8I Holdings Limited
Annual Report FY2018
For personal use only About 8I Holdings
8I Holdings Limited (“the Group” or “8IH”) is an Australia-listed
investment holding company engaged in the businesses of
financial education, public and private market investments,
and financial technology.
licensed
fund management business
The Group is the leading financial education provider in
Singapore and Malaysia through 8VIC Global Pte Limited
(“8VIC”), with offices in Singapore, Malaysia, Thailand,
Taiwan and Australia, supporting a community of value-
investors from 24 cities globally. Through Hidden Champions
Capital Management Pte Ltd (“HCCM”), the Group operates
a
in Singapore,
investing in public listed equities in the Asia-Pacific through a
focused strategy of investing in low-profile underappreciated
Asian Hidden Champions to achieve long-term investment
returns. The Group also invests in private businesses with
hidden value and good operational track records. As a
strategic investor, the goal is to value-add and create
synergy amongst 8IH’s business ecosystem. 8Bit Global Pte
Ltd (“8Bit”), a joint-venture between the Group and 8VIC,
provides smart screening and proprietary investing analysis
tools and passive investment products to enable the man-
on-the-street investors to manage investment risk better and
make smarter investing decisions.
Copyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only 3
Our Mission
We Empower People to Create
Sustainable Wealth
Annual Report FY2018For personal use only Our Core Values
The Core Values that Defines Us.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Contents
01
Group Overview
04
Governance
8I Ecosystem
02
Remuneration Report
02
Strategic Overview
Chairman’s Message
Board of Directors
Key Management
03
Operations Overview
Financial and Operations Review
Financial Highlights
Business Segment Highlights
Corporate Highlights
Corporate Structure
Corporate Information
04
09
11
14
17
19
31
33
34
Directors’ Statement
05
Financial
Independent Auditor’s Report
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Statement of Financial Position -
Company
Consolidated Statement of Changes
in Equity
Consolidated Statement of Cash
Flows
Notes to the Financial Statements
Additional Information
36
39
42
49
50
51
52
54
57
123
Annual Report FY2018For personal use only 1
01
Group Overview
8I Ecosystem
02
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only 8I Ecosystem
Group Overview
2
Financial Technology
WealthPark
- Smart AI Investing Tool
- Wealth Management Platform
Financial Education
Value Investing BootcampTM
Options Mastery ProgramTM
REITs ProgramTM
Value Investing SummitTM
InvestopiaTM
Inner-CircleTM
ReWealthTM
Unearthing CompoundersTM
Waving the Red FlagTM
觉悟智慧
全息智慧
融道智慧
Financial Asset
Management
Hidden Champions Fund
Velocity Property Group
Digimatic Group
CT Hardware
8 MAD Group
8IH China
At 8I, we continue to strengthen our business ecosystem to create a single platform to
share value investing knowledge and to empower our growing community to make smart
investment decisions by applying the principles of value investing.
Annual Report FY2018For personal use only 3
02
Strategic Overview
Chairman’s Message
Board of Directors
Key Management
04
09
11
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Chairman’s Message
“ It is not the critic who counts; not the
man who points out how the strong man
stumbles, or where the doer of deeds
could have done them better. The credit
belongs to the man who is actually in
the arena, whose face is marred by
dust and sweat and blood; who strives
valiantly; who errs, who comes short
again and again, because there is no
effort without error and shortcoming;
but who does actually strive to do the
deeds; who knows great enthusiasms, the
great devotions; who spends himself in a
worthy cause; who at the best knows in
the end the triumph of high achievement,
and who at the worst, if he fails, at least
fails while daring greatly, so that his
place shall never be with those cold and
timid souls who neither know victory nor
defeat”
- Man in the Arena, Theodore Roosevelt (1910).
Strategic Overview
4
Dear Valued Partners,
After co-founding and building 8I for the past ten years, we
reported our first loss for the financial year ended 31 March
2018. This was not our intention to mark such a major
milestone in this unpleasant manner.
It is, however, our intention to disrupt and refine our business
model in order to become sustainable and allow us to scale
robustly forward into the next decade. This is especially critical
when the world is moving rapidly towards globalisation and
digitalisation with data analytics, artificial intelligence (“AI”)
and machine learning.
A trend that is happening in the USA for the last five years
pertaining to our industry is that more funds are flowing
out from the traditional active fund management into
passive fund management using factor-based Exchange
Traded Funds (“ETFs”) such as those offered by VanGuard
and the emergence of smart robo-advisory technological
platforms (Betterment and WealthFront). We will see this
trend happening in Asia soon as the processing power of
the computing chip continues to accelerate with decreasing
production cost. This will enable the machines to get smarter
as time goes by at an amazing speed and equipped with the
ability to crunch trillions of data points.
Personally, I would want my invested company’s management
to be proactive and paranoid to such structural changes that
will erode any past competitive advantages, leading to old
existing business models becoming irrelevant.
8IH is in the midst of a deep transformation as stated in my
last FY2017 Chairman’s letter and there is no turning back.
This is what my team and I are determined to do.
Let me touch on three main points:
1. Despite the absence of the one-off gain of S$10.4 million
from the disposal of a subsidiary in FY2017 by the
Private Market business unit, 8IH’s revenue from its core
operations grew from S$17.3 million to S$20.5 million in
FY2018. This was mainly contributed by our education
subsidiaries, which underwent a regional expansion in the
last 12 months, opening up new offices in Taiwan, Thailand
and Australia. As with any new overseas expansion, it
requires initial capex investments. When we first ventured
into Malaysia (Kuala Lumpur) in 2012, we had to provide
human and financial capital, as well as the IP know-how
for at least three years without knowing if we will succeed.
Now, the Malaysia market (Kuala Lumpur, Penang and
Johor) is one of our fastest growing markets with a strong
team leading the education operations there.
2. A major expansion and business model refinement
exercise underway accounts for the 37.7% increase in
Administrative Expenses. This was mainly due to hiring of
new talents, which led to a 46.3% increase in salaries paid,
and the leasing of new office spaces and special events
costs by 8VIC, 8IH China Pte Ltd (“8IH China”) and 8 MAD
Group Sdn Bhd (“8 MAD”) also account for the increase
in the Administrative Expenses. Having said that, we
are monitoring this cost closely and making appropriate
Annual Report FY2018For personal use only 5
Strategic Overview
Chairman’s Message
corrections without sacrificing the long-term objectives of
building a more resilient business with greater scalability
and higher recurring income.
Several shareholders have expressed deep concerns
regarding this matter and requested for more information
on our employment cost. Please see the breakdown below:
Employee Costs
Directors’
Remuneration
Investment
& Corporate
Office Unit
Education
Unit
Investee
Companies
Newly
Acquired
Subsidiaries
FY2018
S$’000
FY2017
S$’000
Difference
S$’000
Difference
%
667
740
(73)
-10
2,003
1,782
221
3,298
2,024
1,274
1,339
1,107
232
964
-
964
8,271
5,653
2,618
12
63
21
N.A
46
As shown above, the main contributors to the increase in
employee costs are the Education unit and newly acquired
subsidiaries, namely Digimatic Group Ltd (“DMC”) and its
subsidiaries. The increase in the Education unit’s employee
cost of 63% was mainly due to the increase in weighted
average headcount from 37 in FY2017 to 65 in FY2018.
This jump in headcount is the result of the merger of 8I
Education and Financial Joy Institution in FY2017 to form
8VIC Global Pte Ltd (“8VIC”), and the rapid growth in 8VIC’s
overseas establishments in Thailand, Taiwan and Australia.
Clive and I had initially taken a 15% pay reduction in
the second half of FY2018 and further increase the pay
reduction to 30% starting in FY2019. This also includes a
pay and bonus freeze for all 8IH corporate and investment
team members in FY2019 to be aligned with all our
shareholder interests. Please note that I am still staying in
a public housing flat in Singapore, happily eating in hawker
centres (I bump into some shareholders frequently at my
neighborhood market) and my children are attending a
mass market pre-school. In a nutshell, my values have not
changed since day one when I started 8I with Clive in 2008.
And if there are any key managers who are not aligned with
8IH values, they will either leave or we will invite them out
of the Group eventually.
3. We have slowed down our pace in the private market
right, it will create great value to our targeted market
and in return generate a steady recurring operational
cash-flow, and eventually be extremely valuable to the
8I ecosystem. We will have a full product demonstration
for phase 1 launch at the upcoming AGM.
B) Support our existing investee companies in strengthening
and growing their businesses. These include supporting
Hidden Champions Capital Management Pte Ltd
(“HCCM”) who manages Hidden Champions Fund
to raise AUM, supporting 8VIC’s global expansion,
providing consultancy and potential partnership
contacts to 8IH China, 8 MAD Group and CT Hardware
to strengthen and grow their businesses. Going forward,
we will be focusing on divesting non-core investments
and only acquire and partner with operating businesses
that can enhance the eco-system for our Financial
Education, Financial Asset Management and Financial
Technology.
C) Drill down to the core essence of 8IH; an asset-
light, knowledge-based organisation that invests in
Research & Development and constant innovation in
the areas of financial education, wealth creation and
wealth management platform rooted in Value Investing
principles with a strong 8IH culture. In other words,
this is 8IH’s moat – our intangible know-how. As a
manifestation of this, we use this core competency to:
i) Manage, invest and generate sustainable long-term
investment returns;
ii) Share more financial insights with our graduate
network;
iii) Create new financial and business training programs
for potential joint ventures and licensing opportunities;
iv) Support our private investees to improve their
business models or enhance their M&A activities with
greater synergy;
v) Embed AI technology in our investing and wealth
management app so more people around the world
can invest safely and manage their wealth easily; and
vi) Pioneer new intellectual proprietary features such
as “Integrity Score”, “Factor Based Index” and
advance stock screener as premium analysis tools in
WealthPark.
Next, I would like to address the concept of “Risk” as a
pragmatic entrepreneur and investor, especially in three
areas:
investment space over the last 18 months in order to:
1. New Business Venture Risk
A) Build up our own AI-based Financial Technology unit.
8Bit Global Pte Ltd (“8Bit”) is set to launch our first
Smart Investing App known as “WealthPark” soon.
The mission is to empower more lives to make better
and safer investment decisions based on our unique
proprietary formula in Value Investing. This platform will
be opened to the 8VIC’s network first before scaling it
to the public. I believe if we focus and build this idea
Some shareholders have voiced out their concerns about
whether we were taking too much risk in our new venture
into financial technology.
There is a stark difference between “Risk” and “Risky”.
Whether you should take a risk depends not just on the
probability that you are right but also on the consequences
if you are wrong.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
Chairman’s Message
To make reliable, good decisions, you must always weigh
how right you think you are against how sorry you will be if
your decision turn out to be a mistake.
In this case, we are building the financial technology platform
exclusively for our 8VIC’s graduates first, leveraging on the
robust infrastructure, growing quality database, strong brand
goodwill and the regional network effect before spending any
resources opening up to the public.
This approach also provides us valuable insights and data
points to study and fine-tune the features in the platform first,
creating a smarter and user-friendly investing tool before we
scale and serve our intended public market better.
If the new business venture fails, our losses will be limited to
the initial phase.
However, if we go straight to the public like most financial
technology firm, then it will be risky due to expensive
customer acquisition cost and a high capital burn rate.
2. Investing in Public Company Risk
I have shared with our former CIO on numerous occasions
that we should be careful in allocating more than 20% of our
portfolio into one single public company, especially for small
capitalisation businesses with limited liquidity for a simple
reason; Do you have the core operational capability to step
in and run the business if something turns out wrong in your
assessment? If the answer is an affirmative, then we should
load up as much as possible if the fundamentals are strong
with an attractive price to its valuation. If the answer is no
and you still do it, then, this is “Risky” in my humble opinion.
We must be mindful not to let personal ego and academic
intelligence override common business sense.
With that in mind, we have refined our risk management
policy and implemented the “multi-counseller” system to
ensure the fund does not carry out a “Risky” manoeuvre
by allocating a high proportion of our fund capacity into
businesses which we do not have the expertise to turn the
ship around in difficult times.
3. Debts and Key Man Risk
I always remember what Charlie Murger said when I attended
the Berkshire Hathaway AGM in 2009, “Tell me where I will
die, and I will never go there”.
In this case, many corporate graveyards are filled by victims
of over-leverage and high borrowings.
Recently, I saw good companies with decent management
being brought down to their knees seeking creditor protection
with massive debt and asset value write-down due to change
of business climate.
Any company with huge total debt to equity ratio will
experience greater difficulty and find it more challenging to
turn the ship around when the storm suddenly appears and
lasts longer than expected.
Thus, I am constantly aware that 8IH must operate more
sensibly and prudently in the area of financial discipline.
We have low leverage on our existing web of eco-system in
Strategic Overview
6
education, asset management and technology.
The next risk that we are really careful about is key man risk.
In the first six years of 8I’s operations, this was the greatest
risk in 8I – with the key men being Clive and myself.
This is because we trained, spoke and also held the
responsibility of investing the company’s cash flow.
In addition, a corporate episode happened in early 2013
which further deepened this concern.
Thus, from that moment onwards, we actively seek to
design and build a structure that relies on culture, team
work, processes and technology instead of key individual
superheroes.
We have done it for the education unit where our next
generation young leaders and trainers now take the stage
and currently we are implementing this system for the
investment unit.
Everything that we do today, we will always execute with
the next decade in mind, even though the actions may
not be apparent at present. Most people may not be able
to understand and appreciate what we do, just like how
we first started spreading the Value Investing knowledge
and movement during the depth of Great Financial Crisis
in 2008. It takes a lot of convictions and “craziness” to do
what we did. And today, the Group is leading in the Financial
Education space across South-East Asia region.
Just like what my young friend commented recently when
I asked him to get his friends to join us for our famous
5AM daily exercise, “My friends say we are the odd balls.
The crazy ones. Because most people will be sleeping at a
God-forbidden hour at 5AM, let alone exercising!” However,
today, the results in our physical and mental health show and
silence the critics of yesterday.
Lastly, I want to give thanks to all our past team members for
their valuable contributions and also learning experiences.
Most importantly, my deepest appreciation to the current team
members who believe firmly in our business transformation
and are working hard towards our vision; our board members,
shareholders, strategic partners, associates, friends, families
and loved ones who never waiver in their faith towards us
during the good and challenging times.
Like a Chinese saying; “You will only know the enduring
stamina of a horse when the journey is long and you will see
a person’s true character and his heart over a long period of
).
time” (
路遥知马力，日久见人心
Wishing you great health, loving relationships and abundance.
May your kindness to me and others always return to you
and your loved ones abundantly.
And take massive action towards your dreams. Never, ever
give up.
Annual Report FY2018For personal use only And here’s to the crazy ones
who believe in 8IH’s vision after
10 years and another decade to
come.
Ken Chee
Executive Chairman
Copyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only 8
Here’s to the crazy ones.
The misfits. The rebels. The troublemakers.
The round pegs in the square holes.
The ones who see things differently.
They’re not fond of rules.
And they have no respect for the
status quo.
You can quote them, disagree with them,
glorify or vilify them.
About the only thing you can’t do is
ignore them.
Because they change things.
They push the human race forward.
And while some may see them as the
crazy ones, we see genius.
Because the people who are crazy enough
to think they can change the world, are the
ones who do.
- Steve Jobs
Annual Report FY2018For personal use only 9
Strategic Overview
Board of Directors
Ken Chee
Chairman & Executive Director
Clive Tan
Executive Director
Ken Chee was appointed Chairman & Executive Director in
May 2014. He is a co-founder of the 8I Group and is based
in Singapore.
Ken graduated from the Singapore Polytechnic with a
Diploma in Banking and Financial Services, and the University
of Queensland with a Bachelor’s Degree in Business
Administration. He also attended Columbia Business School
in New York and graduated from its Executive Program in
Value Investing.
As an experienced marketing executive and entrepreneur,
Ken’s professional experiences include roles as a marketing
specialist at Quicken (Singapore) and Regional Business
Development Manager at Telekurs Financial. Within the
8I Group, Ken is one of the key executives involved in the
strategic development and partnerships for the Group.
Ken was awarded the Spirit of Enterprise, Honoree Award in
2005 by the President of Singapore for outstanding business
results. He is also a Young Presidents’ Organisation member
within the Singapore Chapter.
Clive Tan was appointed Executive Director in May 2014. He
is a co-founder of the 8I Group and is based in Singapore.
Clive graduated with an Honours Degree from the Nanyang
Technological University in Mechanical and Production
Engineering and attended University of Technology, Sydney
on an academic exchange program. He also holds a Post-
Graduate Diploma in Education from the National Institute of
Education.
Clive started his professional career as a secondary school
educator in Singapore. While teaching, the concept of value
investing caught his attention and triggered his interest in
investment. His entrepreneurial journey started when he and
his wife acquired a childcare centre.
Since inception of the 8I Group in 2008, Clive is responsible
for the strategic planning, development, corporate policies
and risk management of the businesses. He is also deeply
involved in the development of corporate policies and
management of the Group’s Human Capital. Clive also chairs
the board of Australian-listed Digimatic Group Limited.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Board of Directors
Strategic Overview
10
Charles Mac
Non-Executive Director
Chay Yiowmin
Non-Executive Director
Charles Mac was appointed Non-Executive Director in April
2016.
Chay Yiowmin was appointed Non-Executive Director in
September 2014.
Charles has more than 18 years of experience in the SAP
IT industry, dealing with multinational companies in the
Asia Pacific Region. He has held various leadership roles
for large, global multinational companies with extensive
experience across Asia Pacific in Team Management, Quality
Management, Audits, Business Development and Contract
Deliveries. He is an Australian citizen and holds a Bachelor
of Computing (Information System) from Monash University.
Charles currently serves on the Board of an Australian-listed
company, Ennox Group Limited as a Non-Executive Director.
Yiowmin heads BDO Singapore’s Corporate Finance since
2012, providing business advisory services in the areas of
mergers and acquisitions, corporate restructuring, financial
modelling, corporate and financial instruments valuation, and
financial and operational due diligence. Yiowmin has more
than 19 years of public accounting experience in Singapore
and the United Kingdom. Prior to joining BDO, Yiowmin has
worked with various large multinational accounting firms,
including PricewaterhouseCoopers, Deloitte and Moore
Stephens. He was admitted as a partner in 2010 in Moore
Stephens. Yiowmin is also the lead independent director and
chairman of the audit committee for UMS Holdings Limited
which is listed on the Singapore Exchange.
Yiowmin holds a Bachelor of Accountancy (Hons) and a Master
of Business from Nanyang Technological University (“NTU”),
and a Master of Business Administration from University of
Birmingham. Yiowmin is also a practicing member of the
ISCA, an Associate Chartered Accountant (“ACA”) of the
Institute of Chartered Accountants in England and Wales
(“ICAEW”), a Certified Finance and Treasury Professional
(“CFTP”) of the Finance and Treasury Association (“FTA”),
and a Chartered Valuer and Appraiser of IVAS.
Yiowmin is also an active Grassroots Leader, serving as
a treasurer with the Kebun Baru Citizens Consultative
Committee (“CCC”) and an auditor with the Thomson Hills
Neighbourhood Committee (“NC”). He is also a member of
the Kebun Baru and Thomson Inter-Racial and Religious
Confidence Circles (“IRCC”). Yiowmin was recently awarded
the Pingat Bakti Masyarakat (Public Service Medal) (“PBM”)
by the President of the Republic of Singapore on 9 August
2016.
Annual Report FY2018For personal use only 11
Strategic Overview
Key Management
Louis Chua
Chief Financial Officer; Chief Risk Officer; and Company
Secretary (Australia)
Low Ming Li
Head of Private Markets Investment
Louis Chua joined 8I Holdings in April 2015 as the Company’s
Chief Financial Officer.
Louis graduated from University of Queensland with a
Bachelor of Commerce (Finance). He is a Member of
the Institute of Singapore Chartered Accountants, The
Association of Chartered Certified Accountants, and Certified
Practising Accountant (CPA) Australia.
Louis is based in Singapore and has more than 16 years of
financial and commercial experience including infrastructure
development, treasury and controllership operations, group
restructuring and consolidation, tax planning and mergers
and acquisitions. Before he joined 8I Holdings, he had 9
years of experience within the offshore marine industry in
Farstad Shipping, with its holding company listed in the Oslo
Stock Exchange. He started his career in the Audit Division
with Arthur Andersen (later Ernst & Young).
Within the 8I Group, Louis is responsible for risk management,
corporate secretarial, controllership and treasury duties, as
well as economic strategy and forecasting for the Company.
Low Ming Li is the Head of Private Markets Investment at 8I
Holdings. She has been with the Company since September
2015 and is based in Singapore.
Ming Li graduated with a Bachelor in Accountancy and
minor in Banking and Finance (Second Class Upper) from
Nanyang Technological University. She was previously with
PricewaterhouseCoopers Singapore for over 13 years, where
she held the position of Associate Director (Assurance) and
was in charge of strategising and rolling out new business
development initiatives, coordinating audit assignments
as well as training & development. Her past clients include
Singapore Exchange Limited, the Government Investment
Corporation of Singapore and Singapore Press Holdings.
Within the Company, Ming Li is responsible for the successful
planning, execution, monitoring, control, and completion of
business and investment deals under the Private Markets
Investment segment.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Key Management
Strategic Overview
12
Bernard Siah
Chief Technology Officer
Sally Teo
Chief Branding Officer
Bernard graduated from National University of Singapore
with a Bachelor of Computing (Technology Focus). He has
more than 10 years of experience working as a technology
specialist.
He started out his career in a start-up and led the R&D
and product development team. During this period, he
gained invaluable experience in building the R&D team and
developing processes to deliver products in the intelligent
CCTV industry. Eventually, he grew with the company through
its IPO in SGX.
After his start-up experience, he joined a marine company
and continued to apply his vast experience in product
development to develop a world-class system which
provides advance vessel performance monitoring services.
The company was eventually acquired by a French company
from the growing LPG market.
Today he is leading the tech development at 8Bit Global Pte
Ltd (“8Bit”), leveraging on the digital economy for improved
positioning and competitive edge on the digital front.
Sally Teo is the Chief Branding Officer of 8I Holdings. She
has been with the Company since July 2016 and is based in
Singapore.
Sally graduated with a Bachelor of Commerce (Marketing)
from the University of New South Wales (Australia). Prior
to her appointment in the Company, she was the Senior
Manager for Marketing, Product and Channel Development
in Seraya Energy and had more than 17 years of marketing
experience across various industries. Her expertise included
global implementation of marketing campaigns, new product
launches, corporate development, business processes as
well as pioneering comprehensive solutions that resulted in
growth and corporate awards.
Within the 8I Group, Sally is responsible for the management
of the Company’s brands, as well as Investor Relations and
Corporate Communications.
Annual Report FY2018For personal use only 13
03
Operations Overview
Financial and Operations Review
Financial Highlights
Business Segment Highlights
Corporate Highlights
Corporate Structure
Corporate Information
14
17
19
31
33
34
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Financial and Operations Review
Overview
Our total revenue and other income from 1 April 2017 to
31 March 2018 (FY2018) is recorded at S$22.7 million and
our net loss after tax for the year stands at S$4.4 million.
This represents a decrease of 26.2% in total revenue and
other income (total revenue and other income was S$30.7
million for FY2017). Total comprehensive loss attributable to
owners of the company for FY2018 is S$16.4 million (total
comprehensive profit was S$8.6 million for FY2017)
The decline in revenue and the turn from profit to loss is
attributable to a strategic change and transition period when
we shifted the focus from private investments and placed
more strategic focus on our education and public investment
segments, in order to build a more sustainable and scalable
business model. For our private investments going forward,
we will acquire only businesses that have a strategic fit to our
ecosystem.
The main bulk of revenue decrease (comparing FY2018 to
FY2017) was due to the absence of a one-off gain on disposal
of a subsidiary in FY2017 and the absence of such financial
contribution from the disposal of a subsidiary in FY2018 in
the private markets segment. We also had an investment loss
for our public markets investment of S$0.5 million (FY2017:
S$3.0 million investment income). However, the underlying
core revenue from education business, supported by
program sales, has increased significantly by about 16.1%.
The increase in our administrative and other expenses is due
mainly to an expansion in our financial education segment,
which incurred higher manpower-related and marketing
expenses. Due to an aggressive push to several overseas
markets, we incurred higher expenses. Going forward, as we
have a better grasp of the market conditions in each targeted
country, the increase in expenses will be better managed.
With an overall view of our ecosystem, we are working
towards a better strategic fit for the entire group. To improve
our ecosystem, we are currently working on a joint venture
between 8VIC Global Pte Ltd and the Group, where we are
developing a technology platform for us to serve the needs
of our customer base better. This will serve to close the loop
in our ecosystem and allow us to serve our customers in the
most effective and efficient manner.
Business Segment Report
Education
8VIC Global Pte Ltd (a wholly-owned
subsidiary of Digimatic Group), together
with its subsidiaries, has increased
its revenue by 9.4% to S$11.7 million
(FY2017: S$10.7 million) in the financial
year reported.
Our segmental profit has dropped due to higher expenses
to S$0.3 million (FY2017: S$3.6 million), down 91.7%. This
decrease in profits is largely due to the aggressive expansion
of our education segment, where we expanded on our
Operations Overview
14
manpower and increased our marketing and advertising
efforts.
We have performed a share swap between 8VIC Global Pte
Ltd (8VIC) and Digimatic Group Ltd (DMC), after which and
with some additional share purchases, the Group effectively
now owns about 72% of DMC. A strategic review of DMC is
currently underway and we expect that there will be efforts
and actions to bring DMC forward to the next stage of
development.
With our overseas operations to propel our growth in a
strategic manner, our business should grow and expand in a
fast and sustainable manner. While it is never easy to expand
overseas, our team has the intelligence, the teamwork and
the grit to carry them out. On top of that, we are leveraging
on technology and its applications to ensure that we can
reach even more participants around the region and the
world. While we have big dreams and ambitions, we must
accept that the reality may not pan out exactly the way we
are working towards.
At the core, we are focused on adding value to all our
stakeholders, especially our customers. With this in mind
and in our hearts, I believe that DMC (with 8VIC) will grow
into a company that will grow sustainably.
For more information on our Education segment, do look
out for the announcements and latest financial and annual
reports under ASX:DMC.
Investment: Hidden Champions Fund
Our listed securities segment registered
segmental losses of S$1.3 million for
FY2018. The main reason is due to a
drop in two of our core holdings’ share
prices.
As previously shared, the time horizon for our investments in
the identified Hidden Champions is mid to long-term as we
had consciously invested during the early growth stages of
these companies. Internally, we have already put in place a
sound portfolio allocation strategy, which will allow us to grow
and yet be able to take care of the downside. We will also
move towards a concentrated portfolio approach with more
hidden champions so that the portfolio is more balanced
Annual Report FY2018For personal use only 15
Operations Overview
Financial and Operations Review
and diversified. It will take us some time (my personal target
is before the end of 2018) before the portfolio allocation
strategy is fully implemented due to certain constraints that
we face.
As mentioned previously, you should expect that the
contribution from the Investment segment to be lumpy in
nature. This year is one of those years where our returns
is negative and performance is sub-par. To rectify this and
reduce key man risk so often present in many boutique funds,
we will be taking a “multi-counsellor” approach towards the
managing of the portfolio so as to provide more autonomy
and ownership for our investment managers. While a
rigorous process executed by good talent will increase our
probability of choosing the right company stock and portfolio
allocation, the end result at every financial year can still vary
significantly due to the volatility of the capital markets and
the share prices of the vested companies. To do investment
well long term, it is never just a checklist or merely based
on an understanding of the companies. There are many
perspectives that one must take into consideration and the
challenge lies in predicting the companies that will do well
in the long run. Over the mid to long term, I would expect
that the odds are in our favour due to a sound investment
process, portfolio allocation and good talent. This segment
will fluctuate in terms of performance. However, the best
opportunities will typically present themselves in the most
uncertain times.
Going forward, together with our investment managers
in HCF Team, I will be taking over from Koon Boon for the
management of the HCF portfolio and the asset management
business.
Investment: Private Markets
The Private Markets Team registered a segmental loss after
tax of S$0.5 million, a reduction from the previous S$12.9
million. This was due to the absence of a one-off gain on
disposal of a subsidiary. The financial performance of 8IH
China Pte Ltd, 8MAD Group Sdn Bhd and CT Hardware Sdn
Bhd had started to show strength in their revenue growth.
Our current portfolio of investees:
8IH China
The new programmes (Fundamental Value Investing Program
, Intermediate Value Investing Program
, and Advanced Value Investing Program
《全息智
《觉悟智慧》
)
慧》
《融道智慧》
introduced by 8IH Rongdao in July 2017 are starting to gain
traction in China. We noticed that the sales are picking up
with momentum due to strong referrals from our Singapore,
Malaysia and China graduates. Our team in China has grown
in strength and is now focusing on improving the content in
the programmes and extending our reach into the different
cities in China. As of March 2018, 814 people in Shanghai,
Hebei, Shandong and Hubei have benefited from 8IH
Rongdao’s new programmes and we are welcoming more
onboard from Suzhou, Wuxi, Hubei and Hebei in FY2019.
8 MAD Group
8 MAD continued to grow with a high renewal rate for its
retainer accounts and integrated campaigns. Much of its
sales & revenue in FY2018 had been re-invested into the
company as the team moved into a new office, increased
its headcount and strengthened its Online to Offline (O2O)
activations and Experiential Marketing activations. The
company started a new division called LEAP Asia offering
dynamic sales activation services. LEAP Asia had already
secured and executed sales activation services for key
accounts like Johnson Suisse and Nanowhite Fresh Vlog Star
Search. A one-time capex was utilised in the procurement of
VR technology and assets for LEAP Asia TV where the team
rolled out a new service known as “Virtual Reality activations”.
CT Hardware
With the expansion of warehouse facility, CT Hardware
implemented central purchasing and central logistic systems
which helped improve the efficiency and productivity of the
operations. With the support of the new warehouse facility
and an online business unit, CTH launched a “CT Experience”
event at its warehouse. The company also organised more
roadshows and participated in exhibitions to increase sales
and brand awareness.
On a semi-annual basis via our investee roundtable, we share
our respective know-how that we have accumulated through
our own operations, research and through our interaction
with other investees and businesses. We also continue to
support by looking out for new strategic partners that can
add value to our investees.
We continue our hunt to acquire or collaborate with partners
that have a synergistic impact to our unique eco-system.
We believe this will bear fruit via our new initiative under 8Bit
Global.
Over and above what we have shared, the team plays a
unique role in assisting our CEO and Executive Director
with developing and executing various corporate strategic
initiatives. This role ties in closely with our work scope of
looking out for partners that will support to strengthen 8I’s
eco-system.
Financial Position
Despite our challenges, the group’s current financial position
remains fundamentally strong. As of 31 March 2018, the
Group’s total assets stand at S$68.4 million (FY2017: S$68.6
million). However, Net Assets has decreased from S$61.7
million (FY2017) to S$48.0 million (FY2018). This is mainly
due to a reduction in the prices of our financial assets. Most
of our assets are in cash and cash equivalents (FY2018:
S$23.3 million) and investment securities (FY2018: S$27.4
million), which will give us some buffer to ride through the
uncertain times ahead.
The Group’s cash flows from operating activities is in net
outflow position because cash flows derived from our
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Operations Overview
16
Financial and Operations Review
private market investment were classified under “cash from
investment” despite that it was one of our principal activities,
in accordance with Singapore Financial Reporting Standards
(FRS).
In Summary
It may take some time before our group turn around as we
work on the issues arising. A sound strategy and long-term
efforts are required to ensure that the group can grow and
reach towards her fullest potential. 8IH is our “child” and we
are doing what we believe is best for the long-term benefit of
the company. Like parents, we may make an unsupportive
decision from time to time but I believe that we will grow
8IH to becoming a company that you will be proud being a
shareholder of, long term.
Clive Tan
Executive Director
Annual Report FY2018For personal use only 17
Operations Overview
Financial Highlights
For the financial year ended
31 March 2018
01
Revenue & Other Income
04
Total Assets
S$22.7 million
S$30.7 million in FY2017
S$68.4 million
S$68.6 million in FY2017
05
Post Tax Net Tangible
Asset Per Share
A$0.118
As of 31 March 2018
02
Total Comprehensive
(Expense)/Income
(S$16.6 million)
S$8.9 million in FY2017
03
Net (Loss)/Profit for the
Financial Year
(S$4.4 million)
S$11.5 million in FY2017
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only 18
Business Segment
Highlights
Public Markets Investment
- Hidden Champions Capital Management
Private Markets Investment
- 8IH China
- 8 MAD Group
- CT Hardware
Financial Technology
- 8Bit Global
Financial Education
- 8VIC Global
Annual Report FY2018For personal use only 19
Group Overview
Public Markets
Investment
Hidden Champions Capital
Management
While going about our daily process of turning over rocks
to look for gems (as an analogy for our stock picking
process), we are constantly looking at ways to do so in a
more effcient and effective manner. In FY2018, while working
and interacting with our peers, we realised the importance
of reducing key man risk, a common phenomenon amongst
boutique funds such as ourselves, as well as the diversification
of investment portfolio to manage concentration risks. In
order to better manage our risks, we are currently piloting
a “multi-counsellor” approach towards the management of
our investment portfolio to provide autonomy and instil a
higher sense of ownership among our team of investment
managers, who are also at the same time looking at increasing
the diversification of Hidden Champions Fund’s portfolio to
mitigate the risks of our performance being too dependent
on just a few key positions.
into FY2019,
Going
the Hidden Champions Capital
Management team is looking to achieve higher scalability in
our fund capacity via a high-conviction investment strategy
and provide greater transparency to our investors. Our
strategy moving forward would be to look out for Hidden
Champions with a market value range of between US$100
million to US$5 billion and target to potentially double our
fund capacity in the next three to five years on an underlying
CAGR (Compounded Annual Growth Rate) profit growth
of between 15% to 25% and upward re-rating in valuation
multiples. Simultaneously, the fund would also aim to
hold positions between 5% to 20% stake in our positions,
consisting of around 10 to 25 identified Hidden Champions.
We hope to have your patience as the team work hard
towards these goals.
Clive Tan
Chief Executive Officer
Hidden Champions Capital Management Pte Ltd
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.KEEPING YOUR MONEY SAFE, ANDGROWING IT AT THE SAME TIME?If you had invested in ASSA ABLOY, the world’s largest lock manufacturer, in 1994, you would have gained 7,888%The Hidden Champions Fund aims to achieve long-term investment returns in listed equities in the Asia-Pacific markets through a focused strategy of investing in growing but underappreciated Asian Hidden Champions.Hidden Champions, taken from a concept coined by Professor Hermann Simon, are focused market leaders in sophisticated, hard-to-imitate niche products or services and valuable critical niches that may be “invisible” to the average consumer yet are indispensable in their daily lives. The intrinsic outperformance of Hidden Champions is often not linked to economic conditions, thus offering potential de-correlated returns. The fund does not employ leverage in its investment strategy.Hidden ChampionsAre All Around UsOur InvestmentProcess1Shortlisting Companies with Conservative Accounting Practices with Great Corporate Governance2Analysing the Business Models for Quality, Sustainability and Scalability3Selecting Entrepreneurs and Owner-Operators with Mission, Values and PassionFor More Informationwww.hiddenchampionsfund.comFor personal use only Group Overview
20
Annual Report FY2018KEEPING YOUR MONEY SAFE, ANDGROWING IT AT THE SAME TIME?If you had invested in ASSA ABLOY, the world’s largest lock manufacturer, in 1994, you would have gained 7,888%The Hidden Champions Fund aims to achieve long-term investment returns in listed equities in the Asia-Pacific markets through a focused strategy of investing in growing but underappreciated Asian Hidden Champions.Hidden Champions, taken from a concept coined by Professor Hermann Simon, are focused market leaders in sophisticated, hard-to-imitate niche products or services and valuable critical niches that may be “invisible” to the average consumer yet are indispensable in their daily lives. The intrinsic outperformance of Hidden Champions is often not linked to economic conditions, thus offering potential de-correlated returns. The fund does not employ leverage in its investment strategy.Hidden ChampionsAre All Around UsOur InvestmentProcess1Shortlisting Companies with Conservative Accounting Practices with Great Corporate Governance2Analysing the Business Models for Quality, Sustainability and Scalability3Selecting Entrepreneurs and Owner-Operators with Mission, Values and PassionFor More Informationwww.hiddenchampionsfund.comFor personal use only 21
Private Markets
Investment
8IH China
8 MAD Group
CT Hardware
The key focus of the Private Market Investment business
unit is to add value and expand 8IH’s ecosystem through
partnership and acquisition. Most importantly, the team plays
a unique role in assisting our CEO and Executive Director
with developing and executing various corporate strategic
initiatives. This role ties in closely with our work scope of
looking out for partners that will support to strengthen 8I
ecosystem.
The investees under the team’s portfolio are 8IH China Pte
Ltd, 8 MAD Group Sdn Bhd, CT Hardware Sdn Bhd and
Velocity Property Group. More commentary of the investees’
progress can be found in Clive’s message.
We continuously support our investees via a semi-annual
investee roundtable where we share knowledge that has
been accumulated through our operations, research and
interaction with other potential acquirees. Simultaneously,
we will continue to look out for new strategic partners who
can add value to our investees and monetise 8IH’s initial
investment when the right partner comes along.
Ken shared, via his Chairman message, about the refinement
of 8IH business model. I am excited and confident that
this will propel 8IH’s future into one that build long term
sustainability and long term value for our team members
and shareholders. Please be assured that we are always on
the pursuit to acquire or collaborate with partners who have
synergistic impact to the unique eco-system that we built
over the years.
Low Ming Li
Head of Private Markets Investment
8I Holdings Limited
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.Zhou GuiyinHonorary Advisor of 8IHChief Trainer in Shanghai RongdaoCulture Communication Co., Ltd.“The essence of value investing is to invest limited money, time, energy, and even one’s limited life in meaningful activities of valuable assets to create more values for oneself, the society, the nation, and humanity.”- Zhou Guiyin, Honorary Advisor of 8IH and the chief trainer in Shanghai Rongdao Culture Communication Co., Ltd. a subsidiary of 8IH ChinaAs a value investor of more than 20 years, Zhou Guiyin studies and advocates the concept of Value Investing. Integrating the wisdoms of Chinese history, Confucianism, Art of War, Legalism, Buddhism and Taoism and Value Investing philosophy, Zhou Guiyin created three programmes under 8I Rongdao Academy series where he simplified the concepts to empower participants to achieve sustainable wealth and happiness.价值投资精神8I Rong Dao is the first in China to IncorporateSinology & Value Investing!觉悟智慧Wisdom of Self-AwakeningFundamental ProgramInvesting is an important career and a life-time practice for everyone who wishes to obtain financial freedom in life.The important realisation is that one should not be a slave to wealth but instead seek to understand yourself, the different investing styles and the right investing method that suits you to achieve success.The Wisdom of Self-Awakening is a 3-day program that infuses the study of Chinese history, customs, and politics into investing. By the end of the three days, you will gain in-depth understanding on the concept of investing through Chinese religion and philosophy.全息智慧Wisdom of Multi-Dimensional AnalysisIntermediate ProgramMaster the essentials to investing by understanding how to value companies using sophisticated valuation methodologies to make wiser investment decisions.Wisdom of Multi-Dimensional Analysis is a 3-day program that imparts the knowledge of classic investment strategies, cash flow and business model analysis using real-life examples and case studies. By the end of the program, you will gain in-depth knowledge on how to filter out the noise in the market, screen out good companies, calculate the true value of a business and manage your investment portfolio.融道智慧Wisdom of Rong DaoAdvanced ProgramWisdom of Rong Dao is a 15 - 20 days program that cracks the codes towards achieving mastery in the areas of running a profitable business, investing, maintaining happy and harmonious relationships and living your purpose in life by combining the teachings of Sinology, Confucianism, Art of War, Legalism, Buddhism and Taoism in one program. The program consists of five modules, each module is conducted over three to four days. By the end of the program, you will gain the know-how to creating sustainable holistic wealth in all aspects of your life.For More Informationwww.8ichina.comFor personal use only 22
Annual Report FY2018Zhou GuiyinHonorary Advisor of 8IHChief Trainer in Shanghai RongdaoCulture Communication Co., Ltd.“The essence of value investing is to invest limited money, time, energy, and even one’s limited life in meaningful activities of valuable assets to create more values for oneself, the society, the nation, and humanity.”- Zhou Guiyin, Honorary Advisor of 8IH and the chief trainer in Shanghai Rongdao Culture Communication Co., Ltd. a subsidiary of 8IH ChinaAs a value investor of more than 20 years, Zhou Guiyin studies and advocates the concept of Value Investing. Integrating the wisdoms of Chinese history, Confucianism, Art of War, Legalism, Buddhism and Taoism and Value Investing philosophy, Zhou Guiyin created three programmes under 8I Rongdao Academy series where he simplified the concepts to empower participants to achieve sustainable wealth and happiness.价值投资精神8I Rong Dao is the first in China to IncorporateSinology & Value Investing!觉悟智慧Wisdom of Self-AwakeningFundamental ProgramInvesting is an important career and a life-time practice for everyone who wishes to obtain financial freedom in life.The important realisation is that one should not be a slave to wealth but instead seek to understand yourself, the different investing styles and the right investing method that suits you to achieve success.The Wisdom of Self-Awakening is a 3-day program that infuses the study of Chinese history, customs, and politics into investing. By the end of the three days, you will gain in-depth understanding on the concept of investing through Chinese religion and philosophy.全息智慧Wisdom of Multi-Dimensional AnalysisIntermediate ProgramMaster the essentials to investing by understanding how to value companies using sophisticated valuation methodologies to make wiser investment decisions.Wisdom of Multi-Dimensional Analysis is a 3-day program that imparts the knowledge of classic investment strategies, cash flow and business model analysis using real-life examples and case studies. By the end of the program, you will gain in-depth knowledge on how to filter out the noise in the market, screen out good companies, calculate the true value of a business and manage your investment portfolio.融道智慧Wisdom of Rong DaoAdvanced ProgramWisdom of Rong Dao is a 15 - 20 days program that cracks the codes towards achieving mastery in the areas of running a profitable business, investing, maintaining happy and harmonious relationships and living your purpose in life by combining the teachings of Sinology, Confucianism, Art of War, Legalism, Buddhism and Taoism in one program. The program consists of five modules, each module is conducted over three to four days. By the end of the program, you will gain the know-how to creating sustainable holistic wealth in all aspects of your life.For More Informationwww.8ichina.comFor personal use only 23
Operations Overview
8IH China
“The vision for 8IH China is to become the most respectable institution, spreading the wisdom of Chinese culture and
philosophies, infusing the application of Sinology into investing and life.”
China is a country with 5,000 years of cultural and
philosophical influence and rapid economic growth. In 2016,
8IH set up an office in Shanghai to spread value investing,
a philosophy that originated from USA with only 90 years of
history.
We underestimated China’s high-speed development
and its unique financial market environment. Even though
background research was conducted before we entered
China, the widespread perception of value investing is
seriously distorted in China. To make things worse, the
differences in language and culture posed a challenge for our
Singapore and Malaysia trainers.
Fortunately, Tian Dehua met Mr Zhou Gui Yin during a
conference and was deeply impressed by Mr Zhou’s
knowledge in the financial industry. We invited Mr Zhou to
join 8IH China in 2017.
Leveraging on Mr Zhou’s experience in the financial markets
as well as his profound knowledge of sinology, he developed
an improved range of programmes tailored to suit the needs
of China consumers. We are proud to say that 8IH China is
the first to incorporate the teaching of value investing and
sinology in China.
The responses for our new programmes were encouraging.
This prompted us to venture into other provinces in China.
In FY2018, besides Shanghai, 8IH China had expanded our
reach to Hubei Wuhan, Hebei Zhengding, and Shandong
Jinan. Every new location is based on an invitation by
our graduates who had benefited from our programmes
and requested that we conduct the programmes in their
hometowns.
In FY2019, 8IH China will continue to promote our
programmes into Zhejiang, Hubei and Hebei.
Although we may have found initial success with these
programmes, we remain cautious as we expand into other
provinces in this competitive market.
On behalf of the 8IH China team, We sincerely invite you to
China to attend our programmes offered by 8IH China. We
will personally share a series of programs that are carefully
research, design and integrate the spirit of Sinology and
value investing. It will surely benefit your life, relationship
with family and friends, investment and all aspects of your
business or professional career.
Tian Dehua & Juanna Chua
Directors
8IH China (Shanghai) Co. Ltd
For More Information
Visit www.8ichina.com or
scan the QR code
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only 8IH China
Operations Overview
24
Tian Dehua
Director and General Manager
8IH China (Shanghai) Co. Ltd
Juanna Chua
Executive Director
8IH China (Shanghai) Co. Ltd
As the General Manager & Director of 8IH China, Tian Dehua
is responsible for the management, promotion and operations
of the 8I Group in China.
Dehua graduated from Hubei University in 1997 with a Degree
in Accounting, majoring in Economics and completed an
Executive Program with China’s Tsinghua University.
Prior to joining 8I, Dehua was the Vice President of JHT
Investment Holdings Limited, and Vice Chairman of Beijing
JHT Investment Fund Management Co. Limited. He brings
with him, expertise in sales and marketing of large-scale
developments across China.
As the Executive Director of 8IH China, Juanna ensures that
the company’s strategic objectives and plans are being met.
She manages the company’s operations in China and
coordinates between the Singapore and China offices
– aligning vision, mission and culture as it expands in the
Chinese market.
A graduate with a Bachelor of Business Administration
(Honours) in Marketing from the University Tenaga Nasional.
Prior to joining 8I, Juanna spent nine years working in Shell
Malaysia Trading Sdn Bhd, as the distributor and central
store manager. She brings with her, strong human capital and
operations knowledge.
Annual Report FY2018For personal use only 25
As we continue hurtling towards a Trust Economy, 8MAD Group will focus on creating value through collaborative consumption
and helping our clients leverage on our ever-growing eco-system. We will also continue to build our verticals in market
intelligence and development of marketing talents as part of our efforts to help companies stay relevant in the fast-changing
marketing landscape.
Patrick Wee
Group CEO
8 MAD Group Sdn Bhd
8I Holdings LimitedFor personal use only 26
We are planning to expand the floor space in one of the existing store and potentially expand one new outlet, so that we can
expand our product range to our customers.
Seen Chia Toong
Managing Director
CT Hardware Sdn Bhd
Annual Report FY2018CT Hardware Sdn BhdA Malaysia-based business engaged in the wholesale and retail of power tools, construction equipment and machinery since 1977.CT Hardware currently operates 5 retail stores with a service center as well as online stores at various channels in Malaysia and is an authorized dealer of major brands like Bosch, Grundfos, Karcher, Graco and many more.Retail BusinessE-CommerceCorporate SolutionsAfter-Sales SupportFor More Informationwww.cthardware.comFor personal use only 27
Financial
Technology
8Bit Global
As a Technology Evangelist, my life mission is to build
innovations that will live beyond their creators.
As such, I am truly excited about the development of an
intelligent investment platform that 8Bit Global Pte Ltd is
building.
WealthPark, as we call it, is a smart integration of information,
analysis tools and social learning. The focused areas stem
from the struggles plaguing the present day investor, which
led to WealthPark’s vision of making investing easy, like a
walk in the park.
The initial idea was to build an app to support the learning
of our 8VIC’s community. But as we start collaborating with
8VIC trainers and HCF investment managers during the
app development, we realised that together, we have the
potential to create something bigger that enables our users
to better manage investment risk and make smarter investing
decisions.
These are only made possible with years of combined
investing experiences, 8I’s tested and proven proprietary
investment methodologies, and collaboration with our
valuable partners.
The beta version, loaded with premium features like the
Intrinsic Value Line, Star Chart and Integrity Score, will be
ready in September 2018 for our 8VIC’s community to enjoy
early access. This group of users play a crucial role in helping
us form the initial critical mass, following which the network
effects of our strong community will enable us to grow our
user-base rapidly. As WealthPark receives the continuous
feedback and support from its users and our business
partners, we will be able to drive more value and bring value
investing to an entirely new level.
Bernard Siah
Chief Technology Officer
8Bit Global Pte Ltd
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only 28
Annual Report FY2018Intelligence at your FingertipsInvesting Just Got EasyInvestment DecisionsJust Got Easy.The vision of WealthPark is to be a smart AI investing tool and wealth management platform that will incorporate 8I’s proprietary stock analysis methodologies and 8VIC”s learning materials to make lifetime learning and stock analysis easier for 8VIC’s community.Download and explore our basic version with features like retirement calculator, investor profiling analysis, VIC resources, market news subscription and watchlist with PIECE Risk and BSC calculators. For More Informationwealthpark.ioAvailable OnApp StoreAvailable OnGoogle PlayFor personal use only 29
Financial
Education
8VIC Global
The mission of 8VIC Global Pte Ltd is to bring Value Investing
to the World.
We plan to do that through a BOOM approach.
Branding
The headquarter in Singapore will focus on creating more
content to build our brand’s authority as the leading financial
education provider in Value Investing.
Overseas Expansion
Being established in Singapore and Malaysia, our current
focus will be to increase the market shares in Taiwan,
Thailand, Australia and Hong Kong. We will also explore
demands for financial education in other countries through
our channel partners.
Online Courses
We are exploring to provide online courses to reach out to
more audiences beyond our physical offices’ geographically.
Media
We are also exploring using more media channels to brand
and to provide edutainment which was proven effective in
Malaysia. Through our partnership with Astro, we sponsored
and produced a financial education programme called
“Money Money Home” which was very well-received. Money
Money Home had received higher viewership ratings than
other programmes in the same timeslot.
In FY2019, 8VIC will continue to put in our hearts to bring
value investing to the world in a sustainable and meaningful
way.
Sean Seah
Chief Executive Officer
8VIC Global Pte Ltd
A Subsidiary of Digimatic Group Limited
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.Value Investing College is the leading financial education provider in Singapore and Malaysia.Our flagship courses, Value Investing Bootcamp and Options Mastery Programme educate the principles of value investing and provide time-tested strategies to help our graduates grow their wealth safely and consistently.Our graduates enjoy lifetime access to our robust network in VIC Community for continuous learning and investing ideas.Signature Programmes & EventValue Investing BootcampProvides You With A Systematic Formula To Grow Your Wealth & Income.Options Mastery ProgrammeHelps You To Generate Passive Income Consistently with Tested and Proven Options StrategiesValue Investing SummitAn annual conference where industry experts and international well-known value investors gather to share their investment strategies and investing ideas with VIC Community. The upcoming VIS will be held on 19 - 20 January 2019 in Kuala Lumpur, Malaysia.For More Informationwww.valueinvestingcollege.com orwww.facebook.com/valueinvestingcollegeFor personal use only 30
Annual Report FY2018Value Investing College is the leading financial education provider in Singapore and Malaysia.Our flagship courses, Value Investing Bootcamp and Options Mastery Programme educate the principles of value investing and provide time-tested strategies to help our graduates grow their wealth safely and consistently.Our graduates enjoy lifetime access to our robust network in VIC Community for continuous learning and investing ideas.Signature Programmes & EventValue Investing BootcampProvides You With A Systematic Formula To Grow Your Wealth & Income.Options Mastery ProgrammeHelps You To Generate Passive Income Consistently with Tested and Proven Options StrategiesValue Investing SummitAn annual conference where industry experts and international well-known value investors gather to share their investment strategies and investing ideas with VIC Community. The upcoming VIS will be held on 19 - 20 January 2019 in Kuala Lumpur, Malaysia.For More Informationwww.valueinvestingcollege.com orwww.facebook.com/valueinvestingcollegeFor personal use only 31
Operations Overview
Corporate Highlights
26
APR 17
30
JUN 17
Obtained approval from MAS to
operate as a Registered Fund
Management Company (“RFMC”)
8I Holdings Limited’s subsidiary, 8
Capital Pte Ltd now renamed as Hidden
Champions Capital Management Pte
Ltd (HCCM), obtained approval from
MAS to operate as a Registered Fund
Management Company (RFMC), With
the approval, it allows the Company to
commence its new asset management
business which horizontally integrates
value
and
investing ecosystem and also provide
an additional revenue stream for the
Company.
complements
8IH’s
Acquisition of 68% of Shanghai Rong
Dao Culture Communications Co.
Ltd
8I Holdings Limited completed the
acquisition of 68% of Shanghai Rong
Dao Culture Communication Co. Ltd [
(“Rong
its subsidiary, 8IH
上海融道文化传播有限公司
Dao”),
through
China (Shanghai) Co. Ltd [
]
信益安（上
] (“8IH Shanghai), for
海）实业有限公司
RMB588,704.
to
local
Rong Dao is a value investing promoter
and educator in China founded by Mr
Zhou Guiyin in 2016. The acquisition
of Rong Dao will provide the Company
with access
investment
communities and a customised range
of value investing programmes on offer.
Mr Zhou Guiyin will head 8IH Shanghai’s
programme development and value
investing training in China. With his
extensive knowledge and expertise
in value investing, Mr Zhou develops
a range of customised programmes
to suit China consumers’
tailored
needs.
01
JUL 17
28
JUL 17
Soft-launch of Hidden Champions
Fund (“HCF”)
With the approval of MAS for Hidden
Champions Management Pte Ltd
to operate as a Registered Fund
Management Company earlier in the
year, Hidden Champions Fund (“HCF”)
held a soft launch in July 2017 to
commemorate its commencement of
operations.
HCF’s investment process focusses
on its 3-step approach to investing in
Hidden Champions, business which
are successful yet low profile, have a
global or domestic market leadership
and have sophisticated, hard-to-imitate
and valuable niche.
Sale of Investment in Hemus Pacific
Private Limited
8I Holdings Limited announced that it
has completed the disposal of Hemus
Pacific Private Limited to Clear A27 Pte
Ltd for a consideration of 7,000,000
8IH shares
in the form of Chess
Depository Interests. As a result of
the transaction, 8IH realised a gain in
disposal of subsidiary of approximately
S$970,000, based on A$0.49 per share
as at 28th July 2017. The transaction
will provide 8IH shareholders with share
value accretion, and the Company
with treasury shares to seek other
investment opportunities.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Corporate Highlights
Operations Overview
32
28
NOV 17
Completion of Sale of 8VIC Global
Pte Limited and Acquisition of
Substantial
in Digimatic
Group Limited
Interest
8I Holdings Limited announced the
completion of sale of the Company’s
95% holdings
in 8VIC Global Pte
Limited (“8VIC”) to Digimatic Group
Limited (“DMC”) for a consideration of
1,448,955,200 pre-consolidated DMC
shares at a deemed issue price of
A$0.042 per share.
The sale was completed following:
* The transfer of 2,148,421 ordinary
shares in 8VIC Global from 8IH and
Glorymont Ltd (collectively known as
the “Vendors”) to DMC, and;
to
* The issuance of 1,525,216,000 pre-
consolidated DMC CHESS Depositary
Interests
the Vendors which
represents 70% of the enlarged share
capital of DMC post-issuance. The
details of the Consideration shares are
set out as below:
Vendor
Consideration
Shares
(Pre-consolidated)
Percentage of
Enlarge Share
Capital
8IH
1,448,955,200
Glorymont
76,260,800
Total
1,525,216,000
66.50%
3.50%
70.00%
As a result of the transaction, 8IH will
become the holding company of DMC.
29
JAN 18
Acquisition of additional 2% equity
interest in Digimatic Group Limited
8I Holdings Limited has acquired
875,000 shares in Digimatic Group
Limited off market from various DMC
shareholders via a licensed broker. The
DMC Shares represent a 2% equity
interest in DMC.
As consideration for the transaction,
8IH will transfer 7,000,000 ordinary
shares in 8IH to DMC from its treasury
stock in the form of CHESS Depository
Interests. The consideration represents
1.9% of the ordinary share capital of
8IH. As a result of the transaction,
the Company will increase its equity
interest in DMC from 69.7% to 71.7%.
27
MAR 18
Investor Presentation
8I Holdings Limited
released a
presentation for its investor to give an
update on FY2018 in review, Strategic
Review, Rework & Restructure and
8IH’s key focuses for FY2019.
In summary, 8IH will undertake a cost
management exercise which targets
to reduce corporate operating costs
by 30%. The activities will include
reducing professional fees, leasing out
the office space at level 4, reducing
the
Executive
Director and implementing pay freeze
and no bonuses for all corporate and
investment staffs.
remunerations
of
The focuses for FY2019 will be :
• To grow the AUM of Hidden
Champions Fund
• To grow the market shares in
overseas & increase the profit margin
for 8VIC Global
• To launch a personal wealth
management tool for the investor
community
Annual Report FY2018For personal use only 33
Operations Overview
Corporate Structure
8I Holdings Limited
8IH Global Limited
(100%)
Hidden Champions Fund
(100%)
Hidden Champions Capital
Management Pte Ltd (formerly
known as 8 Capital Pte Ltd)
(100%)
8IH China Pte Ltd
(65%)
As of 31 March 2018
8IH China (Shanghai) Co. Ltd
Shanghai Rong Dao Culture
Communication Co. Ltd
信益安（上海）实业有限公司
(100%)
上海融道文化传播有限公司
(68%)
8 MAD Group Sdn Bhd
(51%)
MAD Integrated Sdn Bhd
(100%)
8 Business Pte Ltd
(100%)
CT Hardware Sdn Bhd
(49.9%)
MAD Training Sdn Bhd
(100%)
8Bit Global Pte Ltd
(100%)
LEAP Asia Sdn Bhd
(56%)
8 Investment Pte Ltd
(100%)
Vue at Red Hill Pte Ltd
(100%)
Digimatic Group Ltd
(72%)
Digimatic Media Pte Ltd
(100%)
Digimatic Media Sdn Bhd
(100%)
Webbynomics Pte Ltd
(51%)
Keaworld Pte Ltd
(100%)
Wewe Media Group Pte Ltd
(100%)
Digimatic Creatives Pte Ltd
(51%)
Anonymous Production Sdn Bhd
(100%)
8VIC Global Pte Limited
(100%)
8VIC Singapore Pte Ltd (formerly
known as Financial Joy Institute
Pte Ltd)
(100%)
8VIC Malaysia Sdn Bhd
(100%)
8VIC JooY Media Sdn Bhd
(70%)
8VIC (Australia) Pty Ltd
(90%)
8VIC Taiwan Co., Ltd
(70%)
8VIC (Thailand) Company
Limited
(70%)
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Corporate Information
Operations Overview
34
As of 31 March 2018
Directors
Mr Chee Kuan Tat, Ken (Executive Chairman)
Mr Clive Tan Che Koon (Executive Director)
Mr Chay Yiowmin (Non-Executive Director)
Mr Charles Mac (Non-Executive Director)
Company Secretary (Singapore)
Mr Ang Teck Huat
Company Secretary (Australia)
Mr Louis Chua Chun Woei
Company Registration Number
201414213R
ARBN
601 582 129
Registered Office (Singapore)
Goldbell Towers, 47 Scotts Road, #03-03/04, Singapore 228233
Tel
Fax
: +65 6801 4500
: +65 6235 0332
Registered Office (Australia)
C/- SmallCap Corporate Pty Ltd, Suite 6, 295 Rokeby Road,
Subiaco WA, Australia, 6008
Tel
Fax
: +61 (8) 6555 2950
: +61 (8) 6166 0261
Principal Place of Business
Goldbell Towers, 47 Scotts Road, #03-03/04, Singapore 228233
Share Registrar
Boardroom Pty Limited
Level 7, 207 Kent Street, Sydney, NSW, Australia 2000
Tel
Fax
: +61 (2) 9290 9600
: +61 (2) 9279 0664
Auditors
PricewaterhouseCoopers LLP
Public Accountants and Chartered Accountants
7 Straits View, Marina One East Tower Level 12, Singapore 018936
Singapore Partner in charge: Rebekah Khan (since 2016)
Tel
Fax
: +65 6236 3388
: +65 6236 3715
Stock Exchange Listing
8I Holdings Limited shares are listed on the Australian Securities
Exchange (ASX code: 8IH)
Website
www.8iholdings.com
Annual Report FY2018For personal use only 35
04
Governance
Remuneration Report
Directors’ Statement
36
39
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Remuneration Report
Governance
36
This remuneration report set out information about the remuneration of 8I Holdings Limited’s key management personnel for
the financial year ended 31 March 2018. The term ‘key management personnel’ refer to those persons having authority and
responsibility for planning, directing, controlling the activities of the consolidated entity, directly or indirectly, including any
director (whether executive or otherwise) of the consolidated entity.
Remuneration Policy
The remuneration policy of 8I Holdings Limited has been designed to align director and executive objectives with shareholder
and business objectives. The board of the Company believes the remuneration policy to be appropriate and effective in its
ability to attract and retain the best executives and directors to run and manage the Company and Consolidated Group, as
well as create goal congruence between directors, executives and shareholders.
All remuneration paid to directors and executives is valued at the cost to the Consolidated Group and expensed.
The names and positions of key management personnel of the Company and of the Consolidated Entity who have held office
during the financial year are:
Chee Kuan Tat, Ken
Executive Chairman
Clive Tan Che Koon
Executive Director
Chay Yiowmin
Charles Mac
Low Ming Li
Non-Executive Director
Non-Executive Director
Head of Private Markets Investment Division
Bernard Siah Wee Boon
Chief Technology Officer
Louis Chua Chun Woei
Chief Financial Officer; Chief Risk Officer; and Company Secretary (Australia)
Sally Teo
Chief Branding Officer
Kee Koon Boon
Chief Investment Officer (resigned on 31 May 2018)
Service Agreements
Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel are
formalized in a service agreement. For Non-Executive Directors, these terms are set out in a Letter of Appointment. The major
provisions of the agreements relating to Directors’ remuneration as at date of this report are set out below.
Name
Base Salary(1)
Chee Kuan Tat, Ken
S$252,000 p.a.
Fees
S$ nil
Term of Agreement
Notice Period
No fixed term
Clive Tan Che Koon
S$175,000 p.a.
S$43,200 p.a.(2)
No fixed term
Chay Yiowmin
Charles Mac
S$ nil
S$ nil
S$42,000 p.a.(3)
No fixed term
S$42,000 p.a.(3)
No fixed term
(1) Excluding employer’s Central Provident Fund (CPF) contribution
(2) Non-executive director fee of a subsidiary
(3) Non-executive director fee of the Company
N/A
N/A
N/A
N/A
Annual Report FY2018For personal use only 37
Governance
Remuneration Report (continued)
Details of Remuneration
A breakdown showing the level and mix of each Director’s and Key Management Personnel’s remuneration for the financial
year ended 31 March 2018 is set out below:
Name of Directors
S$250,000 to below S$500,000
Chee Kuan Tat, Ken
Clive Tan Che Koon
Below S$100,000
Chay Yiowmin
Charles Mac
Salary*
%
Bonus/Profit-
sharing
%
Directors’ Fee
%
Total
%
100
94
-
-
-
-
-
-
-
6
100
100
100
100
100
100
Name of Key Management
Personnel
Designation
S$100,000 to below S$250,000
Low Ming Li
Head of Private Markets
Investment Division
Bernard Siah Wee Boon
Chief Technology Officer
Louis Chua Chun Woei
Sally Teo
Kee Koon Boon
Chief Financial Officer; Chief
Risk Officer; and Company
Secretary (Australia)
Chief Branding Officer
Chief Investment Officer
(resigned on 31 May 2018)
Salary*
%
Bonus/Profit-
sharing
%
Total
%
82
94
82
86
83
18
6
18
14
17
100
100
100
100
100
* Salary is inclusive of fixed allowance and CPF contribution.
The total remuneration of each Key Management Personnel has not been disclosed in dollar terms given the sensitivity of
remuneration matters and to maintain the confidentiality of the remuneration packages of these Key Management Personnel.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Remuneration Report (continued)
Governance
38
Details of Remuneration (continued)
The total remuneration of the top five key executives (who are not directors of the Company) is S$863,557 for the financial
year ended 31 March 2018 (2017: S$940,632).
There were no terminations, retirement or post-employment benefits granted to Directors and Key Management Personnel
other than the standard contractual notice period termination payment in lieu of service for the financial year ended 31 March
2018.
No employee whose remuneration exceeded S$50,000 during the financial year is an immediate family member of any of the
members of the Board. The Company did not provide any equity compensation to Directors or executives during the financial
year ended 31 March 2018.
The Company also reimburses validly incurred business expenses of Directors and Key Management Personnel.
Other Information
There were no loans made to any Key Management Personnel during the financial year or outstanding at financial year ended.
Apart from disclosed elsewhere in this report, there were no transactions with Key Management Personnel during the financial
year. During the financial year, the Remuneration Committee reviewed and approved the Company’s remuneration policy.
Directors Meetings
Since the beginning of the financial year, four meetings of directors were held. Attendances by each director during the period
were as follows:
Directors’ Meeting
Eligible to Attend Attended
4
4
4
4
4
4
4
4
Directors
Chee Kuan Tat, Ken
Clive Tan Che Koon
Chay Yiowmin
Charles Mac
Environmental Issues
The Company’s operations comply with all relevant environmental laws and regulations, and have not been subject to any
actions by environmental regulators.
Annual Report FY2018For personal use only 39
Governance
Directors’ Statement
For the financial year ended
31 March 2018
The directors present their statement to the members together with the audited financial statements of the Group for the
financial year ended 31 March 2018 and the statement of financial position of the Company as at 31 March 2018.
In the opinion of the directors,
(a) the statement of financial position of the Company and the consolidated financial statements of the Group as set out on
pages 49 to 122 are drawn up so as to give a true and fair view of the financial position of the Company and of the Group
as at 31 March 2018 and the financial performance, changes in equity and cash flows of the Group for the financial year
covered by the consolidated financial statements; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they fall due.
Directors
The directors of the Company in office at the date of this statement are as follows:
Mr Chee Kuan Tat, Ken
Mr Clive Tan Che Koon
Mr Charles Mac
Mr Chay Yiowmin
Arrangements to enable directors to acquire shares and debentures
Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object
was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of,
the Company or any other body corporate.
Directors’ interests in shares or debentures
According to the register of directors’ shareholdings, none of the directors holding office at the end of the financial year had
any interest in the shares or debentures of the Company or its related corporations, except as follows:
8I Holdings Limited
(No. of ordinary shares)
Mr Chee Kuan Tat, Ken
Mr Clive Tan Che Koon
Holdings registered in name
of director or nominee
Holdings in which director is
deemed to have an interest
At 31.3.2018
At 1.4.2017
At 31.3.2018
At 1.4.2017
86,458,500
86,358,500
65,140,000
65,091,500
-
-
21,991,741
21,991,741
There was no change in any of the above-mentioned interests in the Company between the end of the financial year and date
of this statement.
Except as disclosed in this statement, no director who held office at the end of the financial year had interests in shares,
shares options, warrants or debentures of the Company, or of related corporations, either at the beginning of the financial
year, or date of appointment if later, or during the financial year.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Directors’ Statement
Governance
40
For the financial year ended
31 March 2018
Audit Committee
The members of the Audit Committee at the end of the fi nancial year were as follows:
Mr Chay Yiowmin
Mr Clive Tan Che Koon
Mr Charles Mac
All members of the Audit Committee were non-executive directors,except for Mr Clive Tan Che Koon.
The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act. In
performing those functions, the Committee reviewed:
• the audit plan of the Company’s independent auditor and any recommendations on internal accounting controls
arisingfromthe statutory audit;
• the assistancegivenbythe Company’s management to the independent auditor;and
• the statement of financial position of the Company and the consolidated financial statements of the Group for the financial
year ended 31 March 2018 before their submission to the Board of Directors.
The Audit Committee has recommended to the Board that the independent auditor, PricewaterhouseCoopers LLP, be
nominated for re-appointment at the forthcoming Annual General Meeting of the Company.
Independent Auditor
The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.
On behalf of the directors
Chee Kuan Tat, Ken
Director
29 June 2018
Clive Tan Che Koon
Director
Annual Report FY2018For personal use only 41
Governance
05
Financial
Independent Auditor’s Report
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Statement of Financial Position -
Company
Consolidated Statement of Changes
in Equity
Consolidated Statement of Cash
Flows
Notes to the Financial Statements
Additional Information
42
49
50
51
52
54
57
123
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED
Report on the Audit of the Financial Statements
Our opinion
In our opinion, the accompanying consolidated financial statements of 8I Holdings Limited (the “Company”) and its
subsidiaries (the “Group”) and the statement of financial position of the Company are properly drawn up in accordance
with the provisions of the Companies Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”)
so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the
Company as at 31 March 2018 and of the consolidated financial performance, consolidated changes in equity and
consolidated cash flows of the Group for the financial year ended on that date.
What we have audited
The financial statements of the Company and the Group comprise:
the consolidated statement of comprehensive income of the Group for the year ended 31 March 2018;
the consolidated statement of financial position of the Group as at 31 March 2018;
the statement of financial position of the Company as at 31 March 2018;
the consolidated statement of changes in equity of the Group for the year then ended;
the consolidated statement of cash flows of the Group for the year then ended; and
the notes to the financial statements, including a summary of significant accounting po licies.
•
•
•
•
•
•
We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority Code of
Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical
requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ACRA Code.
Basis for Opinion
report.
Independence
Our Audit Approach
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
accompanying financial statements. In particular, we considered where management made subjective judg ements; for
example, in respect of signifi cant accounting estimates that involved making assumptions and considering future events
that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal control s,
including among other matters considera tion of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
PricewaterhouseCoopers LLP, 7 Straits View, Marina One East Tower Level 12, Singapore 018936
T: (65) 6236 3388, F: -, www.pwc.com/sg GST No.: M 90362196L Reg. No.: T09LL0001D
PricewaterhouseCoopers LLP (Registration No. T09LL0001D) is an accounting limited liability partnership registered in Singapore under the Limited Liabil ity
Partnership Act (Chapter 163A). PricewaterhouseCoopers LLP is part of the network of member f irms of PricewaterhouseCoopers Internat ional Limited, each of
which is a separate and independent legal entity .
3
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
Financial
42
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED
Report on the Audit of the Financial Statements
Our opinion
In our opinion, the accompanying consolidated financial statements of 8I Holdings Limited (the “Company”) and its
subsidiaries (the “Group”) and the statement of financial position of the Company are properly drawn up in accordance
with the provisions of the Companies Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”)
so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the
Company as at 31 March 2018 and of the consolidated financial performance, consolidated changes in equity and
consolidated cash flows of the Group for the financial year ended on that date.
What we have audited
The financial statements of the Company and the Group comprise:
•
•
•
•
•
•
the consolidated statement of comprehensive income of the Group for the year ended 31 March 2018;
the consolidated statement of financial position of the Group as at 31 March 2018;
the statement of financial position of the Company as at 31 March 2018;
the consolidated statement of changes in equity of the Group for the year then ended;
the consolidated statement of cash flows of the Group for the year then ended; and
the notes to the financial statements, including a summary of significant accounting po licies.
Basis for Opinion
We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority Code of
Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical
requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ACRA Code.
Our Audit Approach
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the
accompanying financial statements. In particular, we considered where management made subjective judg ements; for
example, in respect of signifi cant accounting estimates that involved making assumptions and considering future events
that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal control s,
including among other matters considera tion of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
PricewaterhouseCoopers LLP, 7 Straits View, Marina One East Tower Level 12, Singapore 018936
T: (65) 6236 3388, F: -, www.pwc.com/sg GST No.: M 90362196L Reg. No.: T09LL0001D
PricewaterhouseCoopers LLP (Registration No. T09LL0001D) is an accounting limited liability partnership registered in Singapore under the Limited Liabil ity
Partnership Act (Chapter 163A). PricewaterhouseCoopers LLP is part of the network of member f irms of PricewaterhouseCoopers Internat ional Limited, each of
which is a separate and independent legal entity .
3
Annual Report FY2018For personal use only
On 28 November 2017, Digimatic entered into a Share Purchase
Agreement where Digimatic issued 1,448,955,200 shares to 8IH.
The consideration was satisfied through the injection of 8VIC
Global Pte. Limited and its subsidiaries (“8VIC”) from 8IH to
Digimatic.
Arising from this transaction, 8IH’s direct interest was changed as
follows:
•
10.81% interest in Digimatic increased to approximately
69.7%.
As a result, the fair value through other
comprehensive income (“FVOCI”) equity investment was
reclassified to investment in a subsidiary.
95% interest in 8VIC decreased to approximately 69.7%
(increase of minority interest by 25.3%).
A gain on bargain purchase of S$425,042 was recognised
as a result of this transaction.
•
•
43
Financial
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
Key Audit Matters
Key Audit Matters (continued)
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements for the financial year ended 31 March 2018. 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.
Key Audit Matter
How our audit addressed the Key Audit Matter
Acquisition of Digimatic Group Limited (“Digimatic”)
Refer to Notes 3 (critical accounting estimates, assumptions and
judgements) and 30 (Business combinations) to the financial
statements.
Key Audit Matter
How our audit addressed the Key Audit Matter
Acquisition of Digimatic Group Limited (“Digimatic”) (continued)
We focused on the accounting for the acquisition as the
transaction is material and it required key areas of judgement
relating to:
•
Fair value of consideration and re-measurement of
investments at FVOCI
The Group applied significant judgement to determine
that the fair value consideration was assessed based on
the independent valuation of 8VIC’s capitalisation of
future maintainable earnings (“FME”) as the primary
methodology instead of the quoted price of new shares
issued by Digimatic to the Company (due to indicative of
few recent transactions and downwards trend).
Judgements, estimates and assumptions in determining
the fair value considerations include 8VI C’s growth rate
and its multiplier, adjusted by control premium/business
risks and management’s selection of mid-point between
possible high and
low scenarios. The share swap
representing the fair value consideration in 8VIC’s 25.3%
interest, was valued at S$5.9 million.
In addition, the previously held investment (FVOCI) was
re-measured at S$0.3 million based on the fair value per
share arising from the fair value consideration of
Digimatic’s acquisition. As a result, a loss arising from the
re-measurement of FVOCI was included in the other
comprehensive income.
•
Purchase price allocations
At the time the financial statements were authorised for
issue, the group had not yet completed the purchase
price allocations for the acquisition of Digimatic Group
Limited. The fair values of the assets and liabilities
amounting to S$9.9 million have only been determined
provisionally as the independent valuations have not
been finalised.
We have performed the following procedures:
• We discussed with senior management to
understand the commercial substance of the
transactions.
reviewed
sales and purchase
agreement to validate the key terms and
conditions of the transaction.
• We
the
• We involved our internal valuation specialist to
assess appropriateness valuation methodology
adopted by the valuer.
• We assessed key
valuation report.
inputs assumption in the
• We assessed the appropriateness of the
disclosures in the financial statements relating
to the acquisitions.
the
found
We
judgements, estimates and
(including
assumptions used by management
disclosure) is supportable and the acquisition were
appropriately accounted.
4
5
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
Key Audit Matter
How our audit addressed the Key Audit Matter
Key Audit Matters
these matters.
Acquisition of Digimatic Group Limited (“Digimatic”)
Refer to Notes 3 (critical accounting estimates, assumptions and
judgements) and 30 (Business combinations) to the financial
statements.
On 28 November 2017, Digimatic entered into a Share Purchase
Agreement where Digimatic issued 1,448,955,200 shares to 8IH.
The consideration was satisfied through the injection of 8VIC
Global Pte. Limited and its subsidiaries (“8VIC”) from 8IH to
Digimatic.
follows:
•
10.81% interest in Digimatic increased to approximately
69.7%.
As a result, the fair value through other
comprehensive income (“FVOCI”) equity investment was
reclassified to investment in a subsidiary.
•
•
95% interest in 8VIC decreased to approximately 69.7%
(increase of minority interest by 25.3%).
A gain on bargain purchase of S$425,042 was recognised
as a result of this transaction.
We have performed the following procedures:
• We discussed with senior management to
understand the commercial substance of the
transactions.
• We
reviewed
the
sales and purchase
agreement to validate the key terms and
• We involved our internal valuation specialist to
assess appropriateness valuation methodology
adopted by the valuer.
• We assessed key
inputs assumption in the
valuation report.
• We assessed the appropriateness of the
disclosures in the financial statements relating
to the acquisitions.
We
found
the
judgements, estimates and
assumptions used by management
(including
disclosure) is supportable and the acquisition were
appropriately accounted.
Arising from this transaction, 8IH’s direct interest was changed as
conditions of the transaction.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
Key Audit Matters (continued)
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements for the financial year ended 31 March 2018. 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
Key Audit Matter
Acquisition of Digimatic Group Limited (“Digimatic”) (continued)
How our audit addressed the Key Audit Matter
Financial
44
We focused on the accounting for the acquisition as the
transaction is material and it required key areas of judgement
relating to:
•
Fair value of consideration and re-measurement of
investments at FVOCI
The Group applied significant judgement to determine
that the fair value consideration was assessed based on
the independent valuation of 8VIC’s capitalisation of
future maintainable earnings (“FME”) as the primary
methodology instead of the quoted price of new shares
issued by Digimatic to the Company (due to indicative of
few recent transactions and downwards trend).
Judgements, estimates and assumptions in determining
the fair value considerations include 8VI C’s growth rate
and its multiplier, adjusted by control premium/business
risks and management’s selection of mid-point between
possible high and
low scenarios. The share swap
representing the fair value consideration in 8VIC’s 25.3%
interest, was valued at S$5.9 million.
In addition, the previously held investment (FVOCI) was
re-measured at S$0.3 million based on the fair value per
share arising from the fair value consideration of
Digimatic’s acquisition. As a result, a loss arising from the
re-measurement of FVOCI was included in the other
comprehensive income.
•
Purchase price allocations
At the time the financial statements were authorised for
issue, the group had not yet completed the purchase
price allocations for the acquisition of Digimatic Group
Limited. The fair values of the assets and liabilities
amounting to S$9.9 million have only been determined
provisionally as the independent valuations have not
been finalised.
4
5
Annual Report FY2018For personal use only
45
Financial
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
Key Audit Matters (continued)
Other Information
Key Audit Matter
How our audit addressed the Key Audit Matter
Impairment assessment on goodwill
Refer to Note 14 (Goodwill) to the financial statements.
Goodwill recognised separately as an intangible asset is tested for
impairment annually and whenever there is indication that the
goodwill may be impaired.
We focused on the goodwill impairment assessment performed
by management due to the s ignificant estimates by management
and the dependency on future market circumstances. Value in-
use calculations were performed by management to assess the
recoverable amount. The key assumptions relate to discount rates
and growth rates.
Based on the results of
impairment testing performed by
management, there was no impairment of goodwill. This
conclusion was based on the recoverable amounts, determined
based on value-in-use calculations, which exceeded the carrying
value of the cash generating unit (“CGU”), including goodwill as at
31 March 2018. The key assumptions and sensitivity analysis are
disclosed in Note 14 of the financial statements.
lead
that could
Our audit procedures included, among others,
verifying the mathematical accuracy of
the
calculations and the basis of the assumptions,
under which the discount rate was applied. The
examination of the assumptions with respect to the
expected growth rates were part of our audit
procedures. We tested the assumptions among
others by means of comparison with the historic
performance of the company and the growth
expectation. We also verified the completeness of
the disclosures of the assumptions and sensitivity
analysis in Note 14 of the financial statements for
to an
possible situations
impairment.
Management is responsible for the other information. The other information comprises information disclosed in Group
Overview, Strategic Overview, Operations Overview, Governance and Additional Information, which we obtained prior to
the date of this auditor’s report.
of assurance conclusion thereon.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form
In connection with our audit of the financial statements, our responsibility is to read the other information identified above
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 on the other information that we obtained prior to the date of this auditor’s
report, 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.
When we read the Other Sections, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take appropriate actions in accordance with SSAs.
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to
provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and
transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair
financial statements and to maintain accountability of assets.
In preparing the financial statements, management is responsible for assessing the Group’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
management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The directors’ responsibilities include overseeing the Group’s financial reporting process.
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 SSAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
We found the Group’s assumptions and disclosures
to be reasonable based on available evidence.
Responsibilities of Management and Directors for the Financial Statements
6
7
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
Financial
46
Key Audit Matters (continued)
Impairment assessment on goodwill
Key Audit Matter
How our audit addressed the Key Audit Matter
Refer to Note 14 (Goodwill) to the financial statements.
Our audit procedures included, among others,
verifying the mathematical accuracy of
the
Goodwill recognised separately as an intangible asset is tested for
calculations and the basis of the assumptions,
impairment annually and whenever there is indication that the
under which the discount rate was applied. The
goodwill may be impaired.
We focused on the goodwill impairment assessment performed
by management due to the s ignificant estimates by management
and the dependency on future market circumstances. Value in-
use calculations were performed by management to assess the
recoverable amount. The key assumptions relate to discount rates
and growth rates.
examination of the assumptions with respect to the
expected growth rates were part of our audit
procedures. We tested the assumptions among
others by means of comparison with the historic
performance of the company and the growth
expectation. We also verified the completeness of
the disclosures of the assumptions and sensitivity
analysis in Note 14 of the financial statements for
possible situations
that could
lead
to an
impairment.
Based on the results of
impairment testing performed by
management, there was no impairment of goodwill. This
We found the Group’s assumptions and disclosures
conclusion was based on the recoverable amounts, determined
to be reasonable based on available evidence.
based on value-in-use calculations, which exceeded the carrying
value of the cash generating unit (“CGU”), including goodwill as at
31 March 2018. The key assumptions and sensitivity analysis are
disclosed in Note 14 of the financial statements.
Other Information
Management is responsible for the other information. The other information comprises information disclosed in Group
Overview, Strategic Overview, Operations Overview, Governance and Additional Information, 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 and will not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above
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 on the other information that we obtained prior to the date of this auditor’s
report, 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.
When we read the Other Sections, if we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take appropriate actions in accordance with SSAs.
Responsibilities of Management and Directors for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to
provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and
transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair
financial statements and to maintain accountability of assets.
In preparing the financial statements, management is responsible for assessing the Group’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
management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The directors’ responsibilities include overseeing the Group’s financial reporting process.
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 SSAs
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
6
7
Annual Report FY2018For personal use only
47
Financial
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
Report on other Legal and Regulatory Requirements
As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit.
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary
corporations incorporated in Singapore, of which we are the auditors, have been properly kept in accordance with the
We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material mis statement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
provisions of the Act.
The engagement partner on the audit resulting in this independent auditor’s report is Rebekah Khan.
•
•
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s
internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves f air
presentation.
•
PricewaterhouseCoopers LLP
Public Accountants and Chartered Accountants
Singapore, 29 June 2018
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financi al statements of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
8
9
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
Report on other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary
corporations incorporated in Singapore, of which we are the auditors, have been properly kept in accordance with the
provisions of the Act.
The engagement partner on the audit resulting in this independent auditor’s report is Rebekah Khan.
Financial
48
PricewaterhouseCoopers LLP
Public Accountants and Chartered Accountants
Singapore, 29 June 2018
As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit.
We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material mis statement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
override of internal control.
internal control.
disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves f air
going concern.
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
•
•
•
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financi al statements of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
8
9
Annual Report FY2018For personal use only
49
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the financial year ended 31 March 2018
OCI
Revenue and investment income
Other gains
Other income
Expenses
- Cost of sales and services
- Administrative expenses
- Other operating expenses
- Finance costs
Note
2018
S$
2017
S$
4
5
5
6
6
6
21,506,451
425,042
739,023
28,906,069
1,255,447
553,162
(12,425,506)
(11,048,212)
(3,858,329)
(83,324)
(6,058,088)
(8,021,706)
(5,445,335)
(41,710)
- Share of loss attributable to the unit holders of redeemable
participating shares
21
395,985
-
Share of (loss)/profit of associated companies
(79,789)
566,675
(Loss)/Profit before income tax
Income tax expense
(Loss)/Profit for the year
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to profit or loss:
Financial assets through other comprehensive income
- Fair value losses at available for sale
Currency translation differences arising from consolidation
- (Losses)/gains
8
(4,428,659)
(9,929)
(4,438,588)
11,714,514
(221,157)
11,493,357
17
-
(2,719,704)
(1,010,448)
(1,010,448)
143,859
(2,575,845)
Items that will not be reclassified subsequently to profit or loss:
- Financial losses, at FVOCI
Other comprehensive expense, net of tax
17
(11,171,173)
(12,181,621)
-
(2,575,845)
Total comprehensive (expense)/income
(16,620,209)
8,917,512
(Loss)/Profit attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive (expense)/income attributable to:
Equity holders of the Company
Non-controlling interests
(4,249,612)
(188,976)
(4,438,588)
11,245,023
248,334
11,493,357
(16,447,952)
(172,257)
(16,620,209)
8,648,328
269,184
8,917,512
(Loss)/Earnings per share attributable to equity holders of the Company
(S$ cents per share)
Basic earnings per share
Diluted earnings per share
9
9
(1.19)
(1.19)
3.14
3.14
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Investment in an associated company
Financial assets, at FVOCI/ available-for-sale
Deferred income tax assets
As at 31 March 2018
SOFP-Group
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets, at FVPL
Inventories
Non-current assets
Other receivables
Plant and equipment
Goodwill
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Finance lease liabilities
Borrowings
Current income tax liabilities
Unearned revenue
Redeemable participating shares
Non-current liabilities
Finance lease liabilities
Deferred income tax liabilities
Unearned revenue
Total liabilities
NET ASSETS
EQUITY
Share capital
Other reserves
Retained profits
Non-controlling interests
Total equity
Capital and reserves attributable to equity holders of the Company
Note
31 March
2018
S$
2017
S$
10
11
12
11
13
14
16
17
22
18
19
10
8
20
21
19
22
20
23
24
15
23,328,043
11,874,662
25,696,375
454,723
61,353,803
733,603
1,356,466
1,688,861
1,263,908
1,751,877
217,905
7,012,620
68,366,423
3,693,680
33,578
4,209,809
235,094
4,938,840
7,035,922
12,562,376
10,681,560
26,356,434
49,600,370
148,667
910,601
3,459,119
1,425,911
13,025,188
18,969,486
68,569,856
2,782,540
50,180
248,980
3,157,151
-
-
-
-
20,146,923
6,238,851
57,692
93,591
69,523
220,806
92,040
5,344
538,295
635,679
20,367,729
47,998,694
6,874,530
61,695,326
34,422,910
(10,869,540)
21,073,166
44,626,536
3,372,158
34,422,910
(720,786)
26,227,725
59,929,849
1,765,477
47,998,694
61,695,326
The accompanying notes form an integral part of these financial statements.
The accompanying notes form an integral part of these financial statements.
10
11
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the financial year ended 31 March 2018
OCI
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2018
SOFP-Group
Financial
50
- Share of loss attributable to the unit holders of redeemable
21
395,985
-
Share of (loss)/profit of associated companies
(79,789)
566,675
Revenue and investment income
Other gains
Other income
Expenses
- Cost of sales and services
- Administrative expenses
- Other operating expenses
- Finance costs
participating shares
(Loss)/Profit before income tax
Income tax expense
(Loss)/Profit for the year
Other comprehensive (expense)/income:
Items that may be reclassified subsequently to profit or loss:
Financial assets through other comprehensive income
- Fair value losses at available for sale
Currency translation differences arising from consolidation
- (Losses)/gains
4
5
5
6
6
6
8
Note
2018
S$
2017
S$
21,506,451
425,042
739,023
28,906,069
1,255,447
553,162
(12,425,506)
(11,048,212)
(3,858,329)
(83,324)
(6,058,088)
(8,021,706)
(5,445,335)
(41,710)
(4,428,659)
11,714,514
(9,929)
(221,157)
(4,438,588)
11,493,357
17
-
(2,719,704)
(1,010,448)
(1,010,448)
143,859
(2,575,845)
Items that will not be reclassified subsequently to profit or loss:
- Financial losses, at FVOCI
Other comprehensive expense, net of tax
17
(11,171,173)
(12,181,621)
-
(2,575,845)
Total comprehensive (expense)/income
(16,620,209)
8,917,512
(Loss)/Profit attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive (expense)/income attributable to:
Equity holders of the Company
Non-controlling interests
(4,249,612)
(188,976)
(4,438,588)
11,245,023
248,334
11,493,357
(16,447,952)
(172,257)
(16,620,209)
8,648,328
269,184
8,917,512
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets, at FVPL
Inventories
Non-current assets
Other receivables
Plant and equipment
Goodwill
Investment in an associated company
Financial assets, at FVOCI/ available-for-sale
Deferred income tax assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Finance lease liabilities
Borrowings
Current income tax liabilities
Unearned revenue
Redeemable participating shares
Non-current liabilities
Finance lease liabilities
Deferred income tax liabilities
Unearned revenue
Total liabilities
NET ASSETS
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital
Other reserves
Retained profits
(Loss)/Earnings per share attributable to equity holders of the Company
(S$ cents per share)
Basic earnings per share
Diluted earnings per share
9
9
(1.19)
(1.19)
3.14
3.14
Non-controlling interests
Total equity
Note
31 March
2018
S$
2017
S$
10
11
12
11
13
14
16
17
22
18
19
10
8
20
21
19
22
20
23
24
15
23,328,043
11,874,662
25,696,375
454,723
61,353,803
733,603
1,356,466
1,688,861
1,263,908
1,751,877
217,905
7,012,620
68,366,423
3,693,680
33,578
4,209,809
235,094
4,938,840
7,035,922
20,146,923
57,692
93,591
69,523
220,806
12,562,376
10,681,560
26,356,434
-
49,600,370
148,667
910,601
3,459,119
1,425,911
13,025,188
-
18,969,486
68,569,856
2,782,540
50,180
-
248,980
3,157,151
-
6,238,851
92,040
5,344
538,295
635,679
20,367,729
47,998,694
6,874,530
61,695,326
34,422,910
(10,869,540)
21,073,166
44,626,536
3,372,158
34,422,910
(720,786)
26,227,725
59,929,849
1,765,477
47,998,694
61,695,326
The accompanying notes form an integral part of these financial statements.
The accompanying notes form an integral part of these financial statements.
10
11
Annual Report FY2018For personal use only
51
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION - COMPANY
As at 31 March 2018
SOFP-Co
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets, at FVPL
Current income tax asset
Non-current assets
Investments in subsidiaries
Financial assets, at FVOCI/ available-for-sale
Other receivables
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Unearned income
Total liabilities
NET ASSETS
EQUITY
Capital and reserves attributable to equity holders
of the Company
Share capital
Other reserves
Retained profits
Total equity
Note
31 March
2018
S$
2017
S$
10
11
12
8
15
17
11
18
10
20
23
24
5,369,817
17,227,838
37,000
3,959
22,638,614
28,288,147
733,603
29,021,750
51,660,364
2,809,430
27,839,749
-
30,650
30,679,829
13,984,921
428,267
-
14,413,188
45,093,017
4,494,147
4,209,809
274,704
8,978,660
8,978,660
4,126,264
-
-
4,126,264
4,126,264
42,681,704
40,966,753
34,422,910
(2,062,917)
10,321,711
42,681,704
34,422,910
76,042
6,467,801
40,966,753
The accompanying notes form an integral part of these financial statements.
12
I
8
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8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
STATEMENT OF FINANCIAL POSITION - COMPANY
Non-current assets
Investments in subsidiaries
Financial assets, at FVOCI/ available-for-sale
As at 31 March 2018
SOFP-Co
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets, at FVPL
Current income tax asset
Other receivables
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Unearned income
Total liabilities
NET ASSETS
EQUITY
of the Company
Share capital
Other reserves
Retained profits
Total equity
Capital and reserves attributable to equity holders
Note
31 March
2018
S$
2017
S$
10
11
12
8
15
17
11
18
10
20
23
24
5,369,817
17,227,838
37,000
3,959
2,809,430
27,839,749
-
30,650
22,638,614
30,679,829
28,288,147
13,984,921
733,603
29,021,750
51,660,364
428,267
-
14,413,188
45,093,017
4,494,147
4,209,809
274,704
8,978,660
8,978,660
4,126,264
-
-
4,126,264
4,126,264
42,681,704
40,966,753
34,422,910
(2,062,917)
10,321,711
42,681,704
34,422,910
76,042
6,467,801
40,966,753
The accompanying notes form an integral part of these financial statements.
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2018
SOCF
Cash flows from operating activities
(Loss)/profit for the year
Adjustments for:
- Income tax expense
- Gain on disposal of an associated company
- Gain on disposal of a subsidiary
- Gain on initial recognition at its fair value from former associated
- Net fair value loss/(gain) of investment securities held at fair value
company to AFS
through profit or loss
- Net gain on disposal of investment securities held at fair value through
- Share of loss/(profit) of associated companies
- Share of loss attributable to the unit holders of redeemable participating
profit or loss
- Gain from bargain purchase
- Interest income
- Dividend income
- Depreciation of plant and equipment
- Loss on disposal of plant and equipment
- Plant and equipment written off
- Bad debts written off
- Credit loss allowance
- Finance costs
shares
- Exchange differences
Change in working capital, net of effects from
acquisition and disposal of subsidiaries:
- Trade and other receivables
- Financial assets through profit or loss
- Inventories
- Trade and other payables
- Unearned revenue
Cash used in operations
Interest received
Dividend received
Finance costs paid
Income tax paid
Net cash used in operating activities
Note
2018
S$
2017
S$
(4,438,588)
11,493,357
9,929
4, 15(d)
(971,860)
221,157
(1,199,836)
(10,370,350)
(1,160,825)
1,353,244
(1,609,600)
5, 30
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(7,010,930)
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921,694
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(1,477,882)
(8,324,978)
(6,112,143)
(3,991,594)
(7,771,815)
(7,319,816)
The accompanying notes form an integral part of these financial statements.
15
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
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8
I
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
54
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2018
SOCF
Cash flows from operating activities
(Loss)/profit for the year
Adjustments for:
- Income tax expense
- Gain on disposal of an associated company
- Gain on disposal of a subsidiary
- Gain on initial recognition at its fair value from former associated
company to AFS
- Net fair value loss/(gain) of investment securities held at fair value
through profit or loss
- Net gain on disposal of investment securities held at fair value through
profit or loss
- Gain from bargain purchase
- Interest income
- Dividend income
- Depreciation of plant and equipment
- Loss on disposal of plant and equipment
- Plant and equipment written off
- Bad debts written off
- Credit loss allowance
- Finance costs
- Share of loss/(profit) of associated companies
- Share of loss attributable to the unit holders of redeemable participating
shares
- Exchange differences
Change in working capital, net of effects from
acquisition and disposal of subsidiaries:
- Trade and other receivables
- Financial assets through profit or loss
- Inventories
- Trade and other payables
- Unearned revenue
Cash used in operations
Interest received
Dividend received
Finance costs paid
Income tax paid
Net cash used in operating activities
Note
2018
S$
2017
S$
(4,438,588)
11,493,357
8
4
4, 15(d)
9,929
-
(971,860)
221,157
(1,199,836)
(10,370,350)
17
4
4
5, 30
5
4
6
6
6
21
8(b)
-
(1,160,825)
1,353,244
(1,609,600)
(120,925)
(425,042)
(467,146)
(684,461)
622,164
-
-
-
169,685
83,324
79,789
(907,788)
-
(260,892)
(481,121)
335,458
2,618
6,910
338,205
-
41,710
(566,675)
(395,985)
(926,271)
(6,112,143)
-
126,078
(3,991,594)
(575,948)
(572,260)
(113,077)
(671,280)
272,893
(7,771,815)
467,146
684,461
(83,324)
(307,398)
(7,010,930)
214,607
(3,666,169)
-
921,694
(798,354)
(7,319,816)
33,309
481,121
(41,710)
(1,477,882)
(8,324,978)
The accompanying notes form an integral part of these financial statements.
15
Annual Report FY2018For personal use only
55
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2018
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2018
Note
2018
S$
2017
S$
Significant non-cash transactions:
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
Acquisition of subsidiaries by share swap, net of cash acquired
Acquisition of non-controlling interest without a change in control
Acquisition of an associated company
Contribution from non-controlling interest for incorporation of a
new subsidiary
Additional investment in an associated company
Proceeds from disposal of plant and equipment
Proceeds from sale of subsidiary, net of cash disposed
Proceeds from sale of shares in an associated company
Loan to a non-related party
Additions to plant and equipment
Additions to financial assets through other comprehensive income
Addition to pledged deposits
Net cash provided by investing activities
Cash flows from financing activities
Dividend paid to equity holders of the Company
Dividend paid to non-controlling interest
Shares buy-back
Repayment of finance lease liabilities
Proceeds received from fund’s non-controlling unit holders
Net cash provided by/(used in) financing activities
30
16
21,379
10,459,440
(233,157)
-
369,554
-
-
(1,287,440)
151,047
-
-
(1,043,276)
-
(735,000)
(613,282)
(88,964)
(5,000,000)
2,918,187
-
(42,000)
3,227
10,574,549
3,085,028
(7,169,000)
(545,038)
(353,370)
-
4,635,510
(904,947)
(220,000)
-
(41,245)
6,814,793
5,648,601
(1,796,578)
(343,000)
(286,707)
(59,341)
-
(2,485,626)
15(d),
15(e)
15(f)
13
17
10
25
23
21
Net increase/(decrease) in cash and cash equivalents
1,555,858
(6,175,094)
Cash and cash equivalents
Beginning of financial year
End of financial year
12,562,376
18,737,470
14,118,234
12,562,376
a) Consideration paid on acquisition of subsidiary, Digimatic Group Limited, on 28 November 2017 by way of share swap,
with partial disposal of 25.3% equity interest in subsidiary 8VIC Global Pte. Limited of S$5,849,643, no actual cash paid
for this transaction (Note 30).
shares (Note 23 (b)).
b) Consideration paid on acquisition of 2% non-controlling interest of Digimatic Group Limited by reissuance of treasury
c) Consideration paid on acquisition of subsidiary, 8VIC Singapore Pte Ltd (formerly known as Financial Joy Institute Pte.
Ltd. (“FJI”)) on 29 June 2016 is by way of share swap for value of S$2,040,000, no actual cash paid for this transaction.
d) Consideration paid on acquisition of remaining non-controlling interest of FJI on 31 March 2017 is by way of share
swap for value of S$4,632,651, no actual cash paid for this transaction.
Reconciliation of liabilities arising from financing activities:
Principal and
Non-cash changes
Foreign exchange
1 April 2017
interest payments
Interest expense
movement
31 March 2018
S$
S$
S$
S$
S$
Bank borrowings
-
4,287,023
(77,214)
-
4,209,809
The bank borrowings have been fully repaid subsequent to the financial year.
The accompanying notes form an integral part of these financial statements.
The accompanying notes form an integral part of these financial statements.
16
17
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2018
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2018
Note
2018
S$
2017
S$
Significant non-cash transactions:
Financial
56
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
Acquisition of subsidiaries by share swap, net of cash acquired
Acquisition of non-controlling interest without a change in control
Acquisition of an associated company
Contribution from non-controlling interest for incorporation of a
new subsidiary
Additional investment in an associated company
Proceeds from disposal of plant and equipment
Proceeds from sale of subsidiary, net of cash disposed
Proceeds from sale of shares in an associated company
Loan to a non-related party
Additions to plant and equipment
Additions to financial assets through other comprehensive income
Addition to pledged deposits
Net cash provided by investing activities
Cash flows from financing activities
Dividend paid to equity holders of the Company
Dividend paid to non-controlling interest
Shares buy-back
Repayment of finance lease liabilities
Proceeds received from fund’s non-controlling unit holders
Net cash provided by/(used in) financing activities
Cash and cash equivalents
Beginning of financial year
End of financial year
-
-
-
-
21,379
10,459,440
(233,157)
151,047
(1,043,276)
(735,000)
(613,282)
(88,964)
(5,000,000)
2,918,187
15(d),
15(e)
15(f)
30
16
13
17
10
25
23
21
369,554
(1,287,440)
(42,000)
3,227
10,574,549
3,085,028
(7,169,000)
(545,038)
(353,370)
4,635,510
-
-
-
-
-
(904,947)
(220,000)
-
(41,245)
6,814,793
5,648,601
(1,796,578)
(343,000)
(286,707)
(59,341)
(2,485,626)
12,562,376
18,737,470
14,118,234
12,562,376
Net increase/(decrease) in cash and cash equivalents
1,555,858
(6,175,094)
a) Consideration paid on acquisition of subsidiary, Digimatic Group Limited, on 28 November 2017 by way of share swap,
with partial disposal of 25.3% equity interest in subsidiary 8VIC Global Pte. Limited of S$5,849,643, no actual cash paid
for this transaction (Note 30).
b) Consideration paid on acquisition of 2% non-controlling interest of Digimatic Group Limited by reissuance of treasury
shares (Note 23 (b)).
c) Consideration paid on acquisition of subsidiary, 8VIC Singapore Pte Ltd (formerly known as Financial Joy Institute Pte.
Ltd. (“FJI”)) on 29 June 2016 is by way of share swap for value of S$2,040,000, no actual cash paid for this transaction.
d) Consideration paid on acquisition of remaining non-controlling interest of FJI on 31 March 2017 is by way of share
swap for value of S$4,632,651, no actual cash paid for this transaction.
Reconciliation of liabilities arising from financing activities:
1 April 2017
S$
Principal and
interest payments
S$
Interest expense
S$
Foreign exchange
movement
S$
31 March 2018
S$
Non-cash changes
Bank borrowings
-
4,287,023
(77,214)
-
4,209,809
The bank borrowings have been fully repaid subsequent to the financial year.
The accompanying notes form an integral part of these financial statements.
The accompanying notes form an integral part of these financial statements.
16
17
Annual Report FY2018For personal use only
57
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
These notes form an integral part of and should be read in conjunction with the acc ompanying financial statements.
2.
Significant accounting policies (continued)
1.
General information
8I HOLDINGS LIMITED (the “Company”) is listed on the Australia Securities Exchange and incorporated and
domiciled in Singapore. The address of its registered office is Goldbell Towers, 47 Scotts Road, #03-03/04,
Singapore 228233.
The principal activities of the Company are investment holding and management consultancy services. The
principal activities of its subsidiaries are the seminars and programs organiser as well as investment in public and
private companies.
2.
Significant accounting policies
2.1
Basis of preparation
These financial statements have been prepared in accordance with Singapore Financial Reporting Standards
(“FRS”) under the historical cost convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise its judgement in
the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting
estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in Note 3.
Interpretations and amendments to published standards effective in 2018
On 1 April 2017, the Group adopted the new or amended FRS and Interpretations of FRS (“INT FRS”) that are
mandatory for application for the financial year. Changes to the Group’s accounting policies have been made as
required, in accordance with the transitional provisions in the respective FRS and INT FRS.
The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the accounting
policies of the Group and the Company and had no material effect on the amounts reported for the current or
prior financial years except for the following:
2.2
Revenue recognition
FRS 7 Statement of cash flows
The amendments to FRS 7 Statement of cash flows (Disclosure initiative) sets out required disclosures that enable
users of financial statements to evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes.
The Group has included the additional required disclosures in Consolidated Statement of Cash Flows to the
Financial Statements.
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.1
Basis of preparation (continued)
FRS 109 Financial instruments
The Group has elected to early adopt FRS 109 Financial instruments. The accounting policy is disclosed in Note
2.9. Accordingly, the requirements of FRS 39 Financial Instruments: Recognition and Measurement are applied to
financial instruments up to the financial year ended 31 March 2017.
(i)
Classification and measurement
For financial assets held by the Group on 1 April 2017, management has assessed the business models
that are applicable on that date to these assets so as to classify them into the appropriate categories
under FRS 109 Financial
instruments. Material reclassifications/adjustments resulting
from
management’s assessment are disclosed below.
•
Equity investments reclassified from available-for-sale to Fair value through other comprehensive
income (“FVOCI”)
The Group has elected to recognise changes in the fair value of all its equity investments not held
for trading and previously classified as available-for-sale in other comprehensive income. As a
result, assets with a fair value of S$13,025,188 were reclassified from “financial assets, available-
for-sale” to “financial assets, at FVOCI” on 1 April 2017.
(ii)
Impairment of financial assets
The following financial assets are subject to the expected credit loss model under FRS 109:
trade receivables;
-
-
loans to non-related parties and other receivables at amortised cost.
The impairment methodology for each of these classes of financial assets under the FRS 109 is as
disclosed in Note 2.9 and Note 27(b).
Sales comprise the fair value of the consideration received or receivable for the rendering of services in the
ordinary course of the Group’s activities. Sales are presented, net of value-added tax, rebates and discounts, and
after eliminating sales within the Group.
The Group assesses its role as an agent or principal for each transaction and in an agency arrangement the
amounts collected on behalf of the principal are excluded from revenue. The Group recognises revenue when the
amount of revenue and related cost can be reliably measured, it is probable that the collectability of the related
receivables is reasonably assured and when the specific criteria for each of the Group’s activities are met as
follows:
18
19
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
These notes form an integral part of and should be read in conjunction with the acc ompanying financial statements.
2.
Significant accounting policies (continued)
8I HOLDINGS LIMITED (the “Company”) is listed on the Australia Securities Exchange and incorporated and
domiciled in Singapore. The address of its registered office is Goldbell Towers, 47 Scotts Road, #03-03/04,
2.1
Basis of preparation (continued)
FRS 109 Financial instruments
The Group has elected to early adopt FRS 109 Financial instruments. The accounting policy is disclosed in Note
2.9. Accordingly, the requirements of FRS 39 Financial Instruments: Recognition and Measurement are applied to
financial instruments up to the financial year ended 31 March 2017.
The principal activities of the Company are investment holding and management consultancy services. The
principal activities of its subsidiaries are the seminars and programs organiser as well as investment in public and
(i)
Classification and measurement
Financial
58
For financial assets held by the Group on 1 April 2017, management has assessed the business models
that are applicable on that date to these assets so as to classify them into the appropriate categories
from
under FRS 109 Financial
management’s assessment are disclosed below.
instruments. Material reclassifications/adjustments resulting
•
Equity investments reclassified from available-for-sale to Fair value through other comprehensive
income (“FVOCI”)
The Group has elected to recognise changes in the fair value of all its equity investments not held
for trading and previously classified as available-for-sale in other comprehensive income. As a
result, assets with a fair value of S$13,025,188 were reclassified from “financial assets, available-
for-sale” to “financial assets, at FVOCI” on 1 April 2017.
(ii)
Impairment of financial assets
The following financial assets are subject to the expected credit loss model under FRS 109:
trade receivables;
loans to non-related parties and other receivables at amortised cost.
-
-
The impairment methodology for each of these classes of financial assets under the FRS 109 is as
disclosed in Note 2.9 and Note 27(b).
2.2
Revenue recognition
Sales comprise the fair value of the consideration received or receivable for the rendering of services in the
ordinary course of the Group’s activities. Sales are presented, net of value-added tax, rebates and discounts, and
after eliminating sales within the Group.
The Group assesses its role as an agent or principal for each transaction and in an agency arrangement the
amounts collected on behalf of the principal are excluded from revenue. The Group recognises revenue when the
amount of revenue and related cost can be reliably measured, it is probable that the collectability of the related
receivables is reasonably assured and when the specific criteria for each of the Group’s activities are met as
follows:
18
19
1.
General information
Singapore 228233.
private companies.
2.
Significant accounting policies
2.1
Basis of preparation
These financial statements have been prepared in accordance with Singapore Financial Reporting Standards
(“FRS”) under the historical cost convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise its judgement in
the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting
estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in Note 3.
Interpretations and amendments to published standards effective in 2018
On 1 April 2017, the Group adopted the new or amended FRS and Interpretations of FRS (“INT FRS”) that are
mandatory for application for the financial year. Changes to the Group’s accounting policies have been made as
required, in accordance with the transitional provisions in the respective FRS and INT FRS.
The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the accounting
policies of the Group and the Company and had no material effect on the amounts reported for the current or
prior financial years except for the following:
FRS 7 Statement of cash flows
The amendments to FRS 7 Statement of cash flows (Disclosure initiative) sets out required disclosures that enable
users of financial statements to evaluate changes in liabilities arising from financing activities, including both
changes arising from cash flows and non-cash changes.
The Group has included the additional required disclosures in Consolidated Statement of Cash Flows to the
Financial Statements.
Annual Report FY2018For personal use only
59
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.
Significant accounting policies (continued)
2.2
Revenue recognition (continued)
(a)
Rendering of services
Revenue is recognised when the services are rendered. This included program sales, events site rental
income, digital production and advertising income. Commission and referral income is recognised when
the related services are provided.
(b)
Sale of goods
Revenue from these sales is recognised when the Group has delivered the goods to locations specified by
its customers and the customers have accepted the goods in accordance with the sales contract and the
collectability of the related receivables is reasonably assured.
(c)
Interest income
Interest income, including income arising from finance leases and other financial instruments, is
recognised using the effective interest method.
(d)
Dividend income
Dividend income is recognised when the right to receive payment is established.
(e)
Rental income
Rental income from operating leases (net of any incentives given to the lessees) is recognised on a
straight-line basis over the lease term.
having a deficit balance.
(ii)
Acquisitions
2.3
Government grants
Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance
that the grant will be received and the Group will comply with all the attached conditions.
Government grants receivable are recognised as income over the periods neces sary to match them with the
related costs which they are intended to compensate, on a systematic basis. Government grants relating to
expenses are shown separately as other income.
Government grants relating to assets are deducted against the carrying amount of the assets.
Acquisition-related costs are expensed as incurred.
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.4
Group accounting
(a)
Subsidiaries
(i)
Consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are deconsolidated from the date on that control ceases.
In preparing the consolidated financial statements, inter-companies transactions and balances
and unrealised gains on transactions between group entities are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment indicator of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
Non-controlling interests comprise the portion of a subsidiary’s net results of operations and its
net assets, which is attributable to the interests that are not owned directly or indirectly by the
equity holders of the Company. They are shown separately in the consolidated statement of
comprehensive income, statement of changes in equity, and consolidated statement of financial
position. Total comprehensive income is attributed to the non-controlling interests based on
their respective interests i n a subsidiary, even if this results in the non-controlling interests
The acquisition method of accounting is used to account for business combinations entered into
by the Group.
The consideration transferred for the acquisition of a subsidiary or business comprises the fair
value of the assets transferred, the liabilities incurred and the equity interests issued by the
Group. The consideration transferred also includes any contingent consideration arrangement
and any pre-existing equity interest in the subsidiary measured at their fair values at the
acquisition date.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition
date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the
acquiree at the date of acquisition either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets.
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.
Significant accounting policies (continued)
Financial
60
2.2
Revenue recognition (continued)
(a)
Rendering of services
the related services are provided.
(b)
Sale of goods
Revenue is recognised when the services are rendered. This included program sales, events site rental
income, digital production and advertising income. Commission and referral income is recognised when
Revenue from these sales is recognised when the Group has delivered the goods to locations specified by
its customers and the customers have accepted the goods in accordance with the sales contract and the
collectability of the related receivables is reasonably assured.
Interest income, including income arising from finance leases and other financial instruments, is
recognised using the effective interest method.
Dividend income is recognised when the right to receive payment is established.
(c)
Interest income
(d)
Dividend income
(e)
Rental income
2.3
Government grants
Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance
that the grant will be received and the Group will comply with all the attached conditions.
Government grants receivable are recognised as income over the periods neces sary to match them with the
related costs which they are intended to compensate, on a systematic basis. Government grants relating to
expenses are shown separately as other income.
2.4
Group accounting
(a)
Subsidiaries
(i)
Consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The
Group controls an entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are deconsolidated from the date on that control ceases.
In preparing the consolidated financial statements, inter-companies transactions and balances
and unrealised gains on transactions between group entities are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment indicator of the
transferred asset. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
Non-controlling interests comprise the portion of a subsidiary’s net results of operations and its
net assets, which is attributable to the interests that are not owned directly or indirectly by the
equity holders of the Company. They are shown separately in the consolidated statement of
comprehensive income, statement of changes in equity, and consolidated statement of financial
position. Total comprehensive income is attributed to the non-controlling interests based on
their respective interests i n a subsidiary, even if this results in the non-controlling interests
having a deficit balance.
Rental income from operating leases (net of any incentives given to the lessees) is recognised on a
straight-line basis over the lease term.
(ii)
Acquisitions
Government grants relating to assets are deducted against the carrying amount of the assets.
Acquisition-related costs are expensed as incurred.
The acquisition method of accounting is used to account for business combinations entered into
by the Group.
The consideration transferred for the acquisition of a subsidiary or business comprises the fair
value of the assets transferred, the liabilities incurred and the equity interests issued by the
Group. The consideration transferred also includes any contingent consideration arrangement
and any pre-existing equity interest in the subsidiary measured at their fair values at the
acquisition date.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition
date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the
acquiree at the date of acquisition either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets.
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61
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.4
Group accounting (continued)
(a)
Subsidiaries (continued)
(ii)
Acquisitions (continued)
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.4
Group accounting (continued)
(c)
Associated companies (continued)
(i)
Acquisitions
The excess of (a) the consideration transferred, the amount of any non-controlling interest in
the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
over the (b) fair value of the identifiable net assets acquired is recorded as goodwill. Please refer
to the paragraph “Intangible assets – Goodwill on acquisitions” for the subsequent accounting
policy on goodwill.
(iii)
Disposals
When a change in the Group’s ownership interest in a subsidiary results in a loss of control over
the subsidiary, the assets and liabilities of the subsidiary including any goodwill are
derecognised. Amounts previously recognised in other comprehensive income in respect of that
entity are also reclassified to profit or loss or transferred directly to retained earnings if required
by a specific Standard.
Any retained equity interest in the entity is remeasured at fair value. The difference between
the carrying amount of the retained interest at the date when control is lost and its fair value is
recognised in profit or loss.
Please refer to the paragraph “Investments in subsidiaries, and associated companies” for the
accounting policy on investments in subsidiaries in the separate financial statemen ts of the
Company.
(b)
Transactions with non-controlling interests
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the
subsidiary are accounted for as transactions with equity owners of the Company. Any difference between
the change in the carrying amounts of the non-controlling interest and the fair value of the consideration
paid or received is recognised within equity attributable to the equity holders of the Company.
(iii)
Disposals
(c)
Associated companies
Associated companies are entities over which the Group has significant i nfluence, but not control,
generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding
50%.
Investments in associated companies is accounted for in the consolidated financial statements using the
equity method of accounting less impairment losses, if any.
Investments in associated companies is initially recognised at cost. The cost of an acquisition is
measured at the fair value of the assets given, equity instruments issued or liabilities incurred
or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill
on associated companies represents the excess of the cost of acquisition of the associated
company over the Group’s share of the fair value of the identifiable net assets of the associated
company and is included in the carrying amount of the investments.
(ii)
Equity method of accounting
Under the equity method of accounting, the investments are initially recognised at cost and
adjusted thereafter to recognise Group’s share of its associated companies’ post-acquisition
profits or losses of the investee in profit or loss and its share of movements in other
comprehensive income of the investee’s other comprehensive income. Dividends received or
receivable from the associated companies are recognised as a reduction of the carrying amount
of the investments. When the Group’s share of losses in an associated company equals to or
exceeds its interest in the associated company, the Group does not recognise further losses,
unless it has legal or constructive obligations to make, or has made, payments on behalf of the
associated company. If the associated company subsequently reports profits, the Group
resumes recognising its share of those profits only after its share of the profits equals the share
of losses not recognised.
Unrealised gains on transactions between the Group and its associated companies are
eliminated to the extent of the Group's interest in the associated companies. Unrealised losses
are also eliminated unless the transactions provide evidence of impairment of the assets
transferred. The accounting policies of associated companies is changed where necessary to
ensure consistency with the accounting policies adopted by the Group.
Investments in associated companies is derecognised when the Group loses significant
influence. If the retained equity interest in the former associated company is a financial asset,
the retained equity interest is measured at fair value. The difference between the carrying
amount of the retai ned interest at the date when significant influence is lost, and its fair value
and any proceeds on partial disposal, is recognised in profit or loss .
Please refer to the paragraph “Investments in subsidiaries and associated companies” for the
accounting policy on investments in associated companies and in the separate financial
statements of the Company.
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
62
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.4
Group accounting (continued)
(a)
Subsidiaries (continued)
(ii)
Acquisitions (continued)
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.4
Group accounting (continued)
(c)
Associated companies (continued)
(i)
Acquisitions
The excess of (a) the consideration transferred, the amount of any non-controlling interest in
the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree
over the (b) fair value of the identifiable net assets acquired is recorded as goodwill. Please refer
to the paragraph “Intangible assets – Goodwill on acquisitions” for the subsequent accounting
policy on goodwill.
(iii)
Disposals
When a change in the Group’s ownership interest in a subsidiary results in a loss of control over
the subsidiary, the assets and liabilities of the subsidiary including any goodwill are
derecognised. Amounts previously recognised in other comprehensive income in respect of that
entity are also reclassified to profit or loss or transferred directly to retained earnings if required
by a specific Standard.
Any retained equity interest in the entity is remeasured at fair value. The difference between
the carrying amount of the retained interest at the date when control is lost and its fair value is
recognised in profit or loss.
Please refer to the paragraph “Investments in subsidiaries, and associated companies” for the
accounting policy on investments in subsidiaries in the separate financial statemen ts of the
Company.
(b)
Transactions with non-controlling interests
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the
subsidiary are accounted for as transactions with equity owners of the Company. Any difference between
the change in the carrying amounts of the non-controlling interest and the fair value of the consideration
paid or received is recognised within equity attributable to the equity holders of the Company.
(c)
Associated companies
Associated companies are entities over which the Group has significant i nfluence, but not control,
generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding
50%.
Investments in associated companies is accounted for in the consolidated financial statements using the
equity method of accounting less impairment losses, if any.
Investments in associated companies is initially recognised at cost. The cost of an acquisition is
measured at the fair value of the assets given, equity instruments issued or liabilities incurred
or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill
on associated companies represents the excess of the cost of acquisition of the associated
company over the Group’s share of the fair value of the identifiable net assets of the associated
company and is included in the carrying amount of the investments.
(ii)
Equity method of accounting
Under the equity method of accounting, the investments are initially recognised at cost and
adjusted thereafter to recognise Group’s share of its associated companies’ post-acquisition
profits or losses of the investee in profit or loss and its share of movements in other
comprehensive income of the investee’s other comprehensive income. Dividends received or
receivable from the associated companies are recognised as a reduction of the carrying amount
of the investments. When the Group’s share of losses in an associated company equals to or
exceeds its interest in the associated company, the Group does not recognise further losses,
unless it has legal or constructive obligations to make, or has made, payments on behalf of the
associated company. If the associated company subsequently reports profits, the Group
resumes recognising its share of those profits only after its share of the profits equals the share
of losses not recognised.
Unrealised gains on transactions between the Group and its associated companies are
eliminated to the extent of the Group's interest in the associated companies. Unrealised losses
are also eliminated unless the transactions provide evidence of impairment of the assets
transferred. The accounting policies of associated companies is changed where necessary to
ensure consistency with the accounting policies adopted by the Group.
(iii)
Disposals
Investments in associated companies is derecognised when the Group loses significant
influence. If the retained equity interest in the former associated company is a financial asset,
the retained equity interest is measured at fair value. The difference between the carrying
amount of the retai ned interest at the date when significant influence is lost, and its fair value
and any proceeds on partial disposal, is recognised in profit or loss .
Please refer to the paragraph “Investments in subsidiaries and associated companies” for the
accounting policy on investments in associated companies and in the separate financial
statements of the Company.
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63
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
2.5
Significant accounting policies (continued)
2.
Significant accounting policies (continued)
Plant and equipment
(a)
Measurement
(i)
Plant and equipment
Plant and equipment are initially recognised at cost and subsequently carried at cost less
accumulated depreciation and accumulated impairment losses.
(ii)
Components of costs
The cost of an item of plant and equipment initially recognis ed includes its purchase price and
any cost that is directly attributable to bringing the asset to the location and condition necessary
for it to be capable of operating in the manner intended by management.
2.6
Goodwill
Goodwill on acquisitions of subsidiaries and businesses, represents the excess of (i) the sum of the consideration
transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any
previous equity interest in the acquiree over (ii) the fair value of the identifiable net ass ets acquired. Goodwill on
subsidiaries is recognised separately as intangible assets and carried at cost less accumulated impairment losses.
Goodwill on acquisitions of associated companies represents the excess of the cost of the acquisition over the
Group’s share of the fair value of the identifiable net assets acquired. Goodwill on associated companies is
included in the carrying amount of the investments.
Gains and losses on the disposal of subsidiaries and associated companies include the carrying amount of goodwill
relating to the entity sold.
(b)
Depreciation
2.7
Investments in subsidiaries and associated companies
Depreciation of plant and equipment is calculated using the straight-line method to allocate their
depreciable amounts over their estimated useful lives as follows:
Investments in subsidiaries and associated companies are carried at cost less accumulated impairment losses in
the Company’s statement of financial position. On disposal of such investments, the difference between disposal
proceeds and the carrying amounts of the investments are recognised in profit or loss.
Office equipment
Furniture and fittings
Motor vehicles
Useful lives
1 to 3 years
3 years
5 years
2.8
Impairment of non-financial assets
(a)
Goodwill
The residual values, estimated useful lives and depreciation method of plant and equipment are
reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are
recognised in profit or loss when the changes arise.
(c)
Subsequent expenditure
Subsequent expenditure relating to plant and equipment that has already been recognised is added to
the carrying amount of the asset only when it is probable that future economic benefits associated with
the item will flow to the entity and the cost of the item can be measured reliably. All other repair and
maintenance expenses are recognised in profit or loss when incurred.
(d)
Disposal
On disposal of an item of plant and equipment, the difference between the disposal proceeds and its
carrying amount is recognised in profit or loss wi thin “other gains and (losses)”.
Goodwill recognised separately as an i ntangible asset is tested for impairment annually and whenever
there is indication that the goodwill may be impaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-
generating-units (“CGU”) expected to benefit from synergies arising from the business combination.
An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds
the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair
value less cost to sell and value-in-use.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated
to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each
asset in the CGU.
An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.
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Financial
64
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
Significant accounting policies (continued)
2.
2.5
Plant and equipment
(a)
Measurement
(i)
Plant and equipment
Plant and equipment are initially recognised at cost and subsequently carried at cost less
accumulated depreciation and accumulated impairment losses.
(ii)
Components of costs
The cost of an item of plant and equipment initially recognis ed includes its purchase price and
any cost that is directly attributable to bringing the asset to the location and condition necessary
for it to be capable of operating in the manner intended by management.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.6
Goodwill
Goodwill on acquisitions of subsidiaries and businesses, represents the excess of (i) the sum of the consideration
transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any
previous equity interest in the acquiree over (ii) the fair value of the identifiable net ass ets acquired. Goodwill on
subsidiaries is recognised separately as intangible assets and carried at cost less accumulated impairment losses.
Goodwill on acquisitions of associated companies represents the excess of the cost of the acquisition over the
Group’s share of the fair value of the identifiable net assets acquired. Goodwill on associated companies is
included in the carrying amount of the investments.
Gains and losses on the disposal of subsidiaries and associated companies include the carrying amount of goodwill
relating to the entity sold.
(b)
Depreciation
2.7
Investments in subsidiaries and associated companies
Depreciation of plant and equipment is calculated using the straight-line method to allocate their
depreciable amounts over their estimated useful lives as follows:
Investments in subsidiaries and associated companies are carried at cost less accumulated impairment losses in
the Company’s statement of financial position. On disposal of such investments, the difference between disposal
proceeds and the carrying amounts of the investments are recognised in profit or loss.
Office equipment
Furniture and fittings
Motor vehicles
Useful lives
1 to 3 years
3 years
5 years
2.8
Impairment of non-financial assets
(a)
Goodwill
The residual values, estimated useful lives and depreciation method of plant and equipment are
reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are
recognised in profit or loss when the changes arise.
(c)
Subsequent expenditure
(d)
Disposal
Subsequent expenditure relating to plant and equipment that has already been recognised is added to
the carrying amount of the asset only when it is probable that future economic benefits associated with
the item will flow to the entity and the cost of the item can be measured reliably. All other repair and
maintenance expenses are recognised in profit or loss when incurred.
On disposal of an item of plant and equipment, the difference between the disposal proceeds and its
carrying amount is recognised in profit or loss wi thin “other gains and (losses)”.
Goodwill recognised separately as an i ntangible asset is tested for impairment annually and whenever
there is indication that the goodwill may be impaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-
generating-units (“CGU”) expected to benefit from synergies arising from the business combination.
An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds
the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair
value less cost to sell and value-in-use.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated
to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each
asset in the CGU.
An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.
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65
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.8
Impairment of non-financial assets (continued)
(b)
Plant and equipment
Investments in subsidiaries and associated companies
Plant and equipment and investments in subsidiaries and associated companies are tested for
impairment whenever there is any objective evidence or indication that these assets may be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate
cash inflows that are largely independent of those from other assets. If this is the case, the recoverable
amount is determined for the CGU to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be l ess than its carrying amount, the
carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognised as an impairment
loss in profit or loss.
An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. The carrying amount of this asset is increased to its revised recover able amount, provided
that this amount does not exceed the carrying amount that would have been determined (net of any
accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior
years.
A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss .
2.9
Financial assets
The accounting for financial assets before 1 April 2017 are as follows:
(a)
Classification
The Group classifies its financial assets in the following categories: financial assets at fair value through
profit or loss, loans and receivables, held-to-maturity and available-for-sale. The classification depends
on the purpose for which the assets were acquired. Management determines the classification of its
financial assets at initial recognition and in the case of assets classified as held-to-maturity, re-evaluates
this designation at each balance sheet date.
(b)
Recognition and derecognition
Financial assets, available-for-sale assets
26
27
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(a)
Classification (continued)
(i)
Financial assets at fair value through profit or loss
This category has two sub-categories: financial assets held for trading, and those designated at
fair value through profit or loss at inception. A financial asset is classified as held for trading if it
is acquired principally for the purpose of selling in the short term.
Financial assets designated as at fair value through profit or loss at inception are those that are
managed and their performances are evaluated on a fair value basis, in accordance with a
documented Group investment strategy. Derivatives are also categorised as held for trading
unless they are designated as hedges. Assets in this category are presented as current assets if
they are either held for trading or are expected to be realised within 12 months after the balance
sheet date.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are presented as current assets, except for those
expected to be realised later than 12 months after the balance sheet date which are presented
as non-current assets. Loans and receivables are presented as “trade and other receivables” and
“cash and cash equivalents” on the balance sheet.
(iii)
Financial assets, held-to-maturity
Financial assets, held-to-maturity are non-derivative financial assets with fixed or determinable
payments and fixed maturities that the Group’s management has the positive intention and
ability to hold to maturity. If the Group were to sell other than an insignificant amount of
financial assets, held-to-maturity, the whole category would be tainted and reclassified as
available-for-sale. They are presented as non-current assets, except for those maturing within
12 months after the balance sheet date which are presented as current assets.
Financial assets, available-for-sale are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are presented as non-current assets unless the investment
matures or management intends to dispose of the assets withi n 12 months after the balance sheet date.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of
ownership. On disposal of a financial asset, the difference between the carrying amo unt and the sale
proceeds is recognised in profit or loss. Any amount previously recognised in other comprehensive
income relating to that asset is reclassified to profit or loss.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
66
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.8
Impairment of non-financial assets (continued)
(b)
Plant and equipment
Investments in subsidiaries and associated companies
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(a)
Classification (continued)
(i)
Financial assets at fair value through profit or loss
Plant and equipment and investments in subsidiaries and associated companies are tested for
impairment whenever there is any objective evidence or indication that these assets may be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate
cash inflows that are largely independent of those from other assets. If this is the case, the recoverable
amount is determined for the CGU to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be l ess than its carrying amount, the
carrying amount of the asset (or CGU) is reduced to its recoverable amount.
This category has two sub-categories: financial assets held for trading, and those designated at
fair value through profit or loss at inception. A financial asset is classified as held for trading if it
is acquired principally for the purpose of selling in the short term.
Financial assets designated as at fair value through profit or loss at inception are those that are
managed and their performances are evaluated on a fair value basis, in accordance with a
documented Group investment strategy. Derivatives are also categorised as held for trading
unless they are designated as hedges. Assets in this category are presented as current assets if
they are either held for trading or are expected to be realised within 12 months after the balance
sheet date.
The difference between the carrying amount and recoverable amount is recognised as an impairment
loss in profit or loss.
(ii)
Loans and receivables
An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was
recognised. The carrying amount of this asset is increased to its revised recover able amount, provided
that this amount does not exceed the carrying amount that would have been determined (net of any
accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior
A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss .
years.
2.9
Financial assets
The accounting for financial assets before 1 April 2017 are as follows:
(a)
Classification
The Group classifies its financial assets in the following categories: financial assets at fair value through
profit or loss, loans and receivables, held-to-maturity and available-for-sale. The classification depends
on the purpose for which the assets were acquired. Management determines the classification of its
financial assets at initial recognition and in the case of assets classified as held-to-maturity, re-evaluates
this designation at each balance sheet date.
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are presented as current assets, except for those
expected to be realised later than 12 months after the balance sheet date which are presented
as non-current assets. Loans and receivables are presented as “trade and other receivables” and
“cash and cash equivalents” on the balance sheet.
(iii)
Financial assets, held-to-maturity
Financial assets, held-to-maturity are non-derivative financial assets with fixed or determinable
payments and fixed maturities that the Group’s management has the positive intention and
ability to hold to maturity. If the Group were to sell other than an insignificant amount of
financial assets, held-to-maturity, the whole category would be tainted and reclassified as
available-for-sale. They are presented as non-current assets, except for those maturing within
12 months after the balance sheet date which are presented as current assets.
(b)
Recognition and derecognition
Financial assets, available-for-sale assets
Financial assets, available-for-sale are non-derivatives that are either designated in this category or not
classified in any of the other categories. They are presented as non-current assets unless the investment
matures or management intends to dispose of the assets withi n 12 months after the balance sheet date.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of
ownership. On disposal of a financial asset, the difference between the carrying amo unt and the sale
proceeds is recognised in profit or loss. Any amount previously recognised in other comprehensive
income relating to that asset is reclassified to profit or loss.
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.9
Financial assets (continued)
(e)
Impairment (continued)
(i)
Loans and receivables (continued)
67
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(c)
Initial measurement
Financial assets are initially recognised at fair value plus transaction costs except for financial assets at
fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets
at fair value through profit or loss are recognised immediately as expenses.
(d)
Subsequent measurement
Financial assets, available-for-sale and financial assets at FVPL are subsequently carried at fair value.
Loans and receivables and held-to-maturity financial assets are subsequently carried at amortised cost
using the effective interest method.
prior periods.
(ii)
Financial assets, available-for-sale
Changes in the fair values of financial assets at fair value through profi t or loss including the effects of
currency translation, interest and dividends, are recognised in profit or loss when the changes arise.
Interest and dividend income on financial assets , available-for-sale are recognised separately in income.
Changes in the fair values of available-for-sale debt securities (i.e. monetary items) denominated in
foreign currencies are analysed into currency translation differences on the amortised cost of the
securities and other changes; the currency translation differences are recognised in profit or loss and the
other changes are recognised in other comprehensive income and accumula ted in the fair value reserve.
Changes in the fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised
in other comprehensive income and accumulated in the fair value reserve, together with the related
currency translation differences.
(e)
Impairment
The accounting for financial assets from 1 April 2017 are as follows:
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset
or a group of financial assets is impaired and recognises an allowance for impairment when such evidence
exists.
(f)
Classification and measurement
(i)
Loans and receivables
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy
and default or significant delay in payments are objective evidence that these financial assets
are impaired.
The carrying amount of these assets is reduced through the use of an impairment allowance
account which is calculated as the difference between the carrying amount and the present
value of estimated future cash flows, discounted at the original effective i nterest rate. When the
asset becomes uncollectible, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are recognised against the same line item in profit
or loss.
The impairment allowance is reduced through profit or loss in a subsequent period when the
amount of impairment loss decreases and the related decrease can be objectively measured.
The carrying amount of the asset previously impaired is increased to the extent that the new
carrying amount does not exceed the amortised cost had no impairment been recognised in
In addition to the objective evidence of impairment described in Note 2.9(e)(i), a significant or
prolonged decline in the fair value of an equity security below its cost is considered as an
indicator that the available-for-sale financial asset is impaired.
If there is objective evidence of impairment, the cumulative loss that had been recognised in
other comprehensive income is reclassified from equity to profit or loss. The amount of
cumulative loss that is reclassified is measured as the difference between the acquisition cost
(net of any principal repayment and amortisation) and current fair value, les s any impairment
loss on that financial asset previously recognised in profit or loss. The impairment losses
recognised as an expense for an equity security are not reversed through profit or loss in
subsequent period.
The Group classifies its financial assets in the following measurement categories:
• Amortised cost;
• Fair value through other comprehensive income (FVOCI); and
• Fair value through profit or loss (FVPL).
The classification depends on the Group’s business model for managing the financial assets as well as the
contractual terms of the cash flows of the financial asset.
The Group reclassifies debt investments when and only when its business model for managing those
assets changes.
At initial recognition
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit
or loss are expensed in profit or loss.
28
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8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.
Significant accounting policies (continued)
Financial
68
2.9
Financial assets (continued)
(c)
Initial measurement
Financial assets are initially recognised at fair value plus transaction costs except for financial assets at
fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets
at fair value through profit or loss are recognised immediately as expenses.
(d)
Subsequent measurement
Financial assets, available-for-sale and financial assets at FVPL are subsequently carried at fair value.
Loans and receivables and held-to-maturity financial assets are subsequently carried at amortised cost
using the effective interest method.
Changes in the fair values of financial assets at fair value through profi t or loss including the effects of
currency translation, interest and dividends, are recognised in profit or loss when the changes arise.
Interest and dividend income on financial assets , available-for-sale are recognised separately in income.
Changes in the fair values of available-for-sale debt securities (i.e. monetary items) denominated in
foreign currencies are analysed into currency translation differences on the amortised cost of the
securities and other changes; the currency translation differences are recognised in profit or loss and the
other changes are recognised in other comprehensive income and accumula ted in the fair value reserve.
Changes in the fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised
in other comprehensive income and accumulated in the fair value reserve, together with the related
currency translation differences.
(e)
Impairment
exists.
(i)
Loans and receivables
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy
and default or significant delay in payments are objective evidence that these financial assets
are impaired.
The carrying amount of these assets is reduced through the use of an impairment allowance
account which is calculated as the difference between the carrying amount and the present
value of estimated future cash flows, discounted at the original effective i nterest rate. When the
asset becomes uncollectible, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are recognised against the same line item in profit
or loss.
2.9
Financial assets (continued)
(e)
Impairment (continued)
(i)
Loans and receivables (continued)
The impairment allowance is reduced through profit or loss in a subsequent period when the
amount of impairment loss decreases and the related decrease can be objectively measured.
The carrying amount of the asset previously impaired is increased to the extent that the new
carrying amount does not exceed the amortised cost had no impairment been recognised in
prior periods.
(ii)
Financial assets, available-for-sale
In addition to the objective evidence of impairment described in Note 2.9(e)(i), a significant or
prolonged decline in the fair value of an equity security below its cost is considered as an
indicator that the available-for-sale financial asset is impaired.
If there is objective evidence of impairment, the cumulative loss that had been recognised in
other comprehensive income is reclassified from equity to profit or loss. The amount of
cumulative loss that is reclassified is measured as the difference between the acquisition cost
(net of any principal repayment and amortisation) and current fair value, les s any impairment
loss on that financial asset previously recognised in profit or loss. The impairment losses
recognised as an expense for an equity security are not reversed through profit or loss in
subsequent period.
The accounting for financial assets from 1 April 2017 are as follows:
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset
or a group of financial assets is impaired and recognises an allowance for impairment when such evidence
(f)
Classification and measurement
The Group classifies its financial assets in the following measurement categories:
• Amortised cost;
• Fair value through other comprehensive income (FVOCI); and
• Fair value through profit or loss (FVPL).
The classification depends on the Group’s business model for managing the financial assets as well as the
contractual terms of the cash flows of the financial asset.
The Group reclassifies debt investments when and only when its business model for managing those
assets changes.
At initial recognition
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction costs that are directly attributable to the
acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit
or loss are expensed in profit or loss.
28
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Annual Report FY2018For personal use only
69
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(f)
Classification and measurement (continued)
At subsequent measurement
(i) Debt instruments
There are three subsequent measurement categories, depending on the Group’s business model for
managing the asset and the cash flow characteristics of the asset:
For trade receivables, the Group applies the simplified approach permitted by the FRS 109, which requires
expected lifetime losses to be recognised from initial recognition of the receivables.
• Amortised cost: Debt instruments that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and interest are measured at amortised
cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is
not part of a hedging relationship is recognised in profit or loss when the asset is derecognised
or impaired. Interest income from these financial assets is included in finance income using the
effective interest rate method.
•
•
FVOCI: Debt instruments that are held for collection of contractual cash flows and for sale, and
where the assets’ cash flows represent solely payments of principal and interest, are classified
as FVOCI. Movements in fair values are recognised in Other Comprehensive Income (OCI) and
accumulated in fair value reserve, except for the recognition of impairment gains or losses,
interest income and foreign exchange gains and losses, which are recognised in profit and loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in
OCI is reclassified from equity to profit or loss and presented in “other gains/(losses)”. Interest
income from these financial assets is recognised using the effective interest rate method and
presented in “interest income”.
FVPL: Debt instruments that are held for trading as well as those that do not meet the criteria
for classification as amortised cost or FVOCI are classified as FVPL. Movement in fair values and
interest income that is not part of a hedging relationship is recognised in profit or loss in the
period in which it arises and presented in “other gains/(losses)”.
(ii)
Equity instruments
The Group subsequently measures all its equity investments at their fair values. Equity instruments
are classified as FVPL with movements in their fair values recognised in profit or loss in the period
in which the changes arise and presented in “other gains/ (losses)”, except where the Group has
elected to classify the investments as FVOCI.
Movements in fair values of investments classified as FVOCI are presented as “fair value gains and
losses” in Other Comprehensive Income. Dividends from equity investments are recognised in
profit or loss as “dividend income”.
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(g)
Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt financial
assets carried at amortised cost and FVOCI. The impairment methodology applied depends on whether
there has been a significant increase in credit risk.
(h)
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade date – the date on which the
Group commits to purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of
ownership.
On disposal of a debt instrument, the difference between the carr ying amount and the sale proceeds is
recognised in profit or loss. Any amount previously recognised in other comprehensive income relating
to that asset is reclassified to profit or loss.
On disposal of an equity investment, the difference between the carrying amount and sales proceed is
recognised in profit or loss if there was no election made to recognise fair value changes in other
comprehensive income. If there was an election made, any difference between the carrying amount and
sales proceed amount would be recognised in other comprehensive income and transferred to retained
profits along with the amount previously recognised in other comprehensive income relating to that asset.
2.10
Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial
position when there is a legally enforceable right to offset and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously.
2.11
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). Otherwise, they are presented as non -current liabilities.
Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using
the effective interest method.
30
31
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
70
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(f)
Classification and measurement (continued)
At subsequent measurement
(i) Debt instruments
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(g)
Impairment
There are three subsequent measurement categories, depending on the Group’s business model for
managing the asset and the cash flow characteristics of the asset:
For trade receivables, the Group applies the simplified approach permitted by the FRS 109, which requires
expected lifetime losses to be recognised from initial recognition of the receivables.
• Amortised cost: Debt instruments that are held for collection of contractual cash flows where
(h)
Recognition and derecognition
The Group assesses on a forward looking basis the expected credit losses associated with its debt financial
assets carried at amortised cost and FVOCI. The impairment methodology applied depends on whether
there has been a significant increase in credit risk.
those cash flows represent solely payments of principal and interest are measured at amortised
cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is
not part of a hedging relationship is recognised in profit or loss when the asset is derecognised
or impaired. Interest income from these financial assets is included in finance income using the
effective interest rate method.
•
FVOCI: Debt instruments that are held for collection of contractual cash flows and for sale, and
where the assets’ cash flows represent solely payments of principal and interest, are classified
as FVOCI. Movements in fair values are recognised in Other Comprehensive Income (OCI) and
accumulated in fair value reserve, except for the recognition of impairment gains or losses,
interest income and foreign exchange gains and losses, which are recognised in profit and loss.
When the financial asset is derecognised, the cumulative gain or loss previously recognised in
OCI is reclassified from equity to profit or loss and presented in “other gains/(losses)”. Interest
income from these financial assets is recognised using the effective interest rate method and
presented in “interest income”.
•
FVPL: Debt instruments that are held for trading as well as those that do not meet the criteria
for classification as amortised cost or FVOCI are classified as FVPL. Movement in fair values and
interest income that is not part of a hedging relationship is recognised in profit or loss in the
period in which it arises and presented in “other gains/(losses)”.
(ii)
Equity instruments
The Group subsequently measures all its equity investments at their fair values. Equity instruments
are classified as FVPL with movements in their fair values recognised in profit or loss in the period
in which the changes arise and presented in “other gains/ (losses)”, except where the Group has
elected to classify the investments as FVOCI.
Movements in fair values of investments classified as FVOCI are presented as “fair value gains and
losses” in Other Comprehensive Income. Dividends from equity investments are recognised in
profit or loss as “dividend income”.
Regular way purchases and sales of financial assets are recognised on trade date – the date on which the
Group commits to purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of
ownership.
On disposal of a debt instrument, the difference between the carr ying amount and the sale proceeds is
recognised in profit or loss. Any amount previously recognised in other comprehensive income relating
to that asset is reclassified to profit or loss.
On disposal of an equity investment, the difference between the carrying amount and sales proceed is
recognised in profit or loss if there was no election made to recognise fair value changes in other
comprehensive income. If there was an election made, any difference between the carrying amount and
sales proceed amount would be recognised in other comprehensive income and transferred to retained
profits along with the amount previously recognised in other comprehensive income relating to that asset.
2.10
Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the consolidated statement of financial
position when there is a legally enforceable right to offset and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously.
2.11
Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). Otherwise, they are presented as non -current liabilities.
Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using
the effective interest method.
30
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Annual Report FY2018For personal use only
71
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.
Significant accounting policies (continued)
2.12
Fair value estimation of financial assets and liabilities
2.13
Leases (continued)
The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter
securities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices
used for financial assets are the current bid prices; the appropriate quoted market prices used for financial
liabilities are the current asking prices.
The fair values of financial instruments that are not traded in an active market are determined by using valuation
techniques. The Group uses a variety of methods and makes assumptions based on market conditions that are
existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotes for similar
instruments are used. Valuation techniques, such as discounted cash flow analysis, are also used to determine the
fair values of the financial instruments.
The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying
amounts.
(b)
When the Group is the lessor:
2.13
Leases
(a)
When the Group is the lessee
The Group leases motor vehicles under finance leases and office premises and event spaces under
operating leases from non-related parties.
(i)
Lessee - Finance leases
Leases where the Group assumes substantially all risks and rewards incidental to ownership of
the leased assets are classified as finance leases.
The leased assets and the corresponding lease liabilities (net of finance charges) under finance
leases are recognised on the consolidated statement of financial position as plant and
equipment and borrowings respectively, at the inception of the leases based on the lower of the
fair value of the leased assets and the present value of the minimum lease payments.
Each lease payment is apportioned between the finance expense and the reduction of the
outstanding lease liability. The finance expense is recognised in profit or loss on a basis that
reflects a constant periodic rate of interest on the finance lease liability.
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
(a)
When the Group is the lessee (continued)
(ii)
Lessee - Operating leases
Leases where substantially all risks and rewards incidental to ownership are retained by the
lessors are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessors) are recognised in profit or loss on a straight-line basis over
the period of the lease.
Contingent rents are recognised as an expense in profit or loss when incurred.
The Group leases event rental space under operating leases to non-related parties.
(i)
Lessor - Operating leases
Leases of event rental spaces where the Group retains substantially all risks and rewards
incidental to ownership are classified as operating leases. Rental income from operating leases
(net of any incentives given to the lessees) is recognised in profit or loss on a straight-line basis
over the lease term.
Initial direct costs incurred by the Group in negotiating and arranging operating leases are added
to the carrying amount of the leased assets and recognised as an expense in profit or loss over
the lease term on the same basis as the lease income.
Contingent rents are recognised as income in profit or loss when earned.
2.14
Income taxes
Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered
from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the
balance sheet date.
Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from
the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and
affects neither accounting nor taxable profit or loss at the time of the transaction.
A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries and
associated companies, except where the Group is able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available
against which the deductible temporary differences and tax losses can be utilised.
32
33
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.
Significant accounting policies (continued)
2.12
Fair value estimation of financial assets and liabilities
2.13
Leases (continued)
The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter
securities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices
used for financial assets are the current bid prices; the appropriate quoted market prices used for financial
liabilities are the current asking prices.
The fair values of financial instruments that are not traded in an active market are determined by using valuation
techniques. The Group uses a variety of methods and makes assumptions based on market conditions that are
existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotes for similar
instruments are used. Valuation techniques, such as discounted cash flow analysis, are also used to determine the
fair values of the financial instruments.
(a)
When the Group is the lessee (continued)
(ii)
Lessee - Operating leases
Leases where substantially all risks and rewards incidental to ownership are retained by the
lessors are classified as operating leases. Payments made under operating leases (net of any
incentives received from the lessors) are recognised in profit or loss on a straight-line basis over
the period of the lease.
Contingent rents are recognised as an expense in profit or loss when incurred.
The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying
(b)
When the Group is the lessor:
Financial
72
amounts.
2.13
Leases
(a)
When the Group is the lessee
The Group leases motor vehicles under finance leases and office premises and event spaces under
operating leases from non-related parties.
(i)
Lessee - Finance leases
Leases where the Group assumes substantially all risks and rewards incidental to ownership of
the leased assets are classified as finance leases.
The leased assets and the corresponding lease liabilities (net of finance charges) under finance
leases are recognised on the consolidated statement of financial position as plant and
equipment and borrowings respectively, at the inception of the leases based on the lower of the
fair value of the leased assets and the present value of the minimum lease payments.
Each lease payment is apportioned between the finance expense and the reduction of the
outstanding lease liability. The finance expense is recognised in profit or loss on a basis that
reflects a constant periodic rate of interest on the finance lease liability.
The Group leases event rental space under operating leases to non-related parties.
(i)
Lessor - Operating leases
Leases of event rental spaces where the Group retains substantially all risks and rewards
incidental to ownership are classified as operating leases. Rental income from operating leases
(net of any incentives given to the lessees) is recognised in profit or loss on a straight-line basis
over the lease term.
Initial direct costs incurred by the Group in negotiating and arranging operating leases are added
to the carrying amount of the leased assets and recognised as an expense in profit or loss over
the lease term on the same basis as the lease income.
Contingent rents are recognised as income in profit or loss when earned.
2.14
Income taxes
Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered
from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the
balance sheet date.
Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from
the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and
affects neither accounting nor taxable profit or loss at the time of the transaction.
A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries and
associated companies, except where the Group is able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available
against which the deductible temporary differences and tax losses can be utilised.
32
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73
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.14
Income taxes (continued)
Deferred income tax is measured:
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.17
Currency translation
(a)
Functional and presentation currency
(i)
(ii)
at the tax rates that are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date; and
Items included in the financial statements of each entity in the Group are measured using the currency
of the primary economic environment in which the entity operates (“functional currency”). The financial
statements are presented in Singapore Dollars, which is the functional currency of the Company.
based on the tax consequence that will follow from the manner in which the Group expects, at the
balance sheet date, to recover or settle the carrying amounts of its assets and liabilities except for
investment properties. Investment property measured at fair value is presumed to be recovered en tirely
through sale.
Current and deferred income taxes are recognised as income or expense in profit or loss, except to the extent that
the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax
arising from a business combination is adjusted against goodwill on acquisition.
The Group accounts for investment tax credits (for example, productivity and innovative credit) similar to
accounting for other tax credits where deferred tax asset is recognised for unused tax credits to the extent that it
is probable that future taxable profit will be available against which the unused tax credit can be utilised.
2.15
Provisions
Provisions for restructuring costs and legal claims are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be
required to settle the obligation and the amount has been reliably estimated. Restructuring provisions comprise
lease termination penalties and employee termination payments. Provisions are not recognised for future
operating losses.
Other provisions are measured at the present value of the expenditure expected to be required to settle the
obligation using a pre-tax discount rate that reflects the current market assessment of the time value of money
and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised in
the statement of comprehensive income as finance expense.
Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss
when the changes arise.
2.16
Employee compensation
Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset.
Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions
into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The
Group has no further payment obligations once the contributions have been paid.
(b)
Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the
functional currency using the exchange rates at the dates of the transactions. Currency exchange
differences resulting from the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are
recognised in profit or loss.
(c)
Translation of Group entities’ financial statements
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
(i)
(ii)
assets and liabilities are translated at the closing exchange rates at the reporting date;
income and expenses are translated at average exchange rates (unless the average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the tra nsaction
dates, in which case income and expenses are translated using the exchange rates at the dates
of the transactions); and
(iii)
all resulting currency translation differences are recognised in other comprehensive income and
accumulated in the currency translation reserve. These currency translation differences are
reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such reserve.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets
and liabilities of the foreign operations and translated at the closing rates at the reporting date.
2.18
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the executive
committee whose members are responsible for allocating resources and assessing performance of the operating
segments.
34
35
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
74
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.14
Income taxes (continued)
Deferred income tax is measured:
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.17
Currency translation
(a)
Functional and presentation currency
(i)
at the tax rates that are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date; and
Items included in the financial statements of each entity in the Group are measured using the currency
of the primary economic environment in which the entity operates (“functional currency”). The financial
statements are presented in Singapore Dollars, which is the functional currency of the Company.
(ii)
based on the tax consequence that will follow from the manner in which the Group expects, at the
(b)
Transactions and balances
balance sheet date, to recover or settle the carrying amounts of its assets and liabilities except for
investment properties. Investment property measured at fair value is presumed to be recovered en tirely
through sale.
Current and deferred income taxes are recognised as income or expense in profit or loss, except to the extent that
the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax
arising from a business combination is adjusted against goodwill on acquisition.
The Group accounts for investment tax credits (for example, productivity and innovative credit) similar to
accounting for other tax credits where deferred tax asset is recognised for unused tax credits to the extent that it
is probable that future taxable profit will be available against which the unused tax credit can be utilised.
2.15
Provisions
Provisions for restructuring costs and legal claims are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be
required to settle the obligation and the amount has been reliably estimated. Restructuring provisions comprise
lease termination penalties and employee termination payments. Provisions are not recognised for future
operating losses.
Other provisions are measured at the present value of the expenditure expected to be required to settle the
obligation using a pre-tax discount rate that reflects the current market assessment of the time value of money
and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised in
the statement of comprehensive income as finance expense.
Changes in the estimated timing or amount of the expenditure or discount rate are recognised in profit or loss
when the changes arise.
2.16
Employee compensation
Defined contribution plans
Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset.
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions
into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The
Group has no further payment obligations once the contributions have been paid.
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the
functional currency using the exchange rates at the dates of the transactions. Currency exchange
differences resulting from the settlement of such transactions and from the translation of monetary
assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are
recognised in profit or loss.
(c)
Translation of Group entities’ financial statements
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
(i)
(ii)
(iii)
assets and liabilities are translated at the closing exchange rates at the reporting date;
income and expenses are translated at average exchange rates (unless the average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the tra nsaction
dates, in which case income and expenses are translated using the exchange rates at the dates
of the transactions); and
all resulting currency translation differences are recognised in other comprehensive income and
accumulated in the currency translation reserve. These currency translation differences are
reclassified to profit or loss on disposal or partial disposal of the entity giving rise to such reserve.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets
and liabilities of the foreign operations and translated at the closing rates at the reporting date.
2.18
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the executive
committee whose members are responsible for allocating resources and assessing performance of the operating
segments.
34
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Annual Report FY2018For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
3.
Critical accounting estimates, assumptions and judgements
Estimates, assumptions and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances.
3.1
Critical accounting estimates and assumptions
(a)
Acquisition of Digimatic Group Limited (“DMC”) (acquisition of 69.7% equity interest on 28 November
2017)
In performing the fair value considerations of DMC, significant judgements, estimates and assumptions
are used to determine the fair value consideration (independent valuation of subsidiary based on future
maintainable earnings method). Detailed information about each of these estimates and judgements is
In performing the impairment assessment of the carrying amount of goodwill, the recoverable amount
of the CGU (Education CGU) in which goodwill has been attributable to, are determined in using value-in-
use (“VIU”) calculation. Significant estimates are used to estimate the discount rate, short term and long
term growth rate in revenues and expenses. Detailed information about each of these estimates and
judgements is included in Note 14.
75
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.19
Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows, c ash and cash equivalents include
cash on hand, deposits with financial institutions which are subject to an insignificant risk of change in value, and
bank overdrafts. Bank overdrafts are presented as current borrowings on the consolidated statement of financial
position. For cash subjected to restriction, assessment is made on the economic substance of the restriction and
whether they meet the definition of cash and cash equivalents.
2.20
Inventories
Inventories are carried at the lower of cos t and net realisable value. Cost is determined using the first-in, first-out
method. The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs
and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net
realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and applicable variable selling expenses.
included in Note 30.
(b)
Estimated impairment goodwill
2.21
Share capital and treasury shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary
shares are deducted agai nst the share capital account.
When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the carrying
amount which includes the consideration paid and any directly attributable transaction cost is presented as a
component within equity attributable to the Company’s equity holders, until they are cancelled, sold or reissued.
When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share
capital account if the shares are purchased out of capital of the Company, or against the retained profits of the
Company if the shares are purchased out of earnings of the Company.
When treasury shares are subsequently sold or reissued, the cost of treasury shares is reversed from the treasury
share account and the realised gain or loss on sale or reissue, net of any directly attributable incremental
transaction costs and rel ated income tax, is recognised in the capital reserve.
2.22
Dividends to Company’s shareholders
Dividends to the Company’s shareholders are recognised when the dividends are approved for payment.
2.23
Redeemable participating shares
Redeemable participating shares are redeemable at the option of the unit holders and providing the investors
with the right to require redemption for cash at the value proportionate to the investor’s share in the fund’s net
assets. Profit/(losses) attributable to the holders of redeemable participating shares were recorded as part of the
liabilities of redeemable participating shares.
36
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
76
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
3.
Critical accounting estimates, assumptions and judgements
Estimates, assumptions and judgements are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances.
3.1
Critical accounting estimates and assumptions
(a)
Acquisition of Digimatic Group Limited (“DMC”) (acquisition of 69.7% equity interest on 28 November
2017)
In performing the fair value considerations of DMC, significant judgements, estimates and assumptions
are used to determine the fair value consideration (independent valuation of subsidiary based on future
maintainable earnings method). Detailed information about each of these estimates and judgements is
included in Note 30.
(b)
Estimated impairment goodwill
In performing the impairment assessment of the carrying amount of goodwill, the recoverable amount
of the CGU (Education CGU) in which goodwill has been attributable to, are determined in using value-in-
use (“VIU”) calculation. Significant estimates are used to estimate the discount rate, short term and long
term growth rate in revenues and expenses. Detailed information about each of these estimates and
judgements is included in Note 14.
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
2.
Significant accounting policies (continued)
2.19
Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows, c ash and cash equivalents include
cash on hand, deposits with financial institutions which are subject to an insignificant risk of change in value, and
bank overdrafts. Bank overdrafts are presented as current borrowings on the consolidated statement of financial
position. For cash subjected to restriction, assessment is made on the economic substance of the restriction and
whether they meet the definition of cash and cash equivalents.
2.20
Inventories
Inventories are carried at the lower of cos t and net realisable value. Cost is determined using the first-in, first-out
method. The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs
and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net
realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of
completion and applicable variable selling expenses.
2.21
Share capital and treasury shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary
shares are deducted agai nst the share capital account.
When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the carrying
amount which includes the consideration paid and any directly attributable transaction cost is presented as a
component within equity attributable to the Company’s equity holders, until they are cancelled, sold or reissued.
When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share
capital account if the shares are purchased out of capital of the Company, or against the retained profits of the
Company if the shares are purchased out of earnings of the Company.
When treasury shares are subsequently sold or reissued, the cost of treasury shares is reversed from the treasury
share account and the realised gain or loss on sale or reissue, net of any directly attributable incremental
transaction costs and rel ated income tax, is recognised in the capital reserve.
2.22
Dividends to Company’s shareholders
2.23
Redeemable participating shares
Dividends to the Company’s shareholders are recognised when the dividends are approved for payment.
Redeemable participating shares are redeemable at the option of the unit holders and providing the investors
with the right to require redemption for cash at the value proportionate to the investor’s share in the fund’s net
assets. Profit/(losses) attributable to the holders of redeemable participating shares were recorded as part of the
liabilities of redeemable participating shares.
36
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Annual Report FY2018For personal use only
77
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
4.
Revenue and investment income
6.
Expenses by nature
Rendering of services
Event site rental income
Financial education program sales
Advertising income
Digital marketing and production income
Commission and referral income
Non-financial education program sales
Others
Sales of goods
Investment income/(losses) from public markets
Fair value (loss)/gain on investment securities
Gain on sale of investment securities
Dividend income
Investment income from private markets
Gain on disposal of a subsidiary (Note 15 (d,e))
Gain on disposal of an associated company’s shares
Group
2018
S$
2017
S$
931,701
12,591,387
2,203,811
552,223
1,311,747
2,570,506
-
20,161,375
2,238,937
10,802,296
1,258,035
-
-
-
38,106
14,337,374
921,074
-
(1,353,244)
120,925
684,461
(547,858)
1,609,600
907,788
481,121
2,998,509
971,860
-
971,860
10,370,350
1,199,836
11,570,186
Total revenue and investment income
21,506,451
28,906,069
5.
Other gains and other income
Other gains
Gain from bargain purchase (Note 30(i)(f))
Gain on initial recognition at its fair value from former associated company
to available-for-sale financial assets (Note 17)
Gain on foreign exchange - net
Other income
Interest income
Others
Group
2018
S$
425,042
-
-
425,042
467,146
271,877
739,023
2017
S$
-
1,160,825
94,622
1,255,447
260,892
292,270
553,162
38
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
Depreciation of plant and equipment (Note 13)
Employee compensation (Note 7)
Rental expense on operating leases
Audit fees paid to:
- Auditors of the Company
- Other auditors
Non-audit fees paid to:
- Auditors of the Company
- Other auditors
Travelling expense
Professional fees
Commission
Net foreign exchange loss
Marketing expenses
Credit card charges
Trainer fees
Event expenses
Food catering expense
Book and printing expenses
Other program costs
Investment related expense
Corporate expenses
Training costs
AGM expenses
Office expenses
Advertising expenses
Amortisation
Bad debts written off
Credit loss allowance
Digital production costs
Cost of inventories
Other expenses
expenses
7.
Employee compensation
Wages and salaries
Employer’s contribution to defined contribution plans
Other short-term benefits
Group
2018
S$
301,251
47,662
5,350
3,017
622,164
8,270,806
1,910,350
835,798
524,727
615,736
145,087
4,105,331
517,386
1,694,465
608,408
242,146
576,864
932,838
262,957
792,428
163,768
99,070
284,141
1,362,763
100,000
-
169,685
331,218
751,131
1,055,500
2017
S$
219,858
18,101
627,564
-
335,458
5,652,869
2,071,296
524,489
478,298
180,914
-
2,169,860
404,575
557,561
961,064
247,178
366,889
215,878
297,585
2,025,415
180,321
150,774
264,941
768,342
75,000
338,205
-
-
-
392,694
Group
2018
S$
7,060,995
771,877
437,934
8,270,806
2017
S$
4,871,021
561,888
219,960
5,652,869
39
Total cost of sales and services, administrative expenses and other operating
27,332,047
19,525,129
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
4.
Revenue and investment income
6.
Expenses by nature
Audit fees paid to:
- Auditors of the Company
- Other auditors
Non-audit fees paid to:
- Auditors of the Company
- Other auditors
Depreciation of plant and equipment (Note 13)
Employee compensation (Note 7)
Rental expense on operating leases
Travelling expense
Professional fees
Commission
Net foreign exchange loss
Marketing expenses
Credit card charges
Trainer fees
Event expenses
Food catering expense
Book and printing expenses
Other program costs
Investment related expense
Corporate expenses
Training costs
AGM expenses
Office expenses
Advertising expenses
Amortisation
Bad debts written off
Credit loss allowance
Digital production costs
Cost of inventories
Other expenses
Total cost of sales and services, administrative expenses and other operating
Financial
78
Group
2018
S$
301,251
47,662
5,350
3,017
622,164
8,270,806
1,910,350
835,798
524,727
615,736
145,087
4,105,331
517,386
1,694,465
608,408
242,146
576,864
932,838
262,957
792,428
163,768
99,070
284,141
1,362,763
100,000
-
169,685
331,218
751,131
1,055,500
2017
S$
219,858
18,101
627,564
-
335,458
5,652,869
2,071,296
524,489
478,298
180,914
-
2,169,860
404,575
557,561
961,064
247,178
366,889
215,878
297,585
2,025,415
180,321
150,774
264,941
768,342
75,000
338,205
-
-
-
392,694
expenses
27,332,047
19,525,129
7.
Employee compensation
Wages and salaries
Employer’s contribution to defined contribution plans
Other short-term benefits
Group
2018
S$
7,060,995
771,877
437,934
8,270,806
2017
S$
4,871,021
561,888
219,960
5,652,869
39
Rendering of services
Event site rental income
Financial education program sales
Advertising income
Digital marketing and production income
Commission and referral income
Non-financial education program sales
Others
Sales of goods
Investment income/(losses) from public markets
Fair value (loss)/gain on investment securities
Gain on sale of investment securities
Dividend income
Investment income from private markets
Gain on disposal of a subsidiary (Note 15 (d,e))
Gain on disposal of an associated company’s shares
Total revenue and investment income
21,506,451
28,906,069
5.
Other gains and other income
Other gains
Other income
Interest income
Others
Gain from bargain purchase (Note 30(i)(f))
425,042
-
Gain on initial recognition at its fair value from former associated company
to available-for-sale financial assets (Note 17)
Gain on foreign exchange - net
Group
2018
S$
2017
S$
931,701
12,591,387
2,203,811
552,223
1,311,747
2,570,506
921,074
2,238,937
10,802,296
1,258,035
-
-
-
-
-
38,106
20,161,375
14,337,374
(1,353,244)
120,925
684,461
(547,858)
1,609,600
907,788
481,121
2,998,509
971,860
-
971,860
10,370,350
1,199,836
11,570,186
Group
2018
S$
2017
S$
-
-
425,042
467,146
271,877
739,023
1,160,825
94,622
1,255,447
260,892
292,270
553,162
38
Annual Report FY2018For personal use only
79
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8.
(a)
Income taxes
Income tax expense
Tax expense attributable to profit is made up of:
- Profit for the financial year:
Current income tax
- Singapore
- Foreign
Deferred income tax (Note 22)
- Under/(over) provision in prior financial years:
Current income tax
Deferred income tax (Note 22)
Group
2018
S$
2017
S$
-
122,525
122,525
(2,571)
119,954
95,769
(205,794)
9,929
95,276
344,797
440,073
(6,000)
434,073
(212,916)
-
221,157
The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the
Singapore standard rate of income tax as follows:
(Loss)/Profit before income tax
Share of loss /(profit) of associated company, net of tax
(Loss)/Profit before income tax and share of loss /(profit) of associated
company
Tax calculated at tax rate of 17% (2017: 17%)
Effects of:
- different tax rates in other countries
- tax incentives
- expenses not deductible for tax purposes
- income not subject to tax
- deferred tax assets not recognised
- others
- under/(over) provision of tax in prior financial years
Tax charge
Group
2018
S$
2017
S$
(4,428,659)
79,789
11,714,514
(566,675)
(4,348,870)
11,147,839
(739,308)
1,895,132
1,003
(84,193)
448,283
(216,081)
712,821
-
95,769
218,294
44,195
(130,385)
471,785
(2,132,838)
287,955
4,229
(212,916)
227,157
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
Income taxes (continued)
8.
(b)
Movement in current income tax liabilities/(assets):
Beginning of financial year
Currency translation differences
Acquisition and disposal of subsidiaries
Income tax (paid)/credited
Tax expense
Under/(Over) provision in prior financial years
End of financial year
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
248,980
1,457,699
(30,650)
29,766
(307,398)
(1,477,882)
26,691
(31,961)
2,852
72,366
122,525
95,769
235,094
435
41,571
440,073
(212,916)
248,980
-
-
-
-
-
-
-
(3,959)
(28,455)
(30,650)
9.
Earnings per share
2018
2017
Net (losses)/profit attributable to equity holders of the Company (S$)
(4,249,612)
11,245,023
Weighted average number of ordinary shares outstanding for basic earnings
per share
Basic earnings per share (S$ cents per share)
358,507,352
357,720,786
(1.19)
3.14
10. Cash and cash equivalents
Cash at bank and on hand
Short-term bank deposits
following:
Cash and bank balances (as above)
Less: Bank deposits pledged
Less: Bank overdraft
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
17,572,023 11,246,576
369,817 2,809,430
5,756,020 1,315,800
5,000,000
-
23,328,043 12,562,376
5,369,817 2,809,430
Group
2018
S$
2017
S$
23,328,043
12,562,376
(5,000,000)
(4,209,809)
-
-
For the purpose of presenting the consolidated statement of cash flows, cash and cash equivalents comprise the
Cash and cash equivalents per consolidated statement of cash flows
14,118,234
12,562,376
Bank deposits are pledged against bank overdraft facility. The bank overdraft facility had been fully settled and
charge satisfied subsequent to the financial year end.
40
41
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
80
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8.
(a)
Income taxes
Income tax expense
Tax expense attributable to profit is made up of:
- Profit for the financial year:
Current income tax
- Singapore
- Foreign
Deferred income tax (Note 22)
- Under/(over) provision in prior financial years:
Current income tax
Deferred income tax (Note 22)
Group
2018
S$
2017
S$
-
122,525
122,525
(2,571)
119,954
95,769
(205,794)
9,929
95,276
344,797
440,073
(6,000)
434,073
(212,916)
-
221,157
Group
2018
S$
2017
S$
(4,428,659)
11,714,514
79,789
(566,675)
(4,348,870)
11,147,839
1,003
(84,193)
448,283
(216,081)
712,821
-
95,769
218,294
44,195
(130,385)
471,785
(2,132,838)
287,955
4,229
(212,916)
227,157
The tax on the Group’s profit before income tax differs from the theoretical amount that would arise using the
Singapore standard rate of income tax as follows:
Tax calculated at tax rate of 17% (2017: 17%)
(739,308)
1,895,132
(Loss)/Profit before income tax
Share of loss /(profit) of associated company, net of tax
(Loss)/Profit before income tax and share of loss /(profit) of associated
company
Effects of:
- others
Tax charge
- different tax rates in other countries
- tax incentives
- expenses not deductible for tax purposes
- income not subject to tax
- deferred tax assets not recognised
- under/(over) provision of tax in prior financial years
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8.
(b)
Income taxes (continued)
Movement in current income tax liabilities/(assets):
Beginning of financial year
Currency translation differences
Acquisition and disposal of subsidiaries
Income tax (paid)/credited
Tax expense
Under/(Over) provision in prior financial years
End of financial year
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
248,980
2,852
72,366
(307,398)
122,525
95,769
235,094
1,457,699
435
41,571
(1,477,882)
440,073
(212,916)
248,980
(30,650)
-
-
26,691
-
-
(3,959)
29,766
-
-
(31,961)
-
(28,455)
(30,650)
9.
Earnings per share
Net (losses)/profit attributable to equity holders of the Company (S$)
Weighted average number of ordinary shares outstanding for basic earnings
per share
Basic earnings per share (S$ cents per share)
2018
2017
(4,249,612)
11,245,023
358,507,352
(1.19)
357,720,786
3.14
10. Cash and cash equivalents
Cash at bank and on hand
Short-term bank deposits
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
17,572,023 11,246,576
5,756,020 1,315,800
23,328,043 12,562,376
369,817 2,809,430
5,000,000
-
5,369,817 2,809,430
For the purpose of presenting the consolidated statement of cash flows, cash and cash equivalents comprise the
following:
Cash and bank balances (as above)
Less: Bank deposits pledged
Less: Bank overdraft
Cash and cash equivalents per consolidated statement of cash flows
Group
2018
S$
2017
S$
23,328,043
(5,000,000)
(4,209,809)
14,118,234
12,562,376
-
-
12,562,376
Bank deposits are pledged against bank overdraft facility. The bank overdraft facility had been fully settled and
charge satisfied subsequent to the financial year end.
40
41
Annual Report FY2018For personal use only
81
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
11. Trade and other receivables
13. Plant and equipment
Current
Trade receivables
Other receivables
- Non-related parties (a)
- Subsidiaries
- Others (b)
Deposits
Prepayments (c)
Credit loss allowance
Non-current
Other receivables (d)
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
2,612,177
1,003,231
-
-
7,215,683
-
634,568
7,373,826
-
692,171
7,373,826
7,215,683
9,979,679 20,162,012
261,641
8,195
689,642
892,277
(169,685)
11,874,662
705,310
907,022
-
10,681,560
-
30,545
(6,264)
-
42,270
-
17,227,838 27,839,749
733,603
148,667
733,603
-
(a) Advances were granted to a previously associated company amounting to S$7,196,483 (2017: S$7,373,826)
is secured by the borrower’s assets, bears interest at 5% per annum and is repayable 10 years from
commencement date or by notice from lender within 6 months requiring payment in full.
Included in the other receivables is an advance to an employee amounting to S$200,000 (2017: S$nil). The
advance is unsecured, interest bearing at 5% per annum and repayable on demand.
(b)
(c) Prepayments include an amount of S$325,000 (2017: S$425,000), arising from the remuneration element
included in the consideration through share swap acquisition of 8VIC Singapore Pte. Ltd. (formerly known as
Financial Joy Institution Pte. Ltd. (“FJI”)). The remuneration element required the founders of FJI to remain in
employment until the period of June 2021.
(d) Non-current other receivables fair value approximates carrying amount. A promissory note of S$240,000 and
loan to a non-related developer of S$495,000, classified as non-current assets (due more than 12 months
period).
12.
Financial assets at FVPL
Fair value through profit or loss:
Listed securities
- Equity securities - Australia
- Equity securities - Japan
- Equity securities – India
- Equity securities – Taiwan
- Equity securities – New Zealand
- Equity securities – Malaysia
- Equity securities - Singapore
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
6,961,018
101,397
4,848,012
13,117,436
-
179,619
488,893
25,696,375
15,537,537
9,645,155
710,955
219,233
82,973
160,581
-
26,356,434
-
-
-
-
-
-
37,000
37,000
-
-
-
-
-
-
-
-
42
Group
2018
Cost
Beginning of financial year
Currency translation differences
Acquisition of subsidiaries
Disposal of subsidiary
Additions
Written off
End of financial year
Accumulated depreciation
Beginning of financial year
Currency translation differences
Disposal of subsidiary
Depreciation charge (Note 6)
Written off
End of financial year
Net book value
End of financial year
2017
Cost
Beginning of financial year
Currency translation differences
Acquisition of subsidiary
Additions
Disposals
Written off
End of financial year
Accumulated depreciation
Beginning of financial year
Currency translation differences
Depreciation charge (Note 6)
Disposals
Written off
End of financial year
Net book value
End of financial year
sheet date.
Office
Furniture and
Motor
equipment
fittings
vehicles
S$
S$
S$
Total
S$
264,937
12,479
(114,373)
(95,800)
781,192
24,318
294,720
486,784
(7,826)
1,526,676
39,963
557,963
(303,763)
613,282
(12,033)
775,657
1,464,815
181,616
2,422,088
224,256
9,530
(65,225)
399,143
(7,826)
559,878
85,361
4,685
(49,497)
46,041
-
616,075
15,297
(175,881)
622,164
(12,033)
86,590
1,065,622
480,547
3,166
263,243
(93,590)
126,498
(4,207)
306,458
1,082
(61,159)
176,980
(4,207)
419,154
356,503
904,937
95,026
1,356,466
336,173
(31,502)
16,607
162,415
(3,146)
408,443
208,573
(11,876)
(16,658)
78,281
15,367
382,623
-
(5,259)
-
(13,365)
480,547
781,192
264,937
1,526,676
207,670
(28,272)
129,620
(2,560)
73,402
4,929
152,380
-
-
(6,455)
39,538
(7,635)
53,458
306,458
224,256
85,361
616,075
174,089
556,936
179,576
910,601
953,189
(60,036)
110,255
545,038
(8,405)
(13,365)
320,610
(30,978)
335,458
(2,560)
(6,455)
-
-
-
-
-
-
-
43
The carrying amounts of motor vehicles held under finance leases are S$95,026 (2017: S$179,576) at the balance
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
11. Trade and other receivables
13. Plant and equipment
Group
2018
Cost
Beginning of financial year
Currency translation differences
Acquisition of subsidiaries
Disposal of subsidiary
Additions
Written off
End of financial year
Accumulated depreciation
Beginning of financial year
Currency translation differences
Disposal of subsidiary
Depreciation charge (Note 6)
Written off
End of financial year
Net book value
End of financial year
2017
Cost
Beginning of financial year
Currency translation differences
Acquisition of subsidiary
Additions
Disposals
Written off
End of financial year
Accumulated depreciation
Beginning of financial year
Currency translation differences
Depreciation charge (Note 6)
Disposals
Written off
End of financial year
Net book value
End of financial year
Financial
82
Office
equipment
S$
Furniture and
fittings
S$
Motor
vehicles
S$
Total
S$
480,547
3,166
263,243
(93,590)
126,498
(4,207)
775,657
306,458
1,082
(61,159)
176,980
(4,207)
419,154
781,192
24,318
294,720
(114,373)
486,784
(7,826)
1,464,815
264,937
12,479
-
(95,800)
-
-
181,616
1,526,676
39,963
557,963
(303,763)
613,282
(12,033)
2,422,088
224,256
9,530
(65,225)
399,143
(7,826)
559,878
85,361
4,685
(49,497)
46,041
-
86,590
616,075
15,297
(175,881)
622,164
(12,033)
1,065,622
356,503
904,937
95,026
1,356,466
336,173
(31,502)
16,607
162,415
(3,146)
-
480,547
207,670
(28,272)
129,620
(2,560)
-
306,458
408,443
(11,876)
15,367
382,623
-
(13,365)
781,192
208,573
(16,658)
78,281
-
(5,259)
-
264,937
953,189
(60,036)
110,255
545,038
(8,405)
(13,365)
1,526,676
73,402
4,929
152,380
-
(6,455)
224,256
39,538
(7,635)
53,458
-
-
85,361
320,610
(30,978)
335,458
(2,560)
(6,455)
616,075
174,089
556,936
179,576
910,601
The carrying amounts of motor vehicles held under finance leases are S$95,026 (2017: S$179,576) at the balance
sheet date.
43
Current
Trade receivables
Other receivables
- Non-related parties (a)
- Subsidiaries
- Others (b)
Deposits
Prepayments (c)
Credit loss allowance
Non-current
Other receivables (d)
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
2,612,177
1,003,231
-
7,215,683
7,373,826
-
634,568
692,171
7,215,683
7,373,826
9,979,679 20,162,012
8,195
261,641
689,642
892,277
(169,685)
705,310
907,022
-
30,545
(6,264)
42,270
11,874,662
10,681,560
17,227,838 27,839,749
-
-
733,603
148,667
733,603
(a) Advances were granted to a previously associated company amounting to S$7,196,483 (2017: S$7,373,826)
is secured by the borrower’s assets, bears interest at 5% per annum and is repayable 10 years from
commencement date or by notice from lender within 6 months requiring payment in full.
(b)
Included in the other receivables is an advance to an employee amounting to S$200,000 (2017: S$nil). The
advance is unsecured, interest bearing at 5% per annum and repayable on demand.
(c) Prepayments include an amount of S$325,000 (2017: S$425,000), arising from the remuneration element
included in the consideration through share swap acquisition of 8VIC Singapore Pte. Ltd. (formerly known as
Financial Joy Institution Pte. Ltd. (“FJI”)). The remuneration element required the founders of FJI to remain in
employment until the period of June 2021.
(d) Non-current other receivables fair value approximates carrying amount. A promissory note of S$240,000 and
loan to a non-related developer of S$495,000, classified as non-current assets (due more than 12 months
period).
12.
Financial assets at FVPL
Fair value through profit or loss:
Listed securities
- Equity securities - Australia
- Equity securities - Japan
- Equity securities – India
- Equity securities – Taiwan
- Equity securities – New Zealand
- Equity securities – Malaysia
- Equity securities - Singapore
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
6,961,018
101,397
4,848,012
13,117,436
-
179,619
488,893
15,537,537
9,645,155
710,955
219,233
82,973
160,581
-
25,696,375
26,356,434
-
-
-
-
-
-
37,000
37,000
-
-
-
-
-
-
-
-
-
-
-
-
42
Annual Report FY2018For personal use only
83
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
14. Goodwill
Goodwill arising on consolidation
Cost
Beginning of financial year
Acquisition of subsidiaries
Disposal of a subsidiary (Note 15(d))
End of financial year
Impairment tests for goodwill
Group
2018
S$
3,459,119
130,814
(1,901,072)
1,688,861
2017
S$
1,901,072
1,558,047
-
3,459,119
Goodwill is allocated to the Group’s cash-generating units (“CGUs”) identified according to business segments as
follows:
Group
Private markets
Education
2018
S$
2017
S$
134,319
1,554,542
1,688,861
1,904,577
1,554,542
3,459,119
Goodwill relating to the Education Cash Generating Unit (“CGU”)
The recoverable amount of a CGU was determined based on value-in-use. Cash flow projections used in the value-
in-use calculations were based on financial budgets approved by management covering a five-year period. Cash
flows beyond the five-year period were extrapolated using the estimated growth rates stated below.
Management determined budgeted revenues and expenses based on past performance and its expectations of
market developments. The short term average growth rates used were consistent with forecasts and long term
growth rate does not exceed customer price index in Singapore. The discount rates used were pre-tax and
reflected specific risks relating to the CGU.
Key estimates used for value-in-use calculations
Discount rate (pre-tax)
Short term growth rate
Long term growth rate
Gross profit margin
2018
22.81%
10-15%
0%
25%
2017
22.81%
1-3%
0%
23%
The impairment test carried out as at 31 March 2018 for the education segment, has revealed that the recoverable
amount of the CGU is higher than its carrying amount. A further decrease in the growth rate by 2% or increase in
discount rate by 2% would still result in no impairment of the CGU’s carrying value.
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries
Equity investments at cost
Beginning of financial year
Acquisition of a subsidiary (a)
Disposal of a subsidiary (a)(i)
Impairment of investment (b)
Increase in investment (c)
End of financial year
30(i)(a))
Company
2018
S$
2017
S$
13,984,921
8,300,020
(2,456,606)
(1,540,188)
10,000,000
28,288,147
3,424,521
10,560,400
-
-
-
13,984,921
a. Acquisition of subsidiaries amounting to S$8,294,965 is in connection with DMC acquisition (Note 24 and Note
2018
S$
5,971,223
18,078
2,310,719
8,300,020
Acquisition of DMC (i)
Existing equity interest held in DMC as FVOCI at parent entity level being reclassified to
investment in a subsidiary
Additional acquisition of 2% equity interest in DMC (ii)
End of financial year
(i)
The Company acquired approximately 58.9% interest in DMC amounting to S$5,971,223 (Note 30(i)(a)).
The acquisition of DMC was satisfied through the disposal of the Company’s 95% interest in 8VIC Global
Pte. Limited to DMC.
The carrying value of the investment in 8VIC Global Pte. Limited, at cost, was S$2,456,606. The
difference between the cons ideration of S$5,971,223 and the carrying value of S$2,456,606 was
recognised as a gain on disposal of a subsidiary in the income statement of the Company.
(ii) On 25 January 2018, the Group acquired an additional 2% equity interest in DMC by re-issuing 7,000,000
treasury shares at a fair value of S$2,072,504 which represents 8IH’s quoted price as of the date of
transaction (Note 23(b)) and cash of S$238,215. The total additional investment amounted to
S$2,310,719.
b.
Impairment of investment in DMC
An allowance for impairment loss amounting to S$1,540,188 was made during the year in respect to reduce
the carrying value of the investments additional of the 2% acquisition as described in Note 15(a)(ii) above to
the recoverable amounts. The recoverable amount was determined using the same basis as the fair value
consideration arising from the DMC acquisition. (Note 30(i)(a)).
c. Effective from 1 April 2017, the Company converted its receivables from its subsidiary (8IH Global Limited)
amounting to S$10,000,000 into equity.
44
45
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
14. Goodwill
Goodwill arising on consolidation
Cost
Beginning of financial year
Acquisition of subsidiaries
Disposal of a subsidiary (Note 15(d))
End of financial year
Impairment tests for goodwill
follows:
Group
Private markets
Education
Group
2018
S$
3,459,119
130,814
(1,901,072)
1,688,861
2017
S$
1,901,072
1,558,047
-
3,459,119
2018
S$
2017
S$
134,319
1,554,542
1,688,861
1,904,577
1,554,542
3,459,119
Goodwill is allocated to the Group’s cash-generating units (“CGUs”) identified according to business segments as
Goodwill relating to the Education Cash Generating Unit (“CGU”)
The recoverable amount of a CGU was determined based on value-in-use. Cash flow projections used in the value-
in-use calculations were based on financial budgets approved by management covering a five-year period. Cash
flows beyond the five-year period were extrapolated using the estimated growth rates stated below.
Management determined budgeted revenues and expenses based on past performance and its expectations of
market developments. The short term average growth rates used were consistent with forecasts and long term
growth rate does not exceed customer price index in Singapore. The discount rates used were pre-tax and
reflected specific risks relating to the CGU.
Key estimates used for value-in-use calculations
Discount rate (pre-tax)
Short term growth rate
Long term growth rate
Gross profit margin
2018
22.81%
10-15%
0%
25%
2017
22.81%
1-3%
0%
23%
The impairment test carried out as at 31 March 2018 for the education segment, has revealed that the recoverable
amount of the CGU is higher than its carrying amount. A further decrease in the growth rate by 2% or increase in
discount rate by 2% would still result in no impairment of the CGU’s carrying value.
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries
Equity investments at cost
Beginning of financial year
Acquisition of a subsidiary (a)
Disposal of a subsidiary (a)(i)
Impairment of investment (b)
Increase in investment (c)
End of financial year
Financial
84
Company
2018
S$
2017
S$
13,984,921
8,300,020
(2,456,606)
(1,540,188)
10,000,000
28,288,147
3,424,521
10,560,400
-
-
-
13,984,921
a. Acquisition of subsidiaries amounting to S$8,294,965 is in connection with DMC acquisition (Note 24 and Note
30(i)(a))
Acquisition of DMC (i)
Existing equity interest held in DMC as FVOCI at parent entity level being reclassified to
investment in a subsidiary
Additional acquisition of 2% equity interest in DMC (ii)
End of financial year
2018
S$
5,971,223
18,078
2,310,719
8,300,020
(i)
The Company acquired approximately 58.9% interest in DMC amounting to S$5,971,223 (Note 30(i)(a)).
The acquisition of DMC was satisfied through the disposal of the Company’s 95% interest in 8VIC Global
Pte. Limited to DMC.
The carrying value of the investment in 8VIC Global Pte. Limited, at cost, was S$2,456,606. The
difference between the cons ideration of S$5,971,223 and the carrying value of S$2,456,606 was
recognised as a gain on disposal of a subsidiary in the income statement of the Company.
(ii) On 25 January 2018, the Group acquired an additional 2% equity interest in DMC by re-issuing 7,000,000
treasury shares at a fair value of S$2,072,504 which represents 8IH’s quoted price as of the date of
transaction (Note 23(b)) and cash of S$238,215. The total additional investment amounted to
S$2,310,719.
b.
Impairment of investment in DMC
An allowance for impairment loss amounting to S$1,540,188 was made during the year in respect to reduce
the carrying value of the investments additional of the 2% acquisition as described in Note 15(a)(ii) above to
the recoverable amounts. The recoverable amount was determined using the same basis as the fair value
consideration arising from the DMC acquisition. (Note 30(i)(a)).
c. Effective from 1 April 2017, the Company converted its receivables from its subsidiary (8IH Global Limited)
amounting to S$10,000,000 into equity.
44
45
Annual Report FY2018For personal use only
85
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
The Group had the following subsidiaries as at 31 March 2018 and 2017:
Name
Principal activities
Country of
business/
incorporation
Proportion
of ordinary
shares
directly held
by parent
2018
%
2017
%
Proportion
of ordinary
shares held
by the Group
2017
2018
%
%
Proportion
of ordinary
shares held
by non-
controlling
interests
2018
%
2017
%
`
Held by the Company:
8 Investment Pte. Ltd.
8 Business Pte. Ltd.
8IH Global Limited
8Bit Global Pte. Ltd. (formerly
known as 8I Media Pte. Ltd.)
Hidden Champions Capital
Management Pte. Ltd (formerly
known as 8 Capital Pte. Ltd.)
Digimatic Group Limited
Singapore
100
100
100
100
Singapore
100
100
100
100
Mauritius
Singapore
100
100
100
100
100
100
100
100
Singapore
100
100
100
100
-
-
-
-
-
Singapore
-
-
72
-
28
Business management
consultancy
Business management
consultancy
Investment trading
Computer programming
and data processing and
hosting
Registered fund
management company
Investment holding and
development of other
software and
programming activities
Held through 8 Investment Pte. Ltd.
Fusion 462 Pte. Ltd.
Oxford Views Pte. Ltd.
Vue at Red Hill Pte. Ltd.
Dormant
Dormant
Business management
consultancy
Singapore
Singapore
Singapore
Held through 8 Business Pte. Ltd.
Hemus Pacific Private Limited
Events organiser
Singapore
Held through 8IH Global Limited
Hidden Champions Fund
8IH China Pte. Ltd.
8 MAD Group Sdn Bhd
Held through 8IH China Pte. Ltd.
8IH China (Shanghai) Co. Ltd
信益安（上海）实业有限公司
Investment trading
Business management
consultancy
Investment holdings
Mauritius
Singapore
Malaysia
Business and
management consultancy
services
People’s
Republic of
China
Held through 8IH China (Shanghai) Co. Ltd
Shanghai Rong Dao Culture
Communication Co. Ltd
Seminar and programs
organiser
上海融道文化传播有限公司
People’s
Republic of
China
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
49
-
35
49
100
100
100
100
100
100
-
51
100
65
100
65
51
51
-
-
-
-
-
35
49
-
-
-
-
-
-
-
-
65
65
35
35
-
44.2
-
55.8
-
46
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
15.
Investments in subsidiaries (continued)
The Group had the following subsidiaries as at 31 March 2018 and 2017:
The Group had the following subsidiaries as at 31 March 2018 and 2017:
Financial
86
Name
Principal activities
incorporation
by parent
by the Group
Name
Principal activities
Country of
business/
incorporation
Proportion
of ordinary
shares
directly held
by parent
2018
%
2017
%
Proportion
of ordinary
shares held
by the Group
2017
2018
%
%
Proportion
of ordinary
shares held
by non-
controlling
interests
2018
%
2017
%
Held through 8 MAD Group Sdn Bhd
MAD Integrated Sdn Bhd
MAD Training Sdn Bhd
Leap Asia Sdn. Bhd.
Held through Digimatic Group Limited
8VIC Global Pte. Limited
Digimatic Creatives Pte. Ltd.
Digimatic Media Private Limited
Webbynomics Pte. Ltd.
Wewe Media Group Pte. Ltd.
Held through 8VIC Global Pte. Limited
8VIC Malaysia Sdn. Bhd.
8VIC Singapore Pte. Ltd. (formerly
known as Financial Joy Institute
Pte. Ltd.)
8VIC (Australia) Pty Ltd
8VIC Taiwan Co., Ltd
8VIC (Thailand) Company Limited
Advertising and event
management
Advertising, public
relations and publicity
programmes
Advertising and event
management
Seminar and programs
organiser
Motion picture/ video
production
Conducting business
courses/ advertising
activities
E-commerce
Advertising activities
Seminar and programs
organiser
Seminar and programs
organiser
Seminar and programs
organiser
Seminar and programs
organiser
Seminar and programs
organiser
Malaysia
Malaysia
Malaysia
Singapore
Singapore
Singapore
Singapore
Singapore
Malaysia
Singapore
Australia
Taiwan
Thailand
Held through 8VIC Malaysia Sdn. Bhd.
8VIC JooY Media Sdn. Bhd.
Agency and media
Malaysia
Held through Digimatic Creatives Pte. Ltd.
Anonymous Production Sdn Bhd Motion picture/ video
Malaysia
production
Held through Digimatic Media Private Limited
Digimatic Media Sdn Bhd
Keaworld Pte. Ltd.
Conducting business
courses
E-commerce
Malaysia
Singapore
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
51
51
51
51
49
49
49
49
28.6
-
71.4
-
95
72
95
28
5
-
-
-
-
-
-
-
-
-
-
-
-
-
36.7
72
36.7
72
-
-
-
-
63.3
28
63.3
28
72
72
95
95
28
28
64.8
50.4
50.4
50.4
72
72
72
-
-
-
-
-
-
-
35.2
49.6
49.6
49.6
28
28
28
-
-
-
-
5
5
-
-
-
-
-
-
-
47
Proportion
of ordinary
shares
directly held
Proportion
of ordinary
shares held
Country of
business/
Proportion
of ordinary
shares held
by non-
controlling
interests
2018
2017
2018
2017
2018
2017
%
%
%
%
%
%
`
Held by the Company:
8 Investment Pte. Ltd.
Business management
Singapore
100
100
100
100
8 Business Pte. Ltd.
Business management
Singapore
100
100
100
100
8IH Global Limited
8Bit Global Pte. Ltd. (formerly
known as 8I Media Pte. Ltd.)
Mauritius
Singapore
100
100
100
100
100
100
100
100
Hidden Champions Capital
Registered fund
Singapore
100
100
100
100
Management Pte. Ltd (formerly
management company
known as 8 Capital Pte. Ltd.)
Digimatic Group Limited
Investment holding and
Singapore
-
-
72
-
28
consultancy
consultancy
Investment trading
Computer programming
and data processing and
hosting
development of other
software and
programming activities
Hemus Pacific Private Limited
Events organiser
Singapore
-
51
Held through 8 Investment Pte. Ltd.
Fusion 462 Pte. Ltd.
Oxford Views Pte. Ltd.
Vue at Red Hill Pte. Ltd.
Held through 8 Business Pte. Ltd.
Dormant
Dormant
Business management
consultancy
Singapore
Singapore
Singapore
Held through 8IH Global Limited
Hidden Champions Fund
8IH China Pte. Ltd.
Investment trading
Business management
Mauritius
Singapore
consultancy
8 MAD Group Sdn Bhd
Investment holdings
Malaysia
Held through 8IH China Pte. Ltd.
8IH China (Shanghai) Co. Ltd
信益安（上海）实业有限公司
Business and
management consultancy
services
People’s
Republic of
China
Held through 8IH China (Shanghai) Co. Ltd
Shanghai Rong Dao Culture
Communication Co. Ltd
上海融道文化传播有限公司
Seminar and programs
organiser
People’s
Republic of
China
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100
100
100
100
100
100
100
65
100
65
51
51
-
35
49
65
65
35
35
-
44.2
-
55.8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
49
-
35
49
46
Annual Report FY2018For personal use only
87
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
Significant restrictions
Cash and short-term deposits of S$635,919 are held in the People’s Republic of China and are subject to local
exchange control regulations. These local exchange control regulations provide for restrictions on exporting
capital from the country, other than through normal dividends.
Carrying value of non-controlling interests
Digimatic Group Limited and its subsidiaries
Hemus Pacific Private Limited
Others
Total
2018
S$
3,338,270
-
33,888
3,372,158
2017
S$
-
742,845
1,022,632
1,765,477
Summarised financial information of subsidiaries with material non-controlling interests
Set out below are the summarised financial information for each subsidiary that has non-controlling interests that
are material to the Group. These are presented before inter-company eliminations.
Summarised statement of financial position
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Digimatic Group
Limited and its
subsidiaries
31 March 2018
S$
Hemus Pacific
Private Limited
31 March 2017
S$
14,018,323
(6,570,130)
7,448,193
1,803,798
(409,496)
1,394,302
14,028,788
(130,771)
13,898,017
123,052
(1,344)
121,708
21,346,210
1,516,010
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
Summarised statement of comprehensive income
Digimatic Group
Limited and its
Hemus Pacific
subsidiaries
Private Limited
For period ended
For period ended
31 March
31 March
2018
S$
17,305,069
549,849
(105,183)
444,666
2017
S$
2,238,937
(107,089)
-
(107,089)
(75,305)
52,474
Digimatic Group
Limited and its
Hemus Pacific
subsidiaries
Private Limited
31 March 2018
31 March 2017
S$
S$
175,356
28,650
64,430
268,436
(108,775)
(1,596)
-
(68,315)
(178,686)
Revenue
Profit/(loss) before income tax
Income tax expense
Profit/(loss) for the year
Total comprehensive income allocated
to non-controlling interests
Summarised statement of cash flows
Dividends paid to non-controlling interests
220,000
98,000
Cash flows from operating activities
Cash generated from operations
Finance costs paid
Interest income received
Income tax refunded/(paid)
Net cash provided by/(used in) operating activities
Net cash generated from/(used in) investing activities
9,730,666
(38,759)
Net cash used in financing activities
(4,412,009)
(226,133)
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
5,587,093
4,206,647
9,793,740
(443,578)
1,419,442
975,864
There were no transactions with non-controlling interests for the financial years ended 31 March 2018 and 2017,
except as disclosed in Note 30.
48
49
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
Significant restrictions
Cash and short-term deposits of S$635,919 are held in the People’s Republic of China and are subject to local
exchange control regulations. These local exchange control regulations provide for restrictions on exporting
capital from the country, other than through normal dividends.
Carrying value of non-controlling interests
Digimatic Group Limited and its subsidiaries
Hemus Pacific Private Limited
Others
Total
2018
S$
3,338,270
-
33,888
3,372,158
2017
S$
-
742,845
1,022,632
1,765,477
Summarised financial information of subsidiaries with material non-controlling interests
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
Summarised statement of comprehensive income
Revenue
Profit/(loss) before income tax
Income tax expense
Profit/(loss) for the year
Total comprehensive income allocated
to non-controlling interests
Financial
88
Digimatic Group
Limited and its
subsidiaries
For period ended
31 March
2018
S$
Hemus Pacific
Private Limited
For period ended
31 March
2017
S$
17,305,069
549,849
(105,183)
444,666
2,238,937
(107,089)
-
(107,089)
(75,305)
52,474
Set out below are the summarised financial information for each subsidiary that has non-controlling interests that
Dividends paid to non-controlling interests
220,000
98,000
are material to the Group. These are presented before inter-company eliminations.
Summarised statement of financial position
Summarised statement of cash flows
Total current net assets
Current
Assets
Liabilities
Non-current
Assets
Liabilities
Net assets
Total non-current net assets
Digimatic Group
Limited and its
Hemus Pacific
subsidiaries
31 March 2018
Private Limited
31 March 2017
S$
S$
14,018,323
(6,570,130)
7,448,193
1,803,798
(409,496)
1,394,302
14,028,788
(130,771)
13,898,017
123,052
(1,344)
121,708
21,346,210
1,516,010
Cash flows from operating activities
Cash generated from operations
Finance costs paid
Interest income received
Income tax refunded/(paid)
Net cash provided by/(used in) operating activities
Digimatic Group
Limited and its
subsidiaries
31 March 2018
S$
Hemus Pacific
Private Limited
31 March 2017
S$
175,356
28,650
64,430
268,436
(108,775)
(1,596)
-
(68,315)
(178,686)
Net cash generated from/(used in) investing activities
9,730,666
(38,759)
Net cash used in financing activities
(4,412,009)
(226,133)
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
5,587,093
4,206,647
9,793,740
(443,578)
1,419,442
975,864
There were no transactions with non-controlling interests for the financial years ended 31 March 2018 and 2017,
except as disclosed in Note 30.
48
49
Annual Report FY2018For personal use only
89
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
Note 15(d): Current year disposal of a subsidiary
On 19 May 2017, the Company and its wholly owned subsidiary, 8 Business Pte. Ltd., entered into an agreement
with a founder of Hemus Pacific Private Limited (“Hemus”) and also as shareholder Clear A2Z Pte. Ltd. for sale of
the Company’s entire interest in Hemus, in consideration for 7,000,000 8I Holdings (“8IH”) shares (equivalent of
S$3,716,405 as of transaction date) in the form of treasury shares (held by Clear A2Z Pte. Ltd.). The Transaction
was approved during annual general meeting, on 27 July 2017. As a result, there was loss of control and Hemus
ceased to be a subsidiary of the Group. Accordingly, a gain on disposal of a subsidiary of S$971,860 is recognised.
The effect of the disposal was as follows:
Consideration for 7,000,000 8IH shares in the form of
treasury shares
Carrying amounts of assets and liabilities disposed of
Net assets derecognised (including goodwill of S$1,901,072
and cash in bank of S$1,043,276)
Less: Non-controlling interests
Net assets disposed of
Gain from sale of a subsidiary’s shares (Note 4)
Note 15(e): Prior year disposal of a subsidiary
2018
S$
3,716,405
3,554,940
(810,395)
2,744,545
971,860
On 19 August 2016, the Company disposed of its entire interest in Oxford Views Pty Ltd for a cash consideration
of S$10,581,705. The effects of the disposal on the cash flows of the Group were:
16.
Investment in an associated company
Carrying amounts of assets and liabilities disposed of
Cash and cash equivalents
Trade and other receivables
Total assets
Trade and other payables
Net assets disposed of
2017
S$
7,156
215,540
222,696
(11,341)
211,355
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
Note 15(e): Prior year disposal of a subsidiary (continued)
The aggregate cash inflows arising from the disposal of Oxford Views Pty Ltd were:
Net assets disposed of (as above)
Gain from sale of a subsidiary’s shares (Note 4)
Cash proceeds from disposal
Less: Cash and cash equivalents in subsidiary disposed of
Net cash inflow on disposal
Note 15 (f): Prior year disposal of associated company
On 28 September 2016, Fusion 462 Pte. Ltd. and Vue at Red Hill Pte. Ltd. partially disposed of its holding in Velocity
Property Group Limited (“Velocity”) for a consideration of S$3,085,028 (cash inflows arising from disposal). The
Group recognised a gain on disposal of S$1,199,836 (Note 4) and the Group’s shareholding in Velocity reduced to
10.7%. Accordingly, Velocity ceased to be an associated company of the Group.
Net assets disposed of (Note 16)
Gain on disposal of an associated company’s shares (Note 4)
Cash proceeds from disposal
CT Hardware Sdn. Bhd.
At beginning of financial year
Acquisition of associated companies
Share of (loss)/profit of associated companies
Disposal of interest in associated company (Note 15(f))
Reclassification of remaining interest to available-for-sale (Note 17)
Translation difference
At end of financial year
Set out below is the associated company of the Group as at 31 March 2018, which, in the opinion of the directors,
are material to the Group. The associated company as listed below have share capital consisting solely of ordinary
shares, which is held directly by the Group; the country of incorporation is also its principal place of business.
2017
S$
211,355
10,370,350
10,581,705
(7,156)
10,574,549
2017
S$
1,885,192
1,199,836
3,085,028
Group
2018
S$
2017
S$
1,263,908
1,425,911
1,425,911
(79,789)
(82,214)
-
-
-
1,263,908
1,885,151
1,287,440
566,675
(1,885,192)
89,274
(517,437)
1,425,911
50
51
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
Note 15(d): Current year disposal of a subsidiary
On 19 May 2017, the Company and its wholly owned subsidiary, 8 Business Pte. Ltd., entered into an agreement
with a founder of Hemus Pacific Private Limited (“Hemus”) and also as shareholder Clear A2Z Pte. Ltd. for sale of
the Company’s entire interest in Hemus, in consideration for 7,000,000 8I Holdings (“8IH”) shares (equivalent of
S$3,716,405 as of transaction date) in the form of treasury shares (held by Clear A2Z Pte. Ltd.). The Transaction
was approved during annual general meeting, on 27 July 2017. As a result, there was loss of control and Hemus
ceased to be a subsidiary of the Group. Accordingly, a gain on disposal of a subsidiary of S$971,860 is recognised.
The effect of the disposal was as follows:
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
15.
Investments in subsidiaries (continued)
Note 15(e): Prior year disposal of a subsidiary (continued)
The aggregate cash inflows arising from the disposal of Oxford Views Pty Ltd were:
Net assets disposed of (as above)
Gain from sale of a subsidiary’s shares (Note 4)
Cash proceeds from disposal
Less: Cash and cash equivalents in subsidiary disposed of
Net cash inflow on disposal
Note 15 (f): Prior year disposal of associated company
Financial
90
2017
S$
211,355
10,370,350
10,581,705
(7,156)
10,574,549
On 28 September 2016, Fusion 462 Pte. Ltd. and Vue at Red Hill Pte. Ltd. partially disposed of its holding in Velocity
Property Group Limited (“Velocity”) for a consideration of S$3,085,028 (cash inflows arising from disposal). The
Group recognised a gain on disposal of S$1,199,836 (Note 4) and the Group’s shareholding in Velocity reduced to
10.7%. Accordingly, Velocity ceased to be an associated company of the Group.
On 19 August 2016, the Company disposed of its entire interest in Oxford Views Pty Ltd for a cash consideration
of S$10,581,705. The effects of the disposal on the cash flows of the Group were:
16.
Investment in an associated company
Carrying amounts of assets and liabilities disposed of
CT Hardware Sdn. Bhd.
Net assets disposed of (Note 16)
Gain on disposal of an associated company’s shares (Note 4)
Cash proceeds from disposal
At beginning of financial year
Acquisition of associated companies
Share of (loss)/profit of associated companies
Disposal of interest in associated company (Note 15(f))
Translation difference
Reclassification of remaining interest to available-for-sale (Note 17)
At end of financial year
2017
S$
1,885,192
1,199,836
3,085,028
Group
2018
S$
2017
S$
1,263,908
1,425,911
1,425,911
-
(79,789)
-
(82,214)
-
1,263,908
1,885,151
1,287,440
566,675
(1,885,192)
89,274
(517,437)
1,425,911
Consideration for 7,000,000 8IH shares in the form of
treasury shares
Carrying amounts of assets and liabilities disposed of
Net assets derecognised (including goodwill of S$1,901,072
and cash in bank of S$1,043,276)
Less: Non-controlling interests
Net assets disposed of
Gain from sale of a subsidiary’s shares (Note 4)
Note 15(e): Prior year disposal of a subsidiary
Cash and cash equivalents
Trade and other receivables
Total assets
Trade and other payables
Net assets disposed of
2018
S$
3,716,405
3,554,940
(810,395)
2,744,545
971,860
2017
S$
7,156
215,540
222,696
(11,341)
211,355
Set out below is the associated company of the Group as at 31 March 2018, which, in the opinion of the directors,
are material to the Group. The associated company as listed below have share capital consisting solely of ordinary
shares, which is held directly by the Group; the country of incorporation is also its principal place of business.
50
51
Annual Report FY2018For personal use only
91
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
16.
Investments in an associated company (continued)
16.
Investments in an associated company (continued)
Name of entity
Place of business/
country of
incorporation
% of ownership
interest
CT Hardware Sdn. Bhd.
Malaysia
49.9%
CT Hardware Sdn. Bhd. (“CTH”) is a wholesale and retail sale of power tools, equipment, and machinery. The
acquisition of CTH is in line with the Group’s value investing strategy of investing in undervalued private businesses
with growth potential.
There are no contingent liabilities relating to the Group’s interest in the associated company.
Set out below is the summarised financial information for CTH.
Summarised statement of financial position
Current assets
Includes:
- Cash and cash equivalents
Current liabilities
Includes:
- Financial liabilities (excluding trade payables)
Non-current assets
Non-current liabilities
Includes:
- Financial liabilities
Net assets
CTH
As at 31 March
2018
S$
2017
S$
2,544,152
2,716,798
586,123
848,733
(670,773)
(910,706)
(134,059)
(209,506)
2,033,410
2,043,057
(1,370,040)
(1,332,084)
(1,370,040)
(1,332,084)
2,536,749
2,517,065
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
Summarised statement of comprehensive income
Revenue and other income
Expenses
Includes:
- Depreciation
- Interest expense
(Loss)/Profit before tax
Income tax expense
(Loss)/Profit after tax
At 1 Apr 2017 / Net assets at date of acquisition
Profit for the year
Foreign exchange differences
End of financial year
Interest in associated companies (49.9%)
Goodwill
Foreign exchange differences
Carrying value
CTH
For the year ended
31 March
2018
S$
2017
S$
6,794,611
6,071,299
(6,954,527)
(5,876,287)
(122,174)
(126,744)
(109,637)
(146,691)
(159,916)
195,012
-
(12,253)
(159,916)
182,759
CTH
As at 31 March
2018
S$
2017
S$
2,517,065
(159,916)
179,600
2,536,749
1,265,838
45,666
(47,596)
1,263,908
2,527,355
182,759
(193,049)
2,517,065
1,256,016
45,666
124,229
1,425,911
The information above reflects the amounts presented in the financial statements of the associated company (and
not the Group’s share of those amounts).
Reconciliation of summarised financial information
Reconciliation of the summarised financial information presented, to the carrying amount of the Group’s interest
in the associated companies, is as follows:
52
53
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
Name of entity
Place of business/
country of
incorporation
% of ownership
interest
CT Hardware Sdn. Bhd.
Malaysia
49.9%
CT Hardware Sdn. Bhd. (“CTH”) is a wholesale and retail sale of power tools, equipment, and machinery. The
acquisition of CTH is in line with the Group’s value investing strategy of investing in undervalued private businesses
with growth potential.
There are no contingent liabilities relating to the Group’s interest in the associated company.
Set out below is the summarised financial information for CTH.
Summarised statement of financial position
- Financial liabilities (excluding trade payables)
(134,059)
(209,506)
Current assets
Includes:
- Cash and cash equivalents
Current liabilities
Includes:
Non-current assets
Non-current liabilities
Includes:
- Financial liabilities
Net assets
CTH
As at 31 March
2018
S$
2017
S$
2,544,152
2,716,798
586,123
848,733
(670,773)
(910,706)
2,033,410
2,043,057
(1,370,040)
(1,332,084)
(1,370,040)
(1,332,084)
2,536,749
2,517,065
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
16.
Investments in an associated company (continued)
16.
Investments in an associated company (continued)
Summarised statement of comprehensive income
Revenue and other income
Expenses
Includes:
- Depreciation
- Interest expense
(Loss)/Profit before tax
Income tax expense
(Loss)/Profit after tax
Financial
92
CTH
For the year ended
31 March
2018
S$
2017
S$
6,794,611
6,071,299
(6,954,527)
(5,876,287)
(122,174)
(126,744)
(109,637)
(146,691)
(159,916)
195,012
-
(12,253)
(159,916)
182,759
The information above reflects the amounts presented in the financial statements of the associated company (and
not the Group’s share of those amounts).
Reconciliation of summarised financial information
Reconciliation of the summarised financial information presented, to the carrying amount of the Group’s interest
in the associated companies, is as follows:
At 1 Apr 2017 / Net assets at date of acquisition
Profit for the year
Foreign exchange differences
End of financial year
Interest in associated companies (49.9%)
Goodwill
Foreign exchange differences
Carrying value
CTH
As at 31 March
2018
S$
2017
S$
2,517,065
(159,916)
179,600
2,536,749
1,265,838
45,666
(47,596)
1,263,908
2,527,355
182,759
(193,049)
2,517,065
1,256,016
45,666
124,229
1,425,911
52
53
Annual Report FY2018For personal use only
93
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
17.
Financial assets, at FVOCI/available-for-sale
18. Trade and other payables
Financial assets, at FVOCI comprise of equity securities which are not held for trading, and for which the Group
has made an irrevocable election at initial recognition to recognise changes in fair value through OCI rather than
profit or loss as these are strategic investments and the Group considered this to be more relevant.
Group
2018
S$
2017
S$
Beginning of financial year
Reclassification at 1 April 2017
Additions
Acquisition of subsidiaries
Fair value losses recognised in other comprehensive
income (Note 24)
Reclassification from financial assets at FVOCI to
subsidiary (Note 30(i)(e))
End of financial year
-
13,025,188
88,964
100,000
(11,171,173)
(291,102)
1,751,877
Company
Accruals for operating expenses
2018
S$
-
428,267
89,924
-
(500,113)
(18,078)
-
2017
S$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Group has elected to recognise changes in the fair value of all its equity investments not held for trading and
previously classified as available-for-sale in other comprehensive income. As a result, assets with a fair value of
S$13,025,188 were reclassified from “financial assets, available-for-sale” to “financial assets, at FVOCI” on 1 April
2017.
Financial assets, available-for sale is summarised as below:
Beginning of financial year
Reclassification as at 1 April 2017
Additions
Reclassification from associated company to available-
for-sale (Note 16)
Fair value gains recognised in profit or loss from initial
re-measurement (Note 5)
Fair value (losses)/gains recognised in other
comprehensive income (Note 24)
End of financial year
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
13,025,188 13,713,260
-
(13,025,188)
353,370
-
428,267
(428,267)
-
-
-
352,225
-
-
517,437
1,160,825
(2,719,704)
-
- 13,025,188
-
-
-
-
-
-
76,042
428,267
Financial assets at FVOCI/available-for-sale are analysed as follows:
Listed securities
Unlisted securities
Total
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
1,637,998 13,011,309
13,879
1,751,877 13,025,188
113,879
-
-
-
428,267
-
428,267
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
Current
Trade payables
Deposits received
GST payable
Other payables
Amount owing to subsidiaries
Provision for reinstatement
Total trade and other payables
19.
Finance lease liabilities
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
870,772
415,894
2,355,879
1,654,003
40,165
368,828
177,511
701,518
-
-
53,256
348,773
65,000
98,087
238,970
375,586
-
-
78,686
55,171
4,006,468
3,192,064
-
-
-
-
-
-
3,693,680
2,782,540
4,494,147
4,126,264
The Group leases certain motor vehicles from non-related parties under finance leases. The lease agreements do
not have renewal clauses but provide the Group with options to purchase the leased assets at nominal values at
the end of the lease term.
Minimum lease payments due
- Not later than one year
- Between one and five years
Less: Future finance charges
Present value of finance lease liabilities
The present values of finance lease liabilities are analysed as follows:
Not later than one year
Later than one year
- Between one and five years
Total
Group
2018
S$
2017
S$
37,286
60,144
97,430
(6,160)
91,270
56,471
100,282
156,753
(14,533)
142,220
Group
2018
S$
2017
S$
33,578
50,180
57,692
92,040
91,270
142,220
54
55
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
17.
Financial assets, at FVOCI/available-for-sale
18. Trade and other payables
Current
Trade payables
Accruals for operating expenses
Deposits received
GST payable
Other payables
Amount owing to subsidiaries
Provision for reinstatement
Total trade and other payables
19.
Finance lease liabilities
Financial
94
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
870,772
2,355,879
-
53,256
348,773
-
65,000
3,693,680
415,894
1,654,003
98,087
238,970
375,586
-
-
2,782,540
40,165
368,828
-
-
78,686
4,006,468
-
4,494,147
177,511
701,518
-
-
55,171
3,192,064
-
4,126,264
The Group leases certain motor vehicles from non-related parties under finance leases. The lease agreements do
not have renewal clauses but provide the Group with options to purchase the leased assets at nominal values at
the end of the lease term.
Minimum lease payments due
- Not later than one year
- Between one and five years
Less: Future finance charges
Present value of finance lease liabilities
The present values of finance lease liabilities are analysed as follows:
Not later than one year
Later than one year
- Between one and five years
Total
Group
2018
S$
2017
S$
37,286
60,144
97,430
(6,160)
91,270
56,471
100,282
156,753
(14,533)
142,220
Group
2018
S$
2017
S$
33,578
50,180
57,692
92,040
91,270
142,220
55
Financial assets, at FVOCI comprise of equity securities which are not held for trading, and for which the Group
has made an irrevocable election at initial recognition to recognise changes in fair value through OCI rather than
profit or loss as these are strategic investments and the Group considered this to be more relevant.
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
Beginning of financial year
Reclassification at 1 April 2017
Additions
Acquisition of subsidiaries
Fair value losses recognised in other comprehensive
income (Note 24)
Reclassification from financial assets at FVOCI to
subsidiary (Note 30(i)(e))
End of financial year
-
13,025,188
88,964
100,000
(11,171,173)
(291,102)
1,751,877
-
-
-
-
-
-
-
428,267
89,924
(500,113)
(18,078)
The Group has elected to recognise changes in the fair value of all its equity investments not held for trading and
previously classified as available-for-sale in other comprehensive income. As a result, assets with a fair value of
S$13,025,188 were reclassified from “financial assets, available-for-sale” to “financial assets, at FVOCI” on 1 April
2017.
Financial assets, available-for sale is summarised as below:
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
Beginning of financial year
Reclassification as at 1 April 2017
Additions
13,025,188 13,713,260
(13,025,188)
428,267
(428,267)
352,225
Reclassification from associated company to available-
for-sale (Note 16)
Fair value gains recognised in profit or loss from initial
re-measurement (Note 5)
Fair value (losses)/gains recognised in other
comprehensive income (Note 24)
End of financial year
Financial assets at FVOCI/available-for-sale are analysed as follows:
-
353,370
517,437
1,160,825
-
-
-
-
(2,719,704)
- 13,025,188
76,042
428,267
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
1,637,998 13,011,309
113,879
13,879
1,751,877 13,025,188
-
-
-
428,267
-
428,267
Listed securities
Unlisted securities
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
54
Annual Report FY2018For personal use only
95
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
20. Unearned revenue
Current
Non-current
Total
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
4,938,840
69,523
5,008,363
3,157,151
538,295
3,695,446
274,704
-
274,704
-
-
-
This represents revenue received from customers but not yet recognised to the profit or loss as service has yet to
be rendered as at reporting date.
21. Redeemable participating shares
As at beginning of year
Reclassification of non-controlling unit holders
Proceeds received from fund’s non-controlling unit holders
Share of loss attributable to the unit holders of redeemable participating
shares
As at end of year
Group
2018
S$
2017
S$
-
617,114
6,814,793
(395,985)
7,035,922
-
-
-
-
-
Hidden Champions Fund is an investment fund with redeemable participating shares. These shares relate to
amounts payable to non-controlling unit holders of the redeemable participating shares in Hidden Champions
Fund. The unit holders are entitled to redeem their shares in cash at the option of the holders at the value
proportionate to the investors share in the fund’s net assets at the redemption price.
22. Deferred income tax assets/(liabilities)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current
income tax assets against current income tax liabilities and when the deferred income taxes relate to the same
fiscal authority. The amounts, determined after appropriate offsetting, are shown on the consolidated statement
of financial position as follows:
Deferred income tax assets
- To be settled within one year
Deferred income tax liabilities
- To be settled within one year
Group
2018
S$
2017
S$
217,905
-
(93,591)
(5,344)
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
22. Deferred income tax assets/(liabilities) (continued)
Movement in deferred income tax account is as follows:
Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that
realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax
losses of S$5,736,918 (2017: S$1,639,655) at the balance sheet date which can be carried forward and used to
offset against future taxable income subject to meeting certain statutory requirements by those companies with
unrecognised tax losses and capital allowances in their respective countries of incorporation.
The movement in deferred income tax assets/(liabilities) (prior to offsetting of balances within the same tax
Beginning of financial year
Currency translation differences
Acquisition of subsidiaries
Disposal of a subsidiary
Tax credited to
- profit or loss (Note 8(a))
End of financial year
jurisdiction) is as follows:
Group
Deferred income tax liabilities
2018
Beginning of financial year
Currency translation differences
Acquisition of subsidiaries
Credited to profit or loss
End of financial year
2017
Beginning of financial year
Credited to profit or loss
End of financial year
Group
2018
S$
(5,344)
11,829
(91,880)
1,344
208,365
124,314
2017
S$
(11,344)
-
-
-
6,000
(5,344)
Accelerated tax
depreciation
Fair value
gains - net
S$
S$
(5,344)
1,814
(22,578)
1,819
(24,289)
(11,344)
6,000
(5,344)
(69,302)
(69,302)
-
-
-
-
-
-
Total
S$
(5,344)
1,814
(91,880)
1,819
(93,591)
(11,344)
6,000
(5,344)
56
57
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
20. Unearned revenue
Current
Non-current
Total
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
4,938,840
3,157,151
274,704
69,523
538,295
-
5,008,363
3,695,446
274,704
-
-
-
-
-
-
-
-
Group
2018
S$
2017
S$
-
617,114
6,814,793
(395,985)
7,035,922
This represents revenue received from customers but not yet recognised to the profit or loss as service has yet to
be rendered as at reporting date.
21. Redeemable participating shares
As at beginning of year
Reclassification of non-controlling unit holders
Proceeds received from fund’s non-controlling unit holders
Share of loss attributable to the unit holders of redeemable participating
shares
As at end of year
Hidden Champions Fund is an investment fund with redeemable participating shares. These shares relate to
amounts payable to non-controlling unit holders of the redeemable participating shares in Hidden Champions
Fund. The unit holders are entitled to redeem their shares in cash at the option of the holders at the value
proportionate to the investors share in the fund’s net assets at the redemption price.
22. Deferred income tax assets/(liabilities)
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current
income tax assets against current income tax liabilities and when the deferred income taxes relate to the same
fiscal authority. The amounts, determined after appropriate offsetting, are shown on the consolidated statement
of financial position as follows:
Deferred income tax assets
- To be settled within one year
Deferred income tax liabilities
- To be settled within one year
Group
2018
S$
2017
S$
217,905
-
(93,591)
(5,344)
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
22. Deferred income tax assets/(liabilities) (continued)
Movement in deferred income tax account is as follows:
Beginning of financial year
Currency translation differences
Acquisition of subsidiaries
Disposal of a subsidiary
Tax credited to
- profit or loss (Note 8(a))
End of financial year
Financial
96
Group
2018
S$
(5,344)
11,829
(91,880)
1,344
208,365
124,314
2017
S$
(11,344)
-
-
-
6,000
(5,344)
Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that
realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax
losses of S$5,736,918 (2017: S$1,639,655) at the balance sheet date which can be carried forward and used to
offset against future taxable income subject to meeting certain statutory requirements by those companies with
unrecognised tax losses and capital allowances in their respective countries of incorporation.
The movement in deferred income tax assets/(liabilities) (prior to offsetting of balances within the same tax
jurisdiction) is as follows:
Group
Deferred income tax liabilities
2018
Beginning of financial year
Currency translation differences
Acquisition of subsidiaries
Credited to profit or loss
End of financial year
2017
Beginning of financial year
Credited to profit or loss
End of financial year
Accelerated tax
depreciation
S$
Fair value
gains - net
S$
(5,344)
1,814
(22,578)
1,819
(24,289)
(11,344)
6,000
(5,344)
-
-
(69,302)
-
(69,302)
-
-
-
Total
S$
(5,344)
1,814
(91,880)
1,819
(93,591)
(11,344)
6,000
(5,344)
56
57
Annual Report FY2018For personal use only
97
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
22. Deferred income tax assets/(liabilities) (continued)
Deferred income tax assets
2018
Beginning of financial year
Currency translation differences
Credited to profit or loss
End of financial year
2017
Beginning/End of financial year
23.
Share capital
Group and Company
2018
Beginning/End of financial year
Accelerated
tax
depreciation
S$
-
213
5,430
5,643
Unearned
Revenue
S$
-
8,012
204,250
212,262
Total
S$
-
8,225
209,680
217,905
-
-
-
Number of
shares
Amount
S$
361,978,585
34,422,910
24. Other reserves
2017
Beginning of financial year
Share buy back
Additional share issuance:
- Acquisition of 51% equity interest in FJI (Note 30(ii))
- Acquisition of 49% non-controlling interest FJI through
share swap of the Company’s shares (Note 30(ii))
End of financial year
356,894,200
(385,442)
30,736,966
(286,707)
2,551,939
2,040,000
2,917,888
361,978,585
1,932,651
34,422,910
(a)
Composition:
Fair value reserve
Currency translation reserve
Capital reserve
(b)
Movements:
(i) Fair value reserve
All issued ordinary shares are fully paid. There is no par value for these ordinary shares.
On 29 June 2016, the Group acquired 51% equity interest in Financial Joy Institute Pte. Ltd. (“FJI”) by way of share
swap for a purchase consideration of S$2.04 million (2,551,939 shares).
The Group acquired the 49% non-controlling interest of FJI on 31 March 2017 (9 months after the initial acquisition
date) for a purchase consideration through the issuance of 2,917,888 Company’s shares amounting to
S$1,932,651, which is the market share price as at the completion date of the transaction.
58
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
23.
Share capital (continued)
Treasury shares
Group and Company
2018
Beginning of financial year
Treasury shares purchase (a)
Treasury shares re-issued (b)
End of financial year
a. Treasury share purchase
Number of
shares
7,000,000
(7,000,000)
-
-
-
Amount
S$
3,716,405
(2,072,504)
(1,643,901)
-
-
Loss on re-issued treasury shares recognised in capital reserve (b)
The Group has disposed its entire interest in Hemus Pacific Private Limited (“Hemus”) to Clear A2Z Pte Ltd, an
investment holding company owned by one of the founders of Hemus, for a consideration of 7,000,000 shares
of the Company, valued at S$3,716,405 (Note 15(d)).
b. On 25 January 2018, the Group re-issued its 7,000,000 treasury shares (S$2,072,504 at the Company’s quoted
price as of the date of transaction) to acquire an additional 2% equity interest in DMC (Note 24). The loss on
the re-issuance of the treasury shares amounting to S$1,643,901 is recognised in the capital reserve.
Group
Company
2018
S$
2017
S$
2018
S$
2017
S$
(10,088,712)
1,082,461
(424,071)
76,042
(913,252)
113,915
-
132,424
(1,917,162)
(1,638,846)
(10,869,540)
(720,786)
(2,062,917)
76,042
Beginning of financial year
1,082,461
3,802,165
76,042
Financial assets through other comprehensive
income
- Fair value (losses)/gains from financial assets
at FVOCI/AFS (Note 17)
End of financial year
(11,171,173)
(2,719,704)
(10,088,712)
1,082,461
(500,113)
(424,071)
76,042
76,042
(ii) Currency translation reserve
Beginning of financial year
113,915
(9,094)
Net currency translation differences of financial
statements of foreign subsidiaries and
associated companies
End of financial year
(1,027,167)
(913,252)
123,009
113,915
-
-
-
-
-
-
-
-
-
59
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
98
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
22. Deferred income tax assets/(liabilities) (continued)
Deferred income tax assets
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
23.
Share capital (continued)
Treasury shares
2018
Beginning of financial year
Currency translation differences
Credited to profit or loss
End of financial year
2017
Beginning/End of financial year
23.
Share capital
Group and Company
2018
Beginning/End of financial year
2017
Beginning of financial year
Share buy back
Additional share issuance:
Accelerated
depreciation
tax
S$
Unearned
Revenue
S$
Total
S$
-
213
5,430
5,643
-
8,012
204,250
212,262
8,225
209,680
217,905
-
-
-
-
Number of
shares
Amount
S$
Group and Company
2018
Beginning of financial year
Treasury shares purchase (a)
Treasury shares re-issued (b)
Loss on re-issued treasury shares recognised in capital reserve (b)
End of financial year
Number of
shares
-
7,000,000
(7,000,000)
-
-
Amount
S$
-
3,716,405
(2,072,504)
(1,643,901)
-
a. Treasury share purchase
The Group has disposed its entire interest in Hemus Pacific Private Limited (“Hemus”) to Clear A2Z Pte Ltd, an
investment holding company owned by one of the founders of Hemus, for a consideration of 7,000,000 shares
of the Company, valued at S$3,716,405 (Note 15(d)).
b. On 25 January 2018, the Group re-issued its 7,000,000 treasury shares (S$2,072,504 at the Company’s quoted
price as of the date of transaction) to acquire an additional 2% equity interest in DMC (Note 24). The loss on
the re-issuance of the treasury shares amounting to S$1,643,901 is recognised in the capital reserve.
361,978,585
34,422,910
24. Other reserves
356,894,200
30,736,966
(385,442)
(286,707)
2,551,939
2,040,000
2,917,888
361,978,585
1,932,651
34,422,910
(a)
Composition:
Fair value reserve
Currency translation reserve
Capital reserve
(b)
Movements:
(i) Fair value reserve
Beginning of financial year
Financial assets through other comprehensive
income
- Fair value (losses)/gains from financial assets
Group
Company
2018
S$
2017
S$
2018
S$
2017
S$
(10,088,712)
(913,252)
132,424
(10,869,540)
1,082,461
113,915
(1,917,162)
(720,786)
(424,071)
-
(1,638,846)
(2,062,917)
76,042
-
-
76,042
1,082,461
3,802,165
76,042
-
at FVOCI/AFS (Note 17)
End of financial year
(11,171,173)
(10,088,712)
(2,719,704)
1,082,461
(500,113)
(424,071)
76,042
76,042
(ii) Currency translation reserve
Beginning of financial year
113,915
(9,094)
Net currency translation differences of financial
statements of foreign subsidiaries and
associated companies
End of financial year
(1,027,167)
(913,252)
123,009
113,915
-
-
-
-
-
-
59
58
- Acquisition of 51% equity interest in FJI (Note 30(ii))
- Acquisition of 49% non-controlling interest FJI through
share swap of the Company’s shares (Note 30(ii))
End of financial year
All issued ordinary shares are fully paid. There is no par value for these ordinary shares.
On 29 June 2016, the Group acquired 51% equity interest in Financial Joy Institute Pte. Ltd. (“FJI”) by way of share
swap for a purchase consideration of S$2.04 million (2,551,939 shares).
The Group acquired the 49% non-controlling interest of FJI on 31 March 2017 (9 months after the initial acquisition
date) for a purchase consideration through the issuance of 2,917,888 Company’s shares amounting to
S$1,932,651, which is the market share price as at the completion date of the transaction.
Annual Report FY2018For personal use only
99
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
24. Other reserves (continued)
25. Dividends
(iii) Capital reserve
Beginning of financial year
Disposal of 25.3% interest in 8VIC Global and its
subsidiaries
Decrease in equity attributable to
non-controlling interest
End of financial year
Group
Company
2018
S$
2017
S$
2018
S$
2017
S$
(1,917,162)
5,849,643
-
-
-
-
(3,800,057)
132,424
(1,917,162) (1,638,846)
(1,917,162) (1,638,846)
-
-
-
-
Declared and paid during the financial year
Ordinary dividends
Final exempt (one-tier) dividend for 2017: 0.25 (SGD cents) (2016: 0.50 cents)
per share
904,947
1,796,578
Group
2018
S$
2017
S$
26. Commitments
Disposal of 25.3% interest in 8VIC Global and its subsidiaries
(a)
Operating lease commitments - where the Group is a lessee
On 28 November 2017, as part of the DMC’s acquisition as described in Note 30 (i), the Group disposed 25.3%
interests of 8VIC Global Pte. Limited and its subsidiaries with carrying value of S$121,580. The excess of the fair
value consideration from acquisition of DMC and the carrying amount of 25.3% non -controlling interests was
adjusted in the capital reserve amounting to S$5,849,643.
Fair value consideration from acquisition of DMC (A)
Carrying amount of the 25.3% non-controlling interests of 8VIC Global Pte. Ltd. and its
subsidiaries (B)
Excess of fair value consideration recognised in parent’s equity (A)-(B)
Current year decrease in equity attributable to non-controlling interest
2018
S$
5,971,223
(121,580)
5,849,643
On 25 January 2018, he Group acquired 2% equity interest in DMC by re-issuing 7,000,000 treasury shares at a fair
value of S$2,072,504 which represents 8IH’s quoted price as of the date of transaction (Note 23(b)) and cash
S$238,215.
The difference between the total consideration above of S$2,310,719 and the carrying value of DMC’s non-
controlling interest of S$149,505 amounting to S$2,161,214 is recognised in the capital reserve.
In addition, the loss on the re-issuance of the treasury shares amounting to S$1,643,901 (Note 23(b)) is recognised
in the capital reserve.
Prior year decrease in equity attributable to non-controlling interest
The calculation of premium on acquisition of non-controlling interest as of the date of acquisition 49% non-
controlling interest in FJI is as follow:
2017
Acquisition of remaining 49% non-
controlling interest in FJI
Share capital
of the
Company
(Note 23)
S$
Non-controlling
interest – FJI
(49%)
S$
Non-controlling
interest – 8VIG
(5%)
S$
Capital reserve
S$
1,932,651
(125,516)
110,027
(1,917,162)
The Group leases office premises and event spaces from non-related parties under non-cancellable operating
lease agreements. The leases have varying terms, escalation clauses and renewal rights.
The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet
date but not recognised as liabilities, are as follows:
(b)
Operating lease commitments - where the Group is a lessor
The Group lease out event rental space to non-related parties under non-cancellable operating leases. The lessees
are required to pay either absolute fixed annual increase to the lease payments or contingent rents computed
based on their sales achieved during the lease period.
The future minimum lease receivables under non-cancellable operating leases contracted for at the balance sheet
date but not recognised as receivables, are as follows:
Not later than one year
Between one and five years
Not later than one year
Between one and five years
Group
2018
S$
2017
S$
1,593,000
2,319,000
3,912,000
1,445,000
1,305,000
2,750,000
Group
2018
S$
2017
S$
298,726
209,594
508,320
-
-
-
60
61
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
24. Other reserves (continued)
25. Dividends
Financial
100
Declared and paid during the financial year
Ordinary dividends
Final exempt (one-tier) dividend for 2017: 0.25 (SGD cents) (2016: 0.50 cents)
per share
904,947
1,796,578
Group
2018
S$
2017
S$
Disposal of 25.3% interest in 8VIC Global and its subsidiaries
(a)
Operating lease commitments - where the Group is a lessee
26. Commitments
The Group leases office premises and event spaces from non-related parties under non-cancellable operating
lease agreements. The leases have varying terms, escalation clauses and renewal rights.
The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet
date but not recognised as liabilities, are as follows:
Not later than one year
Between one and five years
Group
2018
S$
2017
S$
1,593,000
2,319,000
3,912,000
1,445,000
1,305,000
2,750,000
(b)
Operating lease commitments - where the Group is a lessor
The Group lease out event rental space to non-related parties under non-cancellable operating leases. The lessees
are required to pay either absolute fixed annual increase to the lease payments or contingent rents computed
based on their sales achieved during the lease period.
The future minimum lease receivables under non-cancellable operating leases contracted for at the balance sheet
date but not recognised as receivables, are as follows:
Not later than one year
Between one and five years
Group
2018
S$
-
-
-
2017
S$
298,726
209,594
508,320
60
61
(iii) Capital reserve
Beginning of financial year
Disposal of 25.3% interest in 8VIC Global and its
subsidiaries
Decrease in equity attributable to
non-controlling interest
End of financial year
Group
Company
2018
S$
2017
S$
2018
S$
2017
S$
(1,917,162)
5,849,643
-
-
-
-
(3,800,057)
(1,917,162) (1,638,846)
132,424
(1,917,162) (1,638,846)
-
-
-
-
On 28 November 2017, as part of the DMC’s acquisition as described in Note 30 (i), the Group disposed 25.3%
interests of 8VIC Global Pte. Limited and its subsidiaries with carrying value of S$121,580. The excess of the fair
value consideration from acquisition of DMC and the carrying amount of 25.3% non -controlling interests was
adjusted in the capital reserve amounting to S$5,849,643.
2018
S$
5,971,223
(121,580)
5,849,643
Fair value consideration from acquisition of DMC (A)
Carrying amount of the 25.3% non-controlling interests of 8VIC Global Pte. Ltd. and its
subsidiaries (B)
Excess of fair value consideration recognised in parent’s equity (A)-(B)
Current year decrease in equity attributable to non-controlling interest
On 25 January 2018, he Group acquired 2% equity interest in DMC by re-issuing 7,000,000 treasury shares at a fair
value of S$2,072,504 which represents 8IH’s quoted price as of the date of transaction (Note 23(b)) and cash
S$238,215.
The difference between the total consideration above of S$2,310,719 and the carrying value of DMC’s non-
controlling interest of S$149,505 amounting to S$2,161,214 is recognised in the capital reserve.
In addition, the loss on the re-issuance of the treasury shares amounting to S$1,643,901 (Note 23(b)) is recognised
in the capital reserve.
Prior year decrease in equity attributable to non-controlling interest
The calculation of premium on acquisition of non-controlling interest as of the date of acquisition 49% non-
controlling interest in FJI is as follow:
2017
Acquisition of remaining 49% non-
controlling interest in FJI
Share capital
of the
Company
(Note 23)
S$
Non-controlling
Non-controlling
interest – FJI
interest – 8VIG
(49%)
S$
(5%)
S$
Capital reserve
S$
1,932,651
(125,516)
110,027
(1,917,162)
Annual Report FY2018For personal use only
101
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management
Financial risk factors
The Group’s activities expose it to market risk (including currency risk, interest rate risk and price risk), credit risk
and liquidity risk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the
unpredictability of financial markets on the group’s financial performance.
The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are
executed by the Chief Financial Officer. The audit committee provides independent oversight to the effectiveness
of the risk management process .
(a)
Market risk
(i)
Currency risk
The Group operates in Asia with dominant operations in Singapore, Malaysia and China. Entities in the
Group regularly transact in currencies other than their respective functional currencies (“foreign
currencies”).
Currency risk arises within entities in the Group when transactions are denominated in foreign currencies
such as the Singapore Dollar (“SGD”), Malaysian Ringgit (“MYR”), Australian Dollar (“AUD”), United States
Dollar (“USD”), Chinese Renminbi (“RMB”), Japanese Yen (“JPY”), New Taiwan Dollar (“NTD”) and Indian
Rupee (“INR”).
In addition, the Group is exposed to currency translation risk on the net assets in foreign operations.
Currency exposure to the net assets of the Group’s foreign operations in Malaysia and China are managed
primarily through transactions denominated in the relevant foreign currencies.
62
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(a)
Market risk (continued)
(i)
Currency risk (continued)
The Group’s currency exposure based on the information provided to key management is as follows:
SGD
S$
MYR
S$
AUD
S$
USD
S$
RMB
S$
JPY
S$
NTD
S$
INR
S$
fi nancial assets, at FVOCI
13,772,080
2,222,382 8,615,314
7,165,043
Tra de a nd other receiva bles
9,992,367
442,162
-
730,184
23,764,447
2,664,544 8,615,314
7,895,227
517,488
23,034
540,522
101,397 13,534,583
4,848,012
174,668
495,844
25,393
276,065 14,030,427
4,873,405
(2,378,784)
(446,431)
(5,054)
(611,200)
(41,353)
(210,858)
(4,209,809)
-
-
(91,270)
-
-
-
-
-
-
-
(7,035,922)
-
-
-
(6,588,593)
(537,701)
(5,054)
(7,647,122)
(41,353)
(210,858)
-
-
-
-
-
Net financial assets
17,175,854
2,126,843 8,610,260
248,105
499,169
276,065 13,819,569
4,873,405
139,153
(112,235) 8,610,260
(12,828)
33,321
276,065 13,117,435
4,873,405
At 31 Ma rch 2018
Financial assets
Ca s h a nd cash equivalents,
Fi na ncial a ssets, at FVPL a nd
Financial liabilities
Tra de a nd other paya bles
Fi nancial lease liabilities
Borrowi ngs
Redeemable participating
s ha res
Currency exposure of
financial assets net of those
denominated in the
respective entities’
functional currencies
At 31 Ma rch 2017
Financial assets
Ca s h a nd cash equivalents,
i nves tment s ecurities and
a va i lable-for-sale financial
a s s ets
10,192,655
959,822 29,146,278 1,057,427
141,192
9,457,488
Tra de a nd other receiva bles
8,900,067
534,596
211,816
245,916
1,075
29,735
19,092,722
1,494,418 29,358,094 1,303,343
142,267
9,487,223
Financial liabilities
Tra de a nd other paya bles
(2,283,086)
Fi nancial lease liabilities
(17,485)
(2,300,571)
(394,042)
(124,735)
(518,777)
(18,518)
(75,043)
(11,851)
-
-
-
(18,518)
(75,043)
(11,851)
-
-
-
Net financial assets
16,792,151
975,641 29,339,576 1,228,300
130,416
9,487,223
Currency exposure of
financial assets net of
those denominated in the
respective entities’
functional currencies
229,549
101,635 29,339,576
393,863
14,549
9,487,223
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
63
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
102
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(a)
Market risk (continued)
(i)
Currency risk (continued)
The Group’s currency exposure based on the information provided to key management is as follows:
At 31 Ma rch 2018
Financial assets
Ca s h a nd cash equivalents,
Fi na ncial a ssets, at FVPL a nd
fi nancial assets, at FVOCI
Tra de a nd other receiva bles
Financial liabilities
Tra de a nd other paya bles
Fi nancial lease liabilities
Borrowi ngs
Redeemable participating
s ha res
SGD
S$
MYR
S$
AUD
S$
USD
S$
RMB
S$
JPY
S$
NTD
S$
INR
S$
13,772,080
9,992,367
23,764,447
2,222,382 8,615,314
-
2,664,544 8,615,314
442,162
7,165,043
730,184
7,895,227
517,488
23,034
540,522
101,397 13,534,583
174,668
495,844
276,065 14,030,427
4,848,012
25,393
4,873,405
(2,378,784)
-
(4,209,809)
(446,431)
(91,270)
-
(5,054)
-
-
(611,200)
-
-
(41,353)
-
-
-
(6,588,593)
-
(537,701)
-
(5,054)
(7,035,922)
(7,647,122)
-
(41,353)
-
-
-
-
-
(210,858)
-
-
-
(210,858)
-
-
-
-
-
Net financial assets
17,175,854
2,126,843 8,610,260
248,105
499,169
276,065 13,819,569
4,873,405
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management
Financial risk factors
The Group’s activities expose it to market risk (including currency risk, interest rate risk and price risk), credit risk
and liquidity risk. The Group’s overall risk management strategy seeks to minimise any adverse effects from the
unpredictability of financial markets on the group’s financial performance.
The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are
executed by the Chief Financial Officer. The audit committee provides independent oversight to the effectiveness
of the risk management process .
(a)
Market risk
(i)
Currency risk
currencies”).
Rupee (“INR”).
The Group operates in Asia with dominant operations in Singapore, Malaysia and China. Entities in the
Group regularly transact in currencies other than their respective functional currencies (“foreign
Currency risk arises within entities in the Group when transactions are denominated in foreign currencies
such as the Singapore Dollar (“SGD”), Malaysian Ringgit (“MYR”), Australian Dollar (“AUD”), United States
Dollar (“USD”), Chinese Renminbi (“RMB”), Japanese Yen (“JPY”), New Taiwan Dollar (“NTD”) and Indian
In addition, the Group is exposed to currency translation risk on the net assets in foreign operations.
Currency exposure to the net assets of the Group’s foreign operations in Malaysia and China are managed
primarily through transactions denominated in the relevant foreign currencies.
139,153
(112,235) 8,610,260
(12,828)
33,321
276,065 13,117,435
4,873,405
Currency exposure of
financial assets net of those
denominated in the
respective entities’
functional currencies
At 31 Ma rch 2017
Financial assets
Ca s h a nd cash equivalents,
i nves tment s ecurities and
a va i lable-for-sale financial
a s s ets
Tra de a nd other receiva bles
Financial liabilities
Tra de a nd other paya bles
Fi nancial lease liabilities
10,192,655
8,900,067
19,092,722
959,822 29,146,278 1,057,427
245,916
534,596
211,816
1,494,418 29,358,094 1,303,343
141,192
1,075
142,267
9,457,488
29,735
9,487,223
(2,283,086)
(17,485)
(2,300,571)
(394,042)
(124,735)
(518,777)
(18,518)
-
(18,518)
(75,043)
-
(75,043)
(11,851)
-
(11,851)
-
-
-
Net financial assets
16,792,151
975,641 29,339,576 1,228,300
130,416
9,487,223
Currency exposure of
financial assets net of
those denominated in the
respective entities’
functional currencies
229,549
101,635 29,339,576
393,863
14,549
9,487,223
62
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
63
Annual Report FY2018For personal use only
103
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
27.
Financial risk management (continued)
(a)
Market risk (continued)
(i)
Currency risk (continued)
(a)
Market risk (continued)
(i)
Currency risk (continued)
The Company’s currency exposure based on the information provided to key management is as follows:
2018
SGD
S$
AUD
S$
2017
SGD
S$
AUD
S$
Financial Assets
Cash and cash equivalents, financial assets, at
FVPL and financial assets, at FVOCI
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings
5,370,796
17,753,710
23,124,506
20,045
-
20,045
2,404,801
27,797,479
30,202,280
815,871
-
815,871
(4,489,093)
(4,209,809)
(8,698,902)
(5,054)
-
(5,054)
(4,037,626)
-
(4,037,626)
(18,518)
-
(18,518)
Net financial assets
14,425,604
14,991
26,164,654
797,353
Currency exposure of financial assets net of
those denominated in the respective
entities’ functional currencies
-
14,991
-
797,353
64
If the MYR, AUD, USD, RMB, JPY, NTD and INR change against the SGD by 7% (2017: 8%), 6% (2017: 3%),
6% (2017: 3%), 3% (2017: 3%), 1% (2017: 4%), 2% (2017: nil) and 7% (2017: nil) respectively with all other
variables including tax rate being held constant, the effects arising from the net financial asset that are
exposed to currency risk will be as follows:
Group
MYR against SGD
- Strengthened
- Weakened
AUD against SGD
- Strengthened
- Weakened
USD against SGD
- Strengthened
- Weakened
RMB against SGD
- Strengthened
- Weakened
JPY against SGD
- Strengthened
- Weakened
NTD against SGD
- Strengthened
- Weakened
INR against SGD
- Strengthened
- Weakened
Company
AUD against SGD
- Strengthened
- Weakened
Profit
after tax
S$
(6,521)
6,521
(639)
639
830
(830)
2,291
(2,291)
217,749
(217,749)
283,145
(283,145)
747
(747)
Increase/(Decrease)
2018
comprehensive
Profit
comprehensive
Other
income
S$
2017
Other
after tax
income
S$
S$
5,827
(5,827)
922
(922)
347,480
(347,480)
81,311
(81,311)
406,636
(406,636)
323,919
(323,919)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,807
(9,807)
362
(362)
314,976
(314,976)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,190
(9,190)
10,664
(10,664)
65
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
27.
Financial risk management (continued)
(a)
Market risk (continued)
(i)
Currency risk (continued)
(a)
Market risk (continued)
(i)
Currency risk (continued)
Financial
104
The Company’s currency exposure based on the information provided to key management is as follows:
2018
SGD
S$
AUD
S$
2017
SGD
S$
AUD
S$
Financial Assets
Cash and cash equivalents, financial assets, at
FVPL and financial assets, at FVOCI
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings
5,370,796
17,753,710
23,124,506
20,045
2,404,801
27,797,479
815,871
20,045
30,202,280
815,871
(4,489,093)
(4,209,809)
(8,698,902)
(5,054)
(4,037,626)
(18,518)
(5,054)
(4,037,626)
(18,518)
-
-
-
-
-
Net financial assets
14,425,604
14,991
26,164,654
797,353
Currency exposure of financial assets net of
those denominated in the respective
entities’ functional currencies
-
14,991
-
797,353
If the MYR, AUD, USD, RMB, JPY, NTD and INR change against the SGD by 7% (2017: 8%), 6% (2017: 3%),
6% (2017: 3%), 3% (2017: 3%), 1% (2017: 4%), 2% (2017: nil) and 7% (2017: nil) respectively with all other
variables including tax rate being held constant, the effects arising from the net financial asset that are
exposed to currency risk will be as follows:
Group
MYR against SGD
- Strengthened
- Weakened
AUD against SGD
- Strengthened
- Weakened
USD against SGD
- Strengthened
- Weakened
RMB against SGD
- Strengthened
- Weakened
JPY against SGD
- Strengthened
- Weakened
NTD against SGD
- Strengthened
- Weakened
INR against SGD
- Strengthened
- Weakened
Company
AUD against SGD
- Strengthened
- Weakened
Increase/(Decrease)
2018
2017
Profit
after tax
S$
Other
comprehensive
income
S$
Profit
after tax
S$
Other
comprehensive
income
S$
(6,521)
6,521
-
-
5,827
(5,827)
922
(922)
347,480
(347,480)
81,311
(81,311)
406,636
(406,636)
323,919
(323,919)
(639)
639
830
(830)
2,291
(2,291)
217,749
(217,749)
283,145
(283,145)
747
(747)
-
-
-
-
-
-
-
-
-
-
-
-
9,807
(9,807)
362
(362)
314,976
(314,976)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,190
(9,190)
10,664
(10,664)
65
64
Annual Report FY2018For personal use only
105
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
27.
Financial risk management (continued)
(a)
Market risk (continued)
(ii)
Price risk
The Group is exposed to equity securities price risk arising from the investments held by the Group which
are classified on the consolidated statement of financial position either as available-for-sale or at fair
value through profit or loss. These securities are listed in Australia, Japan, India, Taiwan, New Zealand,
Malaysia and Singapore. To manage its price risk arising from investments in equity securities, the Group
diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the
Group.
If prices for equity securities listed in Australia, Japan, India, Taiwan, New Zealand, Malaysia and
Singapore had changed by 18% (2017: 17%), 18% (2017: 17%), 18% (2017: 17%), 18% (2017: 17%), 18%
(2017: 17%), 18% (2017: 17%) and 18% (2017: 17%) respectively with all other variables including tax rate
being held constant, the effects on profit after tax and other comprehensive income would have been:
Group
Listed in Australia
- increased by
- decreased by
Listed in Japan
- increased by
- decreased by
Listed in India
- increased by
- decreased by
Listed in Taiwan
- increased by
- decreased by
Listed in the New Zealand
- increased by
- decreased by
Listed in the Malaysia
- increased by
- decreased by
Increase/(Decrease)
2018
2017
Profit
after tax
S$
Other
comprehensive
income
S$
Profit
after tax
S$
Other
comprehensive
income
S$
1,016,161
(1,010,161)
238,348
(238,348)
2,192,346
(2,192,346)
1,835,542
(1,835,542)
14,802
(14,802)
707,707
(707,707)
1,914,867
(1,914,867)
-
-
26,221
(26,221)
-
-
-
-
-
-
-
-
-
-
1,360,931
(1,360,931)
100,316
(100,316)
30,934
(30,934)
11,574
(11,574)
22,792
(22,792)
-
-
-
-
-
-
-
-
-
-
66
(a)
Market risk (continued)
(ii)
Price risk (continued)
Group
Listed in the Singapore
- increased by
- decreased by
Company
Listed in Australia
- increased by
- decreased by
Listed in the Singapore
- increased by
- decreased by
(b)
Credit risk
Increase/(Decrease)
2018
2017
Profit
comprehensive
Profit
comprehensive
Other
income
S$
Other
income
S$
after tax
S$
after tax
S$
71,368
(71,368)
-
-
6,507
(6,507)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,428
(60,428)
Credit exposure to an individual counterparty is restricted by credit limits that are approved by the Board of
Directors based on ongoing credit evaluations. The counterparty’s payment pattern and credit exposure are
continuously monitored at the entity level by the respective management and at the Group level by the Executi ve
Management.
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to
engage in a repayment plan with the Group. The Group categorises a loan or receivable for write off when a debtor
fails to make contractual payments greater than a year past due based on historical collection trend. Where loans
or receivables have been written off, the company continues to engage in enforcement activity to attempt to
recover the receivable due. Where recoveries a re made, these are recognised in profit or loss.
The Group applies the simplified approach to providing for expected credit losses prescribed by FRS 109, which
permits the use of the lifetime credit loss provision for all trade receivables.
To measure the expected credit losses, trade receivables, have been grouped based on shared credit risk
characteristics and days past due. In calculating the expected credit loss rates, the Group considers historical loss
rates for each category of customers, and adjusts for forward-looking macroeconomic data.
The Group and Company uses four categories of internal credit risk rating for its financial assets at amortised costs.
These four categories reflect the respective credit risk and how the loan loss provision is determined for each of
those categories.
67
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
27.
Financial risk management (continued)
Financial
106
(a)
Market risk (continued)
(ii)
Price risk
The Group is exposed to equity securities price risk arising from the investments held by the Group which
are classified on the consolidated statement of financial position either as available-for-sale or at fair
value through profit or loss. These securities are listed in Australia, Japan, India, Taiwan, New Zealand,
Malaysia and Singapore. To manage its price risk arising from investments in equity securities, the Group
diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the
Group.
If prices for equity securities listed in Australia, Japan, India, Taiwan, New Zealand, Malaysia and
Singapore had changed by 18% (2017: 17%), 18% (2017: 17%), 18% (2017: 17%), 18% (2017: 17%), 18%
(2017: 17%), 18% (2017: 17%) and 18% (2017: 17%) respectively with all other variables including tax rate
being held constant, the effects on profit after tax and other comprehensive income would have been:
Group
Listed in Australia
- increased by
- decreased by
Listed in Japan
- increased by
- decreased by
Listed in India
- increased by
- decreased by
Listed in Taiwan
- increased by
- decreased by
Listed in the New Zealand
- increased by
- decreased by
Listed in the Malaysia
- increased by
- decreased by
Increase/(Decrease)
2018
Other
2017
Other
Profit
comprehensive
Profit
comprehensive
after tax
income
after tax
income
S$
S$
S$
S$
1,016,161
(1,010,161)
238,348
2,192,346
(238,348)
(2,192,346)
1,835,542
(1,835,542)
14,802
(14,802)
707,707
(707,707)
1,914,867
(1,914,867)
-
-
26,221
(26,221)
-
-
-
-
-
-
-
-
-
-
1,360,931
(1,360,931)
100,316
(100,316)
30,934
(30,934)
11,574
(11,574)
22,792
(22,792)
-
-
-
-
-
-
-
-
-
-
66
(a)
Market risk (continued)
(ii)
Price risk (continued)
Group
Listed in the Singapore
- increased by
- decreased by
Company
Listed in Australia
- increased by
- decreased by
Listed in the Singapore
- increased by
- decreased by
(b)
Credit risk
Increase/(Decrease)
2018
2017
Profit
after tax
S$
Other
comprehensive
income
S$
Profit
after tax
S$
Other
comprehensive
income
S$
71,368
(71,368)
-
-
6,507
(6,507)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,428
(60,428)
-
-
Credit exposure to an individual counterparty is restricted by credit limits that are approved by the Board of
Directors based on ongoing credit evaluations. The counterparty’s payment pattern and credit exposure are
continuously monitored at the entity level by the respective management and at the Group level by the Executi ve
Management.
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to
engage in a repayment plan with the Group. The Group categorises a loan or receivable for write off when a debtor
fails to make contractual payments greater than a year past due based on historical collection trend. Where loans
or receivables have been written off, the company continues to engage in enforcement activity to attempt to
recover the receivable due. Where recoveries a re made, these are recognised in profit or loss.
The Group applies the simplified approach to providing for expected credit losses prescribed by FRS 109, which
permits the use of the lifetime credit loss provision for all trade receivables.
To measure the expected credit losses, trade receivables, have been grouped based on shared credit risk
characteristics and days past due. In calculating the expected credit loss rates, the Group considers historical loss
rates for each category of customers, and adjusts for forward-looking macroeconomic data.
The Group and Company uses four categories of internal credit risk rating for its financial assets at amortised costs.
These four categories reflect the respective credit risk and how the loan loss provision is determined for each of
those categories.
67
Annual Report FY2018For personal use only
107
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(b)
Credit risk (continued)
A summary of assumptions underpinning the Group’s expected credit loss model is as follow:
The Group’s credit risk exposure in relation to trade receivables, under FRS 109 as at 31 March 2018 are set out
Group and Company’s
category of internal
credit rating
Performing
Underperforming
Non-performing
Write-off
Group and Company’s definition
of category
Customers have a low risk of default and a strong capacity to
meet contractual cash flows.
Loans for which there is a significant increase in credit risk.
As significant increase in credit risk is presumed i f interest
and/or principal repayments are 30 days past due.
Interest and/or principal repayments are 60-365 days past
due.
Interest and/or principal repayments are 365 days past due
and there is no reasonable expectation of recovery.
Basis for recognition
of expected credit
loss provision
12-month expected
credit losses
Lifetime expected
credit losses
Lifetime expected
credit losses
Asset is written off
Movements in credit loss allowance for financial assets are set out as follows:
Group
Balance at 1 April 2017
Application of FRS 109
Balance at 1 April 2017 under FRS 109
Changes in credit loss recognised in profit or loss:
- New financial assets acquired
- Increase due to credit risk
Balance at 31 March 2018
Company
Balance at 1 April 2017
Application of FRS 109
Balance at 1 April 2017 under FRS 109
Changes in credit loss recognised in profit or loss:
- Increase due to credit risk
Balance at 31 March 2018
Trade
receivables
Other financial
assets at
amortised costs
-
-
-
163,421
-
163,421
-
-
-
-
6,264
6,264
Total
-
-
-
163,421
6,264
169,685
Other financial
assets at
amortised costs
-
-
-
6,264
6,264
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(b)
Credit risk (continued)
in the provision matrix as follows:
The Group’s credit risk exposure in relation to trade receivables under FRS 109 as at 31 March 2018 are set out as
Current
Within 30
30 to 60
More than
Total
days
days
90 days
Past due
61-90
days
0%
0%
0.35%
37%
56%
1,005,191 1,008,031
230,051
238,005
130,899 2,612,177
-
-
(813)
(88,741)
(73,867)
(163,421)
Current
Within 30
30 to 60
days
days
61-90
days
More than
90 days
Total
Past due
1,005,191
- 1,008,031
213,790
-
672
- 1,005,191
351 1,222,844
16,261 237,333
130,548
384,142
-
-
-
-
-
-
-
-
-
-
-
-
496,142
146,556
117,274
89,272
153,987
-
-
-
-
496,142
507,089
-
496,142
146,556
117,274
89,272
153,987 1,003,231
2018
Expected loss rate
Gross carrying amount
Credit loss allowance
follows:
2018
Gross carrying amount
-Not past due
-Past due but not impaired
-Past due and impaired
2017
Gross carrying amount
-Not past due
-Past due but not impaired
Less allowance for impairment
Net carrying amount
Trade receivables
Less allowance for impairment
Net carrying amount
1,005,191 1,008,031
229,238 149,264
57,032 2,448,756
(813)
(88,741)
(73,867)
(163,421)
In 2017, the impairment of financial assets was assessed based on the incurred loss impairment model. Individual
receivables which were known to be uncollectible were written off by reducing the carrying amount directly. The
other receivables were assessed collectively, to determine whether there was objective evidence that an
impairment had been incurred but not yet identified.
The Group considered that there was evidence if any of the following indicators were present:
• Significant financial difficulties of the debtor;
• Probability that the debtor will enter bankruptcy or financial reorganisation; and
• Default or delinquency in payments (more than 90 days overdue).
Financial assets that are neither past due nor impaired
Financial assets that are neither past due nor impaired are mainly deposits with banks with high credit-ratings
assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are
substantially companies with a good collection track record with the Group and Company.
68
69
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
108
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(b)
Credit risk (continued)
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(b)
Credit risk (continued)
A summary of assumptions underpinning the Group’s expected credit loss model is as follow:
Group and Company’s
Group and Company’s definition
category of internal
of category
credit rating
Performing
Customers have a low risk of default and a strong capacity to
12-month expected
meet contractual cash flows.
credit losses
Underperforming
Loans for which there is a significant increase in credit risk.
Lifetime expected
As significant increase in credit risk is presumed i f interest
credit losses
and/or principal repayments are 30 days past due.
Non-performing
Interest and/or principal repayments are 60-365 days past
Lifetime expected
due.
credit losses
Write-off
Interest and/or principal repayments are 365 days past due
Asset is written off
and there is no reasonable expectation of recovery.
Basis for recognition
of expected credit
loss provision
Movements in credit loss allowance for financial assets are set out as follows:
Balance at 1 April 2017
Application of FRS 109
Balance at 1 April 2017 under FRS 109
Changes in credit loss recognised in profit or loss:
- New financial assets acquired
- Increase due to credit risk
Balance at 31 March 2018
Group
Company
Balance at 1 April 2017
Application of FRS 109
Balance at 1 April 2017 under FRS 109
Changes in credit loss recognised in profit or loss:
- Increase due to credit risk
Balance at 31 March 2018
Trade
Other financial
Total
receivables
assets at
amortised costs
-
-
-
-
163,421
163,421
-
-
-
-
6,264
6,264
-
-
-
163,421
6,264
169,685
Other financial
assets at
amortised costs
-
-
-
6,264
6,264
The Group’s credit risk exposure in relation to trade receivables, under FRS 109 as at 31 March 2018 are set out
in the provision matrix as follows:
2018
Expected loss rate
Gross carrying amount
Credit loss allowance
Current
Within 30
days
30 to 60
days
61-90
days
More than
90 days
Total
Past due
0%
0%
1,005,191 1,008,031
-
-
0.35%
230,051
(813)
37%
238,005
(88,741)
56%
130,899 2,612,177
(163,421)
(73,867)
The Group’s credit risk exposure in relation to trade receivables under FRS 109 as at 31 March 2018 are set out as
follows:
2018
Gross carrying amount
-Not past due
-Past due but not impaired
-Past due and impaired
Current
Within 30
days
30 to 60
days
61-90
days
More than
90 days
Total
Past due
1,005,191
-
- 1,008,031
-
-
-
213,790
-
672
16,261 237,333
- 1,005,191
351 1,222,844
384,142
130,548
Less allowance for impairment
Net carrying amount
-
1,005,191 1,008,031
-
(813)
(88,741)
229,238 149,264
(73,867)
(163,421)
57,032 2,448,756
2017
Gross carrying amount
-Not past due
-Past due but not impaired
496,142
-
-
146,556
-
117,274
-
89,272
-
153,987
496,142
507,089
Less allowance for impairment
Net carrying amount
-
496,142
-
146,556
-
117,274
-
89,272
-
-
153,987 1,003,231
Trade receivables
In 2017, the impairment of financial assets was assessed based on the incurred loss impairment model. Individual
receivables which were known to be uncollectible were written off by reducing the carrying amount directly. The
other receivables were assessed collectively, to determine whether there was objective evidence that an
impairment had been incurred but not yet identified.
The Group considered that there was evidence if any of the following indicators were present:
• Significant financial difficulties of the debtor;
• Probability that the debtor will enter bankruptcy or financial reorganisation; and
• Default or delinquency in payments (more than 90 days overdue).
Financial assets that are neither past due nor impaired
Financial assets that are neither past due nor impaired are mainly deposits with banks with high credit-ratings
assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired are
substantially companies with a good collection track record with the Group and Company.
68
69
Annual Report FY2018For personal use only
109
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(c)
Liquidity risk
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(e)
Fair value measurements
Prudent liquidity risk management includes maintaining sufficient cash and cash equivalents and the ability to
close out market positions at a short notice. At the balance sheet date, assets held by the Group and the Company
for managing liquidity risk included cash and short term deposits as disclosed in Note 10.
The table below analyses non-derivative financial liabilities of the Group and the Company into relevant maturity
groupings based on the remaining period from the balance sheet date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal
their carrying amounts as the impact of discounting is not significant.
The table below presents assets and liabilities measured and carried at fair value and classified by level of the
following fair value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
(b) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and
(c)
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
Group
At 31 March 2018
Trade and other payables
Finance lease liabilities
Borrowings
Redeemable participating shares
At 31 March 2017
Trade and other payables
Finance lease liabilities
Company
At 31 March 2018
Trade and other payables
Borrowings
At 31 March 2017
Trade and other payables
Less than
1 year
S$
Between
1 and
5 years
S$
3,693,680
37,286
4,209,809
7,035,922
-
60,144
-
-
2,782,540
56,471
-
100,282
4,494,147
4,209,809
4,126,264
-
-
-
(d)
Capital risk
Financial assets, at FVOCI
428,267
428,267
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and to ensure that the Group can fund its operations and continue as a going
concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There were no transfers between levels 1 and 2 during the year.
The fair value of financial instruments traded in active markets (such as fair value through profit and loss and
financial assets through other comprehensive income) is based on quoted market prices at the balance sheet date.
The quoted market price used for financial assets held by the Group is the current bid price. These instruments
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management
of debt levels, distributions to shareholders and share issues.
The carrying amount less impairment provision of trade receivables and payables are assumed to approximate
70
71
Level 1
Level 2
Level 3
S$
S$
S$
Total
S$
25,696,375
1,637,998
27,334,373
113,879
113,879
26,356,434
13,011,309
39,367,743
25,696,375
1,751,877
27,448,252
26,356,434
13,011,309
39,367,743
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial assets, at FVPL
37,000
37,000
Financial assets, at FVPL
Financial assets, at FVOCI
Total assets
Financial assets, at FVPL
Financial assets, at FVOCI
Total assets
Group
2018
Assets
2017
Assets
Company
2018
Assets
2017
Assets
are included in Level 1.
their fair values.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
110
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(c)
Liquidity risk
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(e)
Fair value measurements
Prudent liquidity risk management includes maintaining sufficient cash and cash equivalents and the ability to
close out market positions at a short notice. At the balance sheet date, assets held by the Group and the Company
for managing liquidity risk included cash and short term deposits as disclosed in Note 10.
The table below analyses non-derivative financial liabilities of the Group and the Company into relevant maturity
groupings based on the remaining period from the balance sheet date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal
their carrying amounts as the impact of discounting is not significant.
The table below presents assets and liabilities measured and carried at fair value and classified by level of the
following fair value measurement hierarchy:
(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
(b) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and
(c)
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
Between
1 and
5 years
S$
60,144
Less than
1 year
S$
3,693,680
37,286
4,209,809
7,035,922
2,782,540
56,471
100,282
4,494,147
4,209,809
4,126,264
-
-
-
-
-
-
-
Group
2018
Assets
Financial assets, at FVPL
Financial assets, at FVOCI
Total assets
2017
Assets
Financial assets, at FVPL
Financial assets, at FVOCI
Total assets
Company
2018
Assets
Financial assets, at FVPL
2017
Assets
Financial assets, at FVOCI
Level 1
S$
Level 2
S$
Level 3
S$
Total
S$
25,696,375
1,637,998
27,334,373
-
113,879
113,879
26,356,434
13,011,309
39,367,743
37,000
428,267
-
-
-
-
-
-
-
-
-
-
-
-
-
25,696,375
1,751,877
27,448,252
26,356,434
13,011,309
39,367,743
37,000
428,267
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and to ensure that the Group can fund its operations and continue as a going
There were no transfers between levels 1 and 2 during the year.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management
of debt levels, distributions to shareholders and share issues.
The fair value of financial instruments traded in active markets (such as fair value through profit and loss and
financial assets through other comprehensive income) is based on quoted market prices at the balance sheet date.
The quoted market price used for financial assets held by the Group is the current bid price. These instruments
are included in Level 1.
The carrying amount less impairment provision of trade receivables and payables are assumed to approximate
their fair values.
70
71
Group
At 31 March 2018
Trade and other payables
Finance lease liabilities
Borrowings
Redeemable participating shares
At 31 March 2017
Trade and other payables
Finance lease liabilities
Company
At 31 March 2018
Trade and other payables
Borrowings
At 31 March 2017
Trade and other payables
(d)
Capital risk
concern.
Annual Report FY2018For personal use only
111
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(f)
Financial instruments by category
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
Financial assets, at FVPL
Financial assets, at FVOCI
Financial assets at amortised cost
Financial liabilities at amortised cost
25,696,375
1,751,877
35,044,031
(15,030,681)
26,356,434
13,025,188
22,485,581
(2,924,760)
37,000
-
23,300,713
(8,703,956)
-
428,267
30,606,909
(4,126,264)
28. Related party transactions
In addition to the information disclosed elsewhere in the financial statements, the following transactions took
place between the Group and related parties at terms agreed between the parties:
(a)
Sales and purchases of services
Professional fees paid to an affiliated company
Consultation (expense)/income with associated company
Interest income from associated company
Sale of course materials to an affiliated company
Group
2018
S$
-
-
-
-
2017
S$
-
(61,698)
11,836
-
Other related parties comprise mainly companies which are controlled by the Group’s key management personnel
and their close family members.
Outstanding balances at 31 March 2018, arising from sale/purchase of services, are unsecured and
receivable/payable within 12 months from balance sheet date and are di sclosed in Notes 11 and 18 respectively.
(b)
Directors and key management personnel compensation
Directors and key management personnel compensation is as follows:
Wages, salaries and fees
Employer’s contribution to defined contribution plans, including Central
Provident Fund
Group
2018
S$
2017
S$
1,943,913
1,552,270
137,842
2,081,755
100,342
1,652,612
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
29.
Segment information
The Group is organised into geographic business units based on management reporting structure and
organisational set-up, in line with the main business divisions driving the growth of the Group. Geographically,
management manages and monitors the business in two primary geographic areas namely Singapore and
Malaysia, where the Company and certain subsidiaries operate. Based on the management reporting structure,
management reviews the business segments’ performance and to make strategic decisions.
The segments under the reporting model are as follows:
-
Education:
involved in financial education and training providers in Asia, via its flagship course “Value
Investing Bootcamp”, which focus on educating its students on the principles and techniques of value
investing.
-
Investment in Public Markets: involved in investment in listed equities in the Asia -Pacific through a focused
strategy of investing in undervalued companies with unique, scalable and resilient business models run by
aligned owner-operators to provide the foundation for sustainable long-term growth and to achieve long-
term investment returns.
-
Investment in Private Markets: involved in strategic investment in private businesses which have strong and
sustainable business models, with long-term growth potential.
- Media: involved in specialists and training academy that assists brands and individuals with the opportunity
to achieve business and financial success.
-
Creatives: involved in branding and marketing arm of Digimatic and specialises in content creation as well as
full end-to-end branding and marketing solutions for clients.
-
E-commerce: involved in marketing and selling products globally via ecommerce platform, utilising data
analytics and customers’ feedback to sell products effectively with ROI focused.
-
All other segments: includes subsidiaries that just commenced operations in China, Taiwan, Thailand and
Australia, providing financial education and training.
Management monitors the operating results of its business units separately for making decisions about resource
allocation and performance assessment. Segment performance is evaluated based on operating profit or loss
which in certain respects, as explained in the table below, is measured differently from operating profit or loss in
the consolidated financial statements.
72
73
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
112
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
27.
Financial risk management (continued)
(f)
Financial instruments by category
Group
2018
S$
2017
S$
Company
2018
S$
2017
S$
Financial assets, at FVPL
Financial assets, at FVOCI
Financial assets at amortised cost
Financial liabilities at amortised cost
25,696,375
1,751,877
35,044,031
26,356,434
13,025,188
37,000
-
22,485,581
23,300,713
(15,030,681)
(2,924,760)
(8,703,956)
-
428,267
30,606,909
(4,126,264)
28. Related party transactions
(a)
Sales and purchases of services
In addition to the information disclosed elsewhere in the financial statements, the following transactions took
place between the Group and related parties at terms agreed between the parties:
Professional fees paid to an affiliated company
Consultation (expense)/income with associated company
Interest income from associated company
Sale of course materials to an affiliated company
Other related parties comprise mainly companies which are controlled by the Group’s key management personnel
and their close family members.
Outstanding balances at 31 March 2018, arising from sale/purchase of services, are unsecured and
receivable/payable within 12 months from balance sheet date and are di sclosed in Notes 11 and 18 respectively.
(b)
Directors and key management personnel compensation
Directors and key management personnel compensation is as follows:
Group
2018
S$
2017
S$
(61,698)
11,836
-
-
-
-
-
-
Group
2018
S$
2017
S$
1,943,913
1,552,270
137,842
2,081,755
100,342
1,652,612
Employer’s contribution to defined contribution plans, including Central
Wages, salaries and fees
Provident Fund
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
29.
Segment information
The Group is organised into geographic business units based on management reporting structure and
organisational set-up, in line with the main business divisions driving the growth of the Group. Geographically,
management manages and monitors the business in two primary geographic areas namely Singapore and
Malaysia, where the Company and certain subsidiaries operate. Based on the management reporting structure,
management reviews the business segments’ performance and to make strategic decisions.
The segments under the reporting model are as follows:
-
-
-
involved in financial education and training providers in Asia, via its flagship course “Value
Education:
Investing Bootcamp”, which focus on educating its students on the principles and techniques of value
investing.
Investment in Public Markets: involved in investment in listed equities in the Asia -Pacific through a focused
strategy of investing in undervalued companies with unique, scalable and resilient business models run by
aligned owner-operators to provide the foundation for sustainable long-term growth and to achieve long-
term investment returns.
Investment in Private Markets: involved in strategic investment in private businesses which have strong and
sustainable business models, with long-term growth potential.
- Media: involved in specialists and training academy that assists brands and individuals with the opportunity
to achieve business and financial success.
-
-
-
Creatives: involved in branding and marketing arm of Digimatic and specialises in content creation as well as
full end-to-end branding and marketing solutions for clients.
E-commerce: involved in marketing and selling products globally via ecommerce platform, utilising data
analytics and customers’ feedback to sell products effectively with ROI focused.
All other segments: includes subsidiaries that just commenced operations in China, Taiwan, Thailand and
Australia, providing financial education and training.
Management monitors the operating results of its business units separately for making decisions about resource
allocation and performance assessment. Segment performance is evaluated based on operating profit or loss
which in certain respects, as explained in the table below, is measured differently from operating profit or loss in
the consolidated financial statements.
72
73
Annual Report FY2018For personal use only
Financial
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Annual Report FY2018For personal use only
115
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
29.
Segment information (continued)
30. Business combinations
The management assesses the performance of the operating segments based on profit after tax.
Current year acquisition
(a)
Revenue from major products and services
(i)
Acquisition of Digimatic Group Limited.
Revenues from external customers are derived mainly from financial education and training providers, investment
income from public and private markets , media, creatives and e-commerce. Breakdown of the revenue and
investment income is as follows:
Revenue and investment income
Education
Investment in Public Markets
Investment in Private Markets
Media
Creatives
E-commerce
Others
(b)
Geographical information
2018
S$
2017
S$
11,086,574
(547,843)
4,147,569
3,864,729
517,593
923,578
1,514,251
21,506,451
10,721,263
2,998,092
15,065,946
-
-
-
120,768
28,906,069
The Group’s business segments operate in two main geographical areas:
possible high and low scenarios.
•
Singapore - the Company is headquartered and has operations in Singapore. The operations in this area are
principally the financial education and training providers , and investment in public and pri vate markets;
Description
Fair value considerations
Unobservable
inputs
Range of
input
• Malaysia - the operations in this area are principally the financial education and training providers, and
private markets investee;
Revenue and investment income
Singapore
Malaysia
Others
Non-current assets
Singapore
Malaysia
Others
2018
S$
2017
S$
14,987,337
5,004,863
1,514,251
21,506,451
5,409,412
561,536
1,041,672
7,012,620
25,925,579
2,859,722
120,768
28,906,069
18,577,616
382,262
9,608
18,969,486
At the beginning of the financial year, the Group held 10.8 % interest in Digimatic Group Limited (“Digimatic” or
“DMC”) which was recogni sed as financial assets, at FVOCI. Prior to the adoption of FRS 109, it was classified as
available for sale financial assets (Note 17). On 28 November 2017, the Group acquired an additional 58.9% equity
interests in DMC. The acquisition was satisfied through the partial disposal of 25.3% of the Group’s effective equity
interest in 8VIC Global Pte. Limited and its subsidiaries (“8VIC”) to DMC as per Note 24(b)(iii). Following this
transaction, DMC became a 69.7% owned subsidiary of the Group.
The Group applied significant judgement to determine that the fair value consideration was assessed based on
the independent valuation of 8VIC’s capitalisation of future maintainable earnings (“FME”) as the primary
methodology instead of the quoted price of new shares issued by Digimatic to the Company as the trading volume
of DMC’s shares were low and infrequent with a downward trend in quoted prices.
The independent valuer performed a valuation of 8VIC to form an opinion that the transaction is fair to the non-
associated shareholders of DMC.
Estimates and judgements in determining the fair value considerations include 8 VIC’s growth rate and its
multiplier, adjusted by control premium/business risks and management’s selection of mid -point between
Relationship of
unobservable
inputs to fair
value
The higher the
multiple, the
higher fair value
consideration
Fair value
The share swap representing
Assessed 8VIC
6 to 9.5
consideration of
the fair value consideration in
EBITDA multiple
DMC acquisition
8VIC group’s 25.3% interest,
and discounts (*)
was valued at S$5.9 million
(S$23.6 million at 100%
interest).
*Assessed 8VIC EBITDA multiple was determined based on the comparable companies trading multiple adjusted
by business specific discounts and control premium.
The independent valuation resulted in a valuation ranging between S$4.2 million to S$7.5 million for the 25.3%
equity interest in 8VIC. The Company assessed the value to be the mid-point of the range being S$5,971,000.
76
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
29.
Segment information (continued)
30. Business combinations
The management assesses the performance of the operating segments based on profit after tax.
Current year acquisition
(a)
Revenue from major products and services
(i)
Acquisition of Digimatic Group Limited.
Financial
116
Revenues from external customers are derived mainly from financial education and training providers, investment
income from public and private markets , media, creatives and e-commerce. Breakdown of the revenue and
(b)
Geographical information
The Group’s business segments operate in two main geographical areas:
investment income is as follows:
Revenue and investment income
Education
Investment in Public Markets
Investment in Private Markets
Media
Creatives
E-commerce
Others
private markets investee;
Revenue and investment income
Singapore
Malaysia
Others
Singapore
Malaysia
Others
Non-current assets
2018
S$
2017
S$
11,086,574
(547,843)
4,147,569
3,864,729
517,593
923,578
1,514,251
21,506,451
10,721,263
2,998,092
15,065,946
-
-
-
120,768
28,906,069
2018
S$
2017
S$
14,987,337
5,004,863
1,514,251
25,925,579
2,859,722
120,768
21,506,451
28,906,069
5,409,412
561,536
1,041,672
7,012,620
18,577,616
382,262
9,608
18,969,486
At the beginning of the financial year, the Group held 10.8 % interest in Digimatic Group Limited (“Digimatic” or
“DMC”) which was recogni sed as financial assets, at FVOCI. Prior to the adoption of FRS 109, it was classified as
available for sale financial assets (Note 17). On 28 November 2017, the Group acquired an additional 58.9% equity
interests in DMC. The acquisition was satisfied through the partial disposal of 25.3% of the Group’s effective equity
interest in 8VIC Global Pte. Limited and its subsidiaries (“8VIC”) to DMC as per Note 24(b)(iii). Following this
transaction, DMC became a 69.7% owned subsidiary of the Group.
The Group applied significant judgement to determine that the fair value consideration was assessed based on
the independent valuation of 8VIC’s capitalisation of future maintainable earnings (“FME”) as the primary
methodology instead of the quoted price of new shares issued by Digimatic to the Company as the trading volume
of DMC’s shares were low and infrequent with a downward trend in quoted prices.
The independent valuer performed a valuation of 8VIC to form an opinion that the transaction is fair to the non-
associated shareholders of DMC.
Estimates and judgements in determining the fair value considerations include 8 VIC’s growth rate and its
multiplier, adjusted by control premium/business risks and management’s selection of mid -point between
possible high and low scenarios.
•
Singapore - the Company is headquartered and has operations in Singapore. The operations in this area are
principally the financial education and training providers , and investment in public and pri vate markets;
Description
Fair value considerations
Unobservable
inputs
Range of
input
• Malaysia - the operations in this area are principally the financial education and training providers, and
Fair value
consideration of
DMC acquisition
The share swap representing
the fair value consideration in
8VIC group’s 25.3% interest,
was valued at S$5.9 million
(S$23.6 million at 100%
interest).
Assessed 8VIC
EBITDA multiple
and discounts (*)
6 to 9.5
Relationship of
unobservable
inputs to fair
value
The higher the
multiple, the
higher fair value
consideration
*Assessed 8VIC EBITDA multiple was determined based on the comparable companies trading multiple adjusted
by business specific discounts and control premium.
The independent valuation resulted in a valuation ranging between S$4.2 million to S$7.5 million for the 25.3%
equity interest in 8VIC. The Company assessed the value to be the mid-point of the range being S$5,971,000.
76
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117
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
30. Business combinations (continued)
Current year acquisition (continued)
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
30. Business combinations (continued)
Current year acquisition (continued)
(i)
Acquisition of Digimatic Group Limited. (continued)
(i)
Acquisition of Digimatic Group Limited. (continued)
Details of the consideration, the assets acquired and liabilities assumed, the non -controlling interest recognised
and the effects on the cash flows of the Group, at the acquisition date, are as follows:
(d)
Provisional fair value
(a)
Provisional fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
Plant and equipment
Trade and other receivables
Inventory
Other investment
Total assets
Trade and other payables
Current tax liabilities
Unearned revenue
Deferred tax liabilities
Total liabilities
Total identifiable net assets
Less: Non-controlling interest based on proportionate method
Less: Existing equity interests held in DMC as FVOCI (Note 30(i)(e))
Less: Gain on bargain purchase (Note 5)
Consideration transferred for the business
(b)
Effect on cash flows of the Group
Cash paid (as above)
Less: cash and cash equivalents in subsidiary acquired
Net cash inflow on acquisition
(c)
Acquired receivables
28 November
2017
S$
10,459,440
447,215
1,470,452
341,646
100,000
12,818,753
(1,724,016)
(75,939)
(983,541)
(91,880)
(2,875,376)
9,943,377
(3,256,010)
(291,102)
(425,042)
5,971,223
-
10,459,440
10,459,440
The fair value of trade and other receivables is S$1,470,452 and include trade receivabl es with a fair value
of S$1,099,249. The gross contractual amount of trade receivables is S$1,099,249, of which S$1,099,249 is
expected to be collectible.
At the time the financial statements were authorised for issue, the group had not yet completed the
accounting for the acquisition of DMC. In particular, the fair values of the assets and liabilities disclosed
above have only been determined provisionally as the independent valuations have not been finalised.
(e)
Existing equity interests held in DMC as FVOCI
At the transaction date, the Group held 10.8% equity interests in DMC as FVOCI, valued at S$2.7 million
(based on the DMC’s quoted price). From the overall 10.8% interest, 0.2% interest was held at the
Company level and the remaining 10.6% was held by 8 Business Pte. Ltd. (the Company’s wholly owned
subsidiary).
Following the acquisition of DMC, the FVOCI was re-measured based on the fair value per share arising
from the fair value consideration of DMC’s acquisition (Note 30(i)(a)). As a result, a loss arising from the
re-measurement of FVOCI of S$2.4 million was recorded in the other comprehensive income. The fair
value of FVOCI after re-measurement was S$291,102.
The gain on bargain purchase of S$425,042 arising from the acquisition is attributable to the difference
between fair value of the acquired net identifiable assets/liabilities and the purchase consideration. DMC
was willing to accept the purchase consideration as the transaction allowed DMC to acquire a profitable
(f)
Gain on bargain purchase
business with operating cash flows .
(g)
Non-controlling interests
of the DMC’s identifiable net assets.
(h)
Revenue and profit contribution
The Group has chosen to recognise the 30.3% non-controlling interest based on its proportionate share
The acquired business contributed revenue of S$5,315,338 and net profit of S$46,303 to the Group from
the period from 28 November 2017 to 31 March 2018.
Had DMC been consolidated from 1 April 2017, consolidated revenue and consolidated loss for the year
ended 31 March 2018 would have been S$14,756,310 and S$3,335,545 respectively.
78
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
118
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
30. Business combinations (continued)
Current year acquisition (continued)
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
30. Business combinations (continued)
Current year acquisition (continued)
(i)
Acquisition of Digimatic Group Limited. (continued)
(i)
Acquisition of Digimatic Group Limited. (continued)
Details of the consideration, the assets acquired and liabilities assumed, the non -controlling interest recognised
(d)
Provisional fair value
and the effects on the cash flows of the Group, at the acquisition date, are as follows:
(a)
Provisional fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
Plant and equipment
Trade and other receivables
Inventory
Other investment
Total assets
Trade and other payables
Current tax liabilities
Unearned revenue
Deferred tax liabilities
Total liabilities
Total identifiable net assets
Less: Non-controlling interest based on proportionate method
Less: Existing equity interests held in DMC as FVOCI (Note 30(i)(e))
Less: Gain on bargain purchase (Note 5)
Consideration transferred for the business
(b)
Effect on cash flows of the Group
Cash paid (as above)
Less: cash and cash equivalents in subsidiary acquired
Net cash inflow on acquisition
(c)
Acquired receivables
The fair value of trade and other receivables is S$1,470,452 and include trade receivabl es with a fair value
of S$1,099,249. The gross contractual amount of trade receivables is S$1,099,249, of which S$1,099,249 is
expected to be collectible.
28 November
2017
S$
10,459,440
447,215
1,470,452
341,646
100,000
12,818,753
(1,724,016)
(75,939)
(983,541)
(91,880)
(2,875,376)
9,943,377
(3,256,010)
(291,102)
(425,042)
5,971,223
-
10,459,440
10,459,440
At the time the financial statements were authorised for issue, the group had not yet completed the
accounting for the acquisition of DMC. In particular, the fair values of the assets and liabilities disclosed
above have only been determined provisionally as the independent valuations have not been finalised.
(e)
Existing equity interests held in DMC as FVOCI
At the transaction date, the Group held 10.8% equity interests in DMC as FVOCI, valued at S$2.7 million
(based on the DMC’s quoted price). From the overall 10.8% interest, 0.2% interest was held at the
Company level and the remaining 10.6% was held by 8 Business Pte. Ltd. (the Company’s wholly owned
subsidiary).
Following the acquisition of DMC, the FVOCI was re-measured based on the fair value per share arising
from the fair value consideration of DMC’s acquisition (Note 30(i)(a)). As a result, a loss arising from the
re-measurement of FVOCI of S$2.4 million was recorded in the other comprehensive income. The fair
value of FVOCI after re-measurement was S$291,102.
(f)
Gain on bargain purchase
The gain on bargain purchase of S$425,042 arising from the acquisition is attributable to the difference
between fair value of the acquired net identifiable assets/liabilities and the purchase consideration. DMC
was willing to accept the purchase consideration as the transaction allowed DMC to acquire a profitable
business with operating cash flows .
(g)
Non-controlling interests
The Group has chosen to recognise the 30.3% non-controlling interest based on its proportionate share
of the DMC’s identifiable net assets.
(h)
Revenue and profit contribution
The acquired business contributed revenue of S$5,315,338 and net profit of S$46,303 to the Group from
the period from 28 November 2017 to 31 March 2018.
Had DMC been consolidated from 1 April 2017, consolidated revenue and consolidated loss for the year
ended 31 March 2018 would have been S$14,756,310 and S$3,335,545 respectively.
78
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119
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
30. Business combinations (continued)
Prior year acquisition
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
30. Business combinations (continued)
Prior year acquisition (continued)
(ii)
Acquisition of Financial Joy Institute Pte. Ltd.
(ii)
Acquisition of Financial Joy Institute Pte. Ltd. (continued)
On 29 June 2016, the Group acquired 51% equity interest in Financial Joy Institute Pte. Ltd. (“FJI”) by way of share
swap for a purchase consideration of S$2.04 million and FJI became a subsidiary of the Group.
(d)
Goodwill
Management engaged an external valuation specialist to perform the purchase price allocation for this acquisition
including the identification of intangible assets in line with FRS 103 Business combinations. Based on the purchase
price allocation exercise, only goodwill have been identified as an intangible asset being the difference between
the purchase consideration and the fair value of the identifiable assets acquired and liabilities assumed.
Details of the consideration paid, the assets acquired and liabilities assumed, the non-controlling interest
recognised and the effects on the cash flows of the Group, at the acquisition date, are as follows:
(a)
(b)
(c)
Share swap, representing the total consideration transferred (Note 23)
Less: Remuneration element (Note 11(c))
Total consideration through equity swap
Effect on cash flows of the Group
Cash paid (as above)
Less: Cash and cash equivalents in subsidiary acquired
Net cash inflow on acquisition
Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
Plant and equipment
Trade and other receivables
Total assets
Trade and other payables
Current tax liabilities
Unearned revenue
Total liabilities
Total identifiable net liabilities
Less: Non-controlling interest based on proportionate method
Add: Goodwill (Notes 14 and 30(ii)(d))
Consideration transferred for the business
As of the date of
acquisition 29
June 2016
S$
2,040,000
(500,000)
1,540,000
-
414,733
414,733
414,733
19,434
6,399
440,566
(11,840)
(790)
(456,450)
(469,080)
(28,514)
13,972
1,554,542
1,540,000
The goodwill of S$1,554,542 arising from the acquisition is attributable to potential growth to regional
markets with additional trainers and course offerings as well as additional events and programs. It has
been allocated to Education segment. None of the goodwill recognised is expected to be deductible for
income tax purposes.
(e)
Revenue and profit contribution
The acquired business contributed revenue of S$3,331,010 and net profit of S$784,669 to the Group from
the period from 29 June 2016 to 31 March 2017.
Had FJI been consolidated from 1 March 2016, consolidated revenue and consolidated profit for the year
ended 31 March 2017 would have been S$4,052,951 and S$1,107,428 respectively.
(f)
On 31 March 2017, the Group acquired the remaining 49% equity interest in FJI (9 months period since
the first transaction) by way of share swap (Note 24).
Based on the assessment performed by management, we have concluded that these are two separate
transactions as they are negotiated and entered into at two different point of time and the arrangement
is not dependent on each other (different commercial objectives).
31. New or revised accounting standards and interpretations
Below are the mandatory standards, amendments and interpretations to existing standards that have been
published, and are relevant for the Group’s accounting periods beginning on or after 1 April 2018 and which the
Group has not early adopted:
• FRS 115 Revenue from contracts with customers (effective for annual periods beginning on or after 1 January
2018)
or services.
FRS 115 replaces FRS 11 Construction contracts, FRS 18 Revenue, and related interpretations. Revenue is
recognised when a customer obtains control of a good or service. A customer obtains control when it has the
ability to direct the use of and obtain the benefits from the good or service. The core principle of FRS 115 is
that an entity recognises revenue to depict the transfer of promised goods or ser vices to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods
80
81
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
Financial
120
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
30. Business combinations (continued)
Prior year acquisition
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
30. Business combinations (continued)
Prior year acquisition (continued)
(ii)
Acquisition of Financial Joy Institute Pte. Ltd.
(ii)
Acquisition of Financial Joy Institute Pte. Ltd. (continued)
On 29 June 2016, the Group acquired 51% equity interest in Financial Joy Institute Pte. Ltd. (“FJI”) by way of share
(d)
Goodwill
swap for a purchase consideration of S$2.04 million and FJI became a subsidiary of the Group.
Management engaged an external valuation specialist to perform the purchase price allocation for this acquisition
including the identification of intangible assets in line with FRS 103 Business combinations. Based on the purchase
price allocation exercise, only goodwill have been identified as an intangible asset being the difference between
the purchase consideration and the fair value of the identifiable assets acquired and liabilities assumed.
Details of the consideration paid, the assets acquired and liabilities assumed, the non-controlling interest
recognised and the effects on the cash flows of the Group, at the acquisition date, are as follows:
(a)
Share swap, representing the total consideration transferred (Note 23)
Less: Remuneration element (Note 11(c))
Total consideration through equity swap
(b)
Effect on cash flows of the Group
Cash paid (as above)
Less: Cash and cash equivalents in subsidiary acquired
Net cash inflow on acquisition
(c)
Fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
Plant and equipment
Trade and other receivables
Total assets
Trade and other payables
Current tax liabilities
Unearned revenue
Total liabilities
Total identifiable net liabilities
Less: Non-controlling interest based on proportionate method
Add: Goodwill (Notes 14 and 30(ii)(d))
Consideration transferred for the business
As of the date of
acquisition 29
June 2016
S$
2,040,000
(500,000)
1,540,000
-
414,733
414,733
414,733
19,434
6,399
440,566
(11,840)
(790)
(456,450)
(469,080)
(28,514)
13,972
1,554,542
1,540,000
The goodwill of S$1,554,542 arising from the acquisition is attributable to potential growth to regional
markets with additional trainers and course offerings as well as additional events and programs. It has
been allocated to Education segment. None of the goodwill recognised is expected to be deductible for
income tax purposes.
(e)
Revenue and profit contribution
The acquired business contributed revenue of S$3,331,010 and net profit of S$784,669 to the Group from
the period from 29 June 2016 to 31 March 2017.
Had FJI been consolidated from 1 March 2016, consolidated revenue and consolidated profit for the year
ended 31 March 2017 would have been S$4,052,951 and S$1,107,428 respectively.
(f)
On 31 March 2017, the Group acquired the remaining 49% equity interest in FJI (9 months period since
the first transaction) by way of share swap (Note 24).
Based on the assessment performed by management, we have concluded that these are two separate
transactions as they are negotiated and entered into at two different point of time and the arrangement
is not dependent on each other (different commercial objectives).
31. New or revised accounting standards and interpretations
Below are the mandatory standards, amendments and interpretations to existing standards that have been
published, and are relevant for the Group’s accounting periods beginning on or after 1 April 2018 and which the
Group has not early adopted:
• FRS 115 Revenue from contracts with customers (effective for annual periods beginning on or after 1 January
2018)
FRS 115 replaces FRS 11 Construction contracts, FRS 18 Revenue, and related interpretations. Revenue is
recognised when a customer obtains control of a good or service. A customer obtains control when it has the
ability to direct the use of and obtain the benefits from the good or service. The core principle of FRS 115 is
that an entity recognises revenue to depict the transfer of promised goods or ser vices to customers in an
amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods
or services.
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121
Financial
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
31. New or revised accounting standards and interpretations (continued)
31. New or revised accounting standards and interpretations (continued)
• FRS 115 Revenue from contracts with customers (effective for annual periods beginning on or after 1 January
2018) (continued)
The Group has voluntarily adopted SFRS(I)s on 1 April 2018 and will be issuing its first set of financial information
prepared under SFRS(I)s for the half year period ended 30 September 2018 in November 2018.
An entity recognises revenue in accordance with that core principle by applying the following steps:
•
•
•
•
•
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
FRS 115 also includes a cohesive set of disclosure requirements that will result in an entity providing users of
financial statements with comprehensive information about the nature, amount, timing and uncertainty of
revenue and cash flows arising from the entity’s contracts with customers.
Management has identified the following areas that are likely to be affected:
(i) Accounting for certain costs incurred in fulfilling a contract – certain costs which are currently expensed may
need to be recognised as an asset under FRS 115.
At this stage, the Group is not able to estimate the impact of the new rules on the Group’s financial statements.
The Group will make more detailed assessment of the impact over the next six months.
• FRS 116 Leases (effective for annual periods beginning on or after 1 January 2019)
32. Authorisation of financial statements
FRS 116 will result in almost all leases being recognised on the consolidated statement of financial position, as
the distinction between operating and finance leases is removed. Under the new standard, an asset (the right
to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-
term and low-value leases. The accounting for lessors will not change significantly.
Some of the commitments may be covered by the excepti on for short-term and low-value leases and some
commitments may relate to arrangements that will not qualify as leases under FRS 116.
• FRS 116 Leases (effective for annual periods beginning on or after 1 January 2019) (continued)
The new standard also introduces expanded disclosure requirements and changes in presentation.
The Group has yet to determine to what extent the commitments as at the reporting date will result in the
recognition of an asset and a liability for future payments and how this will affect the Group’s profit and
classification of cash flows.
• Adoption of SFRS(I)s
The Singapore Accounting Standards Council has introduced a new Singapore financial reporting framework
that is equivalent to the International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”). The new framework is referred to as ‘Singapore Financial Reporting
Standards (International)’ (“SFRS(I)s”) hereinafter.
In adopting SFRS(I)s, the Group is required to apply all of the specific transition requirements in SFRS(I) 1 First-
time Adoption of Singapore Financial Reporting Standards (International). The Group will also concurrently apply
new major SFRS(I) 15 Revenue from Contracts with Customers. The estimated impact arising from the adoption of
SFRS(I)s on the Group’s financial statements are set out as follows:
(a)
Application of SFRS(I) 1
The Group is required to retrospectively apply all SFRS(I)s effective at the end of the first SFRS(I) reporting
period (financial year ending 31 March 2018), subject to the mandatory exceptions and optional
exemptions under SFRS(I) 1. The Group plans to el ect relevant optional exemptions and the exemptions
resulting in significant adjustments to the Group’s financial statements prepared under SFRS(I)s are as
follows:
(i)
Cumulative translation differences
The Group plans to elect to set the cumulative translation differences for all foreign operations to be zero
as at the date of transition to SFRS(I)s on 1 April 2018. As a result, other reserves and retained profits as
at 1 April 2018 and 31 March 2018 will be increased/ reduced by S$913,252 respectively.
These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of
8I Holdings Limited on 29 June 2018.
82
83
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8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
8I HOLDINGS LIMITED AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2018
Financial
122
31. New or revised accounting standards and interpretations (continued)
31. New or revised accounting standards and interpretations (continued)
• FRS 115 Revenue from contracts with customers (effective for annual periods beginning on or after 1 January
2018) (continued)
The Group has voluntarily adopted SFRS(I)s on 1 April 2018 and will be issuing its first set of financial information
prepared under SFRS(I)s for the half year period ended 30 September 2018 in November 2018.
In adopting SFRS(I)s, the Group is required to apply all of the specific transition requirements in SFRS(I) 1 First-
time Adoption of Singapore Financial Reporting Standards (International). The Group will also concurrently apply
new major SFRS(I) 15 Revenue from Contracts with Customers. The estimated impact arising from the adoption of
SFRS(I)s on the Group’s financial statements are set out as follows:
(a)
Application of SFRS(I) 1
The Group is required to retrospectively apply all SFRS(I)s effective at the end of the first SFRS(I) reporting
period (financial year ending 31 March 2018), subject to the mandatory exceptions and optional
exemptions under SFRS(I) 1. The Group plans to el ect relevant optional exemptions and the exemptions
resulting in significant adjustments to the Group’s financial statements prepared under SFRS(I)s are as
follows:
(i)
Cumulative translation differences
The Group plans to elect to set the cumulative translation differences for all foreign operations to be zero
as at the date of transition to SFRS(I)s on 1 April 2018. As a result, other reserves and retained profits as
at 1 April 2018 and 31 March 2018 will be increased/ reduced by S$913,252 respectively.
• FRS 116 Leases (effective for annual periods beginning on or after 1 January 2019)
32. Authorisation of financial statements
These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of
8I Holdings Limited on 29 June 2018.
An entity recognises revenue in accordance with that core principle by applying the following steps:
•
•
•
•
•
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
FRS 115 also includes a cohesive set of disclosure requirements that will result in an entity providing users of
financial statements with comprehensive information about the nature, amount, timing and uncertainty of
revenue and cash flows arising from the entity’s contracts with customers.
Management has identified the following areas that are likely to be affected:
(i)
Accounting for certain costs incurred in fulfilling a contract – certain costs which are currently expensed may
need to be recognised as an asset under FRS 115.
At this stage, the Group is not able to estimate the impact of the new rules on the Group’s financial statements.
The Group will make more detailed assessment of the impact over the next six months.
FRS 116 will result in almost all leases being recognised on the consolidated statement of financial position, as
the distinction between operating and finance leases is removed. Under the new standard, an asset (the right
to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-
term and low-value leases. The accounting for lessors will not change significantly.
Some of the commitments may be covered by the excepti on for short-term and low-value leases and some
commitments may relate to arrangements that will not qualify as leases under FRS 116.
• FRS 116 Leases (effective for annual periods beginning on or after 1 January 2019) (continued)
The new standard also introduces expanded disclosure requirements and changes in presentation.
The Group has yet to determine to what extent the commitments as at the reporting date will result in the
recognition of an asset and a liability for future payments and how this will affect the Group’s profit and
classification of cash flows.
• Adoption of SFRS(I)s
The Singapore Accounting Standards Council has introduced a new Singapore financial reporting framework
that is equivalent to the International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”). The new framework is referred to as ‘Singapore Financial Reporting
Standards (International)’ (“SFRS(I)s”) hereinafter.
82
83
Annual Report FY2018For personal use only
123
Financial
Additional Information
Shareholders Information
as at 29 June 2018
8I Holdings Limited – Ordinary Shares
The Company has ordinary shares on issue. These are listed on the Australian Securities Exchange under ASX code: 8IH.
Details of trading activity are published daily by electronic information vendors. All ordinary shares carry one vote per share
without restriction.
Analysis of Shareholders and CDI Holders*
Category (Size of Holding)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
Number of Holders Number of Shares % of Issued Capital
0.00%
0.09%
0.16%
6.22%
93.53%
100.00%
9,842
308,759
566,819
22,519,283
338,573,882
361,978,585
14
80
60
492
293
939
The number of investors holding less than a marketable parcel of 4,167 8IH shares (based on a share price of A$0.12) was
50. They hold 100,292 8IH shares in total.
Twenty Largest Shareholders and CDI Holders*
Registered Holder
BNP Paribas Noms Pty Ltd
Pauline Teo Puay Lin
Philip John Raff
1. Chee Kuan Tat, Ken
2. Clive Tan Che Koon
3. HSBC Custody Nominees (Australia) Limited
4.
J P Morgan Nominees Australia Limited
5. Citicorp Nominees Pty Limited
6.
7.
8.
9. Clarence Wee Kim Leng
10. Glorymont Ltd
11. Lim Wei Lin
12. Ho Tuck Chee
13. Hor Chook Lam
14. Alex Chia Che Keng
15. Hue Kuan Yew
16. Fance Chua Meon Keng
17. Loo Tian Guan
18. Vivek Verma
19. Yap Pei Koon
20. Edwin Kang Tien Hock
All Other Shareholders
Total
Notes
Number of
Shares
% of Issued
Capital
86,458,500
65,140,000
22,927,782
22,588,848
18,830,204
8,978,084
8,859,103
7,870,652
2,063,400
2,060,000
2,000,000
1,866,320
1,546,000
1,398,140
1,213,914
1,118,000
1,107,203
1,100,000
1,020,872
934,000
102,897,563
361,978,585
23.88%
18.00%
6.33%
6.24%
5.20%
2.48%
2.45%
2.17%
0.57%
0.57%
0.55%
0.52%
0.43%
0.39%
0.34%
0.31%
0.31%
0.30%
0.28%
0.26%
28.42%
100.00%
* CDI Holders are holder of CHESS Depository Interests issued by CHESS Depository Nominees Pty Limited, where each CDI
represents a beneficial interest in one ordinary share.
8I Holdings LimitedCopyright © 8I Holdings Limited 2018. All Rights Reserved.For personal use only Additional Information (continued)
Financial
124
Shareholders Information
as at 29 June 2018
Substantial Shareholders and CDI Holders**
Date
Announced
Name
Direct
Interest
Shares
%of Voting
Power
Deemed
Interest
Shares
% of Voting
Power
1/2/2018
1/2/2018
Notes
Chee Kuan Tat, Ken
Clive Tan Che Koon
86,458,500
23.88%
65,140,000
18.00%
-
-
-
-
** This table is compiled on the basis that each holding of CDIs is a separate holding and accordingly, the holding of shares
by CHESS Depository Nominees Pty Limited is ignored.
Current On-Market Buy-Back (ASX Listing Rule 4.10.18)
There is no current on-market buy-back arrangement for the Company.
Investment (ASX Listing Rule 4.10.20)
The Group had a total of 433 transactions in securities during the financial year ended 31 March 2018 and has paid or
accrued brokerage and management fees totalling S$29,494 and S$225,310 respectively. As at 31 March 2018, the Group
held investment in DIP Corporation, Emmbi Industries Limited, HRnetGroup Limited, Nick Scali Limited, Nyquest Technology
Co Ltd, PPAP Automotive Limited, Riverstone Holdings Limited, SeaLink Travel Group Limited, Start Today Co. Ltd and
Velocity Property Group Ltd.
Corporate Governance Statement
The directors of 8I Holdings Limited support and adhere to the principles of corporate governance, recognising the need for
the highest standard of corporate behaviour and accountability. Please refer to the corporate governance statement and the
appendix 4G released to ASX and posted on the Company website at www.8iholdings.com.
The directors are focused on fulfilling their responsibilities individually, and as a Board, for the benefit of all the Company’s
stakeholders. That involves recognition of, and a need to adopt, principles of good corporate governance. The Board supports
the guidelines on the “Principles of Good Corporate Governance and Recommendations – 3rd Edition” established by the
ASX Corporate Governance Council.
Given the size and structure of the Company, the nature of its business activities, the stage of its development and the cost
of strict and detailed compliance with all of the recommendations, it has adopted a range of modified systems, procedures
and practices which enables it to meet the principles of good corporate governance.
The Company’s practices are mainly consistent with those of guidelines and where do not correlate with the recommendations
in the guidelines the Company considers that its adopted practices are appropriate to it.
Annual Report FY2018For personal use only 8I Holdings Limited
(Incorporated
Company Registration Number: 201414213R
ARBN 601 582 129
in the Republic of Singapore)
www.8iholdings.com
Offices
Singapore
Goldbell Towers, 47 Scotts Road, #03-03/04
Singapore 228233
T
F
: +65 6801 4500
: +65 6235 0332
info@8iholdings.com
Australia
C/- SmallCap Corporate Pty Ltd, Suite 6, 295
Rokeby Road, Subiaco WA, Australia, 6008
T
F
: +61 (8) 6555 2950
: +61 (8) 6166 0261
China
A13, Zun Mu Hui, No.2695 Hutai Road, Bao Shan
District, 200436, Shanghai, China
中国上海市宝山区沪太路2695号尊木汇A13
T
: +60 3-2201 8089
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