3.         Accounting policies

The financial statements are presented in Japanese Yen which is the functional currency of the operating company MOH and all values are rounded to thousands of Japanese Yen (JPY).

Details of significant accounting policies are set out below.                                  

Reverse Takeover of Bowen Fintech Plc and creation of the MOH Nippon Plc group of companies

On 19 August 2024, the Company, then named Bowen Fintech Plc, became the legal parent of Minnadeooyasan-Hanbai Co. Ltd. These interim financial statements are presented as proforma to present the substance of a reverse takeover transaction.

Bowen Fintech Plc was renamed MOH Nippon Plc.

The results for the six months ended, and as at 30 September 2024, are those of Minnadeooyasan-Hanbai Co. Ltd from 1 April 2024 to 30 September 2024 with the inclusion of the Bowen Fintech Plc at the acquisition date of 19 August 2024 through to 30 September 2024.

The comparative results for the six months ended, and as at 30 September 2023, and also for, and as at 31 March 2024, represent the position of MOH prior to the reverse acquisition.

This transaction is to be deemed outside the scope of IFRS 3 (Revised 2008) and not considered a business combination because the Directors have made a judgement that, prior to the transaction, Bowen Fintech Plc was not a business under the definition of IFRS 3 Appendix A and the application guidance in IFRS 3.B7-B12 due to that Company being a company that had no processes or capability for outputs (IFRS 3.B7). On this basis, the Directors have developed an accounting policy for this transaction, applying the principles set out in IAS 8.10-12, in that the policy adopted is:

§ relevant to the users of the financial information;

§ more representative of the financial position;

§ performance and cash flows of the Group;

§ reflects the economic substance of the transaction, not merely the legal form; and

§ free from bias, prudent and complete in all material aspects.

The accounting policy adopted by the Directors applies the principles of IFRS 3 in identifying the accounting acquirer (Minnadeooyasan-Hanbai Co. Ltd) and the presentation of the consolidated financial statements of the legal acquirer (Bowen Fintech Plc) as a continuation of the accounting acquirer's financial statements (Minnadeooyasan-Hanbai Co. Ltd).

This policy reflects the commercial substance of this transaction as:

§ the original majority shareholders of the Minnadeooyasan-Hanbai Co. Ltd (KBC) is the most significant shareholder after the business combination and readmission to the Official List of the Financial Conduct Authority and to trading on the Main Market for listed securities of the London Stock Exchange ("Readmission"), owning 80.69 per cent. of the issued share capital; and

§ the executive management team of MOH became the executive management of MOH Nippon Plc.

Accordingly, the following accounting treatment and terminology has been applied in respect of the reverse acquisition:

§  the assets and liabilities of the legal subsidiary Minnadeooyasan-Hanbai Co. Ltd are recognised and measured in the Group financial statements at the pre-combination carrying amounts, without remeasurement to fair value;

§  the retained earnings and other equity balances recognised in the Group financial statements reflect the retained earnings and other equity balances of the Minnadeooyasan-Hanbai Co. Ltd immediately before the business combination; and

§  the results of the period from 1 April 2024 to 19 August 2024 are those of the Minnadeooyasan-Hanbai Co. Ltd only.

However, in the Group interim financial statements:

§  the equity structure presented, reflects the equity structure of the legal parent (Bowen Fintech Plc), including the equity instruments issued under the share-for-share exchange to effect the business combination; and

§  the cost of the combination has been determined from the perspective of Minnadeooyasan-Hanbai Co. Ltd.

Transaction costs of equity transactions relating to the issue and Readmission of the Company's ordinary shares, are accounted for as a deduction from equity where they relate to the issue of new ordinary shares, and listing costs are charged to the consolidated statement of comprehensive income. See note 5 for further explanation.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiary undertaking). Where necessary, adjustments are made to the financial statements of the subsidiary to bring its accounting policies in line with those of the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

Subsidiaries are entities controlled by the Group. The Group "controls" an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of the subsidiary are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

Non-controlling interests are measured initially at their proportionate share of the legal acquiree's identifiable net assets at the date of acquisition.

Going concern

These consolidated unaudited interim financial statements have been prepared on a going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future.

In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant information about the current and future position of the Group, including the current level of resources.

At 30 September 2024 the Group had JPY 890 million of cash and net assets of JPY 6,703 million.

Having prepared budgets and cash flow forecasts covering the going concern period which have been stress tested, the Directors believe the Group has sufficient resources to meet its obligations for a period of at least 12 months from the date of approval of these financial statements.

Taking these matters into consideration, the Directors consider that the continued adoption of the going concern basis is appropriate having prepared cash flow forecasts for the coming 12 months. The financial statements do not reflect any adjustments that would be required if they were not prepared under a going concern basis.

Revenue and cost of sales recognition

Revenue is recognised in accordance with the requirements of IFRS 15 'Revenue from Contracts with Customers'.

MOH recognises revenue at the amount to which it expects to be entitled when control of the real estate or services is transferred to its customers. Control is generally transferred when MOH has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers.

MOH's main business activity is operating as a funding platform that facilitates and arranges real estate crowdfunding in Japan. MOH's revenue consists of fundraising commission fee and income from real estate joint development. For the fundraising commission fee, control is transferred when customers sign the agreement, and funds are subsequently transferred by the customers. For revenue from real estate joint development, control is transferred on the effective date of the transaction contract for real estate. Payments for fundraising commission fee and real estate joint development business are collected within a short period following the transfer of control or the commencement of the delivery of services, as applicable.

Cost of sales related to delivered real estate, including land development costs, and building construction costs are recognised as cost of sales as incurred.

Financial instruments

Financial assets and liabilities are recognised in the statement of financial position when the Group becomes a party to the contractual provisions of the instrument. The Group's financial instruments comprise cash, trade and other receivables, trade and other payables, and lease liabilities.

Trade and other receivables

Trade and other receivables are initially measured at fair value, net of direct transaction costs and subsequently measured at amortised cost or fair value, depending on the classification of the financial assets.

The cost is reduced by impairment losses. Any interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

The Group will write-off financial assets, either in their entirety or a portion thereof, if there is no reasonable expectation of its recovery. A write-off constitutes a derecognition of a financial asset.

                   Cash and cash equivalents

The Group manages short-term liquidity through the holding of cash. Only deposits that are readily convertible into cash with maturities of three months or less from inception, with no penalty of lost interest, which are subject to an insignificant risk of changes in value, are shown as cash and cash equivalents.

Impairment of financial assets

An impairment loss is recognised for the expected credit losses on trade receivables and other financial assets when there is an increased probability that the counterparty will be unable to settle an instrument's contractual cash flows on the contractual due dates, a reduction in the amounts expected to be recovered, or both. For trade receivables, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime ECL. The probability of default and expected amounts recoverable are assessed using reasonable and supportable past and forward-looking information that is available without undue cost or effort.

Financial liabilities and equity

Financial liabilities are contractual obligations that requires an entity to deliver cash, another financial asset, or exchange financial instruments under potentially unfavourable conditions.

Trade and other payables

Trade and other payables are initially measured at fair value, net of direct transaction costs and subsequently measured at amortised cost.

Equity

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at fair value on initial recognition net of transaction costs.

Equity comprises the following:

§  Called up share capital represents the nominal value of the equity shares.

§  Merger Relief Reserve is a statutory, non-distributable reserve arising when conditions set out in section 612 of the Companies Act 2006 occur and relate to the share-premium from shares issued to acquire Minnadeooyasan-Hanbai Co. Ltd.

§  Retained earnings/ losses represents accumulated net gains and losses from incorporation recognised in the Statement of Comprehensive Income.

§  Reverse Acquisition Reserve includes the accumulated losses incurred prior to the reverse acquisition and the share capital and share premium of Bowen Fintech Plc (renamed MOH Nippon Plc) at acquisition; the value of the shares issued to acquire all of the share capital of Minnadeooyasan-Hanbai Co. Ltd; as well as the reverse acquisition share-based payment expense.

§  Non-controlling Interest represents the accumulated net gains and losses of Minnadeooyasan-Hanbai Co. Ltd. attributable to the minority shareholders.

Right of use leases

Right of use assets

The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.

Depreciation of Right Of Use Assets

The right-of-use asset is depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. Term used for the reporting period, is as below-

§   Leasehold property - 3 to 9 years

§   Leased plant and equipment - over 5 to 6 years

In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts expected to be paid under residual value guarantees.

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases (of less than 12 months) (including IT equipment). The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Property, plant and equipment

Recognition and measurement

Property, plant and equipment are measured at cost, which includes capitalised borrowing costs, 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.

Depreciation

Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in profit or loss.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

§   Buildings - 47 years

§   Plant and equipment - 10 years

§   Furniture and fixtures - 3 to 15 years

Non-current assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Value in use is based on the present value of the future cash flows relating to the asset and is determined over periods which are deemed to appropriately reflect the minimum expected period that the cash generating unit will operate for.

4.            Use of judgements and estimates

In preparing the interim financial statements, management has made judgements and estimates that affect the application of the Group's accounting policies and the reported amounts of assets, liabilities, income, expenses, shareholders' equity and reserves. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

In the process of applying the Group's accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the interim financial statements:

Reverse Acquisition Accounting

The MOH Nippon Plc Group of companies was formed by Minnadeooyasan-Hanbai Co. Ltd reverse-acquiring Bowen Fintech Plc (a "reverse takeover") on 19 August 2024. Bowen Fintech Plc was then renamed MOH Nippon Plc. The board used judgment in applying Reverse Acquisition Accounting principles and used significant estimates and assumptions as to the share price to value the consideration shares issued by Bowen Fintech Plc to the owners of Minnadeooyasan-Hanbai Co. Ltd. Further details are in note 5.

5.            Reverse Acquisition of Minnadeooyasan-Hanbai Co. Ltd

On 19 August 2024, Bowen Fintech Plc (subsequently renamed MOH Nippon Plc) acquired through a share for share exchange, 97.41% of the share capital of Minnadeooyasan-Hanbai Co. Ltd, whose primary business activity revolves around serving as a funding platform that facilitates and arranges real estate crowdfunding activities in Japan.

Although the transaction resulted in MOH becoming a subsidiary of the Company, the transaction constitutes a reverse acquisition, as the previous shareholders of Minnadeooyasan-Hanbai Co. Ltd own a substantial majority of the ordinary shares of the Company and the executive management of Minnadeooyasan-Hanbai Co. Ltd became the executive management of Bowen Fintech Plc (renamed MOH Nippon Plc).

In substance, the shareholders of Minnadeooyasan-Hanbai Co. Ltd acquired a controlling interest in Bowen Fintech Plc and the transaction has therefore been accounted for as a reverse acquisition. As Bowen Fintech Plc's activities prior to the acquisition were purely the maintenance of its listing, managing cash payments to suppliers towards completion of the reverse acquisition and satisfying filing obligations, it did not meet the definition of a business in accordance with IFRS 3.

Accordingly, this reverse acquisition does not constitute a business combination and was accounted for in accordance with IFRS 2 "Share-based Payments" and associated IFRIC guidance.

Although, the reverse acquisition is not a business combination, the Company has become a legal parent and is required to apply IFRS 10 and prepare consolidated financial statements. The Directors have prepared these financial statements using the reverse acquisition methodology, but rather than recognising goodwill, the difference between the equity value given up by the Minnadeooyasan-Hanbai Co. Ltd's shareholders and the share of the fair value of net assets gained by the Minnadeooyasan-Hanbai Co. Ltd shareholders is charged to the statement of comprehensive income as a cost of lising on reverse acquisition.

In accordance with reverse acquisition accounting principles, these consolidated financial statements represent a continuation of the consolidated statements of Minnadeooyasan-Hanbai Co. Ltd and include:

a.          the assets and liabilities of Minnadeooyasan-Hanbai Co. Ltd at their pre- acquisition carrying value amounts and the results for the periods presented; and

b.         the assets and liabilities of the Company as at 19 August 2024 and its results from the date of the reverse acquisition (19 August 2024) to 30 September 2024.

On 19 August 2024, Bowen Fintech Plc (renamed MOH Nippon Plc) issued 229,779,093 ordinary shares to acquire 97.41% of the share capital of Minnadeooyasan-Hanbai Co. Ltd at a deemed issue price of £0.15 per share.

On consolidation and presentation of the Group's financial position, performance and cash flows, Minnadeooyasan-Hanbai Co. Ltd, was treated as the accounting acquirer, and the legal parent company Bowen Fintech Plc (renamed MOH Nippon Plc), was treated as the accounting acquiree.

The fair value of the ordinary shares deemed to have been issued by Minnadeooyasan-Hanbai Co. Ltd was calculated at JPY 1,568 million (£8.25 million) based on an assessment of the purchase consideration for a 100% holding of Bowen Fintech Plc (renamed MOH Nippon Plc) on 19 August 2024.

The fair value of the net assets of Bowen Fintech Plc (renamed MOH Nippon Plc) at acquisition was as follows:

The difference between the deemed cost JPY 1,568 million and the fair value of the net assets assumed per above of JPY 223.68 million resulted in JPY 1,344 million being expensed to the income statement with a corresponding credit to the reverse acquisition reserve in accordance with IFRS 2, Share Based Payments, reflecting the economic cost to Minnadeooyasan-Hanbai Co. Ltd shareholders of forming a quoted entity.

The professional fees incurred by the Group for the reverse acquisition transaction, in the period were JPY 83 million, and they were expensed to the income statement.

The ReverseAcquisition Reservewhich arose from the reverse takeover is made up as follows:

1.         Recognition of pre-acquisition equity of Bowen Fintech Plc (renamed as MOH Nippon Plc) as at 19 August 2024.

2.         The value of the ordinary shares issued by the Company in exchange for 97.41% share capital of Minnadeooyasan-Hanbai Co. Ltd.

3.         The reverse acquisition expense represents the difference between the value of the equity issued by the Company, and the deemed consideration given by Minnadeooyasan-Hanbai Co. Ltd to acquire the Company.

4.         Recapitalisation of share capital of Bowen Fintech Plc (renamed as MOH Nippon Plc), before the issue of new ordinary shares- 55,000,000 ordinary shares @ £0.01 per share, equivalent to JPY 104.541 million.

5.         Recapitalisation of share premium of Bowen Fintech Plc (renamed as MOH Nippon Plc), before the issue of new ordinary shares- £1,352,043, equivalent to JPY 256.990 million.

6.         Recapitalisation of ordinary share capital of Minnadeooyasan-Hanbai Co. Ltd, excluding the share of non-controlling interest.

7.         Recapitalisation of preference share capital of Minnadeooyasan-Hanbai Co. Ltd, excluding the share of non-controlling interest.

8.         Recapitalisation of other components of equity of Minnadeooyasan-Hanbai Co. Ltd, excluding the share of non-controlling interest.

6.   Revenue and cost of sales

The Group recorded revenue in the 6 months ended 30 September 2024 of JPY 4,009 million (6 months ended 30 September 2023: JPY 4,930 million; year ended 31 March 2024: JPY 11,107 million). All revenue was generated in Japan.

7.    (Loss)/Earnings per share

Basic earnings per share is calculated by dividing the loss/profit after tax attributable to the owners of the Parent company, by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary shares.

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

In calculating the weighted average number of ordinary shares outstanding (the denominator of the earnings per share calculation) during the period in which the reverse acquisition occurs:

§   The number of ordinary shares outstanding from the beginning of that period to the acquisition date shall be computed, on the basis of the weighted average number of ordinary shares of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement; and

§  The number of ordinary shares outstanding from the acquisition date to the end of that period shall be the actual number of ordinary shares of the legal acquirer (the accounting acquiree) outstanding during that period.

The basic earnings per share for each comparative period beforethe acquisition date presented in the consolidated financial statements following a reverse acquisition shall be calculated by dividing:

§  the profit or loss of the legal acquiree attributable to ordinary shareholders in each of those periods by

§  the legal acquiree's historical weighted average number of ordinary shares outstanding multiplied by the exchange ratio established in the acquisition agreement.

The weighted average number of ordinary shares for the purpose of calculating the basic and diluted measures is the same.

8.    Other non-current assets

9.    Share capital

10.       Related party transactions

TSIB (Toshi-Souken Invest Bank Inc)

TSIB is a wholly owned subsidiary of Kyosei Bank Co., Ltd who is the majority shareholder of the MOH Group.

Transactions entered into with TSIB, along with balances owed from and to the related party are as below-

In September 2024, MOH disposed of the Soemon-cho project, a joint real estate development project in Osaka, Japan with TISB to TSIF (both KBC group companies and therefore related parties), and generated a revenue of commission income from TSIB of JPY2.1 billion. A receivable of JPY1.9 billion is included in "Amounts due from related parties" at 30 September 2024. 

In June 2024, MOH loaned JPY3 billion to TSIB at an interest rate of 1.59% per annum.  TSIB repaid the loan with interest in August 2024. Interest income of JPY7.7 million was earned for the six months ended 30 September 2024.

In July 2024, MOH made a deposit of JPY1.5 billion to TSIB for the initial investment in a real estate development project with TSIB in Saipan. In August 2024, MOH made a deposit of JPY3 billion to TSIB for the Soemon-cho project in Osaka, Japan.  These deposits of JPY4.5 billion are included in "Amounts due from related parties" at 30 September 2024.

Reimbursed expenses represent transactions between MOH and TSIB in relation to shared services.

TSIF (Toshi-Souken Invest Fund Inc)

TSIF is a wholly owned subsidiary of TSIB, which is the subsidiary of Kyosei Bank Co., Ltd ("KBC") which is the majority shareholder of the MOH group of companies.

Transactions entered into with TSIF, along with balances owed from and to the related party are as below-

In September 2024, MOH disposed of the Soemon-cho project, a joint real estate development project in Osaka, Japan with TISB to TSIF, and generated a revenue for real estate sales of JPY2.1 billion. A receivable of JPY2.1 billion is included in "Amounts due from related parties" at 30 September 2024. 

Reimbursed expenses represent transactions between MOH and TSIF in relation to shared services.

KBC (Kyosei Bank Co., Ltd)

Kyosei Bank Co., Ltd is the majority shareholder of the MOH group of companies.

Transactions entered into with KBC, along with balances owed from and to the related party are as below-

Reimbursed expenses represent transactions between MOH and KBC in relation to shared services.

11.       Commitments and Contingencies

At 30 September 2024 the Group had no commitments and contingencies to report.

12.       Subsequent events

On 30 September 2024, the Company announced a change of accounting reference date- The accounting reference period ending 30 April 2025 was shortened so as at to end on 31 March 2025.