2023 Annual Report

SOUTHERN CHARTER FINANCIAL
GROUP LIMITED




FOR THE YEAR ENDED 31 MARCH 2023


ANNUAL REPORT

Page 1 Southern Charter Financial Group Limited Annual Report 31 March 2023

CONTENTS

DIRECTORS’ REPORT ________________________________________________________________ 2
DIRECTORS' RESPONSIBILITY STATEMENT ________________________________________________ 3
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME _______________________ 4
STATEMENT OF FINANCIAL POSITION ___________________________________________________ 5
STATEMENT OF CHANGES IN EQUITY ____________________________________________________ 6
STATEMENT OF CASH FLOWS __________________________________________________________ 7
NOTES TO THE FINANCIAL STATEMENTS _________________________________________________ 8
INDEPENDENT AUDITOR’S REPORT ____________________________________________________ 20
CORPORATE GOVERNANCE STATEMENT ________________________________________________ 22
ADDITIONAL INFORMATION _________________________________________________________ 26
BUSINESS DIRECTORY ______________________________________________________________ 30

Southern Charter Financial Group Limited
Page 2 Southern Charter Financial Group Limited Annual Report 31 March 2023
DIRECTORS’ REPORT

Dear Shareholders

The Directors of Southern Charter Financial Group Limited (“the Company”) are pleased to report its
financial results for the year ended 31 March 2023.

Financial Results
The Company reported a net loss attributable to shareholders of $280,107 for the year. This compares
with a net loss attributable to shareholders of $164,650 for the previous year.

The financial results consisted mainly of expenditure relating to the maintenance of the listed company
and interest earned on short term cash deposits, as well as activities related to work undertaken on
evaluation of suitable businesses for acquisition. More expenses were incurred in the year ended
March 2023 on directors fees with the addition of KC Ng as a full director and an increase in individual
fees, whilst still remaining within the limits of the approved fee pool, to recognize the increased
workload on directors engaged in due diligence activities in relation to potential acquisitions. The
director fee increase is partially offset by a reduction in management fees, as disclosed in the related
party note of the report. Legal fees and Compliance costs were higher in 2023, mostly related to the
acquisition of the license agreement and subsequent outsourced production agreement for the
manufacture and supply of a self-cleaning, antimicrobial, surface coating product.

Future Growth Strategy
The Company remains in a position with a strong balance sheet which includes significant cash
resources. The focus of the Board is currently on completing the establishment of the pilot scale
production facility which will be followed by the necessary trials, tests and customer engagements to
move the Company into commercial production and sales. The Company will provide the market with
any updates as to material developments in due course.

On behalf of the Directors of Southern Charter Financial Group the Company extends its thanks to the
shareholders for their support of the Company.

Southern Charter Financial Group Limited
Page 3 Southern Charter Financial Group Limited Annual Report 31 March 2023
DIRECTORS' RESPONSIBILITY STATEMENT

The Directors of Southern Charter Financial Group Limited are pleased to present to shareholders the
financial statements for Southern Charter Financial Group Limited for the year ended 31 March 2023.
The Directors are responsible for presenting financial statements in accordance with New Zealand law
and generally accepted accounting practice, which give a true and fair view of the financial position of
the Company as at 31 March 2023 and the results of its operations and cash flows for the year ended
on that date.
The Directors consider the financial statements of the Company have been prepared using accounting
policies which have been consistently applied and supported by reasonable judgements and estimates
and that all relevant financial reporting and accounting standards have been followed.
The Directors believe that proper accounting records have been kept which enable with reasonable
accuracy, the determination of the financial position of the Company and facilitate compliance of the
financial statements with the Financial Reporting Act 2013.
The Directors consider that they have taken adequate steps to safeguard the assets of the Company,
and to prevent and detect fraud and other irregularities. Internal control procedures are also
considered to be sufficient to provide a reasonable assurance as to the integrity and reliability of the
financial statements.
The Financial Statements are signed on behalf of the Board by:



Director: Bruce Dunlop Director: John Cilliers

30 June 2023

Southern Charter Financial Group Limited
Page 4 Southern Charter Financial Group Limited Annual Report 31 March 2023
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME






The accompanying notes form part of these financial statements
For the year ended 31 March 2023
YearYear
20232022
Notes$$
Interest Income - financial asset at amortised cost26,121 11,264
Administrative expenses2(306,197) (175,914)
(280,076) (164,650)
Finance costs(31) -
Loss before income tax(280,107) (164,650)
Income tax expense3- -
Net loss(280,107) (164,650)
Other comprehensive income- -
(280,107) (164,650)
Earnings per share:centscents
Basic and diluted earnings/(loss) per share5(0.0544) (0.0320)
Loss before interest
Total comprehensive income for the period attributable to
shareholders

Southern Charter Financial Group Limited
Page 5 Southern Charter Financial Group Limited Annual Report 31 March 2023
STATEMENT OF FINANCIAL POSITION

For and on behalf of the Board of Directors, dated 30 June 2023


Director: Bruce Dunlop Director: John Cilliers
The accompanying notes form part of these financial statements
As at 31 March 2023
YearYear
20232022
Notes$$
Assets
Current assets
Cash and cash equivalents6382,113 21,749
Term Deposit61,211,811 1,980,000
Interest receivable on term deposit76,677 2,821
Prepaid production expenses1,7100,000 -
GST receivable711,391 8,048
Income tax receivable (RWT)75,766 2,718
1,717,758 2,015,336
Non-current assets
NZX Deposit720,000 20,000
20,000 20,000
Total assets1,737,758 2,035,336
Equity and liabilities
Current liabilities
Trade and other payables8111,418 128,889
Total liabilities111,418 128,889
Equity
Issued capital45,672,856 5,672,856
Accumulated loss(4,046,516) (3,766,409)
Total equity1,626,340 1,906,447
Total equity and liabilities1,737,758 2,035,336
centscents
Net Tangible Asset per Share0.3159 0.3703

Southern Charter Financial Group Limited
Page 6 Southern Charter Financial Group Limited Annual Report 31 March 2023
STATEMENT OF CHANGES IN EQUITY



The accompanying notes form part of these financial statements


For the year ended 31 March 2023
Issued
capital
Accumulated
Loss
Total equity
$
$
$
As at 1 April 2022
5,672,856


(3,766,409)


1,906,447


Loss for the year
-


(280,107)


(280,107)


Total comprehensive income
-


(280,107)


(280,107)


At 31 March 2023
5,672,856


(4,046,516)


1,626,340


As at 1 April 2021
5,672,856


(3,601,759)


2,071,097


Loss for the year
-


(164,650)


(164,650)


Total comprehensive income
-


(164,650)


(164,650)


At 31 March 2022
5,672,856


(3,766,409)


1,906,447

Southern Charter Financial Group Limited
Page 7 Southern Charter Financial Group Limited Annual Report 31 March 2023
STATEMENT OF CASH FLOWS




The accompanying notes form part of these financial statements

Page 8 Southern Charter Financial Group Limited Annual Report 31 March 2023
NOTES TO THE FINANCIAL STATEMENTS
1. STATEMENT OF ACCOUNTING POLICIES
Reporting entity and statement of compliance
These financial statements and notes represent those of Southern Charter Financial Group Limited. References
to “SNC” are used to refer to Southern Charter Financial Group Limited (the “Company”).
Southern Charter Financial Group Limited is a limited liability company incorporated and domiciled in New
Zealand. It is registered under the Companies Act 1993. SNC is listed on the NZX Main Board (“NZSX”). SNC is a
FMC reporting entity under Part 7 of the Financial Markets Conduct Act 2013 and its financial statements have
been prepared in accordance with the Companies Act 1993, The Financial Reporting Act 2013 and the Financial
Markets Conduct Act 2013 and the NZX Main Board Listing Rules.
As at 31 March 2023 the Company had commenced establishment of outsourced operational facilities for the
production and commercialisation of antimicrobial compounds.
The registered office and principal place of business are disclosed in the directory to the annual report.
Basis of preparation
The financial statements have been prepared in accordance with Generally Accepted Accounting Practice in New
Zealand (NZ GAAP). The company is a for-profit entity for the purposes of complying with NZ GAAP. The financial
statements comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and
International Financial Reporting Standards (IFRS).
The information is presented in New Zealand dollars which is the Company’s functional currency and
presentation currency and is rounded to the nearest dollar.
Measurement base
The accounting principles adopted are those recognised as appropriate for the measurement and reporting of
financial performance and financial position on the historical cost basis.
Use of estimates and judgements
The preparation of financial statements in conformity with NZ IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the year in which the estimates are revised and in any future periods affected.

Page 9 Southern Charter Financial Group Limited Annual Report 31 March 2023
Prepaid Production Expenses
Prepaid production expenses relate to an outsourced production agreement entered into on 20 January 2023, for
the production of antimicrobial coatings and associated operational services. The outsource agreement requires
the outsourced service provider to identity and set up the pilot manufacturing facility and equipment, enter into
and manage any leases for the facility and equipment, obtain appropriate licences and permits required for the
pilot manufacturing facility, identify suppliers for the raw materials needed for production of the Coating Product,
obtain any required certifications for the production and sales of the product, recruit and train all core personnel,
including a General Manager and sales and marketing personnel, followed by the ongoing operation of the
production facility . Once established, in accordance with the agreement the Company will pay fixed fees
NZD$400,000 per annum towards the renting of the Facilities and the engagement of the Licensor to carry out
the outsourced services. As at 31 March 2023 the Company had pre-paid an initial $100,000 in relation to the fee
for services to be provided in the upcoming year. At 31 March 2023, activities required for the setup of the pilot
manufacturing facility had only just commenced and the full amount of the payment was therefore determined
to be a prepayment.
Deferred Tax Asset
A deferred tax asset of $209,876 has not been recognized in the Statement of Financial Position (note 3). The
operations of the antimicrobial manufacturing operations are still in the startup stage and production and sales
activities have not commenced. As such uncertainty remains that taxable profit will be available against which
the deductible temporary differences and carry-forward of unused tax losses can be utilised. Deferred tax asset
will only be recognised when the Company commences business activities that provide a taxable profit.

There were no other significant judgements and estimates in 2022 or 2023.
Specific accounting policies
The following specific accounting policies, which materially affect the measurement of financial performance and
financial position, have been applied.
a) Goods and services tax
All amounts are shown exclusive of Goods and Services Tax (GST), except for receivables and payables that are
stated inclusive of GST.
b) Adoption of new and revised standards
Changes in accounting policies
No new accounting policies were applied or standards came into effect which were required to be adopted by the
company.
New NZ IFRS Standards and Interpretations Issued but not yet adopted.
At the date of authorisation of these financial statements, certain new standards and interpretations to existing
standards have been published but not yet effective, and have not been adopted early by the Company.
. Upcoming standards and interpretations are not expected to have a significant impact on the financial
statements of the Company.

Page 10 Southern Charter Financial Group Limited Annual Report 31 March 2023
2. ADMINISTRATION EXPENSES BY NATURE

The operating expenses generally relate to the cost associated with being a listed entity. Travel and
accommodation expenses for the current year were in relation to negotiation and due diligence on businesses
considered for acquisition.

3. TAXATION

Numerical reconciliation of income tax expense to prima facie tax payable


20232022
$$
Audi t fees - fi nanci al statements20,400 19,270
Contractors1139,055 52,677
Di rectors' fees11156,000 45,714
Travel and accommodati on12,847 31,595
Legal Fees41,509 6,873
NZX Li sti ng and regi stry costs33,478 19,110
Other2,908 675
306,197 175,914
20232022
$$
Income tax expense
Current tax
Current tax on profi t/(l oss) for the year(78,430) (46,102)
Total current tax benefi t(78,430) (46,102)
Deferred income tax
Decrease/(i ncrease) i n deferred tax assets [not yet recogni sed*]78,430 46,102
Total deferred tax expense/(benefit)78,430 46,102
Income tax expense- -
20232022
$$
Loss before tax(280,107) (164,650)
Pri ma faci e i ncome tax at 28%(78,430) (46,102)
Tax l osses not recogni sed78,430 46,102
Income tax expense- -

Page 11 Southern Charter Financial Group Limited Annual Report 31 March 2023
Deferred tax asset
Company Losses to carry forward as at 31 March 2023 are $749,558 (2022: $131,446).
The deferred tax asset of $209,876 (2022: $131,446), resulting from carry forward tax losses, will only be
recognised when the Company commences business activities that provide a taxable profit (note 1).

Accounting policy: Taxation
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income
adjusted by changes in deferred tax assets and liabilities attributed to temporary differences between the tax
base of assets and liabilities and their carrying amounts in the financial statements.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities based on the current period’s taxable income. The tax rates and laws used to compute the
amount are those that are enacted or substantively enacted at reporting date.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the
statement of financial position differs from its tax base, except for differences arising on:
-
- The initial recognition of an asset or liability in a transaction which is not a business combination and at
the time of the transaction affects neither accounting or taxable profit, and
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be
available against which the difference can be utilised. The income tax expense or revenue attributable to
amounts recognised directly in equity are also recognised directly in equity.


Tax losses carried forward.20232022
$$
Openi ng bal ance469,451 304,801
Thi s Year280,107 164,650
Cl osi ng bal ance749,558 469,451

Page 12 Southern Charter Financial Group Limited Annual Report 31 March 2023
4. SHARE CAPITAL
Share Capital

All ordinary shares have been fully paid and have equal voting and dividend rights. The shares have no par value.
No shares were issued or repurchased in the current or comparative years.
The Company’s capital is managed with the objectives of maintaining adequate working capital so that all
obligations can be met on time. All components of equity are regarded as “capital”. The company is not subject to
any externally imposed capital requirements.
Accounting policy: Share capital
Ordinary shares are classified as equity. Direct costs of issuing shares are deducted from the proceeds of the
issue.

5. EARNINGS PER SHARE
At 31 March 2023 there were 514,894,500 shares on issue (2022: 514,894,500).

The Company does not currently have any dilutive interests.
Accounting policy: Earnings per share
The company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the year, adjusted for own shares held.
Diluted earnings (loss) per share is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding, for the effects of all dilutive
potential ordinary shares.
Number of
Shares
Value in $
Balance at 31 March 2023514,894,500 5,672,856
Balance at 31 March 2022514,894,500 5,672,856
20232022
Total comprehensi ve l oss for the year[ $ ]($280,107)($164,650)
Wei ghted average number of shares514,894,500 514,894,500
Basi c earni ngs/(l oss) per share [ cents ](0.0544) (0.0320)
Di l uted average shares on i ssue514,894,500 514,894,500
Di l uted earni ngs/(l oss) per share[ cents ](0.0544) (0.0320)

Page 13 Southern Charter Financial Group Limited Annual Report 31 March 2023
6. CASH AND TERM DEPOSITS

The Term Deposit is not included in cash and cash equivalents as it has maturity dates longer than three months.
The Term Deposit earns interest at 3.8% p.a. and matures on 7 June 2023.
Accounting policy: Cash and cash equivalents
For the purpose of the statement of cash flows, cash includes cash on hand, bank overdrafts, deposits at call and
short term highly liquid deposits with maturities of three months or less.
7. TRADE AND OTHER RECEIVABLES

The prepaid production expense relates to the initial payment made under the Pilot Outsource Agreement for the
set up of the pilot manufacturing facility and equipment associated for the production of antimicrobial coatings.
The agreement was entered into in January 2023 and by 31 March 2023 the setup activities had only just
commenced. As such the Company had not yet received the deliverables covered by the initial payment.
The deposit bond held at NZX is provided as security for all amounts payable to the NZX by the Company as an
Issuer and is provided in accordance with NZX Listing Rule 1.23.
Accounting policy: Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost,
less provision for estimated uncollectable amounts and expected credit losses. The carrying amount of the asset
is reduced through the use of provision accounts, and the amount of the loss is recognised in the statement of
comprehensive income within ‘Administration expenses’. Individual debtor accounts are reviewed for impairment
and a provision is raised based on management’s best estimate of recoverability. Trade receivables are also
assessed for credit risk on a forward-looking basis with a provision raised where a credit loss is considered likely.
20232022
$$
Cash and bank382,113 21,749
Term deposi ts at bank1,211,811 1,980,000
Cash and term deposi ts at bank1,593,924 2,001,749
20232022
$$
GST recei vabl e11,391 8,048
Interest recei vabl e on term deposi t6,677 2,821
Prepai d producti on expenses100,000 -
Income tax recei vabl e (RWT)5,766 2,718
Bond hel d at NZX20,000 20,000
143,834 33,587

Page 14 Southern Charter Financial Group Limited Annual Report 31 March 2023
When a trade receivable is uncollectable, it is written off against the provision account for trade receivables.
Subsequent recoveries of amounts previously written off are credited to the income statement against the
impairment losses on receivables.

8. TRADE AND OTHER PAYABLES


Accounting policy: Trade and other payables
Trade and other payables are initially recognised at fair value net of transaction costs and thereafter carried at
amortised cost and due to their short term nature they are not discounted. They represent liabilities for goods
and services provided to the Company by suppliers in the ordinary course of business prior to the end of the
financial year that are unpaid and arise when the Company become obliged to make future payments in respect
of the purchase of these goods and services. The amounts are unsecured and are usually paid within normal
business trading terms.

9. RECONCILIATION OF OPERATING CASHFLOW AND REPORTED LOSS

20232022
$$
Trade payabl es18,563 2,239
Accrued expenses20,000 22,200
Rel ated party payabl es1172,855 104,450
111,418 128,889
20232022
$$
Net l oss for the year(280,107) (164,650)
Changes in assets and liabilities
(Increase)/decrease i n trade and other recei vabl es(3,856) (1,557)
(Increase)/decrease i n GST recei vabl e(3,343) (2,389)
(Increase)/decrease i n current tax asset(3,048) 4,000
Increase/(decrease) i n trade and other payabl es(17,471) 45,448
(Increase)/decrease i n prepayments(100,000) -
Net cash fl ows from operati ng acti vi ti es(407,825) (119,148)

Page 15 Southern Charter Financial Group Limited Annual Report 31 March 2023
10. FINANCIAL INSTRUMENTS
The Company has entered into a number of non-derivative financial instruments all of which are classified as
financial assets and liabilities at amortised cost. The carrying values of these items approximate their fair value.
They are listed as follows:

All financial instruments are classified as current and have maturity dates of less than twelve months, other than
the NZX deposit which is repayable on delisting of SNC from NZX main board.
The Company is subject to a number of financial risks.
Credit risk: Financial instruments that potentially subject the Company to credit risk are bank balances and short
term deposits. The maximum exposure to credit risk at reporting date is the value of the instruments as stated in
the Statement of Financial Position. The Company only places cash on deposit with Westpac Bank which has a
Standard & Poor’s credit rating of AA- rating.
Liquidity risk: Liquidity risk represents the company's ability to meet its contractual obligations as they fall due.
As at 31 March 2023, all financial liabilities have a contractual maturity of less than 3 months. Liquidity risk was
substantially eliminated by the cash and cash equivalents and term deposit balance of $1,593,924 in total. The
Board regularly reviews its liquidity position by examining future cash requirements.
Currency risk: The Company has no exposure to foreign exchange risk.
Interest rate risk: Interest rate risk is the risk of loss to the Company arising from adverse changes in interest
rates. Cash and short term deposits are subject to interest rate risk. Changes to interest rates can impact the
Company’s financial results by affecting the interest earned or payable on these assets and liabilities. There is
minimal interest rate risk.

20232022
$$
Financial assets at amortised cost
Cas h and cas h equi val ents382,113 21,749
Term depos i t and i nteres t accrued1,218,488 1,980,000
NZX depos i t20,000 20,000
Other recei vabl es17,157 13,587
Total Financial assets1,637,758 2,035,336
Financial liabilities at amortised cost
Trade payabl es and other l i abi l i ti es38,563 24,439
Rel ated party payabl es72,855 104,450
Total financial liabilities111,418 128,889
Interest rate sensitivity analysis
IncreaseDecreaseIncreaseDecrease
$$$$
Effect of a 5% change i n the bank deposi t i nterest rate60,591 (60,591) 60,591 (60,591)
EquityProfit or loss

Page 16 Southern Charter Financial Group Limited Annual Report 31 March 2023

Accounting policy: Financial instruments
Financial instruments recognised in the statement of financial position include cash balances, term deposits,
receivables and payables. The Company has no financial instruments that are not reported in the Statement of
Financial Position.
Financial assets and financial liabilities are recognised when the company becomes a party to the contractual
provisions of the financial instruments.
A financial asset is derecognised when the contractual rights to cash flows from the financial asset expire, or
when the financial asset and all subsequent risks and rewards are transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled or expires.
Impairment of financial assets
The Company recognises a loss allowance for expected credit losses on receivables. 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 Company recognises lifetime expected credit losses (‘ECL’) for receivables. The expected credit losses on
these financial assets are estimated using a provision matrix based on the Company’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.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the
expected life of a financial instrument.
The Company recognises an impairment loss in profit or loss for all financial instruments with a corresponding
adjustment to their carrying amount. The carrying amount of the financial asset is reduced by the impairment
loss directly for all financial assets. Changes in the carrying amount of the allowance account are recognised in
profit or loss.
The Company writes off a financial asset when there is information indicating that there is no reasonable
expectation of recovery. For example, when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings, or in the case of trade receivables, when the amounts are over one year past due,
whichever occurs sooner. Financial assets written off may still be subject to enforcement activities under the
Company’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are
recognised in profit or loss.

Page 17 Southern Charter Financial Group Limited Annual Report 31 March 2023
11. RELATED PARTY TRANSACTIONS AND BALANCES
Remuneration
The directors are considered to be the key management personnel of the Company.
The following table provides the compensation for key management personnel and directors.

Related party trade and other payables

$100,000 was received during 2019 from Mr Chang Ku EE to cover the compliance costs associated with the
change in the majority shareholder from Golden Tower New Zealand Limited to Mr EE. Actual costs were less
than the payment received. The remaining balance of $56,855 is payable on demand, is unsecured and is
included in trade and other payables (note 8). The related party trade and other payables are interest free.
Transactions: 2023
There were no transactions with related parties during the year, other than compensation paid to directors or
their nominees, as disclosed above.
Transactions: 2022
There were no transactions with related parties during the year, other than compensation paid to directors as
disclosed above.
20232022
$$
Management and professi onal servi ces fees39,055 52,677
Di rectors' fees2156,000 45,714
195,055 98,391
20232022
$$
Accrued management and professional service fees:
Kuan Chong NG3,000 3,000
Accrued directors fees:
Chang Ku EE4,000 4,000
Kuan Chong NG3,000 3,000
John Ci l l i ers3,000 3,000
Bruce Dunl op3,000 3,000
Reimbursement due for expenses incurred obh of the company
Kuan Chong NG- 31,595
Payables for balance of funds received for shareholder transaction costs:
Chang Ku EE56,855 56,855
72,855 104,450

Page 18 Southern Charter Financial Group Limited Annual Report 31 March 2023
12. SEGMENT INFORMATION
As at 31 March 2023, the company is organised into one operating segment and one geographical segment in
New Zealand. The Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision maker. The chief operating decision maker is the Board of Directors.
13. COMMITMENTS AND CONTINGENT LIABILITIES
The antimicrobial license agreement contains minimum performance targets that set minimum royalty of 2.1% to
be paid on revenue of SGD $150,000 within 2 years of the effective date and 2.1% on revenue of SGD $1m from
the third year on. The agreement became effective on 2 September 2022. The maximum contingent liability
arising in the event that no revenue has been earned by 2 September 2024 is approximately $3,780 and $25,200
on 2 September 2025.
In accordance with the terms of the Pilot Outsourcing Agreement entered on 20 January 2023 for the
commercialization of antimicrobial coatings, the Company will pay fixed fees of NZD$400,000 per annum towards
the setup of the facility, engagement of core personnel and subsequent services, as well as commission of 30% on
gross profit. Invoices under the Pilot Outsourcing Agreement are payable in 30-day instalments. However, the
Company has the ability to terminate the Pilot Outsourcing Agreement at any time, with prior notice to the
Licensor, with no break fees.
There were no other capital commitments or contingent liabilities at 31 March 2023 (2022: $nil).
14. GOING CONCERN
The Company reported a loss of $280,107 from continuing operations for the year ended 31 March 2023. As at 31
March 2023 the Company reported a net equity position of $1,626,340. The current assets of $1,717,758, which
include cash and term deposits of $1,593,924, provide the Company with sufficient resources to cover
expenditure in relation to the establishment and commencement of its operating business for the manufacture
and supply of a self-cleaning, antimicrobial, surface coating product.
The Company informed the market on 21 February 2023 that it has entered into a Pilot Outsourcing Agreement
as part of SNC’s strategy for the commercialisation of the rights granted under the license agreement to
manufacture and supply a self-cleaning, antimicrobial, surface coating product. In accordance with the terms of
the agreement, the Company will pay fixed fees of NZD$400,000 per annum towards the setup of the facility,
engagement of core personnel and subsequent services, as well as commission of 30% on gross profit. Invoices
under the Pilot Outsourcing Agreement are payable in 30-day instalments. SNC has the ability to terminate the
Pilot Outsourcing Agreement at any time, with prior notice to the Licensor, with no break fees.
The Company has sufficient cash reserves to cover the costs under the Outsourcing Agreement over the next 12
months. The production processes are new the product is new to the market and therefore uncertainty remains
on the sales margins and volumes the product will achieve. The Company can manage its expenditure within the
current cash reserves as the agreement can be terminated if the sales and profitability objectives for the product
do not look likely to be sufficient to move the Company into a profit position.
The Directors have concluded that the basis of preparation of the financial statements on a going concern basis is
appropriate.

Page 19 Southern Charter Financial Group Limited Annual Report 31 March 2023

15. SIGNIFICANT EVENTS AFTER REPORTING DATE
Subsequent to year end, the establishment of the outsourced production plant reached the stage where plant
equipment tests could commence. This will be followed by production trials and product tests. The Company
has made a further $100,000 payment.
There were no other significant events subsequent to 31 March 2023.

BDO Auckland

20

INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF SOUTHERN CHARTER FINANCIAL GROUP LIMITED

Opinion

We have audited the financial statements of Southern Charter Financial Group Limited (“the
Company”), which comprise the statement of financial position as at 31 March 2023, and the
statement of profit or loss and other comprehensive income, statement of changes in equity and
statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the
financial position of the Company as at 31 March 2023, and its financial performance and its cash
flows for the year then ended in accordance with New Zealand equivalents to International
Financial Reporting Standards (“NZ IFRS”) and International Financial Reporting Standards (“IFRS”).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (New Zealand)
(“ISAs (NZ)”). Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with Professional and Ethical Standard 1 International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New
Zealand) issued by the New Zealand Auditing and Assurance Standards Board, and we have fulfilled
our 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 opinion.

Other than in our capacity as auditor we have no relationship with, or interests in, the Company.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to communicate in our report.

Other Information

The directors are responsible for the other information. The other information comprises the
Annual Report (but does not include the financial statements and our auditor’s report
thereon),which we obtained prior to the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express
any form of audit opinion or assurance conclusion thereon.

In connection with our audit of the financial statements, 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 knowledge obtained in the audit or otherwise appears to be
materially misstated. 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.

BDO Auckland

21

Directors’ Responsibilities for the Financial Statements

The directors are responsible on behalf of the Company for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS, 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 on behalf of the Company for
assessing the 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 Company or to cease operations, or have no realistic alternative but to do
so.

Auditor’s 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
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs (NZ) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be expected to influence the
decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located at
the External Reporting Board’s website at: https://www.xrb.govt.nz/standards-for-assurance-
practitioners/auditors-responsibilities/audit-report-2/

This description forms part of our auditor’s report.

Who we Report to

This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an
auditor’s 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 shareholders, as a
body, for our audit work, for this report or for the opinions we have formed.

The engagement partner on the audit resulting in this independent auditor’s report is Richard
Croucher.

For and behalf of:




BDO Auckland
New Zealand
30 June 2023

Page 22 Southern Charter Financial Group Limited Annual Report 31 March 2023
CORPORATE GOVERNANCE STATEMENT
The Board of Directors (“Board”) of Southern Charter Financial Group (“SNC”) recognize the need for strong
corporate governance practices and has adopted a comprehensive corporate governance code. The code is based
on the recommendations set out in the NZX Corporate Governance Code and the requirements of the NZX Main
Board Listing Rules. The Company’s website is currently under construction; but in the interim copies of key
documents referred to in this section can be requested by emailing john.cilliers@outlook.co.nz. The information
contained in this section is current as at 30 June 2023 and has been approved by the Board. The key documents
within the code were last reviewed effective June 2023 and a summary statement of the key documents is as
follows:
Code of Ethics and Financial Products Trading Policy
SNC has adopted policies that are designed to formalise its commitment to the highest standards of ethical
conduct and to provide all Directors and representatives with clear guidance on those standards. These are
governed by the Code of Ethics and also the Financial Products Trading Policy.
The Code of Ethics details the ethical and professional behavioural standards required of the Directors and all
employees.
The Financial Products Trading Policy details the procedure whereby SNC Directors and employees may trade in
the Company’s shares. Directors and employees may not trade in SNC shares when they have price sensitive
information that is not publicly available. In addition, except where the Directors have the permission of the
Board, the Directors may trade in the Company’s shares only during specified trading windows.
The Company maintains an interests register in which the particulars of certain transactions and matters involving
Directors must be recorded. Details of all matters entered into the register by individual Directors are outlined in
Note 11 of the Financial Statements.
Governance Code
The Board has adopted a Governance Code that sets out the roles and responsibilities of the Board and
distinguishes between the role and responsibilities of the Board and Management. Board's role is to direct the
Company and enhance its value for Shareholders in accordance with good governance principles. The Board
recognises that the quality with which it performs its functions is an integral part of the performance of the
Company and that there is a strong link between good governance and performance.
Role and Composition of the Board
SNC retains a Board of Directors which aims to ensure that shareholders’ interests are held paramount. The Board
is responsible for the direction and control of SNC and is accountable to shareholders and others for the
Company’s performance and compliance with the appropriate laws and standards. A key responsibility of the
Board is to monitor the performance of management on an ongoing basis.
The Company’s Constitution requires a minimum of three Directors with a maximum of seven. At least two of the
Directors must be ordinarily resident in New Zealand. The composition of the Board must include a minimum of
two Independent Directors. The Board elects a Chairman whose primary responsibility is the efficient functioning

Page 23 Southern Charter Financial Group Limited Annual Report 31 March 2023
of the Board. The Board is currently made up of four Directors and the Board considers that two Directors are
independent in terms of the New Zealand Exchange requirements.
Independent Directors
• Bruce Dunlop
• John Cilliers
Director
• Chang Ku EE (Chairman)
• Kuan Chong NG

Board meetings
The Board met regularly during the year. The Board is provided with accurate timely information on all aspects of
the Company’s operations. The Board is kept informed of key risks to the Company on a continuing basis. In
addition, the Board meets whenever necessary to deal with specific matters needing attention between the
scheduled meetings.
The table below shows director attendance at board meetings during the year ended 31 March 2023:
Chang Ku EE (Chairman) -
Kuan Chong NG 24
John Cilliers 21
Bruce Dunlop 24
Diversity Policy
SNC believes that diversity and inclusion contribute to competitive advantage and sustainable business success
which is reflected in the Companies Diversity Policy. SNC is committed to an inclusive workplace that fosters and
promotes workplace diversity at all levels. This provides the capacity to view problems and opportunities from
many different perspectives.
Board diversity table as at 31 March 2023:
4 male directors
0 female directors
0 gender diverse directors
0 male officers
0 female officers
0 gender diverse officers
The Board believes that the current makeup of the Board is appropriate at this time.
Board Committees – Audit Finance and Risk Committee
The Board has overall responsibility for the Company’s system of risk management and internal control. The
Board has established a Committee known as the Audit, Finance and Risk Committee. The primary purpose of the
Audit, Finance and Risk Committee is to assist the Board of SNC in fulfilling its responsibilities relating to the

Page 24 Southern Charter Financial Group Limited Annual Report 31 March 2023
company’s management systems, accounting and reporting, external and internal audit, finance and risk
management activities. The Committee comprises John Cilliers (Chairman of Committee) and Bruce Dunlop.
Meetings are held not less than twice a year having regard to the Company’s reporting and audit cycle.
Management tools used by SNC include the audit committee function, outsourcing of certain functions to
experts, internal controls, financial and compliance reporting procedures and processes, business continuity
planning and insurance.
Other Committees
Due to the importance of Nomination and Remuneration matters these are addressed by the Board as a whole
and consequently there is no separate Nomination or Remuneration Committee at this time.
Continuous Disclosure
SNC’s Market Disclosure Policy sets out the Company’s arrangements to ensure material information is identified,
reported, assessed and, where required, disclosed to the market in a timely manner. SNC is committed to
ensuring the timely disclosure of material information about the Company to ensuring that the Company
complies with the NZX Main Board Listing Rules.
Remuneration Policy
SNC’s Remuneration Policy is included in its Remuneration, Nomination and Health & Safety Committee Charter
which sets out the principles which apply to the remuneration of the Board and employees. Details of individual
director remuneration are outlined on page 27 and in Note 11 of the Financial Statements.
Auditors
The Audit, Finance and Risk Committee is accountable for ensuring the performance and independence of the
external auditors – BDO Auckland. The Committee also recommends to the Board, which services other than the
statutory audit, may be provided by BDO Auckland as auditors.
Shareholder Relations
The Board recognises the importance of providing comprehensive and timely information to shareholders.
Information is communicated to shareholders in the Interim Report and the Annual Report. The release of the
Annual Report is followed by the Annual Shareholders Meeting, which the Board recognises as an important
forum at which the shareholders can meet and question the Board. Full participation of shareholders is
encouraged at the Annual Shareholders Meeting to ensure a high level of accountability and identification with
the Company’s strategies and goals. Shareholders are encouraged to submit questions in writing prior to the
meeting.
Environmental, Social and Governance
SNC recognises the importance of minimising our environmental, social and governance impact The Company is
committed to minimise its environmental impact and achieve sustainable business practices.
Summary of Exceptions
The Company’s corporate governance code is based on the recommendations set out in the NZX Corporate
Governance Code and the requirements of the NZX Main Board Listing Rules. The Board considers that SNC’s

Page 25 Southern Charter Financial Group Limited Annual Report 31 March 2023
corporate governance code has followed these recommendations and requirements in all material respects in the
current year with the following exceptions:
• Recommendation 3.6 (protocols setting procedure to follow if takeover offer received including the set-
up of a separate committee) - there are no written protocols at this time but the whole Board would be
immediately involved and legal advice sought.
• Recommendation 4.2 (key governance documents being available on the company’s website) - the
Company’s website is currently under construction but key documents can be obtained on request from
the Company as above.
• Recommendation 4.3 (reporting includes non-financial disclosures such as exposure to environmental
risks and how those risks are managed) – due to the Company’s lack of current operations such
reporting will be considered in future years.
• Recommendation 8.5 (the board should ensure that the notices of annual or special meetings of quoted
equity security holders is posted on the issuer’s website as soon as possible and at least 20 working days
prior to the meeting) - the Company held the 2022 Annual Meeting on 30 September 2022. The notice
of the Annual Meeting was released on 17 September 2020, being less than the 20 working days
recommended.
• Recommendation 8.1 (having a website) – the Company’s website is currently under construction.
The alternate governance practices described above have been approved by the Board.

Page 26 Southern Charter Financial Group Limited Annual Report 31 March 2023
ADDITIONAL INFORMATION
STOCK EXCHANGE LISTING
Southern Charter Financial Group Ltd is listed on NZSX under the code SNC for ordinary shares.
REGISTRY
Link Market Services is SNC’s security register manager and holds all shareholder records electronically. Link
Market Services is also responsible for the maintenance of shareholder records, SNC’s call centre, and the
preparation of distribution payments. Contact details for Link Market Services are set out in the business
directory on the last page.
ANNUAL REPORT AND ANNUAL MEETING
All shareholders are entitled to receive a copy of the Annual Report. If you do not require the Annual Report, or if
you receive more copies than you require, please notify Link Market Services at the address shown on the last
page.
The next Annual General Meeting is intended to be held in September 2023. The Notice of Meeting and Proxy
Form will be sent shortly.
PRINCIPAL ACTIVITIES AND CHANGES IN STATE OF AFFAIRS
The Company is currently in the process of setting up facilities for the production and commercialisation of novel
antimicrobial compounds.
DIRECTORS
The following directors held office during the financial year:
Current directors:
Chang Ku EE (appointed 17 December 2018)
Kuan Chong NG (appointed 8 April 2019)
John Cilliers (appointed 19 February 2018)
Bruce Dunlop (appointed 24 February 2022)

Page 27 Southern Charter Financial Group Limited Annual Report 31 March 2023
DIRECTORS INTEREST IN SOUTHERN CHARTER FINANCIAL GROUP LIMITED
The following table sets out each current director’s relevant interest (direct and indirect) in shares of the
company as at the date of this report.

REMUNERATION
The following table provides the compensation for key management personnel and directors.

During the financial year there were no employees or former employees who received remuneration and other
benefits in their capacity as employees of the Company of which was or exceeded $100,000 per annum.
The Board received no notice during the year from directors requesting to use the Company information received
in their capacity as directors which would not have been otherwise available to them.

DIRECTORS DISCLOSURE OF INTERESTS
The following general disclosures of interest were received in relation to the year ended 31 March 2023:
Chang Ku EE John Cilliers
• ESA Holdings Limited

• Incrementum Ltd


• Ascension Capital Ltd
Kuan Chong NG

• Acanthus Ltd
• C&T Graphics

• Myland Partners NZ Ltd


• Millenium Mineral Resources Ltd Group
Bruce Dunlop

• Callisto One Ltd
• Pracsol Limited

• Western City Holdings Ltd
________
Directors
Fully paid
ordinary
shares
%
Chang Ku EE398,528,343 77.40%
John Ci l l i ers50,000 0.01%
Director fees
Professional
services fees
Other
employee
benefits
Total
$$$$
Chang Ku EE48,000 - - 48,000
Kuan Chong NG36,000 36,000 - 72,000
Johannes Ci l l i ers36,000 3,055 - 39,055
Bruce Dunl op36,000 - - 36,000
156,000 39,055 - 195,055
2023

Page 28 Southern Charter Financial Group Limited Annual Report 31 March 2023


DISTRIBUTION OF SECURITY HOLDERS (AS AT 23 JUN 2023)

20 LARGEST SHAREHOLDERS (AS AT 23 JUN 2023)

Size of HoldingNumber%Number%
1-1000359 73.7%195,500 0.04%
1001-500017 3.5%41,000 0.01%
5001-1000016 3.3%139,495 0.03%
10001-5000028 5.8%677,592 0.13%
50001-10000014 2.9%1,129,728 0.22%
Greater than 10000053 10.9%512,711,185 99.58%
487 100.0%514,894,500 100.00%
Number of SecuritiesNumber of Security Holders
Ordinary shareholdersNumber%
Chang Ku Ee398,528,343 77.4%
Kycz Li mi ted44,280,927 8.6%
Tri ni ty Portfol i o Li mi ted9,000,000 1.8%
Jo Ro Co Li mi ted8,405,130 1.6%
Robert Gregory Mcaul ey7,464,312 1.5%
Roger Gri ce7,459,505 1.5%
Uob Kay Hi an Pri vate Li mi ted5,247,406 1.0%
Rus s el l Mal oney5,015,092 1.0%
John Sydney Phi l pott4,938,425 1.0%
Lei Pei4,000,000 0.8%
Gl obal Paradi gm2,785,714 0.5%
Murray Horton Bl ackwel l2,576,400 0.5%
Ri chard Bl ack1,540,754 0.3%
Mi chael Patri ck Mckenna & Chal l i ce Anne Mckenna1,200,000 0.2%
Cus todi al Servi ces Li mi ted987,412 0.2%
Es tate Dene Peter Bi ddl ecombe600,000 0.1%
M F Campbel l Li mi ted600,000 0.1%
Chri s topher Davi d Cas tl e579,432 0.1%
Phi l i p Sti ckl and500,000 0.1%
Graeme Crai g Joynt500,000 0.1%
506,208,852 98.32%
Fully paid

Page 29 Southern Charter Financial Group Limited Annual Report 31 March 2023
SUBSTANTIAL SHAREHOLDERS
As at 31 March 2023, the following holders are Substantial Product Holders in SNC within the meaning of that
expression under Section 274 of the Financial Markets Conduct Act 2013:

VOTING RIGHTS
Under the Company’s Constitution, each member present at a general meeting is entitled:
1. on a show of hands, to one vote; and
2. on a poll, to one vote for each share held or represented.
WAIVERS
There were no waivers granted or published by the NZX in relation to SNC or relied upon by the Company in the
12 month period to 31 March 2023.
DONATIONS
No donations were made during the year.

ANNUAL REPORT CERTIFICATE
This Annual Report is dated 30 June 2023 and is signed on behalf of the Board by:


Director: Bruce Dunlop Director: John Cilliers

HolderShares held%Classification of holding
Chang Ku Ee398,528,343 77.4%Regi stered hol der and benefi ci al owner
KYCZ Li mi ted44,280,927 8.6%Regi stered hol der and benefi ci al owner

Page 30 Southern Charter Financial Group Limited Annual Report 31 March 2023

BUSINESS DIRECTORY

Company
number:
4844319

Directors:
Chang Ku EE, Chairman
Kuan Chong NG
John Cilliers
Bruce Dunlop

Registered
office:
Level 2 Tower Building
50 Customhouse Quay
Wellington, 6011
New Zealand

Share Registrar

Link Market Services
Level 7, Zurich House
21 Queen Street
Auckland 1010

Bankers:
Westpac Bank Limited

Solicitors:
Duncan Cotterill
Wellington

Auditors:
BDO Auckland