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Registered number: 14112647









AIRSCREAM 313 HOLDINGS LIMITED









FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
COMPANY INFORMATION


 
Directors
W C Ong (appointed 17 May 2022)
K S Yeoh (appointed 17 May 2022)




Registered number
14112647



Registered office
Ashville Park Short Way
Thornbury

Bristol

BS35 3UU




Independent auditors
Harris & Trotter LLP

101 New Cavendish Street

1st Floor South

London

W1W 6XH





 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
CONTENTS



Page
Group Strategic Report
1 - 5
Directors' Report
6 - 8
Independent Auditors' Report
9 - 12
Consolidated Statement of Profit or Loss and Other Comprehensive Income
13
Consolidated Statement of Financial Position
13 - 15
Company Statement of Financial Position
16 - 17
Consolidated Statement of Changes in Equity
18 - 19
Company Statement of Changes in Equity
20
Consolidated Statement of Cash Flows
21 - 22
Notes to the Consolidated Financial Statements
23 - 67
Company Detailed Profit and Loss Account and Summaries
67

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
Founded in 2018 by Yeoh Kai Shen and Sam Ong, AIRSCREAM has quickly risen as a dynamic force in the vaping industry. With a vision to become a leading consumer-based company, AIRSCREAM strategically chose vape products as the cornerstone of its journey. This decision was driven by a commitment to innovation and a dedication to offering high-quality, user-friendly vaping solutions.
Central to AIRSCREAM's success is its talented team of passionate professionals, who are empowered to shape the company's future and drive its mission forward. This collaborative and forward-thinking approach has enabled AIRSCREAM to expand its footprint significantly.
As of the end of 2023, AIRSCREAM's flagship product line, "AirsPops," is distributed and resold in over 80 markets worldwide. The brand's exceptional performance is particularly notable in the African and Oceanic regions, where "AirsPops" ranks among the top three vaping brands.
Over the past five years, AIRSCREAM has garnered prestigious accolades, including two reddot Design Awards and one French Design Award, underscoring its commitment to excellence in design and product quality. These achievements highlight AIRSCREAM's dedication to creating products that not only meet consumer needs but also set new standards in the industry.

Business review
 
2023 has been a challenging year for AIRSCREAM Group, marked by significant obstacles that impeded our planned growth. Regulatory and tax changes in key markets have been particularly impactful, presenting hurdles that required substantial strategic adjustments.
One of the most significant setbacks occurred in Taiwan, where the government implemented a total ban on vape products. This regulatory change resulted in a loss of nearly USD 1 million in sales for AIRSCREAM, with no viable alternative to offset this substantial decrease.
In New Zealand, the introduction of new vape product legislation in October 2023 led to considerable market confusion. The unclear implementation details caused uncertainty among retailers regarding the types of products that would remain legal. Consequently, many took the opportunity to deplete existing stock while awaiting clearer guidance from authorities. This uncertainty disrupted our sales and market positioning in the region.
Despite these challenges, we achieved a 14% growth in South Africa compared to FY22. Maintaining our leadership position in this market required relentless effort to ensure our products remained competitive and affordable, especially in light of increased taxation on nicotine vape liquids. This involved margin adjustments across the entire supply chain to absorb the additional costs.
Moreover, delays in recruiting key team members also impacted our revenue growth in 2023. These delays hindered our ability to execute strategic initiatives and fully capitalize on market opportunities.
In summary, while 2023 posed significant challenges, AIRSCREAM Group remains committed to navigating these obstacles and leveraging our strengths to achieve long-term success.

Page 1

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial key performance indicators
 
In the fiscal year ending 2023, our group demonstrated robust financial health and consistent growth across key performance metrics. Revenue increased by 5.74% to USD 39.97 million from USD 37.80 million. This growth was attributed to the group’s ability to increase its market share in key markets.
The cash and bank balance of the group increased by 37.5%, from USD 9.00 million to USD 12.37 million.
Profit before tax increased by 7.1%, from USD 8.60 million to USD 9.21 million.

Principal risks and uncertainties
 
1. Introduction
AIRSCREAM operates in a dynamic and complex global market, spanning multiple jurisdictions with unique regulatory, economic, and socio-political environments. Under such circumstances, it does not come risk-free for our business operations. This part outlines the primary industry risks and uncertainties we may face in the various markets we operate in, including economic fluctuations, regulatory changes, market competition, and geopolitical instability.
2. Regulatory Environment
2.1 Compliance and Regulatory Changes
In every market, AIRSCREAM must navigate a complex web of local, national, and international regulations. These regulations encompass product safety, marketing practices, environmental standards, and consumer protection laws. The regulatory landscape is continuously evolving, and failure to comply with new or existing regulations could result in significant penalties and reputational damage.
2.2 Country-Specific Regulatory Risks
• European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden): The EU has stringent regulations concerning product safety, consumer rights, and environmental impact. We must stay abreast of changes to the EU Tobacco Products Directive (TPD).
• United States: The US Food and Drug Administration (FDA) regulates tobacco products under the Family Smoking Prevention and Tobacco Control Act. The FDA's Premarket Tobacco Application (PMTA) process is critical for market entry and continued sales.
• Canada: Health Canada enforces the Tobacco and Vaping Products Act (TVPA), which regulates the manufacture, sale, labelling, and promotion of tobacco and vaping products.
• Asia (Indonesia, Japan, Korea, Malaysia, Philippines, Thailand, Vietnam, Hong Kong, Cambodia): Diverse regulatory frameworks require localized strategies for compliance. For instance, Japan regulates e-cigarettes containing nicotine as pharmaceuticals, while Indonesia and Malaysia have stringent advertising restrictions. 
• Middle East and North Africa (Egypt, Jordan, Libya, Morocco, North Africa): Countries in these regions often have restrictive import regulations and varying enforcement levels, making compliance challenging. For example, Egypt has strict regulations on tobacco product sales and imports, despite that, AIRSCREAM is the first and only brand that is officially approved by the government of Egypt for sales and imports of our products in the market. 
It is important to note that despite the risks mentioned above, our strategy is to exercise flexibility for the nicotine contents in our e-liquids to ensure relevant compliances are fully met under different market regulations or circumstances.
 



Page 2

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

3. Market Risks

3.1 Economic Fluctuations
Economic conditions can greatly influence consumer spending behaviour. In times of economic downturns, discretionary spending on products like e-cigarettes may decrease, affecting sales and profitability across the industry and various other sectors.
3.2 Currency Exchange Rates
Given AIRSCREAM’s global presence, currency exchange rate fluctuations can impact financial performance. We are able to manage these risks through effective hedging strategies and financial planning.
3.3 Geopolitical Risks
Geopolitical instability can disrupt supply chains, affect consumer confidence, and lead to sudden regulatory changes. Markets in regions such as the Middle East, North Africa, and Eastern Europe (e.g., Ukraine) are particularly vulnerable to such risks.
4. Competition and Market Dynamics
4.1 Intense Competition
The e-cigarette market is highly competitive, with numerous players ranging from large multinational corporations to small local manufacturers. Maintaining market share requires continuous innovation, competitive pricing, and effective marketing strategies.
4.2 Market Saturation
In mature markets like the USA, UK, and parts of the EU, market saturation presents a challenge. Growth in these markets depends on capturing market share from competitors, high investments required on education to consumers regarding the illicit trade and convincing traditional tobacco users to switch to e-cigarettes.
4.3 The Illicit Trade
Besides a competitive landscape, the industry is constantly battling against the illicit trade in different markets, which thrives among consumers on a global scale, for example in Southeast Asia, the US, UK, Australia and more. This issue is much harder to control or restrict in countries that do not exercise or enforce effective illicit trade monitoring. Please see examples below.
1. United States: The US has seen a substantial increase in the illegal import and sale of e-cigarettes, particularly flavoured disposable ones. Despite regulatory efforts by the FDA and other agencies, thousands of new products continue to enter the market from countries like China. The FDA has created a multi-agency task force to combat this issue, but the influx of illegal e-cigarettes remains a significant challenge (FDA) (Health News Florida).
2. United Kingdom: The UK also faces issues with illicit e-cigarettes, with reports indicating that a notable portion of the e-cigarette market consists of products that do not comply with UK regulations. The Trading Standards Institute has been actively involved in seizing non-compliant products and raising awareness about the dangers of unregulated e-cigarettes.
3. Australia: In Australia, the sale of nicotine-containing e-cigarettes is illegal without a prescription, yet there is a thriving black market for these products. The Australian Border Force and state health departments frequently intercept shipments of illegal e-cigarettes, but the problem persists due to high demand.
4. Europe: Several European countries, including France and Germany, have reported issues with illegal e-cigarettes. The European Union's Tobacco Products Directive regulates the sale of e-cigarettes, but enforcement varies across member states, leading to a patchwork of compliance and enforcement efforts.
4.4 Emerging Markets
While emerging markets (e.g., Indonesia, Pakistan, Vietnam) offer growth potential, they also present unique challenges, including lower consumer purchasing power, limited market infrastructure, and higher operational risks.

Page 3

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

5. Technological Risks

5.1 Technological Advancements
The e-cigarette industry is characterized by rapid technological advancements. AIRSCREAM’s investment in R&D aims to stay ahead of technological trends and consumer preferences.
5.2 Cybersecurity
As a company that likely relies on digital platforms for sales, marketing, and operations, cybersecurity risks are significant. Data breaches could lead to financial losses, legal repercussions, and reputational damage, which is why we invest in appropriate measures to combat such risks.
6. Environmental and Health Risks
6.1 Environmental Regulations
Environmental regulations concerning manufacturing processes, packaging, and disposal of e-cigarettes and related products are becoming stricter globally. Compliance requires significant investment in sustainable practices. For example, the EU's Waste Electrical and Electronic Equipment (WEEE) Directive.
6.2 Health Concerns
Public health debates about the safety of e-cigarettes continue to evolve. Negative perceptions and potential health risks associated with vaping could impact consumer demand and lead to stricter regulations. For instance, the World Health Organization (WHO), American Heart Association (AHA), American Lung Association (ALA) and more have raised concerns about the unknown health impacts of e-cigarettes.

Other key performance indicators
 
Significantly, in 2023, the company made strategic investments to penetrate new markets, opening sales routes and introducing our products to 11 new markets. This expansion underlines our commitment to growth and positions us for continued success in the future.

Page 4

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Directors' statement of compliance with duty to promote the success of the Group
 
The director's overarching duty to promote the success of the Group for the benefit of its shareholders, with consideration of stakeholders' interests, as set out in section 172. The board regards a well governed business as essential for the successful deliver of its principal activity. 
The directors are aware of their duty under section 172 to act in the way which they consider in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole and, in doing so, to have regard (amongst other matters) to:
a) the likely consequences of any decision in the long-term;
b) the interest of the Group's employees;
c) the need to foster the Group's business relationships with suppliers, customer and others;
d) the impact of the Group's operations on the community and the environment;
e) the desirability of the Group maintaining a reputation for high standards of business conduct; and 
f) the need to act fairly as between members of the Group
The directors consider the:
a) long-term implications of their decisions because over time they will have a bigger impact upon profit than accepting a short-term contract almost irrespective of how profitable it would be if it results in the loss of long-term profitable business.
b) impact of decisions upon employees because having a contender stable workforce helps to lower business costs and improves product quality & consistency
c) need to foster good relations with suppliers & customers because this improves your access to supplies at time of shortage and assists with getting new listing of products that are being developed.
d) impact of our operations upon the local community & environment because in the short term this avoids penalties, and in the longer term this is a way to lower costs of production and attract new customers to the Group's products. 
e) desirability of maintaining a reputations for high standards of business integrity because in the long term, it will lead to repeat business.
f) need to act fairly between different member of the Group is important as all shareholders have the same equitable rights to benefit from their ownership of the Group under UK law. 


This report was approved by the board and signed on its behalf.



W C Ong
Director

Date: 15 November 2024

Page 5

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, Directors' Report and the consolidated financial statements, in accordance with applicable law.

Company law requires the directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

Under company law the directors must not approve the consolidated financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing the consolidated financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Principal activity

The principal activity of the Group is the sale of vaping products. 

Results and dividends

The profit for the year, after taxation and minority interests, amounted to $6,164,324 (2022 - $5,902,744).

Page 6

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Directors

The directors who served during the year were:

W C Ong (appointed 17 May 2022)
K S Yeoh (appointed 17 May 2022)

Political contributions

There were no political contributions made by the group in the year.

Future developments

1. Introduction of INKLORDS: AIRSCREAM will be launching a secondary vape device brand, "INKLORDS," to address gaps in our current product portfolio. By the end of 2026, INKLORDS is projected to contribute 20% of all vape sales, providing a significant boost to our market presence and product diversity.
2. Launch of M13 Nicotine Pouches: The upcoming launch of nicotine pouches under the brand M13 presents a significant growth opportunity as a new Nicotine Replacement Therapy (NRT) product. We aim to secure these products at optimal price levels to maximize their market potential. M13 will enable us to penetrate the saturated UK vape market and address restrictions in the US market due to PMTA requirements. By the end of 2027, M13 is expected to contribute at least 30% of our total revenue.
3. Opening of Czech Warehouse and Liquid Factory: In Q4 2024, AIRSCREAM will open a new warehouse and liquid factory in the Czech Republic. This facility will enhance our speed to market in the EU, addressing current growth limitations. Additionally, it will offer new revenue sources through OEM production for other brands. We estimate incremental sales contributions of USD 2 million in 2025, USD 4 million in 2026, and USD 8 million by 2027 from the Czech facilities.
4. Egypt Market Entry: We have secured the first legal permit to import our vape products into Egypt in early 2024. This milestone will allow AIRSCREAM to engage key accounts in the market, tapping into the estimated USD 0.4 billion illicit vape market in Egypt.
5. Strategic Investments in F&B Startups: As part of our strategic plan to become a leading lifestyle consumer company, AIRSCREAM will fund two F&B startups based in Malaysia and China. These investments will provide additional revenue streams and diversify our business operations.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 7

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Post year end events

313-NC Limited – Written off obsolete stock amounting to USD 325,000.
The New Zealand subsidiary, 313-NC Limited, in which the group holds a 50% ownership stake, wrote off obsolete stock valued at USD 325,000 in Q2 2024. This action was necessitated by recent regulatory changes affecting the vape industry in New Zealand.
Shenzhen AIRSCREAM Tech Co., Ltd. is now part of the group structure.
Shenzhen AIRSCREAM Tech Co., Ltd. has been integrated into the group's structure. The group restructuring exercise, which began in Q2 2022, was completed on June 26, 2024, with Shenzhen AIRSCREAM now being transferred to and reported under AIRSCREAM UK Limited. Shenzhen AIRSCREAM is 100% owned by AIRSCREAM UK Limited.

Auditors

The auditorsHarris & Trotter LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 



W C Ong
Director

Date: 15 November 2024
Page 8

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AIRSCREAM 313 HOLDINGS LIMITED
 

Opinion


We have audited the financial statements of AIRSCREAM 313 HOLDINGS Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Incomethe Consolidated Statement of Financial Position, the Company Statement of Financial Positionthe Consolidated Statement of Cash Flowsthe Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 24 - 39. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.

Except for the effects of the matter described in the Basis for Qualified Opinion section of our report, in our opinion:

the financial statements give a true and fair view of the state of the Group's and the Parent Company's affairs as at 31 December 2023 and of the Group's profit for the year then ended;

the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdomand

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for Qualified Opinion


Component auditors for 313-NC Limited were appointed as auditors on 12 April 2024 and thus did not observe the existence of physical inventories amounting to $1,851,549 as at 31 December 2023. They were unable to satisfy themselves by alternative means concerning the existence and valuation of inventory held at 31 December 2023. Since inventories are material to the financial statements and enter into the determination of the financial performance and cash flows, they were unable to determine whether adjustments might have been necessary in respect of the profit for the year reported in the statement of profit and loss and other comprehensive income, statement of financial position and the net cash flows from operating activities reported in the statement of cash flows. 
Our group audit opinion is therefore qualified with respect to the existence and valuation of inventories as at 31 December 2023.

We conducted our qualified audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditors' responsibilities for the audit of the financial statements section of our qualified report. We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our qualified audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our qualified other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Page 9

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AIRSCREAM 313 HOLDINGS LIMITED (CONTINUED)


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Group's and the Parent Company's ability to continue to adopt the going concern basis of accounting included:

Reviewing cash flow forecasts, challenging key assumptions, and performing stress testing on potential downside scenarios. We found that management's assumptions were reasonable and appropriately considered market and regulatory risks.

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

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information


The other information comprises the information included in the Annual Report, other than the financial statements and our qualified auditors' report thereon.  The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our qualified knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006


In our qualified opinion, based on the work undertaken in the course of the audit: 

the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Page 10

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AIRSCREAM 313 HOLDINGS LIMITED (CONTINUED)


Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our qualified opinion:

adequate accounting records have not been kept by the Parent Company, or returns adequate for our qualified audit have not been received from branches not visited by us; or

the Parent Company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our qualified audit.


Responsibilities of directors

As explained more fully in the directors' responsibilities statement on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our qualified opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our qualified responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our qualified procedures are capable of detecting irregularities, including fraud is detailed below:

• We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the industry in which it operates. We determined that the following laws and regulations were most significant: IFRS and the Companies Act 2006.
• We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making enquiries of management.
• We challenged assumptions and judgements made by management in its significant accounting estimates. 
We did not identify any key audit matters relating to irregularities, including fraud.

Page 11

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AIRSCREAM 313 HOLDINGS LIMITED (CONTINUED)


A further description of our qualified responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our qualified auditors' report.

Other matters


As this is the first time the Group has required an audit, the corresponding figures and comparative financial statements are unaudited. 

Use of our qualified report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our qualified audit work, for this report, or for the opinions we have formed.




 
 
Stephen Haffner (Senior Statutory Auditor)
  
for and on behalf of
Harris & Trotter LLP
 
101 New Cavendish Street
1st Floor South
London
W1W 6XH

15 November 2024
Page 12

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
Note
$
$

  

Revenue
 6 
39,970,877
37,801,424

Cost of sales
  
(22,962,525)
(25,181,673)

Gross profit
  
17,008,352
12,619,751

  

Administrative expenses
  
(7,909,035)
(4,002,184)

Distribution expenses
  
(65,150)
6,345

Profit from operations
  
9,034,167
8,623,912

  

Finance income
  
227,541
1,854

Finance expense
  
(49,563)
(21,990)

Profit before tax
  
9,212,145
8,603,776

  

Tax expense
 11 
(2,416,672)
(2,118,068)

Profit for the year
  
6,795,473
6,485,708

Other comprehensive income:

Items that will or may be reclassified to profit or loss:
  

Exchange gains arising on translation on foreign operations
  
412,697
(356,940)

Total comprehensive income
  
7,208,170
6,128,768

Profit for the year attributable to:
  

Owners of the parent
  
6,164,325
5,902,744

Non-controlling interests
  
631,148
582,964

  
6,795,473
6,485,708



Total comprehensive income attributable to:
  

Owners of the parent
  
6,646,351
5,546,122

Non-controlling interest entitlement to ordinary profit
  
631,148
582,964

Non-controlling interests entitlement to OCI
  
(69,329)
(318)

  
7,208,170
6,128,768


Page 13

 
AIRSCREAM 313 HOLDINGS LIMITED
REGISTERED NUMBER: 14112647
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023


31 December
31 December
31 December
2023
2022
2021
Note
$
$
$


Assets

Non-current assets
  

Property, plant and equipment
 13 
1,427,204
988,738
188,592

Intangible assets
 14 
11,056
-
-

  
1,438,260
988,738
188,592

Current assets
  

Inventories
 16 
2,127,655
3,296,712
117,990

Trade and other receivables
 17 
5,924,341
4,121,638
1,255,414

Cash and cash equivalents
 27 
12,372,637
8,998,805
2,167,396

  
20,424,633
16,417,155
3,540,800

  

Total assets

  

21,862,893
17,405,893
3,729,392

Liabilities

Non-current liabilities
  

Lease Liabilities
 19 
509,074
483,127
-

Deferred tax liability
 11 
52,803
45,628
-

  
561,877
528,755
-

Current liabilities
  

Bank overdraft
 27 
1,526
-
-

Trade and other liabilities
 18 
6,038,894
8,188,545
1,813,473

Lease Liabilities
 19 
147,750
162,026
58,710

  
6,188,170
8,350,571
1,872,183

  

Total liabilities
  
6,750,047
8,879,326
1,872,183

  

  

Net assets
  
15,112,846
8,526,567
1,857,209
Page 14

 
AIRSCREAM 313 HOLDINGS LIMITED
REGISTERED NUMBER: 14112647
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023


31 December
31 December
31 December
2023
2022
2021
Note
$
$
$


Issued capital and reserves attributable to owners of the parent
  

Share capital
 20 
830,051
812,040
812,040

Share premium reserve
  
64,607
-
-

Foreign exchange reserve
  
137,130
(358,401)
(1,781)

Other reserves
  
150,439
-
-

Retained earnings
  
12,152,653
6,856,783
1,046,950

  
13,334,880
7,310,422
1,857,209

  

Non-controlling interest
  
1,777,966
1,216,145
-

TOTAL EQUITY
  
15,112,846
8,526,567
1,857,209

The financial statements on pages 13 to 67 were approved and authorised for issue by the board of directors and were signed on its behalf by:

W C Ong
K S Yeoh
Director
Director


Date: 15 November 2024

The notes on pages 24 to 67 form part of these financial statements.

Page 15

 
AIRSCREAM 313 HOLDINGS LIMITED
REGISTERED NUMBER: 14112647
 
 
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023


2023
2022
Note
$
$


Assets

Non-current assets
  

Other non-current investments
 15 
128,725
121,241

  
128,725
121,241

Current assets
  

Trade and other receivables
 17 
1,717,081
726,113

Cash and cash equivalents
 27 
16,041
2,202

  
1,733,122
728,315

  

Total assets

  

1,861,847
849,556

Liabilities

Non-current liabilities
  

Current liabilities
  

Trade and other liabilities
 18 
382,118
121,293

  
382,118
121,293

  

Total liabilities
  
382,118
121,293

  

  

Net assets
  
1,479,729
728,263
Page 16

 
AIRSCREAM 313 HOLDINGS LIMITED
REGISTERED NUMBER: 14112647
 
 
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

2023
2022
Note
$
$


Issued capital and reserves attributable to owners of the parent
  

Share capital
 20 
830,051
812,040

Share premium reserve
  
64,607
-

Foreign exchange reserve
  
(11,181)
(85,904)

Other reserves
  
150,439
-

Retained earnings
  
445,813
2,127

TOTAL EQUITY
  
1,479,729
728,263

The financial statements on pages 13 to 67 were approved and authorised for issue by the board of directors and were signed on its behalf by:

W C Ong
K S Yeoh
Director
Director

Page 17
 


 
AIRSCREAM 313 HOLDINGS LIMITED


 
 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023




Share capital
Share premium
Foreign exchange reserve
Other reserves
Retained earnings
Total attributable to equity holders of parent
Non-controlling interest
Total equity



$
$
$
$
$
$
$
$


At 1 January 2022
812,040
-
(1,780)
-
1,046,950
1,857,210
-
1,857,210


Comprehensive income for the year






Profit for the year
-
-
-
-
5,902,744
5,902,744
582,964
6,485,708


Forex Reserve Movement
-
-
(270,718)
-
-
(270,718)
(318)
(271,036)


Total comprehensive income for the year
-
-
(270,718)
-
5,902,744
5,632,026
582,646
6,214,672


Contributions by and distributions to owners










Dividends
-
-
-
-
(92,912)
(92,912)
-
(92,912)


Parent Forex Reserve Movement
-
-
(85,904)
-
-
(85,904)
-
(85,904)


Issue of share capital in subsidiary to NCI
-
-
-
-
-
-
633,500
633,500


Total contributions by and distributions to owners
-
-
(85,904)
-
(92,912)
(178,816)
633,500
454,684


At 31 December 2022
812,040
-
(358,402)
-
6,856,782
7,310,420
1,216,146
8,526,566
Page 18

 


 
AIRSCREAM 313 HOLDINGS LIMITED


 
 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023




Share capital
Share premium
Foreign exchange reserve
Other reserves
Retained earnings
Total attributable to equity holders of parent
Non-controlling interest
Total equity



$
$
$
$
$
$
$
$


At 1 January 2023
812,040
-
(358,402)
-
6,856,782
7,310,420
1,216,146
8,526,566


Comprehensive income for the year






Profit for the year
-
-
-
-
6,164,325
6,164,325
631,148
6,795,473


Forex Reserve Movement
-
-
420,810
-
-
420,810
(69,329)
351,481


Total comprehensive income for the year
-
-
420,810
-
6,164,325
6,585,135
561,819
7,146,954


Contributions by and distributions to owners










Dividends
-
-
-
-
(868,453)
(868,453)
-
(868,453)


Issue of share capital
18,011
64,607
-
-
-
82,618
-
82,618


Transfer to/from retained earnings
-
-
-
(64,607)
-
(64,607)
-
(64,607)


Transfers between other reserves
-
-
-
215,046
-
215,046
-
215,046


Parent Forex Reserve Movement
-
-
74,722
-
-
74,722
-
74,722


Total contributions by and distributions to owners
18,011
64,607
74,722
150,439
(868,453)
(560,674)
-
(560,674)


At 31 December 2023
830,051
64,607
137,130
150,439
12,152,654
13,334,881
1,777,965
15,112,846

The notes on pages 24 to 67 form part of these financial statements.

Page 19
 
AIRSCREAM 313 HOLDINGS LIMITED

 
 
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023



Share capital
Share premium
Foreign exchange reserve
Other reserves
Retained earnings
Total equity


$
$
$
$
$
$

At 1 January 2022
812,040
-
-
-
-
812,040

Profit for the year
-
-
-
-
2,127
2,127

Total comprehensive income for the year
-
-
-
-
2,127
2,127

Forex reserve movements
-
-
(85,904)
-
-
(85,904)

Total contributions by and distributions to owners
-
-
(85,904)
-
-
(85,904)

At 31 December 2022
812,040
-
(85,904)
-
2,127
728,263

At 1 January 2023
812,040
-
(85,904)
-
2,127
728,263

Profit for the year
-
-
-
-
1,312,139
1,312,139

Total comprehensive income for the year
-
-
-
-
1,312,139
1,312,139

Dividends
-
-
-
-
(868,453)
(868,453)

Issue of share capital
18,011
64,607
-
-
-
82,618

Transfer to/from retained earnings
-
-
-
(64,607)
-
(64,607)

Transfers between other reserves
-
-
-
215,046
-
215,046

Parent Forex Reserve Movement
-
-
74,722
-
-
74,722

Total contributions by and distributions to owners
18,011
64,607
74,722
150,439
(868,453)
(560,674)

At 31 December 2023
830,051
64,607
(11,182)
150,439
445,813
1,479,728

The notes on pages 24 to 67 form part of these financial statements.

Page 20

 
AIRSCREAM 313 HOLDINGS LIMITED

 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
Note
$
$

Cash flows from operating activities
  

Profit for the year
  
6,795,473
6,485,708

Adjustments for
  

Depreciation of property, plant and equipment
 13 
434,833
139,136

Amortisation of intangible fixed assets
 14 
1,307
-

Interest on lease liabilities
  
49,466
20,332

Loss on sale of property, plant and equipment
  
45,658
-

Movement in deferred tax
  
7,175
45,628

Share-based payment expense
 25 
233,056
-

Net foreign exchange loss/(gain)
  
434,533
(356,621)

Income tax expense
 11 
2,416,672
2,118,068

  
10,418,173
8,452,251

Movements in working capital:
  

Increase in trade and other receivables
  
(1,804,579)
(2,864,331)

Decrease/(increase) in inventories
  
1,169,057
(3,178,722)

(Decrease)/increase in trade and other payables
  
(855,613)
4,293,467

Increase in provisions and employee benefits
  
-
185,544

Cash generated from operations
  
8,927,038
6,888,209

  

Income taxes paid
  
(3,708,834)
(223,885)

Net cash from operating activities

  
5,218,204
6,664,324

Cash flows from investing activities
  

Purchases of property, plant and equipment
  
(705,369)
(234,217)

Purchase of intangibles
 14 
(12,363)
-

Net cash used in investing activities

  
(717,732)
(234,217)

Cash flows from financing activities
  

Issue of ordinary shares
  
-
633,500

Dividends paid to the holders of the parent
 12 
(868,453)
(92,912)

Payment of lease liabilities
  
(259,713)
(139,286)

Net cash (used in)/from financing activities
  
(1,128,166)
401,302

Net increase in cash and cash equivalents
  
3,372,306
6,831,409

  
Page 21

 
AIRSCREAM 313 HOLDINGS LIMITED

 
 
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023









2023
2022




$
$


Cash and cash equivalents at the beginning of year
  
8,998,805
2,167,396

Cash and cash equivalents at the end of the year
 27 
12,371,111
8,998,805

The notes on pages 24 to 67 form part of these financial statements.

Page 22

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023




Page
1.
Accounting policies
24
2.
Reporting entity
39
3.
Basis of preparation
39
4.
Functional and presentation currency
40
5.
Accounting estimates and judgments
41
6.
Revenue
42
7.
Auditors' remuneration
42
8.
Employee benefit expenses
43
9.
Directors' remuneration
43
10.
Finance income and expense
44
11.
Tax expense
45
12.
Dividends
48
13.
Property, plant and equipment
49
14.
Intangible assets
52
15.
Subsidiaries
53
16.
Inventories
55
17.
Trade and other receivables
55
18.
Trade and other payables
19.
Loans and borrowings
57
20.
Share capital
57
21.
Reserves
59
22.
Non-controlling interests
59
23.
Leases
60
24.
Financial instruments - fair values and risk management
61
25.
Share based payments
65
26.
Related party transactions
66
27.
Notes supporting statement of cash flows
67















Page 23

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies

 
1.1

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Page 24

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.1
Basis of consolidation (continued)


Changes in the Group's ownership interests in existing subsidiaries

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

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and its 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 interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent account under IAS 39, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.


1.2

Going concern

The financial statements have been prepared on the going concern basis which assumes that the Group will be able to continue in operation for the foreseeable future. 
The management has performed a detailed assessment which included looking at the cash flow positions, financial projections, potential future regulatory changes etc. As a result of their assessment and also based on the Group's current liquidity position, the directors are satisified that the going concern basis of preparation is appropriate for the financial statements for the year ended 31 December 2023. 

 
1.3

Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties.

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

Page 25

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.3
Revenue (continued)


Sale of goods

Revenue from the sale of vapes is recognised on the satisfaction of performance obligations, such as the transfer of a promised goods identified in the contract between the Group and the customer. The group also operates retail stores selling vapes. Revenue from the sale of goods is recognised when a group entity sells a product to the customer. 
For each contract with a customer, the Group: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, value added tax ("VAT") and other sales taxes or duty. The Group principally satisfies its performance obligations at a point in time and the amounts of revenue recognised relating to performance obligations satisfied over time are not material. Typically sales are due for settlement within 30 days but certain customers pay in advance based on the terms and conditions per the agreement with them. 
The products are sold with a right to return option as well as product warranties. Based on the accumulated experience, such returns and claims are not material to the financial statements. 

A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

Page 26

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

  
1.4

Leasing



The Group as a lessee

The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise:

fixed lease payments (including in-substance fixed payments), less any lease incentives;

variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

the amount expected to be payable by the lessee under residual value guarantees;

the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the Consolidated Statement of Financial Position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Property, Plant and Equipment' and 'Investment Property' lines, as applicable, in the Consolidated Statement of Financial Position.

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 1.10.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has used this practical expedient.
Page 27

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

 
1.5

Foreign currency

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at 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 on monetary items are recognised in profit or loss in the period in which they arise except for:
exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge certain foreign currency risks (see  for hedging accounting policies); and
exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into USD using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.

Page 28

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.6

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

  
1.7

Employee benefits


Short-term and other long-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date.

 
1.8

Share-based payments


Share-based payment transactions of the Company

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 25.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.

Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.

Page 29

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

 
1.9

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.


(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the consolidated Consolidated Statement of Profit or Loss and Other Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Page 30

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.9
Taxation (continued)


(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, 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. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. The directors of the Group reviewed the Group's investment property portfolios and concluded that none of the Group's investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, the directors have determined that the ‘sale’ presumption set out in the amendments to IAS 12 is not rebutted. As a result, the Group has not recognised any deferred taxes on changes in fair value of the investment properties as the Group is not subject to any income taxes on the fair value changes of the investment properties on disposal.

Page 31

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

 
1.10

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Plant and machinery
- 33%
Motor vehicles
- 20%
Fixtures and fittings
- 33%
Plant and machinery - moulds and prototypes
- 50%
Computer equipment
- 33%
Right of use assets
- 20%

 
1.11

Intangible assets


Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

Patents
10%
Computer software
10%

 
1.12

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first in, first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.


1.13

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

 
1.14

Financial instruments

Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the instruments.

Page 32

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.14
Financial instruments (continued)

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 
1.15

Financial assets

All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.


(i) Classification of financial assets

Debt instruments that meet the following conditions are subsequently measured at amortised cost:

the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (FVOCI):

the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and

the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

By default, all other financial assets are subsequently measured at fair value through profit or loss (FVTPL).

Despite the aforegoing, the Group may make the following irrevocable election/designation at initial recognition of a financial asset:

the Group may irrevocably elect to present subsequent changes in fair value of an equity instrument in other comprehensive income if certain criteria are met; and

the Group may irrevocably designate a debt investment that meets the amortised cost or FVOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch (see (ii) Financial assets at FVTPL).

Page 33

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.15
Financial assets (continued)


(ii) Financial assets at FVTPL

Financial assets that do not meet the criteria for being measured at amortised cost or FVOCI are measured at FVTPL. Specifically:

investments in equity instruments are classified as at FVTPL, unless the Group designates an equity instrument that is neither held for trading nor a contingent consideration arising from a business combination as at FVOCI on initial recognition.

debt instruments that do not meet the amortised cost criteria or the FVOCI criteria are classified as at FVTPL. In addition, debt instruments that meet either the amortised cost criteria or the FVOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss to the extent they are not part of a designated hedging relationship (see note ). The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset and is included in the 'fair value gains/losses' line item. Fair value is determined in the manner described in note 24.


(iii) Foreign exchange gains and losses

The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. Specifically:

for financial assets measured at amortised cost that are not part of a designated hedging relationship, exchange differences are recognised in profit or loss in the 'finance income' or 'finance expense' line item for gains and losses respectively.

for debt instruments measured at FVOCI that are not part of a designated hedging relationship, exchange differences on the amortised cost of the debt instruments are recognised in profit or loss in the 'finance income' or 'finance expense' line item for gains and losses respectively. Other exchange differences are recognised in other comprehensive income in the investments revaluation reserve.

for financial assets measured at FVTPL that are not part of a designated hedging relationship, exchange differences are recognised in the 'finance income' or 'finance expense' line item for gains and losses respectively.

for equity instruments measured at FVOCI, exchange differences are recognised in other comprehensive income in the investments reconciliation reserve.

See note  regarding the recognition of exchange differences where the foreign currency risk component of a financial asset is designated as a hedging instrument for a hedge of foreign currency risk.

Page 34

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.15
Financial assets (continued)


(iv) Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised costs or at FVOCI, lease receivables, amounts due from customers under contracts, as well as on loan commitments and financial guarantee contracts. No impairment loss is recognised for investments in equity instruments. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Group always recognises lifetime ECL for trade receivables, amounts due from customers under contracts and lease receivables. The expected credit losses on these financial assets are estimated using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.

For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12m ECL. The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-impaired at the reporting date or an actual default occurring.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12m ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.


(v) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. In addition, on derecognition of an investment in a debt instrument classified as at FVOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss. In contrast, on derecognition of an investment in an equity instrument which the Group has elected on initial recognition to measure at FVOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassified to profit or loss, but is transferred to retained earnings.

Page 35

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

 
1.16

Financial liabilities and equity instruments


(i) Classification as debt or equity

Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.


(ii) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group entity are recognised at the proceeds received, net of direct issue costs.

Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

Page 36

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.16
Financial liabilities and equity instruments (continued)


(iii) Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Group, and commitments issued by the Group to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration of an acquirer in a business combination to which IFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.

A financial liability is classified as held for trading if:
it has been incurred principally for the purpose of repurchasing it in the near term;
on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative, except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument.

A financial liability other than a financial liability held for trading or contingent consideration of an acquirer in a business combination may be designated as at FVTPL upon initial recognition if:
such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
it forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss to the extent that they are not part of a designated hedging relationship (see note ). The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘fair value gains/losses' line item.

However, for financial liabilities that are designated as at FVTPL, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. The remaining amount of change in the fair value of the liability is recognised in profit or loss. Changes in fair value attributable to a financial liability's credit risk that are recognised in other comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred to retained earnings upon derecognition of the financial liability.

Page 37

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.16
Financial liabilities and equity instruments (continued)


(iii) Financial liabilities (continued)

Gains or losses on financial guarantee contracts and loan commitments issued by the Group that are designated by the Group as at FVTPL are recognised in profit or loss.

Fair value is determined in the manner described in note 24.

Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (iii) designated as at FVTPL, are subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'finance income' or 'finance expense' line item, for gains and losses respectively, in profit or loss for financial liabilities that are not part of a designated hedging relationship.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship.

See note  regarding the recognition of exchange differences where the foreign currency risk component of a financial liability is designated as a hedging instrument for a hedge of foreign currency risk.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.

 
1.17

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at the AGM.

Page 38

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

 
1.18

Non-controlling interests

For business combinations completed prior to 1 January 2010, the Group initially recognised any non-controlling interest in the acquiree at the non-controlling interest's proportionate share of the acquiree's net assets. For business combinations completed on or after 1 January 2010 the Group has the choice, on a transaction by transaction basis, to initially recognise any non-controlling interest in the acquiree which is a present ownership interest and entitles its holders to a proportionate share of the entity's net assets in the event of liquidation at either acquisition date fair value or, at the present ownership instruments' proportionate share in the recognised amounts of the acquiree's identifiable net assets. Other components of non-controlling interest such as outstanding share options are generally measured at fair value. The Group has not elected to take the option to use fair value in acquisitions completed to date.

From 1 January 2010, the total comprehensive income of non-wholly owned subsidiaries is attributed to owners of the parent and to the non-controlling interests in proportion to their relative ownership interests. Before this date, unfunded losses in such subsidiaries were attributed entirely to the Group. In accordance with the transitional requirements of IAS 27 (2008), the carrying value of non-controlling interests at the effective date of amendment has not been restated.


2.


Reporting entity

AIRSCREAM 313 HOLDINGS Limited (the 'Company') is a limited company incorporated in the United Kingdom. The Company's registered office is at Ashville Park Short Way, Thornbury, Bristol, BS35 3UU. These consolidated financial statements comprise the Company and its subsidiaries (collectively the 'Group' and individually 'Group companies'). The Group is primarily involved in the sale of vaping products.


3.


Basis of preparation

The Group's consolidated and the Company's individual financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). They were authorised for issue by the Company's board of directors on 15 November 2024.

Details of the Group's accounting policies, including changes during the year, are included in note 1.

The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its own Statement of Comprehensive Income in these financial statements.

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The areas where judgments and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 5.

Page 39

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.Basis of preparation (continued)


3.1 Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date.


Items


None


3.2 Changes in accounting policies

i) New standards, interpretations and amendments effective from 1 January 2023

The group has applied the following standards and amendments for the first time for its annual reporting period commencing 1 January 2023:
• IFRS 17 Insurance Contracts 
• Definition of Accounting Estimates – amendments to IAS 8
• International Tax Reform – Pillar Two Model Rules – amendments to IAS 12.
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – amendments to IAS 12
• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2.
The group also elected to adopt the following amendments early:
• Amendments to IAS 1 – Classification of Liabilities as Current or Non-current and Amendments to IAS 1 – Non-current Liabilities with Covenants.
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.


4.


Functional and presentation currency

These consolidated financial statements are presented in US dollars, which is the Group's functional currency. All amounts have been rounded to the nearest US dollar, unless otherwise indicated.

Page 40

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

5.


Accounting estimates and judgments


5.1 Estimates and assumptions

Provision for impairment of inventories

The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence..

Income tax

The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on the Group's current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Page 41

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Revenue


The following is an analysis of the Group's revenue for the year from continuing operations:


2023
2022
$
$


Sale of goods
39,970,877
37,801,424

39,970,877
37,801,424


Analysis of revenue by country of destination:

2023
2022
$
$


Rest of the world
26,982,640
30,800,423

New Zealand
12,776,455
6,776,077

United Kingdom
198,316
224,924

Rest of Europe
13,466
-

39,970,877
37,801,424

Timing of revenue recognition:

2023
2022
$
$

Goods and services transferred at a point in time
39,970,877
37,801,424

39,970,877
37,801,424


7.


Auditors' remuneration

During the year, the Group obtained the following services from the Company's auditors:


2023
2022
$
$

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
145,694
-

Page 42

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Employee benefit expenses

Group


2023
2022
$
$

Employee benefit expenses (including directors) comprise:

Wages and salaries
1,830,829
682,801

National insurance
46,243
15,416

Defined contribution pension cost
73,528
27,356

1,950,600
725,573

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors of the Company listed on page 7, and the Financial Controller of the Company.


2023
2022
$
$


Salary
444,273
-

444,273
-

The monthly average number of persons, including the directors, employed by the Group during the year was as follows:


2023
2022
No.
No.

Employees
80
54

80
54


9.


Directors' remuneration

2023
2022
$
$


Directors' emoluments
179,848
-

179,848
-


During the year1 director (2022 - 0 directors) exercised share options.

Page 43

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Finance income and expense

Recognised in profit or loss


2023
2022
$
$
Finance income

Interest on:
- Bank deposits
227,541
1,854

Total interest income arising from financial assets measured at amortised cost or FVOCI
227,541
1,854


Total finance income

227,541
1,854

Finance expense

Bank interest payable
97
1,659

Interest on lease liabilities
49,466
20,332

Total finance expense
49,563
21,991


Net finance income/(expense) recognised in profit or loss
177,978
(20,137)






Page 44

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Tax expense

11.1 Income tax recognised in profit or loss



2023
2022
$
$

Current tax

Current tax on profits for the year
2,409,469
2,071,657

Total current tax
2,409,469
2,071,657


Deferred tax expense

Origination and reversal of timing differences
7,203
46,411

Total deferred tax
7,203
46,411


2,416,672
2,118,068


Total tax expense

Tax expense excluding tax on sale of discontinued operation and share of tax of equity accounted associates and joint ventures
2,416,672
2,118,068

2,416,672
2,118,068

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:


2023
2022
$
$


Profit for the year
6,795,472
6,485,708

Income tax expense (including income tax on associate, joint venture and discontinued operations)
2,416,672
2,118,068

Profit before income taxes
9,212,144
8,603,776


Tax using the Company's domestic tax rate of 25% (2022:19%)
2,303,036
1,634,717

Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
15,457
10,724

Capital allowances for the year in excess of depreciation
(18,032)
(19,946)

Higher rate taxes on overseas earnings
100,517
268,044

Adjustments to tax charge in respect of prior periods
53,685
43,253

Short-term timing difference leading to an increase/(decrease) in taxation
7,203
46,411

Tax on income eliminated upon consolidation
314,820
153,510

Dividends received by parent not taxable
(398,585)
-

Apportioned increase in corporation tax rate of UK company
(98,307)
-
Page 45

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.Tax expense (continued)


11.1 Income tax recognised in profit or loss (continued)


Unrelieved tax losses carried forward of the parent
69,187
-

Other differences leading to an increase/(decrease) in the tax charge
67,691
(18,645)

Total tax expense
2,416,672
2,118,068

Changes in tax rates and factors affecting the future tax charges

There were no factors that may affect future tax charges.

11.2 Current tax assets and liabilities

2023
2022
$
$

Current tax assets

Corporation tax repayable*
274,234
12,175

274,234
12,175

Current tax liabilities

Corporation tax payable
1,005,556
1,906,358

1,005,556
1,906,358

* tax repayable represents overpaid taxes mainly in relation to 313-NC Limited and Airscream NZ Limited.

Page 46

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.Tax expense (continued)

11.3 Deferred tax balances

The following is the analysis of deferred tax assets/(liabilities) presented in the consolidated statement of financial position:


2023
2022
$
$


Deferred tax liabilities
(52,803)
(45,628)

(52,803)
(45,628)




Opening balance
Recognised in profit or loss
Closing balance
        $
        $
        $
2023
Property, plant and equipment

(45,628)

(7,175)

(52,803)



(45,628)


(7,175)


(52,803)




Recognised in profit or loss
Closing balance
        $
        $
2022
Property, plant and equipment

(45,628)

(45,628)



(45,628)


(45,628)


Page 47

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Dividends

2023
2022
$
$


Final dividend of 0 cents (2022: - cents) per Ordinary share proposed and paid during the year relating to the previous year's results
406,599
92,912

Interim dividend of 0 cents (2022: - cents) per Ordinary share paid during the year
216,193
-

Interim dividend of 0 cents (2022: - cents) per Ordinary share paid during the year
245,661
-

868,453
92,912

There are no proposed dividends at the year end.

Page 48
 


 
AIRSCREAM 313 HOLDINGS LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Property, plant and equipment


Group





Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Right of use assets
Total

$
$
$
$
$
$



Cost or valuation








At 1 January 2022
129,400
-
44,386
24,328
160,083
358,197


Additions
1,563
186,618
46,133
19,110
705,065
958,489


Disposals
-
-
(6,719)
-
-
(6,719)


Foreign exchange movements
(13,693)
-
(3,786)
(2,357)
(16,940)
(36,776)



At 31 December 2022
117,270
186,618
80,014
41,081
848,208
1,273,191


Additions
237,436
156,155
253,732
50,201
221,924
919,448


Disposals
(46,011)
-
(19,295)
(19,746)
-
(85,052)


Foreign exchange movements
6,050
146
(2,645)
999
3,295
7,845



At 31 December 2023
314,745
342,919
311,806
72,535
1,073,427
2,115,432

Page 49

 


 
AIRSCREAM 313 HOLDINGS LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.Property, plant and equipment (continued)


Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Right of use assets
Total

$
$
$
$
$
$



Accumulated depreciation and impairment








At 1 January 2022
37,209
-
17,657
8,017
106,722
169,605


Charge for the year
16,654
1,002
6,777
7,384
-
31,817


Charge for the year on right-of-use assets
-
-
-
-
107,319
107,319


Disposals
-
-
(6,719)
-
-
(6,719)


Exchange adjustments
(3,937)
-
(1,531)
(806)
(11,293)
(17,567)



At 31 December 2022
49,926
1,002
16,184
14,595
202,748
284,455


Charge for the year
80,239
59,459
56,375
21,358
-
217,431


Charge for the year on right-of-use assets
-
-
-
-
215,912
215,912


Disposals
(21,875)
-
(8,298)
(9,221)
-
(39,394)


Adjustment in respect to prior period
-
1,490
-
-
-
1,490


Exchange adjustments
2,576
(42)
(31)
529
5,302
8,334



At 31 December 2023
110,866
61,909
64,230
27,261
423,962
688,228



Net book value


At 1 January 2022
92,191
-
26,729
16,311
53,361
188,592


At 31 December 2022
67,344
185,616
63,830
26,486
645,460
988,736


At 31 December 2023
203,879
281,010
247,576
45,274
649,465
1,427,204

Page 50
 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.Property, plant and equipment (continued)



13.1. Assets held under leases


The net book value of owned and leased assets included as "Property, plant and equipment" in the Consolidated Statement of Financial Position is as follows:

31 December 2023
31 December 2022
$
$


Property, plant and equipment owned
769,386
343,278

Right-of-use assets, excluding investment property
657,818
645,460

1,427,204
988,738

Information about right-of-use assets is summarised below:

Net book value

31 December 2023
31 December 2022
$
$

Leasehold Buildings
657,818
645,460

657,818
645,460

Depreciation charge for the year ended

31 December 2023
31 December 2022
$
$

Leasehold buildings
215,912
202,748

Other fixed assets
-
(95,429)

215,912
107,319

Additions to right-of-use assets

31 December 2023
31 December 2022
$
$

Additions to right-of-use assets
221,924
848,208

Page 51

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Intangible assets

Group





Patents
Computer software
Total

$
$
$



Cost





At 1 January 2022
3,417
-
3,417


Foreign exchange movement
(215)
-
(215)



At 31 December 2022
3,202
-
3,202


Additions
-
12,363
12,363



At 31 December 2023
3,202
12,363
15,565


Patents
Computer software
Total

$
$
$



Accumulated amortisation and impairment





At 1 January 2022
3,417
-
3,417


Foreign exchange movement
(215)
-
(215)



At 31 December 2022
3,202
-
3,202


Charge for the year
-
1,307
1,307


At 31 December 2023
3,202
1,307
4,509



Net book value


At 31 December 2023
-
11,056
11,056

Page 52

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Subsidiaries

Details of the Group's material subsidiaries at the end of the reporting period are as follows:

Name of subsidiary
Place of incorporation and operation
Proportion of ownership interest and voting power held by the Group (%)


2023
2022






1Airscream UK Limited


United Kingdom
 
100

100

2Airscream 313 SDN. BHD.


Malaysia
 
100

100

3Airscream CY Limited


Cyprus
 
100

100

4Airscream Australia PTY LTD


Australia
 
100

100

5PT Airscream Three One Three Indonesia


Indonesia
 
100

100

6Airscream 313 CZ s.r.o


Czech Republic
 
100

100

7313-NC Limited*


New Zealand
 
50

50

8Airscream NZ Limited**


New Zealand
 
65

65


*Airscream UK Limited (wholly owned subsidiary of the parent) holds 50% share in 313-NC Limited and exercises control over 313-NC Limited by way of majority in the management committee. 
** Airscream UK Limited (wholly owned subsidiary of the parent) holds 30% directly in Airscream NZ Limited and 313-NC Limited (which is a 50% subsidiary of Airscream UK Limited) holds 70% in Airscream NZ Limited. Hence the effective shareholding has been disclosed.

Page 53
 


 
AIRSCREAM 313 HOLDINGS LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.Subsidiaries (continued)

15.1 Details of non-wholly owned subsidiaries that have material non-controlling interests

The table below shows details of non-wholly owned subsidiaries of the Group that have material non-controlling interests:

Name of subsidiary
Place of incorporation and principal place of business
Proportion of ownership interests and voting rights held by non-controlling interests (%)
Profit/(loss) allocated to non-controlling interests
Accumulated non-controlling interests

2023
2022
2023
2022
2023
2022



        $
        $
        $
        $

313-NC Limited

New Zealand

50

50

672,812

562,273

1,804,605

1,198,322
 
Airscream NZ Limited

New Zealand

35

35

28,658

20,691

43,681

17,824
 


Company

2023
2022
Note
$
$

Investments in subsidiary companies
  
128,725
121,241

  
128,725
121,241

Page 54
 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Inventories

Group


2023
2022
$
$



Finished goods and goods for resale
1,697,191
3,296,712

Raw materials
430,464
-

2,127,655
3,296,712


17.


Trade and other receivables



Group

2023
2022
$
$


Current

Trade receivables
4,132,251
2,997,791

Trade receivables - net
4,132,251
2,997,791

Prepayments and accrued income
79,036
233,547

Other receivables
1,713,054
890,300

Total current trade and other receivables
5,924,341
4,121,638

Page 55

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Company

2023
2022
$
$


Current

Receivables from related parties
953,387
-

Total financial assets other than cash and cash equivalents classified as loans and receivables
953,387
-

Other receivables
763,694
726,113

Total current trade and other receivables
1,717,081
726,113


18.


Trade and other payables



Group

2023
2022
$
$


Current

Trade payables
3,623,320
5,625,287

Other payables
469,378
195,495

Accruals
542,908
260,466

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
4,635,606
6,081,248

Other payables - tax and social security payments
1,156,573
2,107,296

Dividends
246,715
-

Total current trade and other payables
6,038,894
8,188,544

Page 56

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Company

2023
2022
$
$


Current

Payables to related parties
127,577
121,293

Other payables
7,826
-

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
135,403
121,293

Dividends
246,715
-

Total current trade and other payables
382,118
121,293


19.


Loans and borrowings


Group

2023
2022
$
$

Non-current

Lease liabilities
509,074
483,127

509,074
483,127

Current

Overdrafts
1,526
-

Lease liabilities
147,750
162,026

149,276
162,026

Total loans and borrowings
658,350
645,153

20.


Share capital

Authorised

2023
2023
2022
2022
Number
$
Number
$

Shares treated as equity
Ordinary Class A shares of $0.013534 each

60,000,000

812,040

60,000,000
 
812,040
 
Growth Shares shares of $0.012726 each

1,415,267

18,011

-
 
-
 
61,415,267

830,051

60,000,000
 
812,040
 

Page 57

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.Share capital (continued)

2023
2023
2022
2022
Number
$
Number
$

Growth Shares shares of $0.012726 each

Shares issued

1,415,267

18,011

-
 
-
 
At 31 December
1,415,267

18,011

-
 
-
 

Growth shares does not have any voting rights during the vesting period. Once the shares have vested, the growth shares will have the same rights and privileges as other shareholders. 

Issued and partly paid

2023
2023
2022
2022
Number
$
Number
$

Ordinary Class A shares of $0.013534 each

At 1 January and 31 December
60,000,000

812,040

60,000,000
 
812,040
 

Page 58

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Reserves


Share premium

Includes any premium received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium. 

Foreign exchange reserve

Comprises transaction differences arising from the translation of financial statements of the Group's foreign entities into dollars. 

Retained earnings

Includes all current and prior period retained profits and losses.


22.


Non-controlling interests

2023
2022
$
$


Balance at beginning of the year
1,216,146
-

Share of profit for the year
631,148
582,964

Capital introduced
-
633,500

Forex adjustments
(69,329)
(318)

1,777,965
1,216,146

Summarised financial information in respect of each of the Group's subsidiaries that has material non-controlling interests is set out in note 15.1.

Page 59

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

23.


Leases


Group




(i) Leases as a lessee



The Group has leases in various jurisdictions it operates in and the leases are towards warehouses, vape stores and office spaces. 


Lease liabilities are due as follows:

2023
2022
$
$

Contractual undiscounted cash flows due

Not later than one year
238,807
200,820

Between one year and five years
516,379
592,570

Later than five years
-
31,170

755,186
824,560


Lease liabilities included in the Consolidated Statement of Financial Position at 31 December
656,824
645,153


Non-current
509,074
483,127

Current
147,750
162,026


The following amounts in respect of leases have been recognised in profit or loss:

2023
2022
$
$

Interest expense on lease liabilities
(49,466)
(20,332)

Page 60

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.


Financial instruments - fair values and risk management

24.1 Accounting classifications and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.


Carrying amount
31 December 2023
Note
Amortised cost
Total


        $
        $

Financial assets not measured at fair value


  




Trade and other receivables

 17 

5,924,340

5,924,340

Cash and cash equivalents

 27 

12,372,637

12,372,637



  


18,296,977
18,296,977
Financial liabilities not measured at fair value


  




Bank overdraft

  

1,526

1,526

Financial lease liabilities

 19 

656,824

656,824

Trade payables

 18 

6,038,894

6,038,894


  


6,697,244
6,697,244

Page 61

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.Financial instruments - fair values and risk management (continued)


24.1 Accounting classifications and fair values (continued)


Carrying amount
31 December 2022
Note
Amortised cost
Total


        $
        $

Financial assets not measured at fair value


  




Trade and other receivables

 17 

4,119,761

4,119,761

Cash and cash equivalents

 27 

8,998,805

8,998,805



  


13,118,566
13,118,566
Financial liabilities not measured at fair value


  




Financial lease liabilities

 19 

645,153

645,153

Trade payables

 18 

8,186,669

8,186,669


  


8,831,822
8,831,822


24.2 Credit risk management

Credit risk arises from cash and cash equivalents as well as credit exposures to wholesale and retail customers, including outstanding receivables. The Group has policies in place to ensure that sales of the products are made to customers with appropriate credit worthiness. The use of prepayments limits exposure to credit risk in some cases. 
The maximum financial exposure due to credit risk on the Group's financial assets, representing the sum of cash and cash equivalents, trade receivables and other current assets, as at 31 December 2023 was USD 18.2 million (2022: USD 12.8 million).

Page 62
 


 
AIRSCREAM 313 HOLDINGS LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.Financial instruments - fair values and risk management (continued)



24.3 Liquidity risk management

The Group maintains a robust cash position to ensure sufficient liquidity to meet its operational and strategic needs, even in periods of economic uncertainty. Given the Group’s substantial cash holdings and positive cash flow generation, the Company does not rely on committed borrowing facilities to fund its operations or capital expenditures. As of 31 December 2023, the Group held cash and cash equivalents of USD 12,372,638 (2022: USD 8,998,805), 

Liquidity and interest risk tables

The following tables detail the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The contractual maturity is based on the earliest date on which the Group may be required to pay.

Carrying amount
Total
1 - 3 months
3 - 12 months
1 - 2 years
2 - 5 years
More than 5 years
        $
        $
        $
        $
        $
        $
        $
31 December 2023









Bank overdraft

1,526

1,526

1,526

-

-

-

-

Finance lease liabilities

663,851

755,186

61,043

177,764

189,251

327,128

-

Trade payables

6,040,631

6,040,631

6,040,631

-

-

-

-



6,706,008
6,797,343
6,103,200
177,764
189,251
327,128
-

Page 63

 


 
AIRSCREAM 313 HOLDINGS LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.Financial instruments - fair values and risk management (continued)


24.3 Liquidity risk management (continued)

Carrying amount
Total
1 - 3 months
3 - 12 months
1 - 2 years
2 - 5 years
More than 5 years
        $
        $
        $
        $
        $
        $
        $
31 December 2022









Finance lease liabilities

645,153

822,320

52,462

158,779

184,934

394,975

31,170

Trade payables

8,186,669

8,186,669

8,186,669

-

-

-

-



8,831,822
9,008,989
8,239,131
158,779
184,934
394,975
31,170

Page 64
 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

25.


Share based payments


25.1. Employee growth shares plan of the Company


Details of the employee share option of the Company

The establishment of the Employee Growth Share Plan was approved by shareholders at the during the current year. All full-time, part-time employees, and consultants of the Company, or any other third-party companies, are eligible to participate in the Scheme, subject to the discretion of the management. The Company may allocate growth shares to eligible recipients based on various factors, including performance, tenure, and contribution to the Company's success. The number of shares allocated will be determined by the management and communicated to the recipients in writing.
The Scheme operates on a vesting period, during which the allocated shares are subject to specific conditions or hurdles and the minimum vesting period for each individual is three (3) years of continuous employment. 
Upon the completion of the vesting period, recipients may decide to sell their vested shares. The Company will have the first priority to purchase said share, followed by the co-founders of the company. In the event that neither the Company nor the co-founders, decide to purchase the said shares, only then will the shares be open to other parties for purchase.

The following share-based payment arrangements were in existence during the current and prior years:

Number
Grant date
Expiry date
Fair value at grant date


£
1Scheme 1

267,200

1/04/20

1/04/23
 
0.20

2Scheme 2

313,321

1/04/21

1/04/25
 
0.20

3Scheme 3

457,746

1/04/22

1/04/26
 
0.20

4Scheme 4

377,000

1/04/23

1/04/27
 
0.20



Movements in growth shares during the year

The following reconciles the share options outstanding at the beginning and end of the year:


2023
Number of options
Weighted average exercise price

$


Granted during the year
1,415,267
0.01

Exercised during the year
(267,200)
0.01

1,148,067
-

Page 65

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share options exercised during the year

The following share were exercised during the year:

Option series
Numbers exercised
Exercise date

1Scheme 1

(267,200)

1/10/23
 

(267,200)



26.


Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

26.1 Other related party transactions

Other related party transactions are as follows:

Related party relationship
Type of transaction
Transaction amount
Balance owed


2023
2022
2023
2022

        $
        $
        $
        $


Shenzhen AIRSCREAM Tech Co. Ltd

Management fees

1,056,866
 
394,446
 
223,276

-


All related party transactions were made on terms equivalent to those that prevail in arm's length transactions. 

Page 66

 
AIRSCREAM 313 HOLDINGS LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

27.

Notes supporting statement of cash flows

Group


2023
2022
$
$


Cash at bank available on demand
12,372,222
8,998,805

Cash on hand
415
-

Cash and cash equivalents in the statement of financial position

12,372,637
8,998,805


Bank overdrafts
(1,526)
-

Cash and cash equivalents in the statement of cash flows
12,371,111
8,998,805

Company


2023
2022
$
$


Cash at bank available on demand
16,041
2,202

Cash and cash equivalents in the statement of financial position

16,041
2,202


Cash and cash equivalents in the statement of cash flows
16,041
2,202

Page 67