Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Financial risk management

v3.22.0.1
Financial risk management
12 Months Ended
Feb. 28, 2021
Disclosure Of Nature And Extent Of Risks Arising From Financial Instruments [Abstract]  
Financial risk management

25

Financial risk management

 

Exposure to credit, liquidity, interest rate and foreign currency risks arises in the normal course of the Group’s business.  The Group has formal risk management policies and guidelines that set out its overall business strategies, its tolerance of risk and general risk management philosophy and has established processes to monitor and control its exposure to such risks in a timely manner.  The Group

reviews its risk management processes regularly to ensure the Group’s policy guidelines are adhered to.

 

Credit risk

 

Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations.

 

At the reporting date, the exposure to credit risk for trade receivables at the reporting date by type of counterparty was as follows:

 

 

 

Year

ended

February 28,

2021

 

 

Year

ended

February 29,

2020

 

 

 

US$

 

 

US$

 

Related parties

 

 

 

 

 

3,232,810

 

External parties

 

 

22,853,115

 

 

 

10,162,246

 

 

 

 

22,853,115

 

 

 

13,395,056

 

 

The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position. Refer to Note 3.4 for the Group’s policy on assessment of ECL impairment model.    

Impairment

 

The ageing of trade receivables (external customers and related parties) at the reporting date was:

 

 

 

Non-

credit

impaired

 

 

Credit

impaired

 

 

 

US$

 

 

US$

 

2021

 

 

 

 

 

 

 

 

Current

 

 

12,121,046

 

 

 

1,607,907

 

Past due 1 – 60 days

 

 

10,226,905

 

 

 

278,278

 

Past due over 60 days

 

 

867,264

 

 

 

1,860,282

 

Total gross carrying amount

 

 

23,215,215

 

 

 

3,746,467

 

Loss allowance

 

 

(362,100

)

 

 

(3,746,467

)

 

 

 

22,853,115

 

 

 

 

2020

 

 

 

 

 

 

 

 

Current

 

 

13,275,381

 

 

 

 

Past due 1 – 60 days

 

 

287,892

 

 

 

 

Past due over 60 days

 

 

15,015

 

 

 

 

Total gross carrying amount

 

 

13,578,288

 

 

 

 

Loss allowance

 

 

(183,232

)

 

 

 

 

 

 

13,395,056

 

 

 

 

 

 

 

 

Liquidity risk

 

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with its financial liabilities that are settled by delivering cash or another financial asset.

 

The Group monitors its liquidity risk and maintains a level of cash and bank balances deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

 

The following are the contractual undiscounted cash outflows of non-derivative financial liabilities:

 

 

 

Carrying

amount

 

 

Contractual

cash flows

 

 

Within

1 year

 

 

Within

1 to 5

years

 

 

More

than

5 years

 

 

 

US$

 

 

US$

 

 

US$

 

 

US$

 

 

US$

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other payables*

 

 

6,918,641

 

 

 

6,918,641

 

 

 

6,918,641

 

 

 

 

 

 

 

Lease liability

 

 

1,128,965

 

 

 

1,128,965

 

 

 

260,429

 

 

 

868,536

 

 

 

 

 

 

 

 

8,047,606

 

 

 

8,047,606

 

 

 

7,179,070

 

 

 

868,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other payables*

 

 

1,147,631

 

 

 

1,147,631

 

 

 

1,147,631

 

 

 

 

 

 

 

Amount due to related parties

 

 

4,993

 

 

 

4,993

 

 

 

4,993

 

 

 

 

 

 

 

 

 

 

1,152,624

 

 

 

1,152,624

 

 

 

1,152,624

 

 

 

 

 

 

 

 

 

*

excludes provisions and advances

 

Interest rate risk

 

At the reporting date, the Group does not have any significant exposure to interest rate risk. Consequently, no sensitivity analysis is prepared.

 

Foreign currency risk

 

The Group’s foreign currency risk arises on transactions in the normal course of business.  The Group ensures that the net exposure from transactions in foreign currencies is kept to an acceptable level through regular foreign currency exposure analysis and appropriate management of this risk.

 

Exposure to foreign currency risk is insignificant as the Group’s income and expenses, assets and liabilities are substantially denominated in United States dollars.  The exposure is monitored on an ongoing basis and the Group endeavours to keep the net exposure at an acceptable level.

 

 

 

 

The Group’s exposure to foreign currency risk was as follows based on notional amounts:

 

 

 

Year

ended

February 28,

2021

 

 

Year

ended

February 29,

2020

 

 

 

US$

 

 

US$

 

Singapore dollars

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

185,667

 

 

 

47,997

 

Trade and other payables

 

 

(78,621

)

 

 

(51,898

)

Lease liability

 

 

(1,128,965

)

 

 

 

 

 

 

(1,021,919

)

 

 

(3,901

)

 

Sensitivity analysis

 

A 5% strengthening of United States dollars against the following currencies at the reporting date would have increased profit or loss by the amounts shown below.  This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period.  The analysis assumes that all other variables, in particular interest rates, remain constant.

 

 

 

Profit/(Loss)

 

 

 

Year

ended

February 28,

2021

 

 

Year

ended

February 29,

2020

 

 

 

US$

 

 

US$

 

Singapore dollars

 

 

51,096

 

 

 

195

 

 

A 5% weakening of United States dollars against the above currencies at reporting date would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

 

Offsetting financial assets and financial liabilities

 

The Group does not have any master netting arrangements and none of the financial assets and financial liabilities are offset in the statement of financial position other than US$730,000 of the acquisitions of intangible asset made were offset with the trade balances of external customers who also trade on the platform.

 

During the financial year, certain trade receivable balances were settled by other external parties on behalf of the respective customers amounting to $1,692,473.

 

Estimation of fair values

 

The methodologies and assumptions used in the estimation of fair values depend on the terms and characteristics of the various assets and liabilities and include the following:

 

 

 

Financial instruments for which fair value is equal to the carrying value

 

These financial instruments include other receivables, cash and cash equivalents, trade and other payables and loans and borrowings. The carrying values of these financial instruments are assumed to approximate their fair values because they are short-term in nature. Accordingly, the fair values and fair value hierarchy levels have not been presented for these financial instruments.

 

Accounting classifications and fair values

 

The following table sets out the accounting classification and carrying amounts of the Group’s financial instruments not recognised at fair value.

 

 

 

Fair value through profit and loss

 

 

Amortised

cost

 

 

Total

carrying

amount

 

 

 

US$

 

 

US$

 

 

US$

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

Trade receivables – external customers

 

 

 

 

 

22,853,115

 

 

 

22,853,115

 

Other assets#

 

 

 

 

 

490,631

 

 

 

490,631

 

Cash and cash equivalents

 

 

 

 

 

134,025,561

 

 

 

134,025,561

 

Restricted cash

 

 

 

 

 

35,686,643

 

 

 

35,686,643

 

 

 

 

 

 

 

193,055,950

 

 

 

193,055,950

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Other payables*

 

 

 

 

 

6,918,641

 

 

 

2,418,641

 

Warrants liabilities

 

 

43,811,798

 

 

 

 

 

 

43,811,798

 

Lease liability

 

 

 

 

 

1,128,965

 

 

 

1,128,965

 

 

 

 

43,811,798

 

 

 

8,047,606

 

 

 

47,359,404

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

Trade receivables – external customers

 

 

 

 

 

10,162,246

 

 

 

10,162,246

 

Trade receivables – related parties

 

 

 

 

 

3,232,810

 

 

 

3,232,810

 

Other assets#

 

 

 

 

 

1,400

 

 

 

1,400

 

Amount due from related parties

 

 

 

 

 

5,361,593

 

 

 

5,361,593

 

Cash and cash equivalents

 

 

 

 

 

165,298

 

 

 

165,298

 

 

 

 

 

 

 

18,923,347

 

 

 

18,923,347

 

Financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Other payables*

 

 

 

 

 

1,147,631

 

 

 

1,147,631

 

Amount due to related parties

 

 

 

 

 

4,993

 

 

 

4,993

 

 

 

 

 

 

 

1,152,624

 

 

 

1,152,624

 

 

#exclude prepayments

*exclude provisions and advances