| Accounting Policies, by Policy (Policies) | 12 Months Ended |
| Dec. 31, 2021 |
| Accounting Policies [Abstract] | |
| Basis of presentation | 2.1 Basis of presentation The consolidated
financial statements of Guardforce and subsidiaries have been prepared in accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All amounts are presented in United
States dollars (“USD”) and have been rounded to the nearest USD. On August
20, 2021, the shareholders of the Company approved a 1 for 3 reverse split of the Company’s authorized and issued ordinary shares
whereby every three shares were consolidated into one share (the “Reverse Split”). In addition, the par value of each ordinary
share increased from $0.001 to $0.003. The financial statements and all share and per share amounts have been retroactively restated
to reflect the Reverse Split. In addition,
the accompanying financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business. As discussed
on Note 21, the Company has a loan outstanding in the principal amount of $13.51 million due and payable in full on December 31, 2022,
to Profit Raider Investment Limited, or Profit Raider. The Company will require an extension of the maturity date of this loan, and the
Company cannot be sure whether or not Profit Raider will extend the maturity date of the loan, or if it does, under what terms. If Profit
Raider does not extend the loan, the Company will (i) seek an alternative source of funding to replace the loan; and/or (ii) seek further
negotiation with Profit Raider to convert the loan to shares; and/or (iii) seek support from the Company’s largest shareholder,
Mr. Tu Jingyi, who owns 40.55% (as of the date of this report) of the Company’s ordinary shares, for repayment. There can be no
assurance, however, that the Company would be able to find such alternative funding on terms acceptable to the Company, if at all. If
the Company cannot obtain an extension of the maturity date of the loan and are not otherwise able to refinance the loan, the Company
may default on the loan and such default would have a material adverse effect on the Company’s financial condition, cash flows
and results of operations and could result in an action by Profit Raider against the Company to collect the amount due under the loan
along with interest, fees and any other applicable chargers. The Company considers Profit Raider is one of the Company’s shareholders,
who owns 5.285% (as of the date of this report) of the Company’s ordinary shares. In assessing
the going concern, management and the Board has considered:
- As discussed
above, the risk of default on Profit Raider loan is assessed as low.
- Based on
the budget and financial plans of the Company, management expects to see a positive trend
in the Company’s future results. Management expects the business will be recovered
in the future when the country begins to ease tough Covid pandemic control and lockdown measures .
- Improved
cash flows including liquidity and borrowings from future fund-raising activities and the
receipt of the $10.3 million private placement proceeds on January 20, 2022. The Company’s
principal uses of cash have been, and management expects will continue to be, for working
capital to support a reasonable increase in our scale of operations as well as for business
expansion investments, as disclosed in Note 1, the Company acquired Shenzhen Keweien Robot
Service Co., Ltd. and Guangzhou Kewei Robot Technology Co., Ltd. in March 2022.
- The Company has conditional and unconditional obligations as disclosed in Note 22, these commitments and contingencies are under normal course of business and are included in the budget. Regarding to the legal proceedings, as of the date of this report, the Company is a defendant in various labor related lawsuits in Thailand totaling approximately $0.8 million. Management believes these cases are without merit and is confident that the Appeals Court will make the decision according to the consideration of the Court of First Instance and order the dismissal of such lawsuits. The
Directors are satisfied that the Company has adequate financial resources to continue in operational existence for the foreseeable future,
a period of at least 12 months from the date of this report. Accordingly, the going concern basis of accounting continues to be used
in the preparation of the consolidated financial statements for the year ended December 31, 2021. |
| Basis of consolidation | 2.2 Basis of consolidation The consolidated
statements of profit and loss and other comprehensive loss, statements of changes in equity and statements of cash flows of the Company
for the relevant periods include the results and cash flows of all companies now comprising the Company from the earliest date presented
or since the date when the subsidiaries and/or businesses first came under the common control of the controlling shareholders, wherever
the period is shorter. The consolidated
balance sheets of the Company as at December 31, 2021 and 2020 have been prepared to present the assets and liabilities of the subsidiaries
under the historical cost convention. Equity
interests in subsidiaries held by parties other than the controlling shareholders are presented as non-controlling interests in equity. All intra-group
and inter-company transactions and balances have been eliminated on consolidation. |
| Segment reporting | 2.3 Segment reporting IAS 14 Segment
Reporting requires reporting of financial information by business or geographical area. It requires disclosures for ‘primary’
and ‘secondary’ segment reporting formats, with the primary format based on whether the entity’s risks and returns
are affected predominantly by the products and services it produces or by the fact that it operates in different geographical areas. The entity’s
reportable segments are its business and geographical segments for which a majority of their revenue is earned from sales to external
customers and for which:
● revenue
from sales to external customers and from transactions with other segments is 10% or more
of the total revenue, external and internal, of all segments; or
● segment
result, whether profit or loss, is 10% or more the combined result of all segments in profit
or the combined result of all segments in loss, whichever is greater in absolute amount;
or
● assets
are 10% or more of the total assets of all segments. Segments
deemed too small for separate reporting may be combined with each other, if related, but they may not be combined with other significant
segments for which information is reported internally. Alternatively, they may be separately reported. If neither combined nor separately
reported, they must be included as an unallocated reconciling item. The Company
reports in one segment including (i) the provision of cash solutions (i.e., efficient cash management) and cash handling services to
customers including cash transportation, cash processing and ATM services markets in Thailand, which represents 97.6% of our revenues;
(ii) information security; and (iii) robotics AI solutions. |
| Business combinations | 2.4 Business combinations The Company
accounts for business combinations using the acquisition method when control is transferred to the Company, other than those between
and among entities under common control. The consideration transferred in the acquisition is generally measured at fair value, as are
the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on the bargain purchase is
recognized in the statement of profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue
of debt or equity securities. Any contingent
consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition
of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise,
other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent
consideration are recognized in the statement of profit or loss. IFRS 3
Business combination does not include specific measurement guidance for transfers of businesses or subsidiaries between entities
under common control. Accordingly, the Company has accounted for such transactions taking into consideration other guidance in the IFRS
framework and pronouncements of other standard-setting bodies. The Company recorded assets and liabilities recognized as a result of
transactions between entities under common control at the carrying value on the transferor’s financial statements, and to have
the consolidated balance sheet, consolidated statement of profit or loss, comprehensive income, changes in equity and cash flows reflect
the results of combining entities for all periods presented for which the entities were under the transferor’s common control,
irrespective of when the combination takes place. |
| Non-controlling interest | 2.5 Non-controlling interest The non-controlling
interest represents the portion of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Company.
Non-controlling interests are presented as a separate component of equity on the consolidated balance sheet, consolidated statement of
profit or loss, comprehensive income and changes in equity attributed to controlling and non-controlling interests. |
| Critical accounting estimate and judgements | 2.6 Critical accounting estimate and judgements The preparation
of the consolidated financial statements in conformity with IFRS requires management to make estimates and judgements that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Significant
estimates during the years ended December 31, 2021, 2020 and 2019 include the provision for sales returns, provision for obsolete inventory,
allowance for withholding tax receivables, allowance for doubtful accounts, useful life of fixed assets, impairment of goodwill, measurement
of retirement benefit obligations, measurement of consideration and assets and liabilities acquired as business combinations, accounting
for leases and valuation of deferred tax assets. The estimated amount for sales warranty on the sale of robots at December 31, 2021 and
2020 were $ nil |
| Foreign currency translation | 2.7 Foreign currency translation The
presentational currency of the Company is the U.S. dollar (“USD”). The functional currency of Guardforce, AI Holdings, AI
Robots, Horizon Dragon, Southern Ambition, AI Singapore, AI Robotics is the USD. The functional currency of AI Hong Kong and Handshake
is Hong Kong dollar. The functional currency of AI Thailand and GF Cash (CIT) are Thai Baht (“Baht” or “THB”). The currency
exchange rates that impact our business are shown in the following table:
Period
End Rate Average
Rate
As
of December 31, For
the Years Ended
2021 2020 2019 2021 2020 2019
Thai Baht 0.0300 0.0333 0.0334 0.0313 0.0320 0.0324
Hong Kong Dollar 0.1282 0.1282 0.1280 0.1282 0.1282 0.1280 |
| Financial risk management | 2.8 Financial risk management
2.8.1 Financial risk factors The Company’s
activities expose it to a variety of financial risks: foreign exchange risk, interest rate risk and liquidity risk. The Company’s
overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects
on the Company’s financial performance.
(i) Credit risk The Company
trades only with parties that are expected to be creditworthy. It is the Company’s policy that all customers who wish to trade
on credit terms are subject to credit verification procedures. The Company manages its operations to avoid any excessive concentration
of counterparty risk about the Company takes all reasonable steps to seek assurance from the counterparties that they can fulfill their
obligations. In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to
credit loss remains low. The carrying
values of the Company’s financial assets and contract assets represent its maximum credit exposure.
(ii) Foreign exchange risk The Company
is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the THB and USD. Foreign exchange
risk arises when future commercial transactions or recognized assets and liabilities are denominated in a currency that is not the respective
functional currency of the Company’s subsidiaries. The functional currency of the Company and majority of its overseas subsidiaries
is the USD whereas the functional currency of the subsidiaries which operate in Thailand is the THB. The Company currently does not hedge
transactions undertaken in foreign currencies but manages its foreign exchange risk by performing regular reviews of the Company’s
net foreign exchange exposures. If the
THB had strengthened/weakened by 1.68% against the USD (the average monthly variance during the 2-year period ended December 31, 2021
with all other variables held constant, the post-tax profit would have been approximately $228,000 higher/lower and $210,000 higher/lower,
for the years ended December 31, 2021 and 2020, respectively, as a result of net foreign exchange gains/losses on translation of net
monetary assets denominated in the THB/USD which is not the functional currency of the respective Company’s entities. If the
THB had strengthened/weakened by 1.56% against the USD (the average monthly variance during the 2-year period ended December 31, 2020
with all other variables held constant, the post-tax profit would have been approximately $210,000 higher/lower and $193,000 higher/lower,
for the years ended December 31, 2020 and 2019, respectively, as a result of net foreign exchange gains/losses on translation of net
monetary assets denominated in the THB/USD which is not the functional currency of the respective Company’s entities.
(iii) Interest rate risk The Company’s
exposure to changes in interest rates are mainly attributable to its borrowings and loans. At the reporting date, based on the composition
of borrowings at December 31, 2021 (Note 13), if interest rates on borrowings had been 100 basis points higher/lower with all other variables
held constant, the Company’s post-tax results for the year would have been approximately $14,000, $12,000 and $132,000 lower/higher
for the years ended December 31, 2021, 2020 and 2019, respectively, mainly as a result of higher/lower interest expense on floating rate
borrowings.
(iv) Liquidity risk Prudent
liquidity management implies maintaining sufficient cash and cash equivalents and the availability of funding through an adequate amount
of committed credit facilities. The Company’s
primary cash requirements are for operating expenses and purchases of fixed assets. The Company mainly finances its working capital requirements
from cash generated from funds raised from the IPO, operation, proceeds from bank borrowings and finance leases. The Company’s
policy is to regularly monitor current and expected liquidity requirements to ensure it maintains sufficient cash and cash equivalents
and an adequate amount of committed credit facilities to meet its liquidity requirements in the short and long term. At the
reporting date, the contractual undiscounted cash flows of the Company’s current financial liabilities approximate their respective
carrying amounts due to their short maturities. The table
below analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period
at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows,
including interest if applicable.
Year ended December 31, 2021 Within
1 to
5 years >5
years Total
Trade and other payables $ 1,028,721 $ - $ - $ 1,028,721
Borrowings 933,110 859,120 - 1,792,230
Borrowings from related parties 13,506,184 5,332,803 - 18,838,987
Amount due to related parties 2,217,752 - 2,217,752
Other liabilities 1,824,635 54,000 - 1, 878,635
Lease liabilities 2,366,045 - - 2,366,045
Finance lease liabilities 619,301 666,455 - 1,285,756
Provision for employee benefits 563,243 1,856,583 32,165,128 34,584,954
$ 23,058,991 $ 8,768,961 $ 32,165,128 $ 63,993,080
Year ended December 31, 2020 Within
1 to
5 years >5
years Total
Trade and other payables $ 1,540,411 $ - $ - $ 1,540,411
Borrowings from financial institutions 494,994 993,869 - 1,488,863
Borrowings from related parties - 19,085,812 - 19,085,812
Amount due to related parties 1,670,469 - 1,670,469
Other current liabilities 1,249,106 - - 1,249,106
Income tax payables 284,627 - - 284,627
Lease liabilities 2,211,984 2,106,429 - 4,318,413
Finance lease liabilities 701,796 1,074,047 - 1,775,843
Provision for employee benefits 479,261 1,478,194 36,040,019 37,997,474
$ 8,632,648 $ 24,738,351 $ 36,040,019 $ 69,411,018 Net Debt Analysis
As of December 31,
2021 2020
Cash, cash equivalents, and restricted cash $ 15,853,811 $ 10,129,910
Borrowings – repayable within one year (14,439,294 ) (494,994 )
Borrowings – repayable within one year (6,191,923 ) (20,079,681 )
Net debt $ (4,777,406 ) $ (10,444,765 )
2.8.2 Capital risk management The Company’s
objectives on managing capital are to safeguard the Company’s ability to continue as a going concern and support the sustainable
growth of the Company in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital
structure to enhance shareholders’ value in the long term. In order
to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return of capital to
shareholders, issue new shares or sell assets to reduce debt. In the
opinion of the directors of the Company, the Company’s capital risk is low.
2.8.3 Impact of COVID-19 The Coronavirus
Disease (COVID-19) outbreak and the measures taken to contain the spread of the pandemic have created a high level of uncertainty to
global economic prospects and this has impacted the Company’s operations and its financial performance in year 2021. As COVID-19
continues to evolve with significant level of uncertainty, management of the Company is unable to reasonably estimate the full financial
impact of COVID-19 on the Company’s financial results in year 2022. The Company is monitoring the situation closely and to mitigate
the financial impact, it is conscientiously managing its cost by adopting an operating cost reduction strategy and conserving liquidity
by working with major creditors to align repayment obligations with receivable collections. Based on the Company’s most recent
projections for year 2022 and with over $15 million in cash and cash equivalents and restricted cash, plus bolstered by receipt of the
$10.3 million private placement proceeds on January 20, 2022 (Note 24), management of the Company believes that the Company will be able
to continue to operate as a going concern in the foreseeable future for at least the next 12 months. |
| Fair value measurements | 2.9 Fair value measurements Fair
value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. When determining the fair value measurement for assets and liabilities required or permitted to be recorded
at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions
that market participants would use when pricing the asset or liability. Accounting
guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based
upon the lowest level input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs
that may be used to measure fair value: Level 1—Observable
inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include
other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable
inputs which are supported by little or no market activity. Accounting
guidance also describes three main approaches to measuring the fair value of assets and liabilities: the (1) market approach, (2) income
approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions
involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a
single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts.
The cost approach is based on the amount that would currently be required to replace an asset. Financial
assets and liabilities of the Company mainly consist of cash and cash equivalents, restricted cash, trade and other receivables, amounts
due from related parties, other current assets, trade payables, amounts due to related parties, accruals and other liabilities. As of
December 31, 2021 and 2020, the carrying values of cash and cash equivalents, restricted cash, trade receivables, amounts due from related
parties, prepayments and other current assets, trade payables, amounts due to related parties, accruals and other liabilities approximate
their fair values due to the short-term maturity of these instruments. |
| Share-based payment | 2.10 Share-based payment The Company
accounts for material share-based payments (primarily warrants) with the fair value of the issued warrants on the date of grant and recognition
of compensation cost over the vesting period for award expected to vest. The fair value of warrants is determined using the Black Scholes
valuation model. |
| Cash and cash equivalents and restricted cash | 2.11 Cash and cash equivalents and restricted cash Cash
and cash equivalents include highly liquid investments with original maturities of three months or less. Restricted
cash amounting to $1.53 million represents cash pledged with a local bank in Thailand as collateral for bank guarantees issued by those
banks in respect of project performance and for electricity usage. The restricted cash for projects that are expected to be completed
within one year are classified as a current asset. Restricted cash amounting to $1.6 million represents the sum placed in a local bank
in Hong Kong under the underwriting agreement for the IPO. The sum will be released by the Company upon the earliest of (i) the representative
of the underwriting agreement receives and satisfies with the Company’s D&O policy; or (ii) twenty-four months from the IPO
closing date. |
| Trade receivable and other receivables | 2.12 Trade receivables and other receivables Trade
and other receivables are recorded at net realizable value consisting of the carrying amount less an allowance for doubtful accounts
as needed. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s
existing accounts and other receivables and accounts receivable from related parties. The Company determines the allowance for its trade
receivable based on aging data, historical collection experience, customer specific facts and economic conditions. The Company writes-off
trade receivable when amounts are deemed uncollectible. The Company extends unsecured credit to its customers in the ordinary course
of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. In determining
the amount of the allowance for doubtful accounts, prior to January 1, 2020, the Company applied the following percentages: 5% to receivables
from 61 to 90 days; 30% to receivables from 91 to 180 days and 60% to receivables from 181 to 365 days. Account balances older than one
year were charged off against the allowance after all means of collection of been exhausted (both legally and commercially speaking)
and the potential for recovery was considered remote. No allowance was established for the Company’s due from related parties and
other receivables as the amounts were deemed fully collectible. During
the year ended December 31, 2020, the Company revised its allowance methodology to a specific provision basis in that an allowance for
doubtful accounts is established and recorded based on management’s assessment of the credit history of its customers and current
relationships with them. This revision in the allowance methodology did not have any material effect on the Company’s net accounts
receivable as of December 31, 2019. The Company
did not have any write-offs during the years ended December 31, 2021, 2020 and 2019. The Company recognized a recovery of its bad debt
expense of $ nil |
| Inventories | 2.13 Inventories Inventories
solely consist of robots and are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Net realizable
value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs
necessary to make the sale. When inventory is sold, their carrying amount is charged to expense in the period in which the revenue is
recognized. Write-downs for declines in net realizable value or for losses of inventories are recognized as an expense in the period
the impairment or loss occurs. No allowance for slow moving or obsolete inventory was recorded for the years ended December 31, 2021
and 2020. During
the years ended December 31, 2021 and 2020, all inventories were purchased from a related party. |
| Withholding taxes receivable | 2.14 Withholding taxes receivable Withholding
tax is a deduction from payments made to suppliers who provide services. The withholding tax rates can vary depending on the type of
income and the tax status of the recipient. Based on tax rules currently in effect, the withholding tax rate is 3% for commercial contracts
and 1% for governmental contracts in Thailand, which amounts are refundable. The Company generally files its request for a withholding
tax refund by the end of May of the following year for withholding tax deducted in the previous year. Once the request for withholding
tax refund is submitted to the Thai Revenue Department, the request will be subject to audit and review. Since it is difficult to predict
the time required by the Thai Revenue Department to complete its audit and approve the relevant refund, except for known amount to be
collected within the next 12 months, the Company has reflected its withholding tax receivable as a non-current asset in its statements
of financial position for amounts due from the Revenue Department. Withholding
tax receivable is recorded net of related provision for amount that could be challenged by the taxing authority. Such provision represents
the Company’s best estimate based on recent collection history. |
| Loans to related party | 2.15 Loans to related party The Company
recognizes the contractual right to receive money on demand or on fixed or determinable dates as loans receivable. For those that the
contractual maturity date is less than one year, the Company records as short-term loans receivable. The Company
recognizes interest income on an accrual basis using the straight-line method over the fixed or determinable dates. |
| Property, plant and equipment | 2.16 Property, plant and equipment Property,
plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs
incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged
to expense; major additions to physical properties are capitalized. Depreciation
is calculated using the straight-line method over the following estimated useful lives.
Estimated useful life
Leasehold improvements Lesser of useful life or remaining lease term
Tools and equipment 5 years
Furniture, fixtures and office equipment 5 years
Vehicles 5,10 years
GDM machines 5 years
Robots 5 years |
| Assets under construction | 2.17 Assets under construction Assets
under construction are stated at cost less impairment losses, if any. Cost comprises direct costs of construction as well as interest
expense and exchange differences capitalized during the periods of construction and installation. Capitalization of these costs ceases
and the construction in progress is transferred to property, plant and equipment when substantially all the activities necessary to prepare
the assets for their intended use are completed. No depreciation is provided for assets under construction until they are completed and
ready for intended use. |
| Intangible assets, net | 2.17 Assets under construction Assets
under construction are stated at cost less impairment losses, if any. Cost comprises direct costs of construction as well as interest
expense and exchange differences capitalized during the periods of construction and installation. Capitalization of these costs ceases
and the construction in progress is transferred to property, plant and equipment when substantially all the activities necessary to prepare
the assets for their intended use are completed. No depreciation is provided for assets under construction until they are completed and
ready for intended use. |
| Intangible assets, net | 2.18 Intangible assets, net Intangible
assets represent computer software. The intangible assets are recorded at historic acquisition costs, and amortized on a straight-line
basis over their estimated useful lives. Costs
associated with maintaining computer software programs are recognized as an expense as incurred. Development costs that are directly
attributable to the design and testing of identifiable and unique software products controlled by the Company will be recognized as intangible
assets when the criteria of intangible assets are met. |
| Goodwill | 2.19 Goodwill Following
initial recognition, goodwill is stated at costs less any accumulated impairment losses. Goodwill is reviewed for impairment annually
or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. At the
acquisition date, any goodwill acquired is allocated to the cash-generating units (CGU) which are expected to benefit from the combination’s
synergies. Impairment is determined by assessing the recoverable amount of the CGU to which the goodwill related. Where the recoverable
amount of the CGU is less than the carrying amount, an impairment loss is recognized. Where goodwill forms part of a CGU and part of
the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of In these circumstances is measured
on the basis of the relative values of the operation disposed of and the portion of the CGU retained. No impairment
loss on goodwill was recorded for the year ended December 31, 2021. |
| Impairment of long-lived assets | 2.20 Impairment of long-lived assets At the
end of each reporting period, the Company reviews the carrying amounts of its long-lived assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual
asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. The Company did not incur
any impairment loss during the years ended December 31, 2021, 2020 and 2019. |
| Trade and other payables | 2.21 Trade and other payables These
amounts represent liabilities for goods and services provided to the Company prior to the end of the financial tear which are unpaid.
They are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method. |
| Interest-bearing borrowings | 2.22 Interest-bearing borrowings Interest-bearing
borrowings are recognized initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortized cost with any difference between the amount initially recognized and redemption value being recognized
in profit or loss over the period of the borrowings, together with any interest and fees payable, using the effective interest method. |
| Revenue from contracts with customers | 2.23 Revenue from contracts with customers The Company
generates its revenue primarily from three service lines: (1) Secure logistics; (2) Robotics AI resolutions; and (3) Information security. Each
service line primarily renders the following services:
(1) Secure logistics (i)
Cash-In-Transit - Non Dedicated Vehicle (CIT Non-DV); (ii) Cash-In-Transit - Dedicated Vehicle (CIT DV); (iii) ATM management; (iv) Cash
Processing (CPC); (v) Cash Center Operations (CCT); (vi) Consolidate Cash Center (CCC); (vii) Cheque Center Service (CDC); (viii) Express
Cash; (ix) Coin Processing Service; and (x) Cash Deposit Management Solutions
(2) Robotics
AI solutions (i)
Sale of robots and (ii) Rental of robots
(3) Information
security (i)
Penetration test; (ii) PCI ASV Scan and (iii) Rapid7 Sales The Company
recognizes revenue at a point in time as products are delivered and services are performed. Consultancy fees typically covers a period
of time, the revenue is recognized on a rateable basis over the contract term.
● Identify the contract or quotation with the agreed service price.
● Evaluate the services engaged in the customer’s contract and
identify the related performance obligations.
● Consider the contract terms and commonly accepted practices in the
business to determine the transaction price. The transaction price is the consideration that the Company expects to be entitled for
delivering the services engaged with the customer. The consideration engaged in a customer’s contract is generally a fixed
amount.
● Allocate the transaction price, if necessary, to each performance obligation
(to each good or service that is different) for an amount that represents the part of the benefit that the Company expects to receive
in exchange for the right of delivering the services engaged with the customer.
● Recognize revenue when the Company satisfied the performance obligation
through the rendering of services engaged. All of
the conditions mentioned above are accomplished normally when the services are rendered to the customer and this moment is considered
a point in time. The reported revenue reflects services delivered at the contract or agreed-upon price. Contract
liabilities consist of deferred revenue related to prepaid fees received from customers for future information security service over
the term of the service agreement. The Company expects to recognize as revenue of $43,200 within the next 12 months and $54,000 after
12 months to 36 months. Revenue
is recognized when the related performance obligations are satisfied.
Fixed Fees
Service
Type Performance
Obligations Per
delivery / order Per
month
Cash-In-Transit (CIT) –
Non Dedicated Vehicles (Non-DV) (a) Delivery from point A to point B per customer request. Service obligation
was generally completed within same day. √
Cash-In-Transit (CIT) –
Dedicated Vehicles to Banks (DV) (a) Delivery from point A to point B per customer request. Service
obligation was generally completed within same day. √
ATM Management (a) Includes replenishment of ATM machines and first level maintenance
services. Service obligation was generally completed within the same day. √
Cash Processing (CPC) (b) Cash counting, sorting and vaulting services for customers in the retail
industry. √
Cash Center Operations (CCT) (b) Cash counting, sorting and depositing for local commercial banks on
behalf of Bank of Thailand (BOT). √
Consolidate Cash Center (CCC) (b) Cash counting, sorting and depositing for Bank of Thailand (BOT). √
Cheque Center Service (CDC) (b) Handles cheque consolidation and distribution on behalf of local commercial
bank. √
Express Cash (a) Armored trucks (with onboard GDM) and crew teams are assigned to collect
cash on behalf of local commercial banks. Service obligation was generally completed within the same day. √
Coin Processing Service (a) Armored vehicles and crew teams are assigned to collect/deliver coins
to/from customer sites. Service obligation was generally completed within the same day. √
Cash Deposit Management Solutions (b) Cash deposit machine (Guardforce Digital Machine – GDM) are installed
at the customers’ sites for the collection of cash. √
Robotics AI Solutions - Sale of Robots (a) Delivery of robots and inspection completed at customer site. √
Robotics AI Solutions - Rental of Robots (b) Robots are leased out for a fixed term √
Penetration Test (a) Production of the test report √
PCI ASV Scan (a) Submission of the scan result √
Rapid7 Sales (b) Provision of information security service based on the sale and installation
of Rapid7 software √ The Company
does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers. Except the sale of robots,
customer’s billing is prepared on a monthly basis once service delivery reports have been confirmed and the invoice amount has
been confirmed with the customers. Standard payment is 45 days but it may be 45 to 60 days depending on the individual customer contract.
(a) Revenue is recognized net of sales taxes and upon transfer of significant
risks and rewards of ownership to customers. Revenue is not recognized to the extent where there are significant uncertainties regarding
recovery of the consideration due, associated costs or the possible return of goods.
(b) Related service revenue or rental income is recognized on a straight-line
basis over the term of the contracts. Disaggregation information of revenue by service type which
was recognition based on the nature of performance obligation disclosed above is as follows:
For
the year ended December 31,
Service Type 2021 Percentage
2020 Percentage
2019 Percentage
Cash-In-Transit
– Non-Dedicated Vehicles (CIT Non-DV) $ 11,205,580 31.9 % $ 12,045,914 32.0 % $ 12,052,738 31.2 %
Cash-In-Transit - Dedicated
Vehicle to Banks (CIT DV) 4,556,538 13.0 % 4,822,354 12.8 % 4,958,139 12.9 %
ATM Management 10,809,497 30.7 % 12,542,613 33.3 % 14,024,291 36.4 %
Cash Processing (CPC) 3,034,360 8.6 % 2,842,209 7.5 % 2,283,835 5.9 %
Cash Center Operations (CCT) 2,802,171 8.0 % 3,256,423 8.6 % 3,661,135 9.5 %
Consolidate Cash Center
(CCC) 182,263 0.5 % - - % - - %
Cheque Center Service (CDC) 59,923 0.2 % 61,197 0.2 % 394,290 1.0 %
Others ** 5,270 0.0 % 399,977 1.1 % 38,570 0.1 %
Cash Deposit Management
Solutions (GDM) 1,644,611 4.7 % 1,457,307 3.9 % 1,158,082 3.0 %
Robotic AI solutions 368,659 1.0 % 220,788 0.6 % - - %
Information
security 484,318 1.4 % - - % - - %
Total $ 35,153,190 100 % $ 37,648,782 100 % $ 38,571,080 100 %
** Others
includes revenues from express cash, coin processing services and international shipment. During
the years ended December 31, 2021, 2020 and 2019, revenue amounting to $35,041,563, 37,433,467 and $38,571,080 were generated from third
parties, respectively; and $111,627, $215,315 and $ nil |
| Cost of sales | 2.24 Cost of sales Cost of
sales consists primarily of internal labor costs and related benefits, and other overhead costs that are directly attributable to services
provided. |
| Income taxes | 2.25 Income tax Income
tax expense represents the sum of the tax currently payable and deferred tax. Income tax expense is charged to the consolidated statements
of profit or loss as they incur. Current
income taxes are recorded in the results of the year they are incurred. Deferred
tax is recognized 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 recognized for all
taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, including tax loss
carry forwards and certain tax credits, to the extent that it is probable that future taxable profits, reversal of existing taxable temporary
differences will be available against which those deductible temporary differences can be utilized after considering future tax planning
strategies. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit. Deferred
tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses.
Deferred tax assets are recognized to the extent that it is probable that taxable profit and reversal of existing taxable temporary differences
will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses
can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized
deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable
profits and reversal of existing taxable temporary differences will allow the deferred tax asset to be recovered. Deferred
tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, associates, and interests
in joint ventures, except where the Company 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 recognized to the extent that it is probable that there will be sufficient taxable profits against
which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future. Net deferred
income taxes are classified as a non-current asset or liability, regardless of when the temporary differences are expected to reverse. Deferred
tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current
tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Deferred
tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or
the asset is realized, 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 Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. |
| Provisions | 2.26 Provisions Provisions
are recognized for liabilities of uncertain timing or amount when the Company has a legal or constructive obligation arising as a result
of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and the amount can be
estimated reliably. Where the time value of money is material, provisions are stated at the present value of the expenditures expected
to settle the obligation. Where
it is probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed
as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will
only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent liabilities unless
the probability of outflow of economic benefits is remote. As of
the date of filing, the Company is a defendant in various labor related lawsuits totaling approximately $773,858. Management believes
these cases are without merit and is confident that the Appeals Court will make the decision according to the consideration of the Court
of First Instance and order the dismissal of such lawsuits. Therefore, no provision has been made for these liabilities in the financial
statements. |
| Employee benefits | 2.27 Employee benefits The Company
provides for retirement benefits payable for employees of its subsidiaries in Thailand under the Thai Labor Law; and follows IFRS 19
in accounting for the related obligation. Depending upon the individual employee’s salary and years of service, the related obligation
is calculated by an independent actuary using the projected unit credit method. The present value of the obligation is determined by
discounting with the interest rates of government bonds that are denominated in the currency in which the benefits will be paid, and
that have terms to maturity approximating the terms of the related liabilities. The sensitivity analysis is determined by i) discount
rate; ii) salary increase rate; iii) turnover rate; and iv) life expectancy. All re-measurements
effects of the Company’s retirement benefit obligation such as actuarial gains and losses arising from experience adjustments and
changes in actuarial assumptions are recognized directly in other comprehensive income. As of
December 31, 2021, 2020 and 2019, actuarial gain of $627,193, actuarial loss of $8,772 and actuarial loss of $131,713, net of tax has
been recognized in other comprehensive income, respectively. |
| Leases | 2.28 Leases From
January 1, 2019, in accordance with IFRS 16, leases with terms greater than 12 months are recognized as a right-of-use asset (“ROU”)
and a corresponding lease liability at the date in which the leased asset is available for use by the Company. Contracts may contain
both lease and non-lease components. The Company allocates the consideration in the contract to the lease and non-lease components based
on their relative stand-alone prices. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease
liabilities include the net present value of fixed payments. Lease
payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease
payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally
the case for leases of the Company, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment
with similar terms, security and conditions. To determine the incremental borrowing rate, the Company uses recent third-party financing
received by the individual lessee as a starting point, adjusted to reflect changes in financing conditions. Lease
payments are allocated between principal and finance cost. The finance cost is charged to profit and loss over the lease period so as
to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use
assets are measured at cost comprising the following:
● The amount of the initial measurement of the lease liability
● any lease payments made at or before the commencement date less any lease incentives received Right-of-use
assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. The lease terms
of buildings and others are generally less than ten years and less than five years, respectively. Payments
associated with leases with a lease term of 12 months or less on the Company’s equipment and vehicles and all leases of low-value
assets are recognized on a straight-line basis as an expense in profit or loss. |
| Related parties | 2.29 Related parties Parties
are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject
to common control or significant influence, such as a family member or relative, shareholder, or a related corporation. |
| Earnings per share (“EPS”) | 2.30 Earnings per share (“EPS”) Basic
EPS is calculated by dividing the net profit (loss) attributable to ordinary equity holders by the weighted average number of ordinary
shares outstanding during the year. Diluted EPS is calculated by using the weighted average number of ordinary shares outstanding adjusted
to include the potentially dilutive effect of outstanding share-based awards and convertible debt instruments, unless their inclusion
in the calculation is anti-dilutive. |
| New and amended accounting standards | 2.31 New and amended accounting standards All
new standards and amendments that are effective for annual reporting period commencing January 1, 2021 have been applied by the Company
for the year ended December 31, 2021. The adoption of these new and amended standards did not have material impact on the consolidated
financial statements of the Company. A number of new standards and amendments to standards have not come into effect for the year beginning
January 1, 2021, and they have not been early adopted by the Company in preparing these consolidated financial statements. None of these
new standards and amendments to standards is expected to have a significant effect on the consolidated financial statements of the Company. |
