BEST World International : CGN 0% on Wednesday (Nov 29) responded to questions from Singapore Exchange Securities Trading (SGX-ST) on certain aspects of its latest financial statements for the third fiscal quarter ended September. 

SGX had pressed Best World for details on its current other assets, which, according to the group’s Q3 financial statements posted on the bourse on Nov 13, amounted to S$22.8 million. 

SGX had asked for the nature and breakdown of these assets, as well as the underlying transactions, terms of these transactions, and the payment terms of the underlying contracts. 

Best World said that as at end-September, advances to suppliers accounted for S$14 million of its current other assets. These advances were deposits paid to trade suppliers for goods purchased, a security deposit to its payment gateway service provider, and the upfront deposits paid to vendors for conventions or events. 

Down payments are paid upon the issue of purchase orders for trading of goods, Best World said. Other services are paid for upon the signing of contracts. 

The remaining S$8.8 million comprised prepayments for things like convention-related expenses, IT services and insurance. These prepayments are fees generally paid annually, on the commencement date of the contract term, the company said. 

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SGX also queried Best World on the reasons for its significant other liabilities, amounting to S$27.3 million, when it had recorded cash and cash equivalents of about S$488.9 million as at end-September. 

The bourse wanted the details of these liabilities, including the terms, interest and maturity dates, along with a breakdown of the lenders and their identities. 

In response, Best World said these liabilities comprised a S$15 million loan drawdown from Taipei Fubon Bank (Singapore) for working capital, as well as put options amounting to S$12.3 million relating to Pedal Pulses – the group’s joint venture in the UK. 

In response to SGX, Best World said these loan facilities were approved by the board, including its audit committee, in November last year. 

SGX had also asked Best World to justify its trade payables of S$98.3 million. 

The group attributed this figure to trade and other payables, as well as accrued operating expenses. These included accruals for management and staff incentives, which will be paid mostly in the following year, payables owing to non-trade parties relating to convention and marketing events, as well as monthly commissions for the direct-selling segment and monthly service fees to third-party promotional companies for its franchise segment. 

Shares of Best World lost 0.6 per cent or S$0.01 to close at S$1.69 on Wednesday.