Company Announcements

12 September 2024

 

Amicorp FS (UK) Plc

('AMIF', the 'Company' or the 'Group')

 

Interim Results

 

Strategic focus on organic growth investments beginning to yield positive momentum

 

Amicorp FS (UK) Plc, the international specialist fund services group, is pleased to report its interim results for the six months ended 30 June 2024 ('H1-2024' or the 'Period').  The Board remains optimistic about the Group's ability to sustain this performance level into H2-2024.

 

H1-2024 Financial Highlights

 

·	Total revenue increased by 2.3% to US$7.2 million (H1-2023: US$7.1 million).  This growth was largely driven by the US$234k (11%) increase in revenue within the Business Process Outsourcing ('BPO') division and the US$291k (43%) growth in revenue in the Governance and Compliance ('G&C') services division
·	Gross profit of US$4.8 million (H1-2023: US$4.8 million) is equivalent to a 66.1% margin (H1-2023: 68.1%)
·	Adjusted EBITDA of US$1.0 million (H1-2023: US$2.4 million, before offsetting the one-time IPO expenses of US$1.2 million)
·	EBITDA of US$1.0 million (H1-2023: US$1.2 million) represents a 14.0% margin (H1-2023: 17.2%)

 

H1-2024 Operational Highlights

 

·	The number of funds increased to 508 (H1-2023: 463), driven by 46% growth in new wins to 57 (H1-2023: 39)
·	Opening of Kazakhstan office in mid-2024 following receipt of regulatory approval
·	Ongoing application process for a fund administration license in the Dubai International Financial Centre ('DIFC')
·	Successful launch of AMI-GO in March 2024, as the new platform developed in-house that provides fund managers with a centralised source of information about their funds and investors
·	Launch of an online Anti-Money Laundering / Countering the Financing of Terrorism ('AML/CFT') e-learning tool and an AML/CFT framework documentation service, as the new service offering under the G&C services division

 

Commenting on the Interim Results, Toine Knipping, Non-Executive Chairman of AMIF, said:

 

"As we continue to navigate the post-IPO landscape, I am pleased to report that AMIF's strategic focus on investment in organic growth is yielding early positive returns evidenced by growth in both new wins and revenue in H1-2024, further bolstered by 34 additional new wins in early H2.  These are a testament to the strength of our business model and the effectiveness of our strategy, which is centred on delivering sustainable value to our stakeholders.

 

"The diversification of our client base and services, coupled with our extensive knowledge of the regulatory landscapes across various regions, has been instrumental in driving this growth.  Our Governance and Compliance services division, in particular, has shown consistent revenue growth year-on-year, underscoring our ability to capture market share amidst increasing demand for outsourced services.

 

"Looking ahead, we remain committed to furthering our investment in operational excellence and sales network in strategic locations, ensuring that we can continue to meet the evolving needs of our clients while driving higher operating margins.  Our strategic approach, supported by a capital-light business model, positions AMIF as a key player in the fragmented fund services market, and we are confident in our ability to maintain this momentum as we capitalise on the significant growth opportunities that lie ahead."

 

For further information please contact:

 

Amicorp FS (UK) Plc Toine Knipping, Non-Executive Chairman Chi Kin Lai, Chief Executive Officer Tat Cheung (Stephen) Wong, Chief Financial Officer	Via Burson Buchanan
Zeus (Broker) Martin Green / Louisa Waddell (Investment Banking) Benjamin Robertson (Corporate Broking)	Tel: +44 (0) 20 3829 5000 www.zeuscapital.co.uk
Bowsprit Partners Limited (Financial Adviser) John Treacy Luis Brime	Tel: +44 (0) 20 3883 4430 www.bowspritpartners.com
Media enquiries: Burson Buchanan (Financial Communications) Simon Compton Verity Parker	Tel: + 44 (0) 20 7466 5000 AmicorpFS@buchanan.uk.com www.bursonbuchanan.com

Notes to Editors

 

AMIF is an international specialist fund services group that works with a broad mix of clients including institutional investors, fund managers (private equity, venture capital and hedge funds) as well as family offices to provide a suite of specialist services across global markets. AMIF provides local and global expertise to over 500 funds.

 

AMIF provides a comprehensive and tailored range of services which are all underpinned by market-recognised technology solutions that support clients from a single point of contact.

 

These include:

 

·    Fund Administration and Investor Services: Fund accounting, fund administration, in-house NAV calculation, investor services including Register & Transfer Agency services, booking of subscriptions & redemptions, audit liaison/support, real time oversight over investment performance.

 

·    Governance and Compliance Services: FATCA and CRS reporting services, Fiduciary, Anti-Money Laundering (AML) officer services in compliance with international rules and regulations including administrative support to the Board and Committees of the Board.

 

·    BPO Services: Simplifying accounting and administration services through automated accounting processes and providing management insight into business operations through regular and consistent management reporting.

 

For further information please visit www.amicorp-funds.com/chairmans-welcome/

 

 

 

Chief Executive Officer's Report

 

Operational and Strategic Review

 

Fund Administration

 

Client Base

	H1-2024	H1-2023	FY-2023
Number of funds at start of Period/year	501	444	444
New funds	57	39	104
Funds terminated*	(50)	(20)	(47)
Number of funds at Period/year end	508	463	501

 

^*Approximately half of the funds terminated in H1-2024 are a result of the Group's initiative to clean-up non-revenue generating launching funds, in an attempt to refocus its pipeline.

 

In the last six months the number of funds has grown organically at an annualised rate of 2.8% from 501 on 1 January 2024 to 508 on 30 June 2024.  While the 46% growth in number of new wins is in line with management's expectation arising from the investment in the Group's salesforce, the Group experienced an increased level of terminations in H1-2024 arising from the following:

 

·	Withdrawal of investors' commitment or investment owing to unfavourable market conditions;
·	Voluntary closure of funds due to restructuring or changes in investment strategy; and
·	Clean-up of non-revenue generating launching funds which no longer seek to fund-raise.

 

It is also important to note that a major portion of recurring income from fund administration services is only realised upon successful fund launch.  The timing of fund launch is influenced by external factors like fund raising capability of fund managers, approval process of relevant authorities, economic conditions and market sentiment.  As a result, the number of active funds as of 30 June 2024 remained flat as compared to prior period, reaching 299 out of 508 (H1-2023: 297).

 

The Group continues its focus on expanding service offerings to assist with additional demands within its client base and to capture potential revenue increases.

 

Market Expansion

 

In view of maximising the Group's organic growth, AMIF has also actively expanded its geographic presence in both developed and emerging markets, as follows:

 

Kazakhstan

 

In mid-2024, Amicorp Fund Services (AIFC) Limited has had its fund administration license approved by the Astana International Financial Centre ('AIFC'), Kazakhstan's leading financial hub, making it the first provider to be awarded a license in this important jurisdiction.  Kazakhstan is strategically positioned at the centre of the New Silk Road investment corridor that links Asia and Europe and one that has seen a significant rise in foreign direct investments.  The majority of goods currently exported from China and Central Asia to Europe go through Kazakhstan.

 

The strong investment flows make the AIFC an increasingly important hub for financial markets across Central Asia.  It also offers attractive investment incentives and has a strong regulatory framework that aligns with international standards, making it a highly effective and secure platform to create and build fund structures for a wide range of investment needs.  Those are expected to include real estate and private equity investment funds that focus on the infrastructure opportunities being established across Kazakhstan and the wider Central Asia region; funds that invest in venture capital that are benefitting from an uplift in technological innovation and are being supported by various government initiatives in the local market at the moment; funds that invest in alternative asset classes such as equities, fixed income instruments, commodities or other liquid assets, and funds that provide efficient and flexible vehicles to support specific wealth management plans.

 

UAE

 

Among the Gulf Cooperation Council ('GCC') and UAE, the Dubai International Financial Centre ('DIFC') has become one of the major financial centres in the region where global family offices, asset managers and institutional investors from Europe and Asia have a significant presence.  The Group's application process for the fund administration license in DIFC has been ongoing.  A Category 4 license, when granted, would allow for the offering of fund administration services to DIFC established funds.  The Group has been actively working with local advisors to adhere to the process of the authority, expecting to obtain the regulatory approval in the next six to nine months.

 

Investment in IT

 

The Group has always been committed to rolling out automated and innovative digital solutions that deliver greater operational and cost-saving efficiencies for fund managers, and equip them with the data and insights they need to be compliant and make better informed decisions on their investments.

 

AMI-GO

 

AMI-GO was launched in March 2024, as a cloud-based onboarding platform developed in-house which streamlines the onboarding of investors for fund managers, ensures key information is more accessible, accurate and secure, and better connects the people that matter when it comes to administrating their fund.  This new platform also provides fund managers with a centralised source of information about their funds and their investors, allowing them to retrieve and upload financial, corporate and legal documents, such as subscription forms, source of fund declarations and KYC and/or AML records.

 

NAV Automation Process

 

The Group continued its NAV automation process within existing IT systems, as the enhancement of system capability and use of advanced technology play a crucial role to the operational and financial success of the Group.  During H1-2024, AMIF completed projects such as automated trade upload with key brokers, automatic generation of investor deliverables and the migration of hosting server of its fund administration system.  Although these achievements might not create a visible functionality for the clients, they are seen as important stepping stones in driving efficiency and reducing the risk of human errors.

 

Outlook for Fund Administration - H2-2024

 

Governance and Compliance services

 

The Group actively pursued the expansion of the G&C services segment to reach 455 mandates in H1-2024 (H1-2023: 391), which primarily include the engagements for Anti-Money Laundering Compliance Officer ('AMLCO'), Money Laundering Reporting Officer ('MLRO'), Deputy Money Laundering Reporting Officer ('DMLRO') and Directorship services.  These new mandates were secured with a combined effort in cross-selling from existing customers and securing new mandates from new clients.

 

A portion of IPO proceeds were anticipated for the development of new product and service offering under the G&C services, as follows:

 

In March 2024, the Group successfully launched an online AML/CFT e-learning tool, targeting all the directors, officers and employees who are associated with a Cayman Islands fund or investment management company, pursuant to a recent guidance note published by the Cayman Islands Monetary Authority ('CIMA').  The tool could be subscribed to as an additional offering under the Group's G&C business.

 

In parallel, the Group also invested in the required infrastructure to offer a brand-new AML/CFT framework documentation service, which was rolled out in April 2024.  With this offering, the Group assists its Cayman Islands domiciled fund and fund management company clients to prepare an AML/CFT policy manual which is fully compliant with the latest CIMA regulation.

 

Outlook for Governance and Compliance services - H2-2024

 

As the Group moves into the second half of 2024, there is a strategic emphasis on expanding the market presence of its newly launched online AML/CFT e-learning tool and the AML/CFT framework documentation service.  With these offerings being closely aligned with the recent mandates issued by CIMA, the Group recognises the importance of heightened marketing outreach.  Efforts will focus on educating clients and prospects about the necessity of these tools for compliance, and emphasising their seamless integration into existing AML processes.

 

In addition, the Group intends to capitalise on its established expertise in G&C services by expanding its footprint in the UAE, particularly in Dubai and Abu Dhabi.  Recognising the region's growing prominence as a financial hub, the Group sees significant potential in offering tailored compliance and risk officer services to local funds and fund managers.  These services will be positioned as critical enablers for maintaining compliance with both local and international regulations, offering UAE-based clients the assurance that their operations meet the highest standards of regulatory oversight.

 

The Group is targeting enhancing its client engagement through regular board and AML officer meetings. These sessions will serve not only as platforms for compliance updates but also as opportunities to introduce the latest regulatory developments and discuss their implications for fund operations.  During these interactions, the designated team will actively listen to client feedback to identify emerging needs and explore how its service offerings can be further tailored to meet those demands.  This proactive approach aims to deepen client relationships and ensure that the Group remains a trusted partner in navigating the increasingly complex regulatory landscape.

 

Business Process Outsourcing services

 

Alongside its intragroup outsourcing agreement to provide accounting and administration services to the clients of Amicorp Group, the Company boasts a well-equipped corporate services infrastructure in Luxembourg, positioning itself as a reliable one-stop solution for comprehensive fund structure formation and ongoing administrative support.  The sales team is specifically directed to capitalise on opportunities in Luxembourg that combine both fund administration and corporate services.

 

In addition, the Group positions itself as a trusted strategic partner in the global investment eco-system, which does not only include investment funds, but also investors, fund and asset managers and investee companies.  These customer groups, which rely on outsourcing as a strategic approach to enhance their own competitive advantage and achieve long-term growth objectives, drive the demands for customised back-office support services such as chief financial officer ('CFO') and CFO-assist services, investor reporting, portfolio consolidation and data analysis.

 

In H1-2024, the Group's effort in the promotion of these back-office support services began to materialise, by securing new mandates on appointment as CFO and finance officer for fund managers based in Dubai and Abu Dhabi.  The Group seeks to achieve growth with these clients, by assigning named professionals who assist them with strategic planning and operational oversight, including financial planning, analysis, reporting, budgeting, cash management, and treasury planning.

 

Outlook for Business Process Outsourcing services - H2-2024

 

As the Group enters the second half of 2024, the Business Process Outsourcing division is poised for growth, driven by the successful acquisition of new contracts on the CFO and CFO-assist services from key venture capital focused managers across the middle east region.  These contracts, secured through our newly developed service offerings focusing on services to the fund manager universe, cover finance function outsourcing, investor reporting, finance officer offerings, portfolio administration, back-office administration and pre and post due diligence support.  These services were developed to meet the evolving needs of businesses in an increasingly digitalised environment.  With these new contracts, AMIF anticipates a marked increase in new wins and market share, reinforcing the Group's position as a leader in the BPO sector.

 

Use of IPO proceeds

 

The table below shows an update of use of IPO proceeds:

 

Anticipated use of proceeds	Update - FY23	Current update - H1-2024
IT expenses related to automation process, including licensing fee and consultancy fee (US$1 million)	US$90k deployed towards development of digital onboarding portal and NAV automation	US$139k further deployed towards development of digital onboarding portal and NAV automation
Depositary lite license in Luxembourg (US$1 million)	Demerger completed, creating the condition to start the licensing application of depositary lite license	No change
Expansion of Governance and Compliance services (US$1 million)	US$114k deployed towards expansion of team and development of ESG services	US$227k deployed towards expansion of team, development of an online AML/CFT e-learning tool and an AML/CFT framework documentation service
Setting up licensed fund administration in strategic markets (US$1 million)	The Republic of Ireland was researched as a possible new jurisdiction but after careful appraisals the Board decided to redirect focus to emerging markets including UAE and Kazakhstan	US$80k deployed towards opening of Kazakhstan office; License application process in UAE is ongoing (refer to Market Expansion section)
Expansion of sales team in strategic locations (US$1.7 million)	US$222k deployed towards increase in salesforce	US$354k further deployed towards increase in salesforce

 

Due to the dynamic nature of these projects, completion progress and resource deployment are regularly reviewed by management to ensure alignment with objectives and effective resource utilisation.

 

Outlook for the Group

 

The Board is pleased to report the progress made in the first half of the year, particularly with the early signs of gradual return on the Group's investments.  The consistent positive trend in new funds onboarded at the start of the second half further bolsters our optimism that this momentum will continue throughout the year.  AMIF is well placed to capitalise as its pipeline of funds converts into active mandates, with an understanding of the potential launch rate and an appreciation for the inherent lag in revenue conversion.

 

 

Chi Kin Lai

Chief Executive Officer

12 September 2024

 

 

 

Group H1-2024 Income Statement

 

	H1-2024	H1-20231	Change	FY-2023
	US$'000	US$'000	%	US$'000
Revenue
Fund Administration	3,982	4,347	(8.4)%	7,927
Business Process Outsourcing services	2,299	2,065	11.3%	3,582
Governance and Compliance services	966	675	43.1%	1,305
Total Revenue	7,247	7,087	2.3%	12,814
Payroll and remuneration costs	(4,183)	(3,493)	19.8%	(7,178)
Rent and occupancy	(193)	(262)	(26.3)%	(430)
Professional fees	(855)	(227)	276.7%	(1,068)
IT expenses	(237)	(314)	(24.5)%	(657)
Foreign currency (loss) / gain	(109)	33	(430.3)%	5
Other operating expenses	(643)	(403)	59.6%	(1,607)
Adjusted EBITDA2	1,027	2,421	(57.6)%	1,879
IPO expenses	-	(1,201)	(100.0)%	(952)
EBITDA	1,027	1,220	(15.8)%	927
Other gains / (losses)	17	(37)	145.9%	-
Interest income	27	-	N/A	99
Interest costs	(20)	(23)	(13.0)%	(89)
Depreciation expenses	(157)	(132)	18.9%	(284)
Profit before income tax	894	1,028	(13.0)%	653
Income tax expense	(264)	(298)	(11.4)%	(667)
Profit / (loss) for the Period / year	630	730	(13.7)%	(14)

 

¹ These comparative figures were extracted from the interim results for the six months ended 30 June 2023 published on 27 September 2023, prepared under the consistent basis as that for the Historical Financial Information ('HFI') included in the listing prospectus dated 5 June 2023. See Reconciliations of Comparatives section under the unaudited financial statements of this report for details.

 

² Included in adjusted EBITDA, the Group incurred post-listing expenses of US$813k (H1-2023: $49k) which represent one-time or recurring expenses arising from listing obligations which were dependent on successful admission. Examples of post-listing expenses include the carved-out subscription to certain IT systems such as finance and accounting systems, Microsoft licenses and hosting services. Effective on Admission, the Group also incurred additional expenses such as statutory listing fee, professional indemnity insurance, as well as the engagements of ongoing professional advisers for listing rule compliance.

 

 

 

Financial Review

 

Revenue

 

Revenue increased by 2.3% to US$7.2 million (H1-2023: US$7.1 million), which was contributed by:

 

·	Fund Administration revenue dropped to US$4.0 million in H1-2024 (H1-2023: US$4.3 million).  The Group witnessed an increase in the net number of funds as compared to H1-2023.  However, Fund Administration revenue took a hit as a result of the increased closure and termination of funds at the beginning of the year, as investors redeemed from or withdrew interest in operating funds due to uncertain market conditions.  Fund launches remained slow due to the continuous effects of global inflation staying at an uncomfortably high level, leading to depressed market sentiment and challenges in fund raising.
·	Governance and Compliance services revenue increased by 43.1% to US$1 million in H1-2024 (H1-2023: US$0.7 million), which is in line with the increase in AML officer and directorship mandates to 455 in June 2024 from 391 mandates in June 2023, predominantly associated with the Group's fund clients domiciled in the Cayman Islands and Luxembourg.  The Group has endorsed strategic initiatives to concentrate resources on targeted market, aiming to benefit from the growing demands arising from the fast-changing regulatory requirements, through its expanded services and offerings.
·	Business Process Outsourcing services revenue experienced an increase of 11.3% to US$2.3 million in H1-2024 (H1-2023: US$2.1 million).  The growing revenue is largely driven by the growth of revenue from the Intragroup Outsourcing Agreement with Amicorp Group, arising from an inflationary adjustment on charge-out rates applied on a consistent scope of work performed.

 

The seasonal element of Fund Administration and Business Process Outsourcing revenue remains applicable, specifically arising from revenue recognition of financial statement preparation work which falls on the first half of the year.

 

Divisional Performance Overview

 

H1-2024

		Fund Administration	Business Process Outsourcing	Governance and Compliance	Total
		US$'000	US$'000	US$'000	US$'000
Revenue		3,982	2,299	966	7,247
Direct staff costs		(1,622)	(272)	(355)	(2,249)
Other direct costs		(210)	-	-	(210)
Gross profit		2,150	2,027	611	4,788
Gross profit margins		54.0%	88.2%	63.3%	66.1%

 

 

 

H1-2023

		Fund Administration	Business Process Outsourcing	Governance and Compliance	Total
		US$'000	US$'000	US$'000	US$'000
Revenue		4,347	2,065	675	7,087
Direct staff costs		(1,557)	(179)	(238)	(1,974)
Other direct costs		(284)	-	-	(284)
Gross profit		2,506	1,886	437	4,829
Gross profit margins		57.6%	91.3%	64.7%	68.1%

 

 

FY-2023

		Fund Administration	Business Process Outsourcing	Governance and Compliance	Total
		US$'000	US$'000	US$'000	US$'000
Revenue		7,927	3,582	1,305	12,814
Direct staff costs		(2,710)	(254)	(478)	(3,442)
Other direct costs		(553)	-	-	(553)
Gross profit		4,664	3,328	827	8,819
Gross profit margins		58.8%	92.9%	63.4%	68.8%

 

Fund Administration, Business Process Outsourcing and G&C segments delivered gross profit margin of 54%, 88% and 63% respectively in H1-2024.  These result from the Group's additional investment in the form of additional experienced production employees, especially in the Business Process Outsourcing and G&C services divisions which are in line with the growth strategies set out in the Chief Executive Officer's Report.

 

All in all, these three segments contribute to 66% of overall gross profit margin for H1-2024, compared to 68% for H1-2023.  It continues to demonstrate the Group's capability to consistently maintain a high gross profit margin above 65%.

 

Payroll and renumeration costs

 

The Group reported an increase of US$0.7 million, or 19.8%, in payroll and renumeration costs in H1-2024 (H1-2023: US$3.5 million).  The major incremental payroll and renumeration costs represents the Group's increased investment in senior sales employees to enhance its outreach to potential customers in strategic locations including Hong Kong, Singapore, Luxembourg and Brazil.  The Group's operation and compliance team were also strengthened to provide adequate workforce, capability, and expertise to cope with new business opportunities arising from the continuous sales and marketing efforts, together with local fiscal, tax, and economic reforms.

 

 

The table below summarises the Group's headcount by geographical locations as at the Period/year end:

	H1-2024	H1-2023	FY-2023
Chile	13	13	13
Hong Kong	8	7	9
India	38	45	37
Mauritius	12	10	11
Luxembourg	9	8	9
Others	28	25	29
Total Group Headcount	108	108	108

 

Although the total headcount has remained stable, the Group had intentionally shifted its hiring strategy to focus on jurisdictions that offer the specialised expertise needed to meet the growing operational complexity and dynamic demands of the business.  The expansion in these higher-cost offices is vital to building a pipeline for future organic growth.  As anticipated during the IPO and in line with the adopted business strategies, such investment in human capital is expected to continue in H2-2024.  Although it has put temporary pressure on short-term probability, the Group regularly reviews its strategies and closely monitors its results, in order to achieve long-term sustainable growth and future competitiveness.

 

Rent and occupancy

Rent and occupancy represents cost recharged by Amicorp Group for their subletting and property service rendered to the Group based on various intercompany service agreements.  At the same time, the Group charged to depreciation expenses in accordance with the adoption of IFRS16 for its five leases with third party landlords.

 

The decrease of rent and occupancy by US$69k, or 26.3% to US$193k in H1-2024 compared to US$262k in H1-2023 was partially compensated by depreciation expenses because of the newly acquired third party lease in Hong Kong at lower rate.

 

Professional fees

Professional fees represent accounting, statutory audit and tax compliance service fees for the Group and its subsidiaries, legal fees for licensing application and legalisation of documents, as well as professional outsourcing relating to ordinary business.

 

The increase of professional fees by US$628k, or 276.6% to US$855k in H1-2024 compared to US$227k in H1-2023 was largely attributable to post-listing related compliance and advisory expenses.  In addition, the Group also incurred additional spending towards statutory and tax reporting obligations for its newly demerged subsidiary in Luxembourg.

 

IT expenses

IT expenses comprise of the fees incurred for the use of the fund administration system, Bloomberg terminal and other business-related systems.

 

IT expenses decreased from US$314k in H1-2023 to US$237k in H1-2024 because of the reduced subscription fee incurred from the fund administration system in Chile due to an operation initiative to centralise the usage of the same system with other subsidiaries of the Group.

 

Other operating expenses

Other operating expenses consists of sales and marketing expenses, travelling expenses, statutory fees, office expenses, and other administrative expenses.

 

The increase in other operating expenses to US$643k in H1-2024 from US$403k in H1-2023 was due to increased travelling expenses arising from extensive overseas sales meetings and inter-office visits.  Furthermore, the Group also actively pursued business development activities including subscription of membership in professional and industry associations, organisation of its own marketing events, as well as sponsorship of selected external forums.

 

Income tax expense

The estimated income tax expense decreased to US$264k in H1-2024 (H1-2023: $298k), in line with the movement in the profit before income tax.  The Group's effective tax rate as a percentage of profit before income tax in H1-2024 remained at a similar level of 29.5% (H1-2023: 29.0%).

 

 

 

Unaudited Condensed Consolidated Financial Statement

For the six months ended 30 June 2024

 

	Notes		Six months ended 30 June 2024		Six months ended 30 June 2023
			Unaudited		Unaudited
			US$'000		US$'0001
Revenue	5		7,247		5,587
Payroll and remuneration costs	7		(4,183)		(2,988)
Rent and occupancy			(193)		(140)
Professional fees			(855)		(227)
IT expenses			(237)		(314)
Depreciation expenses			(157)		(132)
IPO expenses			-		(1,201)
Foreign exchange (loss) / gain			(109)		33
Other operating expenses	6		(643)		(403)
Operating profit			870		215
Other gains / (losses)			17		(37)
Finance income/ (costs), net			7		(23)
Profit before income tax	5		894		155
Income tax expense	8		(264)		(112)
Net profit after tax			630		43
Other comprehensive income
Foreign currency translation			171		20
Total comprehensive income			801		63
Earnings per ordinary shares			US$		US$
			Cent		Cent1
Basic EPS			0.53		0.04
Diluted EPS			0.53		0.04

 

¹ These comparatives for the six months ended 30 June 2023 are exclusive of Amicorp Fund Services Luxembourg S.A ('AFS Luxembourg') for IFRS presentation. AFS Luxembourg was successfully merged into the Group in the second half of 2023 via common control transactions and its full-year financial results were included under merger accounting treatments (i.e., the prospective approach) in the Group's audited consolidated financial statements for the year ended 31 December 2023. Please refer to the Reconciliation of Comparatives section in this report after the primary statements for details, in conjunction with the Group's June 2023 interim results published on 27 September 2023, which were however prepared on the consistent basis as that for the HFI included in the listing prospectus dated 5 June 2023, along with the Group's 2023 audited annual report published on 30 April 2024.

 

 

 

Unaudited Condensed Consolidated Statement of Financial Position

As at 30 June 2024

	Notes		30 June 2024		31 December 2023
			US$'000		US$'000
Non-current assets
Property, plant and equipment			87		106
Intangible assets			191		83
Right of use assets	11		403		440
Investments			72		58
Deferred tax assets			212		232
			965		919
Current assets
Trade receivables	9		2,763		2,860
Other receivables, deposits and prepayments			957		561
Amounts due from related companies	13		4,636		3,711
Cash and cash equivalents			2,980		2,973
			11,336		10,105
Total assets			12,301		11,024
Current liabilities
Trade payables			184		151
Accrued payroll and employee benefits			757		459
Other payables and accruals	10		921		840
Lease liabilities	11		211		183
Income tax payable			567		472
			2,640		2,105
Net current assets			8,696		8,000
Total assets less current liabilities			9,661		8,919
Non-current liabilities
Lease liabilities	11		245		304
			245		304
Total liabilities			2,885		2,409
NET ASSETS			9,416		8,615
Equity
Share capital			120		120
Share premium			5,989		5,989
Foreign exchange reserves			(204)		(375)
Merger reserves			3,164		3,164
Retained earnings			347		(283)
Total equity			9,416		8,615

 

 

Unaudited Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2024

 

	Share capital	Share premium	Forex translation	Merger reserves	Retained earnings	Distributable reserves	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
As at 1 January 2024	120	5,989	(375)	3,164	(283)	-	8,615
Profit for the period	-	-	-	-	630	-	630
Foreign currency translation	-	-	171	-	-	-	171
As at 30 June 2024	120	5,989	(204)	3,164	347	-	9,416

 

	Share capital	Share premium	Forex translation	Merger reserves	Retained earnings	Distributable reserves	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
As at 1 January 2023	114 1	-	(200)	2,2443	1,157	4,6664	7,981
AFS Luxembourg exclusion6	-	-	-	-	-	(2,097)	(2,097)
Adjusted opening balance for IFRS presentation6	114	-	(200)	2,244	1,157	2,569	5,884
Share additions	6	6,4622	-	-	-	-	6,468
Profit for the period	-	-	-	-	730	-	730
Pre-listing Dividends	-	-	-	-	(837)	(2,569)	(3,406)5
Foreign currency translation	-	-	20	-	-		20
Adjusted closing balance for 30 June 20235&6	120	6,462	(180)	2,244	1,050	-	9,696

 

¹ This represents the share capital of the Company, immediately prior to being inserted as a holding company of the Group described in Note 2(a).  The share capital amounted to US$62k on its incorporation date being 3 March 2023, and increased to US$114k on 23 May 2023 due to additional share issuance.  According to the merger accounting principles outlined in Note 3(c), the Group is treated as if the Company, together with its subsidiaries, had collectively existed and been merged throughout the comparative accounting periods, and hence this share capital of US$114k is presented as the opening balance as at 1 January 2023.

 

² On 8 June 2023, the Company successfully raised gross proceeds of US$6.47 million through a placing of 6,468,000 ordinary shares, at the par value of US$0.001 each share. The difference between the placing price and the nominal value of the shares constitutes the share premium.

 

³ The details regarding the accounting policy for the merger reserve are described in Note 3(c).

 

⁴ The opening balance represents certain net earnings of prior years according to the carve-out principles of the HFI included in the listing prospectus dated 5 June 2023, at the time when the Group was previously not yet formed as a separate standalone legal entity or group of entities.

 

⁵ Pre-listing dividends of US$5.8m had been preliminarily declared by Amicorp Fund Services Asia Limited, before the Company, Amicorp FS (UK) Plc, was inserted on 26 May 2023 as the holding company of the Group, in line with the listing prospectus dated 5 June 2023. The amount was finalised at $3.4m, following changes for IFRS presentation, included in the annual report ended 31 December 2023 and this final dividend (previously US$5.8m) is updated and reflected here.

 

⁶ As described in Note 4(ii), these adjustments for IFRS presentation were to reflect the exclusion of the AFS Luxembourg portion that was however included in the prior interim results for June 2023 prepared under the consistent basis as that for the HFI in the listing prospectus. AFS Luxembourg was then merged into the Group successfully in October 2023 and its full-year financials were included, under the merger accounting approach under common control as if the subsidiary had always been part of the Group, in the audited consolidated financial statements for the year ended 31 December 2023. Also see Section Reconciliation of Comparatives for details.

 

 

 

Unaudited Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2024

		Period ended 30 June
		2024		2023
		US$'000		US$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax		894		1551
Adjustments for:
Depreciation of tangible asset		25		16
Depreciation of intangible asset		30		-
Depreciation of right of use assets		102		116
Realised and unrealised foreign exchange gain		109		(33)
Recognition of doubtful debt provision		266		-
Provision for group audit fees		250		-
Fair value (gain)/ loss from an investment measured at FVTP&L		(17)		37
Finance costs		20		23
		1,679		3141
(Increase)/ decrease in trade receivables		(164)		335
Increase in other receivables, deposits and prepayments		(391)		(861)
Increase in amounts due from related companies		(813)		(853)1
Increase in accrued payroll and employee benefits		298		104
Increase/ (decrease) in trade payables		33		(91)
(Decrease)/ increase in other provisions and payables		(169)		91
Cash generated from/ (used in) operations		473		(961)
Income tax paid to tax authorities		(161)		(752)
Income tax settled through amounts due from related companies		-		(265)
Net cash flows generated from/ (used in) operating activities		312		(1,978)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of tangible assets		(144)		(51)
Proceeds from a placing of additional ordinary shares		-		6,324
Net cash flows (used in)/ generated from investing activities		(144)		6,273
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of unwinding interest portion of lease liabilities		(20)		(19)
Repayment of principal portion of lease liabilities		(99)		(91)
Net cash flows used in financing activities		(119)		(110)
NET INCREASE IN CASH AND CASH EQUIVALENTS		49		4,185
Cash and cash equivalents at beginning of period		2,973		875
Exchange difference		(42)		32
CASH AND CASH EQUIVALENTS AT END OF PERIOD		2,980		5,092

 

¹ Changes for IFRS presentation (i.e., AFS Luxembourg exclusion) are reflected in the comparatives for the six months ended 30 June 2023. See Section Reconciliation of Comparatives and Note 4(ii) for details.

 

 

Reconciliation tables below of financial information for the six months ended 30 June 2023 are to demonstrate the consolidated half-year comparatives exclusive of AFS Luxembourg (which was then successfully merged into the Group in the second half of 2023) for IFRS presentation, in conjunction with and as opposed to the Group's June 2023 interim results published on 27 September 2023, which were prepared on the consistent basis as that for the HFI included in the listing prospectus dated 5 June 2023.

 

RECONCILIATION OF COMPARATIVES

 

Unaudited Consolidated Condensed Statement of Total Comprehensive Income

for the six months ended 30 June 2023

 

		Adjustment
	As per 2023 interim results	Exclusion of AFS Luxembourg based on IFRS1	Adjusted comparatives in this report
	US$'000	US$'000	US$'000
Revenue	7,087	(1,500)	5,587
Payroll and remuneration costs	(3,493)	505	(2,988)
Rent and occupancy	(262)	122	(140)
Professional fees	(227)	-	(227)
IT expenses	(314)	-	(314)
Depreciation expenses	(132)	-	(132)
IPO expenses	(1,201)	-	(1,201)
Foreign exchange gain	33	-	33
Other operating expenses	(403)	-	(403)
Operating profit	1,088	(873)	215
Other losses	(37)	-	(37)
Interest costs	(23)	-	(23)
Profit before income tax	1,028	(873)	155
Income tax expense	(298)	186	(112)
Net profit after tax	730	(687)	43

 

 

¹ This represents a portion of a subsidiary (related to AMIF business in Luxembourg) in Amicorp Group brought into AMIF Group, included in the prior interim results for 30 June 2023 published on 27 September 2023, which was prepared under the consistent basis as that for the HFI in the listing prospectus dated 5 June 2023, and it has subsequently been decided to be excluded from the comparatives in this June 2024 interim results for IFRS presentation given that AFS Luxembourg has then been accounted for under the prospective approach described in Note 3(c) since it was successfully merged under common control into the Group from October 2023.

 

 

RECONCILIATION OF COMPARATIVES (CONTINUED)

 

Unaudited Condensed Consolidated Statement of Cash Flows

for the six months ended 30 June 2023

	As per 2023 interim results	Exclusion of AFS Luxembourg based on IFRS	Adjusted comparatives in this report
	US$'000	US$'000	US$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax	1,028	(873)	155
Adjustments for:
Depreciation of tangible asset	16		16
Depreciation of right of use assets	116		116
Realised and unrealised foreign exchange gain	(33)		(33)
Fair value (gain)/ loss from an investment measured at FVTP&L	37		37
Finance costs	23		23
	1,187	(873)	314
Decrease in trade receivables	335		335
Increase in other receivables, deposits and prepayments	(861)		(861)
Increase in amounts due from related companies	(1,726)	873	(853)
Increase in accrued payroll and employee benefits	104		104
Decrease in trade payables	(91)		(91)
Increase in other provisions and payables	91		91
Cash used in from operations	(961)		(961)
Income tax paid to tax authorities	(752)		(752)
Income tax settled through amounts due from related companies	(265)		(265)
Net cash flows used in operating activities	(1,978)		(1,978)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of tangible assets	(51)		(51)
Proceeds from a placing of additional ordinary shares	6,324		6,324
Net cash flows generated from investing activities	6,273		6,273
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of unwinding interest portion of lease liabilities	(19)		(19)
Repayment of principal portion of lease liabilities	(91)		(91)
Net cash flows used in financing activities	(110)		(110)
NET INCREASE IN CASH AND CASH EQUIVALENTS	4,185		4,185
Cash and cash equivalents at beginning of period	875		875
Exchange difference	32		32
CASH AND CASH EQUIVALENTS AT END OF PERIOD	5,092		5,092

 

 

Notes to the Unaudited Condensed Consolidated Financial Statements

 

1.  GENERAL

 

These interim financial statements are unaudited condensed consolidated financial statements for Amicorp FS (UK) Plc and its subsidiaries.  Amicorp FS (UK) Plc (the 'Company'), a public limited company incorporated and domiciled in the United Kingdom with its company number being 14704124 under the Companies Act 2006, together with its subsidiaries (collectively, the 'Group'), is a provider of fund administration services, regulatory reporting, fiduciary services and multi-faceted business support alternatives for hedge funds, private equity funds and family offices investing in listed or unlisted equities, financial instruments, projects, real estate and various asset classes locally or globally.

 

The Group also offers administration and fiduciary services to special purpose vehicles associated with fund structures or entities with passive investment on financial instruments.

 

The address of the Company's registered office is 5 Lloyd's Avenue, London, United Kingdom, EC3N 3AE.

 

2.  BACKGROUND AND BASIS OF PREPARATION

 

(a)  Background and basis of the condensed consolidated financial information

 

The Group is a business division of Amicorp Group, which is a multinational organisation providing, in addition to fund administration services, a broad range of corporate management, capital market and financial services to clients globally with a dedicated network of international experts and specialists.

 

Since year 2018, newly incorporated subsidiaries of the Group and former subsidiaries of the Amicorp Group entered into multiple conditional agreements for the sale and purchase of the respective equity share capital of such former subsidiaries, being a set of fund administration services within Amicorp Group.

 

The Group was not formed of a separate standalone legal group of entities, and the Company was incorporated on 3 March 2023 and inserted as the holding company of the Group on 26 May 2023.

 

As announced on 5 June 2023, the Company successfully raised gross proceeds of US$6.47 million through a placing of 6,468,000 new ordinary shares, with a further placing of 9,702,000 existing ordinary shares that raised US$9.70 million.  On 8 June 2023, the Company was successfully admitted to the Main Market of the London Stock Exchange, as a holding company of the Group.

 

The insertion of the Company as the holding company of the Group constitutes a carve-out reconstruction involving transfer of shares in the Group's entities, in which merger accounting was applied to the preparation of the 2023 consolidated annual financial statements; the annual consolidated financial statements of the Group were prepared as if the Company, together with its subsidiaries, collectively had already existed before the start of the earliest period presented.  The comparative information was, therefore, presented as if the carve-out reconstruction had already occurred, and it was derived from the HFI included in the listing prospectus, primarily adjusted for the demerger equity, reserve and consolidation adjustments, except for AFS Luxembourg; AFS Luxembourg was incorporated as a new legal entity in the Luxembourg jurisdiction during the second half of the 2023 annual financial year and transferred to the Group as a subsidiary, and the carved-out portion related to AFS business in Luxembourg included in the HFI was excluded from the comparatives in the 2023 annual consolidated financial statements, in order to be in compliance with the IFRS reporting framework (See Note 3c). In the June 2024 interim consolidated financial statements of this report, such exclusion is also applied to the comparatives for the six months ended 30 June 2023, and reconciliations to the prior year interim results are presented in Section  Reconciliations of Comparatives after the primary statements of this June 2024 interim results.

 

The condensed consolidated financial statements ('Interim Financial Statements') of Amicorp FS (UK) Plc for the six months ended 30 June 2024 have been prepared in accordance with IAS 34 Interim Financial Reporting issued by the International Accounting Standards Board, as adopted by the United Kingdom ('UK IAS'), and UK-adopted International Financial Reporting Standards ('IFRS'), including the interpretations issued by the IFRS Interpretations Committee ('IFRIC').  These Interim Financial Statements, which are unaudited, does not amount to full statutory accounts within the meaning of Section 434 of the Companies Act 2006 and does not include all of the information and disclosures required for full annual financial statements, and should be read in conjunction with the Group's annual report for the financial year ended 31 December 2023, which is available on the Group's website; the Independent Auditor's Report in the annual report for the financial year ended 31 December 2023 was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498 of the Companies Act 2006.

 

The condensed consolidated financial statements are presented in thousands of US Dollars ('US$'000') unless otherwise indicated, and prepared under the historical cost convention and based upon the accounting policies disclosed below.  Under the merger accounting principles, these Interim Financial Statements of the Group are presented as if the Company, with its subsidiaries, had always existed at its earliest period even though the Company was incorporated in 2023.

 

While the comparatives pertaining to the financial year ended 31 December 2023 are audited, the interim consolidated financial statements for 30 June 2024, including comparatives for the six months ended 30 June 2023, are unaudited, with consistency in the accounting policies with those applied to the audited annual financial information for the year ended 31 December 2023.

 

Where applicable, the Group has taken into account and implemented IFRS standards, along with any related interpretations and amendments, which were issued and effective as of 1 January 2024.  The Group has not chosen to adopt any standards, interpretations, or amendments before their effective date.  While there have been some new amendments effective in 2024, they are not considered to impact the condensed consolidated interim financial statements.

 

(b)  Entities included within the Group

 

The financial position and financial performance of the following entities are included as part of the condensed consolidated financial statements:

 

Amicorp Fund Services Asia Limited¹

Amicorp Fund Services (Asia) Pte. Ltd.

Amicorp (Shanghai) Consultants Ltd.

Amicorp Fund Services N.V.

Amicorp Fund Services N.V. (Barbados Branch)

Amicorp Fund Services N.V. (Bahamas Branch)

Administradora de Fondos de Inversión Amicorp S.A.

Amicorp Administradora General de Fondos SA

AFS BRASIL LTDA.

Soluciones y Servicios AFS México, S.A. de C.V.

Amicorp Fund Services Malta Limited

Amicorp Support Services Ltd

Amicorp Fund Services (Mumbai) Private Limited¹

Amicorp Fund Services (Mumbai) Private Limited (Bangalore Branch)

Amicorp Fund Services (Cyprus) Ltd

Amicorp Fund Services Luxembourg S.A¹

Administradora Amicorp Peru SAC

Amicorp Fund Services (AIFC) Limited

 

¹ Shares of these entities were transferred to the Company during the financial year ended 31 December 2023, as part of the reconstruction process for the Company inserted as the holding company of the Group described in Note 2a.  These entities are accounted for under the merger accounting approach described in Note 3c, and included in the consolidated financial statements.

 

(c)  Basis of measurement and going concern assumption

 

The condensed consolidated financial statements have been prepared under the historical cost basis except for certain financial assets and liabilities which are measured at fair value in accordance with UK-adopted IFRS and IAS.  The measurement bases are fully described in the accounting policies below.

 

The material accounting policies that have been used in the preparation of the condensed consolidated financial statements are summarised below.  These policies have been consistently applied to years and periods presented unless otherwise stated.

 

It should be noted that accounting estimates and assumptions are used in preparation of the condensed consolidated financial statements. Although these estimates are based on management's best knowledge and judgment of current events and actions, actual results may ultimately differ from those estimates.  The area involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the condensed consolidated financial statements, are disclosed in note 4.

 

Going concern

 

The Group raised US$6.5 million in the financial year ended 31 December 2023, which has enriched its working capital. The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date this report is issued.  Accordingly, they continue to adopt the going concern basis in preparing the condensed consolidated financial statements.

 

In assessing going concern, the Directors considered the Group's cash flows, solvency and liquidity positions, and have considered a range of scenarios as part of the assessment; Directors considered the reasonably worst case scenario by applying adverse assumptions on key business metrics which presumes fund launch rate and attrition rate of new funds and existing launching funds respectively being 50% worse than those in the normal scenarios, as a reverse stress test. In this reasonably worst scenario, the net current assets and cash and bank equivalence are projected to remain positive throughout the going concern period.

 

As at 30 June 2024, the Group had cash and cash equivalents of US$3.0 million (31 December 2023: US$3.0 million) and net current assets of US$8.7 million (31 December 2023: US$8.0 million), which the Directors believe will be sufficient to maintain the Group's liquidity over the going concern period (i.e. at least 12 months from the date of issue of these Interim Financial Statements), including continued investments to meet existing financial commitments and to deliver future growth.

 

(d)  Functional and presentation currency

 

Items included in the interim financial information of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the 'functional currency').  The presentational currency of the Group is United States Dollars ('US$'), and hence the financial information is presented in US$, unless specified otherwise.

 

In the individual financial statements of the Group's entities, foreign currency transactions are translated into the functional currency of the individual entity using the exchange rates prevailing at the dates of the transactions.  At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at the reporting date.  Foreign exchange gains and losses resulting from the settlement of such transactions and from the reporting date retranslation of monetary assets and liabilities are recognised in profit or loss.

 

Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined and are reported as part of the exchange revaluation gain or loss.  Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

 

In the condensed consolidated financial information, all individual financial statements of foreign operations, originally presented in a currency different from the Group's presentation currency, have been converted into US$.  Assets and liabilities have been translated into US$ at the closing rates at the reporting dates.  Income and expenses have been converted into US$ at the exchange rates ruling at the transaction dates, or at the average rates over the reporting period provided that the exchange rates do not fluctuate significantly.  Any differences arising from this procedure have been dealt with separately in other comprehensive income and the translation reserves in equity.

 

3.  ACCOUNTING POLICIES

 

(a)  Basis of consolidation

 

On consolidation, the results and financial position of foreign operations are translated into the presentation currency of the Group, as follows:

 

·	Assets and liabilities for the condensed consolidated statement of financial position presented are translated at the closing rate at the reporting date;
·	income and expense items are translated at exchange rates ruling at the date of the transactions;
·	all resulting exchange differences are recognised in other comprehensive income (foreign exchange reserves); and
·	cash flow items are translated at the exchange rates ruling at the date of the transaction

 

Inter-company transactions and balances between group companies together with unrealised profits are eliminated in full in preparing the condensed consolidated financial statements.  Unrealised losses are also eliminated unless the transaction provides evidence of impairment on the asset transferred, in which case the loss is recognised in profit or loss.

 

The results of subsidiaries acquired or disposed of, if any, during the year are included in the condensed consolidated statement of comprehensive income from the dates of acquisition or up to the dates of disposal, as appropriate.  Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.

 

Acquisition of subsidiaries or businesses is accounted for using the acquisition method.  The cost of an acquisition is measured at the aggregate of the acquisition-date fair value of assets transferred, liabilities incurred and equity interests issued by the Group, as the acquirer.  The identifiable assets acquired and liabilities assumed are principally measured at acquisition-date fair value.  The Group's previously held equity interest in the acquiree is re-measured at acquisition-date fair value and the resulting gains or losses are recognised in profit or loss.  The Group may elect, on a transaction-by-transaction basis, to measure the non-controlling interests that represent present ownership interests in the subsidiary either at fair value or at the proportionate share of the acquiree's identifiable net assets.  All other non-controlling interests are measured at fair value unless another measurement basis is required by IFRSs. Acquisition-related costs incurred are expensed unless they are incurred in issuing equity instruments in which case the costs are deducted from equity.

 

Any contingent consideration to be transferred by the acquirer is recognised at acquisition-date fair value. Subsequent adjustments to consideration are recognised against goodwill only to the extent that they arise from new information obtained within the measurement period (a maximum of 12 months from the acquisition date) about the fair value at the acquisition date. All other subsequent adjustments to contingent consideration classified as an asset or a liability are recognised in profit or loss.

 

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

 

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

 

(b)  Subsidiaries

 

A subsidiary is an investee over which the Group is able to exercise control.  The Group controls an investee if all three of the following elements are present: power over the investee, exposure, or rights, to variable returns from the investee, and the ability to use its power to affect those variable returns.  Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

 

(c)  Merger accounting

 

Merger accounting was applied to the financial year ended 31 December 2023 since the Company was inserted in May 2023 as the holding company of the Group, by way of receiving transferred shares of certain entities under common control as part of the carve-out reconstruction described in Note 2(a), given the ultimate controlling parent has remained the same.  This method treated the Company, together with its subsidiaries, as if they had been merged throughout the prior financial year and its comparative accounting periods in the 2023 annual report published on 30 April 2024.

 

The net assets of the combining entities or businesses used the existing book values from the controlling parties' perspective.  No amount was recognised in consideration for goodwill or excess of acquirers' interest in the net fair value of acquiree's identifiable assets, liabilities and contingent liabilities over cost at the time of the carve-out reconstruction, to the extent of the continuation of the controlling parties' interest. 

 

When the Company was inserted as the holding company of the Group, the excess of the carrying amount of integrated net assets over the consideration to Amicorp Group was represented as a merger reserve in equity in the condensed consolidated statement of financial position, under the predecessor method.

 

AFS Luxembourg was incorporated as a new legal entity in the Luxembourg jurisdiction in October 2023 and transferred to the Group as a subsidiary in the second half of the prior financial year. As the transaction was considered as an acquisition of trade and assets, merger accounting principles were applied prospectively, i.e. without the necessity for restating pre-combination figures and from the date of the common control transfer of the trade and assets into the AFS Luxembourg business without restating the comparatives for that business to before that date.  AFS Luxembourg was entitled for all the economic benefits and costs of its AMIF business in Luxembourg effective from 1 January 2023 to its incorporation in October 2023, and therefore the consolidated statement of financial statements for the year ended 31 December 2023 were prepared under merger accounting principles to include such transactions from 1 January 2023, accounting for this AFS Luxembourg business as if it had always been with the Group.

 

Transaction costs, including professional fees, registration fees, costs of furnishing information to shareholders, costs or losses incurred in operations of the previously separate businesses, etc., incurred in relation to the carve-out reconstruction that were to be accounted for by using merger accounting were recognised as an expense in the period in which they were incurred.

 

(d)  Tangible assets

 

Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses.

 

The cost of tangible asset includes its purchase price and the costs directly attributable to the acquisition of the items.

 

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.  The carrying amount of the replaced part is derecognised.  All other repairs and maintenance are recognised as an expense in profit or loss during the financial period in which they are incurred.

 

Tangible assets are depreciated so as to write off their cost or valuation net of expected residual value over their estimated useful lives on a straight-line basis.  The useful lives, residual value and depreciation method are reviewed, and adjusted if appropriate, at the end of each reporting period.  The useful lives are as follows:

 

Machinery and equipment	3 - 10 years
Furniture and fixtures	3 - 10 years
Motor vehicles	3 - 5 years
Leasehold improvements	in line with lease terms

 

An asset is written down immediately to its recoverable amount if its carrying amount is higher than the asset's estimated recoverable amount.

 

The gain or loss on disposal of an item of tangible assets is the difference between the net sale proceeds and its carrying amount, and is recognised in profit or loss on disposal.

 

(e)  Intangible assets

 

Costs associated with maintaining software programmes are recognised as an expense as incurred. Costs that are directly attributable to the identifiable software are recognised as intangible assets.

The Group amortises intangible assets with a limited useful life, using the straight-line method over the following periods:

                IT software                                                         3 - 5 years

The useful life is assessed by considering technological advancements, industry trends, evolving needs, and the overall pace of innovation in the relevant market.

 

(f)  Financial instruments

 

(i)  Financial assets

 

A financial asset (unless it is a trade receivable without a significant financing component) is initially measured at fair value plus, for an item not at fair value through profit or loss ('FVTPL'), transaction costs that are directly attributable to its acquisition or issue.  A trade receivable without a significant financing component is initially measured at the transaction price.

 

All regular way purchases and sales of financial assets are recognised on the trade date, that is, the date that the Group commits to purchase or sell the asset.  Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market place.

 

Financial assets with embedded derivatives are considered in their entirely when determining whether their cash flows are solely payment of principal and interest.

 

Investments

 

It represents an investment in an equity fund classified as a financial asset measured at fair value through profit or loss, given that it was not elected by management at inception to recognise fair value gains and losses through OCI; the Group held 2,386 units of Series B in Fondo De Inversion Ecus Agri-food, which is a Chilean public fund regulated by the Chilean Financial Market Commission ('CMF'), with aims to generate long-term capital appreciation from its investment portfolio for food and agricultural products, and the units of Series B held by the Group represent 1.69 per cent of the total units issued by the fund.

 

The Group's valuation technique used for this investment is the net asset value, based on the ratio of the units held over the total unit issued by the fund.

 

The fair value hierarchy of this investment is considered as level 1, given that the fund is required to report its net asset value to the CMF on a quarterly basis, following the guidelines provided by the CMF for the fair value inputs. The fair value of the investment recognised by the Group is measured as at reporting dates.

 

Debt instruments

 

Subsequent measurement of debt instruments depends on the Group's business model for managing the asset and the cash flow characteristics of the asset.  The Group only has the following type of debt instruments:

 

Amortised cost: Assets that are held for collection of contractual cash flows and the cash flows represent solely payments of principal and interest are measured at amortised cost.  Financial assets at amortised cost are subsequently measured using the effective interest rate method. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss.  Any gain on derecognition is recognised in profit or loss.

 

(ii)  Impairment loss on financial assets

 

The Group recognises loss allowances for expected credit loss ('ECL') on trade receivables and other receivables that are financial assets measured at amortised cost.  The ECLs are measured on either of the following bases: (1) 12 months ECLs: these are the ECLs that result from possible default events within the 12 months after the reporting date: and (2) lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.  The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

 

ECLs are a probability-weighted estimate of credit losses.  Credit losses are measured as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive.  The shortfall is then discounted at an approximation to the assets' original effective interest rate.

 

The Group has elected to measure loss allowances for trade and other receivables using IFRS 9 simplified approach and has calculated ECLs based on lifetime ECLs.  The Group has established a provision matrix that is based on the Group's historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

 

For other financial assets, such as amount due from related companies, deposits, prepayments and other current assets, the ECLs are based on the 12-months ECLs.  However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECLs.

 

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort.  This includes both quantitative and qualitative information analysis, based on the Group's historical experience and informed credit assessment and including forward-looking information.

 

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

 

The Group considers a financial asset to be credit-impaired when: (1) the counterparty is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or (2) the financial asset is more than 30 days past due.

 

Interest income on credit-impaired financial assets is calculated based on the amortised cost (i.e., the gross carrying amount less loss allowance) of the financial asset.  For non credit-impaired financial assets interest income is calculated based on the gross carrying amount.

 

(iii)  Financial liabilities

 

The Group classifies its financial liabilities, depending on the purpose for which the liabilities were incurred. Financial liabilities at fair value through profit or loss are initially measured at fair value and financial liabilities at amortised costs are initially measured at fair value, net of directly attributable costs incurred.

 

Financial liabilities at amortised cost

Financial liabilities at amortised cost including trade and other payables are subsequently measured at amortised cost.

 

Gains or losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process.

 

Financial liabilities at fair value through P&L

 

Any deferred consideration, arising from business acquisitions, is measured at fair value at the date of acquisition. If an obligation to pay deferred consideration that does not meet the definition of an equity instrument is remeasured at fair value at each reporting date and subsequent changes in the fair value of the deferred consideration are recognised in profit or loss.

 

(iv)  Effective interest method

 

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

 

 

(v)  Equity instruments

 

Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

 

(vi)  Derecognition

 

The Group derecognises a financial asset when the contractual rights to the future cash flows in relation to the financial asset expire or when the financial asset has been transferred and the transfer meets the criteria for derecognition in accordance with IFRS 9.

 

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires. 

 

(g)  Revenue recognition

 

Revenue from contracts with customers is recognised when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services, excluding those amounts collected on behalf of third parties.  Revenue excludes value added tax or other sales taxes and is after deduction of any trade discounts.

 

Depending on the terms of the contract and the laws that apply to the contract, control of the goods or service may be transferred over time or at a point in time.  Control of the goods or service is transferred over time if the Group's performance:

 

·	provides all of the benefits received and consumed simultaneously by the customer;
·	creates or enhances an asset that the customer controls as the Group performs; or
·	does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

 

If control of the goods or services transfers over time, revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation; for instance, certain services are activities performed to fulfil AMIF's continuous integrated fund administrative service and the benefits consumed by the client are substantially the same for each monthly service (i.e. 12 distinct instances of admin service provision) and the corresponding revenue is being recognised every month.  Otherwise, revenue is recognised at a point in time when the customer obtains control of the goods or service.

 

Where the contract contains a financing component which provides a significant financing benefit to the Group, revenue recognised under that contract includes the interest expense accreted on the contract liability under the effective interest method.  For contracts where the period between the payment and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant financing component, using the practical expedient in IFRS 15.

 

Revenue comprises the provision of fund administration services, regulatory and compliance services and also business process outsourcing services.  Fund administration services represent fund onboarding, registrar and transfer agency and NAV calculation, and preparation of financial statements; regulatory and compliance and business process outsourcing include services of AML, directorship, board support, FATCA, CRS and other tax reporting.  These fund services revenues are recognised when the relevant services are rendered and the customer simultaneously receives and consumes the benefits provided.

 

(h)  Income taxes

 

Income taxes for the reporting period comprise current tax and deferred tax.

 

Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purposes and is calculated using tax rates that have been enacted or substantively enacted at the end of the reporting period.

 

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for tax purposes.  Except for recognised assets and liabilities that affect neither accounting nor taxable profits, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.  Deferred tax is measured at the tax rates appropriate to the expected manner in which the carrying amount of the asset or liability is realised or settled and that have been enacted or substantively enacted at the end of reporting period.

 

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

 

Income taxes are recognised in profit or loss except when they relate to items recognised in other comprehensive income in which case the taxes are also recognised in other comprehensive income or when they relate to items recognised directly in equity in which case the taxes are also recognised directly in equity.

 

The Group has assessed Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12) effective from 1 January 2023, where applicable, which narrows the scope of the initial recognition exemption to exclude transactions that give rise to equal and offsetting temporary differences.  There was no impact on the statement of financial position because the balances qualify for offset under paragraph 74 of IAS 12.

 

(i)  Foreign currency

 

Transactions entered into by group entities in currencies other than the currency of the primary economic environment in which it/they operate(s) (the 'functional currency') are recorded at the rates ruling when the transactions occur.  Foreign currency monetary assets and liabilities are translated at the rates ruling at the end of the reporting period.  Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined.  Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

 

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in profit or loss in the period in which they arise.  Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income, in which case, the exchange differences are also recognised in other comprehensive income.

 

On consolidation, income and expense items of foreign operations are translated into the presentation currency of the Group (i.e. United States dollars) at the average exchange rates for the year, unless exchange rates fluctuate significantly during the period, in which case, the rates approximating to those ruling when the transactions took place are used.  All assets and liabilities of foreign operations are translated at the rate ruling at the end of the reporting period. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity as foreign exchange reserve (attributed to non-controlling interests as appropriate).  Exchange differences recognised in profit or loss of group entities' separate financial statements on the translation of long-term monetary items forming part of the Group's net investment in the foreign operation concerned are reclassified to other comprehensive income and accumulated in equity as foreign exchange reserve.

 

On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that operation up to the date of disposal are reclassified to profit or loss as part of the profit or loss on disposal.

 

(j)  Employee benefits

 

(i)	Defined contribution retirement plan   Contributions to defined contribution retirement plans are recognised as an expense in profit or loss when the services are rendered by the employees.
(ii)	Termination benefits   Termination benefits are recognised on the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognises restructuring costs involving the payment of termination benefits.

 

(k)  Provisions and contingent liabilities

 

Provisions are recognised for liabilities of uncertain timing or amount when the Group has a legal or constructive obligation arising as a result of a past event, which it is probable will result in an outflow of economic benefits that can be reliably estimated.

 

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote.  Possible obligations, the existence of which will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote.

 

(l)  Impairment of other assets

 

At the end of each reporting period, the Group reviews the carrying amounts of the following assets to determine whether there is any indication that those assets have suffered an impairment loss or an impairment loss previously recognised no longer exists or may have decreased:

 

·	tangible assets and intangible assets

 

If the recoverable amount (i.e., the greater of the fair value less costs to sell and value in use) of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount.  An impairment loss is recognised as an expense immediately.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset previously.  A reversal of an impairment loss is recognised as income immediately.

 

(m)         Related parties

 

(a)  A person or a close member of that person's family is related to the Group if that person:

 

(i)	has control or joint control over the Group;
(ii)	has significant influence over the Group; or
(iii)	is a member of key management personnel of the Group or the Group's parent.

 

(b) An entity is related to the Group if any of the following conditions apply:

 

(i)	The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(ii)	One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
(iii)	Both entities are joint ventures of the same third party.
(iv)	One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v)	The entity is a post-employment benefit plan for the benefit of the employees of the group or an entity related to the Group.
(vi)	The entity is controlled or jointly controlled by a person identified in (a); or
(vii)	A person identified in (a)(i) has significant influence over the entity or is a member of key management personnel of the entity (or of a parent of the entity).
(viii)	The entity, or any member of a group of which it is a part, provides key management personnel services to the Group or to the Group's parent.

 

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity and include:

 

(i)	that person's children and spouse or domestic partner;
(ii)	children of that person's spouse or domestic partner; and
(iii)	dependents of that person or that person's spouse or domestic partner.

 

(n)          Share capital

 

In accordance with IAS 32, expenses incurred specifically for issuing shares, such as underwriting fees, are deducted from equity.  Conversely, expenses associated with listing on the stock market, such as listing fees, or those not directly linked to issuing new shares, are recognised as expenses in the income statement.

 

For Costs that pertain to both share issuance and listing, such as legal fees, they are allocated between these two functions in a reasonable and consistent manner.

 

(o)          Distributable reserve

 

It represents certain net earnings of prior years recognised according to the carve-out principles of the HFI included in the listing prospectus, at the time when the Group was previously not yet formed as a separate standalone legal entity or group of entities.

 

4.  KEY ACCOUNTING ESTIMATES

 

In the application of the Group's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.  The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

 

 

Key sources of estimation uncertainty

 

In addition to information disclosed elsewhere in this financial information, other key sources of estimation uncertainty that have a significant risk of resulting a material adjustment to the carrying amounts of assets and liabilities within next financial year are as follows:

 

(i)  Impairment of financial assets measured at amortised cost

 

Management estimates the amount of loss allowance for ECL on financial assets that are measured at amortised cost based on the credit risk of the respective financial asset.  The loss allowance amount is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows after taking into consideration of expected future credit loss of the respective financial asset.  The assessment of the credit risk of the respective financial asset involves high degree of estimation and uncertainty.  When the actual future cash flows are different from expected, a material impairment loss or a material reversal of impairment loss may arise, accordingly.

 

(ii)           Comparatives

 

The Group's June 2023 interim results was published on 27 September 2023, and it had been prepared on the consistent basis as that for the HFI included in the listing prospectus dated 5 June 2023.

 

Subsequent to the prior year reporting for the six months ended 30 June 2023, AFS Luxembourg was established as a new legal entity in October 2023 and transferred to the Group as a subsidiary in the latter half of the financial year 2023, constituting an acquisition of trade and assets. In accordance with merger accounting principles, this transaction was treated prospectively in the annual report for the financial year ended 31 December 2023, without restating pre-combination figures. As part of that annual report, management exercised judgment in applying accounting standards and assessing the impact of opening balance and comparative adjustments in this context.

 

Included in this June 2024 interim results, the half-year comparatives for 30 June 2023 are accordingly adjusted to be exclusive of AFS Luxembourg for IFRS presentation. Please refer to the Reconciliation of Comparatives section in this report after the primary statements for further details, in conjunction with to the Group's June 2023 interim results mentioned above, along with the Group's 2023 audited annual report published on 30 April 2024.

 

5.  SEGMENTAL REPORTING

 

The Group's decision makers, consisting of the chief executive officer, chief operating officer, the chief financial officer and the manager for corporate planning, examines the Group's performance from a fund service provider's perspective and has identified three reportable segments of its business under IFRS 8.

 

The reportable segments are identified as fund administration, business process outsourcing and regulatory and compliance.  Management primarily uses a measure of net earnings by services to assess the performance of the reportable segments.

 

The customer base is primarily institutional clients, including private equity funds, family offices and hedge funds.  No individual client represents more than 5% of revenue in the six months ended 30 June 2024 (30 June 2023: same).

 

 

Period ended 30 June 2024	Revenue	Direct staff cost	Other direct costs	Gross profit
	US$'000	US$'000	US$'000	US$'000
Fund Administration	3,982	(1,622)	(210)	2,150
Business Process Outsourcing	2,299	(272)	-	2,027
Governance and Compliance	966	(355)	-	611
Total	7,247	(2,249)	(210)	4,788
Indirect staff costs				(1,934)
Other operating expenses				(1,967)
Finance income, net				7
Profit before income tax				894

 

Period ended 30 June 20232	Revenue	Direct staff cost	Other direct costs	Gross profit
	US$'000	US$'000	US$'000	US$'000
Fund Administration	2,847	(1,250)	(284)	1,313
Business Process Outsourcing	2,065	(179)	-	1,886
Governance and Compliance	675	(238)	-	437
Total	5,587	(1,667)	(284)	3,636
Indirect staff costs				(1,321)
Other operating expenses				(936)
IPO expense				(1,201)
Finance costs				(23)
Profit before income tax				155

The amount of its revenue from external customers broken down by geographical region of contracting Group entities is shown in the table below.

 

Geographical revenue

		Period ended 30 June
		2024	20232
		US$'000	US$'000
LATAM		1,202	1,468
Europe		1,785	474
MEAI1		4,260	3,645
		7,247	5,587

 

¹ MEAI means Group's operations in the geographical region of Middle East, Asia and India

² Changes for IFRS presentation (i.e., AFS Luxembourg exclusion) are reflected in the comparatives for the six months ended 30 June 2023 in line with Section Reconciliation of Comparatives and Note 4(ii).

 

 

 

6.  OTHER OPERATING EXPENSES

				Period ended 30 June
				2024		2023
				US$'000		US$'000
Business development expense				55		71
Statutory fee expenses				36		17
Travelling expenses				279		177
Other overhead expenses				273		138
				643		403

 

7.  PAYROLL AND REMUNERATION COSTS

 

				Period ended 30 June
				2024		20231
				US$'000		US$'000
Employee costs (including directors) comprise:
Wages and salaries				4,050		2,923
Contributions on defined contribution retirement plans				12		8
Other employment benefits				121		57
				4,183		2,988

 

¹ Changes for IFRS presentation (i.e., AFS Luxembourg exclusion) are reflected in the comparatives for the six months ended 30 June 2023 in line with Section Reconciliation of Comparatives and Note 4(ii).

 

8.  INCOME TAX

 

				Period ended 30 June
				2024		20231
				US$'000		US$'000
Current income tax				257		105
Deferred income tax				7		7
Total tax charge for the Period				264		112

 

¹ Changes for IFRS presentation (i.e., AFS Luxembourg exclusion) are reflected in the comparatives for the six months ended 30 June 2023 in line with Section Reconciliation of Comparatives and Note 4(ii).

 

9.  TRADE RECEIVABLES

 

		As at the Period / year ended
		Jun-2024		Dec-2023
		US$'000		US$'000
Trade receivables		3,248		3,079
Less: loss allowance		(485)		(219)
		2,763		2,860

 

10.  OTHER PROVISIONS AND PAYABLES

 

		As at the Period / year ended
		Jun-2024		Dec-2023
		US$'000		US$'000
Current
Other payables and accruals		419		257
VAT payables		7		29
Group audit fee accruals		443		500
Payment in advance from   customers		52		54
		921		840

 

 

11.  LEASES

 

This note provides information for leases where Group is a lessee within the scope of IFRS 16. 

 

The Group does not have options to purchase certain offices for a nominal amount at the end of the lease term. Also, these leases do not contain variable lease payments throughout the lease terms.

 

The total cash outflow for leases amount to US$119k in the six months ended 30 June 2024 (in the half year ended 30 June 2023: $110k).

 

 

 

(i)        Right of use assets

		Office premise
		US$'000
Cost
At 1 January 2023		475
Additions for the year		304
Exchange differences		-
At 31 December 2023		779
Additions for the period		72
Disposal during the period		(50)
Exchange differences		(5)
At 30 June 2024		796
Accumulated depreciation
At 1 January 2023		111
Depreciation for the year		228
Exchange differences		-
At 31 December 2023		339
Depreciation for the period		102
Disposal during the period		(47)
Exchange differences		(1)
At 30 June 2024		393
Net carrying balance as at 30 June 2024		403
Net carrying balance as at 31 December 2023		440

 

(ii)       Lease liabilities

 

		Office premises
		US$'000
At 1 January 2023		383
Additions		304
Interest expense		40
Lease payments		(240)
Exchange differences		-
At 31 December 2023		487
Additions		70
Interest expense		20
Lease payments		(119)
Exchange differences		(2)
At 30 June 2024		456

 

 

Discounted lease payments are due as follows:

		As at the period / year ended
		Jun-2024		Dec-2023
		US$'000		US$'000
Within one year		211		183
In between one and two years		190		197
In between two and five years		55		107
		456		487

 

Undiscounted lease payments are due as follows:

		As at the Period / year ended
		Jun-2024		Dec-2023
		US$'000		US$'000
Within one year		236		213
In between one and two years		201		214
In between two and five years		55		111
		492		538
Less: Future finance charges		(36)		(51)
Lease liabilities		456		487
Disclosed as:
Current		211		183
Non-current		245		304
		456		487

 

(iii)      Short term leases

 

Short-term leases are leases with a lease term of 12 months or less without a purchase option.  Under IFRS 16, these leases are not included in right of use assets or lease liabilities, and such lease expenses are recognised in profit and loss when incurred; these short term leases are immaterial to Group in the six months ended 30 June 2024 (in the year ended 31 December 2023: same).

 

12.  DIVIDENDS

 

During the interim period ended 30 June 2024, the Company did not declare dividends.

 

In the prior half year ended 30 June 2023, pre-listing dividends of $5.8m had been preliminarily declared and then determined and finalised at $3.4m by Amicorp Fund Services Asia Limited, in line with the listing prospectus dated 5 June 2023.

 

 

 

13.  RELATED PARTIES TRANSACTIONS

 

(a)  Transactions with Amicorp Group

 

The following transactions were carried out with related parties who are members of Amicorp Group.

 

				Period ended 30 June
				2024		2023
				US$'000		US$'000
				2,158		1,766
Rental and remuneration expenses				(542)		(1,155)

 

 

			As at the Period / year ended
			June-2024		Dec-2023
			US$'000		US$'000
Amounts due from related parties			4,636		3,711

 

The expected credit loss assessment does not have a material impact on the carrying amount of the amounts due from related companies, and no bad debt allowance associated with these balances was recognised.

 

(b)  Transactions with related parties other than Amicorp Group

 

There has been no related party other than Amicorp Group that the Group enters into transactions with, related to fund administrative business, throughout the interim period. The Group's transactions are conducted on an arm's length basis.

 

(c)  Transactions with key management personnel, remuneration and other compensation

 

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of Group, directly or indirectly.

 

The summary of compensation of key management personnel is as follows:

 

			Period ended 30 June
			2024		2023
			US$'000		US$'000
Salaries and short-term benefits			517		372

 

 

14.  FINANCIAL RISK AND CAPITAL MANAGEMENT

 

The Group's major financial instruments include trade receivables, other receivables and deposit, amounts due from related companies, cash and cash equivalent and trade payables which are disclosed in respective notes.  The risks associated with these financial instruments include liquidity risk, foreign currency risk, credit risk and interest rate risk.  The management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

 

(a)  Liquidity risk and Capital management risk

 

Our assessment of liquidity risk and capital management risk remain consistent with what was disclosed in the annual report for the year ended 31 December 2023, indicating no alterations.  There has not been any bank facility or financial covenants in the six months ended 30 June 2024 (in the six months ended 30 June 2023: same).

 

(b)  Foreign currency risk

 

The Group operates internationally and is exposed to foreign exchange risk arising from its ongoing transactions and the financial assets and liabilities denominated in foreign currencies.  Foreign exchange risk also arises from financial assets and liabilities denominated in the functional currencies in which they are measured.  Translation exposures with a functional currency different from Group's presentation currency are not included in the assessment of Group's exposure to foreign currency risks in accordance with IFRS 7 - Financial Instruments: Disclosures.

 

In countries where the Group operates, except for Hong Kong, income and expenditure are predominantly derived in respective functional currencies and management therefore considers the transactional related foreign exchange risk is insignificant. In Hong Kong, income is predominantly derived in US$ whilst the expenditure is in HK$.  Because of HK$ having been pegged to US$ at a fixed rate of 7.8 by Hong Kong government since 1983, it is concluded that its foreign currency risk against US$ is minimal in the jurisdiction. Overall, the Group is not subject to significant foreign currency risks.

 

(c)  Credit risk

 

The Group's credit risk is primarily attributable to its trade and other receivables, contract assets and amounts due from related parties.  Management has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis.  Management of credit risk involves a number of considerations, such as the financial profile of the counterparty, and specific terms and duration of the contractual agreement.

 

The Group measures loss allowances for trade and other receivables at an amount equal to lifetime ECLs, which is calculated using a provision matrix.  As the Group's historical credit loss experience does not indicate significantly different loss patterns for different customer segments, the loss allowance based on past due status is not further distinguished between the Group's different customer bases.  The Group does not have any significant credit risk exposure to any individual client or counterparty.

 

(d)  Interest rate risk

 

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.  Management considers the interest rate risk as insignificant to the Group since there has been no interest bearing borrowings, significant interest income or tangible assets with fair values substantially subject to interest rates.

 

 

(e)  Fair value of financial instruments carried at other than fair value

 

The fair value of financial instruments represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced sale or liquidation.  The carrying amounts of the Group's financial instruments carried at amortised cost approximate their fair values as at 30 June 2024 (31 December 2023: same).

 

15.          EVENTS OCCURRING AFTER THE REPORTING PERIOD

 

There has been no subsequent event as of the report date.

 

16.          CONTINGENT LIABILITIES

 

The Group has no contingent liabilities arising in the ordinary course of business, which would be material in the context of the Group's condensed consolidated financial position.

 

 

Principal Risks and Uncertainties

The Group faces a number of risks and uncertainties that may have an adverse impact on the Group's operation, performance or future prospects.

 

The Board regularly assesses and monitors the principal risks and uncertainties of the business, and considers that they have not changed and remain relevant for the remaining six months of the 2024 financial year.

 

Such principal risks and uncertainties are summarised as follows:

 

Fiduciary risk

The Group acts in a fiduciary capacity as directors and AML officers to its clients which carries specific legal obligations, including certain fiduciary duties as well as responsibility for decision making.  Breaches of such specific legal duties and obligations could give rise to a claim against the Group and its employees, and/or sanctions from the Group's regulators.

 

Risk-based approach to AML and KYC for the Group's business

The Group applies a risk-based approach to AML and KYC in conducting its business in jurisdictions in which the Group may or may not be required to be licensed.  Whilst regulatory authorities commonly mandate a risk-based approach to AML and KYC and publish regulatory guidelines and regulatory expectation as to the standards that should be applied in a risk-based approach, there is no assurance that the Group's procedures will in all cases meet all the guidelines and/or regulatory expectation where such guidelines or published regulatory expectations may be open to differing interpretations or lacking legal clarity.

 

Dependency on key personnel

The Group is dependent upon key senior management personnel who direct the implementation of the Group's strategy and business growth.  If the Group's senior management were to depart, or otherwise cease to be able to perform their duties for the Group, the Group may not be able to identify and recruit adequate replacements in a timely manner, or at all, and the Group's business may suffer disruption or other damage.

 

Risks relating to performance

The Group's clients are engaged in complex activities involving investments in financial instruments and multi-jurisdictional structures.  Whilst the Group's staff are trained and experienced in providing services relating to such activities and deliver services within an operating environment that has been developed and tested to prevent errors, the complexity of the activities can mean that it is difficult to fully eliminate the possibility of staff making errors.

 

Importance of ability to maintain and develop existing client relationships

A large proportion of the Group's revenues are derived from servicing existing fund clients and client structures.  There can be no assurance that existing client relationships will continue to grow or that key clients will not choose to move the servicing of their funds and structures to the Group's competitors.

 

Ability to maintain current referral relationship to gain new clients

The Group has been partially reliant on receiving new client and work referrals from established referral relationships with on-shore and off-shore legal advisers, asset management businesses, independent advisors and consultants, accounting firms and other professional intermediaries, as well as the Amicorp Group and its affiliated business.  If the Group is unable to retain and sustain these relationships, this could have a material adverse effect on the Group's business, results of operations or financial condition.

 

Risks associated with growth and acquisitions

Continued growth in the Group's overall client base would require further investment by the Group in personnel, facilities, information technology, ‎financial management and controls.  There is no assurance that the Group would be successful in deploying investment to augment its service offering and overall business scale.‎

 

Relationship with the Amicorp Group

Whilst the Pre-IPO reorganisation has been effected at arm's length and such that all of the operations of the fund services business were carved-out from Amicorp Group, the Group is still reliant on the certain contractual undertakings with the Amicorp Group with respect to its Luxembourg and India operations.  In the event that the Amicorp Group does not comply with such undertakings in full or in part, the ability of the Group to continue to operate and generate revenue from the fund services business in such jurisdictions could be impaired.

 

Variable fee risk

The Group's fees are based on a mix of fixed and variable fees.  The precise proportion of the Group's variable fees may differ depending on asset size of funds, client preference, activity levels and sector norms. Besides, individual asset classes are susceptible to fluctuations in performance driven by, among other things, macroeconomic factors, changing regulatory obligations, changing taxation legislation, and shifts in client preferences and demands.

 

Reliance on third party fund administration systems

The services provided by the Group rely considerably on third party fund administration systems.  Whilst the Group has contracts in place with each these systems, were a disruption to occur to the support provided by them, this might adversely affect the Group's ability to service its clients in keeping with contracted and expected service levels.

 

Business continuity risk and IT security

The Group's business is dependent on the capacity and reliability of the IT and communication systems that support its operations.  A large part of services are delivered through electronic means, including via public and private communications networks.  These IT and communications systems and networks can be subject to performance degradation or failure for reasons within or outside the control of direct suppliers.

 

Disputes and litigation risk

The Group's activities as a professional service provider across multiple jurisdictions with separate legal ‎and regulatory requirements give rise to the risk of potential disputes, legal proceedings or claims both ‎from clients directly or indirectly or from other parties who may be counterparties to transactions which, ‎whilst the Group is not a party to them as a principal, it may be acting as an agent on behalf of clients ‎involved in them.

 

Pricing risk

The fund, corporate and private client services industry is well developed and is a highly competitive environment and the Group may face increased competition and price pressure in the markets and jurisdictions in which it operates.

 

Currency fluctuation risks

As the Group conducts business across multiple jurisdictions, the Group may be exposed to financial risks associated with fluctuations in currency exchange rates, primarily, at present, between, Euros, US dollars, Hong Kong dollars, Singapore dollars and Chilean Pesos.

 

Statement of Directors' Responsibilities

Each of the Directors whose names appear below confirms that, to the best of his or her knowledge:

 

·	the condensed set of financial statements gives a true and fair view of the assets, liabilities, financial position, and profit or loss of the issuer, or undertakings included in the consolidation, as required by DTR 4.2.4R and prepared in accordance with UK adopted IAS 34 'Interim Financial Reporting';
·	the interim management report includes a fair review of the information required by DTR 4.2.7R, namely:
	- an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements; and
	- a description of the principal risks and uncertainties for the remaining six months of the financial year; and
·	the interim management report includes a fair review of the information required by DTR 4.2.8 R, namely:
	- related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the enterprise during that period; and
	- any changes in the related party transactions described in the last annual report that could have a material effect on the financial position or performance of the enterprise in the first six months of the current financial year.

 

The Directors of Amicorp FS (UK) Plc as at the date of this announcement are as follows:

 

Executive Directors

Chi Kin Lai, Chief Executive Officer

Tat Cheung (Stephen) Wong, Chief Financial Officer

Robin Hoekjan, Chief Operating Officer

 

Non-Executive Directors

Antonius Knipping, Chairman

Kathy Byrne

Patrick Byron

 

Approved by the Board and signed on its behalf by:

 

Chi Kin Lai Chief Executive Officer 12 September 2024

Tat Cheung (Stephen) Wong Chief Financial Officer 12 September 2024