryingamountofdeferredtaxassets

isreviewedateachendofthereportingdateandreducedtotheextentthatitisno

longerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthe

deferredtaxassetstobeutilised.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedto

applytotheyearwhentheassetisrealisedortheliabilityissettledbasedontaxlaw

applicableattheconsolidatedstatementoffinancialpositiondate.

Deferredtaxisrecognisedontaxableincomeintheconsolidatedstatementofprofit

orlossandothercomprehensiveincomefortheyearexcepttotheextentthatthetax

relatestotransactionsrecognisedoutsideprofitorloss(eitherinothercomprehensive

incomeorchargeddirectlyinequity).

Deferredtaxassetsandliabilitiescanbeoffsetif,andonlyif,thereisalegallyenforcea-

blerighttooffsetthecurrenttaxassetsandliabilitiesandthedeferredtaxassetsand

liabilitiesrelatetothesametaxableentityandthesametaxationauthority.

T. EARNINGS(LOSS)PERSHAREBasicearnings(loss)pershareiscomputedbydividingtheprofit(loss)fortheyearattribut-

abletoownersoftheCompanybytheweightedaveragenumberofissuedandfully-paid

shares outstanding during the year.

Dilutedearnings(loss)pershareiscalculatedwhentheCompanyhasinstrumentswhichare

potentiallydilutiveordinaryshares.Anti-dilutivesharesareexcludedfrombasicanddilutive

earnings(loss)persharecalculations.

U. OPERATING SEGMENTSOperatingsegmentsarepresentedconsistentlywiththeinternalreportingpreparedbyseg-

ment managers to the operational decision maker. Operating segments are independently

managedbytherespectivemanagerwhoisresponsiblefortheperformanceofrespective

operatingsegmentundertheircharge,whiletheoperatingdecisionmakeristheperson

whoregularlyreviewsthesegmentresultinordertoallocateresourcestothesegmentand

to assess the segment performance.

TheCompany’soperationhasreflectedalltheoperatingsegmentinformation.Accordingly,

the Company did not present the segment information in a separate note.

57Financial report

3. Significant accounting estimation and judgments

Thepreparationofconsolidatedfinancialstatementsrequiresmanagementtomakejudg-

ments,estimatesandassumptionsthataffectthereportedamountsofincome,expenses,

assets and liabilities and disclosure of contingent liabilities at the end of the reporting peri-

od.Judgmentsandestimatesusedinpreparingtheconsolidatedfinancialstatementsare

reviewedperiodicallybasedonhistoricalexperienceandvariousfactors,includingexpecta-

tionsandeventsinthefuturethatmayoccur.However,actualresultsmaydifferfromthese

estimates. The uncertainty about these assumptions and estimates could result in outcomes

thatrequiredamaterialadjustmenttothecarryingamountsofassetsandliabilitiesaffected

in the future period.

JUDGMENTSMADEINTHEAPPLICATIONOFACCOUNTINGPOLICIESThefollowingjudgmentsaremadebymanagementintheprocessofapplyingtheGroup’s

accountingpolicieswhichhavethemostsignificanteffectsontheamountsrecognisedin

theconsolidatedfinancialstatements.

Determination of functional currency

the Group measures foreign currency transactions in the respective functional currencies

of the Company and its subsidiaries. In determining the functional currencies of the entities

intheGroup,judgmentisrequiredtodeterminethecurrencythatmainlyinfluencessales

pricesforgoodsandservicesandofthecountrywhosecompetitiveforcesandregulations

mainly determines the sales prices of its goods and services. The functional currencies of

the entities in the Group are determined based on management’s assessment of the eco-

nomicenvironmentinwhichtheentitiesoperateandtheentities’processofdetermining

sales prices.

Consolidation of entities in which the Group holds less than majority of

voting rights – PTPI

The Group considers that it controls PTPI even though it does not have voting rights. This

isbecausetheGrouphascontroloverPTPIfromtheDirectorrepresentativesoftheGroup

withashareownershipof100%.FromtheacquisitiondateofPTPIon22October2018,there

is no history of other shareholders collaborating to use their votes collectively or to outvote

the Group.

ThefollowingarethekeytermsoftheagreementsthatweresignedamongsttheGroupand

theDirectorrepresentativesshareholders:

i. Loan agreements

In order to ensure that PTPI shareholders are able to provide capital to PTPI, the

CompanyhasenteredintoloanagreementswitheachPTPIshareholders(Note4).

Pursuant to the loan agreements, the Company has granted loans to the shareholders

that may only be used for the purpose of acquiring equity interest in, or contributing

to the registered capital of PTPI. The loans may be repaid only by transferring all of the

shareholders’ equity interests in the PTPI to the Company or their respective designee

58 Financial report

uponexerciseoftheoptionunderthecalloptionagreements.Theloanagreements

also prohibit the PTPI shareholders from assigning or transferring to any third party, or

from creating or causing any security interest to be created on, any part of their equity

interests in these entities.

ii. Call option agreements

In order to ensure that the Company is able to acquire all of the equity interest in the

agreement at its discretion, the Company has entered into call option agreements

withtherespectivePTPIshareholders.EachoptionisexercisablebytheCompany

atanytime,providedthatdoingsoisnotprohibitedbylaw.Theexercisepriceunder

eachoptionistheminimumamountrequiredbylawandanyproceedsobtainedby

the respective PTPI shareholders through the transfer of their equity interests in these

shallbeusedfortherepaymentoftheloanprovidedinaccordancewiththeloan

agreements.

Duringthetermsofthecalloptionagreements,theshareholderswillnotgranta

similar right or transfer any of the equity interests in these to any party other than the

Companyortheirrespectivedesignee,norwillitpledge,createorpermitanysecurity

interest or similar encumbrance to be created on any of the equity interests. The PTPI

shareholderscannotdeclareanyprofitdistributionsorgrantloansinanyformwithout

the prior consent of the Company. The PTPI shareholders must remit in full any funds

received from the PTPI shareholders to the Company or their respective designee in

the event any distributions are made by the shareholders.

ThecalloptionagreementswillremainineffectuntiltherespectivePTPIshareholder

has transferred such shareholder’s equity interest in to the Company or their respective

designee.

iii. Powersofattorney

Pursuanttothepowersofattorney,eachPTPIshareholderhasirrevocablyappointed

the Company as their attorney-in-fact to act for all matters pertaining to such

shareholdingandtoexercisealloftheirrightsasshareholders,includingbutnot

limited to attending shareholders’ meetings and designating and appointing directors,

supervisors,thechiefexecutiveofficerandotherseniormanagementmembersof

these entities, and selling, transferring, pledging or disposing the shares of these

entities. The Company may authorise or assign its rights to any other person or entity at

itssolediscretionwithoutpriornoticetoorpriorconsentfromthePTPIshareholders.

EachpowerofattorneyremainsineffectuntilthePTPIshareholderceasestoholdany

equity interest in PTPI.

iv. Pledge of shares agreements

In order to secure the performance of PTPI and the shareholders under the contractual

arrangements, each of the PTPI shareholders has pledged all of their shares to the

Companyandallrights,title,interestandbenefitpertainingtotheshares,which

59Financial report

includesdividendsandotherschemeswhichareormaybecomepayable.These

pledges secure the contractual obligations and indebtedness of the PTPI shareholders,

includingallpenalties,damagesandexpensesincurredbytheCompanyinconnection

withthecontractualarrangements.ShouldPTPIortheirrespectivePTPIshareholders

breach or default under any of the contractual arrangements, the Group has the right

to require the transfer of the respective PTPI shareholders’ pledged equity interests

inPTPItotheCompanyortheirrespectivedesignee,totheextentpermittedbylaws,

or require an auction or sale of the pledged equity interests and has priority in any

proceeds from the auction or sale of such pledged interests.

v. Spousal consent letters

Under the spousal consent letters, each spouse of the married PTPI shareholders

unconditionally and irrevocably agreed that the equity interest in PTPI held by and

registeredinthenameoftheirspousewillbedisposedofpursuanttothecontractual

arrangements. Each spouse agreed not to assert any rights over the equity interest in

these held by their spouse. In addition, in the event that the spouses obtain any equity

interest in these held by their spouse for any reason, they agreed to be bound by the

contractual arrangements.

KEYSOURCESOFESTIMATIONUNCERTAINTYThe key assumptions concerning the future and other key sources of uncertainty of estima-

tionatthereportingdatethathaveasignificantriskofcausingmaterialadjustmentstothe

carryingamountsofassetsandliabilitieswithinthenextfinancialyeararedisclosedbelow.

TheGroupbaseditsassumptionsandestimatesonparametersavailablewhentheconsoli-

datedfinancialstatementswereprepared.Existingcircumstancesandassumptionsabout

future developments may change due to market changes or circumstances arising beyond

thecontroloftheGroup.Suchchangesarereflectedintheassumptionswhentheyoccur.

Goodwill allocation and impairment

Initsbusinesscombinations,theGroupappliesacquisitionaccounting,whichrequiresex-

tensive use of accounting estimates to allocate the purchase price to the fair market values

of the acquired assets and liabilities, including intangible assets. The business acquisitions

madein2018resultedingoodwill.

Goodwillisnotamortised,butissubjecttoannualimpairmenttesting.Thecarryingamount

ofgoodwillisdisclosedinNote4totheconsolidatedfinancialstatements.

Forgoodwillimpairmenttesting,managementdeterminestherecoverableamountofCGU

wheregoodwillhasbeenallocatedbasedonvalue-in-use.Value-in-useiscomputedbased

oncashflowprojectionsfromformallyapprovedbudgetscoveringafive-yearperiodto

31 December2024.Accordingly,therecoverableamountismostsensitivetotherateused

indiscountingtheexpectedfuturecashflows,aswellasthegrowthrateusedforextrapo-

lation purposes.

60 Financial report

Post-employment benefit liabilities

MeasurementoftheGroup’spost-employmentbenefitexpenseandliabilitiesaredepend-

ent on its selection of certain actuarial assumptions. Those assumptions include, among

others, the discount rate, annual increase in salary rate, annual employee resignation rate,

disability rate, retirement age and mortality rights. Actual results may differ from the as-

sumptionsaccountedforinaccordancewiththeaccountingpoliciesasdescribedinNote 2

totheconsolidatedfinancialstatements.

AlthoughtheGroupbelievesthattheassumptionsatthereportingdatewerereasonable

andappropriate,significantdifferencesinactualresultsorsignificantchangesinassump-

tionsmaymateriallyaffecttheGroup’spost-employmentbenefitexpenseandliabilities.

Recognition of deferred tax assets

TheGrouphasrecognisedthedeferredtaxassetsfromthefiscallossesandotherdeduct-

ibletemporarydifferencesasmanagementdeterminesthatsufficienttaxableincomewill

beavailableagainstwhichthefiscallossesandotherdeductibletemporarydifferencescan

be utilised.

Managementusesjudgmentandestimatesinassessingtheprobabilityoffuturetaxable

income aided by forecasting and budgeting techniques.

4. Business combination

KRYPTONITEKOREACO.,LTD.(“KN”)On30June2018,theCompanyacquired100%ofthevotingequityinstrumentsofKN,agame

softwaredevelopercompany.ThetotalshareconsiderationisUSD75,000.

Thefairvalueoftheassetsandliabilitiesasatthedateofacquisitionareasfollows:

Fair value recognised at acquisition date

Propertyandequipment–net 23,865

Other assets 99

Prepayment 25,808

Trade and other receivables 16,925

Cash on hand and in banks 18,769

Trade and other payables (121,232)

Taxpayables (11,807)

Loan (47,969)

Post-employmentbenefitliabilities (32,692)

Fair value of net assets on acquisition date (128,234)

Share consideration transferred 75,000

Goodwill arising from acquisition (203,234)

61Financial report

Inconnectionwiththeacquisitionofthe100%equityinterestinKN,theCompanyissued

1,000,000ordinarysharesatUSD0.075pershare.Thefairvalueofthesharesisbasedonthe

GuidelinePublicCompanyMethod(GCM)attheacquisitiondate.

TotaltransactioncostsamountingtoUSD49,947relatedtotheacquisitionarerecognised

aspartof“Administrativeexpenses”

Intheconsolidatedstatementofprofitorlossandothercomprehensiveincome,thecarry-

ingamountoftradeandotherreceivablesatacquisitionapproximatetheirfairvalue.Atthe

acquisitiondate,thecontractualcashflowspertainingtotradereceivablesareexpectedto

be collected.

ThegoodwillofUSD203,234comprisesthevalueofthesoftwareengineerteaminSouth

KoreawithastrongtrackrecordthatwillsupporttheGroup’soperations.Italsoincludesthe

valueoftechnicalsupport,whichhasnotbeenrecognisedseparately.Duetothecontractual

terms imposed on the acquisition, the technical support is not separable and therefore does

not meet the criteria for recognition as an intangible asset.

Noneofthegoodwillrecognisedisexpectedtobedeductibleforincometaxpurposes.

Asaresultoftheacquisition,theCompanyisexpectedtohaveadevelopmentcapabilityin

SouthKorea.

FromthedateofacquisitionanduptothereportingKNhascontributedUSD124,942to

the Group’s loss.

GAMESPARKINTERACTIVELIMITED(“GP”)ANDGLOBIMEDIANETWORKPTE.LTD.(“GMN”)On30September2018,theCompanyacquired100%ofthevotingequityinstrumentsof

GP and GMN, a digital platform payment service companies. The total share

considerationisUSD562,500.

62 Financial report

Thefairvalueoftheassetsandliabilitiesasatthedateofacquisitionareasfollows:

Fair value recognised at acquisition date

Propertyandequipment–net 3,448

Intangibleassets–net 13,624

Other assets 64

Trade and other receivables 501,488

Cash on hand and in banks 351,732

Trade payables (61,943)

Duetorelatedparties (307,398)

Accruedexpenses (766)

Fair value of net assets on acquisition date 500,249

Share consideration transferred 562,500

Goodwill arising from acquisition (62,251)

Inconnectionwiththeacquisitionof100%equityinterestinGPandGMN,theCompany

issued3,750,000ordinarysharesatUSD0.075pershare.Thefairvalueofthesharesisbased

ontheGuidelineCompanyMethod(GCM)attheacquisitiondate.

Theconsiderationsettledinsharesiscontingentonthefollowingconditions:

– Issuanceof1,875,000shares,iftheconsolidatedcombinedrevenueofPTPI,GMNand

GPexceedsUSD3,500,000foraperiodof6monthsending30April2019.

– Issuanceof1,875,000shares,iftheconsolidatedcombinedrevenueofPTPI,GMNand

GPexceedsUSD4,300,000foraperiodof6monthsending31October2019.

Thecarryingamountoftradeandotherreceivablesatacquisitionapproximatestheirfair

value.Attheacquisitiondate,thecontractualcashflowspertainingtotradereceivablesare

expectedtobecollected.

ThegoodwillofUSD62,251comprisesthevalueofstrengtheningtheGroup’smarketposition

inHongKongandSingapore.Italsoincludesthevalueofasuppliercontract,whichhasnot

beenrecognisedseparately.Duetothecontractualtermsimposedontheacquisition,the

supplier contract is not separable and therefore does not meet the criteria for recognition

as an intangible asset.

Noneofthegoodwillrecognisedisexpectedtobedeductibleforincometaxpurposes.

Asaresultoftheacquisition,theCompanyisexpectedtobeabletosignwithmerchant

partners, build and retain intellectual property and facilitate treasury operations.

From the date of acquisition and up to the reporting date, GP and GMN have contributed

USD2,388,154andUSD(539,594)totheGroup’srevenueandloss,respectively.

63Financial report

Asof31 December2019,theCompanyhasnotissuedordinarysharestosettlethecontingent

consideration related to the acquisition of GP and GMN because the consolidated revenue

has not been achieved.

PTPROGRESSIVMEDIAINDONESIA(“PTPI”)On22October2018,theCompanyobtainedcontrolofPTPIthroughthefollowingagree-

mentsenteredwithWindiapranaandPatrickReehanSoegeng(“PTPIshareholders”):

– LoanagreementsbetweentheCompanyandPTPIshareholdersdated

27 September2018.

– CalloptionagreementsbetweentheCompanyandPTPIshareholdersdated

22 October 2018, clause 5.1, signed consent received from PTPI shareholders.

– PowerofattorneytosellandvotebetweentheCompanyandPTPIshareholdersdated

22 October2018.

– PledgeofsharesagreementbetweentheCompanyandPTPIshareholdersdated

22 October2018.

– SpousalconsentbetweentheCompanyandPTPIshareholders’wivesdated

19 October 2018.

The combination of the above agreements has resulted in the consolidation of the accounts

of PTPI according to IFRS 10, as discussed in Note 3.

Thefairvaluesoftheassetsandliabilitiesasatthedateofacquisitionareasfollows:

Fair value recognised at acquisition date

Propertyandequipment–net 13,298

Intangibleassets–net 164,842

Deferredtaxassets–net 53,469

Prepaidexpenses 1,339

Prepaidtax 331,176

Trade and other receivables 574,457

Cash on hand and in banks 72,349

Trade payables (1,123,903)

Other payables (27,672)

Taxpayables (298,923)

Post-employmentbenefitliabilities (45,112)

Fair value of net assets on acquisition date (284,680)

Cash consideration transferred 1,009,375

Goodwill arising from acquisition (1,294,055)

Thecarryingamountoftradeandotherreceivablesasofacquisitionapproximatestheir

fair values.

ThegoodwillofUSD1,294,055comprisesthevalueofstrengtheningtheGroup’smarketposi-

tioninIndonesia.Italsoincludesvalueofthepaymentgatewayandmerchantlist,whichhas

64 Financial report

notbeenrecognisedseparately.Duetothecontractualtermsimposedontheacquisition,

thepaymentgatewayandmerchantlistisnotseparableandthereforedoesnotmeetthe

criteria for recognition as an intangible asset.

Noneofthegoodwillrecognisedisexpectedtobedeductibleforincometaxpurposes.

Asaresultoftheacquisition,theCompanyisexpectedtobeabletoreceivecash,buildan

audience and establish local partnerships in Indonesia.

From the date of acquisition and up to the reporting date, PTPI has contributed

USD 7,203,500andUSD(1,435,820)totheGroup’srevenueandloss,respectively.

TotaltransactioncostsamountingtoUSD195,000relatedtotheacquisitionoftheMimo-

payplatform(PTPI,GPandGMNI)arerecognisedaspartof“Administrativeexpenses”in

theconsolidatedstatementofprofitorlossandothercomprehensiveincomefortheyear

ended31 December2018.

ThefollowingtablepresentsGrouprevenueandGroupprofitorlossonacombinedbasisas

iftheacquisitionsofGP,GMN,PTPIandKNhadoccurredon1January2018.

inUSD 2018

Revenue 7,483,339

Cost of revenue (6,904,318)

Grossprofit 579,021

Operating expenses

Marketinganddistributionexpenses (70,823)

Administrativeexpenses (3,328,928)

Researchandproductdevelopmentexpenses (401,371)

Otheroperatingexpenses–net (12,061)

Loss from operation (3,234,162)

Interestexpense (25,000)

Loss before tax (3,259,162)

Incometaxbenefit(expense) 74,368

Loss for the year (3,184,794)

Other comprehensive income

Itemthatwillnotbereclassifiedsubsequentlytoprofitorloss:

Remeasurementofpost-employmentbenefitliabilities–netoftax 17,505

Itemthatmaybereclassifiedsubsequentlytoprofitorloss:

Exchangegain(loss)arisingfromtranslationofforeignoperations 33,179

Other comprehensive income for the year, net of tax 50,684

Total comprehensive loss for the year (3,134,110)

65Financial report

ThefollowingtablepresentsGroupcashflowsonacombinedbasisasiftheacquisitionsof

GP,GMN,PTPIandKNhadoccurredon1January2018.

inUSD 2018

Cash flows from operating activities

Cash receipt from customers 7,714,359

Cash paid to employees (864,808)

Cash paid to suppliers and others (8,559,565)

Net cash used in operating activities (1,710,014)

Cash flows from investing activities

Acquisition of property and equipment (2,354)

Payment for acquisition of subsidiaries (1,646,875)

Net cash used in investing activities (1,649,229)

Cash provided by financing activity

Issuance of share capital 3,225,780

Net increase (decrease) in cash on hand and in banks (133,463)

Effectofexchangeratechangesincashonhandandinbanks –

Cash on hand and in banks at the beginning of year 315,986

Cash on hand and in banks at the end of year 182,523

5. Revenue

In2019and2018,revenuegeneratedwasfrompaymentservicebusinessesthroughdifferent

payment channels, including Telco vouchers, ATM payments and game cards and vouchers.

These channels are used in paying for certain digital goods and services.

TheGrouphasdisaggregatedtherevenuefromcontractswithcustomersintoprimaryge-

ographicmarketsasfollows:

inUSD2019

(One year)2018

(Sevenmonths)

Indonesia 5,940,019 1,263,481

Singapore 405,471 1,486,370

HongKong 121,822 374,491

Total 6,467,312 3,124,342

Contractassetsasof31 December2019and2018amountedtoUSD392,052and

USD 549,508.Theseareincludedwithin“tradeandotherreceivables”intheconsolidated

statementoffinancialposition.

66 Financial report

6. Administrative expenses

Thisaccountconsistsof:

inUSD2019

(One year)2018

(Sevenmonths)

Professional fees 1,439,872 849,426

Salariesandwages 1,399,451 618,586

Employeeshareoptionsexpense 1,528,319 24,432

Directors’remuneration 379,503 –

Corporate fees 330,000 –

Impairment loss on receivables 135,416 –

Travel and transportation 111,614 28,084

Advertisement 54,633 –

Rent 42,144 17,227

Service fees 23,040 87,661

Post-employmentbenefitexpense(Note19) 11,896 31,516

Depreciationandamortisation(Notes10and11) 11,154 18,093

Commission – 19,141

Others 340,090 70,353

Total 5,807,132 1,764,519

7. Other operating expenses – net

Thisaccountconsistsof:

inUSD2019

(One year)2018

(Sevenmonths)

License costs 140,625 –

Listing fees 122,804 1,124,806

Foreignexchangegains /(losses)–net 97,854 29,864

Bankadministration 17,855 5,359

Interest income (570) (1,369)

Other income (153,740) –

Miscellaneousexpenses – 131,583

Total 224,828 1,290,243

Listingfeesincludeunderwriters,legalandregulatoryandotherexpensesrelatedtothe

Company’slistingonSIXSwissExchange.

67Financial report

8. Taxation

A. INCOME TAXThereconciliationbetweenlossbeforetaxperconsolidatedstatementofprofitorlossand

othercomprehensiveincomeandestimatedfiscallossoftheCompanyisasfollows:

inUSD 2019 2018

Lossbeforetaxperconsolidatedstatementofprofitorlossandothercomprehensive income (6,904,565) (3,974,800)

Lossbeforetaxofsubsidiaries 246,935 864,982

Consolidation eliminating entries 10,008 1,840,013

LossbeforetaxoftheCompany (6,647,622) (1,269,805)

Fiscalcorrection:non-deductibleexpenses 135,416 2,900

Estimatedfiscalloss (6,512,206) (1,266,905)

Theconsolidatedincometaxexpense(benefit)isdeterminedasfollows:

inUSD 2019 2018

Estimatedfiscalloss (6,512,206) (1,266,905)

Currentincometaxexpense–Company – –

Currentincometaxexpense(benefit)–subsidiaries 19,329 (74,368)

Consolidatedincometaxexpense(benefit) 19,329 (74,368)

68 Financial report

B. DEFERREDTAXDetailsoftheGroup’sdeferredtaxassetswhichsolelyarisefromPTPIareasfollows:

2019

inUSDBeginning

balanceBenefit(expense)

toprofitorloss

Expensetoothercomprehensive

incomeExchange

differencesEnding

balance

Fiscal losses 108,512 (22,439) – 4,494 90,567

Post-employmentbenefitliabilities 13,643 2,974 (10,903) 430 6,144

Impairment loss on receivables – 1,354 – 11 1,365

Depreciation – (1,218) – (21) (1,239)

Deferred tax assets – net 122,155 (19,329) (10,903) 4,914 96,837

2018

inUSDBeginning

balanceBenefit(expense)

toprofitorloss

Expensetoothercomprehensive

incomeExchange

differencesEnding

balance

Fiscal losses 46,516 66,489 – (4,493) 108,512

Post-employmentbenefitliabilities 12,434 7,879 (5,835) (835) 13,643

Deferred tax assets – net 58,950 74,368 (5,835) (5,328) 122,155

ManagementbelievesthatdeferredtaxassetsforPTPIarerecoverableagainstPTPIfuture

taxableincome.

Asof31 December2019and2018,deferredtaxassetsfromaccumulatedfiscallosses

and other deductible temporary differences are not recognised for other subsidiaries as

managementbelievesthatnosufficientfuturetaxableprofitwillbeavailabletoutilisethe

deferredtaxassets.

9. Loss per share

Thecomputationof losspersharefortheyearended31 December2019and2018 is

asfollows:

inUSD 2019 2018

Loss for the year (6,923,894) (3,900,432)

Outstandingweightedaveragenumberofsharesduringtheyear 83,112,867 47,288,141

Basic loss per share (0.08) (0.08)

Asof31 December2019and2018,theCompanydoesnothaveanypotentiallydilutive

ordinary shares.

69Financial report

The4,203,646and325,760vestedsharesoptionsgrantedtoemployeesasof31 December

2019and2018,respectively,andcontingentconsiderationof3,750,000sharesfrombusi-

ness acquisition of GMN and GP have not been included in the calculation of diluted earn-

ings per share because they are considered anti-dilutive for the calculation of loss per share.

10. Property and equipment – net

Thedetailsandmovementofpropertyandequipmentareasfollows:

2019

inUSDBeginning

balance

Additions from business

combination AdditionsExchange

differencesEnding

balance

Cost

Computer – – 1,196 – 1,196

Officeequipment 38,305 – 1,251 (661) 38,895

Sub-total 38,305 – 2,447 (661) 40,091

Accumulated depreciation

Computer – – 33 – 33

Officeequipment 10,557 – 11,121 (1,543) 20,135

Sub-total 10,557 – 11,154 (1,543) 20,168

Net book value 27,748 19,923

2018

inUSDBeginning

balance

Additions from business

combination AdditionsExchange

differencesEnding

balance

Cost

Officeequipment – 40,611 2,355 (4,661) 38,305

Accumulated depreciation

Officeequipment – – 11,916 (1,359) 10,557

Net book value – 27,748

Depreciationexpensesin2019and2018arechargedtoadministrativeexpensesinthe

consolidatedstatementofprofitorloss(Note6).

Management believes that the carrying amount of property and equipment is recoverable

andtherearenoeventsorchangesincircumstanceswhichmayindicateimpairment;there-

forenoprovisionforimpairmentofpropertyandequipmentwasprovided.

70 Financial report

11. Intangible asset – net

Thedetailsandmovementofintangibleassetareasfollows:

2019

inUSDBeginning

balance

Additions from business

combination Additions DeductionsExchange

differencesEnding

balance

Cost

Licences 29,720 – – 29,720 – –

Accumulated amortisation

Licences 22,283 – – 22,283 – –

Net book value 7,437 –

2018

inUSDBeginning

balance

Additions from business

combination Additions DeductionsExchange

differencesEnding

balance

Cost

Licences – 178,466 – 148,675 (71) 29,720

Accumulated amortisation

Licences – – 6,177 – 16,106 22,283

Net book value – 7,437

Theamortisationexpensein2018waschargedtoadministrativeexpensesintheconsoli-

datedstatementofprofitorlossandothercomprehensiveincome(Note6).

In2019,managementdisposedofthelicenceandtherelatednetbookvalueischarged

againstlicencecostintheconsolidatedstatementofprofitorlossandothercomprehen-

sive income.

12. Goodwill and impairment

TheGroupisrequiredtotest,onanannualbasis,whethergoodwillhassufferedanyimpair-

ment. The recoverable amount is determined based on value-in-use calculations. The use of

thismethodrequirestheestimationoffuturecashflowsandthedeterminationofadiscount

rateinordertocalculatethepresentvalueofthecashflows.

Thecarryingamountofgoodwillisallocatedtothecashgeneratingunit(CGU)identifiedas

under the Mimopay payment platform.

71Financial report

The recoverable amount of the CGU has been determined from value-in-use calculations

basedoncashflowprojectionsfromformallyapprovedbudgetscoveringa5-yearperiodto

31 December2024.Othermajorassumptionsareasfollows:

– RevenuescomingfromMemorandumofUnderstandingwithPTHuaweiTech(Note23).

– Grossmarginrateandoperatingexpensesbasedonpastperformanceandits

expectationofmarketdevelopment.

– Discountrateof4%,basedonaveragelong-terminvestmentrateinSwitzerlandof−1%

andriskpremiumat5%basedontheinternalestimatesofthemanagement.

Basedontheimpairmenttestconducted,noimpairmentwasrecognisedin2019.

13. Prepaid expenses and advances

Thisaccountconsistsof:

inUSD 2019 2018

Advances 101,937 –

Prepayment 56,657 6,317

Prepaid expenses:

Advertising 650,000 650,000

Chat application – 140,625

Accelerators start-ups 8,222 57,556

Total 816,816 854,498

Advances pertain to the amount provided by the Company to Finaplana AG to fund the in-

corporationofAchikoSwitzerlandAG.

14. Trade and other receivables

Thisaccountconsistsof:

inUSD 2019 2018

Trade receivables 392,052 549,508

Other receivables

Shareholder 1,217,771 –

Others – 30,000

Total current trade and other receivables 1,609,823 579,508

Other non-current receivable 100,000 –

Total 1,709,823 579,508

72 Financial report

Trade receivables

Trade receivables come from third parties and are non-interest bearing and are generally on

30to90-dayterms.Theyarerecognisedattheiroriginalinvoiceamountswhichrepresent

their fair values on initial recognition.

TheGroupappliesthesimplifiedapproachtomeasuringexpectedcreditlossesusinga

lifetimeexpectedcreditlossprovisionfortradereceivablesandcontractassets.Tomeasure

expectedcreditlossesonacollectivebasis,tradereceivablesandcontractassetsaregrouped

based on similar credit risk and aging. The contract assets have similar risk characteristics to

the trade receivables for similar types of contracts.

TheexpectedlossratesarebasedontheGroup’shistoricalcreditlossesexperiencedprior

totheperiodend.Thehistoricallossratesarethenadjustedforcurrentandforward-looking

information on macroeconomic factors affecting the Group’s customers.

In2019,theGroupdirectlywroteofftradereceivablesamountingtoUSD5,416dueto

bankruptcy of the customer.

Other receivables

The shareholder receivable pertains to the balance to be received by the Company for sub-

scription of the Company’s shares.

Othernon-currentreceivablepertainstotheamountadvancedtoPTEmpatKaliIndonesia

basedontheconvertiblenoteagreemententeredintoon15November2019.Unlesscon-

verted, the amount is due in 2021.

In2019,theGroupdirectlywroteoffotherreceivablesamountingtoUSD130,000dueto

bankruptcyofathird-partyCompanywhichtheGrouphasprovidedadvancesto.

15. Cash on hand and in banks

Thisaccountconsistsof:

inUSD 2019 2018

Cash on hand 1,205 2,213

Cash in banks

UnitedStatesDollar 286,262 102,638

Rupiah 267,798 62,636

KoreanWon 28,778 4,218

SingaporeDollar 9,063 3,398

HongkongDollar 51 7,420

Sub-total 591,952 180,310

Total 593,157 182,523

73Financial report

16. Trade and other payables

Thisaccountconsistsof:

inUSD 2019 2018

Trade payables 2,223,540 1,848,535

Other payables 228,331 376,410

Total 2,451,871 2,224,945

Trade and other payables are non interest-bearing amounts due to third-party suppliers

for the goods and services provided to the Group in the ordinary course of business. Trade

payablesarenormallysettledwithin60days,whileotherpayableshaveanaverageterm

ofsixmonths.

Thecarryingamountoftradeandotherpayablesasof31 December2019and2018ap-

proximatestheirfairvalues.

17. Accrued expenses

Asof31 December2019and2018,thisaccountincludesaccrualsforsalaries,professional

feesandotherswhichareexpectedtobesettledinthenextreportingperiod.

18. Borrowing from third party

On6October2018,theCompanyenteredintoapromissorynoteagreementwithJen

Wong,wherethelatterwillprovidefundingtotheCompanyofUSD1,500,000.Theprom-

issory note shall bear interest at the rate of zero percent per annum from the date of the

agreementuntil12December2018andinterestpermonthofUSD25,000and50,000of

the Company’s ordinary shares until paid in full.

TotalinterestexpenserelatedtothenoteamountedtoUSD617,500andUSD25,000in

2019and2018,respectively.

In2019,theCompanysettledinfulltheoutstandingamount.

74 Financial report

19. Post-employment benefit liabilities

PTPI,theCompany’ssubsidiary,providespost-employmentdefinedbenefitstoitsemploy-

eesinaccordancewiththeminimumrequirementunderLawNo.13/2003on“Manpower”

underIndonesianjurisdiction.

Asof31 December2019and2018,PTPIaccruedpost-employmentdefinedbenefitliabili-

tiesbasedontheactuarialcalculationpreparedbymanagement,whichusesthe“Projected

UnitCredit”methodwiththefollowingmainassumptions:

inUSD 2019 2018

Normal pension age 56years 55years

Discountrate 8.10% 8.55%

Salary increase rate 10.00% 1.00%

Themovementinthepresentvalueofthedefinedbenefitobligationisasfollows:

inUSD 2019 2018

Beginningbalance 54,575 49,736

Current service cost 11,896 28,090

Interest cost – 3,426

Actuariallossfromchangesinfinancialassumptions 12,253 (23,340)

Actuarialgainfromexperienceadjustments (55,866) –

Exchangerate 1,717 (3,337)

Ending balance 24,575 54,575

Detailsofpost-employmentbenefitexpenserecognisedinconsolidatedstatementofprofit

andlossandothercomprehensiveincomeareasfollows:

inUSD 2019 2018

Current service cost 11,896 28,090

Interest cost – 3,426

Componentrecognisedinprofitorloss 11,896 31,516

Actuariallossfromchangesinfinancialassumptions 12,253 (23,340)

Actuarialgainfromexperienceadjustments (55,866) –

Component recognised in other comprehensive income (43,613) (23,340)

Managementhasreviewedtheassumptionsandagreesthattheseassumptionsareade-

quate.ManagementbelievesthattheliabilityrecognisedissufficienttocovertheGroup’s

liability for retirement plan.

75Financial report

Theaveragedurationofthepost-employmentbenefitliabilityasof31 December2019and

2018are26yearsand29.36years,respectively.TheGroupexpectstocontributeapproxi-

matelyUSD24,575toitsdefinedbenefitplaninthesubsequentfinancialyear.

Asof31 December2019and2018,thesensitivityanalysisofchangeintheassumeddiscount

rateandsalaryrate(withothervariablesheldconstant)wouldhavethefollowingeffects:

inUSD 2019 2018

Discount rate

Increase1% (4,894) (1,561)

Decrease1% 3,957 1,362

Salary increase rate

Increase1% 2,666 1,670

Decrease1% (6,014) (1,470)

20. Share capital and other reserves

SHARECAPITAL

2019 2018

Number of shares USD Number of shares USD

Issued ordinary Shares

At the inception date 2 0 2 0

Issued for cash 16,524,257 16,524 6,498,145 6,498

Issued for non-cash 73,107,883 73,108 69,857,883 69,858

Subscribed ordinary shares 1,750,000 1,750 – –

Total 91,382,142 91,382 76,356,030 76,356

ThetotalauthorisednumberofsharesoftheCompanyis500,000,000sharesasof31 December

2019and2018,withaparvalueofUSD0.001pershare.

SHAREPREMIUMDetailsofthesharepremiumareasfollows:

inUSD 2019 2018

Share premium from issued ordinary shares

Issued for cash 6,804,398 544,675

Issued for non-cash 3,200,874 2,604,749

Share premium from subscribed ordinary shares 1,215,250 –

Total 11,220,522 3,149,424

76 Financial report

CAPITAL MANAGEMENTTheprimaryobjectiveofcapitalmanagementistoensurethattheCompanymaintains

healthycapitalratiosinordertosupportitsbusinessandtomaximiseshareholdervalue.

TheCompanymanagesitscapitalstructureandmakesadjustmentstoitinlinewithchanges

ineconomicconditions.Tomaintainoradjustthecapitalstructure,theCompanymayadjust

thedividendpaymenttoshareholders,returncapitaltoshareholdersorissuenewshares.

The Company monitors its capital using the gearing ratio, by dividing net debt by total equity.

TheCompany’spolicyistomaintainagearingratiowithintherangeofgearingratiosofthe

leading companies in the industry in order to secure funds at a reasonable cost.

Net debt is calculated as total liabilities less cash on hand and in banks. The total capital is

calculatedasequityasshownintheconsolidatedstatementoffinancialposition.Thecom-

putationofgearingratioisasfollows:

inUSD 2019 2018

Total liabilities 2,968,299 3,995,585

Less cash on hand and in banks 593,157 182,523

Net liabilities 2,375,142 3,813,062

Equity 1,909,511 (625,491)

Net debt to equity ratio 1.24 (6.10)

OTHERRESERVESi. Foreign currency translation reserve

Foreigncurrencytranslationreserverepresentstheexchangedifferencesarisingfrom

thetranslationoftheconsolidatedfinancialstatementsofforeignoperationswhose

presentation currencies are different from that of the Group’s presentation currency.

ii. Employee share option reserve

The employee share option reserve represents the equity-settled share options granted

to employees. The reserve is made up of the cumulative value of service received from

employees recorded over the vesting period commencing from the grant

dateofequity-settledshareoptionsandisreducedbytheexpiryorexerciseof

the share options.

The share options granted are pursuant to the Company’s Stock Option Plan adopted

bytheCompanyon3August2018,asamendedon12July2019,withavestingperiod

rangingbetween24−48months.Inaddition,vestingperiodwillbeacceleratedby6−12

monthsforcertainemployeeswhentheCompanyislistedonanystockexchange.

TheCompanygrantedatotalof12,497,500shareoptionsasof31 December2019.

Vestedshareoptionsasof31 December2019and2018amountedto6,678,646and

1,107,813shares,respectively.

77Financial report

Thesefairvaluesforshareoptionsgrantedduringtheyearwerecalculatedusingthe

Black-Scholespricingmodel.Theinputsintothemodelwereasfollows:

2019 2018

Weighted average share price USD0.700 USD0.075

Expectedvolatility 13.93% 33.61%

Risk free rate 6.46% 8.11%

Thevolatilityassumption,measuredatthestandarddeviationofexpectedsharepricere-

turns, is based on a statistical analysis of daily share prices.

21. Financial instruments and risk management

FINANCIAL INSTRUMENTSAllfinancialassetsandliabilitiesrecognisedintheconsolidatedstatementoffinancial

positionasof31 December2019and2018approximatetheirfairvaluesduetoshort-term

maturitiesofthesefinancialinstruments.

TheGroupusesthefollowingthree-levelhierarchyfordetermininganddisclosingfairvalue

offinancialinstrumentsbyvaluationtechnique:

– Level1–Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsor

liabilities;

– Level2–Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothe

fairvaluemeasurementisdirectlyorindirectlyobservable;and

– Level3–Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothe

fair value measurement is unobservable.

Therewerenotransfersbetweenlevelsorchangestothevaluationtechniquesduringthe

period.

FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIESTheGroup,fromitsfinancialinstruments,isexposedtocertainfinancialriskssuchascur-

rency risk, credit risk, and liquidity risk. The operational activities of the Group are managed

in a prudent manner by managing those risks to minimise potential losses.

i. Currency isk

Currencyriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrument

willfluctuateduetochangesinforeigncurrencyexchangerates.

The Group does business transactions in several currencies and consequently is

exposedtocurrencyrisk.TheCompanydoesnothaveahedgingpolicyforforeign

exchangecurrency.However,managementcontinuouslymonitorscurrencyriskand

willconsiderhedgingpolicieswhensignificantcurrencyriskarises.

78 Financial report

In2019and2018,thereasonablypossiblechangeinUnitedStatesDollaragainstforeign

currencywas2.23%and2.03%,respectively.IfUnitedStatesDollarhadstrengthened/

weakenedbysucharate,withallothervariablesheldconstant,thepost-taxprofitin2018

and2019,wouldhaveincreased / decreasedbyUSD38,906andUSD669,345,respectively.

ii. Credit risk

Creditriskistheriskthatacounterpartywillnotmeetitsobligationsunderafinancial

instrumentorcustomercontract,leadingtoafinancialloss.TheGroup’sobjectiveis

toseekcontinualrevenuegrowthwhileminimizinglossesincurredduetoincreased

creditriskexposure.Therefore,theGrouptradesonlywithrecognisedandcreditworthy

third parties.

Bankaccountsareheldwithfinancialinstitutionswhichareregulatedandreputable.

Themaximumexposuretocreditriskisrepresentedbythecarryingamountofeach

classoffinancialassetsintheconsolidatedstatementoffinancialposition,which

comprises cash on hand and in banks and all trade and other receivables. The Group

does not hold any collateral as security.

iii. Liquidity risk

LiquidityriskistheriskthattheCompanywillencounterdifficultyinmeetingfinancial

obligations due to a shortage of funds.

TheGroup’sexposuretoliquidityriskarisesprimarilyfrommismatchesinthe

maturitiesoffinancialassetsandliabilities.

The Group monitors its liquidity needs by closely monitoring scheduled debt servicing

paymentsforfinancialliabilitiesanditscashoutflowsduetoday-to-dayoperations,

aswellasensuringtheavailabilityoffundingthroughanadequateamountofcredit

facilities, both committed and uncommitted.

Asof31 December2019and2018,thematurityprofileofGroup’sfinancialliabilities

based on contractual undiscounted payments is less than one year.

22. Notes supporting the statement of cash flows

Significantnon-cashtransactionsfromfinancingactivitiesareasfollows:

inUSD 2019 2018

Issuance of share capital for:

Vested employee share options 196,875 –

Prepaidexpenses – 2,037,107

Investment in shares – 637,500

79Financial report

23. Events after the reporting date

MEMORANDUMOFUNDERSTANDING(MOU)WITHPTHUAWEITECHOn17March2020,PTPIenteredintoanMoUwithPTHuaweiTechInvestment(Huawei),

whereHuaweiwillhelpPTPItoaccess,strengthenandexpanditsmarketinIndonesia

throughchannelingPTPI’srelationshipwithmajortelecommunicationcompanies.TheMoU

isexpectedtogenerateUSD15millionforPTPIandHuaweibytheendof2020.

Thecontractisvalidandeffectivefromthedateenteredintountil31 December2020.

Managementconsideredthiscontractaspartofitscashflowprojectionsinassessingthe

impairmentofthegoodwill.

COVID-19OUTBREAKOn30January2020,theWorldHealthOrganization(“WHO”)announcedaglobalhealth

emergencybecauseofanewstrainofcoronavirus(the“COVID-19outbreak”)andtherisks

to the international community as the virus spreads globally beyond its point of origin. In

March2020,theWHOclassifiedtheCOVID-19outbreakasapandemic,basedontherapid

increaseinexposureglobally.

ThefullimpactoftheCOVID-19outbreakcontinuestoevolveasofthedateofthisreport.As

such,itisuncertainastothefullimpactthatthepandemicwillhaveontheGroup’sfinancial

condition, liquidity and future results of operations. Management is actively monitoring the

impactoftheglobalsituationonitsfinancialcondition,liquidity,operations,industryand

workforce.GiventhedailyevolutionoftheCOVID-19outbreakandtheglobalresponsesto

curbitsspread,theGroupisnotabletoestimatetheeffectsoftheCOVID-19outbreakon

itsresultsofoperations,financialcondition,orliquidityforfiscalyear2020.

TheCOVID-19outbreaksubsequenttothereportingperiodhasimpactedtheroutineop-

erationsoftheGroup.However,theGrouphastakenallnecessaryandcontrollableactions

to protect the Group’s business from severe impact.

AlthoughtheGroupcannotestimatethelengthorgravityoftheimpactoftheCOVID-19

outbreak at this time, if the pandemic continues, it may have an immaterial adverse effect

ontheGroup’sresultsoffutureoperations,financialpositionandliquidityinfiscalyear2020.

NEWINDONESIANTAXREGULATIONSOn31March2020,thePresidentoftheRepublicofIndonesiaestablishedGovernmentReg-

ulationsinlieuofRepublicofIndonesiaLawNo.1of2020concerningStateFinancialPolicies

andFinancialSystemStabilityforHandlingPandemicCoronaVirusDisease2019(COVID-19)

and/orintheContextofFacingHarmfulThreats,NationalEconomyand/orFinancialSystem

Stabilitybymakingpoliciesinthefieldoftaxation,stateexpenditureincludingtheareaof

regionalfinanceandfinancing,aswellasfinancialsystemstabilitypolicies.TheGovernment

RegulationinlieuofthisLawcameintoforceon31 March2020andseveralrelatedlawswere

declaredinvalidaslongasitrelatestostatefinancialpoliciesbasedonthisregulation.

80 Financial report

Thisnewregulationincludes,amongothers,adjustmentstoincometaxratesfordomestic

corporatetaxpayersandpermanentestablishmentsasfollows:

– Decrease in Article 17, paragraph 1.b. of the Law on 22% Income Tax that applies in

fiscal years 2020 and 2021, and 20% applicable in tax year 2020.

– Domestic taxpayers (publicly-listed companies with a total number of paid-up

shares traded on the Indonesian Stock Exchange at least 40% and meeting certain

requirements) can obtain tariffs of 3% lower or 19% in tax years 2020 and 2021, and

17% in tax year 2020. Further provisions regarding certain conditions are regulated by

or based on the Government Regulations.

Asoftheissuanceoftheconsolidatedfinancialstatements,themanagementisstillevalu-

atingtheimpactofthisnewregulation.

24. Authorisation of consolidated financial statements

TheconsolidatedfinancialstatementshavebeenauthorisedforissuebytheBoardofDirec-

torsoftheCompany,whoareresponsibleforthepreparationandcompletionoftheconsol-

idatedfinancialstatements,on28April2020.

81Financial report

82 Financial report

Independent auditor’s report

83Financial report

84 Financial report

85Financial report

86

Contact and imprint

ACHIKO Ltd.

WismaBaritoPacificTowerA1st Floor

JlLetJendSParmanKav62−63

Jakarta, Indonesia

Media relations

Switzerland&Global

Farner Consulting Ltd.

E:achiko@farner.ch

T:+41442666767

Germany

edictoGmbH

E:sknop@edicto.de

T:+496990550551

Investor relations

ir@achiko.com

T:+41442666767

Stock exchange trading

ACHIKOLtd.

Symbol:ACHI

WKN:A2PQNE

VALOR:48788430

ISIN:KYG0101M1024

Imprint Publisher: ACHIKO Ltd. Jakarta, Indonesia

Concept, design and realisation: Farner Consulting Ltd., Zurich, Switzerland

Note on possible future-oriented statementsThis report contains statements that constitute forward-looking statements. In addition, in the future, Achiko Ltd., and others on Achiko Ltd.’s behalf, may make statements that constitute forward-looking statements. Such forward-looking statements may include, but are not limited to, statements relating to the following:– plans, targets or goals;– future economic performance or prospects;– the potential effect on future performance of certain contingencies; and– assumptions underlying any such statements. Words such as “believes,” “anticipates,” “expects,” “intends” and “plans” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Achiko Ltd. does not intend to update these forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other outcomes described or implied in forward-looking statements will not be achieved. Achiko Ltd. cautions the reader that a number of important factors could cause results to differ materially from the plans, targets, goals, expectations, estimates and intentions expressed in such forward-looking statements.