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ANNUAL REPORT FY2019
For the financial year ended 31 March 2019
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CONTENTS
Our Mission
Our Core Values
8I Ecosystem
Chairman’s Message
Board of Directors
Key Management
Overseas Management
Financial & Operations Review
Corporate Structure
Corporate Information
Remuneration Report
Directors’ Statement
Independent Auditors’ 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
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2
3
4
6
7
8
9
12
13
14
17
19
23
24
25
26
28
30
90
About 8I Holdings Limited
8I Holdings Limited (“the Group”) is an Australian-listed investment holding company engaged in the businesses of
financial education, public and private market investments, and financial technology.
The Group is the leading financial education provider in Singapore and Malaysia through 8VIC Holdings Ltd (“8VIC”) and
8IH China Pte Ltd (“8IHC), with offices in Singapore, Malaysia, Thailand, Taiwan and Shanghai, supporting a community
of value investors from 29 cities globally. Through Hidden Champions Capital Management Pte Ltd (“HCCM”), the Group
operates a licensed fund management business in Singapore, investing in public listed equities in Asia Pacific through a
focused strategy of investing in value-adding, nimble and scalable growing Hidden Champions that are typically at the
forefront of their markets to achieve long-term investment returns. The Group also invests in private businesses with
hidden value and good operational track record. 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 to invest smarter, faster and easier.
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Our Mission We Empower People to Create Sustainable Wealth
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
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Our Core Values
We do what we think & say
We enjoy what we do
We take care of one another like family
We uphold the trust of our stakeholders
We work towards mastery without invalidation of self & others
We are value-conscious (for the price paid)
We keep our hearts & minds open
We make it simple
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8I Ecosystem
At 8I, we continue to strengthen our business
ecosystem on a single platform to share value investing
knowledge and empower our growing community to
make smart investment decisions by applying the
principles of value investing.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
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Chairman’s Message
Dear Valued Partners,
It has been an eventful and rewarding,
challenging year.
though
Aligned with the Singapore government’s interest in
cementing the country’s position as the global hotbed of
technology, innovation and enterprise amidst its Smart
Nation vision 1 , we have since embarked on a
refinement of our business model
leverage
technology and drive innovation.
to
The restructuring of the Group’s individual business
segment continues in line with our transformation
roadmap while keeping a key objective in mind: an effort
to move ahead of the curve, fine-tune to buttress our
moat against our peers/competitors while serving more
value to our customers. While we are seeing initial
positive results as the transformative efforts gain
traction, the road ahead is long and winding.
For a recap of the year, I would like to draw your
attention to three piece of news: Negative, Neutral,
Positive.
The Negatives
There are no surprises here.
As mentioned in my FY2017 and FY2018 Chairman’s
letter, we expect that our earnings and cash flow to be
disrupted temporarily for the coming years as we
contend with challenges while refining our business.
Our results from FY2019 mirror the 1HFY2019 pretty
closely, where we recorded a loss of S$11.2 million.
This net loss for the full year is from a reduction in the
valuation of the mark-to-market investments in quoted
securities, which did not recover in FY2019.
While unrealised fair value loss on investment securities
due to market correction (mainly from 3 stocks in the
Hidden Champions Fund) is approximately S$8.9
million, we have also decided to do a $1.7 million
goodwill write off this year (mainly attributable to 8VIC
Singapore, previously known as Financial Joy Institute)
after our strategic review which resulted
in our
divestment of the Digital and Marketing businesses.
If we disregard this unrealised fair value loss and
goodwill impairment, our business would break-even.
1 https://www.straitstimes.com/singapore/singapore-budget-2019-more-
funding-and-chances-for-people-to-work-and-learn-overseas
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in
to
face
this coming FY2020
However, continue to be prepared for our revenue and
further
earnings
challenges while we carry on with the transformation of
our businesses as (a) we no longer consolidate the
results of the disposed digital and marketing businesses
unit; (b) the volatility of the market grows as global
uncertainties persist given the US-China Trade War,
US-Iran Gulf tension and the messy UK Brexit within EU,
which might continue to impact the existing 3 main
positions in the Hidden Champions Fund.
In other words, please brace for greater headwinds
while we work tirelessly and diligently towards the best
results.
The Neutrals
Within FY2019, we have restructured the Hidden
Champions Fund into two classes; and the team has
been working on reducing our holdings in 3 of the core
illiquid positions daily.
With the available capital, we have partially redeployed
them to capture any undervalued opportunities while the
remaining acts as a cash cushion which reduces the
Hidden Champions Fund’s portfolio volatility.
That being said, the Group’s overall balance sheet
remains sound.
The Positives
We have embarked on our digitalisation strategy with
the launch of our smart investing technology platform,
WealthPark, in FY2019.
Despite the initial shortcomings, learning experiences
and with continuous improvements, Phase 1 of the
launch has been encouraging with increasing monthly
active and paid users. WealthPark has a lot more to
offer and to stay ahead of its peers, which we will
demonstrate to you in the coming AGM.
On the same note, within the first 100 days of taking
over our main educational unit, 8VIC Holdings, as an
active CEO and Executive Director, we have also
managed to restructure our fixed cost and contained the
sales and marketing expenses significantly. More
importantly, the key operational group’s morale and
For personal use only
momentum has returned despite the disruption that we
have subjected them to. With the right people in the right
place, we believe that our team members have been,
and will always continue to be the key to our success.
We are thankful for their tireless efforts behind the
scenes in serving to make a difference.
The board and management remain steadfast as we
continue working on various fronts to drive the digital
transformation of our business,
the
unwavering efforts of our team and support of our
shareholders.
riding on
Once again, thank you for your continuous support and
may you stay safe and healthy always.
Ken Chee
Non-Executive Chairman
“Success is not final, failure is not
fatal. It is the courage to continue that
counts.” – Winston Churchill
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
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Ken Chee
Non-Executive
Chairman
Clive Tan
Executive
Director
Charles Mac
Non-Executive
Director
Chay Yiowmin
Non-Executive
Director
Board of Directors
Charles Mac
Ken Chee
Ken Chee was appointed to the board in May 2014. He is the 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 for its Executive Program in
Value Investing.
Ken has more than 20 years of professional experience across
business development, operations, strategy and marketing from his
past roles, including Quicken (Singapore) and Telekurs Financial.
the 8I Group, Ken advises on strategic planning and
Within
partnerships development, and is involved in driving the all-round
growth of its financial education businesses and smart investing
technology platform, WealthPark.
Ken was awarded the Spirit of Enterprise, Honoree Award in 2005 by
the President of Singapore for outstanding business results. He sits on
the board of 8VIC Holdings Ltd and is also a Young Presidents’
Organisation member under the Singapore Chapter.
Clive Tan
Clive Tan is the co-founder and Executive Director of 8I Holdings
Limited (ASX:8IH) and is based in Singapore.
Clive holds a Post-Graduate Diploma in Education from the National
Institute of Education and an Honours Degree in Mechanical and
Production Engineering from the Nanyang Technological University.
He also attended the University of Technology, Sydney on an academic
exchange programme. He began his professional career in the public
education sector in Singapore.
Within the 8I Group, Clive is responsible for the strategic planning,
business development, corporate policies and risk management of its
businesses, and leads the asset management activities under Hidden
Champions Capital Management. 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 8VIC
Holdings Limited.
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Charles Mac was appointed Non-Executive Director in April 2016. Charles has
more than 18 years of IT corporate experience, of which 15 years in the SAP
Industry dealing with multinational companies across 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 ASX-listed
companies, 8VIC Holdings Limited and Ennox Group Limited as Non-
Executive Director.
Chay Yiowmin
Yiowmin is currently the chief executive officer of Chay Corporate Advisory Pte
Ltd, a boutique corporate advisory house. He is also the lead independent and
non-executive director of UMS Holdings Limited and Metech International
Limited, both listed on the Singapore Exchange, and non-executive director of
both Libra Group Limited listed on the Singapore Exchange and 8I Holdings
Limited listed on the Australia Stock Exchange. Between 2013 and 2015, he
was the lead independent and non-executive director of Advance SCT Limited.
Since graduating in 1998, Yiowmin has accumulated many years of public
accounting experience in Singapore and the United Kingdom with a number of
reputable international accounting firms, including PricewaterhouseCoopers
LLP, Deloitte and Touche LLP, Moore Stephens LLP and BDO LLP. Yiowmin
holds a Bachelor of Accountancy and a Master of Business from the Nanyang
Technological University, and a Master of Business Administration from the
University of Birmingham. Yiowmin is also a Fellow Chartered Accountant
(FCA Singapore) of the Institute of Singapore Chartered Accountants (ISCA),
an Associate Chartered Accountant (ACA) of the Institute of Chartered
Accountants in England and Wales (ICAEW), a Chartered Valuer and
Appraiser (CVA) of the Institute of Valuers and Appraisers of Singapore (IVAS)
and a Certified Finance and Treasury Professional (CFTP) of the Finance and
Treasury Association (FTA).
Yiowmin currently sits on the Singapore steering committee of the Professional
Risk Managers’ International Association (PRMIA), and the Standards and
Technical Committee of IVAS. He is also an active Grassroots Leader, serving
as a treasurer with the Kebun Baru and Sengkang South Citizens Consultative
the Thomson Hills Neighbourhood
Committees, and an auditor with
Committee. He is also a member of the Kebun Baru Inter-Racial and Religious
Confidence Circles. He was awarded the Pingat Bakti Masyarakat (Public
Service Medal) (PBM) by the President of the Republic of Singapore in 2016.
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Louis Chua
Chief Financial Officer
Low Ming Li
Head of Corporate Affairs
Bernard Siah
Chief Technology Officer
Key Management
Louis Chua
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 fellow member of The Association of
Chartered Certified Accountants (FCCA), and member of the Institute
of Singapore Chartered Accountants (CA Singapore) and Certified
Practising Accountant Australia (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 financial forecasting for the Company.
Low Ming Li
Low Ming Li is the Head of Corporate Affairs at 8I Holdings. She has
been with the Company since September 2015 and is based in
Singapore.
Within the Company, she manages the preparation and implementation of
strategic activities and advises on several corporate functions including
investor relations, strategic partnerships and growth initiatives. Ming Li also
oversees the investment deals for the Company.
Bernard Siah
Bernard Siah graduated from the National University of Singapore with a
Bachelor of Computing (Technology Focus). He has more than 10 years of
experience as a technology specialist.
Bernard began 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 create a world-class
system which provides advance vessel performance monitoring services. The
entity was eventually acquired by a French company from the growing LPG
market.
Bernard currently leads the technology development at 8Bit Global Pte Ltd
(“8Bit”), leveraging the digital economy for improved positioning and
competitiveness.
was
She
previously
University.
(Second Class Upper)
Ming Li graduated with a Bachelor in Accountancy and a minor in
from Nanyang
Banking and Finance
Technological
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 and development.
Her past clients include Singapore Exchange Limited, the Government
Investment Corporation of Singapore and Singapore Press Holdings.
Ming Li is also a Chartered Financial Analyst (CFA) charterholder and
a Fellow Chartered Accountant (FCA Singapore) of the Singapore
Institute of Singapore Chartered Accountants (ISCA).
8I Holdings Limited and its Subsidiaries
Interim Report FY2019
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Tian Dehua
Director and General Manager
8IH China (Shanghai) Co., Ltd
Juanna Chua
Executive Director
8IH China (Shanghai) Co., Ltd
Zhou Guiyin
Honorary Advisor of 8IH
Chief Trainer in Shanghai Rongdao
Culture Communication Co., Ltd.
Overseas Management
Tian Dehua
Zhou Guiyin
Zhou Guiyin is the Chief Trainer of Shanghai Rongdao Culture Communication
Co., Ltd.
Guiyin graduated from Shandong University of Finance and Economics with a
Bachelor’s degree in Economics and a Master’s degree in Business
Administration from Shanghai University of Finance and Economics. He was
also nominated Postgraduate Tutor by the Finance College of Shandong
University of Finance and Economics in 2013, and initiated Rongdao Book
Club and Shanghai Rongdao Culture Communication Co., Ltd.
Guiyin was previously a commentator and research specialist for numerous
finance programmes and channels including CCTV. Within the Company,
Guiyin is responsible for the training and promotion of Value Investing and
Sinology related programmes within China.
Tian Dehua is the General Manager and Director of 8IH China, and is
responsible for the management, promotion and operations of the
Group's education business 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 8IH, 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.
Juanna Chua
Juanna Chua is the Executive Director of 8IH China and minds the
Company’s strategic objectives and plans within the Chinese market.
She graduated with a Bachelor of Business Administration (Honours)
in Marketing from Universiti Tenaga Nasional. Prior to 8I, Juanna spent
9 years on distribution and central store management with Shell
Malaysia Trading Sdn Bhd. She brings with her strong human capital
and operations knowledge.
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Financial and Operations Review
Overview
Our revenue including net investment income from 1
April 2018 to 31 March 2019 (FY2019) is recorded at
S$19.0 million and our net loss after tax for the year
stands at S$11.2 million. This represents a decrease of
11.6% in revenue and investment income (FY2018:
S$21.5 million). Total comprehensive expense
attributable to owners of the Company for FY2019 is
S$10.7 million (FY2018: S$16.4 million).
The decline in revenue is mainly attributable to our
public investments made in FY2017 and FY2018. The
investment positions undertaken during this period are
particularly illiquid and exiting those positions, even in
small quantities, drove down their share prices so much
so that our public markets’ unrealised fair value losses
totalled S$8.9 million. This created an enormous hurdle
for the present as these positions dragged down the
overall performance of the current team’s portfolio. A
restructuring of the Hidden Champions Fund (HCF) is
done by splitting up the legacy stock picks and the
current portfolio into 2 classes so that it represents a
clearer underlying performance of
the current
investment team to the fund investors. From the
Group’s perspective, however, the effects of the legacy
stock picks will take a few years to be neutralised and
the main bulk of the losses are still being borne by the
Group.
from
Going forward, with the divestiture of the Digital &
there will be no revenue
Marketing businesses,
recognition
the Group.
Additionally, for our investments in private markets, I
expect that there will be reduced or little contribution as
we seek to restructure this business segment and wind
down the activities.
this segment under
With more management control, we are working
towards a better strategic fit and performance for the
entire Group within the 8I ecosystem.
Business Segment Report
Financial Education
segment
has
Our Education
increased its revenue by 14.7% to
S$12.7 million (FY2018: S$11.1
million) in the financial year reported.
Our net segmental loss including
overseas offices is at S$1.4 million
mainly due to higher marketing and staff costs. The
Group has made a one-off impairment of goodwill
(mainly attributable to 8VIC Singapore, previously
known as Financial Joy Institute) of S$1.7 million after
our strategic review which resulted in our divestment of
the Digital and Marketing Businesses.
forward,
the management has employed
Going
additional measures
to control our segment’s
operational expenses and streamline our business
process performance. This includes, but not limited to:
1) Strategic evaluation of local and regional partners’
performance to optimise productivity;
2) Review and adjustment of our Marketing and
Advertising plans to be more effective across all key
markets in the region (namely Singapore, Malaysia,
Taiwan, Thailand and Australia);
3) Leverage
technology
digital
transformation of the Group to achieve better cost
and operational efficiency;
propel
to
For our financial education segment, revenue has gone
up from S$11.1 million in FY2018 to S$12.7 million in
FY2019. With our overseas expansion, this also
resulted in increased cost of sales and services,
administrative, marketing and other expenses. To
optimise the profitability and sustainability of our
operations, we are refining our approach in local and
regional markets.
The majority of the increased expenses is mainly due a
surge in marketing and advertising expenses of S$2.1
million. With the rise in digital and social media
marketing, fake leads and fraud sign-ups have been on
the rise and this phenomenon has led to increased
customer acquisition costs. To circumvent this, the
marketing team has refined their strategy and put
additional measures in place to keep this expense in
check.
4) Creation of new modules and complementary
5)
courses; and
Integration of WealthPark, our
developed in-house into our offerings.
financial
tool
8VIC Revenue
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$-
FY2015
FY2016
FY2017
FY2018
FY2019
8I Holdings Limited and its Subsidiaries
Interim Report FY2019
9
For personal use only
Financial Education (continued)
We expect that these efforts will yield better results in
the coming financial year and enable a more systematic
and measured expansion of our financial education
business in the Asia Pacific region.
For more information on our Education segment, do
look out for the announcements and latest financial and
annual reports under ASX:8VI.
Financial Technology
This is a joint project between 8IH
and 8VIC in developing a financial
investment
to support our
community and business growth
going
forward. The development
progress has continued on track and
the subscriber take-up rate is satisfactory. We expect
the project to break even by FY2021.
tool
Since we first launched the tool in September 2018, we
have progressively added new features and modules so
that our subscribers can be better served. As our
shareholders, we encourage you to use our Financial
Technology
tool, WealthPark and we welcome
constructive feedback to improve our offering, ratings
and user experience.
We are also working to expand our marketing and
collaborative efforts with different parties across
multiple fields to serve our existing and new subscribers
with a financial tool that supports them to find sound
investments Smarter, Faster and Easier.
www.WEALTHPARK.IO
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Financial Asset Management
Hidden Champions Fund
the
listed securities
Our
registered
segmental losses of S$6.1 million
for FY2019. The main reason is due
to slumping share prices for two of
our core holdings. Despite our
previous intent to have the portfolio
more balanced and diversified, the initial portfolio
reallocation could not be achieved due to certain legal
and liquidity constraints we faced. Therefore, to better
reflect
the current
fund performance since
management took over, we have restructured the fund
into 2 classes, where HCF Class 1 holds our current
stockholdings and HCF Class 2 holds the legacy
stockholdings. Since the restructuring in October 2018,
our performance for HCF Class 1 (as of 31 March 2019)
have been reasonable, delivering a return after fund
expenses of 8.2% against MSCI APAC of 6.9%. This is
achieved despite a 39% cash cushion which acts as a
drag when the fund is going up but can act as a cushion
when it is heading down. This will support in reducing
our portfolio’s volatility. Moreover,
the current
stockholdings in HCF Class 1 is far more liquid on the
market (as compared to legacy stock picks) and we will
be able to exit if the situation demands for it.
Nevertheless, we are cautiously optimistic about the
future for investments due to the ongoing trade war
between the United States and China. This certainly
throws a spanner in the works when it comes to our
thought processes when assessing stock picks, as the
macro situation creates certain fundamental issues for
some stocks. We expect more uncertainties going
forward in the market and yet, it is in these uncertain
times that the best opportunities will typically present
themselves.
Private Markets
We are actively looking to divest our investments in
private market. Going forward, we will focus on strategic
investments which complements our Ecosystem and
serve the community.
8IH China
8IH China will be more closely integrated with 8VIC
Holdings to support both entities in their growth. We
continue to be cautiously optimistic about 8IH China’s
growth prospects.
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Financial Asset Management (continued)
Private Markets (continued)
AutoWealth
We are actively working with AutoWealth to create the
necessary synergies between our groups. This remains
in progress.
For FY2019, we kept a tight lid on the salaries and
bonuses of the current management and senior team
members. We expect that our prudent approach to
managing expenses will bear fruit in FY2020. With
better financial control and budgeting, I believe that we
will be able to reduce unnecessary expenses and
increase the effectiveness of our spending.
Financial Position
In Summary
financial position
The Group’s current
remains
fundamentally sound despite the challenges. As of 31
March 2019, the Group’s total assets stand at S$42.7
million (FY2018: S$68.4 million). Our net assets has
decreased from S$48.0 million in FY2018 to S$32.3
million in FY2019.
Most of our assets are in cash and cash equivalents
(FY2019: S$12.4 million) and investment securities
(FY2019: S$20.4 million), which will give us some buffer
to ride through the uncertain times ahead.
While the Group is undertaking its digital transformation
and restructuring exercise, there are plenty of disruption
and challenges expected to arise. After many months of
this process, I believe that we are beginning to see light
with some preliminary encouraging results. We remain
steadfast in our efforts to grow the Group in reaching
her fullest potential.
I would like to register my sincere thanks for the
unwavering efforts of our team and the strong support
of our shareholders as we move forward into a new era.
Clive Tan
Executive Director
8I Holdings Limited
8I Holdings Limited and its Subsidiaries
Interim Report FY2019
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Corporate Structure
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General Information
As at 28 June 2019
Directors
Mr Chee Kuan Tat, Ken (Non-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: +65 6801 4500
Registered office (Australia)
C/- SmallCap Corporate Pty Ltd, Suite 6, 295 Rokeby Road, Subiaco
WA, Australia, 6008
Tel: +61 (8) 6555 2950
Fax: +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: +61 (2) 9290 9600
Fax: +61 (2) 9279 0664
Stock exchange listing
8I Holdings Limited shares are listed on the Australian Securities
Exchange (ASX code: 8IH)
Website
www.8iholdings.com
8I Holdings Limited and its Subsidiaries
Interim Report FY2019
7
For personal use only
Remuneration Report
This remuneration report set out information about the remuneration of 8I Holdings Limited’s key management personnel for the
financial year ended 31 March 2019. 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
Clive Tan Che Koon
Chay Yiowmin
Charles Mac
Low Ming Li
Bernard Siah Wee Boon
Louis Chua Chun Woei
Executive Chairman
Executive Director
Non-Executive Director
Non-Executive Director
Head of Corporate Affairs
Chief Technology Officer
Chief Financial Officer; Chief Risk Officer; and Company Secretary (Australia)
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
Chee Kuan Tat, Ken
Clive Tan Che Koon
Chay Yiowmin
Charles Mac
Base Salary(1)
S$108,000 p.a.
S$144,000 p.a. (2)
S$175,200 p.a.
S$nil
S$nil
Fees
S$nil
Term of Agreement
No fixed term
Notice Period
N/A
S$43,200 p.a. (3)
S$42,000 p.a.
S$42,000 p.a.
S$21,000 p.a.(3)
No fixed term
No fixed term
No fixed term
N/A
N/A
N/A
(1) Excluding employer’s Central Provident Fund (CPF) contribution
(2) Executive director remuneration of a subsidiary
(3) Non-executive director fee of a subsidiary
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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 2019 is set out below:
Name of Directors
S$250,000 to below S$500,000
Chee Kuan Tat, Ken
S$100,000 to below S$250,000
Clive Tan Che Koon
Below S$100,000
Chay Yiowmin
Charles Mac
Name of Key Management
Personnel
Designation
S$100,000 to below
S$250,000
Low Ming Li
Head of Corporate Affair
Bernard Siah Wee Boon
Chief Technology Officer
Louis Chua Chun Woei
Chief Financial Officer;
Chief Risk Officer; and
Company Secretary (Australia)
* Salary is inclusive of fixed allowance and CPF contribution.
Salary*
%
Bonus/Profit-
sharing
%
Directors’
Fee
%
Total
%
100
81
-
-
-
-
-
-
-
19
100
100
100
100
100
100
Salary*
%
Bonus/Profit-
sharing
%
Employee
Share Plan
%
Total
%
81
92
91
7
8
8
12
100
-
1
100
100
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 Limited and its Subsidiaries
Interim Report FY2019
15
For personal use only
Remuneration Report (continued)
Details of Remuneration (continued)
The total remuneration of the top five key executives (who are not directors of the Company) is S$789,660 for the financial year
ended 31 March 2019 (2018: S$863,557).
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 2019 except for a benefit of S$23,471 arises from the Employee Share Plan provided to the Key Management of
the Company.
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
Chee Kuan Tat, Ken
Clive Tan Che Koon
Chay Yiowmin
Charles Mac
DIRECTORS' MEETINGS
ELIGIBLE TO ATTEND
4
4
4
4
ATTENDED
4
4
4
4
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.
16
For personal use only
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2019
The directors present their statement to the members together with the audited financial statements of the Group for the
financial year ended 31 March 2019 and the statement of financial position of the Company as at 31 March 2019.
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 23 to 89 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 2019 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 31.3.2019
At 1.4.2018
At 31.3.2019
At 1.4.2018
86,684,792
65,140,000
86,458,500
65,140,000
-
-
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 Limited and its Subsidiaries
Annual Report FY2019
17
For personal use only
DIRECTORS’ STATEMENT
For the financial year ended 31 March 2019
Audit Committee
The members of the Audit Committee at the end of the financial 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
arising from the statutory audit;
the assistance given by the 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 2019 before their submission to the Board of Directors.
The Audit Committee has recommended to the Board that the independent auditor, Kong, Lim & Partners LLP, be
nominated for re-appointment at the forthcoming Annual General Meeting of the Company.
Independent Auditor
The independent auditor, Kong, Lim & Partners LLP, has expressed its willingness to accept re-appointment.
On behalf of the directors
Chee Kuan Tat, Ken
Director
31 May 2019
Clive Tan Che Koon
Director
18
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Singapore 228676
T: (65) 6227 4180
F: (65) 6324 0213
konglim@klp.com.sg
www.konglim.com.sg
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of 8I Holdings Limited (the “Company”) and its subsidiaries (the “Group”), which
comprise the consolidated statement of financial position of the Group and the statement of financial position of the
Company as at 31 March 2019, and the consolidated statement of comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows of the Group for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements of 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 2019 and of the consolidated financial performance,
consolidated changes in equity and consolidated cash flows of the Group for the year ended on that date.
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 are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority (ACRA)
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. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Other matter
The financial statements of the Group and the statement of financial position of the Company for the year ended 31 March
2018 were audited by another auditor who expressed an unmodified opinion on those statements on 29 June 2018.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
For the matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled our responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Statements
section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our
audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion
on the accompanying financial statements.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
19
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13A MacKenzie Road
Singapore 228676
T: (65) 6227 4180
F: (65) 6324 0213
konglim@klp.com.sg
www.konglim.com.sg
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
Key audit matters (continued)
Key Audit Matter
Valuation and impairment of Investment in Subsidiaries
(Refer to Note 15 to the financial statements)
The Company carries its investment in subsidiaries at cost
adjusted for impairment losses. As at 31 March 2019, the carrying
amount of investment in subsidiaries amounted to S$18.1 million.
During the financial year, the company recognised S$11.1 million
of impairment losses in investment in subsidiaries.
We consider the valuation and impairment of investment in
subsidiaries to be a significant key audit matter as the amount is
significant
the
identification of impairment events and the determination of
impairment charge requires the application of significant
judgement by management.
statements. Moreover,
financial
the
to
How our audit addressed the Key Audit Matter
1. We have examined and analysed the method
and assumption used by management in
carrying out the impairment test.
2. We also considered the adequacy of the
disclosures in the financial statements in
respect of this matter.
We found that the method and assumptions used
by management was reasonable. We also found the
disclosure
in the financial statements to be
adequate.
Other Information
Management is responsible for other information. The other information comprises the information included in the annual
report, but does not include the financial statements and our auditor’s report thereon. The annual report is expected to
be made available to us after the date of the auditor’s report.
Our opinion on the financial statements does not cover the other information and we do 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 and, in doing
so, consider whether the other information is materiality inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
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.
20
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T: (65) 6227 4180
F: (65) 6324 0213
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www.konglim.com.sg
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
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.
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 misstatement 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.
• 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 fair
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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
21
For personal use only
13A MacKenzie Road
Singapore 228676
T: (65) 6227 4180
F: (65) 6324 0213
konglim@klp.com.sg
www.konglim.com.sg
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF 8I HOLDINGS LIMITED (continued)
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financial 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.
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 Lim Yeong Seng.
KONG, LIM & PARTNERS LLP
Public Accountants and
Chartered Accountants
Singapore, 31 May 2019
22
For personal use only
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the financial year ended 31 March 2019
OCI
Revenue
Investment (loss)/income
Other gains
Other income
Expenses
- Cost of sales and services
- Administrative expenses
- Marketing and other operating expenses
- Impairment of goodwill
- Finance costs
Share of loss attributable to the unit holders of redeemable
participating shares
Share of profit/(loss) of an associated company
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive expense:
Items that may be reclassified subsequently to profit or loss:
Currency translation differences arising from consolidation
- Gains/(losses)
Items that will not be reclassified subsequently to profit or loss:
- Financial losses, at FVOCI
Other comprehensive expense, net of tax
Total comprehensive expense for the year
Loss attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive expense attributable to:
Owners of the Company
Non-controlling interests
Note
2019
S$
2018
S$
4
4
5
5
6
6
6
14
21
8
25,345,224
(6,325,757)
88,511
832,435
21,082,449
424,002
425,042
739,023
(13,026,427)
(10,023,031)
(8,049,684)
(1,676,119)
(16,531)
(12,425,506)
(11,048,212)
(3,858,329)
-
(83,324)
(1,953,397)
46,114
(395,985)
(79,789)
(10,851,868)
(332,545)
(11,184,413)
(4,428,659)
(9,929)
(4,438,588)
494,117
(1,010,448)
17
(989,506)
(495,389)
(11,679,802)
(11,171,173)
(12,181,621)
(16,620,209)
(10,198,735)
(985,678)
(11,184,413)
(4,249,612)
(188,976)
(4,438,588)
(10,680,272)
(999,530)
(11,679,802)
(16,447,952)
(172,257)
(16,620,209)
Loss per share attributable to equity holders of the Company
(S$ per share)
Basic earnings
Diluted earnings
9
9
(0.0281)
(0.0281)
(0.0119)
(0.0119)
The accompanying notes form an integral part of these financial statements.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
23
For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As A 31 March 2019
OFP-Group
Note
31 March
2019
S$
2018
S$
10
11
12
8
11
13
14
16
17
22
18
19
10
8
20
21
19
22
20
23
24
15
12,382,781
4,773,835
20,379,148
213,438
-
37,749,202
931,673
625,925
183,138
1,294,603
1,698,880
178,865
4,913,084
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
42,662,286
68,366,423
1,530,854
18,566
-
106,498
3,072,795
5,582,278
10,310,991
3,693,680
33,578
4,209,809
235,094
4,938,840
7,035,922
20,146,923
17,857
4,000
-
21,857
57,692
93,591
69,523
220,806
10,332,848
20,367,729
32,329,438
47,998,694
34,491,447
(13,793,142)
10,874,431
31,572,736
756,702
34,422,910
(10,869,540)
21,073,166
44,626,536
3,372,158
32,329,438
47,998,694
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets, at FVPL
Current income tax asset
Inventories
Non-current assets
Other receivables
Plant and equipment
Intangible assets
Investment in an associated company
Financial assets, at FVOCI
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 owners of the Company
Share capital
Other reserves
Retained profits
Non-controlling interests
Total equity
The accompanying notes form an integral part of these financial statements.
24
For personal use only
STATEMENT OF FINANCIAL POSITION - COMPANY
As at 31 March 2019
SOFP-Co
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Financial assets, at FVPL
Current income tax asset
Non-current assets
Other receivables
Investments in subsidiaries
Financial assets, at FVOCI
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Unearned income
Total liabilities
NET ASSETS
EQUITY
Capital and reserves attributable to owners of the Company
Share capital
Other reserves
Retained profits
Total equity
Note
31 March
2019
S$
2018
S$
10
11
12
8
11
15
17
18
10
20
23
24
1,111,714
13,085,680
46,444
3,959
14,247,797
947,240
18,125,797
1,033,529
20,106,566
34,354,363
5,369,817
17,227,838
37,000
3,959
22,638,614
733,603
28,288,147
-
29,021,750
51,660,364
141,483
-
38,110
179,593
179,593
4,494,147
4,209,809
274,704
8,978,660
8,978,660
34,174,770
42,681,704
34,491,447
(2,062,917)
1,746,240
34,174,770
34,422,910
(2,062,917)
10,321,711
42,681,704
The accompanying notes form an integral part of these financial statements.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
25
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 March 2019
SOCE-2019
2019
Beginning of financial year
Attributable to owners
of the Company
Share
capital
S$
Treasury
shares
S$
Fair value
reserve
S$
Currency
translation
reserve
S$
Capital
reserve
S$
Retained
profits
S$
Total
S$
Non-
controlling
interests
S$
Total
equity
S$
34,422,910
- (10,088,712)
(913,252)
132,424 21,073,166 44,626,536
3,372,158
47,998,694
Loss for the year
Other comprehensive (expense)/income for the year
Total comprehensive expense for the year
Share buy-back
Issue of new shares
Disposal of subsidiaries
Dilution of subsidiary without change in control
Acquisition of non-controlling interest without a change in
control (Note 15(a))
Total transactions with owners of the Company, recognised
directly in equity
-
-
-
(136,804)
205,341
-
-
-
68,537
-
-
-
-
-
-
-
-
-
-
(989,506)
(989,506)
-
507,969
507,969
- (10,198,735) (10,198,735)
-
-
(481,537)
- (10,198,735) (10,680,272)
(985,678) (11,184,413)
(495,389)
(999,530) (11,679,802)
(13,852)
-
-
-
-
-
-
-
-
(94)
-
-
-
(1,977,690)
-
-
(464,281)
(94)
(2,441,971)
-
-
-
-
-
-
(136,804)
205,341
(1,977,784)
-
-
-
(1,600,040)
90,000
(136,804)
205,341
(3,577,824)
90,000
(464,281)
(105,886)
(570,167)
(2,373,528)
(1,615,926)
(3,989,454)
End of financial year
34,491,447
- (11,078,218)
(405,377)
(2,309,547) 10,874,431 31,572,736
756,702
32,329,438
The accompanying notes form an integral part of these financial statements.
26
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the financial year ended 31 March 2019
Attributable to owners
of the Company
Note
Share
capital
S$
Treasury
shares
S$
Fair value
reserve
S$
Currency
translation
reserve
S$
Capital
reserve
S$
Retained
profits
S$
Total
S$
Non-
controlling
interests
S$
Total
equity
S$
2018
Beginning of financial year
Loss for the year
Other comprehensive (expense)/income for the year
Total comprehensive expense for the year
Dividends on ordinary shares
Incorporation of subsidiaries
Disposal of a subsidiary with consideration of
treasury shares
Reclassification of non-controlling unit holders to liability
Acquisition of 8VIC Holdings Limited in exchange for disposal
25
15(b)
21
of 25.3% interest in 8VIC
Acquisition of non-controlling interest without a change in
control
Total transactions with owners of the Company, recognised
directly in equity
34,422,910
-
1,082,461
113,915
(1,917,162) 26,227,725 59,929,849
1,765,477
61,695,326
-
-
-
-
-
-
-
-
-
-
-
-
-
- (11,171,173) (1,027,167)
- (11,171,173) (1,027,167)
-
-
(3,716,405)
-
-
3,716,405
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,849,643
(3,800,057)
(4,249,612) (4,249,612)
- (12,198,340)
(4,249,612) (16,447,952)
(188,976)
16,719
(4,438,588)
(12,181,621)
(172,257) (16,620,209)
(904,947)
-
(904,947)
-
(220,000)
151,047
(1,124,947)
151,047
-
-
-
-
(3,716,405)
-
(810,395)
(617,114)
(4,526,800)
(617,114)
5,849,643
3,424,905
9,274,548
(83,652)
(149,505)
(233,157)
2,049,586
(904,947) 1,144,639
1,778,938
2,923,577
End of financial year
34,422,910
- (10,088,712)
(913,252)
132,424 21,073,166 44,626,536
3,372,158
47,998,694
The accompanying notes form an integral part of these financial statements.
27
For personal use only
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2019
SOCF
Cash flows from operating activities
Loss for the year
Adjustments for:
- Income tax expense
- Net gain on disposal of subsidiaries
- Net fair value loss 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
- Amortisation of intangible assets
- Amortisation of prepayments
- Plant and equipment written off
- Prepayment written off
- Credit loss allowance
- Finance costs
- Impairment of goodwill
- Share of (profit)/loss of an associated company
- 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, at FVPL
- 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
2019
S$
2018
S$
8
4
4
4
5
5
4
6
6
6
6
6
6
21
8(b)
(11,184,413)
(4,438,588)
332,545
(529,776)
9,929
(971,860)
8,908,419
1,353,244
(720,961)
-
(357,468)
(1,331,925)
655,665
61,045
50,000
33,343
275,000
36,103
16,531
1,676,119
(46,114)
(1,953,397)
525,132
(3,554,152)
(569,221)
(2,612,202)
(507,834)
165,095
(335,292)
(7,413,606)
357,468
1,331,925
-
(573,801)
(6,298,014)
(120,925)
(425,042)
(467,146)
(684,461)
622,164
-
100,000
-
-
169,685
83,324
-
79,789
(395,985)
(926,271)
(6,012,143)
(575,948)
(572,260)
(113,077)
(771,280)
272,893
(7,771,815)
467,146
684,461
(83,324)
(307,398)
(7,010,930)
The accompanying notes form an integral part of these financial statements.
28
For personal use only
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 31 March 2019
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
Contribution from non-controlling interest for incorporation of a
new subsidiary
Proceeds from sale of non-controlling interest without a change in control
Proceeds from sale of subsidiary, net of cash disposed
Proceeds from/(loan to) a non-related party
Additions to plant and equipment
Additions to intangible assets
Additions to financial assets through other comprehensive income
Reduction in/(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
Issue of new shares
Shares buy-back
Finance cost paid
Proceeds from finance lease
Net proceeds received from fund’s non-controlling unit holders
Net cash provided by financing activities
Note
2019
S$
2018
S$
30
13
14
17
10
25
23
23
21
-
-
(570,167)
21,379
10,459,440
(233,157)
-
90,000
(3,087,812)
4,449,979
(377,645)
(244,183)
(1,039,897)
5,000,000
4,220,275
-
-
205,341
(136,804)
(16,531)
48,556
241,724
342,286
151,047
-
(1,043,276)
(735,000)
(613,282)
-
(88,964)
(5,000,000)
2,918,187
(904,947)
(220,000)
-
-
(41,245)
-
6,814,793
5,648,601
Net (decrease)/increase in cash and cash equivalents
(1,735,453)
1,555,858
Cash and cash equivalents
Beginning of financial year
End of financial year
Significant non-cash transactions:
14,118,234
12,562,376
12,382,781
14,118,234
On 2 October 2018, the Group disposed its digital and marketing businesses for a consideration of 3,031,974 shares in
8VIC Holdings Limited with a market value of AUD 0.66 per share (Note 15(b)).
The accompanying notes form an integral part of these financial statements.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
29
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1.
General information
8I HOLDINGS LIMITED (the “Company”) is listed on the Australian Securities Exchange and incorporated and
domiciled in Singapore. The address of its registered office and principal place of business 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 Financial Reporting Standards in Singapore
(“FRSs”) under the historical cost basis, except as disclosed in the accounting policies below.
The preparation of Group consolidation financial statements in conformity with FRSs 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.
2.2
Revenue recognition
These accounting policies are applied on and after the initial application date of FRS 115, 1 April 2018:
Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for
transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good or
service to the customer, which is when the customer obtains control of the good or service. A performance
obligation may be satisfied at a point in time or over time. The amount of revenue recognised is the amount
allocated to the satisfied performance obligation.
(a)
Rendering of services
The Group provide program sales, events site rental income, digital production and advertising income.
Revenue is recognised when the services have been performed and rendered.
(b)
Sale of goods
The Group 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. Revenue is recognised when the goods are passed to the customers.
30
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.2
Revenue recognition (continued)
(c)
Interest income
Interest income 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.
2.3
Government grants
Government grants received are recognised as income over the periods necessary 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 in a subsidiary, even if this results in the non-controlling interests
having a deficit balance.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
31
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.4
Group accounting (continued)
(a)
Subsidiaries (continued)
(ii)
Acquisitions
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.
Acquisition-related costs are expensed as incurred.
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.
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 statements of the
Company.
32
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.4
Group accounting (continued)
(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 influence, 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.
(i)
Acquisitions
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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
33
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.4
Group accounting (continued)
(c)
Associated companies (continued)
(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 retained 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.
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 recognised 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.
(b)
Depreciation
Depreciation of plant and equipment is calculated using the straight-line method to allocate their
depreciable amounts over their estimated useful lives as follows:
Office equipment
Furniture and fittings
Motor vehicles
Useful lives
1 to 3 years
3 years
5 years
The residual values, estimated useful lives and depreciation method of plant and equipment are
reviewed, and adjusted as appropriate, at each reporting date. The effects of any revision are recognised
in profit or loss when the changes arise.
34
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
2.5
Significant accounting policies (continued)
Plant and equipment (continued)
(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 within “other gains and (losses)”.
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 assets 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.
2.7
Investments in subsidiaries and associated companies
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.
2.8
Impairment of non-financial assets
(a)
Goodwill
Goodwill recognised separately as an intangible 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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
35
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.8
Impairment of non-financial assets (continued)
(a)
Goodwill (continued)
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.
(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 less 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 recoverable 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.
36
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.9
Financial assets
(a)
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.
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 contractual cash flow characteristics of the asset:
• 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”.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
37
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(a)
Classification and measurement (continued)
(i)
Debt instruments (continued)
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”.
(b)
Expected credit losses
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at
FVPL. ECLs are based on the difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows will include cash flows from the sale of collateral
held or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase
in credit risk since initial recognition, ECLs are provided for credit losses that result from default events
that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there
has been a significant increase in credit risk since initial recognition, a loss allowance is recognised for
credit losses expected over the remaining life of the exposure, irrespective of timing of the default (a
lifetime ECL).
For trade receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group
does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at
each reporting date. The Group has established a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific to the debtors and the economic environment
which could affect debtors’ ability to pay.
For debt instruments at FVOCI, the Group applies the low credit risk simplification. At every reporting
date, the Group evaluates whether the debt instrument is considered to have low credit risk using all
reasonable and supportable information that is available without undue cost or effort. In making that
evaluation, the Company reassesses the internal credit rating of the debt instrument. In addition, the
Company considers that there has been a significant increase in credit risk when the contractual
payments are more than 90 days past due.
38
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.9
Financial assets (continued)
(b)
Expected credit losses (continued)
The Group considers a financial asset in default when contractual payments are 90 days past due.
However, in certain cases, the Group may also consider a financial asset to be default when internal or
external information indicates that the Group is unlikely to receive the outstanding contractual amounts
in full before taking into account any credit enhancements held by the Group. A financial asset is written
off when there is no reasonable expectation of recovering the contractual cash flows.
(c)
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.
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.
(d)
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 carrying 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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
39
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.11
Trade and other payables
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions
of the financial instrument. The Group determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at FVPL, directly
attributable transaction costs.
Subsequent measurement
After initial recognition, financial liabilities that are not carried at FVPL are subsequently measured at amortised
cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process. Such financial liabilities comprise trade and other payables,
and borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. When
an existing financial liability is replaced by another from the same lender on substantially different terms, or the
terms of an existing liability are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new liability, and the difference in the respective
carrying amounts is recognised in profit or loss.
2.12
Fair value estimation of financial assets and liabilities
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 reporting 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 reporting 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.
40
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
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.
(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.
(b)
When the Group is the lessor:
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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
41
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
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 at the
end of reporting period.
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.
Deferred income tax is measured:
(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 end of the reporting period; and
based on the tax consequence that will follow from the manner in which the Group expects, at the end
of the reporting period, 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 entirely
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 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.
42
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
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.
Short-term compensated absences
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for
the estimated liability for annual leave as a result of services rendered by employees up to the reporting date.
Employee share plan
The Group maintained an incentive securities plan pursuant to which the Company can offer shares to eligible
employees to subscribe at a discounted price. The discounted value, based on the difference between the issue
price and the market price on the date of issuance, is recognised as expense in profit or loss.
2.17
Currency translation
(a)
Functional and presentation currency
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.
(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 reporting 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 transaction
dates, in which case income and expenses are translated using the exchange rates at the dates
of the transactions); and
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
43
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.17
Currency translation (continued)
(c)
Translation of Group entities’ financial statements (continued)
(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.
2.19
Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows, cash 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 cost 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 against 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.
44
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
2.
Significant accounting policies (continued)
2.21
Share capital and treasury shares (continued)
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 related 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.
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
Estimated impairment goodwill
The Group has recognised an impairment charge on its goodwill of S$1,676,119 during the financial year which
resulted in the carrying amount of goodwill as at 31 March 2019 to reduce to nil.
In performing the impairment assessment of the carrying amount of goodwill, the recoverable amount of the CGU
(Education CGU) in which goodwill has been attributable to, are determined in using value-in-use (“VIU”)
calculation. Significant estimates are used to estimate the discount rate, short term and long term growth rate in
revenues and expenses. Detailed information about each of these estimates and judgements is included in Note
14.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
45
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
4.
Revenue and investment (loss)/income
Type of good or service
Rendering of services
Financial education program sales
Advertising income
Digital marketing and production income
Commission and referral income
Non-financial education program sales
Event site rental income
Others
Sale of goods
Total revenue
Timing of transfer of good or service
At a point in time
Investment losses from public markets
Fair value loss on investment securities
Gain on sale of investment securities
Dividend income
Investment income from private markets
Net gain on disposal of subsidiaries
Total investment (loss)/income
5.
Other gains and other income
Other gains
Gain on foreign exchange - net
Gain from bargain purchase (Note 30(e))
Other income
Interest income
Others
46
Group
2019
S$
2018
S$
14,292,156
1,346,187
608,606
2,338,728
4,113,544
-
179,201
22,878,422
12,591,387
2,203,811
552,223
1,311,747
2,570,506
931,701
-
20,161,375
2,466,802
921,074
25,345,224
21,082,449
25,345,244
25,345,224
21,082,449
21,082,449
(8,908,419)
720,961
1,331,925
(6,855,533)
(1,353,244)
120,925
684,461
(547,858)
529,776
971,860
(6,325,757)
424,002
Group
2019
S$
2018
S$
88,511
-
88,511
357,468
474,967
832,435
-
425,042
425,042
467,146
271,877
739,023
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
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 of intangible assets
Amortisation of prepayments
Information technology cost
Plant and equipment written off
Prepayment written off
Investment impairment
Credit loss allowance
Digital & media production costs
Cost of inventories
Other expenses
Total cost of sales and services, administrative expenses,
marketing and other operating expenses
Group
2019
S$
85,333
177,937
14,040
1,042
655,665
8,373,118
1,906,246
652,070
516,102
436,379
-
5,334,865
706,650
2,071,183
346,990
200,805
348,992
1,339,482
126,971
49,054
71,937
91,230
309,485
2,187,125
61,045
50,000
248,483
33,343
275,000
30,000
36,103
892,401
1,849,556
1,620,510
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
258,951
-
-
-
169,685
331,218
751,131
796,549
31,099,142
27,332,047
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
47
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
7.
Employee compensation
Wages and salaries
Employer’s contribution to defined contribution plans
Other short-term benefits
Employee share plan
8.
(a)
Income taxes
Income tax expense
Tax expense attributable to profit is made up of:
- Loss for the financial year:
Current income tax
- Singapore
- Foreign
Deferred income tax (Note 22)
- Under provision in prior financial years:
Current income tax
Deferred income tax (Note 22)
Group
2019
S$
7,200,623
785,262
282,468
104,765
8,373,118
2018
S$
7,060,995
771,877
437,934
-
8,270,806
Group
2019
S$
2018
S$
54,750
118,575
173,325
34,606
207,931
124,614
-
332,545
-
122,525
122,525
(2,571)
119,954
95,769
(205,794)
9,929
The tax on the Group’s loss before income tax differs from the theoretical amount that would arise using the
Singapore standard rate of income tax as follows:
Group
2019
S$
2018
S$
Loss before income tax
Share of (profit)/loss of an associated company, net of tax
Loss before income tax and share of (profit)/loss of associated company
(10,851,868)
(46,114)
(10,897,982)
(4,428,659)
79,789
(4,348,870)
Tax calculated at tax rate of 17% (2018: 17%)
Effects of:
- different tax rates in other countries
- tax exemption
- expenses not deductible for tax purposes
- income not subject to tax
- deferred tax assets not recognised
- others
- under provision of tax in prior financial years
Tax charge
(1,852,657)
(739,308)
101,875
(29,925)
1,080,161
-
835,103
73,374
124,614
332,545
1,003
(84,193)
448,283
(216,081)
712,821
(208,365)
95,769
9,929
48
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
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 provision in prior financial years
End of financial year
9.
Earnings per share
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
235,094
-
(66,172)
(573,801)
173,325
124,614
(106,940)
248,980
2,852
72,366
(307,398)
122,525
95,769
235,094
(3,959)
-
-
-
-
-
(3,959)
(30,650)
-
-
26,691
-
-
(3,959)
Net loss attributable to equity holders of the Company (S$)
Weighted average number of ordinary shares outstanding for
basic earnings per share
Basic earnings per share (S$ per share)
2019
2018
(10,198,735)
(4,249,612)
362,482,465
(0.0281)
358,507,352
(0.0119)
10.
Cash and cash equivalents
Cash at bank and on hand
Short-term bank deposits
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
8,748,184
3,634,597
12,382,781
17,572,023
5,756,020
23,328,043
1,111,714
-
1,111,714
369,817
5,000,000
5,369,817
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
2019
S$
2018
S$
12,382,781
-
-
12,382,781
23,328,043
(5,000,000)
(4,209,809)
14,118,234
Bank deposits are pledged against bank overdraft facility. The bank overdraft facility had been fully settled and
charge was satisfied subsequent to the financial year end.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
49
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
11.
Trade and other receivables
Current
Trade receivables
Other receivables
- Non-related parties (b)
- Subsidiaries
- Others
Deposits
Prepayments
Credit loss allowance (Note 27(b))
Non-current
Other receivables (c)
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
301,209
2,612,177
-
-
2,976,464
-
676,331
7,215,683
-
634,568
2,976,464
10,060,349
8,195
7,215,683
9,979,679
8,195
529,547
371,450
(81,166)
4,773,835
689,642
892,277
(169,685)
11,874,662
-
46,936
(6,264)
13,085,680
-
30,545
(6,264)
17,227,838
931,673
733,603
947,240
733,603
(a) Trade receivables are non-interest bearing and are generally on 30 to 60 days’ terms. There is no other class
of financial assets that is past due and/or impaired except for trade receivables.
Receivables that were past due but not impaired
The Group has trade receivables amounting to S$138,708 as at 31 March 2019 and S$1,443,565 as at 1 April
2018 that are past due but not impaired. These receivables are unsecured and the analysis of their aging at
the end of the reporting period is as follows:
Trade receivables past due but not impaired:
Lesser than 30 days
31-60 days
61-90 days
More than 90 days
Group
2019
S$
30,468
58,903
49,338
-
138,709
2018
S$
1,008,031
229,238
149,264
57,032
1,443,565
Company
2019
S$
2018
S$
-
-
-
-
-
-
-
-
-
-
Receivable that were past due but impaired
There were no receivable that were past due and impaired.
50
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
11.
Trade and other receivables (continued)
(a) Continued
Expected credit losses
The movement in allowance for expected credit losses of trade receivables computed based on lifetime ECL
are as follows:
Movement in allowance accounts
At 1 April
Charge for the year
Disposal of subsidiaries
Group
2019
S$
163,421
36,103
(124,622)
74,902
2018
S$
-
163,421
-
163,421
Company
2019
S$
2018
S$
-
-
-
-
-
-
-
-
(b) Advances were granted to a previously associated company amounting to S$2,922,358 (2018: S$7,196,483).
These advances were secured by the borrower’s assets, bears interest at 5% per annum and is repayable in
10 years from commencement date or by notice from lender within 6 months requiring payment in full.
(c) Non-current other receivables fair value approximates carrying amount. Included in the non-current other
receivables are promissory note of S$240,000 (2018: S$240,000) and loans to third parties of S$691,673
(2018: S$495,000).
12.
Financial assets, at FVPL
Fair value through profit or loss:
Listed securities
- Equity securities - Australia
- Equity securities - Japan
- Equity securities - India
- Equity securities - China
- Equity securities - Hong Kong
- Equity securities - America
- Equity securities - Taiwan
- Equity securities - Malaysia
- Equity securities - Singapore
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
4,882,521
1,933,177
3,004,606
1,241,926
976,430
300,568
6,626,373
181,542
1,232,005
20,379,148
6,961,018
101,397
4,848,012
-
-
-
13,117,436
179,619
488,893
25,696,375
-
-
-
-
-
-
-
-
46,444
46,444
-
-
-
-
-
-
-
-
37,000
37,000
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
51
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
13.
Plant and equipment
Group
2019
Cost
Beginning of financial year
Currency translation differences
Disposal of subsidiaries
Additions
Written off
End of financial year
Accumulated depreciation
Beginning of financial year
Currency translation differences
Disposal of subsidiaries
Depreciation charge (Note 6)
Written off
End of financial year
Net book value
End of financial year
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
Office
equipment
S$
Furniture and
fittings
S$
Motor
vehicles
S$
Total
S$
775,657
(6,753)
(224,165)
114,126
(95,707)
563,158
1,464,815
(10,442)
(261,181)
172,019
(82,585)
1,282,626
181,616
(4,735)
(164,253)
91,500
-
104,128
2,422,088
(21,930)
(649,599)
377,645
(178,292)
1,949,912
419,154
(2,657)
(33,885)
158,642
(86,976)
454,278
559,878
(5,056)
(149,064)
454,241
(57,973)
802,026
86,590
(2,872)
(58,817)
42,782
-
67,683
1,065,622
(10,585)
(241,766)
655,665
(144,949)
1,323,987
108,880
480,600
36,445
625,925
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
The carrying amounts of motor vehicles held under finance leases are S$36,445 (2018: S$95,026) at the reporting
date.
52
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
14.
Intangible assets
Composition:
Goodwill (a)
Software Development Expenditure (b)
(a) Goodwill arising on consolidation
Cost
Beginning of financial year
Impairment
Acquisition of subsidiaries
Disposal of a subsidiary (Note 15(b))
End of financial year
(b) Software Development Expenditure
Cost
Beginning of financial year
Additions
End of financial year
Accumulated amortisation
Beginning of financial year
Amortisation charge
End of financial year
Net book value
Group
2019
S$
-
183,138
183,138
2018
S$
1,688,861
-
1,688,861
Group
2019
S$
2018
S$
1,688,861
(1,676,119)
-
(12,742)
-
3,459,119
-
130,814
(1,901,072)
1,688,861
Group
2019
S$
-
244,183
244,183
-
61,045
61,045
183,138
2018
S$
-
-
-
-
-
-
-
Amortisation expense included in the statement of comprehensive income is analysed as follows:
Administrative expenses
Group
2019
S$
2018
S$
61,045
-
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
53
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
15.
Investments in subsidiaries
Equity investments at cost
Beginning of financial year
Increase in investment
Acquisition of a subsidiary
Disposal of a subsidiary
Impairment of investment
End of financial year
Company
2019
S$
2018
S$
28,288,147
1,719,288
-
-
(11,881,638)
18,125,797
13,984,921
10,000,000
8,300,020
(2,456,606)
(1,540,188)
28,288,147
The Company had provided an impairment loss of S$11,881,638 representing the write-down of the carrying value
of the subsidiaries to the recoverable amount as the investment no longer represented by the Company’s interest
in net assets of the investees.
The Group has the following subsidiaries as at 31 March 2019 and 2018:
Name
Principal activities
Country of
business/
incorporation
Proportion
of ordinary
shares
directly held
by parent
2019
%
2018
%
Proportion
of ordinary
shares held
by the Group
2018
2019
%
%
Proportion
of ordinary
shares held
by non-
controlling
interests
2019
%
2018
%
`
Held by the Company:
8 Investment Pte. Ltd.
8 Business Pte. Ltd.
Business management
consultancy
Business management
consultancy
Singapore
100
100
100
100
Singapore
100
100
100
100
8IH Global Limited
Investment trading
Mauritius
100
100
100
100
-
-
-
8Bit Global Pte. Ltd.
Computer programming
and data processing and
hosting
Singapore
50
100
85.5
100
14.5
Hidden Champions Capital
Management Pte. Ltd.
Registered fund
management company
Singapore
100
100
100
100
-
-
-
-
-
-
8VIC Holdings Limited
(previously known as
Digimatic Group Ltd.)
Investment holding and
management consultancy
services
Singapore
Held through 8 Investment Pte. Ltd.
Fusion 462 Pte. Ltd.
Dormant
Oxford Views Pte. Ltd.
Dormant
Vue at Red Hill Pte. Ltd.
Business management
consultancy
Singapore
Singapore
Singapore
-
-
-
-
-
79.9
72
20.1
28
-
-
-
100
100
100
100
100
100
-
-
-
-
-
-
54
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
15.
Investments in subsidiaries (continued)
The Group has the following subsidiaries as at 31 March 2019 and 2018: (continued)
Name
Principal activities
Country of
business/
incorporation
Held through 8IH Global Limited
Hidden Champions Fund
Investment trading
Mauritius
8IH China Pte. Ltd.
Business management
consultancy
Singapore
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
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
Held through 8 MAD Group Sdn Bhd
MAD Integrated Sdn Bhd
Advertising and event
management
MAD Training Sdn Bhd
Advertising, public
relations and publicity
programmes
People’s
Republic of
China
People’s
Republic of
China
Malaysia
Malaysia
Leap Asia Sdn. Bhd.
Advertising and event
management
Malaysia
Held through 8VIC Holdings Limited
(previously known as Digimatic Group Ltd.)
8VIC Global Pte. Limited
Seminar and programs
organiser
Singapore
Digimatic Creatives Pte. Ltd.
Motion picture/ video
production
Singapore
Digimatic Media Private Limited Conducting business
courses/ advertising
activities
Singapore
Webbynomics Pte. Ltd.
E-commerce
Singapore
Wewe Media Group Pte. Ltd.
Advertising activities
Singapore
-
-
-
-
-
-
-
-
-
-
-
-
-
Proportion
of ordinary
shares
directly held
by parent
Proportion
of ordinary
shares held
by the Group
2019 2018 2019 2018 2019 2018
Proportion
of ordinary
shares held
by non-
controlling
interests
%
%
%
%
%
-
%
-
100
100
-
-
-
-
65
65
35
35
-
51
-
49
65
65
35
35
-
44.2
44.2
55.8
55.8
-
-
-
-
-
-
-
-
-
-
51
51
-
-
49
49
-
28.6
-
71.4
79.9
72
20.1
28
-
-
-
-
36.7
72
36.7
72
-
-
-
-
63.3
28
63.3
28
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
55
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
15.
Investments in subsidiaries (continued)
The Group has the following subsidiaries as at 31 March 2019 and 2018: (continued)
Name
Principal activities
Held through 8VIC Global Pte. Limited
8VIC Malaysia Sdn. Bhd.
Seminar and programs
organiser
Country of
business/
incorporation
Malaysia
8VIC Singapore Pte. Ltd.
Seminar and programs
organiser
Singapore
8VIC (Australia) Pty Ltd
8VIC Taiwan Co., Ltd
8VIC (Thailand) Company Limited
Seminar and programs
organiser
Australia
Seminar and programs
organiser
Taiwan
Seminar and programs
organiser
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
Conducting business
courses
Malaysia
Keaworld Pte. Ltd.
E-commerce
Singapore
Significant restrictions
Proportion
of ordinary
shares
directly held
by parent
2019
%
2018
%
Proportion
of ordinary
shares held
by the Group
2018
2019
%
%
Proportion
of ordinary
shares held
by non-
controlling
interests
2019
%
2018
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
79.9
72
20.1
28
47.9
72
52.1
28
71.9
64.8
28.1
35.2
55.9
50.4
44.1
49.6
55.9
50.4
44.1
49.6
55.9
50.4
44.1
49.6
-
-
-
72
72
72
-
-
-
28
28
28
Cash and short-term deposits of S$337,646 (2018: S$635,919) are held in the People’s Republic of China and are
subject to local exchange control regulations. These local exchange control regulations provide for restrictions on
exporting capital from the country, other than through normal dividends.
Carrying value of non-controlling interests
8VIC Holdings Limited and its subsidiaries
Others
Total
2019
S$
2018
S$
1,091,789
(335,087)
756,702
3,338,270
33,888
3,372,158
56
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
15.
Investments in subsidiaries (continued)
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
Non-controlling interests
Summarised statement of comprehensive income
Revenue
(Loss)/profit before income tax
Income tax expense
(Loss)/profit for the year
Total comprehensive income allocated
to non-controlling interests
8VIC Holdings
Limited and its
subsidiaries
31 March 2019
S$
8VIC Holdings
Limited and its
subsidiaries
31 March 2018
S$
6,401,544
(3,161,976)
3,239,568
14,018,323
(6,570,130)
7,448,193
856,468
(21,857)
834,611
14,028,788
(130,771)
13,898,017
4,074,179
21,346,210
1,091,789
3,338,270
8VIC Holdings
Limited and its
subsidiaries
For period ended
31 March
2019
S$
8VIC Holdings
Limited and its
subsidiaries
For period ended
31 March
2018
S$
22,291,337
(4,329,146)
(386,518)
(4,715,664)
17,305,069
549,849
(105,183)
444,666
147,128
(75,305)
Dividends paid to non-controlling interests
-
220,000
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
57
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
15.
Investments in subsidiaries (continued)
Summarised statement of cash flows
Cash flows from operating activities
Cash (used in)/provided by operations
Interest income received
Dividend received
Income tax (paid)/refunded
Net cash (used in)/provided by operating activities
8VIC Holdings
Limited and its
subsidiaries
31 March 2019
S$
8VIC Holdings
Limited and its
subsidiaries
31 March 2018
S$
(954,361)
58,073
6,674
(426,276)
(1,315,890)
175,356
28,650
-
64,430
268,436
Net cash (used in)/provided by investing activities
(3,756,836)
9,730,666
Net cash used in financing activities
(20,888)
(4,412,009)
Net (decrease)/increase in cash and cash equivalents
(5,093,614)
5,587,093
Cash and cash equivalents at beginning of year
Effect of currency translation on cash and cash equivalents
Cash and cash equivalents at end of year
9,793,740
1,905
4,702,031
4,206,647
9,793,740
Note 15(a): Current year acquisition of additional interest in a subsidiary
During the financial year, the Company acquired additional 2.4% of the issued shares of 8VIC Holdings Limited for
a total purchase consideration of S$570,167. The Group now holds 79.9% of the equity share capital of 8VIC
Holdings Limited after a concentration gain of 5.4% from the share reduction of 8VIC Holdings Limited. The Group
derecognised non-controlling interest of S$105,886 and recoded a decrease in equity attributable to owners of
the parent of S$464,281 on the date of acquisition. The effect of changes in the ownership interest of 8VIC
Holdings Limited on the equity attributable to owners of the Company during the financial year is summarised as
follows:
Carrying amount of non-controlling interest acquired
Consideration paid to non-controlling interest
Excess of consideration paid recognised in parent’s equity
2019
S$
105,886
(570,167)
(464,281)
58
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
15.
Investments in subsidiaries (continued)
Note 15(b): Current year disposal of subsidiaries
On 2 October 2018, the Group disposed its subsidiaries, Digimatic Media Private Limited, Digimatic Creatives Pte.
Ltd., Wewe Media Group Pte. Ltd., Webbynomic Pte. Ltd. and their subsidiaries (together, “Digital & Marketing”)
for a consideration of 3,031,974 shares in 8VIC Holdings Limited with a market value of AUD 0.66 per share. The
effects of the disposal was as follows:
Consideration for 3,031,974 shares in 8VIC Holdings Limited
Carrying amounts of assets and liabilities disposed of
Cash and cash equivalents
Trade and other receivables
Inventory
Plant and equipment
Financial assets, at FVOCI
Trade and other payables
Current income tax liabilities
Contractual liabilities
Deferred income tax liabilities
Net assets derecognised
Less: Non-controlling interests
Net assets disposed off
Gain from sale of Digital & Marketing
2019
S$
1,977,690
3,108,243
2,474,101
962,557
257,275
100,000
(2,337,036)
(82,724)
(1,600,276)
(89,591)
2,792,549
(1,396,821)
1,395,728
581,962
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
59
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
15.
Investments in subsidiaries (continued)
Note 15(b): Current year disposal of subsidiaries (continued)
On 31 March 2019, the Group disposed its subsidiaries, 8 MAD Group Sdn Bhd and its subsidiaries (together,
“8MAD Group”) for a consideration of MYR 480,000. The effects of the disposal was as follows:
Cash consideration
Carrying amounts of assets and liabilities disposed of
Cash and cash equivalents
Trade and other receivables
Current income tax assets
Plant and equipment
Intangible assets
Financial assets, at FVOCI
Trade and other payables
Finance lease liabilities
Net assets derecognised (including goodwill of S$12,742)
Less: Non-controlling interests
Net assets disposed off
Loss from sale of 8MAD Group
Note 15(c): Prior year disposal of a subsidiary
2019
S$
159,456
139,025
236,884
16,552
150,558
12,742
3,388
(40,886)
(103,402)
414,861
(203,219)
211,642
(52,186)
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”) 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. 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 was 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$1,043,276)
Less: Non-controlling interests
Net assets disposed off
Gain from sale of a subsidiary’s shares (Note 4)
60
2018
S$
3,716,405
3,554,940
(810,395)
2,744,545
971,860
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
16.
Investment in an associated company
CT Hardware Sdn. Bhd.
At beginning of financial year
Share of profit/(loss) of associated companies
Translation difference
At end of financial year
Group
2019
S$
2018
S$
1,294,603
1,263,908
1,263,908
46,114
(15,419)
1,294,603
1,425,911
(79,789)
(82,214)
1,263,908
Set out below is the associated company of the Group as at 31 March 2019 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.
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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
61
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
16.
Investments in an associated company (continued)
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
Summarised statement of comprehensive income
Revenue and other income
Expenses
Includes:
- Depreciation
- Interest expense
Profit/(loss) before tax
Income tax expense
Profit/(loss) after tax
CTH
As at 31 March
2019
S$
2018
S$
2,566,025
2,544,152
529,323
586,123
(803,710)
(670,773)
(398,084)
(134,059)
2,040,437
2,033,410
(1,299,872)
(1,370,040)
(1,299,872)
(1,370,040)
2,502,880
2,536,749
CTH
For the year ended
31 March
2019
S$
2018
S$
7,338,635
6,794,611
(7,246,222)
(6,954,527)
(122,534)
(108,247)
(122,174)
(126,744)
92,413
(159,916)
-
-
92,413
(159,916)
The information above reflects the amounts presented in the financial statements of the associated company (and
not the Group’s share of those amounts).
62
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
16.
Investments in an associated company (continued)
Reconciliation of summarised financial information
Reconciliation of the summarised financial information presented, to the carrying amount of the Group’s interest
in the associated company, is as follows:
Net assets
At 1 Apr 2018
Profit/(loss) for the year
Foreign exchange differences
End of financial year
Interest in associated companies (49.9%)
Goodwill
Foreign exchange differences
Carrying value
17.
Financial assets, at FVOCI
CTH
As at 31 March
2019
S$
2018
S$
2,536,749
92,413
(126,282)
2,502,880
1,248,937
45,666
-
1,294,603
2,517,065
(159,916)
179,600
2,536,749
1,265,838
45,666
(47,596)
1,263,908
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.
Beginning of financial year
Additions
Disposal/(acquisition) of subsidiaries
Fair value losses recognised in other comprehensive
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
1,751,877 13,025,188
88,964
1,039,897
100,000
(103,388)
-
1,033,529
-
428,267
89,924
-
income (Note 24)
(989,506) (11,171,173)
-
(500,113)
Reclassification from financial assets at FVOCI to
subsidiary (Note 30(d))
End of financial year
Financial assets at FVOCI are analysed as follows:
Listed securities
Unlisted securities
Total
-
1,698,880
(291,102)
1,751,877
-
1,033,529
(18,078)
-
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
651,472
1,047,408
1,698,880
1,637,998
113,879
1,751,877
-
-
-
-
-
-
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
63
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
17.
Financial assets, at FVOCI (continued)
The Group has elected to measure these equity securities at FVOCI due to the Group’s intention to hold these
equity instruments for long term appreciation.
18.
Trade and other payables
Current
Trade payables
Accruals for operating expenses
GST payable
Other payables
Amount owing to subsidiaries
Provision for reinstatement
Total trade and other payables
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
268,479
715,974
6,546
539,855
-
-
1,530,854
870,772
2,355,879
53,256
348,773
-
65,000
3,693,680
17,969
49,561
-
73,953
-
-
141,483
40,165
368,828
-
78,686
4,006,468
-
4,494,147
Trade payables are non-interest bearing and are normally settled on 30-day terms.
19.
Finance lease liabilities
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
64
Group
2019
S$
2018
S$
19,988
18,304
38,292
(1,869)
36,423
37,286
60,144
97,430
(6,160)
91,270
Group
2019
S$
2018
S$
18,566
33,578
17,857
57,692
36,423
91,270
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
20. Unearned revenue
Current
Non-current
Total
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
3,072,795
-
3,072,795
4,938,840
69,523
5,008,363
38,110
-
38,110
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
Payment to fund’s non-controlling unit holders
Share of loss attributable to the unit holders of redeemable participating
shares
Currency translation differences
As at end of year
Group
2019
S$
7,035,922
-
705,028
(463,304)
(1,953,397)
258,029
5,582,278
2018
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
2019
S$
2018
S$
178,865
217,905
(4,000)
(93,591)
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
65
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
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 (charged)/credited to
- profit or loss (Note 8(a))
End of financial year
Group
2019
S$
124,314
(4,434)
-
89,591
(34,606)
174,865
2018
S$
(5,344)
11,829
(91,880)
1,344
208,365
124,314
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$4,358,030 (2018: S$5,736,918) at the reporting date which can be carried forward and used to offset
against future taxable income subject to meeting certain statutory requirements by those companies with
unrecognised tax losses and capital allowances in their respective countries of incorporation.
The movement in deferred income tax assets/(liabilities) (prior to offsetting of balances within the same tax
jurisdiction) is as follows:
Group
Deferred income tax liabilities
2019
Beginning of financial year
Disposal of subsidiaries
End of financial year
2018
Beginning of financial year
Currency translation differences
Acquisition of subsidiaries
Credited to profit or loss
Disposal of subsidiaries
End of financial year
Accelerated tax
depreciation
S$
Fair value
gains - net
S$
(24,289)
20,289
(4,000)
(5,344)
974
(22,578)
1,315
1,344
(24,289)
(69,302)
69,302
-
-
-
(69,302)
-
-
(69,302)
Total
S$
(93,591)
89,591
(4,000)
(5,344)
974
(91,880)
1,315
1,344
(93,591)
66
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
22. Deferred income tax assets/(liabilities) (continued)
Deferred income tax assets
2019
Beginning of financial year
Currency translation differences
Charged to profit or loss
End of financial year
2018
Beginning of financial year
Currency translation differences
Credited to profit or loss
End of financial year
23.
Share capital
Group and Company
2019
Beginning of financial year
Shares issued
Shares buy-back
End of financial year
2018
Beginning/End of financial year
Accelerated
tax
depreciation
S$
5,643
(115)
-
5,528
-
213
5,430
5,643
Unearned
Revenue
S$
212,262
(4,319)
(34,606)
173,337
-
8,012
204,250
212,262
Total
S$
217,905
(4,434)
(34,606)
178,865
-
8,225
209,680
217,905
Number of
shares
Amount
S$
361,978,585
1,562,822
(1,153,250)
362,388,157
34,422,910
205,341
(136,804)
34,491,447
361,978,585
34,422,910
All issued ordinary shares are fully paid. There is no par value for these ordinary shares. Fully paid ordinary shares
carry one vote per share and carry a right to dividends as and when declared by the Company.
On 17 July 2018, the Company issued 1,562,822 (2018: Nil) ordinary shares, at the exercise price of AUD 0.065
(2018: Nil) each, pursuant to the Employee Share Plan as approved at the general meeting of shareholders held
on 22 November 2017. The cost of the newly issued shares amounted to S$205,341 (2018: Nil). The newly issued
shares rank pari passu in all respects with the previously issued shares.
The Company acquired 1,153,250 (2018: Nil) shares in the Company in the open market during the financial year.
The total amount paid to acquire the shares was $136,804 (2018: Nil).
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
67
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
24. Other reserves
(a)
Composition:
Fair value reserve
Currency translation reserve
Capital reserve
(b)
Movements:
(i) Fair value reserve
Beginning of financial year
Financial assets through other comprehensive
income
- Fair value losses from financial assets
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
(11,078,218) (10,088,712)
(913,252)
132,424
(13,793,142) (10,869,540)
(405,377)
(2,309,547)
(424,071)
-
(1,638,846)
(2,062,917)
(424,071)
-
(1,638,846)
(2,062,917)
(10,088,712)
1,082,461
(424,071)
76,042
at FVOCI (Note 17)
End of financial year
(989,506) (11,171,173)
(11,078,218) (10,088,712)
-
(424,071)
(500,113)
(424,071)
(ii) Currency translation reserve
Beginning of financial year
Net currency translation differences of financial
statements of foreign subsidiaries and
associated companies
Disposal of subsidiaries
End of financial year
(913,252)
113,915
507,969
(94)
(405,377)
(1,027,167)
-
(913,252)
-
-
-
-
(iii) Capital reserve
Beginning of financial year
Disposal of subsidiaries
Decrease in equity attributable to
non-controlling interest
End of financial year
25. Dividends
132,424
(1,977,690)
(1,917,162)
5,849,643
(1,638,846)
-
(464,281)
(2,309,547)
(3,800,057)
132,424
-
(1,638,846)
(1,638,846)
(1,638,846)
Declared and paid during the financial year
Ordinary dividends
Final exempt (one-tier) dividend for 2018: 0.25 (SGD cents) per share
Group
2019
S$
2018
S$
-
904,947
68
-
-
-
-
-
-
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
26.
Commitments
(a)
Operating lease commitments - where the Group is a lessee
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.
Minimum lease payments recognised as expense in the income statement for the financial year amounted to
S$1,906,246 (2018: S$1,910,350).
The future minimum lease payables under non-cancellable operating leases contracted for at the reporting date
but not recognised as liabilities, are as follows:
Not later than one year
Between one and five years
Group
2019
S$
2018
S$
1,185,000
1,186,000
2,372,000
1,593,000
2,319,000
3,912,000
(b)
Operating lease commitments - where the Group is a lessor
The Group lease out office rental space to a non-related party under non-cancellable operating lease agreement.
The lessee is required to pay absolute fixed monthly office lease.
The future minimum lease receivables under non-cancellable operating leases contracted for at the reporting date
but not recognised as receivables, are as follows:
Not later than one year
Group
2019
S$
2018
S$
70,000
-
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
69
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
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
primarily 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.
70
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
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 March 2019
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
Financial lease liabilities
Redeemable participating
shares
MYR
S$
AUD
S$
USD
S$
RMB
S$
JPY
S$
NTD
S$
INR
S$
728,788
169,377
898,165
5,587,570 5,015,434 1,448,186
152,623
5,601,552 5,102,028 1,600,809
86,594
13,982
1,933,177
67,584
2,000,761
7,341,444
225,165
7,566,609
3,004,605
-
3,004,605
(83,115)
(18,566)
(290,426)
-
(225)
-
(21,847)
-
-
(101,681)
-
(5,582,278)
(290,426) (5,582,503)
-
(21,847)
-
-
-
-
(29,881)
-
-
(29,881)
-
-
-
-
Net financial assets
796,484
5,311,126
(480,475) 1,578,962
2,000,761
7,536,728
3,004,605
Currency exposure of
financial assets net of those
denominated in the
respective entities’
functional currencies
At 31 March 2018
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
Financial lease liabilities
Borrowings
Redeemable participating
shares
1,644
5,304,063
292,401 1,231,687
2,000,761
6,626,372
3,004,605
2,222,382
442,162
2,664,544
8,615,314 7,165,043
730,184
8,615,314 7,895,227
-
517,488
23,034
540,522
101,397
174,668
276,065
13,534,583
495,844
14,030,427
4,848,012
25,393
4,873,405
(446,431)
(91,270)
-
(5,054)
-
-
(611,200)
-
-
(41,353)
-
-
-
(537,701)
-
(7,035,922)
(5,054) (7,647,122)
-
(41,353)
-
-
-
-
-
(210,858)
-
-
-
(210,858)
-
-
-
-
-
Net financial assets
2,126,843
8,610,260
248,105
499,169
276,065
13,819,569
4,873,405
Currency exposure of
financial assets net of those
denominated in the
respective entities’
functional currencies
(112,235) 8,610,260
(12,828)
33,321
276,065
13,117,435
4,873,405
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
71
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
27.
Financial risk management (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:
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
2019
AUD
S$
708,810
-
708,810
(5,654)
-
(5,654)
2018
AUD
S$
20,045
-
20,045
(5,054)
-
(5,054)
Net financial assets
703,156
14,991
Currency exposure of financial assets net of those
denominated in the respective entities’ functional
currencies
703,156
14,991
72
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
27.
Financial risk management (continued)
(a)
Market risk (continued)
(i)
Currency risk (continued)
If the MYR, AUD, USD, RMB, JPY, NTD and INR change against the SGD by 2% (2018: 7%), 4% (2018: 6%),
3% (2018: 6%), 3% (2018: 3%), 1% (2018: 1%), 2% (2018: 2%) and 2% (2018: 7%) 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)
2019
2018
Profit
after tax
S$
Other
comprehensive
income
S$
Profit
after tax
S$
Other
comprehensive
income
S$
33
(33)
-
-
(6,521)
6,521
-
-
185,877
(185,877)
26,285
(26,285)
347,480
(347,480)
81,311
(81,311)
8,772
(8,772)
36,951
(36,951)
20,008
(20,008)
132,527
(132,527)
60,092
(60,092)
121
(121)
-
-
-
-
-
-
-
-
-
-
-
-
(639)
639
830
(830)
2,291
(2,291)
217,749
(217,749)
283,145
(283,145)
747
(747)
-
-
-
-
-
-
-
-
-
-
-
-
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
73
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
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 at fair value through profit or loss. These
securities are listed in Australia, Japan, India, Taiwan, China, Hong Kong, America, 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, China, Hong Kong, America, Malaysia
and Singapore had changed by 7% (2018: 18%), 7% (2018: 18%), 7% (2018: 18%), 7% (2018: 18%), 7%
(2018: 18%), 7% (2018: 18%), 7% (2018: 18%) and 7% (2018: 18%) respectively with all other variables
including tax rate being held constant, the effects on profit after tax and other comprehensive income
would have been:
Increase/(Decrease)
2019
2018
Profit
after tax
S$
Other
comprehensive
income
S$
Profit
after tax
S$
Other
comprehensive
income
S$
341,776
(341,776)
45,999
(45,999)
1,016,161
(1,010,161)
238,348
(238,348)
135,322
(135,322)
210,322
(210,322)
463,846
(463,846)
86,935
(86,935)
68,350
(68,350)
21,040
(21,040)
-
-
-
-
-
-
-
-
-
-
-
-
14,802
(14,802)
707,707
(707,707)
1,914,867
(1,914,867)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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 China
- increased by
- decreased by
Listed in Hong Kong
- increased by
- decreased by
Listed in America
- increased by
- decreased by
74
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
27.
Financial risk management (continued)
(a)
Market risk (continued)
(ii)
Price risk (continued)
Increase/(Decrease)
2019
2018
Profit
after tax
S$
Other
comprehensive
income
S$
Profit
after tax
S$
Other
comprehensive
income
S$
12,708
(12,708)
86,223
(86,223)
3,251
(3,251)
-
-
-
-
-
-
26,221
(26,221)
71,368
(71,368)
6,507
(6,507)
-
-
-
-
-
-
Group
Listed in the Malaysia
- increased by
- decreased by
Listed in the Singapore
- increased by
- decreased by
Company
Listed in the Singapore
- increased by
- decreased by
(b)
Credit risk
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 Executive
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 are 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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
75
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
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
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 if 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 2018
Disposal of subsidiaries
Changes in credit loss recognised in profit or loss:
- Increase due to credit risk
Balance at 31 March 2019
Company
Balance at 1 April 2018 and 31 March 2019
Trade
receivables
S$
163,421
(124,622)
36,103
74,902
Other financial
assets at
amortised costs
S$
Total
S$
6,264
-
-
6,264
169,685
(124,622)
36,103
81,166
Other financial
assets at
amortised costs
S$
6,264
76
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
27.
Financial risk management (continued)
(b)
Credit risk (continued)
The Group’s credit risk exposure in relation to trade receivables, under FRS 109 as at 31 March 2019 are set out
in the provision matrix as follows:
2019
Expected loss rate
Gross carrying amount (S$)
Credit loss allowance (S$)
Current
Within 30
days
30 to 60
days
61-90
days
More than
90 days
Total
Past due
0%
87,598
-
0%
30,468
-
5%
62,003
(3,100)
10%
54,820
(5,482)
100%
66,320
(66,320)
301,209
(74,902)
The Group’s credit risk exposure in relation to trade receivables under FRS 109 as at 31 March 2019 are set out as
follows:
2019
Gross carrying amount
-Not past due
-Past due but not impaired
-Past due and impaired
Less allowance for impairment
Net carrying amount
2018
Gross carrying amount
-Not past due
-Past due but not impaired
-Past due and impaired
Current
S$
96,598
-
-
-
96,598
Past due
Within 30
days
S$
30 to 60
days
S$
61-90
days
S$
More than
90 days
S$
Total
S$
-
30,468
-
-
30,468
-
-
62,003
(3,100)
58,903
-
-
54,820
-
-
66,320
96,598
30,468
183,143
(5,482)
49,338
(66,320)
-
(74,902)
235,307
1,005,191
-
-
-
1,008,031
-
-
213,790
16,261
-
672
237,333
-
351
130,548
1,005,191
1,222,844
384,142
Less allowance for impairment
Net carrying amount
-
1,005,191
-
1,008,031
(813)
229,238
(88,741)
149,264
(73,867)
57,032
(163,421)
2,448,756
Trade receivables
In 2018, 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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
77
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
27.
Financial risk management (continued)
(c)
Liquidity risk
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 reporting 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 reporting 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.
Group
At 31 March 2019
Trade and other payables
Finance lease liabilities
Redeemable participating shares
At 31 March 2018
Trade and other payables
Finance lease liabilities
Borrowings
Redeemable participating shares
Company
At 31 March 2019
Trade and other payables
At 31 March 2018
Trade and other payables
Borrowings
(d)
Capital risk
Less than
1 year
S$
1,530,854
19,988
5,582,278
3,693,680
37,286
4,209,809
7,035,922
141,483
4,494,147
4,209,809
Between
1 and
5 years
S$
-
18,304
-
-
60,144
-
-
-
-
-
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 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.
78
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
27.
Financial risk management (continued)
(e)
Fair value measurements
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
2019
Assets
Financial assets, at FVPL
Financial assets, at FVOCI
Total assets
2018
Assets
Financial assets, at FVPL
Financial assets, at FVOCI
Total assets
Company
2019
Assets
Financial assets, at FVPL
2018
Assets
Financial assets, at FVPL
Level 1
S$
Level 2
S$
Level 3
S$
Total
S$
20,379,148
-
651,472 1,047,408
21,030,620 1,047,408
25,696,375
1,637,998
27,334,373
-
113,879
113,879
46,444
37,000
-
-
-
-
-
-
-
-
-
-
20,379,148
1,698,880
22,078,028
25,696,375
1,751,877
27,448,252
46,444
37,000
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 reporting 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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
79
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
27.
Financial risk management (continued)
(f)
Financial instruments by category
Group
2019
S$
2018
S$
Company
2019
S$
2018
S$
Financial assets, at FVPL
Financial assets, at FVOCI
Financial assets at amortised cost
Financial liabilities at amortised cost
20,379,148
1,698,880
17,716,838
(7,149,555)
25,696,375
1,751,877
35,044,031
(15,030,681)
46,444
1,033,529
15,097,698
(141,483)
37,000
-
23,300,713
(8,703,956)
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:
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
2019
S$
2018
S$
990,500
1,943,913
69,955
1,060,455
137,842
2,081,755
80
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
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.
- Digital & Marketing (discontinued): involved in specialists and training academy; content creation, branding
and marketing solutions provider; and marketing and selling products via ecommerce platform.
- All other segments: included fintech business and subsidiaries that provided financial education and training
in China, Taiwan, Thailand and Australia.
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.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
81
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
29.
Segment information (continued)
The segment information provided to the key management for the reportable segments are as follows:
Singapore
Investment in
Public
Markets
S$
Investment in
Private
Markets
S$
Digital &
Marketing
(discontinued) Education
S$
S$
Malaysia
Investment in
Private
Markets
S$
Digital &
Marketing
(discontinued)
S$
All other
segments
S$
Education
S$
Corporate
S$
TOTAL
S$
2019
Revenue and investment income
Total segment revenue and investment
income
5,023,047
(6,855,532)
757,292
8,455,988
3,706,717
821,331
927,264
6,888,492
1,077,658
20,802,257
Inter-segment revenue and investment
income
(428,986)
-
(240,000)
-
(36,146)
-
-
(1,077,658)
(1,782,790)
Revenue and investment income to
external parties
4,594,061
(6,855,532)
517,292
8,455,988
3,670,571
821,331
927,264
6,888,492
-
19,019,467
(1,741,536)
(6,128,643)
142,221
518,108
64,148
19,650
(168,816)
(1,395,746)
(2,493,799)
(11,184,413)
Profit/(loss) after tax
Depreciation
Share of profit of an associated company
Net gain on disposal of subsidiaries
Impairment of goodwill
-
-
-
-
-
-
-
529,776
-
Segment assets
5,178,608
25,514,164
746,570
Segment assets includes additions to:
- plant and equipment
- intangible assets
118,467
-
-
-
-
-
Segment liabilities
(1,783,854)
(5,619,542)
82
-
-
-
-
-
-
-
-
-
-
46,114
-
-
968,264
1,294,603
122,923
-
91,828
-
(729,456)
-
-
-
-
-
-
-
-
-
-
(121,577)
-
-
(1,554,542)
46,114
529,776
(1,676,119)
1,763,675
7,196,402
42,662,286
16,254
244,183
28,173
-
377,645
244,183
(1,531,034)
(668,962)
(10,332,848)
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
29.
Segment information (continued)
Singapore
Investment in
Public
Markets
S$
Investment in
Private
Markets
S$
Digital &
Marketing
S$
Education
S$
Education
S$
Malaysia
Investment in
Private
Markets
S$
Digital &
Marketing
S$
All other
segments
S$
Corporate
S$
TOTAL
S$
2018
Revenue and investment income
Total segment revenue and investment
income
9,280,924
(427,843)
2,363,758
4,895,911
2,279,421
2,203,811
535,331
1,514,251
1,103,018
23,748,582
Inter-segment revenue and investment
income
(460,071)
(120,000)
(420,000)
(125,342)
(13,700)
-
-
-
(1,103,018)
(2,242,131)
Revenue and investment income to
external parties
8,820,853
(547,843)
1,943,758
4,770,569
2,265,721
2,203,811
535,331
1,514,251
-
21,506,451
Profit/(loss) after tax
Depreciation
Share of loss of associated companies
Gain from sale of a subsidiary’s shares
159,424
(222,631)
-
-
(1,312,732)
-
-
-
282,801
(21,921)
-
971,860
250,428
(94,004)
-
-
(15,865)
(203,396)
-
-
(120,789)
(35,066)
(78,789)
-
160,788
(1,054)
-
-
(527,477)
(26,900)
-
-
(3,315,166)
(17,192)
-
-
(4,438,588)
(622,164)
(78,789)
971,860
Segment assets
7,326,200
33,477,357
1,984,142
5,937,559
1,446,900
737,054
1,032,781
2,032,087
14,392,343
68,366,423
Segment assets includes additions to:
- plant and equipment
- intangible assets
368,360
-
-
-
26,750
-
32,327
-
108,888
-
18,171
9,237
19,200
-
17,105
121,577
22,481
-
613,282
130,814
Segment liabilities
(1,861,574)
(7,166,342)
(48,218)
(2,665,070)
(1,258,586)
(117,018)
(422,245)
(1,612,409)
(5,216,267)
(20,367,729)
83
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
29.
Segment information (continued)
The management assesses the performance of the operating segments based on profit after tax.
(a)
Revenue from major products and services
Revenues from external customers are derived mainly from financial education and training providers, investment
income from public and private markets and digital & marketing. Breakdown of the revenue and investment
income is as follows:
Revenue and investment income
Education
Investment in Public Markets
Investment in Private Markets
Digital & Marketing
Others
2019
S$
2018
S$
12,719,635
(6,855,532)
3,036,174
9,383,252
735,938
19,019,467
11,086,574
(547,843)
4,147,569
5,305,900
1,514,251
21,506,451
(b)
Geographical information
The Group’s business segments operate in two main geographical areas:
•
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 private markets;
• 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
2019
S$
2018
S$
6,868,671
5,419,166
6,731,630
19,019,467
14,987,337
5,004,863
1,514,251
21,506,451
4,598,459
200,970
113,655
4,913,084
5,409,412
561,536
1,041,672
7,012,620
84
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
30. Business combinations
Prior year acquisition
Acquisition of 8VIC Holdings Limited (previously known as Digimatic Group Ltd.)
At the beginning of the financial year 2018, the Group held 10.8% interest in 8VIC Holdings Limited (“8VI”) which
was recognised as financial assets, at FVOCI. On 28 November 2017, the Group acquired an additional 58.9%
equity interests in 8VI. 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 8VI as per Note 24(b)(iii). Following this
transaction, 8VI 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 8VI’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 8VI.
Estimates and judgements in determining the fair value considerations include 8VIC’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.
Description
Fair value considerations
Unobservable
inputs
Range of
input
Fair value
consideration of
8VI 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$5,971,000.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
85
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
30. Business combinations (continued)
Prior year acquisition (continued)
Acquisition of 8VIC Holdings Limited (previously known as Digimatic Group Ltd.)(continued)
Details of the consideration, the assets acquired and liabilities assumed, the non-controlling interest recognised
and the effects on the cash flows of the Group, at the acquisition date, are as follows:
(a)
Provisional fair value of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents
Plant and equipment
Trade and other receivables
Inventory
Other investment
Total assets
Trade and other payables
Current tax liabilities
Unearned revenue
Deferred tax liabilities
Total liabilities
Total identifiable net assets
Less: Non-controlling interest based on proportionate method
Less: Existing equity interests held in 8VI as FVOCI (Note 30(d))
Less: Gain on bargain purchase (Note 5)
Consideration transferred for the business
(b)
Effect on cash flows of the Group
Cash paid (as above)
Less: cash and cash equivalents in subsidiary acquired
Net cash inflow on acquisition
(c)
Acquired receivables
28 November
2017
S$
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 receivables 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.
86
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
30. Business combinations (continued)
Prior year acquisition (continued)
Acquisition of 8VIC Holdings Limited (previously known as Digimatic Group Ltd.)(continued)
(d)
Existing equity interests held in 8VI as FVOCI
At the transaction date, the Group held 10.8% equity interests in 8VI as FVOCI, valued at S$2.7 million
(based on the 8VI’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 8VI, the FVOCI was re-measured based on the fair value per share arising
from the fair value consideration of 8VI’s acquisition (Note 30(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.
(e)
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. 8VI
was willing to accept the purchase consideration as the transaction allowed 8VI to acquire a profitable
business with operating cash flows.
(f)
Non-controlling interests
The Group has chosen to recognise the 30.3% non-controlling interest based on its proportionate share
of the 8VI’s identifiable net assets.
(g)
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 8VI 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.
31.
Events occurring after reporting date
In April 2019, Shanghai Rong Dao Culture Communication Co. Ltd (“SRD”), subsidiary of the Company, issued new
ordinary shares to an unrelated party, amounting to 10% of the total issued share capital in SRD after the new
share issuance, for the consideration of CNY 5,000,000. Accordingly, the net assets of the Group increased by
approximately S$1,000,000 subsequent to the reporting date.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
87
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
32. 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 2019 and which the
Group has not early adopted:
(a) SFRS(I) 16 Leases (effective for annual periods beginning on or after 1 January 2019)
SFRS(I) 16 will result in almost all leases being recognised on the balance sheet, 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 exception for short-term and low-value leases and some
commitments may relate to arrangements that will not qualify as leases under SFRS(I) 116.
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.
(b) SFRS(I) INT 23 Uncertainty Over Income Tax Treatments (effective for annual periods beginning on or after 1
January 2019)
The interpretation explains how to recognise and measure deferred and current income tax assets and
liabilities where there is uncertainty over a tax treatment. In particular, it discusses:
(i) how to determine the appropriate unit of account, and that each uncertain tax treatment should be
considered separately or together as a group, depending on which approach better predicts the
resolution of the uncertainty;
(ii) that the entity should assume a tax authority will examine the uncertain tax treatments and have full
knowledge of all related information, i.e. that detection risk should be ignored
(iii) that the entity should reflect the effect of the uncertainty in its income tax accounting when it is not
probable that the tax authorities will accept the treatment;
(iv) that the impact of the uncertainty should be measured using either the most likely amount or the
expected value method, depending on which method better predicts the resolution of the uncertainty;
and
(v) that the judgements and estimates made must be reassessed whenever circumstances have changed or
there is new information that affects the judgements.
The Group does not expect additional tax liability to be recognised arising from the uncertain tax positions on
the adoption of the interpretation on 1 January 2019.
88
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 March 2019
32. New or revised accounting standards and interpretations (continued)
(c) Amendments to SFRS(I) 3 Business Combinations (effective for annual periods beginning on or after 1 January
2020)
The amendments provide new guidance on the assessment of whether an acquisition meets the definition of
a business under SFRS(I) 3. To be considered a business, an acquisition would have to include an output and
a substantive process that together significantly contribute to the ability to create outputs. A framework is
introduced to evaluate when an input and substantive process are present. To be a business without outputs,
there will now need to be an organised workforce.
The definition of the term ‘outputs’ is narrowed to focus on goods and services provided to customers,
generating investment income and other income, and it excludes returns in the form of lower costs and other
economic benefits.
It is also no longer necessary to assess whether market participants are capable of replacing missing elements
or integrating the acquired activities and assets.
Entities can apply a ‘concentration test’ that, if met, eliminates the need for further assessment. Under this
optional test, where substantially all of the fair value of gross assets acquired is concentrated in a single asset
(or a group of similar assets), the assets acquired would not represent a business.
These amendments are applied to business combinations and asset acquisitions with acquisition date on or
after 1 January 2020. Early application is permitted. The Group does not expect any significant impact be
recognised arising from applying these amendments.
33.
Comparative information
During 2019, the Company modified the classification of revenue and investment income to reflect more
appropriately the way in which economic benefits are derived from its use. As a result, S$424,002 was reclassified
from ‘Revenue’ to ‘Investment income’.
34. 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 31 May 2019.
8I Holdings Limited and its Subsidiaries
Annual Report FY2019
89
For personal use only
Additional Information
Shareholders Information as at 25 June 2019
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
16
76
56
490
285
923
Number of
shares
10,374
293,231
526,369
22,357,428
338,571,693
361,759,095
% of issued
capital
0.00%
0.08%
0.15%
6.18%
93.59%
100.00%
The number of investors holding less than a marketable parcel of 8,333 8IH shares (based on a share price of A$0.06) was 5. They hold 559 8IH
shares in total.
Twenty Largest Shareholders and CDI Holders*
Registered Holder
1. Chee Kuan Tat, Ken
2. Clive Tan Che Koon
3. J P Morgan Nominees Australia Limited
4. Citicorp Nominees Pty Limited
5. HSBC Custody Nominees (Australia) Limited
6. BNP Paribas Noms Pty Ltd
7. Pauline Teo Puay Lin
8. Philip John Raff
9. Hue Kuan Yew
10. Clarence Wee Kim Leng
11. Lim Wei Lin
12. Ho Tuck Chee
13. Hor Chook Lam
14. Alex Chia Che Keng
15. Fance Chua Meon Keng
16. Loo Tian Guan
17. Vivek Verma
18. Yap Pei Koon
19. Edwin Kang Tien Hock
20. Tan Chong Yan
ALL OTHER SHAREHOLDERS
Total
Number of
Shares
86,684,792
65,140,000
27,774,418
26,132,893
11,819,048
9,941,371
8,859,103
7,779,324
3,063,914
2,063,400
2,000,000
1,866,320
1,546,000
1,398,140
1,118,000
1,107,203
1,100,000
1,020,872
934,000
870,020
99,540,277
361,759,095
% of issued
capital
23.96%
18.01%
7.68%
7.22%
3.27%
2.75%
2.45%
2.15%
0.85%
0.57%
0.55%
0.52%
0.43%
0.39%
0.31%
0.31%
0.30%
0.28%
0.26%
0.24%
27.52%
100.00%
Notes
* 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.
90
For personal use only
Additional Information (continued)
Shareholders Information as at 25 June 2019 (continued)
Substantial Shareholders and CDI Holders**
Name
Chee Kuan Tat, Ken
Clive Tan Che Koon
Direct
Interest
Shares
86,684,792
65,140,000
% of voting
power
23.96%
18.01%
Deemed
Interest
Shares
-
-
% of voting
power
-
-
Notes
** 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 177 transactions in securities during the financial year ended 31 March 2019 and has paid or accrued brokerage and
management fees totalling S$4,405 and S$32,664 respectively. As at 31 March 2019, the Group held investment in Velocity Property Group
Limited, Autowealth Private Limited, Beauty Comm Public Co Ltd, IGG Inc, MKS Instruments, Inc, Tokyo Electron Limited, Emmbi Industries
Limited, Nyquest Technology Co Ltd, SeaLink Travel Group Limited, Hangzhou Hikvision Digital, Kweichow Moutai Co Ltd, Sunny Optical Tech,
Mizuho Medy Co Ltd, E-Guardian Inc, Japan Lifeline Co Ltd, Ya-Man Ltd, Yossix Co Ltd, Riverstone Holdings Ltd and Alibaba Group Holding.
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.
8I Holdings Limited and its Subsidiaries
Interim Report FY2019
91
For personal use only
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For personal use only
For personal use only
8I Holdings Limited
(Incorporated in the Republic of Singapore)
Company Registration Number: 201414213R
ARBN 601 582 129
www.8iholdings.com
Offices
Singapore
Goldbell Towers, 47 Scotts Road, #03-03/04, Singapore 228233
T: +65 6801 4500
Australia
C/- SmallCap Corporate Pty Ltd, Suite 6, 295 Rokeby Road, Subiaco WA, Australia, 6008
T: +61 8 6555 2950 F: +61 8 6166 0261
Follow Us On:
Facebook:
Linkedin:
www.facebook.com/8IHoldings
www.linkedin.com/company/8iholdings
For personal use only