| Related party balances and transactions |
22. Related party balances and transactions
(a) The following is a list of related parties which the Group has
balances and transactions with:
| Name of entity or individual | | Relationship | | Mr. Gerard Kim Meng Lim (“Gerard Lim”) (b)(ii)(iii) | | Chief Executive Officer and controlling shareholder | | | | | | Ms. Khoo Kwai Fun (“Ms Khoo”) (b)(ii)(iv) | | Spouse of the controlling shareholder and became a shareholder of the Company in January 2024 | | | | | | Mr. Au Say Kiat (b)(ii)(x) | | Close family member of the controlling shareholder and became a shareholder of the Company in February 2024 | | | | | | Isa Wellness Marketing (b)(ii)(viii) | | An entity controlled by a close family member of the controlling shareholder | | | | | | EPetani Sdn. Bhd. (b)(ii)(ii) | | Significantly influenced by Mr. Gerard Kim Meng Lim and ceased to be a related party in January 2024* | | | | | | Isa Farm Sdn. Bhd. | | Under common control of the controlling shareholder | | | | | | Braiven Co., Ltd. (b)(ii)(vi) | | Significantly influenced by key management of the Group* | | | | | | HWG Cash (b)(ii)(vii) | | Under common control of Mr. Lim Chun Hoo and ceased to be a shareholder in January 2024 | | | | | | Agroz Ventures Sdn. Bhd. (b)(ii)(i) | | Significantly influenced by Agroz Group** | | | | | | Agroz Vertical Farms Sdn. Bhd. (b)(ii)(v) | | Significantly influenced by Agroz Group** | | | | | | Agroz Asia Sdn. Bhd. | | Under common control of the controlling shareholder | | | | | | Ahoku Ventures Sdn. Bhd. (b)(ii)(ix) | | Under common control of the controlling shareholder |
| * | Mr. Gerard Kim Meng Lim or key management of the Group holds a voting interest of 10% or more and has the right to participate in the financial and operating policy decisions of the applicable company, but does not have control. |
| ** | Agroz Group’s shareholdings of 19% in each of Agroz Ventures
and Agroz Vertical Farms are proxy holdings, with such shares held in trust. While shareholders holding 10% or more of the voting power
in an entity are presumed to have a significant influence on the entity under Item 7B of Form 20-F, under International Accounting Standards
(“IAS”) 28 and International Financial Reporting Standards (“IFRS”) 9, significant influence requires a holding
of 20% or more in voting power. Agroz Group does not possess any Director nomination rights, voting power, or decision-making influence
on the Board of Directors of either Agroz Ventures or Agroz Vertical Farms. Although Agroz Group meets the significant influence presumption
under Item 7B of Form 20-F, it does not meet the criteria under IAS 28 and IFRS 9 for significant influence. Therefore, Agroz Group does
not believe these proxy holdings should be accounted under equity method. These proxy holdings additionally do not meet the criteria of
assets under IASB Framework. The Company, through its wholly owned subsidiary, Agroz Group Sdn Bhd, pursuant to agreements with each of
these entities, agreed to operate vertical farms based on guidelines and instructions from Agroz Ventures and Agroz Vertical Farms’
management teams, in return for a share of such vertical farms’ revenue. Such revenue is received by Agroz Group in consideration
of the services Agroz Group provides and the license it grants to use its technology. Agroz Group does not make management decisions on
behalf of Agroz Ventures and Agroz Vertical Farms in the operation of such vertical farms, and in such capacity, Agroz Group exercises
no control over Agroz Ventures and Agroz Vertical Farms in accordance to IFRS 10. This is because Agroz Group does not have the power
or ability to direct such related parties’ activities, which activities would affect investee’s return. Agroz Group also has
no purchase or funding obligations to Agroz Ventures and Agroz Vertical Farms. While IFRS 15 Revenue from Contracts with Customers will
be applied for Agroz Group’s performance obligations under such agreements (i.e., operating Agroz Ventures and Agroz Vertical Farms’
vertical farms), the transaction price for Agroz Group’s performance obligations is share of revenue on inhouse produced vegetable
sales revenue to other parties except Agroz as management fee. During the year ended December 31, 2024, the management fee earned on vegetable
sales revenue is insignificant. There was no management fee earned for the year ended December 31, 2023. | | (b) | Transactions with related parties |
| (i) | Key management personnel compensation |
| |
|
For the year ended December 31, | |
| |
|
2023 | | |
2024 | |
| |
|
MYR | | |
MYR | | |
USD | |
| |
|
| | |
| | |
| |
| Salaries |
|
| 200,000 | | |
| 1,407,150 | | |
| 314,834 | |
| Contribution to social security contribution plan |
|
| 9,886 | | |
| 29,959 | | |
| 6,703 | |
| |
|
| 209,886 | | |
| 1,437,109 | | |
| 321,537 | |
| (ii) | Other transactions with related parties |
| |
|
For the year ended December 31, | |
| |
|
2023 | | |
2024 | |
| |
|
MYR | | |
MYR | | |
USD | |
| Farm solution sales to |
|
| | | |
| | | |
| | |
| Agroz Ventures Sdn. Bhd. (i) |
|
| 4,000,000 | | |
| — | | |
| — | |
| Agroz Vertical Farms Sdn. Bhd. (v) |
|
| — | | |
| 1,400,174 | | |
| 313,273 | |
| |
|
| | | |
| | | |
| | |
| Fresh vegetable sales to |
|
| | | |
| | | |
| | |
| EPetani Sdn. Bhd. (ii) |
|
| 1,145,443 | | |
| — | | |
| — | |
| Isa Wellness Marketing (viii) |
|
| 327,776 | | |
| 32,841 | | |
| 7,348 | |
| |
|
| | | |
| | | |
| | |
| Consultancy fees to |
|
| | | |
| | | |
| | |
| Ahoku Ventures Sdn. Bhd. (ix) |
|
| 350,000 | | |
| — | | |
| — | |
| |
|
| | | |
| | | |
| | |
| Commission fee to |
|
| | | |
| | | |
| | |
| Au Say Kiat (x) |
|
| 137,912 | | |
| — | | |
| — | |
| |
|
| | | |
| | | |
| | |
| Purchases of fresh produce from |
|
| | | |
| | | |
| | |
| EPetani Sdn. Bhd. (ii) |
|
| 48,581 | | |
| — | | |
| — | |
| Agroz Vertical Farms Sdn. Bhd. (v) |
|
| 886,100 | | |
| 4,115,842 | | |
| 920,873 | |
| Agroz Ventures Sdn. Bhd. (i) |
|
| — | | |
| 274,733 | | |
| 61,468 | |
| |
|
| | | |
| | | |
| | |
| Purchase of IT software from |
|
| | | |
| | | |
| | |
| Braiven Co., Ltd. (vi) |
|
| 1,423,354 | | |
| 6,341,924 | | |
| 1,418,934 | |
| |
|
| | | |
| | | |
| | |
| Expenses paid by the Group on behalf of |
|
| | | |
| | | |
| | |
| Agroz Vertical Farms Sdn. Bhd. (v) |
|
| 1,571,296 | | |
| 818,196 | | |
| 183,062 | |
| Agroz Ventures Sdn. Bhd. (i) |
|
| 19,000 | | |
| 751,695 | | |
| 168,183 | |
| |
|
| | | |
| | | |
| | |
| Loan from |
|
| | | |
| | | |
| | |
| HWG Cash (vii) |
|
| 1,363,000 | | |
| — | | |
| — | |
| |
|
| | | |
| | | |
| | |
| Interest on a loan from |
|
| | | |
| | | |
| | |
| HWG Cash (vii) |
|
| 17,081 | | |
| 27,260 | | |
| 6,099 | |
| |
|
| | | |
| | | |
| | |
| Expenses paid on behalf of the Group by |
|
| | | |
| | | |
| | |
| Gerard Lim (iii) |
|
| 350,927 | | |
| 240 | | |
| 54 | |
| Khoo Kwai Fun (iv) |
|
| 110,289 | | |
| 120,637 | | |
| 26,991 | |
| HWG Cash (vii) |
|
| 1,178,275 | | |
| — | | |
| — | |
| |
|
| | | |
| | | |
| | |
| Payments to |
|
| | | |
| | | |
| | |
| EPetani Sdn. Bhd. (ii) |
|
| 70,302 | | |
| — | | |
| — | |
| Gerard Lim (iii) |
|
| 339,333 | | |
| 53,280 | | |
| 11,921 | |
| Khoo Kwai Fun (iv) |
|
| 257,749 | | |
| 105,028 | | |
| 23,499 | |
| Ahoku Ventures Sdn. Bhd. (ix) |
|
| 350,000 | | |
| — | | |
| — | |
| Au Say Kiat (x) |
|
| 137,912 | | |
| — | | |
| — | |
| Braiven Co., Ltd. (vi) |
|
| 684,684 | | |
| 7,040,368 | | |
| 1,575,203 | |
| Agroz Vertical Farms Sdn. Bhd. (v) |
|
| — | | |
| 1,510,233 | | |
| 337,898 | |
| HWG Cash (vii) |
|
| — | | |
| 70,925 | | |
| 15,869 | |
| |
|
| | | |
| | | |
| | |
| Payments from |
|
| | | |
| | | |
| | |
| Agroz Ventures Sdn. Bhd. (i) |
|
| — | | |
| 3,021,580 | | |
| 676,044 | |
| ISA Wellness Marketing (viii) |
|
| — | | |
| 551,350 | | |
| 123,358 | |
| Agroz Vertical Farms Sdn. Bhd. (v) |
|
| — | | |
| 1,300,568 | | |
| 290,987 | |
Notes:
| (i) | During the years ended December 31, 2023 and 2024, Agroz Group
paid expenses on behalf of Agroz Ventures Sdn. Bhd. amounted to MYR 19,000 and MYR 751,695 (USD 168,183) respectively. During
the year ended December 31, 2024, Agroz Group also purchased fresh produce from Agroz Ventures Sdn. Bhd. amounted to MYR 274,733 (USD
61,468). Agroz Group sold its farm solutions to Agroz Ventures Sdn. Bhd. amounted to MYR 4,000,000 during the year ended December 31,
2023 and received payments amounted to MYR 3,021,580 (USD 676,044) during the year ended December 31, 2024. |
| (ii) | Agroz Group purchased fresh produce from EPetani Sdn. Bhd. amounting
to MYR 48,581 during the year ended December 31, 2023 respectively. The Group made payments to EPetani Sdn. Bhd.
amounted to MYR 70,302 during the year ended December 31, 2023. Also, Agroz Group sold fresh vegetables to EPetani Sdn. Bhd amounted to MYR 1,145,443 during the year ended December 31, 2023 respectively. In January 2024, Mr. Gerard Lim disposed
shares in EPetani Sdn. Bhd. and EPetani Sdn. Bhd. no longer a related party to the Group. During the year ended December 31, 2024, Agroz
Group sold fresh vegetables to EPetani Sdn. Bhd amounted to MYR 7,968,903 (USD 1,782,952) and received payments amounted to MYR 4,531,555
(USD 1,013,884). |
| (iii) | During the years ended December 31, 2023 and 2024, certain operating
expenses of Agroz Group amounted to MYR 350,927 and MYR 240 (USD 54) respectively was paid by Mr. Gerard Lim. Agroz Group
has repaid MYR 339,333 and MYR 53,280 (USD 11,921) to Mr. Gerard Lim during the years ended December 31, 2023 and 2024
respectively. |
| (iv) | Khoo Kwai Fun paid on behalf of Agroz Group on certain expenses amounted
to MYR 110,289 and MYR 120,637 (USD 26,991) during the years ended December 31, 2023 and 2024 respectively. Agroz Group has repaid MYR 257,749
and MYR 105,028 (USD 23,499) to Khoo Kwai Fun during the years ended December 31, 2023 and 2024 respectively. |
| (v) | During the years ended December 31, 2023 and 2024, Agroz Group purchased fresh produce from Agroz Vertical Farms Sdn. Bhd. amounted to MYR 886,100 and MYR 4,115,842 (USD 920,873) respectively. Also, Agroz Group paid expenses on behalf of Agroz Vertical Farms Sdn. Bhd. amounted to MYR 1,571,296 and MYR 818,196 (USD 183,062) during the year ended December 31, 2023 and 2024. During the year ended December 31, 2024, Agroz Group sold its farm solutions to Agroz Vertical Farms Sdn. Bhd. amounted to MYR 1,400,174 (USD 313,273) and received payments amounted to MYR 1,300,568 (USD 290,987) during the year ended December 31, 2024. Agroz Group repaid MYR 1,510,233 (USD 337,898) during the year ended December 31, 2024. |
| (vi) | Agroz Group purchased IT software from Braiven Co., Ltd. amounted to MYR 1,423,354 and paid MYR 684,684 during the year ended December 31, 2023. During the year ended December 31, 2024, Agroz Group endured the investment in IT software from Braiven Co., Ltd. amounted to MYR 6,341,924 (USD 1,418,934) and paid MYR 7,040,368 (USD 1,575,203). | | | | | (vii) | As of December 31, 2023, amount owing to HWG Cash consists of interest-bearing
borrowing amounted to MYR 1,363,000 and related interest payable MYR 17,081 (note 21), and cash advances to the Group amounted to MYR
1,178,275. During the year ended December 31, 2024, Agroz Group incurred additional interest amounted to MYR 27,260 (USD 6,099) (note
21) and repaid MYR 70,925 (USD 15,869) to HWG Cash. |
| (viii) | During the years ended December 31, 2023 and 2024, Agroz Group
sold fresh produce to ISA Wellness Marketing amounted to MYR 327,776 and MYR 32,841 (USD 7,348) respectively. Agroz Group
received payments amounted to MYR 551,350 (USD 123,358) during the year ended December 31, 2024. | | | | | (ix) | The Group paid consultancy fees to Ahoku Ventures Sdn. Bhd. amounted to MYR 350,000 as this entity advises for design of CEA vertical farms during the year ended December 31, 2023. | | | | | (x) | The Group had paid a commission to Au Say Kiat for introducing new investors during the year ended December 31, 2023, amounted to MYR 137,912. | (c) Balances with related parties
| | |
As of
December 31,
2023 | | |
As of
December 31,
2024 | |
| | |
MYR | | |
MYR | | |
USD | |
| Included in trade receivables from related parties, net | |
| | | |
| | | |
| | |
| Agroz Ventures Sdn. Bhd. | |
| 3,980,000 | | |
| 588,000 | | |
| 131,559 | |
| EPetani Sdn. Bhd. | |
| 1,475,736 | | |
| — | | |
| — | |
| Isa Wellness Marketing | |
| 548,594 | | |
| 32,513 | | |
| 7,275 | |
| Agroz Vertical Farm Sdn. Bhd. | |
| — | | |
| 99,500 | | |
| 22,262 | |
| Total trade receivables from related parties, net | |
| 6,004,330 | | |
| 720,013 | | |
| 161,096 | |
| | |
| | | |
| | | |
| | |
| Included in amounts due from related parties | |
| | | |
| | | |
| | |
| Agroz Asia Sdn. Bhd. | |
| 1,000 | | |
| — | | |
| — | |
| Agroz Ventures Sdn. Bhd. | |
| 21,580 | | |
| 751,695 | | |
| 168,183 | |
| Agroz Vertical Farm Sdn. Bhd. | |
| 685,196 | | |
| — | | |
| — | |
| Isa Farm Sdn. Bhd. | |
| 3,300 | | |
| — | | |
| — | |
| Total amounts due from related parties | |
| 711,076 | | |
| 751,695 | | |
| 168,183 | |
| Included in prepayments to a related party | |
| | | |
| | | |
| | |
| Braiven Co., Ltd. | |
| 1,423,354 | | |
| 5,517,306 | | |
| 1,234,435 | |
| | |
| | | |
| | | |
| | |
| Included in amounts due to related parties | |
| | | |
| | | |
| | |
| HWG Cash | |
| | | |
| | | |
| | |
| - Non-current | |
| 1,363,000 | | |
| — | | |
| — | |
| - Current | |
| 1,195,356 | | |
| 2,514,691 | | |
| 562,634 | |
| Gerard Lim | |
| 86,731 | | |
| 33,691 | | |
| 7,539 | |
| Braiven Co., Ltd. | |
| 738,670 | | |
| 40,226 | | |
| 9,000 | |
| Khoo Kwai Fun | |
| 20,289 | | |
| 35,898 | | |
| 8,032 | |
| Agroz Ventures Sdn. Bhd. | |
| — | | |
| 274,733 | | |
| 61,468 | |
| Agroz Vertical Farm Sdn. Bhd. | |
| — | | |
| 1,102,611 | | |
| 246,697 | |
| Total amounts due to related parties | |
| 3,404,046 | | |
| 4,001,850 | | |
| 895,370 | |
|